It was passed as property tax reform 45 years ago this month.
But Proposition 13, in reality, is California’s most effective mass affordable housing tool.
That’s why it is perplexing politicians that like to say they’re progressive have labored non-stop since June 6, 1978 to gut or eliminate it.
Proposition 13 did two basic things.
*It capped the most property assessments can increase each year to 2 percent unless the property is sold. When that happens, the assessment is reset at its market value.
*It also limited overall property taxes to 1 percent of the assessed value.
That cap doesn’t prevent voters from authorizing property tax assessments for bonds for schools and such as well as community facilities district on top of the 1 percent cap.
So how is Proposition 13 an affordable housing measure?
It was the core premise of the ballot measure.
People were literally being financially squeezed to the point they couldn’t afford to keep their homes.
It was framed as property tax reform because the premise of a property tax is to fund government.
But if it is viewed in its entirety and not just how it benefits government, it is as much an affordable housing measure as it is a property tax measure.
It is why it is disingenuous for those wanting to gut Proposition 13 to argue it benefits the “well to do.”
Try telling the lady in her 80s who resides about 1½ blocks from me and relies primarily on her Social Security check. She lives in a home that the mortgage has been paid off that she’s “well to do.”
Her tax bill — including add-ons such as school bond measures — is S1,350 a year.
A similar sized home down the street sold for $350,000 in 2021.
Pre-Proposition 13, that would have meant her property assessment would be adjusted to match the new market value of similar homes within a specific distance.
That means her tax bill today would be in excess of $3,500, and not $1,350.
A $2,000 hit a year from someone living primarily on Social Security clearly would make their housing unaffordable.
I bought my home in 2008 for $189,000.
That made my initial tax bill in 2008 — minus add-ons such as bind measures — $1,890
Today, my basic tax bill is $2,232.
Various real estate websites supposedly contend my home now has a market value of $389,736.
If Proposition 13 wasn’t in place , and my property tax reflected market sales around me that the alleged $389,736 value is based on, my basic property tax bill would go from $2,232 to $3,897 a year.
This is where those hell-bent against the measure make the mistake to assume that support of Proposition 13 is waning with successive generations.
The best example to explain how shortsighted their view of property taxes are can be found in the neighborhoods that are less than 8 years old to the south of Woodard Park in Manteca.
It is where several large tract homes recently sold for $1.1 million that had been purchased for just under $800,000 three years prior.
If Proposition 13 wasn’t in place, similar homes based on square footage and market values would have meant someone that had no intention of selling and had paid $800,000 for their home would have seen their basic property tax bill go from $8.000 to $11,000 a year.
Granted, most new home buyers today in Manteca are not yet at their likely earnings peak. But a $3,000 a year hit is still a $3,000 a year hit. It reflects a $250 month increase in housing costs.
As such, Proposition 13 protects buyers of homes that are much more expensive today from the ravage of massive property tax bill jumps just as it does those that bought homes 15, 30 or 40 years ago.
Housing affordability is determined not just on the price of the home but also property taxes and additional fees such as Mello-Roos taxes and property insurance.
As for Proportion 13 singlehandedly supposedly destroying the California dream by undermining state government funding especially when it comes to schools, I can sell you Yosemite National Park and toss in the Stanislaus National Forest as a sweetener for 15 recyclable aluminum soda cans.
In inflation-adjusted dollars, California is spending 150 percent more today on schools than it was in 1978.
And that’s not just because there are more students.
That’s on a per student spending.
The non-stop handwringing of folks convinced that at least some part of every California’s ills — perceived and otherwise – that includes the inability to get on top of the homeless problem can be somehow traced back to the passage of Proportion 13 Is laughable at best.
California did not go on a forced spending diet because of Proposition 13.
The California Legislature worked its way around that quite nicely, thank you.
Gut Proposition 13 and you will make the housing crisis worse, not better.
And it won’t just be a squeeze placed on older homeowners or those that bought in newer neighbors where sale prices keep escalating year after year.
Urban areas big and small across California have a lot of low-income neighborhoods.
There are homeowners in such areas. Most, just like California as a whole, are minorities.
They don’t own McMansions.
They do not have homes with marble backsplashes in the kitchen.
Typically, they are much older homes often predating 1950.
But they are still a home.
And there are low-income neighborhoods in the path of gentrification.
That is especially true of the San Francisco Bay Area where available land for new housing is rare.
Many embrace what happens with gentrification as urban renewal.
But as property values start growing and if the safeguard that Proposition 13 process didn’t exist plus the pre-1978 tax assessment rules were still in place, a lot of people would be forced out of affordable housing.
To understand thoroughly how little “progressives” or those in charge of major media and state government think of Proposition 13 — this month marks the 45th anniversary of its passage.
When it was passed in 1978, every form of media big and small — as well as politicians of every stripe — described it in tectonic terms .
And it certainly was tectonic.
Yet, the usual milestone coverage of tectonic events like Proposition 13 that are marched out like clockwork in increments every five years has not occurred.
The reason is simple.
The power structure has no reason to celebrate a clear and continuing defeat of how they want the world to be.
Proposition 13 is one of the few ballot measures that those in power haven’t been able to undo with legal challenges or to dilute its intent with bureaucratic rulings.
Yes, they did find replacement income with fees and other taxes.
But those fees, and other taxes, tend to be in discretionary spending for the most part.
People need a house to live in.
It is why Proposition 13, in reality, is California’s most successful affordable housing endeavor in the state’s history.