Real Estate Crash thread

[soul_skier]

Either way, you guys think I'm huge proponent of prop 13. I'm not. I don't understand it completely. The whole conversation started with me saying there should be a way to somewhat control property taxes in areas experiencing high value increases on primary residences. Some don't agree with me. Some do. I'm all for paying a fair share but I guess we all have different definitions of what is fair.

I live in and own property in CA and prop 13/19 is huge for me. The knowledge that my property taxes won't change significantly over the course of the next 50+ years I hope to live in this house gives a sense of predictability that is great to have. The key missing provision in prop 13 is that it used to apply to more than a single primary residence. Prop 13 was designed so that the schoolteacher who inherits a $1M+ property from their parents doesn't have to sell it to afford the taxes or a retired couple can age gracefully in the house they have lived in for decades, not so that someone can pay low tax rates on their vacation house or move out of state and charge renters a ton to live in a house with a reduced tax rate.

Prop 19 addressed some of these concerns but added in new loopholes like the portability of property tax rates once you hit 55 and up. The system is far from perfect but if i've lived in the same house for decades and planned my retirement around my expected property taxes and suddenly they go up 3x, I'd be pretty irate.

[schuss]

What are your thoughts on new home impact fees to the developers?

Depends on structure. Here we've moved to more private roads for developments so the town doesn't get hit quite as hard. I think any major development should be working with the town on the best compromise for all as all developments are not created equal. Ultimately any additional cost to developers should be commensurate with impacts and continuing maintenance additions, but if they meet all regs normal property tax should cover it (again, this is why not restricting this is important to self-sustaining municipalities).
I know we advised on one recently that's idiotic with a bunch of wetland crossings and shitty water management/road grading because the site is so bad and they've burned their bridge with the landholder who could give them the easy way in and are trying to stuff too many houses in the site (effectively a peninsula into wetlands next to a brook that flows into key area reservoirs).

[BCMtnHound]

BCMH, if the taxes were the same as my sister pays in Peachland I could live with that, but at the level some areas charge that are about 4X or more higher, no thanks.

I try to look at the entire taxation, but by your charts, BC is in the middle of the road there, at least my location is. After my homeowner grants, I pay around 1% in property taxes. And like I said, the community needs every cent it gets and probably needs more to even maintain our community services and infrastructure if provincial and federal grants cant/wont cover the deficit. Now add an effective tax rate of 25% in income tax to the prov and feds, 7% prov sales tax, 5% fed sales tax, and about 40% in tax for each litre of gas. And as at the local level, provincial and fed expenditures are barely enough to cover health care and education, let alone the transportation infrastructure in our vast empty geography.
Don't get me wrong, FIL with a house 2 blocks from the beach in Victoria has deferred his property taxes for the last 20yrs. No idea what will be left when he passes or sells. MIL and my Dad haven't had to defer theirs, but as I tell each of them, I'm good if the last check they write bounces. I don't think age is a reason to no longer to contribute to your community, whether that be by sweat, or invested equity. The reason that we all live the standard of lving we do is because the system and all its parts works and contributes. Not sure where this idea came about that at some magical age, you can be a bum on the system. Retirement in the old days wasn't that, at least not in the rural communities I was raised in.

On the flip side, if state/local governments are using the current craziness of the real estate market to bloat their budgets, that is blatant overtaxation, and those elected officials should at the least be voted out at the earliest convenience, and some should be strung up in the town square. Using laws like those being described here like Prop13 or 19 (and I have no experience with themoutside this thread) seems like a very poor means of addressing shitty governance.

[The Kids Are Alright]

I live in and own property in CA and prop 13/19 is huge for me. The knowledge that my property taxes won't change significantly over the course of the next 50+ years I hope to live in this house gives a sense of predictability that is great to have. The key missing provision in prop 13 is that it used to apply to more than a single primary residence. Prop 13 was designed so that the schoolteacher who inherits a $1M+ property from their parents doesn't have to sell it to afford the taxes or a retired couple can age gracefully in the house they have lived in for decades, not so that someone can pay low tax rates on their vacation house or move out of .

