As of May 19, 2020, there were about 80 statewide ballot measures that had qualified in 31 states. In California, as of May 19, 2020, six statewide ballot measures/propositions had qualified for the ballot in California for the elections in 2020.

Highlights

Ways to Place Ballot Measures

Currently, there are two ways in which measures can be placed on the ballot;

  1. The legislature of any state has the power to place constitutional amendments, bond measures and proposals to change any law on the ballot.
  2. Any voter in the state can put forward an initiative on a referendum on the ballot. Follow this link to find out how you can qualify for an initiative process.

For a ballot measure to pass, it has to be voted for by the majority of people. Certain measures will require an approval rate of 55%+ or two-thirds vote of the electorate.

With that said, we are going to be covering only the measures related to housing. As such, Californians will decide on the fate of these three measures put on the November 3, 2020, ballot.

Tax Measures

  1. Tax on Commercial and Industrial Properties for Education and Local Government Funding Initiative: this is a measure that could potentially raise the nonresidential commercial property tax sites that are valued more than $3Million to market rate. The properties are to be revised or reassessed every three years; however, the single-family and multi-family properties are not affected by the measure.

If the measure is passed, it will generate an additional $12 billion in revenue; this money will be streamlined to schools which will be beneficiaries, seeing slightly more than $4 billion.

In the state, the practice of assessing the taxes on the commercial and industrial properties at market value, while at the same time continuing to assess the taxes on residential properties based on their purchase prices is called ‘split roll.’

Proposition 13, which is the measure being amended, requires that the residential, commercials and industrial properties be taxed on their purchase price. However, the limit has to be no more than 1 percent of the purchase price at the time of purchase. The annual adjustment should be equal to the rate of inflation or 2 percent, or whichever is lower. The market values in the state increase faster than 2 percent annually, which means, the taxable value on the properties is often lower than their market values.

If the measure passes, properties will be taxed based on their market value, not their purchase price. The tax rates will, however, remain uniform. The commercial and industrial properties will be reassessed every three years while the residential properties will continue to be reassessed at the point of sale.

  1. Property Tax Transfers and Exemptions Initiative: this is a measure that will change how the tax assessments are transferred between the properties and when the tax assessments are reset to reflect market values.

Similar to 2018’s Proposition 5, which was spearheaded by CAR, this ballot initiative would raise the opportunities for eligible homeowners to transfer their property tax assessment to a new home.

In the state, properties are taxed at no more than 1 percent based on their market values at the time of purchase. Their values can increase each year based on the inflation rate or at 2 percent, whichever is lower.

However, the values of properties in California have increased at a rate of more than 2 percent per year. As such, new movers/homeowners are forced to pay higher taxes on their new properties despite the new home having a similar or in some cases, a lower market value than their old homes.

In years 1986 and 1988, state voters approved ballot measures that allowed eligible homeowners to transfer the taxable value of their sold home to a newly purchased home, but with some limitations. First, the homeowners eligible for the transfer are persons above 55 years old and persons with severe disabilities, and the victims of natural disasters.

If passed, this measure will allow eligible homeowners to make a transfer of their tax assessment anywhere within the state. Additionally, they will also be able to increase the number of times a tax assessment can be transferred from 1 to 3 and lastly, allow the assessments to be transferred to even more expensive homes with an upward adjustment.

Measure on Housing

  1. Local Rent Control Initiative; also known as Rent Affordability Act, is a measure that will expand the local governments’ ability and power to use rent control.

Housing Affordability issues in California have been escalating with each day that passes. The Rent Control Affordability Act, AB 1482, is the latest act pushing for rent control restrictions in California. The measure has been officially set for the November ballot, and if it is passed, it will expand the rent control restrictions.

Recently, the California governor, Gavin Newsom signed the new statewide rent controls into law, with the new measure, rent control restrictions would be expanded to include the vacancy control and rent control for the single-family houses and condos.

Like with most other rent control ordinances and legislative responses to the affordability issue in California, this measure has been in fervent opposition to the commercial real estate community. However, the ballot measure is gaining popularity and good traction.

To read more about this measure and The Power Is Now Media’s take on RAA, click here.

Bottomline

Some of these measures are will help Californians, but some will not. I am opposed to the very idea of rent control in the state. I firmly believe that to move forward and solve the affordability crisis the state needs to build more houses.   I do not think that the Tax on Commercial and Industrial Properties for Education and Local Government Funding Initiative measure will achieve its objective. In fact, the opposite will happen.  We will see many companies leaving California to states like Texas, which for the last 12 years, has been the number one destination for the companies leaving California.

 

The Power Is Now Media, is committed to making sure that you stay up to date with the stories that matter most to you. While we cannot tell you how to vote, we strongly urge you to study the ballot measures that are housing and real estate related, as some of them are harmful not just to our economy but to you and the generations to come. So please examine how each of these measures will affect you, so that come November 3, 2020, you will have the information you need to make the right choice.

If you are not sure how to vote, why don’t you talk to an expert? Our VIP agents are knowledgeable real estate professionals who are ready to help you and offer advice, not just in the ballot measures, but also in all matters related to housing, mortgage, and credit. To check whether we have agents in your county, click the following link https://thepowerisnow.com/vipagentsservices/.  You can also contact me directly for a referral if we do not have an agent in your area.  Stay up to date with current real estate news and housing developments by visiting our blogs page at https://thepowerisnow.com/blog/ daily.   If you would like to set an appointment and speak to me directly, use the following link, https://calendly.com/thepowerisnow/ericfrazier.

About The Power Is Now Media

The Power Is Now Media Inc., is an online multimedia company founded in 2009 by Eric L. Frazier, MBA, and is headquartered in Riverside, California. We are advocates for homeownership, wealth building, and financial literacy for low to moderate-income and minority communities.  The Power Is Now Media Inc. corporate office is located at 3739 6th Street Riverside, CA 92501. Ph: 800-401-8994 Website: www.thepowerisnow.com.

Eric Lawrence Frazier
President & CEO
The Power Is Now Media, Inc.

 

Sources;

https://www.thecentersquare.com/california/california-to-vote-on-realtors-backed-property-tax-transfers-and-exemptions-initiative-in-november/article_9bc92334-88bf-11ea-9562-f39bc386bc2d.html

https://www.thecentersquare.com/california/california-initiative-would-raise-property-taxes-by-billion/article_b0980c18-4f34-11ea-aacb-ffd02f22a1f9.html

https://www.sacbee.com/news/politics-government/capitol-alert/article236493983.html

https://ballotpedia.org/California_2020_ballot_propositions

https://ballotpedia.org/Ballot_Measure_Scorecard,_2020#November_3

https://www.sos.ca.gov/elections/ballot-measures/

https://www.sos.ca.gov/elections/ballot-measures/qualified-ballot-measures/