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View Diary: California: Back in the black with progressive governance (134 comments)

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  •  Those "some" include my 93 year old mother (7+ / 0-)

    My parents bought their house in 1952 for $20K, when the suburb they live in was a distant outpost iof San Francisco -- the street in front of the newly consttructed high school was unpaved.  My father was a teacher, my mother a "homemaker", as they were called in those days.  My father died in 1962.  My mother,who did take a job, still lives there.  It is a very modest house which just happens to be in an area that is now high-priced.   It would probably sell for $400K.  When it sells, tax it at that value.  But for now, my mother's social security income could not make the property tax payments on that value.   Where should she go?  She is not realizing $400K -- it is her home, the place she has lived for 60-some years, and because of Prop 13 she is still able to live there.   She, and most of the individual property owners who are able to stay in their homes, will soon be dead.  Then you won't have to lament their passing the price onto poor little you.

    •  Non-homeowners view equity (0+ / 0-)

      as some magic pot of gold which can be dipped into in a moment's notice. They think if your home is worth $500,000 that means you're rich - that you can just write a check against your home's value. They just don't get it.

      "The two pioneering forces of modern sensibility are Jewish moral seriousness and homosexual aestheticism and irony." Susan Sontag

      by Shane Hensinger on Sun Jan 13, 2013 at 07:32:01 PM PST

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      •  Kinda. You can certainly borrow from (0+ / 0-)

        your equity, so you can actually "write a check against your home's value" . . .

        "Lone catch of the moon, the roots of the sigh of an idea there will be the outcome may be why?"--from a spam diary entitled "The Vast World."

        by bryduck on Mon Jan 14, 2013 at 08:57:21 AM PST

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        •  Equity is not liquid (0+ / 0-)

          And banks have rules on how much can be tapped and when. Loan devaluation, credit score etc... all play a role. It's not at all simple nor is it a good idea to rely on that in the first place. Look at what happened during the financial crisis - lots of people lost their homes because the value dropped so quickly and they had "borrowed" against the equity - which became nonexistent.

          I'm of the mind that if you want to tap into the equity in your home you consider selling it and buying a new place which is cheaper - then pocket the difference. You can also refinance and use the additional equity as a cash out, but you never refinance more - always less. I don't have a home equity line of credit nor would I advise anyone else to get one.

          "The two pioneering forces of modern sensibility are Jewish moral seriousness and homosexual aestheticism and irony." Susan Sontag

          by Shane Hensinger on Mon Jan 14, 2013 at 02:32:31 PM PST

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    •  I am of mixed feelings (0+ / 0-)

      I am not a fan of property taxes precisely for the reason you express: the property rises in value due to no action by the homeowner, and the tax has no relationship to disposable cash actually available to pay it. When people lose their jobs, for example, they still have to pay that property tax bill, and it can be a big bite. Having people move solely because the property tax increases lowers stability in neighborhoods.

      And, as much as the inequality burns, at least you know what you're getting into when you buy a new house.

      However, corporations have an unconscionable advantage: they don't die. So you create a corporation solely for the purpose of owning a piece of land, and they you sell the corporation, and the property is not reassessed. Disneyland will never be reassessed... even though Walt Disney Corp is not owned by the same people who owned in in 1977.

      This creates some pernicious situations, too. An old supermarket is taxed at its 1977 valuation. A new company starting up buys land for a supermarket and has to pay taxes based on a valuation that is probably 10 to 20 times higher, even though they use the same services and sit on land of similar value.

      Fry, don't be a hero! It's not covered by our health plan!

      by elfling on Mon Jan 14, 2013 at 08:42:35 AM PST

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    •  By the way, future grandmothers (0+ / 0-)

      are in houses that are median $500,000 valuation, meaning that they are paying $5k + a year now and will be facing bills that your parents can't cover in retirement. It's also likely that they won't benefit from a large appreciation in home values as your parents did.

      So we are going to have to fix this, if our goal is to keep grandmothers from having to sell due to property taxes, because when the current working generation retires, they will typically be seeing property taxes well in excess of $500 a month, and with little or no equity to draw out to cover it.

      Fry, don't be a hero! It's not covered by our health plan!

      by elfling on Mon Jan 14, 2013 at 09:14:49 AM PST

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