Today I’m going to talk about a couple of the Local California Bay Area propositions from the recent election, their status, and how they may affect Bay Area real estate, homeowners, and local realtors. Whether they’ve passed or have not passed, it’s essential to know about these propositions in the Bay Area.
So, we’re going to talk about the three props that have to do with a local San Francisco Bay Area Real Estate as a whole, so that’s going to be prop 15, prop 19, and prop 21.
Proposition 15 and Bay Area Property Taxes
Let’s start with prop 15. So it looks as though prop 15 has been rejected. Essentially what prop 15 would be sort of like a partial repeal of prop 13, which passed in the 70s that put a cap on how much property taxes can be increased by every year to [I think] a maximum of 2%, with the continued increase in home prices going up way more than 2% per year since that time. Essentially, people’s accessed property taxes are much much lower than their fair market value. Especially if they bought their home a long time ago.
For example, somebody who bought their house in the 70s for $100,000 is paying property taxes on a property that’s worth $250,000. Still, some are very low like that. While the property is likely worth over a million dollars in the San Francisco Bay Area, Los Angeles, etc.
That also applied to businesses, which also applied to commercial real estate. What prop 15 aimed to do was repeal that for commercial properties. Proponents of prop 15 are people who own big corporations or very wealthy landlords.
Proposition 19 and Changes to Certain Property Tax Rules
This prop changes some of the tax assessment rules on property transfers by homeowners 55 or older or those who have lost a home due to natural things like an earthquake or tornado. Homeowners like these could transfer their tax assessment to a more expensive home 3 times with an upward adjustment. It would also eliminate the exemption of a home transfer to a child or a grandchild; if the recipient doesn’t use the home as their primary residence, its tax value would be reassessed under Prop 19.
Proposition 21 and Rent Control
This is the new rent control measure. It looks like it has failed- what prop 21 would have done is a partial repeal or a full repeal of cost to Hawkins. Hawkins is a law that stipulates that properties built before a statewide law that put a cap on rent control that said that the property’s made after the year 1995 statewide. Still, I believe it’s different for each county or city that enacted the rent control. For example, in San Francisco – any house built after a single-family home or condo built after 1979 is exempt from rent control laws.
This law prop 21 would have essentially repealed that and said that any home older than 15 years – Condo, single-family anything can/ will have rent control imposed on it, or can have rent control set on it. This is a big deal for a lot of tenants and a lot of landowners. This law did not pass, so it does not change anything. Right now, cities still have their rent control laws just as they did. In San Francisco, its properties were built before 1979. Property in 1979 is not exempt from rent control. Properties built after 1979 are exempt from rent control for Single-Family homes and condos.
I hope this breakdown was helpful. If you have any questions, I hope that you reach out to me! I’m constantly posting relevant information on the San Francisco real estate market. Please follow me on Instagram, Facebook, and Youtube!
Watch the video below for a realtor’s take on the prop update!