Only now, in the end, do you understand. (bankrupt, creditors, interest)

[Ultrarunner]

I was way to young to have voted for Prop 13... I do remember my teacher and my Uncle both received rent reductions several months after it passed and both were quite happy about it.

My teacher was very vocal in her support... her landlord put through two back to back substantial rent increases and enclosed a copy of the property tax bills as justification.

Our long time neighbors were speaking with my father at the dinner table... they were both retired and told us they never thought they would leave California... but, they had to since taxes were going up so much.

The legislature had many opportunities to address the problem... by far the simplest would have been increasing the home owner exemption which really meant something years ago and now is almost insignificant.

The other thing which really got folks was the Serrano Decision that allowed the State to take away local school tax dollars... it was one thing to pay taxes knowing they were going to local schools and quite another paying and having the State spend them.

California had a very good education system under the old system.

I've lived most of my life in Oakland CA... my father and grandmother were also born here... Oakland, pre and post Prop 13 has never been known as a low property tax city.

It costs me about 50% more in property tax to live in Oakland then if I were living 15 minutes away in Castro Valley. The older I get, the more I become cognizant of just where my money goes.

When my brother moved to Castro Valley, his car and home owner insurance dropped significantly, crime was only a fraction, schools are much better, (The new additions to the High School are magnificent, as is the new library and downtown renovations...) AND his property tax is about 1.1% vs the 1.6% I pay.

If money is the answer, Oakland schools should be at the top and crime should be crime should be low...

Castro Valley has no industrial tax base, no port, no corporate world headquarters and yet the comparison is stark...

I bought my home in 2005 and it has been a constant battle with the Assessor the last 4 years... Everyone that has bought since 2008 pays only a fraction of what I pay... and my home is the oldest, smallest in the area.

The Assessor instituted a filing fee and justified it because the office was flooded with appeals... well, it is no wonder when property is way over valued... Assessor also has 2 full years to make a decision, meanwhile, I must pay the full amounts billed

There are few things that I am as passionate about as the roof over my head... I pay a lot in taxes under Prop 13 and getting rid of it would be financial suicide.

In frustration, I have an offer in on the home next to me... it is twice as big, 10 years old instead of 55 years old, has solar and many nice features and is seismically up to date... the list price is 100k less then what my home is assessed for... so the plan is to move next door and sell my home entirely driven by property taxes... because my home will have a sales price much less than I paid for it...

[gwynedd1]

Its not an easy answer and I know its sounds insane to allow real estate taxes to rise. However it is a good idea to tax the land values at least to the point where wages and industry are not taxed which would offset the burden. You would I am sure have an easier time not having to pay income or sales taxes.

The other thing that can be done is to cut off easy credit. Wages for people who live there should be the price support, not easy credit and absentee owners. 25% down would have done wonders for controlling prices. California could also have tax rules for those who occupy the space, certain exemptions etc. Hot money buying up real estate from out of state or over seas is not a good idea. More or less tax policy can act like a capital control for hot money.

[thrillobyte]

I think all of this is being engineered by people in the legislature as a prelude to taking Prop 13 to the Supreme Court to have it overturned.

[Ultrarunner]

Originally Posted by thrillobyte

I think all of this is being engineered by people in the legislature as a prelude to taking Prop 13 to the Supreme Court to have it overturned.

They could try again... the US Supreme Court did rule a tax based on acquisition price did not violate equal protection... so Prop 13 survived.

Don't have the exact ruling and I'm not a lawyer...

[Malloric]

Originally Posted by thrillobyte

I think all of this is being engineered by people in the legislature as a prelude to taking Prop 13 to the Supreme Court to have it overturned.

Ironically, that would be the same people who try to attract their voter base by complaining about activist judges. Nothin' beats a steamin' mug o' hypocrisy in the morning.

[CK78]

Originally Posted by Ultrarunner

I was way to young to have voted for Prop 13... I do remember my teacher and my Uncle both received rent reductions several months after it passed and both were quite happy about it.

My teacher was very vocal in her support... her landlord put through two back to back substantial rent increases and enclosed a copy of the property tax bills as justification.

Our long time neighbors were speaking with my father at the dinner table... they were both retired and told us they never thought they would leave California... but, they had to since taxes were going up so much.

The legislature had many opportunities to address the problem... by far the simplest would have been increasing the home owner exemption which really meant something years ago and now is almost insignificant.

The other thing which really got folks was the Serrano Decision that allowed the State to take away local school tax dollars... it was one thing to pay taxes knowing they were going to local schools and quite another paying and having the State spend them.

California had a very good education system under the old system.

I've lived most of my life in Oakland CA... my father and grandmother were also born here... Oakland, pre and post Prop 13 has never been known as a low property tax city.

It costs me about 50% more in property tax to live in Oakland then if I were living 15 minutes away in Castro Valley. The older I get, the more I become cognizant of just where my money goes.

When my brother moved to Castro Valley, his car and home owner insurance dropped significantly, crime was only a fraction, schools are much better, (The new additions to the High School are magnificent, as is the new library and downtown renovations...) AND his property tax is about 1.1% vs the 1.6% I pay.

If money is the answer, Oakland schools should be at the top and crime should be crime should be low...

Castro Valley has no industrial tax base, no port, no corporate world headquarters and yet the comparison is stark...

I bought my home in 2005 and it has been a constant battle with the Assessor the last 4 years... Everyone that has bought since 2008 pays only a fraction of what I pay... and my home is the oldest, smallest in the area.

