Are Oakland's property taxes a rip-off?
Posted in the Berkeley Forum
#1 Jun 18, 2007
I've been wanting to ask a group of dimond/glenview locals these following questions for some time. this post is not meant to become a flame war, just looking for some insight:
1. do you rent or own in Oakland?
2. do you think that renters should be allowed to vote on measures that ONLY financially impact property owners? meaning through property taxes. for example, when my wife and i rented, we usually voted on improvement measures because they didn't cost us anything (landlords and homeowners paid for it through property taxes).
3. do you feel, as property owners, that you are getting a good return on your investment? meaning, do you think your property tax dollars are being well spent in Oakland? would you like an open book assessment of "where the money is going?"
here's my thoughts:
Oakland and state taxes are roughly 1.45%(including assessments). so, the state is 1%, that's .45% for Oakland. Oakland does tack on a lot relatively compared to other cities. and to think we will be paying this ever slightly escalating amount every year until we sell or die is sorta hard to grasp. i mean we aren't talking a few grand anymore. people are paying $10,000-$13,000 A YEAR. and to say they are all rich is absurd. many, like us, are middle class employed (at least for now) folks that understood the cost of property taxes, but not the personal impact. it's far different when you come to realize you will be paying this large sum forever.
and the common response of "well, you can write them off, along with your interest - so stop complaining). well, true, but unless you make A LOT of money, your salary is not even close to high enough to reap the maximum benefits of the write-offs. you can't get back more than you pay into income tax. for example, if you have a big mortgage and high property taxes, but are unemployed. you get NOTHING back. because you have put nothing torwards income tax.
as home values in the bay area, and Oakland specifically, have nearly tripled since the late 1990's, so have city and state income from property taxes. yet the city incessantly keeps claiming they are broke. i just don't get it. our infrastructure is damaged. our schools are in disarray (aren't they still state controlled?), crime is on the rise, yet property tax income has been soaring. where is the money going?
homes that were $280,000 in 2001 are now being put back on the market for $630,000 (I'm not inventing these numbers). lets say this is fairly common (and it is). that means the city's revenue for this typical dimond home went from $4,060/year to $9,135 and up FOREVER (barring a collapse of housing prices).
my main point is housing prices have nearly tripled in Oakland, yet what are we seeing for the money? do you feel any safer? are your children getting a better education? are Oakland's public areas getting beautified? the common city response is well we need more measures and assessments because Oakland doesn't have the money to provide these things with the present budget..
and so yet another assessment or measure gets thrown on the ballot, only to be SOLELY paid for by property owners. sucking off property owners is a one trick pony that has got to stop. my wife and i are seriously thinking of selling our home and renting again. rents are still relatively flat and the relative rent our home would go for is about HALF of what we pay for in a mortgage NOT including property taxes.
another common response being "well that's the price of ownership - and you will reap the benifit of ever increasing property values." well, maybe, but when home prices have far outstripped wages, i doubt homes will keep rising period, let alone at the brisk clip they've been screaming in the last 5-7 years.
in closing, i don't profess to be an expert. in fact, i want you to NICELY critique my thoughts and educate me as well.
#6 Jul 30, 2007
I found your comment interesting: when you rented, you usually voted on improvement measures because they didn't cost you anything (landlords and homeowners paid for it through property taxes)." did the landlords not increase your rent accordinly?
Since: Jul 07
#7 Jul 30, 2007
the short answer is no. basically, rents are so below what an equivalent mortgage and taxes would be for a given property, it's not even funny. currently, you can rent a place for less than half of what it would cost for a mortgage, property taxes, water and garbage if you were to buy the same place.
not to mention, if you are in Oakland or San Francisco with fairly restrictive rent control, there's absolutely no chance of recouping your losses in property tax increases.
the county and the state pretty much reassess your property the prop. 13 maximum of 2%, compounded every year. you can see that skyrocketing on expensive bay area property. like tack on a compounded 2% a year in value on a $800,000 rental property over 7 years. just watch the price scream.
so, why are there still so many cheap rents? because landlords have had a relatively hard time keeping tenants with the screaming housing market. things will probably change now that the tides have turned.
another reason is because there are MANY rental properties that were purchased decades ago. the overall monetary investment is very low at this point, so landlords can have aggressively priced rents compared to income property bought in the last few years.
#8 Jan 20, 2013
Oakland puts 80% to the police so thats 20% for everything else
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