Rich Gordon always claims to be on the right hand side of liberal causes, like pitting SEIU against management in the case of El Camino Hospital. Look closer and deeper into his motivations, before signing on to what he is trying to sell. He's the last person I'd return to county power. He talks platitudes and doesn't deliver meaningful reform.

When politicians use words like "inequality" and "transparency" grab your wallet and hide the valuables.

Attacks on Prop 13 are unabashed attacks on home and property owners to shake out more money for the politicians favorite causes. Prop 13 equally protects every property owner from being taxed on unrealized gains. You can bankrupt just about anyone by taxing on current appraised value. If you bought your home here five years ago without Prop 13 your tax would now be DOUBLED. And the politicians will waste any extra money they might get.

Commentary and direction for "equality" and "common good" from someone who lives in arguably one of the most expensive areas in the entire country, homes easily over $3M. And he says government needs to even out the playing field?

What a total and complete joke. How easy to say government should be responsible. Put your money where your mouth is buddy, feel free to step up and contribute wherever you want. I'm tired of the government taking my hard-earned $ while I scrap it out and eke out enough to live in a run-down 1200 sq ft house.

Classic politician.

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Rich Gordon works for and represents his party machine, not voters. While in office he was a champion of high speed rail and was among those responsible for wasting billions of dollars on this boondoggle. He knew it would be a disaster but supported it anyway because that is what the party machine that kept him office told him to do.

I'm happy to see someone finally pushing to have homeowners pay their fair share. I've had enough of my hard-earned tax dollars going to subsidize property owners while renters are trying to scrape by. Repeal Prop 13!

Fair, when your landlord's taxes go up, guess what's going to happen to your rent. Why do you think rents are already so high? Because property owners have to cover their own taxes first.

And when the property taxes of residentialists go up who don't want tall buildings in view of their house, maybe their calculus will suddenly change to wanting that extra supply there.

I think that Proposition 13 should be updated relative to commercial properties and commercial / corporate owned condo's and apartments. Those units are stuck in a time period when purchased but the rents and leases go up with the "going rate". Single family houses are a different subject - they are subject to continual upgrade that does get reflected in an increase in property taxes as those upgrades get validated by the city and house insurance groups. People who own houses are continually stuck with all types of requirements imposed by the city, county, and state that gets reflected in their property tax bills as special assessments. Yes - people who are new property owners have a high rate but that house has to undergo a lot of repair and upgrade in order to sell - that cost goes back to the selling owner - he paid to get that house up to date. Since all costs are relative to points in time quit beating the drum that life is unfair. If you buy a house then you have established your point in time relative to that house.

The mental gymnastics I keep hearing to justify Prop 13 for residential homes are impressive. So it's OK because the owner has to get their home up to code before being able to sell? Well that changes everything!

Prop 13 amounts to a giant subsidy we're giving to the Boomer generation, nothing more. They cut taxes and gutted the school system so they'd have cheaper property taxes and then pulled the ladder up with them by hobbling development so the next generation could reasonably afford to live here too.

Web Link

Which generation is YIMBY talking about? We have put our children through the schools, donated time, put the children through college. And now when they graduate the surrounding companies only want to have H1B people. Are we suppose to break up our neighborhoods to accommodate the local company profit goals while our US children who would be actual employees can't get jobs? Sorry - the whole picture of what we bought into has changed and we are not selling out so the local companies can expand their profit ratios and hide money overseas tax free. Sorry that tact is not going to work. Save your "rage" for the situation the local companies have created. [Portion removed.]

@resident,

It's OK to say that you just don't care about paying your fair share. You can think that's all right, but you can't ignore the fact that that's what's going on. Property owners are being subsidized by the hard work of the rest of us.

This guy loves to spend other people's money. He voted for CAHSR - enough said.

Gee Fair - is you are an employee of SU then your housing is being subsidized by SU. And if you work for a non-profit then your institution is not paying taxes. That is becoming the norm for CA - every organization proudly states that it is a non-profit. That is suppose to be browny points? Massive number of organizations are not paying taxes and your favorite groups are hiding their money overseas. Why are you lecturing everyone on what's fair?

Time to even things out somehow. Why do I pay $2400 in property taxes and my neighbor pays $27,000? I bought my house in 1975. I didn't begin to pay what it cost PAUSD to put my kids through school.

@resident,

I've clearly touched a nerve. Some people just don't like having the reality of how much they're stealing from the rest of us being pointed out, I guess...

I'm still waiting for FAIR to grant that if his landlord's taxes rise, his rent will rise as much to cover the increase.

And resident makes an excellent point about all the tax-exempt properties around that we're all subsidizing.

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@Online Name,

That's clearly false, since it would imply that there's a significant difference in rent between @Mutti's house and their neighbors.

Instead, we see what economics predicts: landlords will charge what the market will bear given supply and demand. Comparable houses rent for comparable amounts, regardless of date of purchase.

Residential property and commercial property prices both rise with demand and current income. However, commercial enterprises enjoy a rise in income whereas residents retire and their income reduces drastically.

Prop 13 protects ALL residents by insuring their taxes never elevate substantially above their ability to pay.

Commercial properties should be excluded from prop 13 as their income has grown to pay fair market taxes.
This would increase tax revenue allowing for tax relief to newer home owners without forcing retired owners to move out. And it would hold down or reduce rental rates.

Why should a profitable business still get to pay 1979 tax rates?

@Jim H,

Why should a homeowner with a multimillion dollar house still pay 1979 tax rates?

To current residents that recently paid 3 million for a house and are complaining about owners of homes bought at less than 1 million dollars for paying less tax, consider this:

In 20 years, you'll be paying slightly more tax, about $40,000/year. But your new neighbor will bye paying $30 million for his house and paying $300,000/year in taxes because of income inflation.

Would you like your taxes to go from $40,000 to $300,000/year without prop 13 protection?

Should you pay more in taxes just because with inflation of income the next door neighbor can afford to pay that much for his house?

This is long overdue. There's nothing faiir or logical about slapping new purchasers with taxation @ 1% of purchase price while the neighbors in identical houses are paying taxes based on 1% of the prices they paid when they bought 20 or 30 years ago. Modest annual increases are appropriate for everyoone.

Commercial properties don't get re-assessed nor do residential properties held in trusts, despite their high earnings & profits. As long as a family trust owns the house, 2 or 3 generations get the benefit of pre-1978 property taxes.

Many of us are unhappy with the changes in the natures of our peninsula communities which seem to be increasingly infested with nouveau mega-riche folks whose community values differ from those of Palo Alto's traditional inhabitants. When new residents can buy homes with $3000-4000 monthly prop tax tabs, (based on 1.25% of price) in addition to their acquisition & mortgage costs, it polarizes the community into the very wealthy vs. those in traditional middle class & upper middle class income brackets. The mega-rich kids are in school with less affluent children, which causes some social problems we didn't have 20 years ago.
Personally, I'd like to see an entirely different town - Richeville ?-built elsewhere, with it's own schools & services. Those with $1+M after-tax disposable income could go live as lavishly as they like, helicopter their kids at will, and leave Palo Alto to the "normal" middle class world, where doctors, bankers, teachers, business owners, writers, non-vc lawyers, employees of state and local governments, musicians, etc. all lived harmoniously in the same neighborhoods as was the case a generation ago.

It is unclear if FAIR is a homeowner, apartment owner, or a renter. So what are you arguing about? If you could afford to buy in at this point in time then you are making a high salary that qualifies you for a mortgage. The retired people worked in a previous time period when house prices and salaries were relatively low. We all cannot go out and get a super high salary at this point in time. And if you are young then where do your parents live? Can your parents afford to stay in their house if they pay the same rate you are? Don't think so - your parents would lose their home and come live with you. It is all relative to your age and circumstances and what your parents need to stay where they want to be.

Chip - the tax assessment is relative to the price of the home when bought. People who qualify for a high mortgage and pay a big price for their home have a higher tax assessed value. That is what the housing market is all about. It is an industry - not a mom and pop business.

