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Did Proposition 13 Affect the Mobility of California Homeowners ?

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  • John Nagy

    (Wells Fargo Bank)

Abstract

In 1978, the voters of California cut the property tax paid by home owners whenthey passed Proposition 13. However, home owners lose much of this tax savings if they sell their homes and buy others, because, under Proposition 13, recently purchased property is assessed at a higher rate. This may create a lock-in effect, and as a result home owners may be less likely to move from their present homes. Using the Census Bureau's Annual Housing Surveys (1975, 1978, 1982), I compare home owner mobility rates after Proposition 13 with rates immediately prior to the initiative. I find that mobility did decline in the years immediately after the introduction of Proposition 13. However, the data suggest the decline in mobility in California may be simply a part of a national decline in mobility, because there was a concurrent decline in mobility in the rest of the nation.

Suggested Citation

  • John Nagy, 1997. "Did Proposition 13 Affect the Mobility of California Homeowners ?," Public Finance Review, , vol. 25(1), pages 102-116, January.
    • Handle: RePEc:sae:pubfin:v:25:y:1997:i:1:p:102-116
    DOI: 10.1177/109114219702500106
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    References listed on IDEAS

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    1. O'Sullivan Arthur & Sexton Terri A. & Sheffrin Steven M., 1995. "Property Taxes, Mobility, and Home Ownership," Journal of Urban Economics, Elsevier, vol. 37(1), pages 107-129, January.
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    Cited by:

    1. Ferreira, Fernando, 2010. "You can take it with you: Proposition 13 tax benefits, residential mobility, and willingness to pay for housing amenities," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 661-673, October.
    2. Skidmore, Mark & Ballard, Charles L. & Hodge, Timothy R., 2010. "Property Value Assessment Growth Limits and Redistribution of Property Tax Payments: Evidence From Michigan," National Tax Journal, National Tax Association;National Tax Journal, vol. 63(3), pages 509-537, September.
    3. Cheung, Ron & Cunningham, Chris, 2011. "Who supports portable assessment caps: The role of lock-in, mobility and tax share," Regional Science and Urban Economics, Elsevier, vol. 41(3), pages 173-186, May.
    4. Ihlanfeldt, Keith R., 2011. "Do Caps on Increases in Assessed Values Create a Lock-in Effect? Evidence From Florida’s Amendment One," National Tax Journal, National Tax Association;National Tax Journal, vol. 64(1), pages 8-25, March.
    5. Ayşe İmrohoroğlu & Kyle Matoba & Şelale Tüzel, 2018. "Proposition 13: An Equilibrium Analysis," American Economic Journal: Macroeconomics, American Economic Association, vol. 10(2), pages 24-51, April.
    6. Bradley, Sebastien, 2018. "Assessment limits and timing of real estate transactions," Regional Science and Urban Economics, Elsevier, vol. 70(C), pages 360-372.
    7. John Deskins & William Fox, 2008. "Measuring Behavioral Responses to the Property Tax," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0816, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    8. Chris Cunningham & Robert R. Reed, 2012. "Housing wealth and wage bargaining," FRB Atlanta Working Paper 2012-20, Federal Reserve Bank of Atlanta.

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