White households get bigger tax breaks than black and Latino homeowners, study finds

Hahnel said generational disparities may belie racial disparities because not all buyers have had equal access to the housing market.

The longer a person keeps a home and the higher its value, the greater the tax benefits. Homeowners who benefit the most are disproportionately white, non-Hispanic 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 found, resulting in higher tax burdens.

“It’s really about structural inequalities that allowed Proposition 13 to exacerbate inequalities in wealth accumulation,” Hahnel said.

Dowell Myers, a professor at the Sol Price School of Public Policy at the University of Southern California, found similar results in a study he published in 2009.

“Support. 13 is timeless,” he said. “It will be exactly the same, but perhaps with growing disparities.”

Growth of Asian Owners

One difference between Myers’ study and more recent findings is the increase in real estate wealth among Asian Californians.

Asians’ share of the state’s real estate wealth has risen from 4% to 19% in four decades, according to the new report’s researchers, outpacing their share of population growth. Researchers have suggested that this is due to higher-income East Asian and South Asian immigrants.

While Asians received below-average tax breaks in the 2009 study, in the new report, the demographic group now receives above-average tax breaks, although slightly less than the white homeowner. typical.

Now, like in the late 1970s when Proposition 13 was passed, home values ​​in California are skyrocketing.


Any changes to Proposition 13 would have to be approved by voters, but it remains popular with most. A poll last month by the Public Policy Institute of California showed that 64% of likely voters in California think Proposition 13 has turned out to be mostly a “good thing.”

An effort to partially reform it, a measure to reassess commercial property values ​​only, was defeated at the polls with 52% of the vote in 2020.

Myers said if advocates want to reform Proposition 13, they need to appeal to older white homeowners — and he suspects focusing on generational disparities would be effective.

But most proponents say there are ways to peg appraisals to market values ​​without triggering huge tax hikes for homeowners.

The report suggests increasing taxes only on “very high value properties” or second homes, or increasing taxes gradually over time.

State and local governments could also defer a tax hike until a homeowner sells their property.

“We have to be careful,” Briones said, “but my view is that it’s not that hard to design policy revisions that take into account the needs of low-income homeowners. This is all very doable.

This article is part of the California Division project, a collaboration between newsrooms examining income inequality and economic survival in California.

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