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Prop 13 Imprisons Californians in Their Homes

Josh Stephens on
Apr 25, 2022

By the accounts of pop culture, Los Angeles is a fast-moving city that creates tends just as quickly as it abandons them. It dances to the seasonal rhythms of fashion, cinema, television, and, as of late, the breakneck pace of YouTube and TikTok.

And yet, as it turns out, Los Angeles is actually ruled by stasis.

A recent report from the real estate listing site Redfin reveals a far slower pace of life, at least for the city’s homeowners. As of 2021, the median Angeleno homeowner has stayed put for 18.1 years. Los Angels ranks dead last among the 74 cities that Redfin analyzed. Every single one of them.

Other California cities follow closely: San Jose, Oxnard, and Anaheim all have average tenures of over 16 years. San Diego and San Francisco are over 15 years. Tenures in all California cities in the report are well above the nationwide average of 13.2 years and are, respectively, 3-4 years longer than the study's 2012 benchmarks.

The causes and effects are equally dispiriting.

By plenty of measures, Los Angeles has been the country’s least-affordable housing market, comparing average rents against average salaries. The for-sale market follows suit. So, homeowners who bought in decades ago have gained wealth through appreciation. But, they’re unlikely to trade up (or down) because the alternatives are just as expensive as their current homes are. They’d have to gain significant wreath through other means and/or dedicate a larger share of their wealth a new home as they do to their current homes. (The same may be true in Cleveland, Dayton, and Detroit, where, despite median home values as low as $180,000, relative poverty makes inhibits would-be movers.)

For whatever reason, Grand Rapids, Michigan, has the shortest average tenure, at 5.8 years. Louisville ranks second, at 6.6, and a handful of affordable cities in Florida and elsewhere in the Sunbelt come in comfortably below 10 years.

Economics thus imprison Californians in their own homes. Policy throws away the key. The policy, of course, is Prop. 13. Champions and detractors alike can surely agree that it provides a powerful incentive to immobility.

In many ways, Redfin's analysis is just another way of illustrating California's housing crisis. But it is revealing and unusually powerful.

What the numbers reveal is that, while we might assume that incumbent homeowners are the relative winners in the housing crisis, their victories are limited. They too are constrained. They're possibly stuck in starter homes that weren’t intended to serve them that long. Or, perversely, they might be stuck in dream homes that have outlived their usefulness -- but are still more economical than a more manageable downsized unit might be.

The statistics are powerful because they express the human scale of the housing crisis. A shortage of 2 million homes is a statistic. Staring at the same walls for nearly two decades can, in many instances, be a tragedy.

The tragedy lies in the erosion of freedom. One of the many benefits of urban life is that of diversity: lively center cities, commodious suburbs, distinctive neighborhoods. We're all familiar with those typologies. And we all know that tastes change. A young couple who buys a fixer-upper in Echo Park might want to raise kids in a downtown high-rise ten years later (and make way for the next young couple). A mid-career professional who buys a condo near her job might want to buy a house near her next job, on the other side of town. An aesthete's tastes might change, and he might want to trade a midcentury Modern ranch house for something from the '80s built entirely of glass blocks and neon tubes.

These are the options people deserve. In the aggregate, these are the freedoms that makes a city healthy. Just as we rightfully worry about economically vulnerable people losing homes, we should also worry--at least a bit--about well-off people being stuck in their homes.

If all goes well, each of these residents becomes happier and more economically satisfied from one move to the next. But the residents themselves aren’t the only beneficiaries. Their neighborhoods and neighbors do too.

Freedom of movement means freedom to discover a fitting place and then to participate in the life of that place, as a customer, diner, neighborhood council member, or gadfly. It also means the freedom to create new relationships. Whatever the welcome wagon might look like in a given neighborhood, every move presents opportunities to make new friends and even new colleagues on the sidewalk, at the local bar, and in the grocery aisles. These relationships are especially crucial in cities like Los Angeles and San Francisco, whose economies thrive on artistic and entrepreneurial creativity. Imagine how much worse off the world would have been if some weird tax policy had kept John Lennon's parents on the opposite side of Liverpool from the McCartneys, or if Flea and Anthony Kedis hadn’t both lived in Fairfax High School’s catchment area.

In Los Angeles and other constrained cities, I can't help but think that housing tenure equates with an unspoken but troubling sense of collective anxiety. On balance, churn is good; stasis is not. Anyone who owns a home is fortunate. But fortune might not feel so good when, after a few years, it feels more like an obligation a burden -- and that the only way to release yourself from it is to move to Ohio.

But we should not want people to move to Ohio. We should want them to stay in their respective cities and in our state, if they so choose, and contribute as fully as they can. That’s where the public sector comes in.

Planners hardly need any more reason to figure out how California cities can accommodate more housing. And the wheels of policy are slowing turning in the direction of more housing. But the Redfin report gives them one more reason to get it right, and—along with developers--to do it quickly. We do not want 18.1 years to turn into a life sentence.