Real Estate Investing

Which 2022 Ballot Initiatives Passed and How Could They Impact Homeowners?

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Belong on Nov 18, 2022

A silhouette of a voter placing their voting card in a ballot box. Learn more about the ballot initiatives that passed in November 2022 and how they could impact real estate investors and rental home owners.

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We recently wrote about the 2022 Ballet Initiatives that could impact homeowners and the real estate market. This is because property availability, prices and investment potential are all influenced by local factors such as interest rates, economic cycles and legislation.


In a follow up to that article, here are the latest updates (current as of November 17, 2022) on what passed and what didn’t — and the potential impact on real estate investors.




1. Proposition 30: California’s Wealth Tax


California proposed a Wealth Tax to support clean air programs, generating funds for electric vehicle (EV) incentives and wildfire prevention. While wealth taxes aren’t often billed as for millionaires, they work in a similar way to property taxes, where taxes are based on the value of your assets. This include any residential or commercial property you own. This makes it one to watch for any states where you own — or even inherit — property. 


Status: Defeated, with 58% voting ‘no’ on Proposition 30



Insights for real estate investors


With the ballot defeated, this is no longer an immediate concern for homeowners and real estate investors in California. That doesn’t mean that wealth taxes aren’t still on the agenda across the country. In fact, voters in Massachusetts have passed a similar measure, approving a 4% surtax on annual income over $1 million to fund education, road infrastructure, and public transport.

 

It’s worth keeping an eye on this on a federal level too — France, Portugal and Spain are all countries with a ‘wealth tax’. 




2. Washington’s Property Tax


King County in Washington State proposed a property tax levy to fund the acquisition and preservation of urban green spaces, natural areas, wildlife and salmon habitat, trails, river corridors, farmlands and forests. The conservation futures property tax level will be charged at a rate of $0.0625 per $1,000 of assessed value for collection in 2023. 


Status: Approved, with 69% voting yes on Proposition 1



Insights for real estate investors


For homeowners in Washington state, your property taxes will be affected by this measure from 2023. In terms of how it will affect the Washington real estate market, the conservation efforts that it funds will contribute to a healthy and prosperous community, keeping cities like Seattle desirable places to live. It will protect residents from issues such as excessive heat, poor air quality, or flooding — all of which can contribute to a loss of income for homeowners through reduced rental pricing or repairs to your investment home. 




3. Florida’s Flood Resistance Improvements


Florida’s Amendment 1, ‘Disregard Flood Resistance Improvements in Property Value Assessments Measure’, sought to incentivize homeowners to take proactive measures to protect their property from flooding, with the value of any improvements excluded from property tax evaluation. 


Status: Defeated, despite 57% voting yes. A supermajority of 60% was required for the approval of Amendment 1. 



Insights for real estate investors


Florida experiences the highest amount of property value losses due to flooding, which has an obvious impact on anyone investing in real estate in the area. While there won’t be an incentive on property taxes to take a proactive approach to improving your Florida property, it could pay off to do so anyway by minimizing the loss of value or cost of repairs should your property be in a flood zone. There are also resources available for anyone considering investing in Florida to check property addresses for the risk of flooding before purchasing. 


Additionally, in 2022-23, legislation from the Florida House will dedicate $100 million to mitigate the impacts of flooding on homes and businesses. 




4. Florida’s Property Tax Exemption


Florida Amendment 3 sought to lessen the financial burden on public service workers looking to buy a home in Florida. The Additional Homestead Property Tax Exemption for Certain Public Service Workers Amendment would provide an additional tax exemption on $50,000 of assessed value on property owned by teachers, law enforcement officers, emergency medical personnel, active duty members of the military and Florida National Guard, and child welfare service employees.


Status: Defeated, despite 58% voting yes. A supermajority of 60% was required for the approval of Amendment 3. 



Insights for real estate investors


Home values and property taxes are increasing rapidly in Florida and the amendment sought to provide a financial break to essential workers who are supporting the community. While defeated by a single no vote from State Senator Bobby Powell, it was not because he didn’t support financial initiatives for essential workers. “I don't think that us putting another homestead exemption on the ballot alleviates or helps with the situation that we're currently facing. I am of the belief that the priority at this point should be to figure out how we can get police and firefighters and teachers into a home, whether it be first-time homebuyers, whatever it be, we need to figure out how to get them into homes,” said Powell.


For essential workers, this means new initiatives could be proposed in future to support home buying. For real estate investors, it could mean a shift such as a reduction of stock suitable for the rental market if more first home buyers enter the market. 




Other noteworthy ballot measures to watch




1. San Francisco’s Proposition M, the “Empty Homes Tax” 


San Francisco is warning real estate investors that they could face additional taxes for keeping vacant properties, with Proposition M, Create Tax on Certain Vacant Residential Units Initiative.


From 2024, property owners with at least three units that have been vacant for more than six months will be taxed $2,500 - $5,000 per empty unit, with penalties set to increase yearly to up to $20,000. Money collected will be invested in subsidizing affordable housing in the city, including for people over the age of 60. 


Status: Too close to call, projected to pass



Insights for real estate investors


Larger and professional real estate investors who hold multiple units will be directly impacted by the measure. To avoid financial penalties they will need to put empty units up for rent or sale. This would increase the available inventory of both rentals and units for sale in San Francisco — having a direct impact on pricing for the city. 


Individual investors, like those that Belong supports, are less likely to be financially impacted by the measures at this stage, with single-family homes and duplexes exempt. That said, it’s a timely reminder that many counties are actively taking steps to reduce empty homes while the homelessness crisis continues to bite and more families are priced out of home ownership. 


It’s not uncommon for homeowners to sit on a vacant home for a variety of reasons. Some have inherited a family home and aren’t sure if they’re cut out for property management. Others move for work and plan to return to the home and feel unsure about renting the home out. If this is the case, Belong has a solution. We find people that will love and respect your home as much as you do, while also doing all the work to ensure it’s looked after and maintained. We can even help you move out if you’re relocating. Learn more about Belong’s unique residential network and homeowner services here. 




2. Pasadena’s Measure H, Rent Control Initiative 


Rent control measures in California are back up for debate, with Pasadena going to vote for Measure H, Charter Amendment For Rent Control Initiative. The initiative would establish an independent board that will limit rent increases to 75% of the CPI increase and provide enhanced eviction protections, requiring homeowners to have just-cause. 


The rent-increase caps do not apply to multifamily rental units built after February 1, 1995, and most single-family homes and condominiums; however, the eviction protections do apply.


Status: Too close to call, projected to pass



Insights for real estate investors


This is billed as a win for renters, who have been getting priced out of the rental market or evicted only to have the home listed for a higher price. 


California already has a number of rent control and eviction protections in place and the call to increase measures further means it’s more important than ever for homeowners to have the right advice and assistance to manage their properties. If your home is looked after by Belong, you can benefit from always having your home priced correctly for your market, responsible residents in your home long-term and up to $15,000 protection from evictions. Learn more here. 




Make moves on your rental home with confidence


Making predictions about the real estate market and how to price your rental home isn’t as simple as looking at the latest news cycle — we recommend seeking expert advice. If you have a rental property and are seeking a hassle-free experience with an expert crew to support your investment goals, book a consultation with us at Belong.