Your point about moving is really important: there are a ton of boomers sitting in houses which are much larger than they need without children living at home but in many cases they're doing exactly what the system incentivizes. Accessory dwelling units (ADUs) can help somewhat if they have enough space and want to get in the landlord business (or have family who need it) but really we need to make it easy for people to downsize without financial precarity.
On one hand I’m sympathetic to the individualist argument that it’s unfair for these people to have to vacate their 30+ year residences just because a bunch of people moved to their area.
On the other, I agree that it’s ridiculous someone can be paying 10-20% what their neighbor pays in property taxes, and that this causes an inefficient allocation of resources.
If we ever want to solve this we IMO need some kind of gradual phase out. We can immediately/over a 5-20 year interval move the taxes to what they should be on commercial and non-primary residences. But for actual primary homes probably the only way we can do it is if we let the property taxes be deferred until the current homeowner dies. No matter how much pain the policy causes we must under no circumstances cause a single grandma to lose her home.
A lot of this also comes back to the “just build more housing” point: an 80 year old probably doesn't want to have to be responsible for a house, but if the choice is considerably more expensive or moving away from everyone & everything they've known for 40+ years they'll do it. If there were reasonably-sized options nearby, they'd probably have a different answer.
Where I live now has a couple of nice options for aging in place – dedicated 55+ apartment building, with government support for low-income; and a co-op where the units are smaller but they have more shared space. A lot of older neighbors have spoken glowingly the latter because it's all ages and it since they see their neighbors more they don't feel lonely the way someone in a detached suburban home might. I wish we'd build a lot more stuff like that where someone has an option which doesn't break the bank and avoids those other downsides.
Great point. Prop 13 creates a lot of illiquidity/friction that probably keeps people in places they wouldn’t stay in otherwise. Not just old folks. It’s probably just as much of a problem for people who inherit property or get a job an hour away.
Prop 19 passed in 2020 IIUC partially solves the problem you mention because people 55+ can maintain lower tax rates after moving, but of course it is just a bandaid. Definitely the better solution would be for the real estate market to not be so expensive that people can’t afford to move/live in the general type of housing they want though.
> It’s probably just as much of a problem for people who inherit property or get a job an hour away.
My knowledge is stale - I moved away from California a decade ago - but I think you’re right about downsizing at least to the extent that they can actually find a cheaper place.
I think now seniors can keep their Prop 13 tax exemption if they move anywhere in the state. However, that is a law that only passed a few years ago. Before then, I believe you were restricted to moving only within the same county.
