Schwarzennegar's ineptitude. (Arnold: school district, property taxes, to live)
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What people fail to realize is that Prop 13 is one of the reason that have cause Ca real estate to get to out of touch. I agree taxes are to high but and a big but, If you look at all the states that have reassements on houses to pay current market value what it cause is a check and balance on prices. This is because when your house starts to gain to much value your property taxes go up and cause you to either pay more or sell your house to avoid the tax. What this causes is a steadier more controlled increase in prices vice the 10 and 20 percent gains that we saw during the market booms. Why do you think that Texas didn't have the problems we had is because first they have a 3% rate and they reassess which causes people to get rid of their house if it gets to out of whack. That 3% rate and really limits the amount people are willing to pay for houses. They offset that high rate with no income taxes which I feel ca should look to. No income tax and a 2 % rate would solve our problems.
What people fail to realize is that Prop 13 is one of the reason that have cause Ca real estate to get to out of touch. I agree taxes are to high but and a big but, If you look at all the states that have reassements on houses to pay current market value what it cause is a check and balance on prices. This is because when your house starts to gain to much value your property taxes go up and cause you to either pay more or sell your house to avoid the tax. What this causes is a steadier more controlled increase in prices vice the 10 and 20 percent gains that we saw during the market booms. Why do you think that Texas didn't have the problems we had is because first they have a 3% rate and they reassess which causes people to get rid of their house if it gets to out of whack. That 3% rate and really limits the amount people are willing to pay for houses. They offset that high rate with no income taxes which I feel ca should look to. No income tax and a 2 % rate would solve our problems.
Total property tax revenues to local governments in California have increased at a rate exceeding inflation. State and local governments have more money today than before Proposition 13 passed, even considering inflation and population growth.
Texas has had it's own booms and busts with rampent foreclosures in the past...
Proposition 13 provides stability to our Property Tax System... it does not prevent voters from approving higher taxes...
Increases of 10% or more per year led to the voters overwhelming support for Prop 13 back in 1978... Prop 13 is not the cause, it is the remedy providing some protection...
My effective tax rate is nearly 1.5% because the voters in my city have seen fit to approve higher assessments using the mechanism Prop 13 provides...
California is not a low tax state... getting rid of Prop 13 would take away the most important protection new buyers have... the ability to reasonably predict future property tax burdens at the time of purchase.
Prop 13 is not the problem and the voters back in 1978 realized this... as did the US Supreme Court when Prop 13 was unsucessfully challenged.
You are correct Prop 13 was the worst bill that ever passed. The reason is because as time goes on costs to maintain local infrastructure goes up while property tax revenue barely keeps up with inflation. A great example is in Point Loma you drive down a street and see these little houses that have been let go next to these mansions. One person is paying 10 grand a year in taxes while the neighbor is paying 800 a year. How is that fair. What people fail to realize is that as property values increase people who can't afford it move and keep the flow of houses on the market. It's not like Grandma will not be well off from selling here house. So for all us young professionals looking for a house this policy contributes to a shortage of housing which drives up prices. :
First there is no shortage of Housing... inventory of available homes is at record levels and prices far lower than just a few years ago...
In 2005 I sold a home for 255k... the buyer sold it for 350k and the bank sold it this year for 70k... there are lots of home in my Bay Area City for less than 100k...
I bought a home that the original owner/builder built in 1955 and was paying $1200 a year in taxes and I paid $8800 my first year...
I don't begrudge him or my neighbors that pay less... it is my choice to buy or not buy and I fully intend to be one of those Home Owners paying less than my newer neighbors 30 years from now.
Why is it people so often begrudge those that built the neighborhoods, the homes and the community? The reason I choose my new neighborhood is because of the people that live here and I would not do anything to force them out or wish there taxes would double, triple or more...
No one made me buy... the last thing I want to do is go back to a system where it was a gamble just opening the tax bill each year... can I stay one more year or will I have to leave because the Assessor's OPINION allows the government to take more of my money.