@Jim H,

In the long run, barring supply restrictions, home prices will track inflation. Your numbers assume 10x growth over 20 years, which is 12% annual growth. That's not just income inflation.

Regardless, if my house is now valued at $30M, I'll happily sell it and take the extra $27M. Having me stay in some clearly extremely valuable land and pay back far below market value is just not a fair allocation of resources.

"Prop 13 protects ALL residents by insuring their taxes never elevate substantially above their ability to pay."

If this is the goal, there are more effective ways to accomplish this than Prop 13. Many other states have found alternate solutions that help people stay in their homes that we could implement here.

Property tax protection should be based on financial need, not how long you have lived here. I have VERY wealthy neighbors who benefit from it while they also benefit from the rapid rise in their home values. They can afford to pay. I am a senior who has lived here twenty-one years, and I SUPPORT fixing Prop 13. It has created inequities that are making it impossible for public servants, young people, and lower income workers we NEED to live here.

If fairness is the goal, then eliminate the Property Tax altogether.
Institute a use tax instead.

Why should a single man who just bought a $10M house pay 20x more than a Family with 10 kids crammed into a $500K house they just bought ?
The single guy has no kids in school, spends most of his time in Aspen and Vail, rides a bike to work when he's here, and is very healthy and never calls the police so consumes very little city or state resources. The family with 10 kids consumes resources like gangbusters between the schools, driving their three cars, and reliance on city services for 12.

Its so stupid to tax a made up valuation like property value. Granny bought a $100k house with her fixed income of $10K per year. Just because you say it's worth $2M or $M3 or $100M, what does that have to do with her fixed resources and limited use of city services ? The property tax should be abolished.

If you want to protect people on fixed incomes from being taxed out of their homes then use a tax deferment for that case.

Bravo, Rich Gordon!

Prop. 13 is the reason California's roads and infrastructure are in such a mess -- and the reason that we spend so little on our public schools, compared to other affluent states in the US.

When seeking to reform Prop. 13, however, I hope you will work with others who are seeking to have a "split roll," so that the commercial property owners who have made out like bandits for many years start to pay their fair share of taxes for the local services they enjoy. Since commercial properties change hands much less often than residential ones, they are not reassessed as much and their property taxes have not kept pace with the change in value over the years -- BUT, as research by Menlo Park resident Jennifer Bestor has shown, these commercial property owners ARE continuing to charge market rate rents, reaping a windfall of profits.

One organization that's been working on this issue for several years is Evolve -- www.evolve-ca.org . Their website puts out a number of important facts about how a split roll tax would benefit ALL Californians while still providing tax roll protection to long-time homeowners, many of whom are now seniors on fixed incomes.

Prop 13 was "sold" to the voters by claiming that it would protect seniors who live on fixed incomes. In fact, such seniors were seeing enormous increases in their property tax bills back in the 70s and some were being "driven out of their homes". The goal to help seniors on fixed incomes stay in their homes is a good goal, but the method - Prop 13 - is not. Prop 13 has created enormous distortions in taxation of equivalent properties based solely on length of ownership. Seniors benefit, but so do lots of non-seniors, including businesses. New property owners suffer.

Prop 13 has two main provisions. One limits the total property tax rate to 1% of assessed value. The other limits growth in assessed value to 2% per year, except when a property is sold or improved. Limiting the tax rate does not produce distortions in taxes paid by long and short term owners; limiting growth in assessments does create great distortions.

As someone who has owned his own home for 33 years, I do benefit from Prop 13. As a senior who will soon retire, I am also concerned about the need to have predictable bills. But I am in favor of Prop 13 reform. Prop 13's "freezing" of assessments is not the best way to help seniors. A better way, that eliminates the distortions in taxes paid, is to re-assess all properties annually to reflect market values, but allow seniors to "freeze" the amount they pay on their tax bill every year, with any increases due to increased assessments becoming a lien on the property that is due when it is sold. That way, the senior has a fixed predictable cost to go with his/her fixed income, but the entire society benefits when the appreciated property is sold.

It is important to remember that the vast majority of the increase in property values in our area is due to the collective community actions that have made our towns desirable. It is not due to the individual improvements made by the property owners. So why should those property owners reap all the benefits? The community should recover some of that increase in value through taxes. But those taxes could be deferred for seniors until the property is sold.

If we replaced the limit on increases in assessed value with a tax deferral program for seniors, we still need to worry about rampant appreciation causing everyone's tax bills to rise rapidly. The solution to that is also straightforward. Have a provision that lowers the maximum tax rate (the 1%) if the overall assessed value of properties in the county rises faster than population growth or ordinary inflation. We have computers and "big data" now that didn't exist in 1978. It would be easy to program an algorithm that manipulates the property tax rate to maintain a consistent overall income that tracks population growth and ordinary inflation, but does not create "windfall taxes" due to extraordinary property appreciation, while maintaining accurate market valuations for property tax assessments, so long and short term owners of equivalent properties pay the same tax.

The thing about Prop 13, or Property Taxes, is that the money has to be raised somehow to pay for things like roads, police, schools, etc. It is interesting to see how other places raise this money.

Here we have property taxes which is paid to the county and some of which is used by the county for their purposes and they pay back to the city and school districts their proportions for other purposes.

As to whether this is the best way to claim this money is worth debating, but I would like to remind everyone that it was attempting to tax people as opposed to property that brought down Margaret Thatcher as leader of the Conservative Party and her time as Prime Minister of the UK. She suggested and promoted a system that did away with the system based on a valuation of the property and instead assessed each address with a poll tax based on the number of inhabitants of the address. It was so unpopular that it changed politics. Her poll tax we amended to another tax based on size of the property and its amenities, number of bedrooms, bathrooms, etc.

What is considered to be a "fair share" by one is considered to be outrageously expensive to another and one commenter above has even accused those not paying their "fair share" to be tantamount to theft. Whatever system is used will never be equal because of the differences in how each of us live. A widow managing to live in her own home that she has raised her family may have a large house, but it is her home. Her drains on the community may be low during her twilight years, but she has paid her dues, in my opinion, by living there for so long and contributing all that she has done over the years, not just by paying taxes but by being a worthy citizen to her city. Some family of four, just moving into the area, where both adults work, children attend schools, they all visit local parks, use libraries and community centers, are possibly drawing out more than they are contributing, but at the same time they are paying their downpayment on their future needs also.

Just as young people pay into social security to enable them to draw pensions and benefits in the future, those that have lived here are establishing their future benefits of a lower property tax. Their home may be worth a good deal more on paper in the future, but their investment in the community is a lot more than what is written on paper as they age. The value of a home and community is a lot more than what it would fetch in the open market. Nobody can pay their taxes or any of their bills on what their home's market value would be. It is their income that pays their bills and taxes.

If a widow wishes to remain in her long established home then suggesting that she should move out to let younger people in just so that they can start paying their "fair share" is wrong at so many levels. It smacks of socialism at best and a step away from euthanasia at worst. For many old people, their home and familiar surroundings is what is giving them their quality of life. Removing that quality of life by uprooting them and telling them to move elsewhere might just take away their will to live. Hopefully, all of us one day will be old and want to remain living where we have roots for as long as possible. Trying to force people out because of age or being in the way of the young is scary.

Young people don't pay in to social security to then later pull benefits. That money goes directly to fund todays seniors. You're paying it forward and hoping that the next generation continues to do the same for you.

@Debbie Mytels.

You are wrong about Prop 13 being the reason for our crumbling infrastructure.
Compared to other states, we spend the smallest percentage of our GDP on infrastructure (see: Web Link ).

Here's a clue:
Meanwhile our public employee pension and retirement benefit obligations have been soaring. Roads don't have unions and they don't lobby politicians.

This is ridiculous, because California pays the most money in the WORLD yet gets the worst results in its schools considering the money spent per student.

