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I’d much rather have a higher sales tax than property taxes. You could just have a higher statewide rate and fund local governments on a per capita basis. Paying money to the government just to be allowed to keep the home you own and live in just feels wrong. Furthermore it penalizes homeownership, which I would think a conservative state like Texas would want to promote. In my opinion any limitation of property taxes is good, so the deal struck today sounds fine by me.
Me too. A sales tax is the perfect example of a low, broad-based, flat tax. And unlike property or income tax, everyone pays, including tourists and visitors.
And generally a lower property tax rate means more home price appreciation, all else equal.
We have decades of evidence to conclude that Prop 13 was a horrible idea that benefited no one except for those who purchased a home in the 70s and 80s and early part of the 90s in California. To ask Texas to adopt a similar measure would just be repeating the disaster. I believe some reforms are needed, but going the prop 13 route is not the way.
Hogwash! Prop 13 benefits everyone buying a house now and in the past. No one but the top 1/2% of the nation could afford a house in any of the major metroplexes without it. Unless of course you think people would have no problem paying $25k-$30k a year in property taxes. You clearly don't know your history.
So let me clarify a few points from your statement.
Prop 13 is based on 1% of acquisition cost and a maximum increase of 2% per year. It came about due to a taxpayer revolt in the late 70's due to volatility with property taxes (the previous system was a very similar system to how Texas does things).
On average, 360k homes are sold each year in CA and taxes are reassessed at the current acquisition cost. Each one of those reassessed houses generates substantial new income from property tax to the tune of over $2 billion. So the notion that there isn't turn on houses isn't exactly true. In addition, Prop 19 was recently passed allowing people over the age of 55 to transfer their tax basis to a similar home in another part of the state. This of course, will encourage even more turnover (however children can no longer keep the complete property tax basis at death...there is a $1 million dollar exclusion if they choose to live in the house).
There are currently over 75,000 homes available in CA. One would have to ask is it home availability, or is it that people don't want to purchase homes at the listed prices or the areas they're in. And would building more reduce costs or is it really that the state is just a desirable place to live that is driving up costs?
In my opinion, Prop 13 is a favorable tax system versus what they have in Texas and the games they like to play with these exemptions. There's absolutely no need for it and it's the one thing CA does that is far superior to Texas.
As I've stated many times, one has more control over income tax than property tax (despite the close minded and intellectually rigid people that constantly cite their "it's a non-starter" mantra). And CA's system is better suited for people that want to remain in state and in their communities until death.
With that said, Dan Patrick (who I am not typically a fan of) got the Senate version with the $100k homestead exemption passed today, so good for him! The whole "I've got to have 100% tax compression" hogwash by Abbott was simply his way of keeping control (and I have less faith in him to do the right thing on tax rates, let alone what happens when they don't have a surplus?). The $100k exemption is at least something tangible that a homeowner can hang his hat on. I'm happy to live with this for now and glad they got this done.
There is no one 'single' reason that housing is expensive in California. There are multiple reasons, some government induced, others naturally induced. Geography, Demand, Building Code, Limited safe building areas, but prop 13 definitely had an effect on how many residential neighborhoods were built in comparison to industrial and commercial:
Yes, that isn't the only reason housing is expensive in California, but it certainly doesn't help having less residential zoning. Texas currently has aprox 130k homes on the market but even we are in the midst of a housing crisis by our standards atleast. California could have 300k homes on the market, but if they have 2 million people trying to move in at that given time, they still have a housing shortage. Of course, those numbers are completely hypothetical, but it is to state that anything that hinders housing availability while housing demand is high, will work in assisting to keep housing out of reach for the average person. Both Texas and California are large states with several large metro's as well, so it would stand to reason that both states would have more available housing in respective to the rest of the nation as well. I agree Prop 13 isn't the only reason that housing is expensive, but it can't be ignored that it does impact the amount of housing available.
