Not to be a grump, but really we need to repeal Prop 13 in part or whole, while creating some new possible issues, I think it will solve more than it causes.
Converting to garages just passes more windfall to people who just happened to move to California a while ago.
Prop 13 will never be repealed, especially not with housing prices the way they are now. If you want to see one issue unite every single demographic with great vengeance and furious anger, then try to take on prop 13.
I don't think prop13 needs to be repealed entirely, just changed so it only applies to the owner's primary home.
Then prop 13 will meet its ostensible purpose -- so the elderly don't get forced out of their homes by taxes, while those that own investment properties pay taxes on the market value of their property.
(note that I say this as someone that owns a couple rental properties in the California and benefit from Prop 13)
Or we can restrict it to just the elderly and disabled, instead of letting every single incumbent hitch a ride.
One of my favorite alternatives is to bring back regular tax reassessments, but owners can choose to cede excess property value to the city/state. This forces a choice between having your cake and eating it too.
I'm ok with rewarding people that choose to live in one community for a long time by reducing their property taxes -- living in one area is what helps build communities.
True, but the elderly will leave through attrition, forcing them to leave through high taxes that make their homes affordable doesn't seem like a good way to ensure neighborhood turnover.
I lived in a rent controlled apartment in San Francisco, and about 30% of my neighbors were over the age of 60 including an 80 year old neighbor who'd been there for 40 years and had great stories to tell.
Then I lived in a 20 year old building with no rent control, and almost all of my neighbors were age 30 or below working in the tech field (few lived there for more than a couple years) -- with no elderly people that I was aware of. (we had a few months of of false fire alarm activations, so it was pretty easy to see all of the residents)
Grandma's low property tax bill is not the problem per se, it is the punitively high property tax bill we charge more recently sold properties to make up for it. This is popular because it punishes techie migrants, but it also punishes downsizing late and life and new household formation early in life.
If we don't need the extra revenue from rising property values, we should cut property tax rates accordingly. City residents getting the same public services for a smaller percentage of their wealth would be an immensely positive impact of tech's prosperity.
If we do need it (and I suspect we do, because higher prices mean government facilities and staff are more expensive), we should collect it fairly across the board. Maybe "fair" means flat, maybe it means progressive, maybe it even means "tenure in city" or "tenure in neighborhood," but "tenure in current address" is crazy. At least use a mechanism with some thought put into its incentives and possible unintended consequences.
Honestly though, wouldn’t you just pass on any property tax increase to your tenants, thus driving rent prices higher? I can’t imagine you would just eat that cost and potentially turn your real estate investments into money losing properties based on principle.
Okay, how about as a first step we eliminate prop 13 only for 'new' houses, say bought after 2015 and also eliminate it for houses that change hands via estate transfer?
The real issue is that (1) people want housing to be affordable and (2) people want housing to be an investment, and this is simply not sustainable. It's obvious. Only the first few generations get to have both, everybody else gets fucked. They will give you a bunch of reasons that all sound very different but somehow all magically take the side that favors (2). Weird. At this point for housing to become affordable the prices need to tank. This can be achieved in many ways but nobody is going to vote for any of them because of (2). Housing is a massive political sticking point. Too many people have too much of their livelihood invested in their house. Their votes are easily manipulated. You say build more, I guarantee that the build rate will be such that prices are not affected negatively. You can try to lower demand by raising ongoing fees in order to make housing a worse investment in hopes to drive out foreign investors and other speculators but clearly this will only work if prices drop and that will not happen because of (2). Things outside of voter control, specifically owner-voter control, need to crash the housing prices for the current generation to afford a house. _And_ the growth must be kept down to around inflation levels, because otherwise the problem is just postponed. The problem with California is that there hasn't been anything outside of voter control to affect housing prices like in other states. People are adamant to stay where they are and there are no big enough disasters to damage the properties.
You can have affordability and home investment as long as the populations are not the same. If we rezone the vast amount of under two story residential we open up the ability for cheap high rise apartments and condos.
