NEVER LET A GOOD CRISIS GO TO WASTE
PACIFIC PALISADES TODAY
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NEVER LET A GOOD CRISIS GO TO WASTE
RAHM EMANUEL from a quote by Saul Alinsky
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Following the aftermath of the terrible Southern California fires in PACIFIC PALISADES, ALTADENA, MALIBU etc., President Trump went to Southern California to meet with Los Angeles Mayor Karen Bass and a group of City and County Administrators and other Leaders on planning for recovery of the fire stricken areas with an emphasis on rebuilding the some 15,000 or so homes that were destroyed. President Trump was pushing for an expedited process of building permits so those who lost their homes could begin immediate reconstruction funded in large part by Billions of Dollars in Federal Disaster Relief Money.
Unsaid, but my impression was that the President was thinking that John Q. and Mary J. Citizen had a house lost in the fire and the City/County should “give” John Q. and Mary J. a new piece of paper authorizing them to rebuild what they lost in the fire. My further impression was that, if my television resolution were a little better, I would have been able to see the looks of opportunity in the faces of these “Public Servants” as they envisioned the Billions of Federal Taxpayer Dollars being filtered through their “hands” so they could “harvest” a share of this money in Permit Fees, Impact Fees, Environmental Fees, Mitigation Fees, School Fees, Drainage Fees, increased Property Taxes, etc., etc., ad nauseum.
In plain Taxpayer terms, John Q. and Mary J. will be paying more, in taxes and, if they have a mortgage, probably much more for a home like the one they had before the fire. However, the City and County of Los Angeles will reap a great harvest in fees and increased property taxes.
Hard numbers are difficult to come by when it comes to Permit Fees (if you do an internet search have a lunch and calculator handy) but “new” residential construction in California begin with a paperwork fee of $5,000 to $7,000 and by the time you are shovel ready to build the total cost is in the $100,000 (or more) range just for the completed permit to let you build. I have been told by knowledgeable sources that the above number is even more in many areas. Keep in mind that these permit fees are added to the “value” of the home for market and tax purposes and you will in fact be paying property taxes on the permit fees “forever”. And you were wondering why housing in California is so expensive?
Couple the above with the fact that if any of these homeowners have lived for many years in their homes they were covered by California Proposition 13 which restricted Property Value Tax Increases to 1% per year if they maintained their property as it was when they bought it and the “State”/”County”/”Authorities” could not raise your tax rates just because home values have increased over the years. To give you an example I will use someone whom I know well. To protect his identity I will just call him “Bob”. Bob bought his average residential 1,500 square foot home some thirty years ago for $110,000. With Proposition 13 in place the County has increased the Property Tax Valuation of the property by 1% (accrual) a year and the County now values the Property at $174,000 for Tax Purposes. If my friend, “Bob”, had done a major remodel or added on a room etc. it would have triggered a County Revaluation to current market value, lets say $440,000 and he would be paying property taxes on the increased value. If “Bob” sells his home the new buyer will pay taxes on the current market value. If “Bob’s” house burns down and the Insurance Company rebuilds it then that triggers a new tax basis and the “County Revenuers” win again. Similarly, folks in these fire ravaged areas, if they have lived there for a number of years, were being protected from property tax increases by Proposition 13. Rebuilding now they lose that benefit and their tax rates will increase to current market values.
Soooooooo……….. You can see why the City, County and State can see the opportunity presented by the terrible losses from the fires as both a challenge and and opportunity. A bonanza in Permits and Fees and as a bonus the increased Property Tax Base on the increase in value of the “New” Homes. “NEVER LET A GOOD CRISIS GO TO WASTE”.
For another view of life in California living I am including below a link to an article I wrote some six years ago titled:
CALIFORNIA’S “END AROUND” PROPERTY TAX HIKE
Still available at: https://www.stoppullingthewagon.com/?s=California%27s+end+around+property+tax
Don’t you just love government and their ingenious ways to tax you?
Bob Bandy – February 2025
