Nordlinger v. Hahn

Background

In 1978 California voters approved Proposition 13, which capped property tax rates at 1% and limited annual assessment increases to 2% unless property is sold or newly built. Stephanie Nordlinger, a recent buyer in Los Angeles, had her home reassessed after purchase and paid about five times more than nearby long-time owners whose assessments remained tied to earlier acquisition values. She sued, arguing the system unfairly assigns disparate tax burdens to owners of similar homes. Lower courts rejected her claim and the Supreme Court took the case.

Reasoning

The Court reviewed the challenge under the ordinary rational-basis equal protection test and refused to apply heightened scrutiny. It identified two plausible state interests that could justify the acquisition-value system: promoting neighborhood stability and protecting reliance interests of long-time owners. The Court distinguished Allegheny Pittsburgh by emphasizing that California’s system was an enacted, statewide acquisition-value scheme rather than an arbitrary administrator practice. Because those rationales could reasonably support the law, the Court affirmed the judgment upholding Proposition 13.

Real world impact

The ruling leaves intact the large tax differences between long-term owners and new buyers, so many new homeowners will continue to face substantially higher tax bills than nearby longtime owners. The opinion recognizes consequences discussed in the case: effects on new businesses, on housing turnover and development, and on local tax revenues for services like education. Those policy concerns, while acknowledged, were deemed matters for democratic change rather than constitutional remedy.

Dissents or concurrances

Justice Thomas agreed with the judgment but would have confronted Allegheny Pittsburgh more directly. Justice Stevens dissented, arguing Proposition 13 creates severe, arbitrary inequities and fails rational-basis review.