California has a housing shortage problem that is talked about quite a bit but very few solutions that make fiscal sense are offered. Housing prices are rising beyond affordability for the middle class in most markets and certainly for first time buyers in almost all markets due to the law of supply and demand. We simply don’t have enough housing. There will be two propositions on this November’s ballot that will deal with housing, Props 5 and 10. Prop 10 will support rent control statewide which is the absolute worse answer for the housing crisis. Rent control as a solution for more housing is like the middle age practice of bleeding someone to bring them back to health. Rent control simply removes the incentive for developers to build more housing and multi-family units. Prop 10 is a disaster in waiting.
However, Prop 5 offers a measure of relief for Californians 55 and older or severely disabled to move to a more affordable location in the State of California by transferring their tax assessments from their current home to a new home. In essence, Prop 5 eliminates the “moving penalty” of increased property taxes by letting senior homeowners take their property tax rate with them when they move. The inability to afford the increased property taxes of a new home keeps many California Seniors living in homes that do not fit their needs or lifestyle as they transition in to retirement where fixed and reduced incomes become a concern.
By extending Prop 13 tax protections for Californians 55 or older we will begin to ease our housing crisis by making more homes available and lowering prices. Giving seniors the opportunity to buy new homes will increase the inventory of mid-level and move-up housing available to younger families, and professionals and in the longer term housing prices will begin to come down as the available inventory catches up with the current demand. Prop 5 isn’t the end all be all solution housing in the Golden State but Prop 5 is a market driven solution that will increase inventory and lower housing costs. Prop 5 is step in the right direction and deserves a “Yes” vote on November 6th.