Contact: Mark Church, Assessor-County Clerk-Recorder
Alternate: Terry Flinn, Special Assistant to the Assessor
(Redwood City, CA) San Mateo County Assessor Mark Church recently certified the 2013-2014 Property Assessment Roll, making the assessment roll official. “The 2013-2014 Property Assessment Roll moved in a positive direction for the third consecutive year, and is increasing at an accelerated rate,” said Church.
The local combined roll increased by $8.8 Billion to $156 Billion. This represents a 6.01% increase over last year, which is the highest percentage increase since 2008. This year’s increase recaptures a portion of the assessed value that was lost in prior years due to the recession. Last year, the 2012-2013 Property Assessment Roll reflected a $4.75 Billion or 3.33% increase in assessed property value compared to the 2011-2012 roll.
“The real estate market has definitely rebounded this year and overall is showing signs of a strong recovery. Total assessed values have increased in all 20 cities, and most of the percentage increases are significant compared to previous years,” Church noted.
However, there are a few limited exceptions. “While the real estate market in most of the county shows signs of a robust improvement, a few areas, while in positive territory, are not as strong,” explained Church.
The 2013-2014 net Property Assessment Roll in San Mateo County is the highest dollar amount enrolled and the fourth highest dollar increase in the county’s history. “Fortunately, the increase in the county’s property assessment roll will increase the shared property tax funding base for all local agencies – schools, cities, special districts and the County – by $88 Million, or 1% of the increased roll value,? Church stated. The County’s share will be approximately $19.3 Million or 22% of $88 Million.
Although this is welcome news, there are contrasts among cities within the County. For example, Atherton and Foster City posted increases of over 9% while Half Moon Bay posted an increase of less than 2% and Brisbane posted a modest .08% decline. Additionally, the difference between the Proposition 13 value (Factored Base Year Value) and the Proposition 8, Decline in Value (January 1st market value) assessments included in the 2013-2014 roll value, continues to be substantial at $6.6 Billion, although it is less than the $8.9 Billion reflected in the 2012 roll.
The Property Assessment Roll is the assessed value of all properties as of January 1 each year and reflects additions, removals and declines in property value from the previous January 1.
The Property Assessment Roll is comprised of two parts, the Unsecured Roll and the Secured Roll. The Unsecured part of the assessment roll, which includes the assessed value of countywide Business Property and Air Transportation Property at the San Francisco International Airport, increased by 2.39%, reflecting improvements in local business conditions.
The Secured Roll makes up the largest share of the Property Assessment Roll; it represents 94.49% of the total and includes the valuations of commercial and residential real property. This year, the Secured Roll increased by 6.23% or $8.64 Billion from 2012-13, reflecting improving economic conditions since the downturn started in 2008. The value of the Secured Roll is the result of a combination of the following factors discussed below.
Annual Inflationary Factor. A portion of this year’s roll increase was the application of the 2.0 percent annual inflationary factor. The annual inflationary factor is based on the California Consumer Price Index, which is issued by the California Industrial Relations Board. Proposition 13, which governs property taxation in California, ties the annual inflationary factor to this index and limits annual increases to no more than 2%.
Improving conditions in the real estate market. Most areas of San Mateo County are showing significant improvement. Construction activity has more than doubled and sales have increased dramatically in 2012. These are important indicators pointing to a strong recovery. The vast majority of cities in the county experienced total assessment increases of over 5% and are generally located in the southern and central or Silicon Valley portions of the county. Only a handful of cities experienced increases of less than 5% and are typically located in the northern and coastal regions of the county.
Proposition 8 / Decline in Value Program. The Proposition 8 program provides property tax relief to both residential and commercial property owners when the market value of a property falls below its assessed value and is reflective of the strength and/or weakness of the local real estate market. The property tax relief is temporary. During periods of high Proposition 8 enrollment, the value of the local property tax base is diminished. Due to improving economic conditions, most of the Proposition 8 enrollments showed that their assessed values increased above their 2012 values.
Residential Properties in Proposition 8 / Decline in Value Program. Nearly 30,800 residential properties were reviewed and 26,275 received relief from the Proposition 8 program. Due to improving economic conditions, most of these Proposition 8 assessments show some restoration of their assessed values and reflect an increase in the value of the roll (from 2012) by $1.33 Billion, which will result in an additional $13.3 Million in tax revenue. This is a significant improvement from 2012, when there were 32,500 residential properties enrolled in the program which reduced the 2012 roll by over $385 Million from 2011. Summaries of the current and last years’ residential decline in value activity delineated by city are attached and available at www.smcare.org.
It is notable that the total assessed value for residential properties in the Proposition 8 / Decline in Value Program for the 2013 Assessment Roll increased in 18 cities and decreased in only 2 cities. That is a dramatic change from the 2012 Assessment Roll which showed 17 cities with decreased total assessed values and only 3 cities with increased total assessed values.
The two Assessment Rolls show a sharp contrast in values for residential properties participating in the Proposition 8 Program. In the 2013 Assessment Roll, values of residential properties participating in the program were fully or partially restored in almost every area of the county. But in the 2012 Assessment Roll, declines in value of residential properties participating in the program were prevalent throughout the county.
Commercial Properties in Proposition 8 / Decline in Value Program. 509 commercial properties were reviewed to determine if they were eligible for property tax relief under the Proposition 8 program. Of those, 464 commercial properties qualified for relief. The majority of these properties increased in value. The net effect was a $ 430 Million increase in assessed value. Although this is welcome news and a good sign of recovery, the difference between the Proposition 13 Factored Base Year Value and the 2013-2014 roll value continues to be substantial at $754 Million compared to $1.1 Billion for 2012-2013. Last year, there were 604 commercial properties enrolled in the program.
Foreclosures. There were 2,228 Trustee’s Deeds recorded in 2012, which represents a 34% decrease from the 3,354 foreclosures recorded in 2011. Additional good news is that the number of Notice of Defaults recorded in 2012 (2,195) has decreased by 34% from 2011 when there were 3,374 recorded.
Unsecured Roll. The Unsecured Roll makes up 5.51% of the Property Assessment Roll and includes the valuations of business/personal property and possessory interests. The Unsecured Roll posted a 2.39% increase in value. This represents an increase of almost $201 Million in assessed value as compared with last year. The increase in value is a mixed result from a 49% increase in San Carlos, to a 29% reduction in Pacifica. Changes in unsecured assessed values are typically volatile as business conditions can result in expansions or contractions. Additionally, most of these values are personal property, which typically depreciates and is not limited to an inflationary value increase as is real property on the Secured Roll.
2013-2014 Assessed Value Notices. Over the next few days, approximately 40,000 property owners will be mailed their 2013-2014 assessed value notices. The Proposition 8 program and annual inflationary factor that is tied to the consumer price index were legislative efforts designed to give property owners a tax break in difficult economic times. These programs are working as designed, but as market conditions improve, property owners in the Proposition 8 program, will see increases in their assessed values in excess of the 2% limit reflected in the base year value of their property. The result is that local agencies that depend on property taxes will see increased revenue.
The press release is displayed in its original format. San Mateo County Assessor-County Clerk-Recorder & Elections website now resides at www.smcacre.org