Posted on 09/11/2019 6:28:05 PM PDT by karpov
California lawmakers approved a statewide rent cap on Wednesday covering millions of tenants, the biggest step yet in a surge of initiatives to address an affordable-housing crunch nationwide.
The bill limits annual rent increases to 5 percent after inflation and offers new barriers to eviction, providing a bit of housing security in a state with the nation’s highest housing prices and a swelling homeless population.
Gov. Gavin Newsom, a Democrat who has made tenant protection a priority in his first year in office, led negotiations to strengthen the legislation. He has said he would sign the bill, approved as part of a flurry of activity in the final week of the legislative session.
The measure, affecting an estimated eight million residents of rental homes and apartments, was heavily pushed by tenants’ groups. In an indication of how dire housing problems have become, it also garnered the support of the California Business Roundtable, representing leading employers, and was unopposed by the state’s biggest landlords’ group.
That dynamic reflected a momentous political swing. For a quarter-century, California law has sharply curbed the ability of localities to impose rent control. Now, the state itself has taken that step.
“The housing crisis is reaching every corner of America, where you’re seeing high home prices, high rents, evictions and homelessness that we’re all struggling to grapple with,” said Assemblyman David Chiu, a San Francisco Democrat who was the bill’s author. “Protecting tenants is a critical and obvious component of any strategy to address this.”
A greater share of households nationwide are renting than at any point in a half-century. But only four states — California, Maryland, New Jersey and New York — have localities with some type of rent control, along with the District of Columbia.
(Excerpt) Read more at nytimes.com ...
if you stay in the house in Cal it doesn’t matter if values soar. Tax not effected
I avoid the Feces section
Arizona is getting so crowded and honestly it doesn’t even feel much like Arizona here anymore.
I agree. But almost EVERYWHERE is getting crowded. Arizona has added a million people a decade for my entire life. I really miss the Arizona of 3 million...
A Rent Control Proposition was put on the Ballot and it lost.
Who needs Elections?
It tells you they didn’t want to waste their Money.
I miss it so much. I literally am starting to HATE what it's becoming.
True, everywhere is this crowded. Imagine how miserable life is in, say, Atlanta right about now? At least we have ten lane highways with wide lanes.
Every single day now, I see people doing such wreckless and insane things. It's madness. Yesterday, coming home from work the traffic was backed up. (I was on Arizona Ave in Chandler if you are in the East Valley). I got close enough and I could see the light was out. Some lady was sitting in her car in the middle of the road with her legs out. All the traffic lights were out. Another car was way over on the other side of the road, completely crashed up. It was mayhem.
I went 2 minutes from my house to get pizza on Friday and a car was upside down in a green belt area.I feel like I am living in pre-Mad Max world.
My daughter just moved to Seattle for a job (yeah, I know) she says the traffic is insane. Lawless. Everytime you leave the house, it's a gamble if you or the car will come back in one piece. She's tried to go to the farmer's market in the neighborhood area where she lives two weekends in a row. She drove around for 30 minutes each time and had to leave because there was no parking for many, many blocks around it.
I feel like our (Americans) quality of life is degrading by the hour.
You’re posting to someone that was there in 1979, part of the campaign, up close with a 77-year old neighbor on social security whose house was paid off but who was being taken to a tax foreclosure because she couldn’t afford the property taxes, why?. Because the tax assessed value was soaring.
So the campaign helped her and tens of thousands like her.
But the legislation was crap. It caused people to stay put for fear of being slammed with property taxes that were like a second mortgage. The 1031 exchange scheme became a cottage industry as a result, no pun intended.
But that was forty years ago. Since then the tax assessed values have climbed astronomically. Rental property owners have had to increase rents to carry increased costs across the board.
Now the brilliant minds in Sacramento are imposing rent controls. It will work for them for about a year and a half, just enough time to get them past the next election cycle. Then they will need to think of something else.
Meanwhile the homeless population in LA County exceeds 60,000 in numbers. And many of them are drug-crazed violent animals. Rent control will not decrease their numbers. And those numbers are causing homeowners to flee. More people are leaving California than are coming in. But homeowners struggle to sell their homes even at below market values because an estimate of the new tax-assessed value must be disclosed or it will be factored in during financing.
Sacramento’s addiction to taxes is excessive. As I posted above, the state will rip it out of counties who in turn will rip it out of residents. The property tax scam is based on an extrapolation of market values. The extrapolation formula is the culprit.
The tendency for homeowners to rent versus sell is caused by a desire to avoid tax reassessment and this tendency takes a lot of homes out of the market. Rather than base tax-assessed values on market activity alone, the assessor’s formulas should look at such sales as a tiny fraction (which it is) of all homes and structures for sale and not for sale, then apply that small fraction to reassessments uniformly within a county and cap it at 1%. But this will never happen because counties would forecast much lower revenues and need to inform Sacramento thee requested taxes can’t be collected.
P.S. California just voted down rent control (Prop 10) in November 2018. Why do we have Propositions if the legislature and courts just ignore them?
> “if you stay in the house ...”
You just showed the problem (sort of) and seem to blow it off.
