[yuan43]

The recipe for what Santa Cruz is experiencing seems to be:

1. Locate the city in a geographically isolated, but beautiful area close to a major employment hub.

2. Institute strong anti-growth policies.

3. Invite a UC into town.

4. Allow the UC to expand without the matching requirement to build one market-rate housing unit per admitted student.

5. Wait a few decades.

What's great about this is how everyone is trying to get something for nothing. The students are trying to get a "UC" brand without the highly-selective entry requirements of other UCs, and largely bringing in loans to pay for it. The university is growing the student population without building sufficient student housing. Property owners benefit from skyrocketing values without experiencing the pain of finding a place to live, or proportionally exploding property taxes. The city benefits from the money the students bring with them in the form of debt.

I suspect this process would go into reverse rather quickly by taking a single step. Cut the federal loans program by 50%, then 10% per year for every year thereafter.

For extra bang, repeal Proposition 13.

[vineyardmike]

I mostly agree with your sentiment, but I don’t think you’re being very fair to students, and i don’t think this issue is particularly about the students. (and I’m not convinced Prop13 needs to be repealed to solve problems). Students and loans are a different issue and it seems cruel to label them as wannabe UC students who aren’t good enough. All UCs are respectable.

I think this issue can be generalized a lot…

1. Locate a city with geographic limits.

2. Institute anti-growth policies.

3. Invite anything that may attract more people into town.

4. Allow 3 to continue/repeat without an increase in market rate housing.

5. Wait.

6. Landlords profit

Prop 13 has a good goal - prevent property tax increases from displacing long term residents. If you allow growth in housing supply then this can be a good thing, but the incentives ruin it. A balanced law or requirement that requires more housing to maintain prop13 would likely solve this mismatched incentive issue (if you vote against more housing, you could experience cost increases). Maybe tack a “breakpoint” in tax stability to rent-rates-beyond-inflation stability.

[rcpt]

Since 1977 California has had the California Tax Postponement Program to protect low income seniors from the economy. If you're a low income senior and own your house in California you can defer property taxes indefinitely so that no matter what happens to housing prices you'll never feel pressured to move. Several states have something similar (eg. NJ senior freeze) but I think California is the most aggressive.

Prop 13 is wholly unnecessary. It could be removed entirely overnight and grandma wouldn't need to pay a dime.