Generally, given a fixed population, I think that improved transportation doesn't increase property values, but rather redistributes the value of property from areas near jobs to areas further away along the improved transportation. For example, starting in the 50's highways were built which allowed people to live outside of the city and commute in. Property values in the suburbs went from very low value farmland to hundreds of thousands of dollars per acre today. As these commuting routes became saturated property value in cities has recovered, since it is less and less possible to commute in a reasonable amount of time.
They don’t benefit until after they sell the property. They pay capital gains on that windfall. The people who buy the high value property also pay taxes.
No property owner benefits from land value increasing until after they have sold said property.
> No property owner benefits from land value increasing until after they have sold said property.
People take loans against their assets all the time and having valuable houses makes that a lot easier. Such loans can be used as leverage to buy more property.
Consider a million dollar property in the Bay Area. ( as an example)..property taxes approximate to $12k/year. It costs 9-14k/year per student in the Bay Area depending on the city. With one child, they benefit. With two children, they are still good value for money. But in 12 years, they don’t have kids in public school but they continue paying the property tax. Maybe they will subsidize others’ kids or maybe it will go to infrastructure.
On the other side, someone in an affordable home is getting subsidized by higher value home owners property taxes. If they own the affordable home and the best deal is for the renters. They get the most bang for their rent bucks.
But consider an aging couple with property taxes capped by prop 13, have no more kids in public school and are on a fixed income. What benefit do they gain? There is a more stressed resource pool of law enforcement, $$ for infrastructure improvement, essential services and likely no community benefit like elder day care(in my town, they are converting them to homeless transition centers)...so owning a home is a really bad deal and renting is better.
The only return is the windfall when they sell. But the taxes are also appropriated for the gains. Contrary to popular opinion, home ownership is a burden and not a comfort. It doesnt matter to those who inherit or to those who are in higher income brackets, but those higher income nimbys rightly demand their due and expect a certain quality of life for which they pay dearly.
If productive members of a society are not incentivized to keep producing and supporting the less fortunate, it will be like killing the golden goose instead of just collecting the golden eggs everyday. They will simply leave. Bay Area prosperity bubble will burst sooner than we expect because we treat the productive $$ contributors badly..shaming them for their ‘privilege’. You have to give something back when you are the state with insanely high taxes.
That’s speculative activity. Loans have to be repaid and have interest. It’s not free money.
Home ownership doesn’t always imply assured appreciation of property. Even those with second homes have to pay property taxes and rental income is also taxable.
Many people do NOT take more loans to buy a new home. Home ownership does give a sense of security that the down payment guarantees...it’s 30 years of mortgages and interest. And even the down payment is a result of hard earned or saved $$. People assume that property is a privilege. It’s debt. It’s a higher risk but highly rewarding risk.
Sounds like a benefit to me. Debt is a tool that can bring huge benefits to people who know how to use it.
Most people who own homes have used debt to buy them. Almost everyone who owns more than one home has borrowed against equity in homes they already own to buy the others. The ability to do that is a clear benefit of property ownership.
And a lot of them don’t. Debt is not a strategic play for most householders. Maybe when one is young, but most people seek stability when they have kids and as they get older.
You are generalizing. I know more people who are only single home owners. Perhaps you know wealthier or younger people than I do.
Also: you can’t penalize people for the benefit to get into more debt with more taxes. Then it no longer is a benefit.
They mean we can stop worrying about those homeowners who oppose an apartment building being built near them on the basis that it reduces property values. Because if the drop in values doesn’t hurt them until they sell then they have no right to complain about property values today when the apartment is built.
Property taxes get redistributed in the state of California. The way it works now is that property taxes goes to county and then state and it gets redistributed throughout the state. It is no longer true that wealthy towns get more $$ for better schools.
Further, over 45% of California budget is for schools. A lot more than property taxes goes towards public school. The teachers union is very powerful in CA. There are a lot more factors involved. Not a lot comes to infrastructure. Even tax measures and bond measures for infrastructure improvements gets diverted into affordable housing and usually this is high density. High density degrades existing infrastructure as more resources are spread thin for larger number of people and has the opposite effect of improving infrastructure.
Infrastructure should be in place before high density housing measures are put into action. Right now, the opposite is happening..or infrastructure is not happening. It’s just not rational problem solving.
When those taxes pay for services and amenities that make your city more attractive and it grows you get two broad benefits: network effect, and quality of life. Network effect is largely your property value going up. Quality of life is from things like more goods and services located closer to you as density increases. If you don’t want either of those things you probably don’t want to live in a city.
What about traffic? The more prosperous Bay Area becomes, more traffic woes, more homelessness, more demand for affordable homes and otoh, no infrastructure improvements, no new public transport system, no new schools, congestion everywhere and higher cost of living.
Everything declines with high density. Medium density is better than low density. Networked public transport systems is better with medium density. More housing stock is good to reduce sprawl but the answer isn’t always high density housing and not subsidized housing. Example: senior affordable housing is good..shared housing is good..affordable micro homes is good for single working people. But affordable housing that crams a lot of working adults and children that go to public schools is not really good. Etc.