This doesn't lower the value of the two story homes, it simply allows them to be bought out and developed. You say people are adamant to stay but I'm not sure that's true. You do see turn over, it's simply a limited supply.
I don't understand. Investment growth means house/condo prices keep going up. New houses/condos sell for market rates. The smallest places, studios, are already out of control. Building more at these prices is not building affordable housing. And everything is interconnected because it is a market. The only way things get better for renters is if they get a lot worse for owners.
Single family homes and cheap apartments serve different populations. There's some market pressure, sure, but the family looking to buy a $1m+ home is not in the same market as a studio renter.
Adding more studios won't crash the single family home market but will mean cheaper studios.
More supply would lower the cost. My point is more supply of studios would not greatly lower the cost of single family homes so we can have our cake and eat it too. Landlords would take a hit but they could also decide to redevelop at a higher density for more revenue. No one has to get screwed as long as we're willing to live near higher density construction.
Actually affordable studios would have impact, significant impact up stream. Also, what are you trying to solve? A semantic argument or the need for people to live comfortably? Last generation got there first so they get houses, this generation got here last so they get studios?
>Last generation got there first so they get houses, this generation got here last so they get studios?
This is a self defeating sentiment. You're not going to drive homeowners out without buying them off. You're not going to serve more people with low density housing. Its just how it is.
With the availability of cheaper high density housing young people can at least start saving. There can still be nice high rise condos but the idea that everyone in LA and SF can have a single story home is just not going to happen.
Maybe just be repealed for commercial uses, I don't get it why commercial properties are exempts.
There is a podcast by Malcolm Gladwell about a golf club in the heart of LA, the land worth north of $2B and they are paying property taxes on purchase price! this is insane, we need our laws to stop subsiding the rich!
one of the interesting special cases here is rental properties, in particular apartments. if the property tax is raised on these buildings, the costs will ultimately pass through to the tenants.
definitely need to repeal prop 13. This is creating housing dynasties. I personally know people who inherited rental properties from their parents who are paying taxes at 1980s-level valuation on these inherited properties because they never informed the city that their parents are dead. $40,000 tax valuation on a multifamily worth probably $2 million now.
this seems like a separate issue. these are individuals who are simply breaking the existing tax law combined with a miserably run local government that fails to do even the most basic job of enforcing that law.
i mean, when someone dies, a death certificate is issued. the county government finds out about that event and it's losing money by not putting 2 and 2 together -- but it still fails. IMHO a better-run government is the first remedy here.
ok. thanks. so it's prop 58 (an amendment to the state constitution) which would need to be repealed. and, I guess this proves the old saying that it's not breaking the law that's outrageous, it's what is actually legal that's outrageous.
I'm still baffled Prop 13 applies to commercial properties and second/third/vacation homes. There's a greater conversation to be had about Prop 13 as a whole, but there's no good argument as to why the law as it stands should not only apply to the primary residence of the homeowners.
Even if you don't have hobbies, that's square footage you own. You should be able to use it how you want, within legal limits. Even if you want to store boxes full of crap, that's your right.
There was a couple who lived out in somebody's garage for a few years after they got married and bought a house cash. I heard if on that Dave Ramsey show or whatever, it's amazing what people do to get through life. Some are strategizing ahead of others. Here in Florida if you live in a garage you might die without a proper A/C in there.
It should be obvious from the word "convert" in the title, you don't simply call it a living space and bingo, you're done. You actually have to outfit it as such.
My last bit about florida was a sidenote, because I never considered people living in a garage a thing. Here in Florida I never see that kinda thing anywhere I've lived, but I'm just one person and there's a whole lot of Florida I have not seen.
Seems more practical in Los Angeles than it would be in San Francisco. Though I suppose it's not impossible to imagine building down in a one car garage (though in a state with lots of earthquakes, that would be expensive, and not everyone will want to sleep in a batcave).
this will probably result in more cars parking overnight on the streets. at a certain point in the future, the streets in LA will become as over-parked as the streets in SF.
My bedroom in LA was like this. 10x20 ft, so a distinctly "long" room. It actually worked really well. My bed was in one end, then there was a tall paper divider, then a loveseat, coffee table, and desk in the remainder. Basically a room that divided in thirds for bed, living, and study.
