San Diego Voter: Housing Issues in Upcoming Election

Prop 15 - Split Roll

PROP 15 INCREASES  FUNDING SOURCES FOR  PUBLIC SCHOOLS, COMMUNITY  COLLEGES, AND LOCAL  GOVERNMENT SERVICES BY  CHANGING TAX ASSESSMENT  OF COMMERCIAL AND  INDUSTRIAL PROPERTY.   INITIATIVE CONSTITUTIONAL  AMENDMENT.  Taxes such  properties based on current market  value, instead of purchase price.   Fiscal Impact:  Increased property  taxes on commercial properties worth  more than $3 million providing $6.5  billion to $11.5 billion in new funding  to local governments and schools.

Analysis

Currently, property tax assessed values are the same for both residential and commercial properties.  In general, the values are limited to 2% increase per year and are reassessed at the time of sale.

If this is implemented, commercial properties ONLY would be reassessed more frequently.  This would increase property taxes paid by commercial properties.

Key concerns about this are:

• Consumer prices would increase because the additional property tax costs would be passed down in the form of price increases.
• Residential properties would be at future risk.

Prop 19 - Tax Portability

PROP 19 CHANGES CERTAIN  PROPERTY TAX RULES.  LEGISLATIVE CONSTITUTIONAL  AMENDMENT.  Allows homeowners  who are over 55, disabled, or  wildfire/disaster victims to transfer  primary residence’s tax base to  replacement residence. Changes  taxation of family-property transfers.  Establishes fire protection services  fund. Fiscal Impact: Local  governments could gain tens of  millions of dollars of property tax  revenue per year, probably growing  over time to a few hundred million  dollars per year. Schools could  receive similar property tax gains.

Analysis

Currently, property tax values are limited to an increase of 2% per year and are reassessed at the time of sale.  Many homeowners don't move because it would cause a jump in property taxes on the their new home. However, after the age of 55 or if you are disabled or a wildfire disaster victim, you can purchase a new home and port your property tax basis to your new home so you don't have a jump in property taxes.  The new home must be of equal or lower value than your current home, you can only do it one (1) time in your lifetime and only 10 counties in California participate in the program.

If this bill were to pass, you would be able to port your property taxes multiple times.  The home could be more expensive home and you would only pay an incremental difference in taxes.  By allowing multiple moves and allowing the replacement home to be more expensive, it frees up the lower priced homes in a more affordable market.

Also, currently inherited homes keep their tax basis.  If the home is passed down from one generation to the next, the taxes would theoretically stay low as long as it is in the family.  It is unlikely the home would be sold which limits the housing inventory.  This bill would change that so if the home is inherited,   the new owner must live in the home to keep the property tax basis.  If would not qualify as a rental or investment property.

Prop 21 - Rent Control

PROP 21 EXPANDS LOCAL  GOVERNMENTS’ AUTHORITY TO  ENACT RENT CONTROL ON  RESIDENTIAL PROPERTY.   INITIATIVE STATUTE.  Allows local  governments to establish rent control  on residential properties over 15  years old.  Local limits on rate  increases may differ from statewide  limit.  Fiscal Impact: Overall, a  potential reduction in state and local  revenues in the high tens of millions  of dollars per year over time.  Depending on actions by local  communities, revenue losses could  be less or more.

Analysis

Allows more rent control.  There's rent control currently in place but this allows cities and counties to be more restrictive.

Measure A - Prop tax increase

MEASURE A GENERAL  OBLIGATION BONDS FOR  AFFORDABLE HOUSING.  To  provide permanent and supportive  housing for extremely low- to  low-income individuals and families,  including supportive mental health  and substance abuse services, for  populations including veterans,  seniors, the disabled, youth and the  homeless, shall the City of San Diego  issue up to $900 million in general  obligation bonds financed by property  tax assessments estimated between  approximately $3 and $21 per each  $100,000 of assessed valuation for  fiscal years 2022 through 2068?

Analysis

Increases property taxes by $3 and $21 per each $100,000 of assessed value.  This is an increase in housing costs when costs are already high.

Measure N - City of Santee - Voter Approval for New Development

Shall an ordinance amending the Santee General Plan requiring voter approval for development actions that would increase residential density or intensify land use over that currently permitted by the General Plan be adopted?

Analysis

If this passes, voter approval would be required for new development.  This would delay the time it takes for new housing to be built and increase the costs of development which means the price for new homes would go up.