I am not even from USA, but this whole thing seems a bit off to me.
As far as I understood, one of the core goals of all these subsidies (I'm using this phrase to group all the mechanisms that change total cost of ownership, be it tax rate or whatever) were designed to keep people from being thrown out of their homes by rising taxes due to rising value and creating affordable housing. I base my comment on this.
First of all property prices can rise due to [fake] economic growth/housing bubbles. In that case most property values rise proportionally, therefore no change here - housing gets more expensive in general.
Second, property prices can rise due to area getting more attractive or just having more luxurious properties. And if you can no longer afford living there due to rising taxes - this means that you just happen to live in an area that is out of your class. Income change (e.g. loss of a job) might throw a family into a lower class. Is it unreasonable to expect to relocate? Personally I don't think so. The same should apply to rising property costs in a neighbourhood.
Last, any regulation differences in the same area (housing in this case) creates non-free, regulated market and as a consequence actual prices might differ from expected "natural" free-market values by quite a margin or just cancel the intended effect out. For example artificially lowering construction prices in a new neighbourhood (tax exemptions; city funded utilities installation: electricity, plumbing, etc.) might create demand higher than supply effectively cancelling out the intended price reduction. Of course city planners might want to prohibit industrial buildings in some areas, but these are in no direct competition with living places.
I believe that the best solution is to simply have a fixed tax rate based on property value. The biggest challenge here is to calculate real market value without actually transferring ownership. The obvious choice of sell price is only valid for several years, while property can be held for decades. Valuation based on rental price is off if one can rent from wife. Yes, there are loopholes to plug and mechanisms to adjust billable property value without sudden spikes to place. The only way to make housing more available to the poor I see is to lower billable property value if it contains at least x units and maximum household income averaged over y years is less than z, legally placing tax burden on renters.
As far as I understood, one of the core goals of all these subsidies (I'm using this phrase to group all the mechanisms that change total cost of ownership, be it tax rate or whatever) were designed to keep people from being thrown out of their homes by rising taxes due to rising value and creating affordable housing. I base my comment on this.
First of all property prices can rise due to [fake] economic growth/housing bubbles. In that case most property values rise proportionally, therefore no change here - housing gets more expensive in general.
Second, property prices can rise due to area getting more attractive or just having more luxurious properties. And if you can no longer afford living there due to rising taxes - this means that you just happen to live in an area that is out of your class. Income change (e.g. loss of a job) might throw a family into a lower class. Is it unreasonable to expect to relocate? Personally I don't think so. The same should apply to rising property costs in a neighbourhood.
Last, any regulation differences in the same area (housing in this case) creates non-free, regulated market and as a consequence actual prices might differ from expected "natural" free-market values by quite a margin or just cancel the intended effect out. For example artificially lowering construction prices in a new neighbourhood (tax exemptions; city funded utilities installation: electricity, plumbing, etc.) might create demand higher than supply effectively cancelling out the intended price reduction. Of course city planners might want to prohibit industrial buildings in some areas, but these are in no direct competition with living places.
I believe that the best solution is to simply have a fixed tax rate based on property value. The biggest challenge here is to calculate real market value without actually transferring ownership. The obvious choice of sell price is only valid for several years, while property can be held for decades. Valuation based on rental price is off if one can rent from wife. Yes, there are loopholes to plug and mechanisms to adjust billable property value without sudden spikes to place. The only way to make housing more available to the poor I see is to lower billable property value if it contains at least x units and maximum household income averaged over y years is less than z, legally placing tax burden on renters.