New tax data platform fuels Prop. 15 debate in South Bay
The Tax Fairness Project interactive map allows users to see the difference between purchase-price tax and market-value tax.

Proposition 15, one of the most highly-contested issues on the ballot, has given hope to those who believe it will eventually lead to changes in how residential property taxed.

The measure, if approved, would require commercial and industrial properties to be taxed based on their market value rather than the price at which they were purchased. Prop. 15 would not change how residential property is taxed.

However, the tax assessment formula for Prop. 15 comes from Prop. 13, the measure approved in 1978 by 64.79% of voters. Prop. 13 called for residential, commercial and industrial properties to be taxed based on their purchase price — which, 40 years later, has led to a drastic schism between older and newer property owners.

Phil Levin saw this firsthand as a new homeowner in Oakland and decided to showcase those discrepancies online. He launched the Tax Fairness Project Oct. 23, featuring an interactive map of homeowner tax subsidies across the Bay Area with collected data points from the official state property tax record.

He believes the findings further prove the need for Prop. 15, and the need for continued change to a long-antiquated and contested system.

“Prop. 15 is a great step toward reform but estimates show that about 75% of property tax receipts in California are residential rather than commercial,” he said. “It will be crucial to build on Prop. 15 and use the momentum to drive changes in residential subsidies.”

The map is searchable by cities and individual addresses, and provides additional graphs and tables that demonstrate tax inequities across the greater Bay Area. At the top of the site’s homepage, Levin included a stark example of the inequity, with a $9 million home in San Francisco’s Presidio Heights neighborhood having the same property tax as a $331,000 home in Richmond.

In Silicon Valley, there are striking inequities between neighboring homes. In the Rose Garden neighborhood of San Jose, 995 Emory St. — a 5 bedroom, 3 bath home valued at $1.6 million — has an annual property tax of $7,214. Next door, at 812 Myrtle St. — a 3 bedroom, 4.5 bath home valued at $2.8 million — the annual property tax is $31,730.

The inequities work the same way for commercial and industrial properties, with major conglomerates such as Disneyland paying the same property taxes in 2020 as they did in 1975.

According to the California Tax Reform Association’s findings in 2010, the bulk of the land is being taxed at a mere five cents per square foot; a decade later, Curbed estimates that if the property tax was readjusted with a measure like Prop. 15, “Orange County would see $19.6 million or more from the world’s biggest media company each year.”

Santa Clara County Assessor Larry Stone was a young councilmember when Prop. 13 was on the ballot, opposing it then as he does now. He said he believes it to be one of the two worst things to happen for California (term limits being the other).

But he doesn’t necessarily believe Prop. 15 will lead to change in the ways new homeowners such as Levin and others think.

“I’m surprised that they would launch this right before the election because it validates what the commercial opponents to Proposition 15 are saying, which is that Proposition 15 is just the next step to increasing long-time homeowners’ subsidies,” Stone said.

Stone said commercial and industrial property owners should pay a fairer share of the property-tax burden but, should the measure pass, it would be improbable and costly to implement.

“It’s an interesting and valid argument about the inequities that exist, and they do, but it’s where equity and politics collide,” Stone said. “I don’t believe there’s any possibility that Proposition 13 will be changed for residential property owners anywhere in the near future due to politics.”

Some opponents of Prop. 15 are holding strong to that fear. Rex Hime, chief executive of the California Business Properties Association, told The New York Times earlier this week: “They want to do this because they believe now is an opportunity to break up Proposition 13 … They’re coming after homeowner protections next.”

Stone saw the impact of Prop. 13 negatively effecting younger generations over time, not only impacting their ability to become homebuyers but also affecting money coming into local school districts.

For Levin, that’s one of the primary issues that makes the Tax Fairness Project necessary in advance of the coming election.

“Property taxes pay for one very important thing: K-12 education. In most jurisdictions, a minimum of 40% goes toward education,” Levin said. “The (Prop. 13) subsidy, primarily benefiting wealthy homeowners, is paid for with lower teacher salaries, larger classroom sizes and deteriorating facilities.”

The nonpartisan Legislative Analyst’s Office estimates Prop. 15 would raise $6.5 billion to $11.5 billion annually for public schools, community colleges and city and county government.

While this could be a benefit of the measure, it doesn’t directly demonstrate the effects of Prop. 15’s implementation.

“To try to change 42 years of significant inequities that increased every year with a single ballot measure is a dream,” Stone said. “If I were to try and change Proposition 13, I would say that assessments should go up some percentage of the California Consumer Price Index with a gradual price index toward equity — that seems to be a more reasonable approach.”

As of voting estimates on Oct. 26, a poll released by UC Berkeley’s Institute of Governmental Studies determines supporters of the proposition outweigh opponents, 49% to 42%.

Contact Grace Stetson at [email protected] and follow her @grace_m_stetson on Twitter.

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