The Assessor instituted a filing fee and justified it because the office was flooded with appeals... well, it is no wonder when property is way over valued... Assessor also has 2 full years to make a decision, meanwhile, I must pay the full amounts billed

There are few things that I am as passionate about as the roof over my head... I pay a lot in taxes under Prop 13 and getting rid of it would be financial suicide.

In frustration, I have an offer in on the home next to me... it is twice as big, 10 years old instead of 55 years old, has solar and many nice features and is seismically up to date... the list price is 100k less then what my home is assessed for... so the plan is to move next door and sell my home entirely driven by property taxes... because my home will have a sales price much less than I paid for it...

"My teacher was very vocal in her support... her landlord put through two back to back substantial rent increases and enclosed a copy of the property tax bills as justification."

Whoa!!!

You must not have been on city-data long.

Haven't you heard?

People who rent don't pay property taxes. The landlords are very giving people and pick up the tab themselves.

[gwynedd1]

Originally Posted by CK78

"My teacher was very vocal in her support... her landlord put through two back to back substantial rent increases and enclosed a copy of the property tax bills as justification."

Whoa!!!

You must not have been on city-data long.

Haven't you heard?

People who rent don't pay property taxes. The landlords are very giving people and pick up the tab themselves.

They do pick up the tabs themselves because land lord cannot set the price if its a land value tax. The alternative competition sets the price. A coffee monopolist cannot charge more than the price tea competition sets. Thus if I will switch to tea when coffee is $2, the coffee seller cannot pass on a coffee tax for example.

So again its a myth that all taxes can be passed on. Now if California jacks up prices across the board then yes, its a dead weight tax. The tax must discriminate based on land value, but specifically not on building value to be effective for public purpose.

In the market the land lord is going to charge the market price based on the demand so again what makes you think they are saints in either direction? They will pass on taxes they are able and they will charge as much for the space as possible. The low property tax will save you nothing since the person who wants to rent your space will set the price. Problem is when credit is loose it all goes to the banks anyway so why not make the tax base land rather than pay out land values as interest to creditors? Its literally an economic vassal state.

[Ultrarunner]

There are plenty of Mom and Pop landlords that seldom if ever raise the rent on good tenants...

I have some that have not had a rent increase since 2001... they treat the property as their own and are just nice to be around.

We do go to market when units become available... it just doesn't happen that often.

A good tenant makes life so much easier and a bad tenant can make a landlord swear-off rental property forever!

My city has passed fees that are pass throughs at 50%... tenants are often incensed since the fee is not mentioned in the Rental Agreements when it was enacted... I have never charged my tenants their half... I have provided them copies of the ordinance.

[gwynedd1]

Originally Posted by Ultrarunner

There are plenty of Mom and Pop landlords that seldom if ever raise the rent on good tenants...

I have some that have not had a rent increase since 2001... they treat the property as their own and are just nice to be around.

We do go to market when units become available... it just doesn't happen that often.

A good tenant makes life so much easier and a bad tenant can make a landlord swear-off rental property forever!

My city has passed fees that are pass throughs at 50%... tenants are often incensed since the fee is not mentioned in the Rental Agreements when it was enacted... I have never charged my tenants their half... I have provided them copies of the ordinance.

Well again what are the options? For the most part rentals are going to be larger commercial operations. If you freeze property taxes then a huge wealth benefit will go to the land owner. Also, as I described, they will also tend to encourage any amenity in the area which by definition is unfunded by them while increasing property values.

It all sounds so heart breaking about the Ma & Pa land owners until you compare it to the alternative which is to levy a tax on the people that work and have to pay for the benefit through rent. Worst of all is the leveraged buyout which turns the entire property value into an interest payment exported from the state.

Ground rent can be said to be the least bad tax. So there is a downside and it should not be the only tool. Other parts of the answer are the ridiculous mortgage deduction that drives up the price. Large down payments like 25% down should be required. Laws on absentee ownership, easy credit etc. all matter. You just can't have property values be what ever a bank is willing to lend against it. It will become what the state now is, the land of negative equity and unemployment.



Its not accident that the unemployment is highest where the bubble was biggest.

Unemployment Rates for States

Business cannot afford to pay high prices for the means of producing its product. How can you sell something cheap when the people you hire need to pay $2,500 a month in rent? All those people need to pay for other people's services with the same overhead. In the end it undermines the value of the property all the same. So what is the point ultimately? Wealth is created by human industry and that needs the most favorable tax treatment if we expect to see it thrive.

[Ultrarunner]

Seems there are plenty willing to buy... at least in the SF Bay Area.

Multiple offers are back in fashion and overbids of 20% or more are not unusual.

Word is interest rates are low and inflation fears are driving the trend.

Alameda County Unemployment continues to drop.

The Bank Owned Home next to me has been vacant since February... the previous owner had gone almost 2 years without a payment to Wells Fargo while trying to get a loan mod.

In the end, Wells paid him 25k and he took the money and left.

I've been watering and keeping an eye on the place... the day it hit the market my little street in Oakland was so full of cars it was hard to navigate... after 10 days the bank received 12 offers with all the paperwork in proper order... then the bank put out a request for highest and best from the 12...

Bank also disregarded local ordinances regarding sewer compliance certificate and HOA documents... listing was full of errors...

All I can say there are people willing, ready and able to buy.

There must be a reason California has lost many of the Big Banks like Bank of America?

On the other hand... Oakland is full of small rental properties... a 3 unit that sold for 600k is offered for 210k... seems like plenty of opportunity for those wanting to get their feet wet with Oakland Income Property plus various government programs to assist.