We found a few properties in our crawl that exceeded this threshold and submitted to rentbrigade.org.

Screenshots of the ads before and after the fires

• 800 Canon Dr: Before, After
• 705 Chaucer Rd: Before, After
• 11410 Dona Pegita Dr: Before, After

Previously on this site we’ve established, using Padmapper and Craigslist ads, that Prop 13 is not passed on to renters. A common retort has been “of course landlords won’t pass on saving to new tenants, but long-time renters get lower rents because of Prop 13”. That sounds fair, but now that we have data we can see it’s likely not true.

The Data

Currently the Rental Registry has 62,227 datapoints specifying, among other things, the address, report date, and rent amount. Given the address, we can pull AIN and property tax information from the LA Country Assessor web portal. The county give us more information: Base Year (the year the property last was sold), Base Year Property Tax, Current Year Property Tax, Use Type (whether it’s a SFH, condo, etc.), and square footage.

Most of the data is from apartment buildings which, unfortunately, don’t have precise tax information available online. “Vacant Land”, “Commercial”, and “Other” are uninteresting to us so we restrict our attention to condominiums and single family homes. For each of these we drop reports when the report date precessed the Base Year (because that means the owner in the assessor database is different from the landlord who reported the rent to Culver City) as well as rows that contain NaNs, zero rents, impossibly high rents, or null sqft. This leaves us with 3,334 rent reports across 1,023 distinct addresses in Culver City.

Here’s the plot of how tax assessments and rent correlate:

Howard Jarvis and his supporters claimed that when tax assessments are low then rent will drop accordingly. And while there does seem to be some degree of truth to this, it’s only for newly purchased units (the blue dots). These units have not been held long enough to feel much effect from Prop 13 and the assessments closely track current market value.

What’s interesting to look at is the red dots. These units have been held for a long time and thus have remarkably low assessments due to Prop 13. The rent_per_sqft on these is easily as high as for newly-purchased units and there’s no evidence that the landlords have been giving their tenants a discount simply because of their low property tax rates.

So again we see that Prop 13 is not incident on renters. Rent is set by what the market will bear, not what taxes the most fortunate landlords pay.

sometimes a map gives off a "haven't I seen this map before?" vibe.

Left: size of Prop 13 property tax subsidy that homeowners who bought a long time ago get, map by @levin_phil. https://t.co/RzJUc2NOFF

Right: Racial dot map, map by @UVACooperCenter https://t.co/I1Otit83xj pic.twitter.com/KcxjR4Glui

— Alfred Twu (@alfred_twu) November 15, 2020

How does this happen? Why do white neighborhoods get larger property tax cuts than others? Answer: Prop 13.

Under Prop 13 assessment at purchase time is used to determine taxes for the duration of ownership. What’s more, these assessments are passed down through bloodlines. When the original owner dies their heirs inherit the low tax rates in addition to the appreciated property. With few exceptions, if your family bought property a long time ago, you still pay low taxes today. This holds even if the original purchase was made possible by unfair advantages which are now illegal. In this way, Prop 13 ensures that housing discrimination from the past remains enshrined forever in California law.

And of course California has a long history of housing discrimination, from redlining our major cities in the 1930s to loan discrimination as recently as 2020. But even when the law acknowledges that something is unjust, Prop 13 steps in and slows meaningful change. For example, between 2017 and 2020 City National was denying mortgages to borrowers when they were looking for homes in Black or Latino communities. Anyone who was denied such a mortgage was also denied the COVID housing price boom and, with it, the ensuing Prop 13 tax cut.

