[bearishgurl]

[quote=CA renter]Perhaps that could be dealt with in some other fashion (code enforcement?).[/quote]

CA Renter, calling “Code Enforcement” is of no use. There are only TWO compliance officers in the entire city, which has grown from 53,000 to 285,000 in the last 12 years.

These TWO (hired only two years ago) are each assigned to a list of lenders. Their job is to constantly monitor the exterior condition of foreclosures by dealing with the lenders’ property managers to get pools emptied, weeds mowed, broken windows replaced, etc. 90% of these properties are in recently-annexed portions of CV where they were originally sold for way too much money during the “bubble.”

They care NOTHING about circa 1965 “grandfathered” garages and room additions built too close to property lines, dead trees (unless leaning on a neighbor’s roof), broken down fences, junk vehicles parked on private property, etc.

[bearishgurl]

[quote=CA renter]Perhaps that could be dealt with in some other fashion (code enforcement?).[/quote]

CA Renter, calling “Code Enforcement” is of no use. There are only TWO compliance officers in the entire city, which has grown from 53,000 to 285,000 in the last 12 years.

These TWO (hired only two years ago) are each assigned to a list of lenders. Their job is to constantly monitor the exterior condition of foreclosures by dealing with the lenders’ property managers to get pools emptied, weeds mowed, broken windows replaced, etc. 90% of these properties are in recently-annexed portions of CV where they were originally sold for way too much money during the “bubble.”

They care NOTHING about circa 1965 “grandfathered” garages and room additions built too close to property lines, dead trees (unless leaning on a neighbor’s roof), broken down fences, junk vehicles parked on private property, etc.

[bearishgurl]

[quote=CA renter]Perhaps that could be dealt with in some other fashion (code enforcement?).[/quote]

CA Renter, calling “Code Enforcement” is of no use. There are only TWO compliance officers in the entire city, which has grown from 53,000 to 285,000 in the last 12 years.

These TWO (hired only two years ago) are each assigned to a list of lenders. Their job is to constantly monitor the exterior condition of foreclosures by dealing with the lenders’ property managers to get pools emptied, weeds mowed, broken windows replaced, etc. 90% of these properties are in recently-annexed portions of CV where they were originally sold for way too much money during the “bubble.”

They care NOTHING about circa 1965 “grandfathered” garages and room additions built too close to property lines, dead trees (unless leaning on a neighbor’s roof), broken down fences, junk vehicles parked on private property, etc.

[bearishgurl]

[quote=CA Renter] . . . if they want the benefit of their parents’ cost basis for property taxes, then they should not be able to step-up the cost basis at death/transfer for capital gains purposes. It should be one or the other. Perhaps people should have a choice when they inherit to either step up the cost basis for all purposes, or leave it at the original cost basis for all purposes.

. . . IMHO, they deserve a home, too, and there is no reason for me or anyone else to feel entitled to take away their right to live in their own family’s home.[/quote]

CA Renter, I agree with your first para. (above) that it should be one or the other (Prop. 13 treatment but with original cost basis or market rate taxes with stepped-up cost basis) upon death, but not both. This (stepped-up basis for capital gains purposes) benefit never occurred to me. This illustrates that owners of Prop. 13-eligible properties have the best of both worlds if they choose to avail themselves.

Re: your second quote, no one is proposing to take away any anyone’s home or property rights. I believe in private property rights, too, to the extent those rights don’t encroach on neighbors. I’m simply proposing that Prop. 13 benefits end with the death of the original owner, period. Property taxes are THE biggest funder of schools, police, fire, libraries, etc. in this state. A percentage of these taxes are protected by Prop 13 from reassessment, indefinitely, as long as title to the real property stays within the family. This, among other issues, is why CA is in such a deep hole, fiscally. I don’t know of any other states that have this perk, worded quite like Prop. 13 is.