Obviously the problem isn't lack of funds ( except PAUSD), so it is something else, which must be defined before a solution can be found!

Time for a lot of people posting here to get informed on Prop 13. The lack of understanding is astounding. It seems like many have been presented talking points.

First, taxing properties on unrealized gains is unfair. Residential or commercial. Everybody in CA starts from the same point- the price YOU decided to pay for your property. It is your decision and the tax rules are clear.

You are unhappy your neighbor who has been in their home for 25 years is paying less than you? Did you think they have been paying taxes for 25 years? And you have not? They also are likely to have out in their time helping build the community for 25 years. PTA. Civic volunteering. Careers in business, academia and the professions. They have sweat equity that you are just going to start. If property taxes were based on current market value most Californians could not afford to stay in their homes. That goes ten fold in Palo Alto. Believe it or not most people have not made $50M from Google, Facebook or (fill in the blank) equity.

Live here a while as a homeowner and see what would happen to you without Prop 13. And in case you don't know there are many many other taxes piled onto homeowners for everything from special school assessments to storm drain assessments. The burden is huge especially for the retired. The retired people who built Silicon Valley so it can be the place today that affords you a job.

Commercial property tax protection under Prop 13 is just as important. What do you think happens to the incremental tax increases on commercial properties? It is passed on to renters, leaders and the customers of the businesses taxed. You will pay. There is no free lunch.

Last, the Howard Jarvis Taxpayers Association has the figures that show California tax revenues have grown better than inflation even with Prop 13Web Link

Programs in California that are underfunded are that way because our politicians have wasted stunning amounts of tax dollars for many years. Prop 13 has worked.

As to some of the harebrained taxation readjustment proposals to Prop 13 written above- the idea of accruing tax liabilities for seniors based on annual market value adjustments all due on sale is outrageous. There is a capital gains tax to both the Feds and California when that home is finally sold. That is a ton of money.

California will never be happy that it has enough tax money because it has an unending appetite for spending. Just wait until the state is no longer able to hide or manage its public pension liability. Being a California citizen with assets will become a huge problem if you are one of them.

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Santa Clara County assessments rose 8 percent in the past year. Inflation was 1.5 percent and the population increase was 1.2 percent. No limit to how fast we can spend the money. @Phil, wouldn't your proposal for a lid on tax-growth thus actually decrease our revenue expectations?

As for putting liens on property, many residents rely on their home as their retirement vehicle. The appreciated value is extracted as a reverse-mortgage, or the selling price is applied to buy-in at a retirement community or long-term care facility. That would be impossible with the County confiscating your equity faster than you can build it.

We may as well incur a 1 percent annual tax on the value of our 401(k) or pension plans for the privilege of living here. I mean the money is just sitting there doing nothing, right?

Yimby

Of course paying into social security is not putting money into some slush fund unobtainable until old age. Of course paying into social security funds the payments to seniors today. That is why it works and how it works. In the same way that if a person hasn't paid into the system, it is unfair for them to receive the payments. Likewise, if you can't see that they have been paying their fair share of property taxes over the years and should not be expected to pay more than the original purchase price of their property is unfair, if you can't see that then you are no more than someone scrounging off the wealth of others who have paid their taxes to enable you to go to school to get your education. Yes, if you received an education in the public schools, then you were reaping the rewards of those present seniors paying their taxes over the years. The fact that you think those same people should move out to enable you and your cohorts a chance to own their homes shows selfishness beyond belief. You call those of us who have lived here 10 years, 20 years or more greedy. Well you are saying more about yourself than those you criticise.

Many of those seniors you seem to call greedy were the ones who went to war to cause your freedoms that you seem to take for granted. Those seniors did a lot of the groundwork that made them the pioneers of Silicon Valley. Those seniors were the parents of people like Steve Jobs and Steve Wozniak and the others who founded the high tech giants of today.

Just because you can't see the value of our seniors, our elderly, our empty nesters, our almost retired, our long established residents, it doesn't mean that the rest of us want to look at them the way you do. We value those people, we admire them, we aspire to be like them, we want to learn from them, we want them to be role models for ourselves and our children.

If any of my children had attitudes like yours, I would feel I had failed as a parent.

Sorry everyone for the rant, but Yimby just makes me see red.

YIMBY
If you have a job here it's likely that many of the old folks you see around had a hand in creating the enviorment that allowed your job to exist. Stanford had a big role by being one of the first incubators in the country. Lockheed, Fairchild, IBM, Moffet and NASA too. You did not likely help create the Silicon Valley you came to.

But to your point about growth. Do you think there is ever a limit on growth that's justified? How about when we are out of water like the last few years? Or when we are out of roads like right now this minute. This afternoon in front of my home in Crescent Park in Palo Alto there is genuine gridlock. Bumper to bumper not moving. Is that a sign we need more growth?

If you still favor growth how would you feel about volunteering your home to be divided into many 150 sq ft apartments? And huts in your yard of course. Orcif you are a renter take in another 20 deserving folks in your place. Be a part of the solution.

If you favor growth at this point in time you need to be personally involved. Not a NIMBY.

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My issue with Prop 13 is the abuse if it by the Boomer generation who have shielded themselves from any negative affects of constraining the housing supply in a high demand area, seeing their homes turn into 3 million dollar assets while they throw up roadblocks to any new developments that might help with the housing crisis because they want to keep the hottest job market on Earth a suburban enclave. You want to know what makes me see red? Seeing friends and family get priced out of the area all because a bunch of homeowners didn't want a building blocking their view. You guys have a level of entitlement that earns you the title of The Me Generation. See red all you want, you guys see green at the end of the day as your home values continue to increase with no end to the housing crisis in sight.

If you're a senior who can't afford property taxes in a non Prop 13 world, then your taxes should be deferred. But home owners should not be incentivized to continue blocking development and seeing their home values constantly skyrocket. If you want to freeze the area in time then you better be willing to pay for it.

You think Prop 13 is a subsidy? You think there is a figure representing each homeowners 'fair share?' And you know what that is? How about the fact that 2.7% of taxpayers paid over 51% of taxes? Web Link

I have paid into Social Security for many years. I know that what I have paid in if in a passbook savings account would be worth $3.6 M today. But when I retire I will get about $3000/month from SS. That means I would have to collect for about 83 years to not quite break even. I'm pretty sure I'm not going to last that long after retirement. It looks like I am the one subsidizing. Not being subsidized. How does that rate on your fairness scale?

I'm now going to bow out of this discussion. The comments are running about 4:1 in favor of Prop 13. I rest my case and arguments.

Winner is the one with lowest blood-pressure. It's such a pleasant evening.

Prop 13 isn't just a subsidy. It's generational theft. You froze your property taxes, which gutted school funding, and transferred increased tax burden onto new home owners while accruing ever increasing home value.

Web Link

Social Security is and never was meant to give a dollar for dollar return. You're funding a subsidy for seniors so they have some form of safety net and aren't homeless on the street. And that's good, we need programs like social security, and I will not be angry if I do not get back as much as I put in to the program. It's a pay it forward program.

@MikeCrescentPark,

Not all subsidies are bad! SNAP, SCHIP, Section 8, these are all great uses of funds to subsidize what we think is good for society.

On the other hand, massive giveaways to people with assets in the multiple millions, that's not good policy. But pointing that out really works people up for some reason.

Assets in the multiple millions aren't assets until they're realized. Who knows, an earthquake might come along and wipe everyone out and that's why they're not called assets until you have cash in hand.

A fire might wipe out your house because the fire trucks can't reach it in time due to gridlock -- as the firemen in Menlo Park have repeatedly warned. And your home insurance sure won't give you millions the house might have been worth.


Don't forget that the realtors take their share, the city takes its share, the state counts capital gains from home sales as earned income and then the feds take their share.

Tell me why the governments need more of our money. Tanaka said his goal was to double the city's take from its residents. Is this part of his plan?

