Re: Property taxes
[Rod Dreher  03/13 02:39 PM]

More readers weigh in on property taxes and the effect they have on conserving community. Here’s Joel in California:

Certainly, much as Nancy pointed out property taxes can be very difficult for families to handle as time goes on, especially as people move into their retirement years. In many ways this has been the great benefit of California's Prop. 13. Which locks in property tax rates at 1% (+ some carried over bond issues) and fixes the assessed value of the home at the price paid for the property plus I believe a max 2% adjustment per year.

That being said, as valuable as Prop. 13 is, it is not without it's distorting affects. Because property taxes are largely fixed for long-time homeowners, homeowners who no longer work and have retired, are easily able to continue to afford the property taxes associated with living close to prime near commute locations. As a result, the supply of homes near major work areas are distortively low, which serves to make housing even more expensive. This is demonstrated by the fact of just how many people in California have disturbingly long commutes, of which I am one. Don't get me wrong Prop. 13 is immensely valuable, but it is not without costs. Not the least of which is that the next generation will be the hardest hit. This has especially been the case in California again, where new communities are commonly assessed something called Mello-Roos. Which is a type of bond assessed against only new communties for 30 years. As a result, newer (typically after about 1990ish) communities can be paying upwards of 2% of the assessed value of property. Again, there is no easy answer, "protecting" a community can have the same affect as undermining the "community"; the people may stay the same, but its attributes will change. It hasthe affect of causing the community to remain static and age together, but a community that was once perhaps young families, will down the road become a community of retirees.