To an heir who never had anything all of their lives, inheriting unencumbered real property is like winning the lottery! If an heir with no assets and a low income chooses to move in, not only do they now have a FREE place to live with Prop 13 tax treatment, they can choose to borrow off the property repeatedly and make sporadic payments or just keep borrowing until a lender forecloses, while they let their trees die and fences fall down. This could be several years away, depending on the size of the loan(s). Meanwhile they can qualify for lifeline utility and phone services and even free internet services and bum their neighbors trash cans to avoid paying for pickup. This is DEFINITELY MORE PREFERABLE to selling immediately (selling costs) and taking the cash. Heck, one heir on my block managed to borrow $490K in total before a lender finally foreclosed after almost four years and resold the property for $297K!

I believe if at least the Prop. 58 portion of Prop. 13 were repealed, then these “unqualified-homeowner heirs” I am speaking of here would probably sell immediately upon death and take the cash and run, as they wouldn’t be able to afford the carrying costs of market-rate taxes. The buyers they sell to would then presumably be more qualified as “homeowners.”

[bearishgurl]

[quote=CA Renter] . . . if they want the benefit of their parents’ cost basis for property taxes, then they should not be able to step-up the cost basis at death/transfer for capital gains purposes. It should be one or the other. Perhaps people should have a choice when they inherit to either step up the cost basis for all purposes, or leave it at the original cost basis for all purposes.

. . . IMHO, they deserve a home, too, and there is no reason for me or anyone else to feel entitled to take away their right to live in their own family’s home.[/quote]

CA Renter, I agree with your first para. (above) that it should be one or the other (Prop. 13 treatment but with original cost basis or market rate taxes with stepped-up cost basis) upon death, but not both. This (stepped-up basis for capital gains purposes) benefit never occurred to me. This illustrates that owners of Prop. 13-eligible properties have the best of both worlds if they choose to avail themselves.

Re: your second quote, no one is proposing to take away any anyone’s home or property rights. I believe in private property rights, too, to the extent those rights don’t encroach on neighbors. I’m simply proposing that Prop. 13 benefits end with the death of the original owner, period. Property taxes are THE biggest funder of schools, police, fire, libraries, etc. in this state. A percentage of these taxes are protected by Prop 13 from reassessment, indefinitely, as long as title to the real property stays within the family. This, among other issues, is why CA is in such a deep hole, fiscally. I don’t know of any other states that have this perk, worded quite like Prop. 13 is.

To an heir who never had anything all of their lives, inheriting unencumbered real property is like winning the lottery! If an heir with no assets and a low income chooses to move in, not only do they now have a FREE place to live with Prop 13 tax treatment, they can choose to borrow off the property repeatedly and make sporadic payments or just keep borrowing until a lender forecloses, while they let their trees die and fences fall down. This could be several years away, depending on the size of the loan(s). Meanwhile they can qualify for lifeline utility and phone services and even free internet services and bum their neighbors trash cans to avoid paying for pickup. This is DEFINITELY MORE PREFERABLE to selling immediately (selling costs) and taking the cash. Heck, one heir on my block managed to borrow $490K in total before a lender finally foreclosed after almost four years and resold the property for $297K!

I believe if at least the Prop. 58 portion of Prop. 13 were repealed, then these “unqualified-homeowner heirs” I am speaking of here would probably sell immediately upon death and take the cash and run, as they wouldn’t be able to afford the carrying costs of market-rate taxes. The buyers they sell to would then presumably be more qualified as “homeowners.”

[bearishgurl]

[quote=CA Renter] . . . if they want the benefit of their parents’ cost basis for property taxes, then they should not be able to step-up the cost basis at death/transfer for capital gains purposes. It should be one or the other. Perhaps people should have a choice when they inherit to either step up the cost basis for all purposes, or leave it at the original cost basis for all purposes.

. . . IMHO, they deserve a home, too, and there is no reason for me or anyone else to feel entitled to take away their right to live in their own family’s home.[/quote]

CA Renter, I agree with your first para. (above) that it should be one or the other (Prop. 13 treatment but with original cost basis or market rate taxes with stepped-up cost basis) upon death, but not both. This (stepped-up basis for capital gains purposes) benefit never occurred to me. This illustrates that owners of Prop. 13-eligible properties have the best of both worlds if they choose to avail themselves.