Raising taxes won't reduce rents; they'll simply cause rents to skyrocket so the landlords can pay their newly increased taxes. Sure, let's raise commercial property rates and watch renters and the Chamber of Commerce scream bloody murder.

@OnlineName

Your argument applies to stocks just as much as it applies to housing. Are you going to tell me that someone isn't rich if they have millions in stocks?

Raising taxes via repealing Prop 13 will unshield homeowners from the negative impacts that rapid unrestrained property value increases that everyone else has to deal with. Throwing up a roadblock for a new apartment complex will rightfully incur a cost on them as the reduced supply increases their home values and their taxes. Pro-growth strategies will be incentivized in order to meet demands for housing with new supply and keep property values stable. Rents will only skyrocket as far as people are willing to pay them. More likely, people will sell, more supply will come onto the market, and more importantly, barriers to new development will cease once the housing crisis is hitting homeowners in their wallets the same as everyone else.

It may surprise some people like NIMBY that the IRS does not require taxpayers to pay tax on unrealized gains for stocks either.

[Portion removed.]

Yimby, you obviously missed the dot bomb stick market crash less than 20 years ago where many people paid real money to exercise their "millions" in stock options and then got stuck paying taxes on ASSUMED gains based on their exercise price, not on what they could sell the stock for a few months later when they qualified for long-term gains.

People LOST money TWICE: they were out both the purchase price of the stock options AND the taxes owed on the PRESUMED gain based on the exercise price that was in fact a loss because the stock was worth so much less! Make that THRICE because they were often unemployed when their employer went belly-up along with the stock! (Remember ho outraged Kate Downing was that she had to pay MONEY for her Palantir stock options?? Multiply that by half the Valley!)

You had people committing suicide. You had investment advisers being sued. You had people selling their homes and taking losses on their homes to pay their HUGE tax bills based on ILLUSORY ASSUMED GAINS.

So the short answer is, yes I am. There are all sorts of other ways people can lose money on millions in stock the most obvious other one being if they're over-leveraged and buying on margin and get a margin call.

Bottom Line: Stop counting other people's money and home equity when you have no idea of the specifics and whether they even have equity. A home may have been refinanced multiple times to pay $60,000 a year for the kid(s)'s college tuition, $100,000 a year nursing home care for multiple years for a spouse or parent, hundreds of thousands dollars in unexpected medical expenses, whatever. The house you assume may be worth millions may have had the equity eaten away by a reverse mortgage to pay property taxes and utilities and/or living expenses during several years of unemployment.

Bottom line: you have no clue what people's situations are and how much they're going to "make" when they sell their homes. They may even OWE money on the sale.

Wow, @Online Name, now we're supposed to bail out people who own multimillion dollar houses because they've spent all that money? What ever happened to people taking some personal responsibility for their choices?

Rent, did I say you needed to bail people out? Never! I was answering Yimby's question. Of course, people SHOULD certainly take personal responsibility although not everyone does.

Some have more responsibilities than others, particularly older people who have kids to educate AND aging parents who need their help.

Regardless, people should also stop blithely assuming people are reaping millions of dollars on their homes when often they're not.

It's not all black and white!

The dollar could crash tomorrow and all of your paper money rendered worthless. How far do you want to take this line of reasoning?

Well, @Online Name, your contention was that we should continue to subsidize people that own multimillion dollar houses because they might have blown all that money on things. The responsible thing to do would be not to spend all that money.

If you can't afford to pay your part of the tax burden, you should sell the house and move somewhere cheaper. Why should the rest of us subsidize it?

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[Post removed.]

[Portion removed due to deletion of referenced comment.] There's no way to buy a house in Palo Alto for the sort of price older residents paid. Houses in Palo Alto cost $2m now. The only reason for that is that the residents of Palo Alto hate poor people so much that they have passed laws that make cheaper housing illegal, by mandating minimum lot sizes, maximum occupancy, maximum floor area ratio, maximum units per lot, etc.

Prop 13 benefits all Californians! Stop worrying about your neighbors finances. Prop 13, in part, limits the amount the state can increase taxes on all property owners. Local jurisdictions have sidestepped Prop 13 by adding taxes disguised as "fees". Seems the politicians and lawyers will never be satisfied until everything is subsidized by the working class. Seems to bother career politicians like Democratic Rich Gordon who offers nothing. Look at his record of bouncing from one government funded political job to the next and decide for yourself. The world does not revolve around Palo Alto as many of those posting believe. Relax, enjoy life!

Laszlo, I wouldn't consider people who have millions of dollars in assets to be "working class", and those who are definitely don't need of a subsidy from the rest of us.

I'm really sick of this portrayal of homeowners as mega rich. Everyone I know who owns around the area, made significant sustained sacrifices to get into a home because of the stabilization of costs and living circumstances. I mean sacrifices - living long periods of time with multiple roommates, giving up every nicety. I haven't been able to travel to see my family for a holiday (or practically anywhere else) since I was a young person and it's been so long I can't even remember when. Time gets sacrificed as renovating delapidated spaces (after the years-long quest to even buy one) is a consuming endeavor when you have to do everything yourself. The reason to sacrifice is that the alternative is worse. It is horrible always having to pay rent as high as you can bear and never knowing one year to the next whether you will have to move and find another overpriced horrible place with all the attendant problems and costs of moving in this housing market. I cannot understand why people fall for developer arguments to let them build more of that. Being at the mercy of rentals/landlords, in an area of global demand (because of Stanford, for one), means the usual rules of supply and demand will never apply (just ask Hong Kong).

People get into housing here (Bay Area) under huge strain and sacrifice, on the promise that eventually, things will become stable as they never will be in a rental, and that it is possible to build equity. In the meantime, all money goes to the house, no other retirement savings is possible. I am more than paying our fair share to the schools and then some, with our $25k/yr taxes, for a rundown place, even though they treated us like [email protected] I would love to move now that Palo Alto is being ruined by CC allowing companies to take it over as their own fiefdoms and consequently encouraging the overbuilding crowd/trolls (like Kate Downing who clamored for microunits, falsely climed she couldn't buy a house here, while moving into a large house in Santa Cruz for an amount that would buy a home here - living on more than twice our income, I should note.)

Prop 13 is the only way people can put down roots here and not become a burden on society in their old age. When we sell, it willnot be a bonanza of cash, it will be moving the only retirement savings, which in the end, will not be generous. My self-employed FIL thought he cashed out his big home in SoCal to live on, too, as his only savings (like so many of us). Moved to a really cheap part of the south, but medical bills (even with insurance) bankrupted him a long time ago. Not earning any interest didn't help either but it would never have offset the medical.

This area is hard enough. Getting into a house here usually means working up from other punishingly expensive substandard homes, you cannot judge someone's situation by their being a recent home purchaser. Mischaracterizing truly struggling homeowners and taking away the only financial refuge (after decades) in Prop 13 would be highly unjust. My concern is that Gordon doesn't really exhibit the curiosity he espouses and would believe all the developer-troll hype. The real reform that needs to happen with Prop 13 is to restore the balance between homeowners and large businesses. The balance used to be more even, but the businesses have found ways to avoid paying and the burden has shifted more to homeowners.

Prop 13 is the only protection we have against a taxing authority run amok. That's why there was a prop 13 revolt. Our housing property prices have risen faster than most anywhere in the USA. I'd like to see some stats on the per capita revenue from home taxation in Santa Clara, both absolute and with respect to local inflation and compared to nationwide.
If the tax authorities could get rid of prop 13, new buyers that are complaining about unfairness would not save a dime. Santa Clara government would just hire more people and waste more money. This is one of the few restraints against wasted government spending.

We could really help out the government. Let's start taxing our automobiles every year. That 10 year old car you bought for $15,000 could now be taxed this year on a $45,000 basis. Just consider how stupid it is to pay greater taxes on something you own simply because other people are now paying more for the same item.

Where's the outrage about commercial property tax rates staying at decades earlier-levels while still raising rents to nosebleed levels?? Why just pick on homeowners?

