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My views on Proposition 13 are well known - equal parts envy at being too young to have had an early spot in the Ponzi and anger at the relative lack of options engendered by the combination of my inherent sense of value and present housing prices.
But in considering the present situation, another interesting angle has come up:
http://maps.live.com/default.aspx?v=2&FORM=LMLTCP&cp=pmjsdk54xxhm&style=b&lvl=2&tilt=-90&dir=0&alt=-1000&scene=31508778&phx=0&phy=0&phscl=1&encType=1
Check out the house at the bottom of the photo. Now compare with the house at the top (right).
The house at the bottom of the photo is a Prop. 13 baby. The house at the top right is what the Prop. 13 baby used to be.
One trick with the Prop. 13 valuation is that add-ons don't bring about a complete reassessment of the house. Thus the 6 bedroom, 3 bathroom house on the bottom right has a property tax of $1,329/year.
And the property tax on the 2 bedroom, 1 bathroom, 990 sq. ft.?
$6,937/year.
Property 1 (6/3): bought for $29,000 in 1972
Property 2 (2/1): sold in 7/2008 for $665,000
Because the owners are not high income; 3 generations are now living there.
But consider what this means to the overall market: even beyond the McMansions being converted into multiple family housing, you have a permanent dynamic where future generations in lower income Prop. 13 families don't ever buy a house.
And that house itself is never going to sell - the sides of the building now are basically touching the property edges. Who's going to buy what is basically an apartment building in the suburbs? In the meantime these virtual apartments also affect the 'quality of life' in the neighborhood - kind of a self imposed housing project.
How's that for starving the plankton?
Edit: corrected property tax paid. Added 2 bedroom property tax info. Added last sale info.
But in considering the present situation, another interesting angle has come up:
http://maps.live.com/default.aspx?v=2&FORM=LMLTCP&cp=pmjsdk54xxhm&style=b&lvl=2&tilt=-90&dir=0&alt=-1000&scene=31508778&phx=0&phy=0&phscl=1&encType=1
Check out the house at the bottom of the photo. Now compare with the house at the top (right).
The house at the bottom of the photo is a Prop. 13 baby. The house at the top right is what the Prop. 13 baby used to be.
One trick with the Prop. 13 valuation is that add-ons don't bring about a complete reassessment of the house. Thus the 6 bedroom, 3 bathroom house on the bottom right has a property tax of $1,329/year.
And the property tax on the 2 bedroom, 1 bathroom, 990 sq. ft.?
$6,937/year.
Property 1 (6/3): bought for $29,000 in 1972
Property 2 (2/1): sold in 7/2008 for $665,000
Because the owners are not high income; 3 generations are now living there.
But consider what this means to the overall market: even beyond the McMansions being converted into multiple family housing, you have a permanent dynamic where future generations in lower income Prop. 13 families don't ever buy a house.
And that house itself is never going to sell - the sides of the building now are basically touching the property edges. Who's going to buy what is basically an apartment building in the suburbs? In the meantime these virtual apartments also affect the 'quality of life' in the neighborhood - kind of a self imposed housing project.
How's that for starving the plankton?
Edit: corrected property tax paid. Added 2 bedroom property tax info. Added last sale info.