Jumpstarting the Exurban Nation, Prop 13

California and Prop 13 is the stuff of legend and many a Doctoral Thesis.

Starting at the beginning:

1974-1975 property valuations and property mil rates were spiraling out of control relative to municipal services rendered. So what. BFD. The big bad government was stealing and people were balking. Enter the "democratic" process. So in 1978 the "people" voted their bread and circuses by limiting property taxes to 1% of the 1975 assessed value and -sales- price thereafter. The whole world turned upside down. But you want to know why this screwed up commuting and transportation in general. Like I said, a doctoral thesis, hang with me here.

Using a theoretical example. A house bought bought in 1995 for $250,000. Today's price, $1m. Yeah, weird. So anyway the effective property tax rate is 1/4 of 1% annually. The sames house provided
outright, at today's price, property taxes would be $900 per month. The owner cannot relocate to a different but equivalent home because of the tax consequences. Think of it reversed. The owners' personal travel budget makes it desirable to commute $900 worth (direct costs and my time value) rather than move closer to work.

Prop 13 so raised the value of good housing that it also all but requires two earner income families. That means two sub-optimal commutes and child care travel trips. See where the Exurban Nation comes from?