Comment by carefree-bob
2 days ago
Some things to keep in mind:
1. There are many states such as New Jersey or Texas that do not have Prop 13 style laws and their seniors are not suffering excessively. However housing is much more affordable for younger people in those states.
2. States that freeze property taxes have more volatility and boom/bust cycles. You are trading being shielded from tax volatility for increasing economy-wide volatilty and asset price volatility, so the gains are not as high as you think, and seniors are exposed to this volatility indirectly.
3. There are more targeted relief mechanisms available, such as deferring the tax liability until the owner dies for senior owners.
As someone from NJ...you think seniors and young people don't have affordability problems, especially wrt housing here, in the 5th most expensive state to buy a house? (California, Hawaii, Massachusetts, Washington, New Jersey, in that order, according to redfin, if you're going by house cost to income ratio, NJ is 6th)
https://www.redfin.com/blog/most-expensive-states-to-buy-a-h...
> you think seniors and young people don't have affordability problems?
Of course I don't think that, which is why I didn't say it. That would be a silly thing to write. What is the advantage for you in mischaracterizing what someone wrote and then expending effort to "correct the record" for a statement no one made?
You created a strawman and then knocked it down.
What I actually said: "New Jersey or Texas that do not have Prop 13 style laws and their seniors are not suffering excessively. However housing is much more affordable for younger people in those states."
Both of these statements are demonstrably true. Let's look at the data.
So housing in NJ is more affordable than in CA.
Now, let's look specifically at seniors.
In California:
In New Jersey:
So we see that across the board, seniors in NJ are not cost burdened more than in California, and that in fact they are cost burdened a bit less.
Therefore if your solution is to look to Prop 13 style fixes to address cost burdens for either seniors or the general population, then you are not making a data based argument, and in fact the data goes against you, because there is no excess cost burden in states without these property tax freezes.
> So housing in NJ is more affordable than in CA.
I don't know if it changes the result significantly, but remember the NJ has very high property taxes, more than double of California. So mortgage cost alone does not paint the full picture.
This is more significant for seniors, who likely have a paid-off home so their main expense is property tax. So being a fixed-income senior with a home is likely more affordable in California than in NJ. The worst thing after retirement is cost increases when you no longer have a salary that goes up with inflation.
Your exact words were "housing is much more affordable for younger people in those states", which, even by the numbers you have cited, is not correct. More affordable? Sure, we are number 5 or 6, not number 1. Much more affordable? Come on now.
And no, I don't think prop 13 style laws would be helpful, it would just create more problems, as it has in California.
Many states have prop 13 style laws, and they’re fine. The key difference is that they kick in at retirement age.
Kicking in at retirement age plus limiting it to a single owner occupied property is the key, IMO.
In California, it applies to multiple properties, you can pass it down to your children and it applies to property owned by businesses both commercial and industrial, which is absolutely crazy.
California has basically created a class of landed gentry.