The ballot initiatives to split the roll—to treat commercial property tax assessments differently than residential property assessments—have been developed in the context of sky-high real estate prices.
But Californians may vote on the latest version of the initiative in a very different context.
The real estate market is looking pretty soft in different parts of the state. A recession may be on the way, which could actually bring prices down after many years of rapid growth. How could this change the politics of split roll?
One possibility is that a flat or declining market would make it easier for voters to split the roll. With lower prices, companies that would be affected by the split roll might not see as big increases in their property taxes. Split roll might seem less scary in such a market.
But that’s a reaction that makes common sense. And Californians rarely react to anything with common sense.
So I suspect that the declining market would work against the split roll. People would look at the value of their homes declining, and wonder whether this was the best time to raise their property taxes. This wouldn’t make sense – since split roll doesn’t affect residential property – but it could play a factor. Employers and businesses that oppose split roll could argue that, in a recession, higher property taxes might mean less hiring and fewer jobs.
As I’ve argued here before, California would be better off without Prop 13, but split roll is not a smart strategic way to begin the roll back of that ballot measure.