12/05/2024
As a realtor I see this a lot. People bought their place in the Berkeley Hills in the 1960's/1970's for very little and literally can't afford to move somewhere else because their house is paid off and their Prop 13 property taxes are minimal. They have 25 steps up or 25 steps down (most hill properties) and are now in their 80's and are having trouble navigating the steps. If they sell they get their 500k exemption (for couples) but have to pay 1/3 capital gains tax (20% fed/ 13% state) and buy into a more expensive place in the flats that's hopefully "level in" which may or may not exist... The can move their lower property tax to the new property (Prop 19) but most of the new development downtown is apartments (not condos) and they aren't interested in renting but they want to stay in Berkeley because this is their community. The thought of moving to a place thru the tunnel doesn't interest them.
They are the definition of house rich/ cash poor. Their houses are older and suffer from deferred maintenance which was fine before but now insurance companies are starting to crack down on houses 1) in the fire zone, 2) that have older electrical panels or k**b and tube wiring 3) older roofs 4) galvanized plumbing etc. All of these things are extremely expensive to bring up to code and there's no guarantee you can find insurance even if you rectify all of them.
To compound things, Millennials are more interested in living in the flats (or at least walking distance to something) so houses in the hills aren't as desirable as they once were and generally younger buyers aren't as interested in buying "fixers" but the seniors don't have the $ to do listing prep to make the house "move in ready".
It's sort of a mess. We won't even go into what would happen if there was a fire there... What to do? Open to suggestions.
Retiring Councilmember Susan Wengraf says the Berkeley Hills are far more prepared for a wildfire, but still face major challenges.