Yeah they're already doing that in Santa Cruz and it sucks across the board.
Evidence: I live there and I like to go to open houses just to gloat at how badly people have f*ed up otherwise perfectly workable floor plans to make a little extra cash.
OTOH reducing the cost of in-law unit permits to zero across the board would work wonders.
A lot of those conversions are illegal and substandard. It has been going on for decades. The various city fees for a 500 sq ft ADU, when I investigated it about a decade ago, ran well into 20-30% of the budget for the ADU.
You are preaching to the choir here. I loved when Micah Posner, one of the chief NIMBYs of Santa Cruz, turned out to be an illegal ADU slumlord. That in my opinion explains a lot about how Santa Cruz really works. Or as I refer to it to outsiders: Mayberry politics by the sea.
“Standard” is one of the reasons costs are so high. New builds and large remodels in my city require overhead sprinkler systems... why? 2 car garages too, even though everyone I know uses them for storage or as a workshop. We need to lower housing standards if we want to house everyone.
No; this a band-aid, not a solution. A solution is changing laws and allowing or encouraging development to happen and allow all kinds of development, from mixed use, luxury, middle class and subsidized, not necessarily in the same place. Allow gentrification to happen, but also build housing for the poor.
No? No you're against a good idea that helps because it doesn't outright solve the problem?
Band-Aid or not, it's solid and well thought through. Don't be so quick to dismiss something because it doesn't solve all the world's problem immediately.
Look, what’s going to happen? Garages prove to be a safety valve, it’ll become a new normal that allows this “can” of housing issues to get kicked down the road. I don’t see how this helps.
It’s not all that different from saying allow six to a room or something. Sure, it increases “density” but it’s not a solution.
One of their examples is garages in the mission (SF). Those things are low ceiling, dingy, etc. Students might be okay. Not grown adults. Like I said, it’d become a new normal, an accepted solution. But it’s not a solution. It just postpones things and makes sub-par acceptable.
Tackling a solution from multiple angles isn't a con.
If I had the choice of a garage in SF or a 2h commute to my barrista job for a something more in my price range it would be a no brainer. You're dismissing a good idea because it doesn't help you personally... I expert more from HN commenters than "no because this doesn't benefit me or conform to my world view".
Not the US or SF. Been to a few converted garages in Sydney AU advertised as “Duplex’s” or “Granny flats”.
Small, dingy, cheaply done so the owner can earn as much money as possible renting it out. Garages are designed mainly as a storage room or just big enough to squeeze an average sized car in, newer builds you would struggle fitting a car in. Fitting a bathroom, bed, kitchen in? Not a nice place to live.
Agreed, we need to solve the issue of houses sitting empty due to money laundering and foreign investment. Why try to encourage people to convert their garages when they are hundreds of thousands of living units sitting completely empty for people's portfolios?
1978 California Proposition 13: Section 1. (a) The maximum amount of any ad valorem tax (a tax whose amount is based on the value of a property) on real property shall not exceed one percent (1%) of the full cash value of such property.
I am generally in favor of supply side solutions to housing, but I'm also pissed about the environmental cost of that develop ent, especially in a market favoring construction of giant homes on giant lots.
Not just environmental. Very productive and irreplaceable farmland in the east side of California's Central Valley is be being eaten up by housing development.
most cities in the central valley are growing. My hometown has grown from a population of 27k in 1970 to 133k today, with massive developments on West side replacing walnut groves. Same story pretty much everywhere. Farmers can make a lot of cash selling land to developers, and people complain about the dust and smell and other pollution from farms neighboring their new homes.
I know people who did this. They were a nice well-behaved family, though a bit clueless about some things. Converting to add an apartment exposed them to stuff that hadn't really been a part of their world, like prostitution and drugs. Yep, renters ran that out of the apartment.
The downsides are real. If you dislike having police raid your house in the middle of the night, this isn't for you.
My parents lived in the front half of a duplex house and rented out the back half for years. One night, the tenant fell asleep with a cigarette in his mouth and burned our house down.