Some may say Prop 13 is flawed... as someone that was not old enough to vote for it back in 1978... I'm sure glad the voters passed it and I would never want to go back to the uncertainty and rampent tax increases of the 1970's...
Total property tax revenues to local governments in California have increased at a rate exceeding inflation. State and local governments have more money today than before Proposition 13 passed, even considering inflation and population growth.
Texas has had it's own booms and busts with rampent foreclosures in the past...
Proposition 13 provides stability to our Property Tax System... it does not prevent voters from approving higher taxes...
Increases of 10% or more per year led to the voters overwhelming support for Prop 13 back in 1978... Prop 13 is not the cause, it is the remedy providing some protection...
My effective tax rate is nearly 1.5% because the voters in my city have seen fit to approve higher assessments using the mechanism Prop 13 provides...
California is not a low tax state... getting rid of Prop 13 would take away the most important protection new buyers have... the ability to reasonably predict future property tax burdens at the time of purchase.
Prop 13 is not the problem and the voters back in 1978 realized this... as did the US Supreme Court when Prop 13 was unsucessfully challenged.
But there is a problem. Prop. 13 took away local governments' school funding and made the counties and districts dependent upon the state for school revenues. The end result has been that CA schools are badly underfunded because the state doesn't have the money to pony-up and also suspends or redirects funds depending upon the fiscal crisis du jour.
Enter Prop. 98 in 1988 -- the mother of all catagorical spending schemes -- giving 40% of State General Fund revenues to education and it still isn't enough. Those funds also get jacked-around by the Governor and Legislature on a regular basis. CA is still near the bottom in state per-student funding and the end product only seems to get worse.
First there is no shortage of Housing... inventory of available homes is at record levels and prices far lower than just a few years ago...
In 2005 I sold a home for 255k... the buyer sold it for 350k and the bank sold it this year for 70k... there are lots of home in my Bay Area City for less than 100k...
I bought a home that the original owner/builder built in 1955 and was paying $1200 a year in taxes and I paid $8800 my first year...
I don't begrudge him or my neighbors that pay less... it is my choice to buy or not buy and I fully intend to be one of those Home Owners paying less than my newer neighbors 30 years from now.
Why is it people so often begrudge those that built the neighborhoods, the homes and the community? The reason I choose my new neighborhood is because of the people that live here and I would not do anything to force them out or wish there taxes would double, triple or more...
No one made me buy... the last thing I want to do is go back to a system where open the tax bill each year was like gambling... can I make it one more year here or will I have to leave because the Assessor's OPINION allows the government to take more of my money.
Wow what gangs did you live next too. Because I know of know respectable neighborhood in the Bay area that sells for even 350K. In SD all the houses that are in the 350K range in a respectable area are fixer uppers from people who got foreclosed on and destroyed their house. I'm sorry I do own a house in the central coast and yes this would affect my taxes but I see the whole picture of what is going on. I do realize we have high taxes but I would counter it by lowering all the other taxes we're charged. I feel that what were doing right now is not working you say their coming down but by god I will not put my son in a school that is crime infested and that is what is affordable right now.
But there is a problem. Prop. 13 took away local governments' school funding and made the counties and districts dependent upon the state for school revenues. The end result has been that CA schools are badly underfunded because the state doesn't have the money to pony-up and also suspends or redirects funds depending upon the fiscal crisis du jour.
Enter Prop. 98 in 1988 -- the mother of all catagorical spending schemes -- giving 40% of State General Fund revenues to education and it still isn't enough. Those funds also get jacked-around by the Governor and Legislature on a regular basis. CA is still near the bottom in state per-student funding and the end product only seems to get worse.
My understanding is a big reason Prop 13 passed is because the State had already started redistibuting revenue from wealthy areas to poor areas... Serrano Decision
It was one thing to pay high property taxes and have great schools... it was quite another to pay high property taxes and see that money leave the district.
