L.A. Country Clubs Taking More Than Their Share and Paying Less

Malcolm Gladwell argues that Los Angeles country clubs have used special carve outs as well as a legal argument that makes their owners legally immortal to dodge millions of dollars of property taxes.

Rents and home prices are going up around L.A. and the homeless population is ballooning. This makes the land that the many golf courses take up in and around Los Angeles all the more valuable. The city also lacks public green space and its parks lag behind those of other big cities. But California golf courses are not subject to taxes at the rate of their highest and best use, in part because of a Bob Hope-backed campaign to give their special interest group special treatment. But that's just the first piece of the tax dodge for Los Angeles area golf courses. Proposition 13 allows that properties owned since 1978 remain taxed at the same value they held in 1978 until 50 percent or more of their ownership changes hands.

When journalists pointed out that country clubs are continually turning over ownership, because they are owned by members who can leave or simply die, many of these courses should no longer be taxed at 1978 levels. But the city reasoned that as only small bits of ownership are replaced at a time, the overall ownership is not changed. Gladwell points out that this argument recalls the Ship of Theseus.