The towering case of fraud was yet another unforeseen consequence of Proposition 13. Thirty-three years ago, the specter of indigent grandparents being taxed into the streets led Californians to overwhelmingly approve the ballot measure. Prior to 1978, assessors didn't much care who owned a building — property was appraised yearly and taxed based on that valuation. Prop. 13 changed things with the subtlety of a thunderclap. Property values are now essentially frozen at the year the owner obtained the real estate, and only reassessed when it changes hands. Determining ownership — and when it changes — is paramount.
And after all these years, Assessor Phil Ting admits the city is no less vulnerable. "It would be great to review a lot more properties to determine if we're missing changes of ownership," he says. "But it would be very, very difficult to detect."
In the meantime, society's wealthiest and most powerful — "the 1 percent" in the parlance of those who were until recently encamped in the shadow of One Market Plaza — exploit loopholes in Prop. 13 to grow wealthier and more powerful still. Read more.