The Golden State bestows (mostly undeserved) housing benefits far in excess of what any US public housing authority could possibly accomplish and its ramifications are much more far-reaching and affect every single resident of this state.
In my mind, this NY family of four is no different than the senior-citizen (or nearly senior citizen or their “heirs”) resident-owner of a CA single family home (even a “modest” one) which was purchased by them (or their “benefactor(s)”) prior to April 1978.
This group owns real property in CA which is assessed at 1/6 to 1/8 of its current market value (assuming they didn’t let the premises “go to waste” over the years).
Make no mistake . . . a LARGE portion of the (original) CA owners qualified for this deep discount have a net worth of $1.5M to $10M or more (avg over $2M) have up to $8K per month in defined-benefit pensions coming into the household, haven’t had a mortgage payment in decade(s) and NEVER MOVED since their purchase date (or date of taking title from their benefactor)! OR they DID move out for a period of time and subsequently returned to reside in the same (already-owned) property.
CA Props 13, 58 and 193 are akin to a GIANT LIFETIME housing subsidy to John and Suzy Q Public whose only “qualifications” were purchasing a home at the “right time” or “long enough ago” and hanging onto it over the years resulting in their property having an inordinately unrealistic lowered assessment today.
The rest of the CA property owners are subsidizing this HUGE group’s (limited and now decimated) municipal and county services. The deeply-discounted group isn’t going anywhere and will never decline (due to being able to take advantage of Props 58 and 193 into perpetuity), IMO.
Sadly, the (near or) market-rate-taxed CA property owners can’t possibly make up the shortfall in state, county and municipal coffers with their property taxes because the deeply-discounted property-tax group comprises too large of a percentage of voters.
CA’s extremely short-sighted former Legislature made this mess (and later added to it with their passage of Props 58 and 193). Unfortunately, it isn’t fixable now or in the future due to too many “taxpayers” reaping the benefits.
In my mind, this statutory scheme amounts to gross unjust enrichment for a very large percentage of CA property owners who have been availing themselves of this gravy train for years, many of whom are able-bodied 25-50 year-olds who “inherited” real property! Most of those eligible for this government largesse can well afford to pay property taxes based upon the market value of their properties but instead get to enjoy a minuscule property tax bill, freeing thousands up annually for other endeavors.
IIRC, some states have “senior citizen exemptions” exempting a fixed portion of property value (such as $50,000) of a (age 65+) property owner’s principal residence from their assessment which terminates upon their deaths. CA is the ONLY state which allows just a 2% increase in assessment annually, regardless of fluctuations in market value and allows this scheme (based upon the original purchase price) to continue on into perpetuity as long as the property is continually deeded via an intrafamily transfer deed, quitclaim deed or via a trust to child(ren) or grandchild(ren).
Prop 13 and its progeny also serve to keep thousands of CA properties in the more desirable established communities OFF the market …. virtually forever. As a byproduct, inventory shortages (chronic in markets where there has been no new construction tracts in decades) have been the norm for years and will remain so, bolstering property values and pricing.
If you owned a SFR in SD County in good shape which was worth $400K, it had a current tax bill of $600 per year and could fetch $1750 in monthly rent, would you ever sell it?
If you had one or two siblings and your last parent recently passed and left their principal residence in San Diego County (a SFR worth $550K) to all of you in equal shares, would you attempt to purchase your siblings’ portion from them (~$275K – $367K) to take title to use the property for a rental investment? Current assessment is $78K, resulting in a current tax bill of $850, which would carry over to any new (child or granchild) owner. Monthly rent would be $2200 – $2400.
