Seniors & Cost of Living

[TJ_98370]

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This has been a somewhat re-occurring theme of my recent posts, but I am becoming really bothered about a trend that I have become aware of on a personal level. My mom passed away recently, so I have had an opportunity to converse with many of her friends and relatives that I haven't talked to in 10 years or more.

Today I had a conversation with an 86 year old lady that worked at the King County Assessors Office in Seattle for more than three decades. She is impressive for her age. She is single, has few local relatives, still lives independently, still drives her 23 year old Volvo, does volunteer / charity work, and is proud of her 1000 sq ft garden in which she grows vegetables and then donates. She has an apartment on Boston Street that she has had for many years. Can you guess what her biggest worry is now? Her landlord just raised her rent $400 a month. She was very upset. She told me that there was no warning that a rent increase was forthcoming. Us younger bubbleheads may bitch about the real estate market, but I believe that some seniors are being pushed to desperate situations. Proud seniors who have worked all of their lives are not the type to complain about their personal financial problems, so this is a "quiet" issue. I predict that cost of living issues for seniors in Seattle will become a increasing problem in the near future.
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[rose-colored-coolaid]

Yesterday, I heard a radio call about a very similar issue. The caller's mother's property had been reassessed from a $60k home to a $800k home, and with it the property taxes were set to increase like 10-fold.

Paying $7k a year for housing isn't a big deal if you've got a rising income, but it is a problem if you have a fixed income and expect to pay $1k for the year.

The only thing I disagree on is that it will be a silent problem. Many seniors own their home (as in actually paid off) and it isn't until their taxes increase that the housing bubble directly effects them. Perhaps it just takes longer for tax increases to move through the system than it does for the other effects of the bubble.

[biliruben]

When you examine the tax assessors records, you see something like "senior exemption" coupled with a usually remarkably low tax amount. I'm not sure of the ins and outs of the exemption, but there are programs to try and soften the blow for those on a fixed income.

I freakin' hate the term "Senior", btw. Not sure what I'd want to be called (fogy? Oldster? Human?) when I get to my golden years, but I generally only hear it when the group is trying to be pandered to and it sounds like they are about to graduate from HS.

Age-challenged, maybe.

Given that the ancient, on average, have gobs of time on their hands and tend to vote and bitch and a higher rate then the "Juniors" who are more busy, their views are generally over-compensated for in general, I tend to think. Health care and food costs are a much bigger problem than property taxes, I would guess.

Rent, on the other hand, is a legitimate problem. That's an issue that should be addressed if we don't want to force those on a low fixed-income out of the city. Dunno about the details of how well SS benefits are indexed to inflation and whether that keeps pace with rents.

[ira s]

Senior tax exemptions explained

http://www.metrokc.gov/ASSESSOR/Exempti ... tions.html

[TJ_98370]

[ira s]

You can't simply be old to get the property tax exemption. There's an annual income top limit of 30,000 dollars as well.
In King County, I just don't think that there are a whole lot of folks who qualify for this. If we value living with diversity, then poorer old people are part of the great mix. Otherwise, we risk living only amongst 30 somethings who write code.

[biliruben]

No doubt it's tough to be poor. Doubly so if you are old and poor. I'm simply not sure that property taxes are where we should concentrate if we are trying to ease their burden.

That voting is stronger among older people isn't really up for debate.

[Notabull]

"Today I had a conversation with an 86 year old lady that worked at the King County Assessors Office in Seattle for more than three decades."

I don't know the situation here, but I do have to wonder why this person didn't buy any real estate in those 86 years. Why is she renting? I can imagine that they maybe sold a house and moved into an apartment or something, but wouldn't the prudent thing have been to buy a condo? OK, now's not a good time to buy, generally, but perhaps some time in the last thirty years might have presented rich pickings in condo-land?

I don't disagree that $400 a month is an insane increase, however. Assuming she's not getting screwed on the new rate, she'll have to move and be thankful that she was able to rent for significantly less than market rate for many years prior. If she *is* getting screwed on the rent, she'll have to leave or negotiate. Either way, that does suck.

