Millennials simply can't afford to live in OC (San Francisco, Orange: tax return, properties)

[Ultrarunner]

Originally Posted by Des-Lab

What I'm waiting for.....and you just know that someone is going to try this eventually....

Is for the Millenials to attempt a by-force confiscation of older/established homes through referendum.

Seizing a property purely for the purpose of reselling it for higher tax rates has already been ruled legal by the US Supreme Court.

So what's to prevent wholesale Eminent Domain of Prop 13 protected homes under this pretext?

If the incumbent residents are being taxed at...say....what the house was worth in 1978, why not "compensate" them ONLY for that value, regardless of the actual 2018 open market value? If a house is paying an assessed value of....say $95k, then use $95k as the "Fair Value" amount of compensation. The fact that its open market value is 575k would be irrelevant.

Then re-sell it a-la FHA to the Millenials for maybe a 20% markup (i.e. 105k, give or take), which would be the SocioEconomic coup OF the Millenium inasmuch as it would be a stunning end-run around the Market.

Of course those same said homeowners would rightly be horrified at such a brazen money grab and equity theft.


So what would happen to them? Well, they'd be pretty much "cheet outta luck" and would have to eat that loss and move, and buy something somewhere else AT the full open market price as they would have no protections and programs; they already "got theirs" through decades of low taxes.

-While at the same time, the Millenials would rabidly salivate for such a prospect.

You do realize that there are no home owners paying tax on the 1978 value in 2018???

Say you bought a home in 1978 and this was your base year... if you did nothing... expect a 2% Prop 13 increase each year... which is more than 40 years x 2% because as the value increases the 2% is based on the already increased value...

Also... not a single property in California that doesn't come with voter approved assessments on top of the Prop 13 statewide assessment.

As the New Kid on the block in a neighborhood of 50+ year home owners it strikes me odd that people would actually advocate the wholesale taking of homes... the senior sellers of my home paid $1200 the year I bought and it went to $8800... but the senior sellers also paid 30 years of bonds for infrastructure that I get to enjoy simply by buying their home...

Be careful for with luck... you too will be old someday.

[Des-Lab]

Originally Posted by Ultrarunner

You do realize that there are no home owners paying tax on the 1978 value in 2018???


Also... not a single property in California that doesn't come with voter approved assessments on top of the Prop 13 statewide assessment.

it strikes me odd that people would actually advocate the wholesale taking of homes

I think my overall point was-or should have been clear. Yes, I know that "all" homes are protected one way or another by Prop 13. I used the numbers I did as an oversimplification.

And no. I'm not advocating this either. Only stating my surprise that no one has tried it yet considering all of the kvetching that the Millennials are infamously known for.

[Ultrarunner]

For decades California had a system in place that accomplished the objective... the Home Owner Exemption.


The Home Owner Exemption of $7000 meant something when a modest home in California cost 10 to 12,000.... it only applied to owner occupied homes and if you were fortunate to own a very expensive home... you still had a modest savings but much smaller in proportion.

The legislature failed to act... even indexing for inflation was too much.

Combine that with the Serrano Decision mandating the State take over Public School funding and away from local communities made the situation ripe for Tax Payers to revolt... and it was a revolt... one given no chance to succeed as every group in the State was against it... Teachers, Fire Fighters, Police, Gov Workers, Construction, Nurses, Doctors, etc... all came out against it.

Not until the 11th hour did the State put a competing measure on the ballot which lost....

California has almost every tax known to man... at least California voters provided a little predictability when it comes to property taxes.... for which, I am forever grateful...

[ryanst530]

Originally Posted by CaliRestoration

Buying a primary home is not an investment. It's forced savings and a place to live. Nothing more. I say this as someone who actually owns multiple investment properties. The majority of people buy homes using a 30 year note, the amount of interest they end up paying dilutes the "investment" part of the equation pretty badly.

Yes it's generally better than renting in the long term but "renting" is not an investment vehicle, not a valid comparison.

It sounds like we're on the same page then. I was referring to buying vs. renting more from an net cost POV.

Clearly relying on a primary residence to grow wealth is not a good strategy.

[brown_dog_us]

Originally Posted by CaliRestoration

Buying a primary home is not an investment. It's forced savings and a place to live. Nothing more. I say this as someone who actually owns multiple investment properties. The majority of people buy homes using a 30 year note, the amount of interest they end up paying dilutes the "investment" part of the equation pretty badly.

I have invested in real estate and developed real estate for my entire adult life, and I look at every real estate purchase as an investment. When buying my personal residence I consider location, demographics, schools, value I can add through remodeling, and financing just like I do on any other property. I have a feeling you do the same.

[CaliRestoration]

Originally Posted by brown_dog_us

I have invested in real estate and developed real estate for my entire adult life, and I look at every real estate purchase as an investment. When buying my personal residence I consider location, demographics, schools, value I can add through remodeling, and financing just like I do on any other property. I have a feeling you do the same.

Sure, you look for the best value for your money, but you consider you primary home an investment vehicle? There are far better places to put money if you're looking simply for an investment. As a form of forced savings, and a place to live, it's great. Pure investment? Not good at all.

That's the problem with housing, and how the housing crisis in general collapsed upon itself, too many people see their primary home in terms of an investment (let's be honest, sometimes pure speculation), and as the past decade showed us, it got lots of people in trouble.

[CaliRestoration]

Originally Posted by Des-Lab

I think my overall point was-or should have been clear. Yes, I know that "all" homes are protected one way or another by Prop 13. I used the numbers I did as an oversimplification.

And no. I'm not advocating this either. Only stating my surprise that no one has tried it yet considering all of the kvetching that the Millennials are infamously known for.

Oh they will. Once Newsom takes office in California, and he implements "California Care for All (including illegal aliens)", Prop 13 is going to get a full frontal assault from Dems, and then the flood gates will be open.

I'm honestly considering selling off every single property I own in California if Newsom implements California Care for All, because it will lead to some huge increases in taxation. It simply won't be profitable to stay in the state (compared to other states) if voters put Newsom into office.

[LuvSouthOC]

Originally Posted by CaliRestoration

Oh they will. Once Newsom takes office in California, and he implements "California Care for All (including illegal aliens)", Prop 13 is going to get a full frontal assault from Dems, and then the flood gates will be open.

I'm honestly considering selling off every single property I own in California if Newsom implements California Care for All, because it will lead to some huge increases in taxation. It simply won't be profitable to stay in the state (compared to other states) if voters put Newsom into office.

Which in turn will also lower property prices here.

[LuvSouthOC]

Originally Posted by CDBS

Which in turn will increase NOI yield

What on earth is your point? Do you know what NOI means and how it is calculated? NOI makes no sense as it fails to take into consideration oher expenses, including higher taxes.

[payutenyodagimas]

Originally Posted by Des-Lab

What

If the incumbent residents are being taxed at...say....what the house was worth in 1978, why not "compensate" them ONLY for that value, regardless of the actual 2018 open market value? If a house is paying an assessed value of....say $95k, then use $95k as the "Fair Value" amount of compensation. The fact that its open market value is 575k would be irrelevant.

this is the law on expropriation in CA

"At the present market value, as determined by independent licensed appraisers."

and the US Constitution provides:

No person shall...be deprived of[/b] life, liberty, or property, without due process of law

so there, before they get your property, there must be due process and in CA they have to pay you MV before they expropriate it. thats the law