Re: your second quote, no one is proposing to take away any anyone’s home or property rights. I believe in private property rights, too, to the extent those rights don’t encroach on neighbors. I’m simply proposing that Prop. 13 benefits end with the death of the original owner, period. Property taxes are THE biggest funder of schools, police, fire, libraries, etc. in this state. A percentage of these taxes are protected by Prop 13 from reassessment, indefinitely, as long as title to the real property stays within the family. This, among other issues, is why CA is in such a deep hole, fiscally. I don’t know of any other states that have this perk, worded quite like Prop. 13 is.

To an heir who never had anything all of their lives, inheriting unencumbered real property is like winning the lottery! If an heir with no assets and a low income chooses to move in, not only do they now have a FREE place to live with Prop 13 tax treatment, they can choose to borrow off the property repeatedly and make sporadic payments or just keep borrowing until a lender forecloses, while they let their trees die and fences fall down. This could be several years away, depending on the size of the loan(s). Meanwhile they can qualify for lifeline utility and phone services and even free internet services and bum their neighbors trash cans to avoid paying for pickup. This is DEFINITELY MORE PREFERABLE to selling immediately (selling costs) and taking the cash. Heck, one heir on my block managed to borrow $490K in total before a lender finally foreclosed after almost four years and resold the property for $297K!

I believe if at least the Prop. 58 portion of Prop. 13 were repealed, then these “unqualified-homeowner heirs” I am speaking of here would probably sell immediately upon death and take the cash and run, as they wouldn’t be able to afford the carrying costs of market-rate taxes. The buyers they sell to would then presumably be more qualified as “homeowners.”

[bearishgurl]

[quote=CA Renter] . . . if they want the benefit of their parents’ cost basis for property taxes, then they should not be able to step-up the cost basis at death/transfer for capital gains purposes. It should be one or the other. Perhaps people should have a choice when they inherit to either step up the cost basis for all purposes, or leave it at the original cost basis for all purposes.

. . . IMHO, they deserve a home, too, and there is no reason for me or anyone else to feel entitled to take away their right to live in their own family’s home.[/quote]

CA Renter, I agree with your first para. (above) that it should be one or the other (Prop. 13 treatment but with original cost basis or market rate taxes with stepped-up cost basis) upon death, but not both. This (stepped-up basis for capital gains purposes) benefit never occurred to me. This illustrates that owners of Prop. 13-eligible properties have the best of both worlds if they choose to avail themselves.

Re: your second quote, no one is proposing to take away any anyone’s home or property rights. I believe in private property rights, too, to the extent those rights don’t encroach on neighbors. I’m simply proposing that Prop. 13 benefits end with the death of the original owner, period. Property taxes are THE biggest funder of schools, police, fire, libraries, etc. in this state. A percentage of these taxes are protected by Prop 13 from reassessment, indefinitely, as long as title to the real property stays within the family. This, among other issues, is why CA is in such a deep hole, fiscally. I don’t know of any other states that have this perk, worded quite like Prop. 13 is.

To an heir who never had anything all of their lives, inheriting unencumbered real property is like winning the lottery! If an heir with no assets and a low income chooses to move in, not only do they now have a FREE place to live with Prop 13 tax treatment, they can choose to borrow off the property repeatedly and make sporadic payments or just keep borrowing until a lender forecloses, while they let their trees die and fences fall down. This could be several years away, depending on the size of the loan(s). Meanwhile they can qualify for lifeline utility and phone services and even free internet services and bum their neighbors trash cans to avoid paying for pickup. This is DEFINITELY MORE PREFERABLE to selling immediately (selling costs) and taking the cash. Heck, one heir on my block managed to borrow $490K in total before a lender finally foreclosed after almost four years and resold the property for $297K!

I believe if at least the Prop. 58 portion of Prop. 13 were repealed, then these “unqualified-homeowner heirs” I am speaking of here would probably sell immediately upon death and take the cash and run, as they wouldn’t be able to afford the carrying costs of market-rate taxes. The buyers they sell to would then presumably be more qualified as “homeowners.”