The article mentions something called “Naturally Occuring Affordable Housing” that doesn’t require public subsidy and then goes on to talk about a plan to publicly subsidize these conversions in the very next paragraph. Feels like a bait and switch.
The article is referring to the entire state which is geographically diverse. Cities like San Francisco, L.A., San Diego, and even Sacramento have some taller housing options. Also, CA has major earthquakes so high-rises are generally not as common. We've been building out vs up but can't match the demand. Part of it is also due to CA's strict building/environmental regulations that make any construction project a slow and tedious process.
This ADU law was passed at the state level. The state could, if it had the political will, go even further. It could re-zone every SFD lot (even ones in Larkspur, Palo Alto, Beverly Hills and Berkeley) into one that would allow, say, a 4 unit apartment. Magic!
I know a guy who owns large sheds / warehouses around the place and he finds homeless people around the place and allows them to live in the sheds so that he always has someone protecting them from theft.
Before eeking out the small spaces in people's garages, we need to solve the issue of houses sitting empty due to money laundering and foreign investment. Why try to encourage people to convert their garages when they are hundreds of thousands of living units sitting completely empty for people's portfolios? I am libertarian, but I feel like in a housing crisis this is something that needs to be tamped down on ASAP
Think about why an investment property might sit empty. At first glance, that seems absurd. An investor wants to earn money, and rent would be one way to get that.
As high as rents might be, they are clearly not enough to put these properties on the market. Find the cause and fix it.
Possible causes: too difficult to evict non-paying tenants, too difficult to sue tenants for damages, too many expensive upgrades required (fire protection, disability access, etc.), too difficult to avoid getting sued by the government, etc.
Investors don't leave property idle for fun. There is a reason.
Many investors find a property momentarily unprofitable and set it on the back burner while the neighborhood they dont have to live in goes down the drain. It is a huge negative externality that affects millions directly. But prvitizing gains and socializing losses seems to be the cali way.
Doesn't really make sense. Even less parking in our low density residential neighborhoods? No thanks.
My understanding is the issue is really about rezoning. Homeowners are willing to sell to each other so I assume they'll be willing to sell to a high density high-rise but no one wants to approve the new construction. We should figure out how to get it through city planning. As we increase density we can more efficiently manage public transit.
Shouldn't we wait for a solution to our traffic and resource issues before trying to increase our density? Is it really so terrible for people to consider living somewhere besides California?
I'm a renter now, so I sympathize with people like me who are suffering from the current situation, but I feel like efforts like this just create sub-standard housing and enable more irresponsible growth. Are we just trying to lower the quality of life for everyone in CA until enough people leave?
At a seminar for HOA managers in Irvine, there was a panel discussion on the impact of higher Housing costs. Converting garages into dwelling units was top of the list for action plans. Number two was look for ways to solve parking issues, but there was no actual solution proposed by the panel. Besides some system like Parking Boss, I can't see how any community is supposed to manage the increase in cars, especially if garages are out of the question.
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[ 2.6 ms ] story [ 148 ms ] threadConverting to garages just passes more windfall to people who just happened to move to California a while ago.
Then prop 13 will meet its ostensible purpose -- so the elderly don't get forced out of their homes by taxes, while those that own investment properties pay taxes on the market value of their property.
(note that I say this as someone that owns a couple rental properties in the California and benefit from Prop 13)
One of my favorite alternatives is to bring back regular tax reassessments, but owners can choose to cede excess property value to the city/state. This forces a choice between having your cake and eating it too.
I lived in a rent controlled apartment in San Francisco, and about 30% of my neighbors were over the age of 60 including an 80 year old neighbor who'd been there for 40 years and had great stories to tell.
Then I lived in a 20 year old building with no rent control, and almost all of my neighbors were age 30 or below working in the tech field (few lived there for more than a couple years) -- with no elderly people that I was aware of. (we had a few months of of false fire alarm activations, so it was pretty easy to see all of the residents)
If we don't need the extra revenue from rising property values, we should cut property tax rates accordingly. City residents getting the same public services for a smaller percentage of their wealth would be an immensely positive impact of tech's prosperity.
