Flyer, it IS a subsidy. The investors who are paying below-market property taxes are being subsidized by taxpayers. Prop 13 absolutely reduced taxes for property owners. If you still can’t grasp that concept, I can’t help you. Everyone who is paying below-market tax rates is being subsidized by those who are paying the full rate, but some subsidies (keeping owners from being taxed out of their single, primary residences) are more palatable than others (padding the profits of RE investors).
“The effect of Proposition 13 on mobility varies widely depending on the size of the subsidy…”
[That’s the National Bureau of Economic Research, in case you didn’t know…]
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And reform is on the way. Whether it happens this year, or 5 years from now, it is coming.
“Californians have consistently expressed overwhelming support for Proposition 13, but opinion polling – and a key ballot measure – has also shown voters open to tweaking aspects of the landmark reform.
How far they’re willing to go may soon be tested, with at least nine state bills aimed at altering the 35-year-old limitation on property taxes. The number of bills is expected to be whittled down, as most bills would require voter approval – and most are similar in their intent to make it easier for local government to raise taxes”…
…”But a 2012 USC poll, directed by Schnur, parsed the question more finely. It asked whether “large” commercial properties should be removed from Prop. 13’s protections – and found that 59 percent of respondents either “strongly” or “somewhat” supported such a change. That particular reform has never been proposed, but the finding was another indication of the electorate’s willingness to tinker with Prop. 13.”
