Home ownership is almost impossible for those without credit, unless you are a U.S. Veteran with a HUD loan on a FEMA house in a land rich state, you can’t even put a down-payment on a home if your credit is below 600, and yes most poor people have low credit ratings, because they can’t make ends meet.
Yet for income inequality, the issue is not that land-ownership is all but impossible for the poor, the issue is that investment real-estate property is considered the same as primary housing. Capitalists don’t own real-estate directly, they own the corporations that own the subsidiaries that own the shell-corporations that own the real-estate. Plus, they own the property management companies that collect the rent. That may seem convoluted, but this is how it works to confuse the public.
The REAL Problem is that, in 1978, California Proposition 13 changed the law and limited Property Taxes to just 1% of the last sale-price of the real-property. That applies to ALL real-estate, not just your home or primary residence, but even commercial and investment properties, too. The average home-owner pays 7% on a 30-year mortgage, and moves every 7 years. Including real-estate fees, they actually pay close to 1% of the property value in property taxes each year. That means they pay more than the rich, who invest forever using corporations to limit their liability.
If I miss one house payment, I get a foreclosure. That’s just not true for the REAL owners of this society, they INVEST, in corporations, that own the real-estate (i.e. banks), and those corporations don’t sell it, they lease and rent it for profit. Yet, that’s not the real money, the real money is in EQUITY, gained over time, and since the corporation’s stock can be sold (up to 49%/year) without re-assessment of the property for tax purposes, those who wish to cash-out, simply shift the property to other capitalists via stock sale, then re-invest their profits in other corporations to avoid any capital-gains tax liabilities.
The rich then use their money to manipulate the media directly, and thus divert our attention, so that they can choose politicians who will keep taxes low and their investments secure. That’s why 10% of the land in California is hidden in Family Trusts, creating a landed elite. Ever wonder why you see so much commercial real-estate for lease, but never for sale? Why sell a building when your tax burden is only 1% of the 1978 value of that structure. Get the ‘Whole Roll’ of real-estate tax assessment data from your County Tax Assessor office and you can figure out who the subsidized, dead-beat capitalists really are. Disneyland in Anaheim CA only pays 1/10th of their fair share of property taxes, most commercial and investment real-estate in California is the same.
What is worse, this ‘secret’ business practice robbed the state government of the resources necessary to pay for vital public infrastructure, like roads, schools, libraries, and hospitals, shifting the burden to average home-owners who move every 7-years and are thus re-assessed at current prices for property-tax purposes. The rich get richer, while the poor get the bill.
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