California is a strangely suffocated paradise. Because of their citizen-referendum-influenced governing system, they have a strange property tax configuration. Taxes are based on the purchase price of a home. If you purchased your home in 1960, your taxes are based on that price. Consequently, people don’t sell their homes. Since people don’t sell their homes, there is limited housing stock, which sends the price of homes higher. The problems aren’t limited to the tax system, but it sure doesn’t help.
As I ferry my grandson around to his friends’ homes, I see how this deformed tax system plays out. Yesterday, I picked him up at an impressive home in an elite section of Burlingame. Its value would be in the many millions in the current market. The house was built by the friend’s grandparents, and they, their children, and their four grandchildren live there.
Inside, the house looked like a rabbit warren. I asked my grandson if his friend had his own room, and he said, “He’s got a bunk in his brother’s room, but he never sleeps there. He’s got four different places in the house where he sleeps. We slept in the living room.”
There were boxes and furniture stuffed onto a second floor balcony visible from the first floor. The saving grace was something that a newly built Burlingame home would not have – an ample back yard.
Another friend lives in the neighboring town, in a house built and owned by his mother’s uncle. There are at least seven people living in that house, which doesn’t have such a fancy yard. When this friend came over, he slept on the floor in my grandson’s room, “It doesn’t matter. I’m used to it,” he said.
So it’s beautiful here, egalitarian, pleasant. People are “happy,” at least that is how they appear, smiling and greeting me on the street, helping my grandson and me when he dropped a bottle of Bacon Soda (we just HAD to taste that, but unfortunately, it got dropped) on the sidewalk. The food is better than average, the weather marvelous, the recreational activities above average, with even more recreational activities available close by. But if you open up the lovely homes in the neighborhood, you’re likely to find people stuffed in there like clowns in a clown car, because the deformed tax system has made it impossible for young people to buy a home.
One last note is even more pathetic. While I was driving south from Burlingame to Palo Alto, I saw the northbound lane of the highway backed up for about five miles, inching forward or stalled. They were waiting to get across the San Mateo Bridge in order to get home. The housing stock is so suffocated on this side of the bridge that people have to live across the bridge, spending hours a day stuck in traffic.
I guess you get what you pay for. If you run a state without collecting taxes, somebody has to suffer. Just ask New Jersey.Tags: taxes in california