I say ‘sort of’ because it’s not ‘staying’, rather it’s ‘not selling’. Because property taxes are not reassessed until a real property is sold.
What sellers are doing in CA is moving out and renting their homes because they can’t sell them, at least not easily. Buyers are also informed there will be a new tax assessment which will be heavy.
People that want to buy a home will not easily find new developments because that is seen as sprawl that impacts the environment. Home buyers will look at existing neighborhoods and find less for sale because more people are moving out and renting rather than selling out right. They do this because they know a heavy tax reassessment will turn buyers off.
Homes for sale will have to disclose new property tax estimates in some fashion. And those estimates will be heavy, effectively throwing cold water at buyers.
If a building was tax assessed say at 250k twenty years ago, the property taxes are about 200 per month. If the home sells in 2019 at 1 million, the property tax bill will be 1000 per month. Even if the home sells at a huge discount, say 500k, the property taxes will still be higher than they should be because the assessor’s formula includes all recent sales, not just the one isolated sale.
This situation forces a lot of buyers to rethink which in turn causes sellers to rent rather than sell. This leads to less homes on the market for buyers and this causes an increase in property values. It becomes a vicious cycle. The only winners are government groups.
No sympathy for the disaster their voters are creating.
Voters voted 60-40 AGAINST rent control last November. CA Prop 10
Evictions are incredibly easy and common.
I've never been evicted. Wanna know my secret?
Never let a "crisis" go to waste, especially a government-created "crisis"!
The bill limits annual rent increases to 5 percent after inflation
And who is in charge of calculating the inflation rate? Oh yeah, the government. This is gonna work out well.
The same was done with Prop 187 except via a judge who was a member of the Lavender Mafia.
California is run by a few autocratic families, seriously:
https://www.youtube.com/embed/9Z-J0I01QP8
So if I’m a landlord who is doing OK as it is, with good tenants, I’ll be forced to raise the rent (up to) 5% each year, so I don’t get caught short when the socialists’ policies trash the economy.
I have not raised the rent on my tenants in several years, because they pay, and they have done some maintenance and improvement work that save me money and effort. But if I was in CA I might have to do so in self-defense.
I get depressed every time I see an Ayn Rand dystopian future element occurring in real time.
And Prop 8. CA voters went 52-48 AGAINST same sex marriage.
Yes buyers get a tax estimate before close of escrow. My wife and I are brokers and we estimate the tax when we first meet with the buyers. Tat way they won’t get surprised after they get into escrow.
Most buyers think whatever the tax is, it is normal and they budget for it. We tell them about prop 13. People from other states comment on the high prices but like the low % of property taxes.
Also for 7 Cal counties, seniors can move and keep their old taxes.
You’re still arguing that property taxes are ‘normal’ because of a deceptive low rate when it’s not the rate that is causing the problem. Your transaction experience with a few buyers who accept the heavy property tax burden is likely based on a small sample biased toward people that are in a high earner group and haven’t been around long enough to get smacked by it all. Another group you may be dealing with is a group that has the means or trust funds which take care of everything for them. Such groups are usually oblivious to the heavy burden until life smacks then down a notch or two. And it will, eventually.
As I posted before, here is the key item for people to understand where the bulk of the problem arises from:
“But homeowners struggle to sell their homes even at below market values because an estimate of the new tax-assessed value must be disclosed or it will be factored in during financing.”
When a homeowner in say LA or Orange County is lucky to sell their tract home, a home they bought twenty years ago and have paid a reasonable 200 per month in property taxes, they sell that thing for somewhere near a million and they move to say Escondido, they purchase a similar home for say near 800k and they think they are going to enjoy a little profit only to find that now they will be paying close to 1000 per month in property taxes.
Many people that leave the state won’t sell because they want to keep the option of the low assessed value in case they should ever move back or somehow manage to place it in a family trust. So they rent it and in so doing they take that home off the list of potential homes for sale. Ergo, houses for sale tend to be tamped down by the state’s idiot tax laws and fuels a false sense of more demand than supply.
A full-up statistical analysis will show the housing problem fault lines run very close and parallel to tax policy. The only way out of the mess is via tax reform, new permits, expanding water supply infrastructure, control of the border, and prosecuting the population subject to deportation. That will never happen under the current political control group unless something is in it for them.
If you have money, CA is great, screw everyone else. But that’s a temporary position at best.
CA is ruled by a handful of autocratic families. Until they are gone, things can only get worse:
https://www.youtube.com/embed/9Z-J0I01QP8
By normal I meant if you buy house for million you see the taxes as 10,000 and you buy it. You thin k that’s the way it is. You don’t walk away because your neighbor pays 25000. That is the real estate experience my wife and I see everyday a brokers.
In 17 years, I have never seen a price lowered due to property taxes. It;’s included in the estimate and they pay it as part of the monthly.
If people move to escondido at 55 or older, they can take their property taxes with them under propositions 60 and 90.
If you are moving from LA or Orange County I could put you close to the beach instead of much hotter Escondido.
Best wishes. I just disagree on how buyers look at property taxes. This based on experience.
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