Here is an excerpt:
Proposition 13 drew its impetus from 1971 and 1976 California Supreme Court rulings in Serrano v. Priest,Serrano[›] that a property-tax based finance system for public schools was unconstitutional. The California Constitution required the legislature to provide a free public school system for each district, and the Fourteenth Amendment of the United States Constitution (which includes the Equal Protection Clause) required all states provide to all citizens equal protection of the law. The court ruled that the amount of funding going to different districts was disproportionately favoring the wealthy. Previously, local property taxes went directly to the local school system, which minimized state government's involvement in the distribution of revenue. This system also allowed a wealthier district to fund its schools with a lower tax rate than the rate a less affluent district would have to set to yield the same funding per pupil. The Court ruled that the state had to make the distribution of revenue more equitable. The state legislature responded by capping the rate of local revenue that a school district could receive and distributing excess amounts among the poorer districts. As a result property owners in affluent districts perceived that the benefits of the taxes they paid were no longer enjoyed exclusively by the local schools
What people fail to realize is that Prop 13 is one of the reason that have cause Ca real estate to get to out of touch. I agree taxes are to high but and a big but, If you look at all the states that have reassements on houses to pay current market value what it cause is a check and balance on prices. This is because when your house starts to gain to much value your property taxes go up and cause you to either pay more or sell your house to avoid the tax. What this causes is a steadier more controlled increase in prices vice the 10 and 20 percent gains that we saw during the market booms. Why do you think that Texas didn't have the problems we had is because first they have a 3% rate and they reassess which causes people to get rid of their house if it gets to out of whack. That 3% rate and really limits the amount people are willing to pay for houses. They offset that high rate with no income taxes which I feel ca should look to. No income tax and a 2 % rate would solve our problems.
I would think that Prop 13 would also produce a drag on housing prices as well.
The current system shifts the burden of Property taxes from long time owners onto new purchasers who must pay taxes on the recently assessed - and higher - value of the property. These taxes will be a higher percent of their income and when figured into the new owners ability to pay, would lower the amount of monthly income the purchaser has available to pay his mortgage. This should LOWER the amount an individual can afford to pay for a house and thus hold prices down.
Last edited by OC Investor2; 12-31-2009 at 11:59 AM..
Wow what gangs did you live next too. Because I know of know respectable neighborhood in the Bay area that sells for even 350K. In SD all the houses that are in the 350K range in a respectable area are fixer uppers from people who got foreclosed on and destroyed their house. I'm sorry I do own a house in the central coast and yes this would affect my taxes but I see the whole picture of what is going on. I do realize we have high taxes but I would counter it by lowering all the other taxes we're charged. I feel that what were doing right now is not working you say their coming down but by god I will not put my son in a school that is crime infested and that is what is affordable right now.
I live in the Heart of the Bay Area... Oakland California.
I completely support your right for you to live anywhere you can afford...
I have a problem when you think it is right or OK and expect others, many that have long ago paid for the schools and infrastructure to again pay for your kids or can justify higher taxes to the point it forces people out of their homes... how selfish is that?
As for going to a school that is crime infested Well it was good enough for Tom Hanks...
Just because a person lives in a low income area doesn't mean the schools are bad or all schools in the district are bad.
Sure... I would like my kids to attend Piedmont Schools... (Piedmont is very wealthy city with top notch public schools and is completely surrounded by the city of Oakland... for those not familiar)
My kids will have to live with what I can afford... I can choose to rent a shoebox apartment and make sacrifices or get involved in my local school and make a difference...
I live in the Heart of the Bay Area... Oakland California.
I completely support your right for you to live anywhere you can afford...
I have a problem when you think it is right or OK and expect others, many that have long ago paid for the schools and infrastructure to again pay for your kids or can justify higher taxes to the point it forces people out of their homes... how selfish is that?
As for going to a school that is crime infested Well it was good enough for Tom Hanks...
Just because a person lives in a low income area doesn't mean the schools are bad or all schools in the district are bad.
