That's not all of it, either. Older buyers have gotten the lionshare of their wealth from housing appreciation by preventing new housing and pay a lower tax burden than new buyers due to Prop 13. There's a reason that when it made it to the supreme court Justice Stevens called it medeival and referred to entrenched owners as Squires.
"During the two past decades, California property owners have enjoyed extraordinary prosperity. As the State's population has mushroomed, so has the value of its real estate. Between 1976 and 1986 alone, the total assessed value of California property subject to property taxation increased tenfold. Simply put, those who invested in California real estate in the 1970s are among the most fortunate capitalists in the world.Proposition 13 has provided these successful investors with a tremendous windfall and, in doing so, has created severe inequities in California's property tax scheme. These property owners (hereinafter "the Squires) are
guaranteed that, so long as they retain their property and do not improve it, their taxes will not increase more than 2% in any given year. As a direct result of this windfall for the Squires, later purchasers must pay far more than their fair share of property taxes." https://www.law.cornell.edu/supct/html/90-1912.ZD.html
mullingitover|3 years ago
This might be one of the craziest parts of it, and it makes me understand how a lot of neighborhoods in California just look sort of...dumpy. The system actively discourages you from improving a property!
My dream is to see the state property tax code flipped to land value tax. No penalties for improving the property, just purely tax the value of the land and penalize people who park their vacant lots for year after year.
la64710|3 years ago