At the expense of the first generation teacher being able to afford a decent place to live. And they don’t have a million dollar asset to back them up. Prop 13 ruined CA. My years in Oakland/Alameda taught me that. It’s great if you’re multigenerational or pulling an inflated tech salary. But terrible for anyone else. But it’s not about that, really..,

[Hopeless Sinner]

I try to look at the entire taxation, but by your charts, BC is in the middle of the road there, at least my location is. After my homeowner grants, I pay around 1% in property taxes. And like I said, the community needs every cent it gets and probably needs more to even maintain our community services and infrastructure if provincial and federal grants cant/wont cover the deficit. Now add an effective tax rate of 25% in income tax to the prov and feds, 7% prov sales tax, 5% fed sales tax, and about 40% in tax for each litre of gas. And as at the local level, provincial and fed expenditures are barely enough to cover health care and education, let alone the transportation infrastructure in our vast empty geography.
Don't get me wrong, FIL with a house 2 blocks from the beach in Victoria has deferred his property taxes for the last 20yrs. No idea what will be left when he passes or sells. MIL and my Dad haven't had to defer theirs, but as I tell each of them, I'm good if the last check they write bounces. I don't think age is a reason to no longer to contribute to your community, whether that be by sweat, or invested equity. The reason that we all live the standard of lving we do is because the system and all its parts works and contributes. Not sure where this idea came about that at some magical age, you can be a bum on the system. Retirement in the old days wasn't that, at least not in the rural communities I was raised in.

On the flip side, if state/local governments are using the current craziness of the real estate market to bloat their budgets, that is blatant overtaxation, and those elected officials should at the least be voted out at the earliest convenience, and some should be strung up in the town square. Using laws like those being described here like Prop13 or 19 (and I have no experience with themoutside this thread) seems like a very poor means of addressing shitty governance.

Your MIL and Dad live in the same house?

What's bloated here is pensions and life time healthcare paid for by local governments. In reality every other service like road repair, upkeep and replacement of facilities, and in some areas schools more spending is badly needed.

[BCMtnHound]

Your MIL and Dad live in the same house?.

Heh.
No.

[Mazderati]

Lifetime healthcare. The true upper class.

[glademaster]

What's bloated here is pensions and life time healthcare paid for by local governments. In reality every other service like road repair, upkeep and replacement of facilities, and in some areas schools more spending is badly needed.

Thank you for reaffirming my belief that there are a lot of truly reprehensible people who post here.

[old_newguy]

Thank you for reaffirming my belief that there are a lot of truly reprehensible people who post here.

It’s true in Oregon. It’s been fixed, but PERS tier 1/2 was is ridiculous. For example, no cap on pension payments:

https://www.koin.com/news/ex-ohsu-pr...onth-via-pers/

$76k per month.

On the other hand, the current model is going to create a lot of problems for private sector workers who aren’t saving.

[dan_pdx]

It’s true in Oregon. It’s been fixed, but PERS tier 1/2 was is ridiculous. For example, no cap on pension payments:

https://www.koin.com/news/ex-ohsu-pr...onth-via-pers/

$76k per month.

On the other hand, the current model is going to create a lot of problems for private sector workers who aren’t saving.

Fortunately, that guy is not representative, but PERS costs are definitely going to bankrupt the state unless we come up with some brilliant solution. Kind of amazing that the state agreed to the old, rich PERS plans; I'm sure they did the math, saw they would be unsustainable, and kicked the can down the road "They can worry about that in 40 years." And here we are, worrying about it. Maybe we should start mining bitcoin using cheap BPA electricity.

[old_newguy]

Fortunately, that guy is not representative, but PERS costs are definitely going to bankrupt the state unless we come up with some brilliant solution. Kind of amazing that the state agreed to the old, rich PERS plans; I'm sure they did the math, saw they would be unsustainable, and kicked the can down the road "They can worry about that in 40 years." And here we are, worrying about it. Maybe we should start mining bitcoin using cheap BPA electricity.

