I attended the California Association of Realtors business meetings in San Diego earlier this month. The week started with the annual C.A.R. EXPO, the largest trade show for the real estate industry.
In attendance were numerous top producers, CEOs, tech experts, and any imaginable vendor related to real estate.
I heard some engaging speakers and an informative economic forecast. But perhaps the most compelling news came out of the Board of Directors meetings.
After two days of discussion, the C.A.R. Board of Directors authorized a sponsoring effort for a ballot initiative that will allow all homeowners over age 55 to transfer their property-tax base.
The initiative would allow the transfer anywhere in California each time they move without a requirement to buy a lower-priced home, which is the current rule under Proposition 90.
A higher price home will have a blended rate based on how much new value was added.
Current law allows a one-time transfer of property tax base rate for homeowners over 55 if they move within their county or into one of the 11 of 58 counties that approved Prop. 90.
Many seniors are retiring in place when they’d rather move closer to children and grandchildren, move to a single-story home, or move to a new location. A recent study has shown more than 75 percent of senior homeowners have not moved this century.
The state Legislative Analyst office has estimated that the passing of this initiative would result in an additional 43,000 homes being transferred in California each year. That is an increase in statewide inventory of more than 10 percent.
Legislation in the Assembly would expand property tax portability by allowing such transfers to any county in the state, starting Jan. 1, 2019. Since it would amend the state constitution, it would need to be approved by a simple majority of voters.
An argument has been made that counties would lose revenue due to the loss in property tax. However, a dynamic study shows this is more than made up for on the sale of their home.
Property tax portability also might help alleviate the housing shortage by bringing new inventory onto the market, and allowing more options for first-time buyers.
Studies show real-estate transactions help boost the economy, as many home buyers end up shopping for new furniture, painting and replacing flooring, hiring contractors to do various jobs, etc.
This is one of the most impactful issues I have seen passed at C.A.R.
The goal with this initiative is to provide an option to homeowners who may feel stuck in their homes by making it a bit easier to move to a home that is more suitable for their needs.
In doing so, we gain more housing supply and help stimulate our local economy. A true win/win.
— David Kim is a licensed real estate broker with Village Properties and the 2017 president of the Santa Barbara Association of Realtors. Contact him at david@villagesite.com or 805-296-0662. The opinions expressed are his own.