San Mateo County’s 2012-13 Property Tax Roll Reflects Local Mixed Economic Conditions
Contact: Mark Church, Assessor-County
Phone: 650.363.4988 Fax: 650.363.1903 E-mail: email@example.com
Alternate: Terry Flinn, Special Assistant
to the Assessor
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(Redwood City, CA) Mark Church, San Mateo County Assessor-County Clerk-Recorder, signed the 2012-2013 Property Assessment Roll on June 29, 2012, making the tax roll official. “The 2012-2013 Property Assessment Roll moved in a positive direction for the second consecutive year, however, looking at changes by location, there continue to be areas of economic stress,” explained Church. “While overall the real estate market has shown signs of improvement, particularly in the more high-end locations, many areas continue to show signs of weakness.”
The 2012-13 Property Assessment Roll increased 3.33 percent, which represents an increase of over $4.75 Billion in Assessed Property Value as compared with last year’s roll. This increase recaptures a portion of the assessed value that was lost in prior years.
The 2012-2013 net Property Assessment Roll in San Mateo County is $147.26 Billion. “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 $47.5 Million, or one (1) percent of the increased roll value,? Church said. The County’s share will be approximately $10.4 Million or 22 percent of $47.5 Million. The unsecured part of the assessment roll, which includes the assessed value of Business Property and Air Transportation Property at the SFO, increased by 5.46%, reflecting improvements in local business conditions.
Although this is welcome news, there are sharp contrasts among cities within the County. Atherton posted a 9.05% increase while East Palo Alto reflects a 2.51% decrease. Additionally, the difference between the Proposition 13 value and the Proposition 8, Decline in Value assessments included in the 2012-2013 roll value, continues to be substantial, at $8.1 Billion.
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 Secured Roll and the Unsecured Roll. The Secured Roll makes up the largest share of the property assessment roll; it represents 94.3 percent of the total and includes the valuations of commercial and residential real property. This year, the secured roll increased by 3.21 percent or $4.32 Billion from the previous year, indicating 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. The primary cause 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 two (2) percent.
Continuing decline in a portion of the local real estate market. Most of the more affluent areas of San Mateo County are showing robust improvement, however, entry-level communities of the county continue to exhibit a sluggish market and limited new construction. Overall, the county’s real estate market is recovering.
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 in the more affluent areas, many of the Proposition 8 enrollments showed that their assessed values increased above their 2011 values.
Residential Properties. Nearly 36,000 residential properties were reviewed and almost 32,500 received relief from the Proposition 8 program; this further reduced the value of the roll (from the 2011 roll) by $385 Million, which represents a reduction of $3.8 Million in taxes. However, this is a significant improvement from 2011, when 40,000 residential properties were reviewed and 35,000 received relief which reduced the 2011 roll by over $1.5 Billion from 2010. A summary of this year’s Residential Decline in Value activity delineated by city is available on Exhibit 1 and on www.smcare.org.
Commercial Properties. 733 commercial properties were reviewed to determine if they were eligible for property tax relief under the Proposition 8 program. Of those, 604 commercial properties qualified for relief. The majority of these properties remained at their 2011 Proposition 8 value or were reduced further, but some have increased in value. The net effect was a $ 22.38 Million increase in assessed value. Although moving in a positive direction, the difference between the Proposition 13 factored base year value and the 2012-2013 roll value continues to be substantial at $1.1 Billion compared to 1.4 Billion for 2011-2012. Last year, there were 546 commercial properties enrolled in the program.
Foreclosures. There were 3,354 Trustee’s Deeds recorded in 2011, which represents a nine (9) percent decrease from the 3,690 foreclosures recorded in 2010. The slightly good news is that the number of Notice of Defaults recorded in 2011 (3,374) has decreased by 11% from 2010 when there were 3,777 recorded.
The Unsecured Roll makes up 5.7 percent of the Property Assessment Roll and includes the valuations of business/personal property and possessory interest. The Unsecured Roll posted a 5.5 percent increase in value. This represents an increase of almost $434 Million in assessed value as compared with last year. The increase in value is due in part to increased commercial aviation and concession possessory interest values at the San Francisco International Airport (SFO).
“Property is a big ticket item,” Church said. “As buyer and investor confidence picks up, which we are now experiencing, the real estate market picks up, signifying a turn for the better in the economy and the next Assessment Roll.”
The press release is displayed in its original format. San Mateo County Assessor-County Clerk-Recorder & Elections website now resides at www.smcacre.org