Full Citation
Title: The Role of Property Tax in California's Housing Crisis
Citation Type: Miscellaneous
Publication Year: 2023
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Abstract: California faces a shortage of housing according to politicians, activists, and residents. In this paper, I leverage differential exposure to the Proposition 13 tax laws to understand the impact of this policy on the production of housing in Southern California. Proposition 13 restricts property tax growth as long as the owner doesn't sell or redevelop the property, which allows me to exploit differences in market conditions at the time of prior purchase to identify the effect of these property tax limits on property redevelopment. I find that Proposition 13 discourages redevelopment and sales. In a dynamic discrete choice model of land use, I find that adopting a land value tax or other property tax reforms would increase housing production by 14-32% generating a similar or greater amount of new housing as other polices under consideration in California.
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Authors: Fisher, Paul J
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Data Collections: IPUMS USA
Topics: Poverty and Welfare
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