As California struggles with its chronic budget mess, State Assemblyman Tom Ammiano has championed a long-term solution: close the corporate loophole in Prop 13. It’s far from a new idea, and Ammiano is only the most recent proponent of this idea in Sacramento – following in the footsteps
of Quentin Kopp, Marta Escutia and even Warren Buffett. When the right-wing Howard Jarvis Taxpayers Association pushed Prop 13 in 1978, they claimed it was about protecting long-term homeowners. But like most right-wing measures with an insidious agenda, by far the biggest beneficiaries have been commercial landlords who should never have been included. Rather than explain to readers this dichotomy, Bay Citizen
columnist Elizabeth Lesly Stevens decided to shoot the messenger instead this weekend
– by pointing out that Ammiano has owned his house since 1974. By that logic, environmentalists who champion an oil severance tax are hypocrites because they don’t own an oil company – and therefore wouldn’t pay the tax increase. Her column simply repeated right-wing talking points.
Thirty three years ago, escalating property taxes in California gave the Howard Jarvis Taxpayers Association political ammunition to pass Prop 13 – which froze property taxes at 1% of the assessed value, with allowable increases of 2% a year. And like many of San Francisco’s middle class homeowners who bought their home in the Seventies, Tom Ammiano has benefited from Prop 13. We can have a political debate about whether it’s “fair” that one set of homeowners pays lower taxes than others, but there’s also a simple truth – many of these homeowners could never afford to buy their home today.
In 1978, Howard Jarvis argued that grandmothers were being “priced out” of their homes by escalating taxes. But there’s a whole other side to the Prop 13 debate. In 1979, 60% of San Francisco’s property tax revenue came from commercial property – with landlords and homeowners only shouldering 40% of the burden. Today, despite San Francisco’s residential population remaining stagnant and the commercial “Manhattanization” we saw during the Feinstein years, it’s the reverse. Residential owners now pay about 60% of the property tax burden, whereas commercial landlords only pay approximately 40%.
That’s the real
crime of Prop 13 – not that a few homeowners who have stayed in their communities long-term are paying less than their neighbors. Because homeowners eventually move on, we’re guaranteed to have some turnover. But when corporations – with perpetual life that transcends any human occupation – own commercial property, it never changes hands. Even when it does, Prop 13 has yet another corporate loophole – it only becomes a “sale” that triggers re-assessment if an entity owns more than 50% of the property. Many commercial properties have never been re-assessed since Prop 13.
That’s what Ammiano’s legislation would do – end this corporate tax loophole, so that Prop 13 only benefits the people it was meant to protect: homeowners. But instead, the Bay Citizen
would rather talk about how Ammiano has benefited from Prop 13 as a long-term homeowner – and his legislation only affect commercial properties. Never mind that amending Prop 13 for homeowners is a political non-starter in California – regardless of how much power or influence Tom Ammiano has. We can have the broader discussion later, but for now Ammiano’s legislation is an incremental, politically feasible proposal that directly targets the real culprits of Prop 13: commercial landlords.
But I’ve learned to expect nothing less from Bay Citizen
columnist Elizabeth Lesly Stevens. After all, she wrote a column about those “poor” landlords who can’t evict tenants
after they already did one owner move-in on the property.
EDITOR'S NOTE: Paul Hogarth bought his San Francisco condo in 2008, and thus pays higher property taxes than long-time homeowners due to Prop 13. But he'd rather get mad at Walter Shorenstein than Tom Ammiano.