there are issues with Prop 13 – it could well be reformed
commercial real estate very rarely gets re-assessed for tax purposes because of Prop 13 – the property is held inside a corp or LLC – the corp or LLC is sold but, the way Prop 13 currently works, the property held inside the corp / LLC DID NOT CHANGE HANDS and therefore no tax re-assessment is triggered
another injustice of Prop 13: person has owned residential real estate in CA for 30 years – tax increases on the property are limited by Prop 13 but the tenants living in those properties are paying rents based on TODAY’S cost of living which includes property taxes – ie, the long-term landlord is collecting today’s property taxes (in the form of rents) but only paying yesterday’s property taxes to the city – the landlord is shifting the burden of supporting those tenants onto the rest of the tax-payers
because Prop 13 limits the re-assessment of property values, cities try to expand their tax basis by building new sub-divisions, strip malls and big-box stores – thus we have the ever-expanding suburbs and all the commercial properties that now have ‘For Lease’ signs in their windows [stay tuned for the crash of the commercial real estate market – coming soon to a theater near you]
just making the point that Prop 13 is NOT just a symptom, it is one of the contributing factors to the economic woes being felt in CA right now
