[quote=AN][quote=CA renter]
Those numbers in your chart mute the real effects of Prop 13 on the owner-occupied/rental housing ratio, particularly in desirable areas with older housing stock (which is where the benefits of Prop 13 are the greatest). The fact so much of California’s newer housing developments were built in “lizard land”– making it more affordable for younger buyers — is what has kept the *statewide* owner-occupied numbers fairly stable. In the desirable areas and job centers with homes built before Prop 13, the owner-occupied rates have fallen dramatically….[/quote]Uh, Prop 13 starts in 1978, so why did you use 1960 numbers? If you use 1970s, which would be more appropriate, home ownership is up. But you’re trying to link causation where there doesn’t seem to have any hard evidence of one. You stated a declined of home ownership after prop 13 came into effect, but the opposite is true. Also, could home ownership have something home price vs rent and not so much prop 13? Unless you’re hypothesizing that somehow, if we remove prop 13 for non-owner occupied, that somehow will reduce price and get more people to buy vs rent? If your assertion is prop 13 reduces home ownership, then why not remove prop 13 for everyone? All other states don’t have prop 13 and they seem to have retires doing OK and have a higher home ownership than us.[/quote]
I compared the changes from *both* 1960 and 1970. You can see for yourself that most of the other expensive states made improvements in the owner-occupied rates, while California declined or remained fairly stagnant. If you consider all of the new housing that’s been built here since 1976, with much of that in “affordable” areas (far-flung communities with long commutes for workers — this trend is much stronger in CA than in other states), that would explain why the statewide owner-occupied housing ratio is higher than it is in the more desirable areas.
Yes, some of it is due to being a high-cost area, but other high-cost areas in the U.S. don’t see the same trends. Even New York has made improvements in owner-occupied trends. If you look at the metro areas with the lowest owner-occupied rates, you’ll see that the other areas aren’t necessarily high-cost, either, so the high prices are not the only, or primary, cause of the low owner-occupancy rates in expensive California areas.
Yes, I believe that by removing Prop 13 protection for non owner-occupied housing, more inventory would come on the market for sale. Renters can’t use mortgages, and raising rents beyond what renters can truly afford would lead to higher turnover rates and evictions, and/or higher density living with more people/families living in a single unit/home (whether or not the LL knows about it, or approves of it). The profitability of holding long-term rentals would be greatly affected, and many of these landlords would end up selling instead of holding onto these older homes in desirable areas.
If we were to remove Prop 13 protection for everyone, then there would definitely be an exodus of elderly people who would sell and move to other, cheaper areas in CA, or out of state. I do NOT favor this, and it’s not even politically feasible under any circumstances. Just making the point that Prop 13 does indeed distort the RE market.
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“The effect of Proposition 13 on mobility varies widely depending on the size of the subsidy, with the largest effects occurring in coastal California cities where the increase in property values has been greatest.”
I’ll give you some real-life examples of properties I’m familiar with in LA (SFHs and an apartment complex or two — the apartments as an example of how much taxpayers are subsidizing landlords/property owners) to make my point. Will take some time to dig up all the info, but will get back to you with the details today or tomorrow. I’m even going to try to find some info on long-time owners of large tracts of land (like Pardee!) and commercial/industrial buildings to show how much we’re subsidizing them. The numbers are staggering.
