Prop 13 and Millennials: It's Not Just For Your Parents Anymore
Updated: Oct 1, 2020
By Carrie O'Malley
One of the biproducts of the housing crisis that has gripped California in recent years is the demonization of Proposition 13. A common complaint we hear from millennials and younger residents is that Prop 13 is a 40-year old relic that does nothing to help them attain home ownership. Unfortunately, this is a talking point usually perpetuated by special interest groups whose aim is to ultimately dismantle Prop 13 and reap even more tax revenue from property owners.
The crux and primary purpose of Prop 13 was that it capped the amount of annual property tax increases to no more than 2%. Why is this relevant to younger Irvine property seekers? Because the housing crisis itself has forced Irvine home values to rise by a staggering 36% in the last five years. Without Prop 13 protection – a protection that all California homeowners enjoy regardless of purchase year – annual assessments would grow at a similar rate and dramatically increase annual property tax bills.
For perspective, in 1978 at the height of California’s tax revolt days, property assessments statewide were hovering around 3% of total home value. Without the anchor of Prop 13, local jurisdictions could have free reign to assess private homes capriciously (as they did pre-1978) – but would be able to use the massive increase in values to make 3% look much less than it actually is.
The main point for Millennials is this: Buying a home is just one part of the battle. Prop 13 helps you KEEP your home.
The rise in California home values is surely a troubling concern for our community and our state, but Prop 13 is doing far more to keep you in the ballgame than most critics are willing to admit publicly. Millennials need not be hoodwinked into believing a false narrative that could have an enormous impact on their futures.