"Yesterday, I heard a radio call about a very similar issue. The caller's mother's property had been reassessed from a $60k home to a $800k home, and with it the property taxes were set to increase like 10-fold."

This strikes me as a similar situation. Either (a) the new assessment is high, in which case you *can* appeal although I bet it's a hassle, or (b) the homeowner was getting away with stupidly low real estate taxes for many years and they were being subsidized by their neighbors. This is because the county sets the *overall* tax revenue they want to pull in and then splits that amongst the property owners using the assessed value as the portion of tax that an individual property will pay.

"Many seniors own their home (as in actually paid off) and it isn't until their taxes increase that the housing bubble directly effects them. Perhaps it just takes longer for tax increases to move through the system than it does for the other effects of the bubble."

There is a gross misunderstanding that if the value of your house goes up, say, 10%, so will your taxes. After all, the tax man said my tax rate was 1.1% and therefore a 10% increase will increase my taxes linearly, right? Wrong. Every year, powers beyond your control decide on the overall tax revenue they want, from everyone, in total. The increase in this amount is restricted by law. I think it's 2%, but there are some exceptions here and there I think. Then your particular house is assessed in value, which happens every so often. I'm not sure on the formula there. Regardless, if everyone's house went up 100% in value in one year, and the *overall* revenue your taxing district wants increased 2%, then your taxes will go up 2%.

If, however, you double the size of your house, add a bathroom, or do other things that mean the value of *your* property doubles in comparison with the stagnant values around you, then your taxes will double, plus the 2% increase.

"That voting is stronger among older people isn't really up for debate."

Agree. Why, for example, do we continually vote down increases in taxes to pay for schools? Could it be because the majority of people that vote are older and are less likely to have school age children? I think so...

"No doubt it's tough to be poor. Doubly so if you are old and poor."

Agreed. I think the biggest burdens for the elderly are the cost of food and energy, and possibly healthcare if you need something medicare won't provide. Luckily, social security benefits are linked to the core rate of inflation. So as long as you don't eat, drive, heat your home, or otherwise consume energy, your social security check will keep you in the lap of luxury!

Old people of Seattle, stop eating, and wear more fleece!

[ira s]

"I'm simply not sure that property taxes are where we should concentrate if we are trying to ease their burden."

A number of seniors have left places like Ballard not so much because they died as much as they couldn't afford to live there any more, including their skyrocketing property taxes. Some of these folks had lived in their houses for 30-40 years +.


How should we ease the burden of poor seniors without giving them a property tax exemption?

[TJ_98370]

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...I don't know the situation here, but I do have to wonder why this person didn't buy any real estate in those 86 years....

You make an excellent point Notabull. We all have to deal with the long term consequences of financial decsions we make. In this particular case, I would agree that she should have bought a condo / house a long time ago.

[explorer]

...Why, for example, do we continually vote down increases in taxes to pay for schools? Could it be because the majority of people that vote are older and are less likely to have school age children? I think so...

It is a bit more complex than that. When you base the increases on Sales tax, no one, especially Seniors are going to approve it. Most people-- singles, seniors, childless couples, etc recognize the common need to support schools. However, WA State was resisting, until fairly recently, any increases in K-12 funding, especially during times of surplus.

Often, raising taxes is not the answer. Reallocating what already exists can do the job, provided other basic services are not negatively impacted. School funding became a game of budget chicken. The state finally blinked a little.

[Lake Hills Renter]

[deejayoh]

[TJ_98370]

My mother is in her mid-60s and has never owned for one simple reason -- she has never had the money. There's a non-insignificant number of people that simply don't make enough to buy real estate. They are called "poor", or increasingly, "middle class".

LHR - Any of my previous comments were not meant to show disrespect toward people like your mom. My 86 year-old acquaintance is different from your mom in that she did have the resources to buy a place when she was working, but she chose not to. She was a bit radical for her age group in that she chose to remain single and I believe her thinking was that as a single woman she did not want to be "tied down" with owning real estate.

I'm certainly glad these type resources are available.........

[Lake Hills Renter]

Re-reading my post, I realize it could come off a little harsher than I intended. I took no offense. It was just a poor attempt at snarkiness, mostly aimed at the REIC/world in general.