California ballot propositions may cause significant changes for the state’s economic outlook and Proposition 15 is no exception.
If Proposition 15 passes, commercial and industrial properties would be taxed on current market value instead of their purchase price, which would likely entail higher taxes for such properties. The beneficiaries of this change would include K-12 public schools, community colleges and local governments, which would all have increased funding sources.
Opponents of the proposition said the property tax increase would harm small businesses and raise the cost of living for things such as health care, restaurants, gas, groceries and utilities, among other things. Opponents have also said that local governments would be motivated by the tax revenue generated by business properties to prioritize commercial development over new housing developments, effectively exacerbating California’s housing crisis.
“Prop 15 will raise the cost of living for California families by up to $960 and will especially hurt low-income communities,” Alice Huffman, the president of the California State Conference of the NAACP, wrote in the official voter guide.
Despite the purported harm the proposition could do to low-income communities, it has garnered support from some Los Angeles community organizations.
One of these organizations is Community Coalition, which works to improve socioeconomic conditions in South L.A.
Marsha Mitchell is the communications director for Community Coalition, which supports Proposition 15. She cited recent analysis from the nonprofit research organization Urban Institute in response to the argument that Proposition 15 would worsen housing in California. After analyzing property records data in Los Angeles, Berkeley, Fresno and Chula Vista, the institute concluded that the proposition would likely increase California’s housing supply and would not affect many properties' land use.
Urban Institute identified “at-risk properties” and “opportunity properties” would likely be impacted by the proposition.
At-risk properties are those at risk of “being rezoned from residential use to commercial or industrial use because these uses may generate more tax revenue for municipalities.”
Opportunity properties are “properties where there is ‘opportunity’ for private owners or developers to convert from commercial or industrial use to residential use to save on their property tax bill.”
In all four of the cities analyzed, the institute found a majority of properties could be classified as opportunity properties. For example, the institute’s case study found that Los Angeles had 3,830 at-risk properties and 8,104 opportunity properties.
Community Coalition wrote that they see the proposition as a means of improving education inequity and ensuring that more public school students can utilize their education to escape poverty.
Mitchell received her undergraduate degree from UCLA after attending Hillcrest Elementary, Audubon Jr. High and Dorsey High school, schools she said are now some of the highest need in South LA.
“When I had my family, I refused to leave South L.A. I love my neighborhood and we deserve great community schools,” Mitchell said. “I also felt like my husband and I were forced to find summer and after school programming outside of our area because South L.A. lacked those resources that are found readily in other parts of the city.”
Strategic Actions for a Just Economy (SAJE) is a community organization that advocates for tenant rights and equitable development in Los Angeles.
SAJE’s director of communications, Ralph Jean, said some of the arguments used to oppose Proposition 15 sound as though they are rooted in trickle-down economics. From what he has read, he felt there is often not enough evidence or numbers to back up claims that business will be deterred without trickle-down economic models.
“One of the things that we try to make more people aware of is the amount of corporate ownership that exists today in L.A., and how much corporate interests threaten to continue to take over our communities,” Jean said. He explained that corporations must be taxed fairly and contribute their fair share to surrounding communities.
Further details and the arguments for and against Proposition 15 can be found at https://tinylink.net/3HvEz.