I don't know if things work the same way in California as they do up here in Washington, but up here I see a large number of complaints from current home owners about rising house prices.
That's because rising house prices means rising property taxes.
It's a huge problem here: the hottest areas of Chicagoland have the best schools, in large part because property tax levies fund the schools, which sets up a vicious cycle: voters will approve arbitrary levy increases for the schools because they assume (justifiably) that they're getting the money back in house values. Their kids graduate, they don't care about the schools anymore, so they sell their (appreciated) house and move to a bigger house or a loft or whatever. But at some point --- we crossed this point 20 years ago --- the schools spend more on your kids than you will pay in property taxes in the window of time your kids are in schools. I'll have to live in Oak Park for at least 12 more years to pay D97 and D200 back, and my kids are both in their 20s. Meanwhile, property taxes are being driven up so much that the only rational buyer for a house is a family planning to put kids through our schools, because all the lots are SFZ freestanding houses, and the property taxes are so high.
At least it sounds like you're funding good schools in Chicago.
California has a bizarre problem where the most expensive areas to live cannot fund their schools. Cupertino, the city of Apple's HQ, median home selling price over 2 million dollars - relies on state funds to pay for its public school district, since local property taxes aren't enough:
Chicago has one of the worst pension problems in the country largely on the back of public employee pension underfunding, including the teachers union.
That is more or less not how it works in Washington. Property tax is divided proportionately across owners by property valuation. If all prices rise by the same percent, tax assessed per property in absolute terms does not change, and as a percentage of price, actually falls. Only if your property value rises faster than the average or if the government assesses more total tax does your property tax go up.
My neighbors bought their house in 1975, pay $3k in property taxes. I pay 9k in property taxes. If I bought today I'd pay 17k.
I will not get a larger house because my property taxes would triple if I wanted another bedroom. A marginally larger house is not worth the marginal cost to move.
And with my 2.8% refinanced mortgage and 60% equity, and current rates today, there's no chance I'd sell.
It's a dream of mine to build a custom home, I can afford it, but I'm not willing to put up with a multi year struggle to get a house approved.
Thanks for the link, I had seen that site before but forgotten about it.
Have you confirmed that 3.5k number with the neighbor, or is it from the website?
I see a few large errors on that site for my neighborhood, so can't really trust it.
There is one house similar to mine shown as paying less than one fifth property tax. But if I look up the tax history in zillow, it's not true, their property tax history is quite similar to mine.
Then there are two interesting cases, where their property tax is shown as minuscule, less than $1k. And interestingly, zillow agrees.
But here's the interesting part: looking at the history in zillow, it shows that both these houses were paying around $9K in property tax and then suddenly one year it dropped to $900.
Please correct me if I'm wrong but I don't think there is any mechanism in California property tax code that makes it possible for the property tax to drop like that.
I know one can request a revision if the market drops significantly (like in 2008) but this is not that, it dropped to 1/10th of previous value! And these are all very similar homes from a mass produced builder, they're all within a handful percentage of each other in estimated market price. None of the other houses in the neighborhood dropped in assessed value like that.
So I'm guessing it is just a typo or otherwise bad data from the county, feeding into both zillow and this website.
I should add: The $900 property tax shown is quite a bit less than the property tax on year one when these houses were built in the 90s. Which seems quite impossible, so I conclude the data is wrong.
I think some of the data is just old: my house is listed with the tax assessment for the previous owner.
But all the tax bills are published (though in a harder to navigate format) on the country website. I went and checked all my neighbors property taxes there when signs against a modest tax increase for road fixing started going up in the neighborhood.
As for property tax drop: there are such mechanisms, like those in the Mills act. They’re not easy to use though
> I think some of the data is just old: my house is listed with the tax assessment for the previous owner.
You can compare in zillow which lists it year by year (though some data is missing).
> As for property tax drop: there are such mechanisms, like those in the Mills act.
I looked up Mills act, it is for designated historical buildings.
These are cookie-cutter houses, all built by the same builder during the same year in the 90s. No designated historical buildings here, so that's not it.
First year after being built in the 90s that house paid near $3K in property taxes. I'm pretty sure there is no mechanism for it to actually pay $900 in property taxes in 2024. It's just bad data in the system.
To add to my previous comment, for my neighborhood, if one thought all the numbers there are true, there is 15x multiplier from the cheapest property tax to the most expensive. Which sounds wild.
But if you take out the obviously wrong values, the multiplier from lowest to highest tax is actually only ~2.5x. And that's lowest to highest. The mean difference is far less, under $1K.
One might say there shouldn't be any multiplier, perhaps. But the point is that the impact of Prop13 is often far overstated.
And then you have probably lots of people who didn't move to better jobs because it meant they'd buy a new home and all the people who couldn't move to a new, better job because people already there aren't selling even when they are retired because they want to keep that sweet property tax rate locked in. Prop 13 is poison for the economy.
That's because rising house prices means rising property taxes.