It would have been nice if this article had covered Gordon's position in some substantive detail and been less of a puff personal profile. If anyone finds any other coverage of Gordon's moves and positions, please post the links because I couldn't find anything elsewhere.

@jim h

Cars do not generally increase in value after purchase. I'm sure you've often heard about how much the value drops once you drive it off the lot. Plus, you already pay a yearly tax on your vehicle (VLF) which decreases annually, so it sounds like you should be happy with that.

Two things ...

One is that whatever you do to tweak Prop 13 will now create massive chaos.
The people who want to change Prop 13 usually see a huge gain in it ... perhaps
real estate people who know it will create a glut of properties on the market and
lower prices for those folks who are retired and have been living on fixed incomes
that could not afford the new taxes on their homes. This was the problem Prop 13
was designed to fix. I do think the suggestion to change Prop 13 for commercial
properties is a good one and should be looked into.

Second, why is a story like this does it start and then go on at length about the
subject of the story and his philosophy of government. Answer is to get you to
feel emotionally a certain way before you are exposed to the real idea ... it's called
framing, and it is usually some underhanded play on your emotions. Oh, he's like
me in how he sees government - so he must be right about Prop 13. Boooooo!
Why can't our "journalists" seem to write to inform anymore instead of always
writing to persuade from some unknown undisclosed point of view?

This is why we cannot have a democracy anymore ... lies, angry arguments, and
ridiculous emotional appeals have replaced facts, discussion, and the analysis of
experts. Look at what we have for President thanks to this new American political
mode.

There is no need to repeal Prop 13. Politicians wanting to grab more of taxpayers' money is a very bad excuse.

The most basic flaw in Prop 13, when it was passed and on to this day was that it didn't make property tax a progressive tax, also referred to as means testing. Billionaires, multi millionaire and ordinary home owners were lumped together, that's why very wealthy people pay a pittance in property taxes compared to younger home owners for the same type of home. Prop 13 was right to protect home owners from unlimited property tax increases that would have caused many of them who weren't wealthy to lose their homes, but aforementioned basic flaw bankrupted our previously marvelous public education system and caused great damage to California. It shielded rich people from paying their fair share. A billionaire paying $5000 in property taxes in palo Alto while his young neighbor is paying ten times that and more is a joke.

Property taxes pay for services: roads, police, schools, libraries, parks, pools,and much more. With the current status of prop 13 essentially those who for the longest time are subsidized by the ones who bough more recently. This is a political problem . It also has the side effect of keeping family housing off the market, not to speak about the fact that taxes on housing profit may never be realized (1031). The effect of all this is that long time owners are being subsidized by others. . Do we want to deal with the consequences of prop 13 and pay more so that others can have the luxury of continuous occupation of their houses? I wish that there was a referendum on this matter. This is specially galling because the people who pay at "older" rates have the money to pay for equitable taxes: it's in their house. They don't want to pay an equitable share for the services they receive .But they have the money. Their houses have appreciated at unprecedented rates.

It's not necessary to have prop 13 suddenly disappear. But a gradual, persistent, and steady overhaul of property taxes is not just the just thing to do, it's the only decent thing to do.

I keep seeing the attack on the single family home in one form or another. I also keep seeing the desire to free up more homes on the market. Must be a realtor - there was one in the neighborhood looking for people who planned on moving. The single family home is the one of the biggest investments that people make. If you live in parts of San Jose you can get your house ruined by flood water. Or you can live in the valley and have your water cut off and your livelihood taken away when all of your crops die. Or an earthquake can take your house down. There are no guarantees in life only the luck of the draw. If your home is owned by someone else they can take it back and make it into an AIRBNB. So the attack comes on all fronts. NDN thinks it is a luxury to have continuous occupation of a house. What a concept. The more we toss this around the more Mr Gordon is going down. The "framing" is falling apart and not working to his advantage. All of the kooks are coming out of the woodwork - like termites - another house problem. That is why you see all of those tear downs - too many problems to fix so start over.

@Resident

I wouldn't have as much of a problem with lack of housing turnover if the people in those houses didn't go out of their way to prevent development so that others might also have a place of their own.

Yimby - you indicate Mountain View - they have housing going up allover the place and more planned - the housing is going in open space or tear down of old manufacturing. It is all go in your town so why are you complaining. [Portion removed.]

The Bay Area as a whole is severely behind in housing, and hasn't built enough to keep up with demand for years. This is why it costs $1500 to rent a bedroom now. Mountain View is starting to move on it, but not nearly as much as it needs to, and it's not the only city that's​ behind.

It will never be enough, will it, yimby? You're like one if those deep sea fish with the bright shiny lures in front. It always looks good to keep reaching for the shiny thing, but never ends well for those who fall for it. You can't build enough to lower prices here, unless you ruin the place so badly people exit en masse. But you are right that we should even things up - which should be done by reducing overpopulation of office space, and converting office parks to housing diring the next recession so we don't face this again when things heat up.

San Jose and Concord are clamoring for the development. Please take your shiny lure there where it is welcome.

@The Real World,

Nice of you to give us a perfect distillation of the NIMBY mindset: don't build houses here, build them in San Jose or Concord.

I'm curious about the circumstances of the people insisting long-time homeowners should lose all protections that prop. 13 has provided. Were you ignorant of the high cost of living when you moved here? Did you accept a job offer with a salary that would not allow you to purchase a house but now are unwilling or unable to find a job in an area that is affordable? Are you able to afford a house but just can't stand the fact that your seventy-year-old neighbor pays lower property taxes than you? Do you want to live in the area long term, and if so, if prop 13 was repealed and no similar protections were established for homeowners, how would you be able to continue to pay escalating property taxes as you aged and earned less than newcomers, and eventually retired and lived on a fixed income? I just can't wrap my head around the mentality that people who've spent their lives in a community should be shoved out if the local economy is booming and property values skyrocket.

@The Real World

You're not entitled to a world where you get to move in somewhere and pull the ladder up with you. Your claim that the bay area would need to be built out to the point that people would leave en-masse is ridiculous and I'd love to see an example. You're also selfish to try and put a crimp on the job market here in the valley, which has provided extremely well paying jobs, just because you don't like the growth it's attracted. If you want to live in a sleepy suburb that won't grow beyond your liking then I'd suggest you not live in the hottest economic zone on the planet.

@bemused

Prop 13 incentivizes homeowners to advocate for no-growth policies, reducing housing supply/competition and increasing their property values, while renters and prospective property owners deal with the negatives that this brings. Getting rid of Prop 13 would unshield homeowners from the negative impacts of rampant uncontrolled property value increases, incentivizing them to adopt pro-growth policies in order to stabilize property values and their taxes.

@YIMBY, I'm thinking you meant to reply to someone else. Your comment doesn't address my question at all.

"I'm curious about the circumstances of the people insisting long-time homeowners should lose all protections that prop. 13 has provided"

The Bay Area, and California at large, is facing a housing shortage that is exacerbated by Prop 13 in the way that I described above. Those are the circumstances in which I insist that Prop 13 be repealed.

Bemused, when you say "I just can't wrap my head around the mentality that people who've spent their lives in a community should be shoved out if the local economy is booming and property values skyrocket." let me be the first to say that I fully agree. I've had too many friends that I grew up with here get pushed out of the valley because of the skyrocketing housing costs. I can't wrap my head around the mentality that someone's view of the mountains is more important than a new housing development which would help alleviate the housing crunch.

Homeowners are currently immune to these effects because Prop 13 shields them from it, and then go on to make it worse by advocating for no development and shutting down new housing projects which would help alleviate the problem. This has to stop, and ending Prop 13 would go a long way to helping by exposing homeowners to the same cost pressures that renters face and incentivize them to support new housing developments.

