Prop 13 is defective because it is inequitable (as well as a glaring reminder of why ad valorem taxation as well as direct ability-to-pay taxation fails logically as well as morally). There is no justification whatsoever for anyone coming to California today to purchase a home on a street, and have to pay one cent more than the owner of an identical home on an identical parcel of land on that same street, who has lived there since before the mid-1970s pays in property taxes. Not one cent. That is the true defect of Prop 13. The freeloaders who benefit from this resent anything that threatens making them pay more to reduce the unfair burden of those who are now paying much higher taxes (can be ten times or more) for the same thing.

The obvious solution is reasonably low property taxes for everyone, of course. (Beyond the intellectual ability of too many people, sadly, is to ditch the assessed valuation basis for taxation and go with a truly objective as well as equitable basis instead, such as square footage of land and developed structures.)

Aside from that, home prices themselves are still too high. I have no sympathy with those expecting to get easy riches, especially the “flippers” and the parasitical people associated with them.

Note that the federal government could reform itself here, and end its subsidy and social-engineering game, which means no longer to allow deduction of home mortgage interest. (Given our current slump and desire for stimulus, I'm still wondering why all interest on debt wasn't made tax deductible, or at least for home, automobile, and appliance purchases, the items normally most important in this regard.) This is a sacred cow that has a lot of emotional dreck defending it and it won't be slaughtered any time soon (no more than Obama will end the cap-and-trade idiocy for a simple, more honest tax on carbon in fuels), but could at least be modified to be more equitable, such as to allow all mortgage costs and all rent that renters have to pay (or a consistent fraction among these) to be tax-deductible, if nothing else.

Don't expect intelligence from Washington any time soon, however.

I thought on my own why we didn't see an expansion of Cash for Clunkers not only to involve more vehicles (which is logical, anyway, if auto buying is primarily sought), but also to encompass housing purchases, on the larger, more expensive end, and appliance purchases (to be followed by assisted purchases of stereos, large-screen plasma TVs, etc.) on the smaller, less expensive end.

Following World War II, and the Great Depression, the US public was still a nation of savers. Madison Avenue played a huge role on behalf of corporations in changing the public attitudes from savers to spenders. As home buying increased, the housing industry continued to fuel the growth. The financial system also offered easy credit to the mix, and we evolved into a culture of rampant consumers and debters. And here we are now. The fix, I think, won't come from government or the corporate world, but through a cultural change back to more realistic way of living.

Personally I want to see more renters. Home ownership was turned into a lighthearted game when it's serious business. And the numbers don't lie about renting: if you lose your job, pay $1000/month rent, and have 10 months left on a one year lease, you are obligated to $10,000. But in home ownership, that number is easily 25 – 40 times that easily (on average today).

The big myth is “affordable housing”. Well here is some news, do you know what affordable housing really is? Its not the housing you want, its the housing you can actually afford. Government made a gross mistake about this and sent us on a couse that led to the housing crisis and kept many hard working Americans unable to responsibly buy their homes because of the overinfated market due to government interventions.

Thomas Sowell wrote a great piece on this entitle “Lured to Disaster, I recommend everyone read it.

http://article.nationalreview.com/?q=ODA2NzIwYW…

here is an excerpt:

When I first left home, back in 1948, I rented a room about 4 by 8 feet, costing $5.75 a week. Since my take-home pay was $22.50, that was affordable housing. (Multiply these numbers by about ten to get the equivalent in today’s prices).

After three years of living in rented rooms, I began living in Marine Corps barracks, and sometimes tents—none of which cost me anything. That was certainly affordable.

As a civilian again in 1954, I rented my first apartment, a studio apartment—small but affordable. But a year later, I went off to college and lived in dormitories on various campuses for the next six years. None was fancy but all of them were affordable.

After completing my academic studies, I rented another studio apartment—not a big advance, but it was affordable.

In 1969, I rented my first house, which I could now afford, after several years as a faculty member at various colleges and universities. A dozen years later, I began to buy my first house.

————————-

This is what big government destroys with a sense of entitlement that paints affordable housing as the housing you want instead of the housing you can afford, we saw where that got us.