Hahnel said the generational disparities can belie racial ones because not all buyers have had the same access to the housing market.
The longer someone holds onto a house and the higher its value climbs, the more the tax benefits increase. Those homeowners who benefit most are disproportionately non-Hispanic white residents, the report said.
Black and Latino homeowners, on the other hand, are more likely to have become homeowners more recently and to own lower-value homes than white homeowners, the study said, leading to higher tax burdens.
“This is really about structural inequities that have allowed Prop. 13 to exacerbate inequities in wealth accrual,” Hahnel said.
Dowell Myers, a professor at the University of Southern California’s Sol Price School of Public Policy, found similar results in a study he published in 2009.
“Prop. 13 is timeless,” he said. “It’s going to be exactly the same, but maybe with growing disparities.”
Growth in Asian homeowners
One difference between Myers’ study and the more recent results is the rise of housing wealth amongst Asian Californians.
Asians’ share of the state’s housing wealth has risen from 4% to 19% over four decades, researchers in the new report found, exceeding their share of population growth. The researchers suggested this is driven by higher-income east Asian and south Asian immigrants.
While Asians received below-average property tax breaks in the 2009 study, in the new report the demographic group now receives above-average property tax breaks, though slightly less than the typical white homeowner.
Now, like in the late 1970s when Prop. 13 was passed, home values in California are skyrocketing.
Any change to Prop 13 would have to be approved by voters, but it remains popular among most. A poll last month by the Public Policy Institute of California showed 64% of California likely voters believe Proposition 13 turned out to be mostly a “good thing.”
One effort to partially reform it, a measure to reassess only commercial property values, was defeated at the ballot box with 52% of the vote in 2020.
Myers said that if advocates want to reform Prop. 13, they must appeal to older white homeowners — and he suspects focusing on generational disparities would be effective.
But most advocates say there are ways to peg assessments to market values without triggering huge tax hikes for homeowners.
The report suggests increasing taxes only on “extremely high-value properties” or on second homes, or phasing in tax increases over time.
State and local governments also could defer a tax hike until an owner sells their property.
“We have to be careful,” Briones said, “but my perspective is that it is not that difficult to design revisions to policy that take into account needs of low-income homeowners. That’s all very doable.”
This article is part of the California Divide project, a collaboration among newsrooms examining income inequality and economic survival in California.