Well, you didn't specifically address the points I made Camaro, but no worries. Like I said, I'm cool with what Patrick was able to do. And I think what CA has done with Prop 13 is a far superior system than what Texas has to offer solely because it gives homeowners predictability on what they'll pay on their property which was the reason it passed after taxpayers revolted. No one needs to play this guessing game and to deal with volatility. And the exemptions are really nothing more than a silly game that is completely unnecessary. It would be far better to have consistent system for the state. In addition, there is no housing shortage in CA or Texas for that matter (and people should stop saying that because it's factually incorrect). What there is, is a shortage of housing available at the prices people want to pay. There are always homes available for sale in all the major metroplexes in CA or TX and that has been the case forever. There are clearly not 2 million people trying to move in at any given time because if there were, and they were willing to pay market prices for homes, there would be zero available. There may be 2 million people wanting to buy houses at 1990 prices, but that's a completely different animal. You could take away any zoning restrictions right now and I doubt you'd see much change on housing prices. It's about the desirability to live in an area, which is influenced by things like weather, job availability and wages, and the other amenities that are offered. Most of these metroplexes are overcrowded as it is, so certain limitations aren't necessarily a bad thing for the quality of life of the current residents.
Last edited by blameyourself; 07-11-2023 at 05:05 AM..
Well, you didn't specifically address the points I made Camaro, but no worries. Like I said, I'm cool with what Patrick was able to do. And I think what CA has done with Prop 13 is a far superior system than what Texas has to offer solely because it gives homeowners predictability on what they'll pay on their property which was the reason it passed after taxpayers revolted. No one needs to play this guessing game and to deal with volatility. And the exemptions are really nothing more than a silly game that is completely unnecessary. It would be far better to have consistent system for the state. In addition, there is no housing shortage in CA or Texas for that matter (and people should stop saying that because it's factually incorrect). What there is, is a shortage of housing available at the prices people want to pay. There are always homes available for sale in all the major metroplexes in CA or TX and that has been the case forever. There are clearly not 2 million people trying to move in at any given time because if there were, and they were willing to pay market prices for homes, there would be zero available. There may be 2 million people wanting to buy houses at 1990 prices, but that's a completely different animal. You could take away any zoning restrictions right now and I doubt you'd see much change on housing prices. It's about the desirability to live in an area, which is influenced by things like weather, job availability and wages, and the other amenities that are offered. Most of these metroplexes are overcrowded as it is, so certain limitations aren't necessarily a bad thing for the quality of life of the current residents.
When people say there’s a housing shortage, they mean that as a shorthand for “homes in good school districts in low crime areas with jobs within a decent commuting distance are too expensive”. In California, despite there being plenty of housing, finding a home with all the above listed qualities for a decent price is quite difficult, particularly in LA or the Bay Area. No one is doubting the reasons for California’s desirability, and the fact that the tech and entertainment industries drive up house prices along with the cost of living there more generally, but I’d wait and see what impact SB 9 has on prices, because in many places in California there is not only opposition but legal obstacles to building out further, as well as geographical limits. The only option in many areas is to build up, and it hasn’t been long enough to tell of their efforts with that are working.
Me too. A sales tax is the perfect example of a low, broad-based, flat tax. And unlike property or income tax, everyone pays, including tourists and visitors.
And generally a lower property tax rate means more home price appreciation, all else equal.
Any tax cut is a good one in my book.
100% agree. I feel the property taxes are the one thing Texas gets wrong, and without them it’d be unstoppable.
When people say there’s a housing shortage, they mean that as a shorthand for “homes in good school districts in low crime areas with jobs within a decent commuting distance are too expensive”. In California, despite there being plenty of housing, finding a home with all the above listed qualities for a decent price is quite difficult, particularly in LA or the Bay Area. No one is doubting the reasons for California’s desirability, and the fact that the tech and entertainment industries drive up house prices along with the cost of living there more generally, but I’d wait and see what impact SB 9 has on prices, because in many places in California there is not only opposition but legal obstacles to building out further, as well as geographical limits. The only option in many areas is to build up, and it hasn’t been long enough to tell of their efforts with that are working.
