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Prop 13 & affordable housing
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What goes down must come up.

San Joaquin County Assessor Steve Bestolarides a few  weeks ago sent out the assessment notices for property as of Jan. 1, 2016.

My 990-square-foot two bedroom, one bathroom home built in the 1950s now has an assessment value of $192,000. That’s an 11 percent gain over the 2015 assessment of $173,000. It’s 8.9 percent under what my assessed value would be under Proposition 13.

That is good news for government entities that count on property taxes to provide services such as San Joaquin County, Manteca Unified School District, Delta College, the City of Manteca, and others. The city’s cut of your tax bill is right around 15 percent. I will be paying $190 more in property taxes in 2016-2017 which I guess could be considered bad news for me.

The odds are next year will cover the remaining gap between my Proposition 13 value— set at the starting base of $185,000 which is the purchase price I paid in 2008 — and the market value. After that my property values will be capped at annual gains not to exceed 1.5 percent regardless of how insane housing prices get.

That means by the 2017-2018 fiscal year government agencies such as Manteca will be “whole again” in terms of property tax revenue they lost as home values tumbled during the housing recession.

On the flip side my tax bill dropped the first four years of home ownership as market values plunged. The home value went from $185,000 in 2008 to $90,000 on Jan. 1, 2012 based on the county assessor’s calculation. My annual tax bill had dropped by $950. Since 2012 the county assessment has increased 113 percent as has my property tax bill.

The one thing people forget the most about Proposition 13 is that any backslide in valuation can be made up as the market improves in percentages greater than 1.5 percent until it reaches what is dubbed as the Proposition 13 cap. The cap is what the home was purchased for with a maximum increase of 1.5 percent in any given year. The 1.5 percent in subsequent years is based on what the home value increased to under Proposition 13 rules.

There were more than a few who thought it was unfair my taxes dropped during the Great Recession and their’s didn’t.

But after delving into it with them and explaining how Proposition 13 works they had no qualms.

One homeowner bought her house in the late 1980s for $62,000

She did not see a rollback in her property taxes like I did from 2008 to 2012 as housing prices tumbled because Proposition 13 kept her assessment and tax liability substantially below market values as the housing boom tore through Manteca in the late 1990s and early years of the 21st century.

This year I paid just under $900 more in property taxes than she did even though her home is bigger and newer. It’s because the assessment clock on my home started with the price I paid for it in 2008.

I do not think that is unfair.

Meanwhile someone that buys a new home for $400,000  today will be paying at least $2,300 more a year in property taxes than I am. I say at least because they may have a park maintenance district or Mello Roos to pay that I don’t.

When some complain about Proposition 13 being unfair and no longer effective, they ignore the premise of the 1978 voter revolt.

Proposition 13 prevents – or at least greatly reduces — people from being priced out of their homes by rising taxes tied to rising values triggered by bigger and more expensive home sales.

The lady who bought her home in the 1980s happens to now be retired and depending primarily on Social Security. Had Proposition 13 not been in place she’d be paying in excess of $1,500 more a year in taxes based on her home’s square footage and other improvements. The additional taxes alone would more than wipe out one of her monthly Social Security checks.

Proposition 13 allowed people to live within the means they secured when they were working.

Someone who has been retired for 20 years isn’t likely in the position to buy a $400,000 home or let alone pay $4,000 plus a year in property taxes.

It’s a different story for a working household where the wage earners may make a combined $70,000 a year.

In the worst case and most likely scenario my property taxes will increase  by $300 on an annual basis by 2018 and then hit the Proposition 13 tourniquet that caps annual valuation jumps to 1.5 percent.

In a sense, Proposition 13 stands as the most effective tool in place to assure housing remains affordable for people who buy homes and opt not to sell as it keeps property tax liability at a level they can afford.