Real Estate Industry Wants to Expand Prop. 13 Property Tax Breaks

A proposed ballot initiative in California would extend the property tax limits offered by Proposition 13 as a lifetime benefit to homeowners over age 55 or severely disabled—even if they move to a new home in another part of the state.

2 minute read

December 11, 2017, 2:00 PM PST

By James Brasuell @CasualBrasuell


Full House Painted Ladies

Erik Söderström / Flickr

The idea behind a proposed ballot initiative in the state of California would be to provide a property tax incentive to get longtime homeowners to move from their homes. Currently, the property tax cap offers a strong incentive for staying put as the value of homes around California skyrocket.

As reported by Katy Murphy, a ballot initiative circulated for signatures by the California Association of Realtors would "expand Proposition 13, the landmark constitutional amendment passed by voters in 1978 that has kept homeowners’ property taxes artificially low over the years, even as their home values have doubled or even quadrupled. Under the initiative, homeowners who are over 55 or severely disabled would be able to keep those lower tax obligations for life, regardless of how many times they move, as long as they stay in California."

Proposition 13 is already widely blamed for struggles to deliver services at every level of government in the state of California, as well as the state's worsening economic segregation (here's a link to a thorough explanation of Prop 13 and its effects, if you're not already familiar). This statewide ballot initiative is not designed to solve those problems, and more debate will surely follow about whether the initiative will improve or exacerbate those challenges, though a report from the California Legislative Analyst’s Office "estimates the annual losses in tax revenue from giving older owners a break would grow to $1 billion or more for schools and at least $1 billion for cities and counties," reports Murphy. Yes, "that’s even after taking into account the higher taxes paid by those buyers who would presumably purchase some of the new inventory."

This ballot initiative is designed to get older homeowners to decamp from their homes and create more real estate transactions. Alex Creel, a lobbyist for the California Association of Realtors, is quoted directly in the article explaining the state of the market: "A lot of older people — and I’m one of those older people, by the way — are feeling locked into their properties....They’re holding onto their property not because they like their house, but because they like their taxes."

The initiative would need 585,000 voter signatures by late March to place the measure on the November 2018 ballot.

Monday, December 11, 2017 in The Mercury News

Sweeping view of Portland, Oregon with Mt. Hood in background against sunset sky.

Oregon Passes Exemption to Urban Growth Boundary

Cities have a one-time chance to acquire new land for development in a bid to increase housing supply and affordability.

March 12, 2024 - Housing Wire

Aerial view of green roofs with plants in Sydney, Australia.

Where Urban Design Is Headed in 2024

A forecast of likely trends in urban design and architecture.

March 10, 2024 - Daily Journal of Commerce

Cobblestone street with streetcar line, row of vintage streetlights on left, and colorful restaurant and shop awnings on right on River Street in Savannah, Georgia.

Savannah: A City of Planning Contrasts

From a human-scales, plaza-anchored grid to suburban sprawl, the oldest planned city in the United States has seen wildly different development patterns.

March 12, 2024 - Strong Towns

Aerial View of Chuckanut Drive and the Blanchard Bridge in the Skagit Valley.

Washington Tribes Receive Resilience Funding

The 28 grants support projects including relocation efforts as coastal communities face the growing impacts of climate change.

7 hours ago - The Seattle Times

Historic buildings in downtown Los Angeles with large "Pan American Lofts" sign on side of building.

Adaptive Reuse Bills Introduced in California Assembly

The legislation would expand eligibility for economic incentives and let cities loosen regulations to allow for more building conversions.

March 18 - Beverly Press

View from above of swan-shaped paddleboats with lights on around artesian fountain in Echo Park Lake with downtown Los Angeles skylien in background at twilight.

LA's Top Parks, Ranked

TimeOut just released its list of the top 26 parks in the L.A. area, which is home to some of the best green spaces around.

March 18 - TimeOut

News from HUD User

HUD's Office of Policy Development and Research

Call for Speakers

Mpact Transit + Community

New Updates on PD&R Edge

HUD's Office of Policy Development and Research

Urban Design for Planners 1: Software Tools

This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.

Planning for Universal Design

Learn the tools for implementing Universal Design in planning regulations.