From where I am sitting the weekend papers have continual listings of open houses to visit throughout the bay area. PA has a large turnover of homes when the school year is over and the kids are going on to college. On my street we do not have any the original homeowners but we do have people come in who buy the houses and rent them out. For the new, young homeowners who have a young family they need to have a predictable projection of expenses as their children navigate through school and the extra-curricular functions that the children enjoy. So from where I am sitting the tax assessed value of the homes is continually churning and being upgraded - except for the speculators who buy and rent out the properties. Since Palo Alto is selling education and family life as it's main attractions then that is all to the good and the system in place is working fine. Except for the school system which should be wallowing in the benefits of the continual reselling of homes but is somehow struggling. That is a different problem. YIMBY - you are yelling into the wind. If you really want to buy a house then wait until May-June and you can tour the areas to see what works for you. That could be a condo. It is all there - especially in Mountain View and Redwood City who are building on previously open land. If owning is your goal then you can do it. So what is your goal?

[Post removed.]

@Resident

And due to the housing crunch across the entire Bay Area, the cost to rent or buy property has resulted in $1500 rent for a spare bedroom, $2000+ rent for a studio, $500,000 to buy a condo, and $1,000,000+ to buy a house. People are barely able to afford rent here anymore, let alone buy a condo. There needs to be more supply and far, far more listings in the paper you're reading in order to make up for years of under-building, spread out the demand across more supply, and finally make a dent in rent and purchase costs. Otherwise people are going to continue to be forced out as rent climbs beyond what they can afford.

The thought that there are still tons of homeowners who purchased their houses prior to 1975 is ridiculous. We've had at least 2 generations of turnover since the implementation of Prop. 13. And no doubt that those who have bought properties in the last 40 years have done so more than once. And each time they "buy up", these homeowners have had to do the same thing some are complaining about - step up their property tax liability in a big way.

The system works fine. You are paying it forward each time you buy a new property. Yes, it's a big lump of cash, but we all do it and we all get it done.

The notion that everyone should be able to buy a house in Palo Alto is nonsense. Why not Atherton, Beverly Hills or La Jolla while we're at it? Housing supply is only part of the equation - to say it is the only reason why a home is more valuable in one city over another is simply nonsense. Schools. Proximity to Stanford. Social options. City services. "Urban forest". And on and on.

There's nothing wrong with starting out with renting an apartment, then purchasing a condo in Foster City, then buying a "starter" home in Mountain View and then buying your dream home in Palo Alto. The "I must have what I want and I want it now" attitude is a bit entitled if you ask me. Why don't you try working your way up the ladder instead of just magically dropping in on the top floor? Buying a home in Palo Alto has always been a more expensive proposition than buying in other surrounding communities. I can remember when my folks bought their house (1972) in Menlo Park that a similar home in PA was double the price...and BTW, that was before Prop. 13.

"The only reason for that is that the residents of Palo Alto hate poor people so much that they have passed laws that make cheaper housing illegal, by mandating minimum lot sizes, maximum occupancy, maximum floor area ratio, maximum units per lot, etc."

Newsflash: Every city has minimum lot sizes, zoning for single residential, multi-residential and high-density housing, max. occupancy, floor ratios, height limits, etc. And these zoning requirements have been on the books (in every California city) decades before Prop. 13 came to be. No offense, but you're argument is a bit of a reach.

Cities and counties have found ways to work around Prop. 13 (with voter approval). In PA, we have parcel taxes for the school district (both for yearly operations and new/rebuilding of campus buildings), fees for storm water system improvements, new sewer systems, general fund fees on our utility bills, library improvement, etc. Further we (along with other county residents) pay extra (either property or sales) taxes for road improvements (such as the 101 improvements), BART to San Jose, transit, etc. Again - voter approved. And (if you care to look up the California voting results), the residents of PA have voted in favor of the initial and then continuation of the higher state income tax program that Gov. Brown has implemented. To say that PA property owners have exempted themselves from stepping up to pay for city (or school) services or infrastructure improvements is an uninformed statement.

No one is asking to make it so you can buy a "dream home" in Palo Alto right off the bat, or skip the progression you're laying out. The system as is currently has stalled the construction of apartments and has caused rents to explode. How are people supposed to move up to a condo if rents have sky skyrocketed and they're doing all they can to just cling on in the bay area? I've had numerous friends who have had to move away because they just couldn't afford it anymore. This is the exact reason why restaurants and other businesses in the service industry around here are hurting due to labor costs, because their labor supply needs more and more pay just to live around here, or they leave the bay area entirely.

In other words, how are people supposed to move up from their apartment, to a condo, to eventually a starter home with a family if they're barely able to afford to rent a spare bedroom with how much rent currently costs? $1500 for a bedroom, $2000 for a studio. This is what renters are dealing with now.

[Post removed.]

What are this guys thought on the megahouse being built on Newell? The people would like to know his opinion.

No "resident" I have never been a realtor neither have I had anything to do with housing or any related fields. Spreading falsehoods as you seem to be doing about me is also not truthful or nice. So, please stop if you want to be honest. In my long life (almost 7 decades) I've seen a lot of twists and turns in housing. It simply a matter of being intellectually honest to look at the truth and recognize it: newer buyers are subsidizing the long term house owners via prop 13. In the Bay Area long time owners had a lot of subsidies - mortgage deduction like all of us, but also a long run of stratospheric gains and appreciation curtesy of immigration (like all the US) and specifically around here, a huge push from technology hires.

So you would like to see prop 13 to stay. But is it fair and conducive to decent results to continue to insist on others paying for you? It's not single housing that's under threat-it's the privilege and luxury of wanting others to pay for your use of city and county services. I will be only too glad when prop 13 goes to ballot. Nothing drastic or sudden needs to happen, but gradually we should all be starting to pay our fair share of the services we receive.

We're all stuck subsidizing government spending on items we don't like, don't use and/or find objectionable. We all have our own laundry lists of these items and many of us doubt the government's ability to spend our money wisely.

My main one is unchecked government spending while we run city-wide deficits and have huge unfunded pension liabilities for workers where ALL city employees still get maximum raises, benefits and housing allowances.

Until government learns how to manage cost-effectively, honestly and for our benefit, I remain highly skeptical about giving them more.

If anyone is in doubt about Palo Alto then be out at 3:00PM - the streets are filled with kids on bikes getting out of school. Mitchell Park and the library are filled with kids. Walgreen's has kids spending on candy and whatever. So that is what we do here - we are a family town with soccer fields and baseball diamonds. The last thing families need who have bought into this town and all other towns in California is to have their current financial picture high jacked by politicians. And that is exactly what it is - this state cannot manage itself and our politicians are busy thinking more ways to spend money. What they do get is going to all of the wrong places. I think their pension funds.

Elysium looked like a pretty great place to live, too.

Here's the thing: I don't view this as a taxation issue. I view this as an incentives issue. You can say that you don't feel the government should get more of your money, and fine. But before Prop 13, there was incentive to keep property values from inflating out of control because home owners were taxed on that value. In a post Prop 13 world, there's no incentive for property owners to keep property values stable, and every incentive to do things to increase that value, including blocking any housing competition from new apartment construction. And thus we're now in a world where property values are through the roof, rents are insane, and buying even a condo requires having 100k liquid for a down payment, but new developments for condos/apartments/whatever are shouted down because they block a homeowners view of the mountains. Getting rid of Prop 13 puts everyone back on an equal level where we're all impacted by property values, and makes it so that homeowners who want to keep their city frozen from growth can continue to do so so long as they're willing to pay the cost for doing so.

"It simply a matter of being intellectually honest to look at the truth and recognize it: newer buyers are subsidizing the long term house owners via prop 13."

False.

Those people that have lower assessments had to get there BY LIVING THERE LONGER, and overpaid early on, and paid taxes for a much longer timeframe than the people you're comparing them to. Their patience and their paying taxes over a longer period of time is what resulted in their lower assessment.

