A major problem with decoupling property taxes on owner-occupied housing from market prices is that it removes the biggest incentive for a homeowner to vote for policies that keep the local real estate market in check. An owner occupied house in a desirable area where there is no disincentive to politically engineering a supply shortage becomes a financial investment. Any increase in housing value becomes profit for the owner (or their descendants). This leads to supply restrictions and escalating prices and an increasingly unhealthy society as the young and the poorer are pushed out of the city, county, or even state.
This is essentially what has happened in coastal California over the last 60 years.
Why shouldnt coastal property be crazy expensive? It's the most scarce land there is.
The land should be expensive, the housing doesn’t need to be.
With different policy, there could be more housing built on the same land. The most scarce land there is shouldn’t be predominantly zoned for only low density single family homes.
We could easily build apartments on the coast in CA and then non multi millionaires might be able to live there. We have decided that only multimillionaires deserve to own a coastal house by restricting zoning in the coast so heavily
It's funny because it happens at all levels.
The uber wealthy have their gated communities in the hills.
The very wealthy have their lock on places like Carmel.
The upper-middle class in Santa Cruz or Half Moon Bay try to prevent new condos (or student housing) from being built, because it "destroys the community character."
Everyone wants to pull the ladder up behind them.
Yea, the point of property taxes is to stop that from happening.
Austin has been begrudgingly growing up, not without a raft of complaints from locals, because the property taxes are high enough to make selling to a developer tempting. In return, Austin has remained relatively affordable in comparison to other tech hubs.
This then means there is no real fix to anything since basic human greed always prevails. May explain why things move slowly if at all.
If those places became worse places to live as a result, wouldn't that drive property values down?
According to the massive drop of properly value near a certain Tenderloin quarter, yes.