Property Tax Limitations and Mobility: The Lock-in Effect of California's Proposition 13

Nada Wasi and Michelle White

No 11108, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Proposition 13, adopted by California voters in 1978, mandates a property tax rate of one percent, requires that properties be assessed at market value at the time of sale, and allows assessments to rise by no more than 2% per year until the next sale. In this paper, we examine how Prop 13 has affected the average tenure length of owners and renters in California versus in other states. We find that from 1970 to 2000, the average tenure length of owners and renters in California increased by 1.04 years and .79 years, respectively, relative to the comparison states. We also find substantial variation in the response to Prop 13, with African-American households responding more than households of other races and migrants responding more than native-born households. Among owner-occupiers, the response to Prop 13 increases sharply as the size of the subsidy rises. Homeowners living in inland California cities such as Bakersfield receive Prop 13 subsidies averaging only $110/year and their average tenure length increased by only .11 years in 2000, but owners living in coastal California cities receive Prop 13 subsidies averaging in the thousands of dollars and their average tenure length increased by 2 to 3 years.

JEL-codes: H2 H7 K2 R2 (search for similar items in EconPapers)
Date: 2005-02
New Economics Papers: this item is included in nep-geo, nep-law, nep-pbe, nep-pol and nep-ure
Note: LE LS PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (30)

Published as Nada Wasi & Michelle J. White, 2005. "Property Tax Limitations and Mobility: Lock-in Effect of California's Proposition 13," Brookings-Wharton Papers on Urban Affairs, vol 2005(1), pages 59-97.

Downloads: (external link)
http://www.nber.org/papers/w11108.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:11108

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w11108

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().