It's also worth pointing out that sales taxes and state income taxes eventually rose significantly post-Prop-13, with state revenues increasing as a result. The issue isn't long-time homeowners, the issue is that the tax revenue THAT ALREADY EXISTS in Sacramento needs to be more equitably distributed to towns and counties. The "bad guys" aren't the homeowners, it's Sacramento, which would rather spend money on High-Speed-Rail than Dumbarton Rail, and would rather burden school districts with pension liabilities than fix the pension laws THAT THEY WROTE or finance the pension liabilities that THEY CREATED.

Despite being pro-Prop-13, I'd be receptive to "reform", provided "reform" came with dollar-for-dollar drops in sales taxes and/or state income taxes. But you NEVER here "reformers" talk about lowering income taxes, because they're not interested in "reform" or "fairness", they want MORE TAXES; they want more of YOUR MONEY.

[Post removed.]

Did you read this part?

"What took its place? Hotel taxes, utility taxes, and new fees. Mostly, the highly regressive sales tax."

If you did, then you realize that the above, and my other points (income taxes, for example) are spot-on. Thank you.

You and people like you (*cough* Gordon *cough*) are welcome to make suggestions on ACTUAL reform, that includes dollar-to-dollar reductions in sales and income taxes. I'll actually listen.

But I won't hold my breath because you're not interested in tax fairness, you want MORE TAXES.

Your move junior.

@peninsula resident,

"But I won't hold my breath because you're not interested in tax fairness, you want MORE TAXES."

I'm honestly curious, why do you think all @YIMBY wants is more taxes? What do you think their goal would be with that?

I'll gladly trade you dropping those taxes for dropping Prop 13.

This whole story line is about Rich Gordon - it is not about YIMBY and his political activism - OKAY? We are all one vote only and I know how I am going to vote and YIMBY is irrelevant to that decision. Mr Rich Gordon is going to have to face off with every one on his own terms. The fact is that we are shadow boxing with someone who is only one vote.

I don't think there was any doubt that your default position was​ to vote in your own self-interest regardless of the cost it ends up putting on others. I'm only here to shine a light on that cost that others are paying for you to keep Prop 13, so your vote is cast with full knowledge of the people your stepping on to maintain the status quo for yourself.

I had to look up the term "virtue signaling" again.

"I don't think there was any doubt that your default position was​ to vote in your own self-interest regardless of the cost it ends up putting on others”

It is amusing that you don't see the hypocrisy in your statement.

You would willingly drastically cut state revenues (and state services and affect all the poor people that depend on them), for no other reason that you want YOUR taxes lower.

You are no different than the homeowners you claim only care about their own interests.

Mr. Pot, meet Mr. Kettle. Guess what! You're the same color.

@Peninsula Resident,

That's not a fair or even valid reading at all of what @YIMBY said. They were asked if they'd support a dollar-for-dollar balance of Prop 13 repeal. That is, they'd take lowering sales and income tax to account for the new revenue generated in a Prop 13 free world. No services would be cut, no revenue would be lost.

I hope this was just a misunderstanding, otherwise it would not seem like you are arguing in good faith.

I'm similarly confused at this accusation that I want to cut state taxes. I want to get rid of Prop 13 in order to bring back an incentive to lower (or at least stabilize) property values. I'm fine with cutting sales taxes and other similar regressive taxes, even if it means cutting income taxes a bit. I expect that property owners in the current housing climate would see the tax burden shifted onto them unevenly, but that could be blunted with tax deferments initially. Incentive to lower property taxes would spur support for more housing supply, property values would drop as the demand for housing units starts being met with new high-density development. Property ownership then becomes more attainable, and more people start becoming owners and paying property taxes themselves, and the entire housing and taxation situation stabilizes.

Rich Gordon did nothing much during his years as Assembly member. He is part of the Establishment Democrats and arrogant to no end as a public official.

Gordon, don't mess with Prop 13 and screw it up for Seniors and homeowners.

Sadly, he is replaced with another Irrelevant career politician, Marc Berman.

All the above arguments appear to assume that nothing is going on out there and we are stuck in a state of limbo. The amount of building going on in the peninsula is constant and on-going. Any one who drives around can see the amount of continual building in process. Time to focus on the special perks given to developers / builders of apartments and condos. The above arguments are more specifically directed at the single family home which is a favored target of city management and developers of large community assets. Large developments are the place where the tax advantages are implemented to supposedly satisfy some requirement imposed by the state/ABAG. Remove all of the incentives to developers to even up the total of tax assessments in any one community. Time for the city, county, and state to provide data on any new development and the "incentives" provided to the developer. That would include the new building proposed for Apple in Cupertino, Google in Mountain View, and FB in Menlo Park. There is a lot of "trading" in process of what benefits the city gets.

A specific problem for Palo Alto has been it's resistance to big box stores. Example - the shopping center on Charleston south of San Antonio - the parking lot is in Palo Alto and the stores are in Mountain View - that was purposely planned that way. And the lack of development on El Camino in the area Oregon to Charleston - that is property that has to have a very low tax assessed value - someone is sitting on the property and any attempt to upgrade has been met with resistance. The small hotel in that location wanted to upgrade and met with resistance. There is a business area on East Bayshore at San Antonio - all very old buildings. And we do not have a major Safeway store with bakery - there is one on San Antonio at El Camino, one in Los Altos, one in Menlo Park, one in Redwood City. The location where Fry's is could include a major Safeway - the gold standard Safeway was first introduced in Honolulu. And any attempt to bring BART around the bay through Santa Clara is met with resistance. Palo Alto has walked itself into a lack of balance depending on SU to provide support. We have a lot of areas that can be upgraded for commercial purposes and still retain the balance of single-family homes. All of those upgrades would increase the tax assessed value of those properties. Please note that the Eichler community is a "planned community" with recreation facilities and club houses so it does meet a goal of a planned community. Check that box please.

What did Gordon do on this issue when he was a California legislator...when he had a voice to directly make law?

When Mr Gordon surfaces as himself he will have a lot of questions - save that one for a face to face. I have noted on other streams the Compadres rebuild and the El Camino rebuild as items which need revised tax assessments and discussion of any trades or deals which compromise any updated tax assessment which is reflective of current market value.

@Resident

There is nowhere near enough building going on. What it see up and down the peninsula is a drop in the bucket.

We either need more building on more plots of land, or we need to uncap height restrictions and let what is being built become very high density. Either way the number of units coming into the market is not even enough to soak up increased demand for the year, let alone put a dent in all of the previous years of not building enough to meet demand.

@Yimby - in your earlier post you mention about how else someone like you can move up. Honestly PA city council should care more about improving PA quality of life,rather than worsen congestion here just so that people like you can move up. Now with the campaign finance revelations for Tanaka/Kniss emerging, there could be influence from developers swaying their decisions. But I sure hope that the council ignores developer interests and instead focuses on improving quality of life in PA instead.

YImby, let's be honest here. "we" don't NEED anything but you do. You NEED cheaper housing so you can afford to live in an area that is out of your reach.

Pure and simple.

As long as you guys are willing to pay a social cost (taxes) for blocking development in a high-growth environment, then I'm fine with it. Prop 13 offloads that cost onto renters and future property owners while owners reap all the benefits. That's incredibly lopsided.

The key person for development in Mountain View is Lennie Siegel - Vice Mayor. YIMBY can go to a Mountain View City Council Meeting and get his two minutes of fame and find out what Lennie has to say about future planning for your city. We include Lennie at times for regional planning. Maybe he would appreciate your donated time.

"They were asked if they'd support a dollar-for-dollar balance of Prop 13 repeal. That is, they'd take lowering sales and income tax to account for the new revenue generated in a Prop 13 free world. No services would be cut, no revenue would be lost."

Respectfully I think you (and yimby) should learn the history and the financial redistribution that resulted from prop 13.

Property tax revenues have a bias towards funding local government: towns, school districts, fire districts etc. The consequence of prop 13 was that local revenue decreased and (thru income and sales taxes) state revenues have increased.

Your interest in increasing property taxes and lowering income and sales taxes has the consequence of increasing local government funding and decreasing state funding in the dollar for dollar.