While this may not have been be the original intent of Prop 13, the net result over time is the same: white neighborhoods get the largest tax cuts. Here’s a chart showing what the effect is in Oakland:

(from https://www.spur.org/sites/default/files/2022-02/SPUR_Burdens_and_Benefits.pdf):

This is arguably illegal under the Federal Fair Housing Act

While Prop 13 was ruled constitutional in Nordlinger v. Hahn it has not been challenged under the federal Fair Housing Act (FHA). Prop 13 can still be overturned by the courts as it likely violates the FHA’s disparate impact liability. The idea isn’t new. It’s from Exclusionary Taxation by Shayak Sarkar & Josh Rosenthal:

There have been lawsuits which made use of the FHA in relation to property tax assessments. These may provide guidance on how to proceed on a potential suit against Prop 13:

Coleman v. Seldin

Nassau County assessed property taxes based on a combination of 1938 construction costs and 1964 land value – current market value was unused. This resulted in low assessments for homes in areas that saw high appreciation and comparatively high assessments for homes in areas that saw low appreciation.

Minority homeowners paid higher taxes relative to the value of their property compared to white homeowners. The New York Civil Liberties Union (NYCLU) filed the suit, invoking Title VI of the Civil Rights Act and Title VIII of the Fair Housing Act. A settlement was reached on March 28, 2000. A consent decree was entered into with the Court requiring the county to adopt a fair, scientific, and non-discriminatory assessment system based on fair market value and engage in mass reassessment.

Annual updates of the assessment were implemented to ensure compliance. By December 2004, the assessment rolls were considered in substantial compliance, eliminating discrimination. The NYCLU continues to monitor the implementation, and the county agreed to maintain compliance with annual assessments without further court involvement.

Morningside v. Sabree

In 2016, the ACLU of Michigan and NAACP Legal Defense Fund, representing a group of Detroit neighborhood associations and homeowners, filed a class-action lawsuit in state court against the Treasurer of Wayne County, Michigan alleging that the tax foreclosure rate in predominantly African-American neighborhoods in Wayne County is 10 to 15 times higher than the rate of foreclosures in predominantly non-African-American areas. The reason for the high foreclosure rate is because homes in African-American neighborhoods are often between double and eleven times the actual fair-market value. This is significantly higher than in white neighborhoods.

The pattern of over-assessment was acknowledged by the State in 2014 and measures were taken to correct it, however, this was too late for homeowners who were already in default and had to foreclose. The Michigan courts decided that the lawsuit’s FHA aspect should be dismissed under jurisdictional grounds. Fortunately, in July 2018, a settlement was reached allowing the foreclosed to keep their homes.

Related work

Disparate impact of Prop 13 has been quantitatively studied:

• https://www.taxfairnessproject.org – Aligns California tax assessments with current market valuation (as reported by propertyshark in November 2020). Limited to the Bay Area.

• Property Tax Limitation and Racial Inequality in Effective Tax Rates – This paper examines effective property tax rates reported by homeowners to the Panel Study of Income Dynamics in states with and without property tax limitation policies. The authors find that racial inequality in effective property tax rates is most exaggerated in areas with tax limitations and address Prop 13 specifically.

Today we also have access to the recent 2020 census and the updated racial dot map. This can be easily joined with California property tax data (which is public) to strengthen the existing results.

Remember, the intention of Howard Jarvis and his supporters is irrelevant. Disparate impact cares about outcome, not intent. Prop 13 can still be found to violate the law no matter if were a welfare program for low income seniors or a scheme to disadvantage minority schoolchildren. Prop 13 does not need to be voted down in a statewide ballot meause, it could quickly be overturned in a lawsuit for which the evidence is piling up.

The deputy who arrested Howard Jarvis for investigation of drunken driving in March testified Wednesday that Jarvis was unable to recite the alphabet and failed three other easy sobriety tests after being pulled over.

https://www.newspapers.com/article/contra-costa-times-jdui/126697287/

Howard Jarvis referred to one of his Jewish opponents as a “lying kike lawyer from Brooklyn”

This happened during the campaign for Prop 9 in 1980. An initiative where Jarvis was ultimately defeated by a wide margin.

You’re not like Reiner. He is a goddamn lying lawyer kike son of a bitch from Brooklyn.

