Virginia Postrel, Columnist

These Tax Laws Are Holding Back California’s Housing Market

The state’s efforts to save homeowners money are now keeping many of them locked in their homes — and potential buyers locked out.

July 15, 2018 at 4:00 PM UTC

By Virginia Postrel

Virginia Postrel is a Bloomberg Opinion columnist. She is a visiting fellow at the Smith Institute for Political Economy and Philosophy at Chapman University and author, most recently, of “The Fabric of Civilization: How Textiles Made the World.”

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Forty years ago last month, Californians passed Proposition 13, the property-tax limitation that helped spark a national tax revolt. It’s still popular. In a March survey by the Public Policy Institute of California, 57 percent of residents, and 65 percent of likely voters, said it had been mostly good for the state, with only 23 percent saying it had been mostly bad.

Prop 13 limited local property taxes to 1 percent of purchase price (or of the assessed value in 1975) and capped subsequent increases at 2 percent a year. It also required a two-thirds legislative majority for new state taxes and two-thirds voter approval for new local taxes.