I don’t believe so. My understanding is that new homes aren’t significantly affected by prop 13. New home gets charged taxes at its full value. Over time, if housing prices increase, that home owner will pay only a 2% max increase per year. It does affect housing sales though. A person who is retired with no kids living at home anymore may want to sell their large home to downsize, but In doing that, they need to buy a now home which will likely have higher taxes. This discourages people from selling their homes. Removing prop 13 would help remove this concern.
It won’t create more housing, alone, but if what OP is after is more-affordable housing, it will tend to reduce housing prices in existing stock, since it will encourage more of it to be placed on the market, which will tend to make housing more affordable for people who want to buy a house.
It would also risk putting existing gentrification into hyperdrive. If taxes rose significantly past what older/minority/low-income residents can afford, they would be driven out of their homes faster than new affordable homes can be built.
Right I think this is the biggest factor. People living in a home in an area that becomes prime real estate will find not only the value of their home going up, but the taxes they have to pay on it every year. Prop 13 says that can only hair at 2 percent, regardless of the value; without it, a family could easily find their home becoming unaffordable for them to stay in. This isn’t a concern in areas where home prices don’t grow rapidly.
Prop 13 locked property tax to the sale price of the home. It’s since been partly repealed, with a grandfathering of those who owned their homes while it was in effect.
The way it affects housing is that people would normally move when the appraised value of their home causes their tax to exceed their budget. But Prop 13 keeps that from happening. If they do move, they lose their grandfathering and have to pay the prevailing tax rate. That’s huge. If you are paying $1.6k on an $80k Prop 13 valuation, sell, and buy a smaller home for $650k, your tax goes up to $13k. So it makes more financial sense to live in your big house until you die.
Fully repealing Prop 13 would essentially evict a lot of fixed-income seniors, or force them to take out reverse mortgages to pay their property tax, which could jump to 20k-30k in many metropolitan areas. The political fallout would be disastrous for whatever politicians supported the repeal. Seniors are the block of people most likely to vote. That’s why Prop 13 will endure until those grandfathered have passed on.