If we do need it (and I suspect we do, because higher prices mean government facilities and staff are more expensive), we should collect it fairly across the board. Maybe "fair" means flat, maybe it means progressive, maybe it even means "tenure in city" or "tenure in neighborhood," but "tenure in current address" is crazy. At least use a mechanism with some thought put into its incentives and possible unintended consequences.
Maybe the progressive tax scheme will one day switch from an income-based gradient, to a function of both income and age.
A repeal would only happen with reduced taxes in other areas, like income.
http://www.savingcommunities.org/issues/taxes/landvalue/
Economic rents, unearned income, asset appreciation, constrained supply.
This doesn't lower the value of the two story homes, it simply allows them to be bought out and developed. You say people are adamant to stay but I'm not sure that's true. You do see turn over, it's simply a limited supply.
Adding more studios won't crash the single family home market but will mean cheaper studios.
This is a self defeating sentiment. You're not going to drive homeowners out without buying them off. You're not going to serve more people with low density housing. Its just how it is.
With the availability of cheaper high density housing young people can at least start saving. There can still be nice high rise condos but the idea that everyone in LA and SF can have a single story home is just not going to happen.
this seems like a separate issue. these are individuals who are simply breaking the existing tax law combined with a miserably run local government that fails to do even the most basic job of enforcing that law.
i mean, when someone dies, a death certificate is issued. the county government finds out about that event and it's losing money by not putting 2 and 2 together -- but it still fails. IMHO a better-run government is the first remedy here.
Prop 193 allows grandparents to do the same with their grandkids.
Evidence: I live there and I like to go to open houses just to gloat at how badly people have f*ed up otherwise perfectly workable floor plans to make a little extra cash.
OTOH reducing the cost of in-law unit permits to zero across the board would work wonders.
Band-Aid or not, it's solid and well thought through. Don't be so quick to dismiss something because it doesn't solve all the world's problem immediately.
It’s not all that different from saying allow six to a room or something. Sure, it increases “density” but it’s not a solution.
One of their examples is garages in the mission (SF). Those things are low ceiling, dingy, etc. Students might be okay. Not grown adults. Like I said, it’d become a new normal, an accepted solution. But it’s not a solution. It just postpones things and makes sub-par acceptable.
If I had the choice of a garage in SF or a 2h commute to my barrista job for a something more in my price range it would be a no brainer. You're dismissing a good idea because it doesn't help you personally... I expert more from HN commenters than "no because this doesn't benefit me or conform to my world view".
Small, dingy, cheaply done so the owner can earn as much money as possible renting it out. Garages are designed mainly as a storage room or just big enough to squeeze an average sized car in, newer builds you would struggle fitting a car in. Fitting a bathroom, bed, kitchen in? Not a nice place to live.
Not just environmental. Very productive and irreplaceable farmland in the east side of California's Central Valley is be being eaten up by housing development.
seems like an under reported story.
where is this happening?
is it housing tracts with hundreds of units or individual homes with large lots?
The downsides are real. If you dislike having police raid your house in the middle of the night, this isn't for you.
The downsides are real.
As high as rents might be, they are clearly not enough to put these properties on the market. Find the cause and fix it.
Possible causes: too difficult to evict non-paying tenants, too difficult to sue tenants for damages, too many expensive upgrades required (fire protection, disability access, etc.), too difficult to avoid getting sued by the government, etc.
Investors don't leave property idle for fun. There is a reason.
My understanding is the issue is really about rezoning. Homeowners are willing to sell to each other so I assume they'll be willing to sell to a high density high-rise but no one wants to approve the new construction. We should figure out how to get it through city planning. As we increase density we can more efficiently manage public transit.
I'm a renter now, so I sympathize with people like me who are suffering from the current situation, but I feel like efforts like this just create sub-standard housing and enable more irresponsible growth. Are we just trying to lower the quality of life for everyone in CA until enough people leave?
If small apartments are substandard, the roommate situations that are most people’s best alternative are then sub-substandard.