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Proposition 13 Does Not Appear to Be a Major Cause for This Shift. As described in the background, under Proposition 13 owning a property for more years results in a lower property tax bill compared to those purchasing a similar property more recently. Thus, if some types of properties turn over more frequently than others, the share of property taxes paid by those properties would increase. In particular, if residential properties turn over more frequently than commercial and industrial properties, then Proposition 13 would be part of the reason homeowners pay a slightly higher share of property taxes today. This does not appear to be the case. Rather, residential, commercial, and industrial properties appear to be turning over at relatively similar rates.

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Shifts in homeownership are driven by complex relationships between economic and demographic trends. This makes it hard to measure the influence of any policy change on homeownership. Nonetheless, some evidence suggests that Proposition 13 may have increased homeownership for some older Californians, while decreasing it for younger Californians.

Homeownership Costs Decreased for Some Households . . . Limits on assessed value growth result in lower, more predictable property tax payments for homeowners that do not move often. This would seem to promote homeownership for these households, particularly retirees with fixed incomes. Evidence of this is mixed. As Figure 25 shows, in places with less expensive housing across the country, assessed value limits are linked with higher rates of homeownership among Social Security retirees. This does not appear to be true in places with more expensive as much of coastal California. This could be because the difficulty of qualifying for and paying a home loan (rather than the cost of property taxes) becomes an increasingly important driver of homeownership as home prices rise.

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The list below provides the data sources for each of the figures contained within this report. Much of the data used in the report is accessible online or in historical publications. Some data was requested from federal, state, and local government entities.

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