Then split the property tax up in such a way that some goes to the local government and some goes to the state government in a ratio that preserves the current balance.

Uhh... Seriously...I'm not trying to be insulting, but are you new to California?

The bulk of the historical debate has been about the relative underfunding of local government.

The bulk of the groups that push for prop 13 destroyed want more funding for local government.

The very people and groups that want prop 13 gone will be opposed to your solution, because it doesn't solve the problem they are interested in.

It must be nice being you, walking around thinking everything has a simple solution

In the year 2010, 50 percent of Palo Alto residents rented their home. It is a surprisingly high number. Imagine how much higher rents would be if landlords were forced to pass on their higher tax bills to their tenants.

@Peninsula Resident

Born and raised in the Bay Area.

That's fine if other groups have their own motivations for getting rid of Prop 13. My concern isn't one of state vs local property taxes, and if those groups want to debate that then more power to them. I lean towards starting out with a balance that maintains the current ratio and going from there.

As far as I can see no one here is an elected or appointed individual with any authority for negotiation of this topic. And Mr Gordon plans on running against other people. I think we should wait for Mr. Gordon to appear and we will listen to him and the other people running for this office. Hopefully it be a large number of people.

@Renters,

How do you think landlords set their rent? You seem to be assuming that they could successfully rent out their properties at the new, higher rent. If that's the case, aren't they leaving money on the table by not setting their rents to that amount now?

Sorry YIMBY,

You can't have it both ways.

Either the property tax is not passed on as part of the rent from apartment dwellers and thereby they do not pay for school services they consume.

or

the property tax is passed on and thus they benefit just as much as residential or commercial owners from Prop 13.

Recent history also shows that when the property value is reset for new apartments the rent skyrockets above the threshold you are complaining about.

Would you be willing to pay deferred taxes when you sign your lease for that flashy new dream apartment with the latest amenities and within walking distance of shopping, restaurants and mass transit?

@Sanct

I will echo @Landlord's post: if landlords could be charging more rent than they are now, then why aren't they doing it?

@Sanctimonious City (fun name!)

I assume you're talking to me, since @YIMBY hasn't mentioned paying property tax via rent. If not, my mistake.

Landlords charge what the market will bear, with a floor at what their ongoing costs are. This difference is called "profit." With the current housing supply and demand, rents far outstrip what their costs are. Even with an increase in property taxes due to the repeal of Prop 13, the rents that the market will bear would still exceed costs, due to the lack of supply. The renter is still "paying" the property tax, yet they are not "benefitting" because rents are artificially high. This is due to scarcity induced by NIMBY homeowners, which is partially a result of Prop 13.

I hope this helps.

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@Landlords and @YIMBY,

You both appear to be arguing for the second scenario I listed. There are several components to the cost to the landlord including loan interest, insurance, utilities, labor, depreciation, maintenance, administrative fees and property taxes.

The price the landlord charges the renter includes all of those items plus a profit or he goes out of business. So renters do indirectly pay the property tax. In fact, in Indiana the property tax is not hidden. Renters itemize their property tax included in the rent and are allowed to deduct up to $3,000 per year in property taxes.

Thus, if the landlord property taxes are low now then the renter is benefiting from Prop 13. If it goes up dramatically because Prop 13 is changed and the property value is reassessed then that increase will certainly be passed on to the renter. There would be no incentive not to pass it on because all properties will be reassessed with higher taxes at the same time.

@Sanct

You seem to be under some assumption that landlords are leaving extra profit on the table that they could be charging now, but aren't for some reason. And that if Prop 13 raises their costs, they'll have to buckle and finally take that extra profit they weren't taking before in order to cover those costs.

In the rental of properties many people want a stable family unit in the house VS a bunch of young techie groupies who create a disturbance in the neighborhood. My cousin has some rental properties in which the renters are no end of trouble and he has to work with the sheriff to get them out of he house. People want stability in their business dealings and rentals tend to be an unknown so having a stable family unit is worth a lot. Peace of mind is part of the profit picture. People cannot afford to continually work with problem renters who break everything or are endlessly complaining. If I was in that situation I would raise the rent just to get problem people out of the picture. Anything that has to do with property and people has many variables that will not suit all people.

On the topic of profit is a developer builds a huge complex that is leased out - or rented - then the developer has frozen his tax assessment at the point of when the complex was built. Leases and rents will go up relative to market value so the Developer is going to make an increasing profit over time. Likewise the single family house owner will also make a relative profit over time - but only at the point of sale of the property. So what is the argument here - changing the single family home which benefits the single family owner or the developer who is making a profit. If the goal here is to rip out single family homes and put in huge develop units the that argument is going down.
So the best focus then is on commercial properties where the tax cost is part of the income statement merged into all of the other elements of the profit statement. So focus on commercial properties as the least controversial changes here.

@YIMBY

The point you are missing is the profit is taxed as income and subject to the entire basket of local, state and federal taxes.

For the sake of argument, lets assume a worst case example where the landlord has paid off his loan and the building is fully depreciated. His only remaining significant fixed cost would be property tax.

Fixed costs are typically passed on to consumers because if the owner can't cover them then he will go out of business. Variable expenses can be deferred or scrimped but not money going to banks or Uncle Sam.

If property values for apartments were all reset at the same time the additional costs would be passed on to renters. There would be no place to seek a lower price because they all went up the same percent at the same time.

Of course, landlords could individually decide not to pass on the cost increase in an attempt to compete on price. They could do that today. However, it would be sub-optimal from a business standpoint because every dollar they pass on they will get to keep a percentage depending on their taxes.

Speaking of taxes, the landlord will pay a marginal tax rate of over 60% on those "extra" profits just for the privelage of doing business in California. Net tax rates will be lower but in the case above the property will likely qualify for less deductions.

So there is no imaginary loophole or free ride you are concerned about. Despite all the misinformation, businesses pay their fair share and the government is extremely good about getting what it is owed.

Rents will be whatever the market will bear. If costs go up forcing offered rents to increase, people may just as well​ move rather than accept the increase. The next obvious avenue to solve that would be lowered costs via lowered property taxes through lowered property values, which would incentive more development to spread out demand across more units.

Nimby - you just went back to "units" indicating a "developer" situation in which the "developer" is making all of the money / profits. We already did that here - Eichler homes - a developer with a planned community. And they are not going anywhere but up in price. Forget tearing out single family homes because YOU want a place to live. That is not going to happen. And Prop 13 is not going to get you there. Prop 13 is only going to work for commercial properties. And I am all for that. I even have hopes that those old buildings on El Camino between Oregon and Charleston get torn down and apartments / commercial get built - that is the place for that to happen - but strangely it does not happen in the most obvious of places because "someone" who owns those properties has had them forever and they have a low tax assessment and they are waiting for some big deal to happen. Or they cannot pay the capital gains / taxes if the properties are torn down and sold. There is some sticking point about those properties and the ones at San Antonio and East Bayshore. That is where the focus needs to be.

@NIMBY,

Now you are thinking.

If you really want to unfreeze the real estate market, you should support an amnesty period for owners to sell or re-develop without a punitive tax penalty.

This is similar to the national issue of repatriation of offshore funds due to the corporate tax rate being comparatively too high.

By lowering the tax rate temporarily on gains for real estate sales for people who have owned for 10 years or more and lowering rates on the reset property values on development of existing sites, it would spur a high rotation of selling and new construction.

SF has a annual budget of.$9.7 Billion.
Austin TX is larger in all aspects and has annual budget of $3.7 billion.

Gee whiz, poor SF is being denied proper revenue because of prop 13 & boomers & homeowners & nimbys & everybody that worked hard. Boo Hoo. Life isn't fair. I'm entitled to a piece of someone else's hard work.

Go ahead Gordon, run for office on a reform prop 13 platform. You'll go down in flames.

It is the small owner who offers the only really profitable and reliable material for taxation. He is made for taxation. Auberon Herbert