Yes, and as much as I've heard the "building up" and more dense mantras, I have yet to find too many residents that are in favor of that (that's mostly just young professionals without a desire to raise a family at this time). It is a mantra spewed by those that advocate a "more is better" philosophy and blindly believe that not only will building to the moon reduce housing prices, but that it is preferred by people living there. In reality, most would tell you they would love for people to leave. And current residents will also tell you that the only thing that will do is increase more $1 million plus units without relieving affordability issues due to pent up demand.
As mentioned, saying there is a shortage is simply not accurate. It is simply a shortage of homes at prices people want to pay (which in turn are priced accordingly for school districts, crimes, and other factors you mentioned).
Last edited by blameyourself; 07-11-2023 at 07:45 AM..
Yes, and as much as I've heard the "building up" and more dense mantras, I have yet to find too many residents that are in favor of that. That is simply spewed by those that advocate a "more is better" philosophy and blindly believe that not only will building to the moon reduce housing prices, but that it is preferred by people living there. In reality, most would tell you they would love for people to leave. And current residents will also tell you that the only thing that will do is increase more $1 million plus units without relieving affordability issues due to pent up demand.
As mentioned, saying there is a shortage is simply not accurate. It is simply a shortage of homes at prices people want to pay (which in turn are priced accordingly for school districts, crimes, and other factors you mentioned).
I guess another option is to just improve the schools and lower crime in existing affordable areas. But I’ve yet to see a successful example of that anywhere, despite an abundance of good will. And I guarantee you schools in south central won’t be improving any time soon.
I guess another option is to just improve the schools and lower crime in existing affordable areas. But I’ve yet to see a successful example of that anywhere, despite an abundance of good will. And I guarantee you schools in south central won’t be improving any time soon.
The only problem with that are the powers to be in the education field are too lazy to put together any criteria that would grade teachers (they like to claim there's no metric and fall back on tenure which in no way determines quality). I can't imagine being on a job and not have goals or a way to judge how effective my work was. And without that, there's really no justification for a raise.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Prop 13 is too late for Texas. (Property taxes have been unaffordable for decades). Recent valuation increases have added to an already burdensome high property tax. Infrastructure needs increase with population + Texas has a very greedy school funding model (reliant on property tax assessment).. prop 13 would never work in Texas.
Consider the entire demographic (from kids, immigrants, wage earners, retirees). All have different infrastructure needs and tax implications. Fair taxes distribute the burden equally. Few states have achieved that. Polarized states can't. (zero income tax / zero sales tax / zero business tax states).
My 'other' no income tax state (WA) has been destroyed by CA real estate valuations (equity inflow). My property tax was <$3 / day, now is $48/ day on the same home, just 20 yrs older and need of repair. As a retiree (no pension), I haven't had income for 19 years. Getting a little thin. My Texas properties are high property taxes, but not nearly as burdensome as WA valuation and taxes.
Colorado is known as a 'fair tax' state, but has lots of taxes. Car registration is really expensive.
So... As a retiree... Need to have a SD domicile (one night per lifetime required), a MT LLC to own and register vehicles (no sales tax, no inspections), rent a home or apartment in a low cost area, get inexpensive healthcare done overseas.
As a wage earner... live and working an Income tax free state with high wages (AK, WY, WA). Or work in a war region (income tax free), housing is free too! Own investment RE in a fast growing market. Then... Early retire (age 35) to a low cost desirable area with no income tax (probably NE TN)
Lots of options.... If in Texas... Play the game for property tax exemption. Everything over a spec in size is a ranch! Just like the numerous TX counties (smaller size and population than some towns). Each county has to duplicate expensive services, as does every ISD. It's nuts, it's expensive, it's Texas. (Thus it will ALWAYS be done this way )
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