– Howard Jarvis

https://www.newspapers.com/article/the-los-angeles-times-jlawyer/126710975/

Howard Jarvis used the slur “Japs” after suffering a bitter defeat on Prop 9

He also charged that public employee unions are going to assume “dictatorships”.

The question is, are we going to permit the public employee unions to assume dictatorships

The public employees have won the first battle like the Japs won the first battle at Pearl Harbor, but the United States won the war

https://www.newspapers.com/article/news-pilot-jarvis-slur/126710329/

Howard Jarvis was sued for slander for telling a woman heckler that she “couldn’t make a quarter” in a “house they have” in Nevada

Why don’t you go to Nevada in house they have over there, you couldn’t make a quarter.

– Howard Jarvis speaking to Darla Davisson in 1980

https://www.newspapers.com/article/the-sacramento-bee-slander-suit/126697136/

Howard Jarvis threatened a high school district with an $800,000 libel suit because of an article written by a 16-year-old in the school newspaper

During the run up to Prop 13 in 1978 16-year-old Brad Teaby wrote an article describing the ballot measure in the Granite Hills High School Clarion. A footnote alleged Jarvis and Gann were “prominent real estate owners” who stood to reap “several million dollars” in tax savings if the proposition passed. Jarvis and Gann quickly labeled the story “grossly libelous” and filed their claim, the first step toward a libel suit.

The lawsuit was ultimately dismissed after Allyn Smith, the 17-year-old editor, published a partial retraction.

https://www.newspapers.com/article/the-peninsula-times-tribune-16yopa/126714954/

Howard Jarvis suggested removing 100,000 foreign students from California universities because they were “mooching on us”

DAILY: Estimates are that if tuition is charged 100000 students will be knocked out of the CSUC system

JARVIS: I wish there would be and especially a lot from foreign countries. We could cut 100000 foreign students – legal and illegal aliens going to school here – mooching on us – and get them the hell out of here.

note: jfc that whole interview is unhinged.

https://www.newspapers.com/article/the-sacramento-bee-foreign-students/126715147/

https://www.newspapers.com/article/the-sacramento-bee-dailypt2/126715365/ (part 2)

Howard Jarvis referred to the California public school system as a “cancer on this society” which manufactures “permanent welfare recipients”

During an interview with Libertarian Review in 1979 (though he also mentioned it in the interview above):

LR: Where do you feel the most money is wasted by government today?

Jarvis: The public school system is second to none in waste, incompetence, and zero results. I think the public school system is a cancer on this society. The only difference between the public schools and the Mafia is that the public schools steal more money.

LR: The Libertarian Party has proposed a ballot initiative granting a state income tax credit of up to $1200 for any individual or corporation that pays the private school tuition of a child in the state of California. What do you think of that idea?

Jarvis: I have to agree with it. Private schools are far superior to the public schools. A grand jury investigation in Los Angeles County last year turned up the sad fact that 63 percent of the students at affluent schools—not ghetto schools, but affluent schools—were functionally illiterate. Instead of providing education, the public schools are a manufacturing establishment for permanent welfare recipients.

https://www.libertarianism.org/publications/essays/howard-jarvis-mad-hell-76-lr-interview

The California Tax Postponement Program has been on the books since 1977 (Prop 13 passed in 1978) and allows “homeowners who are seniors, are blind, or have a disability to defer current-year property taxes on their principal residence if they meet certain criteria”.

The criteria are reasonable: “at least 40 percent equity in the home and an annual household income of $51,762 or less”. This is around the median income for people aged 65+ in California. The limit has been increased over time and is regularly adjusted.

The California Tax Postponement Program does not change the amount of taxes paid to the state. When the owner dies or sells the property the deferred taxes are due. This way low income seniors are not displaced by rising taxes but our schools and parks can continue to function.

