My House Divided

Catherine Horiuchi · Feb 13, 2025 · 30 replies

I’M A HOUSEHOLD of one—in theory. True, one adult child lives rent-free in our family home in California. Her first full-time job’s wages are too low for her to afford an apartment in our expensive urban area.

I’m also paying college expenses for another daughter living on campus 80 miles away. She’s working part-time and will graduate this coming spring semester. With a STEM (science, technology, engineering and math) degree, I hope she’ll find gainful full-time employment soon after.

My son is in Wyoming finishing up an alternative high school program. He just landed his first paid internship at an agricultural lab, the first step toward a career in environmental science. I provided the security deposits to get him into his first apartment. I also drop a bit of money into his bank account at random intervals. I do the same for his sisters, just to take the edge off early adulthood.

Finally, wherever I reside, I share quarters with the family dog. So, I’m never entirely a household of one. Yet I wonder if my living situation will simplify as my children take flight.

Due to my frugality and some luck, I have choices when answering these four key questions:

Where do I want to be?
What do I want to do?
Who will accompany me?
How much will all this cost?

This last financial question causes me more angst than the existential where-what-who kind because there’s less opportunity to recover from any significant money mistakes I may make in retirement. To ease my concerns, I’ve considered selling the family house in California, rather than continuing to spend energy and money tending to it.

After half a lifetime there, however, I wonder how it would feel to lose my old neighborhood. A song from the scouting bonfires of my youth comes to mind: Make new friends, but keep the old. One is silver and the other gold.

When I look around, though, my neighborhood has more youthful faces of late and fewer longtime residents like me. Shops and restaurants have also changed, to match newcomers’ preferences.

So, where do I truly want to live? There’s no contest. I’m passionate about my recently acquired immobile home in Tucson. It’s been an exciting challenge to maintain my new, fragile manse, while also enjoying local treasures like the Arizona Sonoran Desert Museum.

My brother and sister-in-law live here, and I’m also forming new friendships. Driving over the cinematic Gates Pass, I explore the sprawling metropolitan area I now call my second home, winter and summer.

Still, I’m unprepared to sell the family home in California. To begin with, I’ve filled every corner and cupboard to the rafters. Clearing it out is proving a slow chore.

I also have a sensual connection. When I’m in the old place, I savor walking its red oak floors barefoot, a sensation that’s hard to replicate on vinyl planks in my ersatz fishing cabin.

When given a choice, do both. The B-side to life could see me living in my tin shack with periodic visits to the big house. Whenever I’m at the old place, I enjoy the kids’ company. For now, I’ll age in two places until I can no longer enjoy both houses or can’t manage the travel. Thankfully, I have the health and cash flow (almost) to support this strategy.

Still, I’d like to reduce my fixed costs. The big house’s single biggest fixed expense is its property tax bill, which is manageable. I can pass along my relatively low property tax rate to my children. This oddity of California real estate law has created a strategy of families passing houses down, more in the European style.

One home on my block will eventually belong to the great-granddaughter of its original builder. It’s conceivable that a similar future awaits my home as well.

To be sure, my overall tax expense is pretty high. Happily, most of this obligation derives from adequate income rather than my property taxes. Still, state and federal income taxes, property taxes and sales taxes amount to a big bite when combined.

Arizona’s flat personal income tax is 2.5%, while California’s progressive income tax ranges from 1% to 13%. Last year, I paid 3.6% of my California adjusted gross income to the state. The lower rate in Arizona does reduce my overall income tax payments a bit. The savings are enough to cover my weekly hamburgers with my brother over at Tiny’s on Ajo Highway.

Part-year living in Arizona reduces my gasoline expenses, as well. The gas tax is 19 cents a gallon in Arizona, versus 68 cents in California. A gallon of gas costs $3.39 in Arizona, while California’s gasoline recently averaged $4.74 a gallon. Another half-dollar price increase could result from the latest change in the carbon standard for California’s special blend.

I don’t drive all that much, though, so my savings are comparatively small. Despite all my grumbling when filling my car’s gas tank in California, I calculate my gas savings at less than $500 a year.

Arizona’s state sales tax is 5.6%, though Tucson’s local additions push it to 8.7%. Meanwhile, California’s state sales tax is 7.25%, but my local rate there is 8.75%. That makes shopping in either city roughly comparable. I can achieve greater savings by simply not buying things I don’t need.

As a thought experiment, I imagine how much I’d save by leaving California behind for good. If I sold the house, I’d save $1,095 annually in property insurance, $4,611 in property taxes, $2,364 for city utilities (trash and sewer), and around $3,200 for natural gas and electricity.

As I compare fixed costs, it helps to have already chosen an affordable landing zone. In Arizona, I only pay about $500 a year in property tax and insurance, a tenth of my California expenses. My tin can casita is all-electric, which I estimate will cost around $700 a year.

All in all, I’d be saving $11,570 in fixed expenses by becoming a year-round resident of the desert. With savings like these available, it should be no surprise that some 700,000 California residents moved out of the state in 2022, according to the California Legislative Analyst’s Office.

Yet I’m choosing to maintain two homes, an admittedly costly position. To defray my expenses, I could start charging my kids rent of $1,000 a month. That would be a bargain over what they’d pay elsewhere. Still, since much of my estate will go to them later, charging rent seems like taking money out of one pocket and putting it in another.

One of the heaviest expenses I shoulder is the cost of insurance, which will reach $24,875 in 2025. This covers a lot of policies: medical and dental for me and two of my children, a small life insurance policy and long-term-care insurance for me, auto insurance for me and two young drivers and, finally, two homeowner’s policies.

I might be overinsured. But in the five years since my spouse’s unexpected death, I’ve leaned toward extra protection. To save on insurance, I plan to up my deductibles and reduce coverage.

I have other ideas about cutting my expenses, starting with dropping the Disney Channel. I also plan to sell an actively managed fund to invest in a lower-cost index fund.

Finally, I’ll be easing the kids off the family phone plan. This may not be cutting the apron strings entirely, but it’s a start.

Catherine Horiuchi is retired from the University of San Francisco’s School of Management, where she was an associate professor teaching graduate courses in public policy, public finance and government technology. Check out Catherine’s earlier articles.

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My House Divided

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