“High-5!” and “Hang 10!”
Proposition 5 - the Property Tax Fairness Initiative and Proposition 10 - the Affordable Housing Act
Proposition 5, the Property Tax Fairness Initiative- C.A.R., the California Association of Realtors, provided an indicator of strong voter support by submitting nearly 1 million voter signatures to the Secretary of State’s Office and so by qualifying the proposition for this year’s ballot. The initiative is being proposed with the intention of creating opportunities for homeownership. Millions of equity-rich Seniors often stagnate themselves in homes that are no longer ideal living situations to avoid what can be experienced as a moving penalty under today’s current legislation. Most Seniors whom are taxpayers on fixed incomes, cannot afford the raise in taxes that the purchase of a replacement property in today’s market values would impose, thereby constricting them into a property that is no longer serving their needs. Having become accustomed to a tax basis they have budgeted on for years, these homeowners are not moving and so depleting even further the supply of a market in dire need of inventory. It is the intention of Proposition 5 to incentivize homeowners into transitional housing, circulating equity back in to the economy and restoring balance to the market.
Proposition 5 allows those eligible the ability to transfer their current property tax base to the purchase of a replacement home into any California county. Property tax would then be based on their original home’s assessment, in addition to an adjustment consisting of the difference in value between the sale price of the original home and the sale price of the new home.
A broad group of bipartisan feel Proposition 10 would actually make the housing crisis worse. Proposition 10, deceivingly named the “Affordable Housing Act,” contains zero funding for affordable housing, fails to provide a plan to create more housing and fails to address homelessness, a rapidly increasing consequence of the housing shortage. A yes vote would repeal the long-standing Costa-Hawkins Rental Housing Act of 1995 allowing local governments to adopt rent control measures that might eliminate homeowner protections. Homeowners would be subject to regulations and price controls enacted by unelected boards. Even nonpartisan Legislative Analysts feel that Proposition 10 would discourage new construction and result in existing rental units being taken off the market, which would actually reduce rental housing availability. Homeowners dependent on rental income to supplement mortgage payments may be forced to sell or convert rental properties into other more profitable uses. Homeowners may find incentive to convert long term rentals into short-term vacation rentals. Fewer rentals on the market will actually increase the cost of existing housing and make it even harder for renters to find affordable housing.
Proposition 10 will reduce home values for middle-class families at a time when many homeowners are counting on the homes to help finance their retirement. It even contains a hidden loophole requiring taxpayers to pay the initiative supporters’ legal bills for participating in certain lawsuits, even if they lose and even if their position is frivolous. This blank check benefits lawyers and puts taxpayers on the hook for limitless legal bills. (noprop10.org/the-facts)
The California Association of Realtors encourages homeowners and tax payers to get out and vote!
Vote “Yes on Proposition 5” and Vote “No on Proposition 10”.