[bearishgurl]

[quote=CA Renter] . . . if they want the benefit of their parents’ cost basis for property taxes, then they should not be able to step-up the cost basis at death/transfer for capital gains purposes. It should be one or the other. Perhaps people should have a choice when they inherit to either step up the cost basis for all purposes, or leave it at the original cost basis for all purposes.

. . . IMHO, they deserve a home, too, and there is no reason for me or anyone else to feel entitled to take away their right to live in their own family’s home.[/quote]

CA Renter, I agree with your first para. (above) that it should be one or the other (Prop. 13 treatment but with original cost basis or market rate taxes with stepped-up cost basis) upon death, but not both. This (stepped-up basis for capital gains purposes) benefit never occurred to me. This illustrates that owners of Prop. 13-eligible properties have the best of both worlds if they choose to avail themselves.

Re: your second quote, no one is proposing to take away any anyone’s home or property rights. I believe in private property rights, too, to the extent those rights don’t encroach on neighbors. I’m simply proposing that Prop. 13 benefits end with the death of the original owner, period. Property taxes are THE biggest funder of schools, police, fire, libraries, etc. in this state. A percentage of these taxes are protected by Prop 13 from reassessment, indefinitely, as long as title to the real property stays within the family. This, among other issues, is why CA is in such a deep hole, fiscally. I don’t know of any other states that have this perk, worded quite like Prop. 13 is.

To an heir who never had anything all of their lives, inheriting unencumbered real property is like winning the lottery! If an heir with no assets and a low income chooses to move in, not only do they now have a FREE place to live with Prop 13 tax treatment, they can choose to borrow off the property repeatedly and make sporadic payments or just keep borrowing until a lender forecloses, while they let their trees die and fences fall down. This could be several years away, depending on the size of the loan(s). Meanwhile they can qualify for lifeline utility and phone services and even free internet services and bum their neighbors trash cans to avoid paying for pickup. This is DEFINITELY MORE PREFERABLE to selling immediately (selling costs) and taking the cash. Heck, one heir on my block managed to borrow $490K in total before a lender finally foreclosed after almost four years and resold the property for $297K!

I believe if at least the Prop. 58 portion of Prop. 13 were repealed, then these “unqualified-homeowner heirs” I am speaking of here would probably sell immediately upon death and take the cash and run, as they wouldn’t be able to afford the carrying costs of market-rate taxes. The buyers they sell to would then presumably be more qualified as “homeowners.”

[bearishgurl]

Awesome letter, edna. Thanks for sharing. I think as more “Prop. 13 original owners” die and leave their properties to their heirs, it will become more and more palatable to the voting public to have a closer look at Prop. 13 and find ways to dismantle it, either piecemeal (repealing Prop. 58) or in its entirety. It’s not a fair system for the vast majority of CA property owners today and is becoming less and less fair as the years roll by.

However, I’m all for leaving it in place for pre-1978 owners of their PRINCIPAL RESIDENCES only. This “grandfather” clause would eventually become moot, due to deaths. I agree that everyone else should be reassessed. Built into the system should be re-assessment triggers based upon the death of the original (Prop. 13) owner or a pre-death transfer of eligible property. To circumvent the (predicted) non-filing of death certificates with county recorders, ALL county health departments should furnish electronic lists of adult death certificates they issued to every county assessor once a month.

Sound a little like “Big Brother?” Prop. 13 proponents believe their rights to this perk are sacrosanct. If Prop. 13 was decimated, heirs would just take posssession but fail to take proper title if the property is in a trust or there are not enough assets to be probated. Who’s to know, anyway?? As long as they don’t want to borrow from the property, IMHO this could work, indefinitely.

[bearishgurl]

Awesome letter, edna. Thanks for sharing. I think as more “Prop. 13 original owners” die and leave their properties to their heirs, it will become more and more palatable to the voting public to have a closer look at Prop. 13 and find ways to dismantle it, either piecemeal (repealing Prop. 58) or in its entirety. It’s not a fair system for the vast majority of CA property owners today and is becoming less and less fair as the years roll by.