Sure... I would like my kids to attend Piedmont Schools... (Piedmont is very wealthy city with top notch public schools and is completely surrounded by the city of Oakland... for those not familiar)
My kids will have to live with what I can afford... I can choose to rent a shoebox apartment and make sacrifices or get involved in my local school and make a difference...
Well said.
I'm just frustrated right now because my household income is over 100k and I do live in apt and the school district is allright but not great and I do volunteer every other friday to help my son's class out, which has 33 students, but I am not willing to help support a market that is completely false and I'm sorry you don't agree with my stand but we're living in times where we can't afford to keep subsidizing peoples lives. The future of our country depends upon the innovation of our young bright minds and we can't rob them of a good life just because somebody feels that they earned the right to not pay their fair share anymore. And yes I grew up in Santa Maria which does not have good schools and I somehow came out of their and managed to be an electrical engineer, but I am in the minority when it comes to these cases. Schools do matter and if you attend a subpar school it has been shown to decrease your chances of success.
Well said.
I'm just frustrated right now because my household income is over 100k and I do live in apt and the school district is allright but not great and I do volunteer every other friday to help my son's class out, which has 33 students, but I am not willing to help support a market that is completely false and I'm sorry you don't agree with my stand but we're living in times where we can't afford to keep subsidizing peoples lives. The future of our country depends upon the innovation of our young bright minds and we can't rob them of a good life just because somebody feels that they earned the right to not pay their fair share anymore. And yes I grew up in Santa Maria which does not have good schools and I somehow came out of their and managed to be an electrical engineer, but I am in the minority when it comes to these cases. Schools do matter and if you attend a subpar school it has been shown to decrease your chances of success.
I believe the single greatest factor contributing to the roller coaster CA real estate market has been the tremendous amount of money that was available...
The reason I bought my first home in Oakland in the 80's was because I could not qualify for a loan... back then a normal buyer needed:
20% down plus closing costs
6 months of living expenses in the Bank
3 years of continuous employment in the same field with 2 years with the same employer
Home had to appraise AND have at a minimum a Structural Pest Control Clearance.
I was very good at saving and had the money... I started paying into social security at age 12... I did not have employment in the same field or employer and all the homes that were "Nice" were way out of my price range... so I bought a home AS-IS for cash in East Oakland, moved-in and made repairs as money allowed... my neighbors were skeptical and a few even came right out and asked what was I doing here... they all came around and I couldn't have asked for better neighbors... just go into any neighborhood, buy the worst house and start painting, greening up the yard and you will have instant friends...
All this changed after 2000.... money was free-flowing into real estate... no income requirements, no termite clearances... loose appraisals and money coming in from foreign lands to buy mortgage backed securities... just about anyone can remember the nightly calls from lenders or the pre-approved loan letters clogging the mailbox.. and credit card offers
People went crazy and why not... most thought the party would never end... home prices skyrocketed and everyone and their neighbor started to "Invest" in Real Estate.
The receptionist at work making $12 an hour bought 2 homes... A family friend, a clerk at Safeway bought 5 homes Needless to say... they all lost these properties through Foreclosure...
Prop 13 didn't have anything to do with the madness... and thankfully, it helped those not caught up in it survive the decade by doing what they always did... pay their bills, including the property tax to keep the roof over their heads and being prudent with money...
I really can understand your frustration... there is a price for living here... for some it's too high and others become resourceful... like my Oakland School Teacher High School Classmates... they also bought a dump of a home when they married at age 20... she was in school and he worked selling auto parts... it took them 5 times of buying fixers to get their home in the Hills...
I grew up in a family without any Health Insurance and my parents, grandparents and my siblings and I don't have pensions... Going to school in Oakland, the classroom size was limited to 50 students with one teacher back in the 70's.
These are uncertain times... living withing your means and thinking outside the box has worked for me...
Last edited by Ultrarunner; 12-31-2009 at 01:22 PM..
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Well it was good enough for Tom Hanks...
A family friend, a clerk at Safeway bought 5 homes 
