Proposition 19’s complicated tax arrangement is another maneuver to squeeze relatively little incremental revenue from property taxpayers. The proposition adds another intricate set of procedures to California’s already complex system of assessing property values. NO: The measure will likely not significantly raise housing inventory. Kelly Cunningham, San Diego Institute for Economic Research Entry-level housing inventories will remain tight and not enough price declines for larger homes will occur to accommodate the potential “move-up” buyer. Rural areas could see the influx of seniors, with rapid increases in prices and sales. A few more older homeowners might purchase more expensive properties, while a number might see the tax benefits from moving anywhere in the state. NO: While it may change the inventory mix, it has no effect on the total supply of housing. Lynn Reaser, Point Loma Nazarene University Some will not meet the higher taxes, and if families must give up these homes, inventory will also increase. This provision stifles property inheritance among lower-income heirs -mostly Black and Latinx – who largely keep their family property. Higher tax bills to heirs will drive more inherited homes to the market. Many may seek more accommodating housing. YES: Opportunities for seniors and the disabled to move within California and transfer their property tax base will likely increase available housing. Reginald Jones, Jacobs Center for Neighborhood Innovation 19 could marginally increase the available housing supply, but in turn it will also increase demand as people selling will still need to buy another house to avoid paying capital gains tax. Only a small segment of homeowners can take advantage of transferring their tax basis to a different home. Proposition 19 will not increase inventory because it does not encourage new home building. NO: San Diego has a deficit in excess of 60,000 housing units. Proposition 19 does not include provisions that will lead to substantial housing construction. More importantly, first-time homebuyers may find they are now competing with empty nesters for condos and smaller homes. While the supply of large older homes for sale may increase, the overall stock of housing will not expand. NO: Empty nesters are more likely to move into smaller homes now that they can do so without a big increase in their property taxes. This, coupled with much-needed CEQA reform, could help increase overall home inventory in the state. Proposition 19 will now provide older homeowners with the flexibility to downsize or upsize where they can then take their favorable property tax rate with them, freeing up much needed single-family properties. So, we will continue to have low existing home inventory, keeping prices up. As interest rates move up late next year, we may have problems getting those who refinanced to give up below-market mortgages. Proposition 19 adds some flexibility to the price range for new purchases, but don’t expect a surge of inventory. NO: We already had the ability for those 55 and older to buy a home of equal or lesser value and maintain their tax basis. It could increase turnover of housing inventory, which may help the economy as homebuyers spend money on all that comes with improving a house and making it a home. NO: While the thinking is that many of those who would take advantage of Proposition 19 are empty nesters who would choose to downsize to a smaller home, freeing up larger homes for young families, I don’t believe it would create a meaningful increase in housing inventory.
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