However, I’m all for leaving it in place for pre-1978 owners of their PRINCIPAL RESIDENCES only. This “grandfather” clause would eventually become moot, due to deaths. I agree that everyone else should be reassessed. Built into the system should be re-assessment triggers based upon the death of the original (Prop. 13) owner or a pre-death transfer of eligible property. To circumvent the (predicted) non-filing of death certificates with county recorders, ALL county health departments should furnish electronic lists of adult death certificates they issued to every county assessor once a month.

Sound a little like “Big Brother?” Prop. 13 proponents believe their rights to this perk are sacrosanct. If Prop. 13 was decimated, heirs would just take posssession but fail to take proper title if the property is in a trust or there are not enough assets to be probated. Who’s to know, anyway?? As long as they don’t want to borrow from the property, IMHO this could work, indefinitely.

[bearishgurl]

Awesome letter, edna. Thanks for sharing. I think as more “Prop. 13 original owners” die and leave their properties to their heirs, it will become more and more palatable to the voting public to have a closer look at Prop. 13 and find ways to dismantle it, either piecemeal (repealing Prop. 58) or in its entirety. It’s not a fair system for the vast majority of CA property owners today and is becoming less and less fair as the years roll by.

However, I’m all for leaving it in place for pre-1978 owners of their PRINCIPAL RESIDENCES only. This “grandfather” clause would eventually become moot, due to deaths. I agree that everyone else should be reassessed. Built into the system should be re-assessment triggers based upon the death of the original (Prop. 13) owner or a pre-death transfer of eligible property. To circumvent the (predicted) non-filing of death certificates with county recorders, ALL county health departments should furnish electronic lists of adult death certificates they issued to every county assessor once a month.

Sound a little like “Big Brother?” Prop. 13 proponents believe their rights to this perk are sacrosanct. If Prop. 13 was decimated, heirs would just take posssession but fail to take proper title if the property is in a trust or there are not enough assets to be probated. Who’s to know, anyway?? As long as they don’t want to borrow from the property, IMHO this could work, indefinitely.

[bearishgurl]

Awesome letter, edna. Thanks for sharing. I think as more “Prop. 13 original owners” die and leave their properties to their heirs, it will become more and more palatable to the voting public to have a closer look at Prop. 13 and find ways to dismantle it, either piecemeal (repealing Prop. 58) or in its entirety. It’s not a fair system for the vast majority of CA property owners today and is becoming less and less fair as the years roll by.

However, I’m all for leaving it in place for pre-1978 owners of their PRINCIPAL RESIDENCES only. This “grandfather” clause would eventually become moot, due to deaths. I agree that everyone else should be reassessed. Built into the system should be re-assessment triggers based upon the death of the original (Prop. 13) owner or a pre-death transfer of eligible property. To circumvent the (predicted) non-filing of death certificates with county recorders, ALL county health departments should furnish electronic lists of adult death certificates they issued to every county assessor once a month.

Sound a little like “Big Brother?” Prop. 13 proponents believe their rights to this perk are sacrosanct. If Prop. 13 was decimated, heirs would just take posssession but fail to take proper title if the property is in a trust or there are not enough assets to be probated. Who’s to know, anyway?? As long as they don’t want to borrow from the property, IMHO this could work, indefinitely.

[bearishgurl]

Awesome letter, edna. Thanks for sharing. I think as more “Prop. 13 original owners” die and leave their properties to their heirs, it will become more and more palatable to the voting public to have a closer look at Prop. 13 and find ways to dismantle it, either piecemeal (repealing Prop. 58) or in its entirety. It’s not a fair system for the vast majority of CA property owners today and is becoming less and less fair as the years roll by.

However, I’m all for leaving it in place for pre-1978 owners of their PRINCIPAL RESIDENCES only. This “grandfather” clause would eventually become moot, due to deaths. I agree that everyone else should be reassessed. Built into the system should be re-assessment triggers based upon the death of the original (Prop. 13) owner or a pre-death transfer of eligible property. To circumvent the (predicted) non-filing of death certificates with county recorders, ALL county health departments should furnish electronic lists of adult death certificates they issued to every county assessor once a month.

