[quote=AN][quote=CA renter]Yes, they are indirectly paying the property taxes for their landlords in most cases. This is exactly the group I want to help by freeing up more for-sale inventory at better prices. Most renters want to own, but are not able to because of inventory constraints due partly to Prop 13 and also the hordes of speculators who bid-up housing prices so they can have renters pay their mortgages/taxes/insurance/profits for them.
Though this isn’t related to Prop 13, I would also disallow GSE/FHA financing for investment properties and second homes, and eliminate the mortgage interest deduction for investment properties (all MID, actually).
I would also favor changing the rules regarding “stepping-up” the cost basis of housing upon the death of an owner (for the benefit of the heir/beneficiary), and exchange that for an inflation adjustment to the cost basis for all real estate sold by anyone, not just lucky heirs. This would free up a lot of RE that people are holding onto in order to avoid the tax consequences of selling before the death of the original or long-term owner.[/quote]You still fail to see that the renters are subsidizing you, a home owner, as much as those landlord you seem to hate so much. Fact is, like it or not, you as a home owner, is taking subsidies from the poorer people of this state. If you want change, why not start w/ the person in the mirror, like Michael Jackson said so eloquently.
BTW, do you own a long term rental? If yes, would you sell if your cost of owning that property goes up a few thousands a year? IIRC, you rented from a long time landlord at a very good price. Would you think you would have gotten that rental price if their cost is higher?
Again, you’ve provided no proof that removal of prop 13 on non primary would force long time land lord to sell or it would prevent people who want to be landlord from buying.[/quote]
How are they subsidizing me? I’m paying full, market-rate property taxes.
Yes, my long-time LL was an original owner, and was kind enough to “share” the benefit of their Prop 13 subsidy with us by keeping us at below-market rents (started at market rate, and was raised after the first year, per the lease agreement, and then once by us over the years). But that’s because we were excellent tenants who paid rent 6-12 months in advance, handled (and paid for) all of the small repairs/maintenance, and many of the more expensive repair/maintenance items and upgrades…and raised our own rent in order to control the increase and maintain goodwill with the LL.
And yes, an increase in property taxes would most definitely make me reconsider holding onto a property that was older (and in need of more maintenance), and worth a lot of money. This is especially true if other investments begin to look relatively more lucrative given the carrying costs — including the higher property taxes — and risks of keeping the home vs. more passive investments.
We are watching this closely because we’re probably going to inherit a couple of properties in desirable areas in the future. One of these is paid-off, and has been in the family for a couple of generations. Changes to Prop 13 for investment properties will absolutely factor into our decision-making process.
BTW, never said it would prevent current prospective landlords from buying, mostly just the long-time owners who are currently paying well below-market property taxes. Of course, in the desirable areas, there are very few “new” landlords because it’s rare for rents to cover the carrying costs of owning in these higher-cost areas, especially if the deal is financed.