Yes, it is an outlier, but is indicative of the very good deal they got.

Reading the reports is mind blowing. My last job was with a municipality and PERS costs are a very real issue in the budget for local and county agencies even more than the state.

[Conundrum]

Here’s what I’ve been trying to say what I think would be fair. You all might not agree and I may be called reprehensible. It’s not about prop 13 either. I’m using myself. I started working at age 16 so when I retire at 65, I will have paid in to Medicare and Social Security for 49 years. So far, those taxes have been a % of income with SS capping at a certain level because the benefits also cap in retirement. As long as I’ve earned, I have paid state and federal income tax. That will continue as long as I earn because I’m still receiving for which I can use as buying power. Depending on retirement savings and how I access them, I can be taxed on the withdrawals. That is okay because I may not have paid taxes on those earnings ever until withdrawal.

I bought my house at 23. I know things can change and I may move but my plan is to retire here. I will have paid property taxes on my primary and only house at 65 for 42 years. At 1.5% of value, with value increasing, the first 20 years of taxes have increased to 1100% of original.

I feel that if I’ve paid into my community for 42 years, I’ve probably paid my fair share especially if the upward trend of value of the home continues. I will have paid factors over what was paid for the property. Yes, is the property more valuable, sure. I stand by to access the value, you have to give the property away.

With the increase of people, I’ve seen the services my community provide go down. I wouldn’t expect to move to a new community and not pay property taxes because I’m old at over 65.

I’m not saying my benefactors should not pay the going rate for taxes when they inherit it. I’m not saying I shouldn’t pay a fair an increasing rate while I’m still able to work and earn an income. I’m not saying income generating properties shouldn’t pay market rate.

What I am saying is that telling someone that’s paid in for over 40 years at an inflating rate to either give away ownership of their home to stay or sell and leave because “they’re rich” with home equity is silly to me. Also silly to think that if there is even SS when I get to retirement, it won’t cover my property taxes to live in my own 1,600 sq ft home.

Maybe I’m reprehensible or maybe I don’t see how it’s my duty to increase supply because someone wants to live where I’ve carved out a modest life for myself.

/end rant

[liv2ski]

Now you've done it

[dan_pdx]

Yes, it is an outlier, but is indicative of the very good deal they got.

Reading the reports is mind blowing. My last job was with a municipality and PERS costs are a very real issue in the budget for local and county agencies even more than the state.

Yep, I have heard that PERS costs are a primary reason why Portland Public Schools is always asking for more funding and still has overloaded teachers and unsafe classrooms - apparently it's not just chronic mismanagement. To be clear, I always vote to tax myself more for schools, but it gets discouraging when you don't see much positive impact from each new bond measure.

[Hopeless Sinner]

Thank you for reaffirming my belief that there are a lot of truly reprehensible people who post here.

Being called reprehensible by you is a badge of honor.

Giving $200,000/yr pensions to policeman and lifetime healthcare to non-police and non-firemen has turned into a nightmare for many cities, counties, and states to pay for.


https://www.seethroughny.net/pensions

[climberevan]

"What I am saying is that telling someone that’s paid in for over 40 years at an inflating rate to either give away ownership of their home to stay or sell and leave because “they’re rich” with home equity is silly to me. Also silly to think that if there is even SS when I get to retirement, it won’t cover my property taxes to live in my own 1,600 sq ft home. ”

This. I can't, for the life of me, understand how someone who lives in a place they paid off years before should face a hugely increased tax burden simply due to that home's HYPOTHETICALLY increased value. It's of zero use to that person if they don't sell it, rendering themselves homeless. How is that person supposed to pay these increased property taxes? Are we suggesting that everyone whose home value has gone up a ton get a reverse mortgage?

Tax the hell out of investment and income generating properties, of course. Reset property taxes to current value when property changes hands, sure. But force someone to pay 5x what they've been paying for decades (for the same or even fewer services) based only on the fact that their area has become popular? Nope.