While the California Tax Postponement Program is typically left out of conversations about Prop 13 it is understood by people who think deeply about the law. For example, Justice Stevens in the dissenting opinion on Nordlinger v. Hahn writes:

In my opinion, Proposition 13 sweeps too broadly and operates too indiscriminately to “rationally further” the State’s interest in neighborhood preservation. No doubt there are some early purchasers living on fixed or limited incomes who could not afford to pay higher taxes and still maintain their homes. California has enacted special legislation to respond to their plight. Those concerns cannot provide an adequate justification for Proposition 13. A state wide, across the board tax windfall for all property owners and their descendants is no more a “rational” means for protecting this small subgroup than a blanket tax exemption for all taxpayers named Smith would be a rational means to protect a particular taxpayer named Smith who demonstrated difficulty paying her tax bill.

https://www.law.cornell.edu/supct/html/90-1912.ZD.html

The California Tax Postponement Program is rarely taken advantage of with less than ten thousand participants every year. This might be because of Prop 13 but it could just as well be that “getting taxed out of your house” isn’t a legitimate risk on any appreciable scale. Several states provide no such protection and residents do just fine.

In any case, when it comes to housing stability for seniors, Prop 13 is wholly unnecessary.

That was pretty obviously a lie. And of course shortly after Prop 13 passed rents didn’t go down and tenants lashed out with aggressive rent control laws in response. But, despite all that, people today still believe that Prop 13 is keeping rents lower than they would be without it.

Here is some data which suggests otherwise.

To investigate the relationship between property tax assessments and rent I collected ads from Padmapper, Craigslist and, recently, the Culver City Rental Registry. These ads include advertised rent, square footage, and exact addresses. I restricted data collection to single-family homes because tax assessments for apartment buildings often do not resolve to individual units.

To get tax information I used the LA County Assessor Portal which provides up-to-date information on property taxes and assessments. The Portal also provides the “base year” which is the year the property last changed ownership. Since the passage of Prop 13 property assessments are made based on the value of the property during the “base year”.

The final result is a dataset that has advertised rent, square footage, and property tax assessment for each address.

The below plot shows rent against tax assessment per sqft:

Here’s the same study but using Craigslist rental ads instead:

And here’s the study but using the Culver City Rental Registry:

Howard Jarvis promised that if assessment_per_sqft decreased then rent_per_sqft would also decrease. He was lying.

Contrary to the claims of Proposition 13 supporters, there is no clear relation between tax assessments and rent prices. Yes the data shows that higher assessed properties might command higher rents, but this is only true for recent purchases (blue dots). Long-held homes (red dots) with low tax assessments charge comparable rents to recently-purchased homes with higher tax assessments.

To put it another way: Prop 13 is not incident on renters – a statement in line with mountains of academic research.

A map to look at data points individually

A concrete example

Here is a long-held 837 sqft house in Silverlake. Rent is $3500 per month. The owner pays $484 per year in property taxes on a $29,511 assessment. From the tax assessor’s point of view, if you rent this house in January you will have paid off more than it’s complete value before Halloween.

Now, just 3.5 miles away, is a more recently purchased house of the same size with the same number of bedrooms. It’s currently up for rent at $2,995 and the tax assessment is $579,693 (more than 10x the previous home). The rent, however, is about the same at roughly $4/sqft.

Discussion

As rent and home prices soar, landlords enjoy a decline in their effective tax rates and a widening of their profit margins. Meanwhile, tenants are burdened with the necessity of spending more to maintain their residences, while also facing the need to save up for the ever-more-distant day when they might buy a home of their own. And if they do, they will be confronted with an onerous tax burden, often as much as ten times greater than that which the previous owner paid.

It doesn’t matter whether a landlord is new to the scene or an entrenched member of the establishment. Both will charge as much as they can, regardless of their tax rate. Rent, as all market-driven commodities, finds its equilibrium through supply and demand. The notion that landlords would somehow be compelled to pass on their tax savings to their tenants is utter nonsense.