Sound a little like “Big Brother?” Prop. 13 proponents believe their rights to this perk are sacrosanct. If Prop. 13 was decimated, heirs would just take posssession but fail to take proper title if the property is in a trust or there are not enough assets to be probated. Who’s to know, anyway?? As long as they don’t want to borrow from the property, IMHO this could work, indefinitely.

[bearishgurl]

[quote=CA renter]The whole “I’m a landlord with negative cash flow ‘investor'” comes with bubble territory. My parents were RE brokers, landlords, and investors for decades. They would NEVER have purchased a property where rents didn’t cover all expenses and provide a profit on top of that. They never had a negative cash flow in any of their properties, and I know many other long-time landlords who are in the same boat (my current landlords, included).[/quote]

CA Renter, did your parents purchase the bulk of their rental portfolio prior to the passage of Prop. 13 (April 1978)? Until about 1983 or 1984, it was difficult to get a loan of more than 60% LTV on rental properties. In addition, the interest rates were high during that time period. Did your parents get low LTV purchase-money loans or pay cash for some of their properties? If so AND they didn’t bleed the properties, obviously some of them would be paid off by now and generating very good profits.

Could they also have purchased properties with more amenities with other equity partners? These properties tend to attract a higher-quality tenant.

I say “kudos” to your parents for hanging around long enough managing, for doing the repairs themselves and for their patience with flaky tenants and their (hidden) pets, etc. in good times and bad. My “negative” cash flow scenario presumes a 25% vacancy rate. This is in line with more a transient (low income and military) tenant population, which I am most familiar with.

My 12-year “landlord-stint” had nothing to do with bubbles. I myself have been a licensee since 1984. I’ve owned two rental properties, one duplex, sold ’90 (small loss) and one triplex, sold ’94 (break-even). In both cases, I HATED dealing with tenants and their lame excuses for late rent payment, when I am observing standing in their doorway that they have more cable channels and a much newer vehicle than I do. Never had to evict but hung several “3-day notices” and wrote letters to commanding officers. And I HATED spending my weekends cleaning, repairing and painting the units between the frequent vacancies.

I believe we will soon enter a very favorable period in which to purchase working-class SFR’s for rentals, but I no longer possess the “DIY” patience or personality for the landlord thing.

[bearishgurl]

[quote=CA renter]The whole “I’m a landlord with negative cash flow ‘investor'” comes with bubble territory. My parents were RE brokers, landlords, and investors for decades. They would NEVER have purchased a property where rents didn’t cover all expenses and provide a profit on top of that. They never had a negative cash flow in any of their properties, and I know many other long-time landlords who are in the same boat (my current landlords, included).[/quote]

CA Renter, did your parents purchase the bulk of their rental portfolio prior to the passage of Prop. 13 (April 1978)? Until about 1983 or 1984, it was difficult to get a loan of more than 60% LTV on rental properties. In addition, the interest rates were high during that time period. Did your parents get low LTV purchase-money loans or pay cash for some of their properties? If so AND they didn’t bleed the properties, obviously some of them would be paid off by now and generating very good profits.

Could they also have purchased properties with more amenities with other equity partners? These properties tend to attract a higher-quality tenant.

I say “kudos” to your parents for hanging around long enough managing, for doing the repairs themselves and for their patience with flaky tenants and their (hidden) pets, etc. in good times and bad. My “negative” cash flow scenario presumes a 25% vacancy rate. This is in line with more a transient (low income and military) tenant population, which I am most familiar with.

My 12-year “landlord-stint” had nothing to do with bubbles. I myself have been a licensee since 1984. I’ve owned two rental properties, one duplex, sold ’90 (small loss) and one triplex, sold ’94 (break-even). In both cases, I HATED dealing with tenants and their lame excuses for late rent payment, when I am observing standing in their doorway that they have more cable channels and a much newer vehicle than I do. Never had to evict but hung several “3-day notices” and wrote letters to commanding officers. And I HATED spending my weekends cleaning, repairing and painting the units between the frequent vacancies.

I believe we will soon enter a very favorable period in which to purchase working-class SFR’s for rentals, but I no longer possess the “DIY” patience or personality for the landlord thing.

[Author]

Posts