Tuesday, June 10, 2008

PROP 13 | CLAMPING THE JUMPER CABLES ON THE THIRD RAIL: A reader writes to 4LAKids, many write to The Times about Prop 13 @ 30


The debate over a face lift or haircut for Proposition 13 continues. smf/4LAKids has proposed splitting the rolls and periodically reassessing commercial and industrial property, 4LAKids reader and Westchester parent/blogger David Coffin suggests changing the formula for multi-unit housing (condos and apartments). LA Times reader-letter writers are all over the place.

The only letter writer who specifically addresses splitting the rolls, George T. Chronis, asks " if a commercial enterprise is operating at the same property year after year, isn't that a good thing for job stability?"

smf opines that the oil refineries who merge and modernize have far fewer employees than in '78, and that the serial merging chain stores consolidate and close less-profitable outlets and often de-unionize; the entities that open in closed stores generally hire cheaper non-union labor. So the answer is no, employment stability (and the overall public good) is not served!

That strange whirring noise you hear is Howard Jarvis and Paul Gann, the godfathers of Prop 13 (and professional lobbyists for apartment owners) spinning in their graves at at Mr Coffin's suggestion and Mr Chronis' equation of Prop 13 and Rent Control!  - smf

David Coffin writes to 4LAKids:

June 9, 2008 - I don't know your age or whether you remember the how and why Prop 13 came about but it protected a lot of homeowners from losing their homes during a time of out of control real estate speculation and flipping properties. Much like what has been occurring over the last eight years. 

There needs to be better ways to tax properties.

Given the rise in the number of multi unit housing over single unit housing I've been suggesting that rather than tax properties the state should instead tax housing units. After all, residents in both types of housing use the same services.

However a single family home pays 100% of the taxes of the property it sits on while a single unit of let's say, a 40 unit apartment complex pays 1/40th of the taxes of the property it sits on.  Today the average home is selling for roughly $550,000. You will find very few if any 40 unit apartment complexes selling for $22 million ($550,000 x 40). What that means is that owners of multi unit housing pay only a fraction of the cost for services provided by the state, county and city governments services that their residents use.

The problem is getting worse as the number of multifamily units grows faster than single family units. In Los Angeles, single family units grew by 3,240 units. However multifamily units grew by 30,531 between 2000 and 2005. In 2005 there was 537,109 single family units compared to 803,799 multifamily units. Everyone of those multi family units pay a greatly discounted share of the states property tax even though they require the same services such as police, fire, education, roads, etc. 

This is really simple math and Sacramento needs to deal with this growing disparity because as the number of multi unit housing grows fur apart from single unit housing the problem will get worse.

Changing how housing is taxed by moving away from a property based tax to a housing unit based tax could yield the state billions and protect us the housing price fluctuations.

David Coffin

Coffin writes and edits the WestchesterParents.org & WestchesterKids.org blogs.


PROP. 13 PROTECTED HOMEOWNERS: Re "Prop. 13 at 30," editorial, June 6

LA Times Letters to the editor - June 10, 2008

• You say that "there really were people in the 1970s who could have been taxed out of their homes." I was one of them. I was taxed out of my $80,000 beach home.

I didn't vote for Proposition 13 because I knew it would hurt public services. Perhaps The Times should keep in mind that we who benefited most from it will soon be gone. Our passing will enhance tax revenues.

Had a more reasonable tax law been enacted in 1978, it would have been beneficial to state and local services and less of a burden to homeowners.

Jean Mannings, Redondo Beach

• In 1977, our taxes had tripled from 1970. We worried what they would be in 1978. We could not assume an additional tax burden. Proposition 13 fixed that problem.

Taxation should be related to income. If you earn more, you pay more. If your income is fixed, your taxes should be fixed. Why don't politicians want to address this matter?

Tom Pincu, Los Angeles

• I'll remind you that rent control and Proposition 13 operate for the same benefit: protecting long-term residents from the vicious effects of rampant speculation. Consistency demands that you support one if you support the other.

Second, before calling for any changes in Proposition 13, you should present data on what percentage of California residences are sold every five years, 10 years and 30 years into higher tax rates. We just went through a decade of massive churn in the housing market, which should be great for tax assessments.

Last, if a commercial enterprise is operating at the same property year after year, isn't that a good thing for job stability?

George T. Chronis, Los Angeles

• What a bunch of drivel. You really want to give Proposition 13 a haircut? The barber needs the real clipping. How about doing away with government-defined benefit pensions for all new hires? How about reducing fringe benefits? How about kicking elected officials out of office if they cannot balance a budget?

We have two classes of citizens: Government employees who can retire at younger and younger ages, and those who have to wait longer to retire so they can pay government employees.

Almost every homeowner has gained from Proposition 13. Don't touch it until the government can prove it is able to stick to a balanced budget.

Robert Somerville, Brea

• As a property owner and a real estate professional, I agree fully with the editorial. However, rather than weakening the measure, as The Times suggests, changes should be geared to strengthening protections that homeowners need.

In particular, with declining home values, the automatic increase in property valuation should be cut from 2% annually to 1%.

Unless and until the governor and Legislature get the states' fiscal house in order, Proposition 13 should stand as a bulwark against irresponsible politicians who care more about their jobs and perks than the financial health of the people they swore to serve.

Bill Greenberg, Laguna Niguel

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