[BCMtnHound]

I don't think you are reprehensible, but perhaps a but selfish

As our population increases, so does the cost to flush the toilet, turn on the tap, provide hospitals, schools, policing, pavement, etc. And I may be misinformed, but economics of scale are not simple between those increasing costs and population increases - it becomes increasingly expensive per person for those services as the pop increases. You are still using those services, no?

The wage you received when you were 20 something bought you a lot more than the average wage that those 20 somethings get now, so trying to incease the tax burden on the younger population is a self defeating proposition unless wage power returns to the middle and lower classes.

Finally, I still find this notion of retirement from the last 100yrs or so to be silly. It has never existed in the past, and is unsustainable going into the future. Don't agree? Then your argument that SS will not be there for you is moot IMO, can't have it both ways.

Sorry, but everyone needs to contribute. Age, and withdrawal from the regular workforce of the middle classes has nothing to do with it. Not saying your property tax is too high - no idea the costs your community faces, but everyone who has a connection to the system, and can reasonably contribute to the cost, should pay up.

[Conundrum]

What if I didn't contribute to the population increase? And in the US, I actually pay more in taxes and consume less of those resources because I didn't put out crotch fruit. Don't worry, I still vote yes to fund public education when our legislators fail to do so on their own. I pay my health insurance premiums and Medicare taxes, our water system is owned by a private company and I pay that monthly bill as well.

And I agree with you. I'm happy to pay all my taxes except for the one that will ultimately force me to move or give up my house. I'm trying to point out that there is one very particular tax that I don't agree with that is directly related to the "real state" thread. And really, even a tax deferment would work but that is not an option here. Without kids, I'd tell the local gov they could have my house when I'm dead if they waive my taxes after I retire. Not an option.

And yes, I'm a bit selfish. See above-no kids.

[Benny Profane]

What if I didn't contribute to the population increase? And in the US, I actually pay more in taxes and consume less of those resources because I didn't put out crotch fruit. Don't worry, I still vote yes to fund public education when our legislators fail to do so on their own. And I agree with you. I'm happy to pay all my taxes. I'm trying to point out that there is one very particular tax that I don't agree with that is directly related to the "real state" thread.

And yes, I'm a bit selfish. See above-no kids.

Therefore, with no kids, you cost the local community a whole lot less than the three kid family next door, but paid the same taxes.

[RoooR]

You all are like the old man in UP. Gonna be stomping your feet screaming "Why should I sell!" as a city goes up around you.

[Conundrum]

You're damn right I am. I actually thought of that and bought my house next to a cemetery where a couple of former governors are buried. But I wouldn't put that above dirt pimps digging up the corpses and building there too from what I'm seeing lately.

[The AD]

It’s true in Oregon. It’s been fixed, but PERS tier 1/2 was is ridiculous. For example, no cap on pension payments:

https://www.koin.com/news/ex-ohsu-pr...onth-via-pers/

$76k per month.

Wow. And I'm stoked that I have a pension that might pay my mortgage when I retire.

[skaredshtles]

Doesn't anybody buy *down* any more when they get older? I see people all around me, my age, buying BIGGER houses... despite kids moving out.

I can't wait to GTFO of my 2K sq foot monstrosity and maybe think about something in the 850-1K sq ft range.

[The AD]

Doesn't anybody buy *down* any more when they get older? I see people all around me, my age, buying BIGGER houses... despite kids moving out.

I can't wait to GTFO of my 2K sq foot monstrosity and maybe think about something in the 850-1K sq ft range.

I feel the same way, but not sure my wife agrees. I'd much rather have a small house with a view and/or on the water than a 3,000 square foot house--most of which isn't really used.

[Skidog]

You're damn right I am. I actually thought of that and bought my house next to a cemetery where a couple of former governors are buried. But I wouldn't put that above dirt pimps digging up the corpses and building there too from what I'm seeing lately.

i think a very smart man once said. Golf Courses and Graveyards, biggest wastes of prime real estate. #caddyshack