Proposition 15 opens a referendum to change how California enacts property taxes. It is designed to create a split-roll property tax system in California.
What is Proposition 15 all about?
A split-roll property tax system would require all commercial properties to be reassessed of its market price every three years. Owners with less than $3 million in total commercial properties would be exemption from this initiative.
Meanwhile, residential properties would continue to be taxed under the rules of the 1978 Proposition 13. Under this ruling, an increase in assessments for residential properties would restrict it to no more than 2%.
Final tally is not out yet, Capital Public Radio in Sacramento forecasts a voter rejection of Proposition 15 by a 52% to 48% margin.
Proposition 15 – PROS
- increasing property taxes on commercial real estate would encourage the conversion of these properties into residential developments, thus alleviating the state’s chronic housing affordability problems.
Research by the Urban Institute shows that many commercial parcels in four major markets—Berkeley, Chula Vista, Fresno, and Los Angeles were eligible to be converted from commercial or industrial use into homes.
Sarah Strochak, a research analyst in the Urban Institute’s Housing Finance Policy Center, concluded that “long-term incentives for owners and developers to build/convert to residential uses are much stronger than for municipalities to rezone under medium and high price appreciation scenarios.
