Kenneth Wilkins is walking down the block in North Oakland where he bought a home 42 years ago. As he strolls up to the front of his home, he talks about the single-family home he purchased in 1976.
“Actually this house cost less than this car,” Wilkins says, pointing to a modest white Toyota parked in front of the house.
“This car cost $21,000, I think. And this house was less than that. I never dreamed that a house would sell for over a million in this neighborhood. But they do.”
Two years after Wilkins became a homeowner, California voters overwhelmingly passed Proposition 13, rolling back property taxes and putting a strict limit on annual increases. Wilkins isn’t sure, but he thinks he voted for it.
“But still you know even with Prop. 13 your taxes go up every year,” he says. “I mean it is limited, but over time it adds up, especially for people who are on fixed incomes.”
There is no question homeowners like Wilkins have benefited tremendously from Prop. 13.
Even if Prop. 5 passes, longtime owner Kenneth Wilkins doesn’t plan on selling. (Sean Havey for California Dream)
According to a 2016 analysis from the Legislative Analyst’s Office, Prop. 13 has led to vastly different property tax assessments within counties, or even blocks, depending on how long the home has been owned.
Our own analysis of real estate data from Zillow found significant disparities across the state, as well. On Wilkins’ block alone, we found that if everyone was taxed at the current value of their home, the block would have paid an additional $130,000 in property tax last year.
Wilkins’ tax bill, for example, is much lower than a nearby neighbor in a similar home who bought more recently.
That kind of disparity can be found even among homeowners with similar ages, incomes and overall wealth.
“Looking at 45- to 55-year-old homeowners with homes worth $575,000 to $625,000 and incomes of $80,000 to $90,000, property tax payments in 2014 ranged from $1,350 to $7,500,” the LAO report found in examining the San Francisco Bay Area.
That difference is based mostly on how long a property has been “protected” by annual tax increases by Prop. 13.
An unintended consequence is that the longer people benefit from lower property taxes, the harder it can be to afford a new home with taxes based on its new assessed value.
Indeed, the LAO report found that “the share of properties sold each year in California has been on the decline since the passage of Prop. 13.” While 16 percent of California properties were sold in 1977-78, this share declined to only 5 percent in 2014-15.