[quote=flyer]BG, I’d be the first to admit many of the legal benefits many families have taken advantage of when building real estate portfolios in CA over the years may not be “fair” in many ways–but they are what they are for the many reasons mentioned here–at least for the time being.
When we, and many people we know chose this path, no one ever dreamed San Diego, and the state in general, would develop as it has.
When, in the late 1800’s, some of my relatives were clearing land in areas that developed into major neighborhoods around the city, I’m sure they never imagined the magnitude of what lay ahead.
We appreciate the opportunities we’ve been given, and realize they were simply a matter of being at the right place at the right time with the right resources and vision to make the most of it all.[/quote]
I understand that your family felt they may have been taking a big gamble when they purchased multiple properties (incl vacant land) in the lazy “branch-office town” that was once San Diego, flyer. I did not arrive here until the ’70’s but even then, arriving from a large, well-established city which was larger in population than SD at the time (Denver, CO), I immediately moved to Banker’s Hill and noticed the same two aging quonset huts facing the bay and the 3.5 (2.5 aging), semi-tall buildings dtn which your family did and laughed, thinking SD was “quaint” and sort of “bucolic” but had a gritty and lonely downtown. I also lived in (what was then semi-rural) Alameda County, CA thru age 12, where we frequented the Oakland Coliseum (nka the Oracle Arena) and the Cow Palace on the SF peninsula for events. In my mind, SD did not hold a candle to either Denver or SF/Oakland at the time and was in no way comparable to either city in amenities or sophistication. I was also used to dressing in the city, brought clothing to do so and quickly realized that no one actually ever dressed up in SD.
HOWEVER, based upon the aggregate of your prior posts, I feel your family would have not have been worth anywhere near what it is had it not been able to avail itself of the HUGE tax subsidies permitted by Props 13, 58 and 193, simply because it would have been way too costly to keep real property in their “portfolio” for decades (regardless of what their holdings were rented for) while at the same time acquiring more and more real estate. And your family is just but one small example in the big picture of the lasting effects of this ill-thought-out statutory scheme. On a larger scale, I know of two (Chinese) families in SF who were actual descendants of the crew who built the Golden Gate Bridge. These descendants (now age 35 to 45) each manage more than 150 residential units full time for their siblings which are scattered in three Districts of SF, situated both in multifamily buildings, converted warehouses into lofts and scattered 2-4 unit bldgs with “flats,” all “acquired” or “inherited” by their parents, grandparents and great-grandparents (these individuals and their siblings purchased NOTHING on their own). These young people were able to hang onto all the properties bequeathed to them simply and ONLY because their annual property tax bills are artificially low, i.e. $1100 – $1800 (for a 2-4 unit bldg); ~$5K for a 27-unit bldg; and $3,300 for a former 9k sf comm’l whse (now with residential lofts). As long as these young owners don’t add any additional stories or square feet to the perimeter of their properties (to trigger reassessment), I predict they and their siblings could easily be worth tens of millions apiece by the time they hit retirement age. Combined with the astronomical monthly rents they are now able to command for each unit (except in their few rent-controlled bldgs, which they are only required by law to maintain to the bare minimum), it was actually Prop 13 and its progeny which allowed their families … and later themselves, to amass this level of fortune. These two individuals possess RE licenses but no college degrees and DO NOT come from a highly-educated families! They are young multimillionaires simply by birthright (and CA laws later enacted which heavily favored early RE investors). And they are just a drop in the bucket of what is SF today.
Yes, I feel it IS grossly unfair to those long-time Californians whose parents sold their RE early on and/or who had to sell or deed away long-owned, coveted CA homes during their lifetimes for a variety of reasons which have nothing to do with defaulting on a mortgage. I DO deeply resent having to pay a HUGE portion of my low income ($4K++ annually) to the tax assessor when nearly half of my neighbors on my tract pay $380 to $800 per year in property tax (and another ~1/3 pay $800 to $1500)! And I’ve owned my latest home over 14 years. My neighbors greatly benefiting from this scheme are all within eight years of my own age and the vast majority are just as able-bodied as me and no more “deserving” of a tax break than I am. Even if our incomes are nearly equal, I find myself pinching pennies in cheap motor lodges with my ice chest on the open road in a 21-year-old vehicle while they fly, dine out and rent new vehicles on their trips. WHY? Their “vacation money” isn’t being spent at the tax assessor, plain and simple.
Well, if you can’t beat them, I say join them, folks. I’m going to find a nicer home than mine (even if only its “bones”) on a bigger lot in a “participating county” and avail myself of Prop 90 (a one-time deal). This may take me longer than I had originally planned, but so be it. I want my piece of the action … however small. I don’t care what happens to the CA RevTax Code after MY Prop 90 contract is processed and approved by my new tax assessor because it will be “grandfathered” and every property owner in CA deserves “grandfather privileges” … including me.
