Admit I know nothing about California real estate, but if the "current residents own multiple homes for investment", it must mean they are getting a good return on that investment or they wouldn't bother, and it must mean they are getting this return by renting to people who need to rent. Now.... please explain to me....how does this reduce supply of housing for your new employees?
Because people generally want to buy homes (not rent) and there are not enough homes on the market, because there is no incentive to EVER sell, if you are locked into your property tax rate for effectively, forever.
There is an economic term for effectively freezing someone's costs to acquire an asset while the true costs go up.... can't remember but I think it is "siphoning"... the end result is almost always an exponential pricing curve for the remaining assets on the market. That is what we have in California for home ownership.
As to rentals, a bit of a different situation. We used to have a severe shortage of rentals in the tech bubble in the late 90s... foreign visas were extended from 60K - 200K for just one of the programs and most of the these visa holders wound up here. We needed more apts and a lot were built, also more office space was built. But homes for people to purchase were NOT built on available land, mostly because cities don't want to zone for housing due to the taxation issues- they can't make any revenue. This is called the "monetization of property"- also a direct result of prop 13, you can look that up on the web, it has been addressed by a lot of RE professionals. So lots of new office bldgs + new apts just adds more demand for homes.
Today with all the offshoring and the tech collapse the rental climate has also collapsed. So no new apts for awhiile.
Now, all of this might be an academic argument if we were a state in excellent fiscal shape. But with a 38 billion dollar deficit and looming tax increases like a tripling of car registration, some re-evaluation of these property tax laws is in order, imho. |
