San Mateo County’s 2019-20 Property Assessment Roll Reaches Record High after Ninth Consecutive Year of Growth
Roll Value Increases by 7.1% to $238.4 billion
Contact: Mark Church, Chief Elections Officer & Assessor-County Clerk-Recorder
Alternate: Terry Flinn, Special Assistant to the Assessor
(Redwood City, CA) San Mateo County Assessor Mark Church today announced the county’s Property Assessment Roll increased year-over-year by $15.9 billion, or 7.1%, to a record high of over $238.4 billion in assessed value.
“2018 marked another year of roll growth for San Mateo County,” said Church. “The combined assessment roll has increased by $97 billion from nine years ago. This is the ninth consecutive year in which a new historical high has been set”.
“While there was some softening in the residential market, record growth in commercial and mixed-use development helped push the total roll value to this new high,” Church added. “With the lowest annual unemployment rate in the state at 2.2% for 2018, according to the EDD, and continued growth of the labor force, San Mateo County’s local economy remains one of the strongest in the nation.”
“Our robust job market and economic growth continue to push the demand for housing and commercial space,” said Church. “As has been the case for several years now, the strong demand and low inventory in every sector of real estate, are the driving forces behind the high real estate values and rents throughout the county.”
The 2019-20 Property Assessment Roll reflects overall growth throughout the County. Total assessed values increased in all 20 cities and unincorporated areas, with increases ranging from 3.4% to as high as 10.5% and an overall average of 7.1%. The County’s unincorporated areas, which include San Francisco International Airport (SFO), experienced a growth rate of 5.6%.
The top 5 cities with the highest percentage growth in Assessed Value are:
- Menlo Park (+10.5%)
- Foster City (+10.2%)
- South San Francisco (+9.1%)
- Brisbane (+7.9%)
- San Mateo (+7.7%)
The shared property tax funding base is approximately 1% of the county’s Property Assessment Roll and will thus increase to $2.38 billion. Approximately 45% of revenue is allocated to schools within the county, 25% to the County, 18% to cities, 10% to special districts, and 2% to former redevelopment agencies. “The county’s share will be 25%, or approximately $595 million, an increase of $39 million over last year,” noted Church.
The Property Assessment Roll is the assessed value of all properties as of January 1 each year, and reflects changes in ownership, new construction, value declines, and value restorations from the previous January 1. The Property Assessment Roll is composed of two sections, the Secured Roll and the Unsecured Roll. When combined, the two sections are referred to as the Combined Roll.
The Secured Roll represents nearly 95% of the Combined Roll and includes 221,516 commercial, residential and agricultural real properties. This year, the Secured Roll increased to $227 billion, an increase of $15.6 billion or 7.4% over 2018-19, reflecting continued economic growth in the county.
The growth of the San Mateo County Secured Roll is primarily due to the following factors:
New Commercial Development. Commercial and mixed-use construction were major contributors to the 2019-20 Roll growth. Major projects in the county, consisting of 80,000 square feet or more, accounted for more than 3 million square feet of new development coming to market in 2018. In all, 55 million square feet of new construction are expected to be completed in the county over the next six to eight years. A total of 21 million square feet are under construction, 7 million square feet have planning approval, and 27 million square feet are under review. Approximately 8.6 million square feet of new construction have been completed in the last four years.
Commercial projects account for 67% of all major construction projects being tracked by the Assessor’s office. The following table shows the percentages attributed to each of the major use-types in the county’s development pipeline.
New Major Development
|Master Planned Community||11%|
|Senior Care Facility||2%|
|Commercial Sq. Ft.||67%|
|Residential Sq. Ft.||33%|
Top 5 Cities for New Commercial Development. The following cities have the greatest amount of major development, consisting of projects that are 80,000 square feet or more that are pending, approved, or under construction:
- Redwood City – 13.6 million square feet
- Menlo Park – 10.4 million square feet
- South San Francisco – 8.8 million square feet
- Brisbane – 8.0 million square feet
- San Mateo – 4.9 million square feet
Growth in the technology and life science sectors continues to drive the demand in office, housing, hotel and retail.
Completed office projects include 550 Allerton, 601 Marshall, and 825 Hamilton in downtown Redwood City, and Station 3 of Bay Meadows in San Mateo. Facebook continued to drive new office development in east Menlo Park, including completion of Facebook building 21, its new landmark headquarters building. Life Sciences was led by the completion of phase one of Lincoln Center and phase one of Britannia Cove at Oyster Point in South San Francisco.
Newly completed hotels include the Residence Inn Hotel in San Carlos and Hotel Nia in Menlo Park. Residential completions were led by Victory at Bay Meadows in San Mateo and smaller projects such as the Garden Valley Subdivision in Daly City. Completion of the new Primo Honda dealership in San Carlos highlighted retail completions along with ongoing redevelopment at Hillsdale Mall in San Mateo.
Sales and Ownership Changes. Sales and changes in ownership totaled $7.8 billion, or about 50% of this year’s Secured Roll increase. Residential sales accounted for about 75% of that dollar growth while commercial sales accounted for 25%.
After strong median price growth in spring 2018, the residential real estate market experienced a decline in the second half of 2018, breaking a seven-year growth trend, as reported by local media earlier this year. According to the California Association of Realtors (CAR), total dollar value of sales declined by 7.1% and the number of sales decreased by 2.6% for the calendar year. According to CAR, median home prices decreased after the spring sales cycle to end the year slightly up from January 2018 to January 2019 at $1,450,000 (up 0.9% year-over-year). Residential values are still near record highs, so when residential property is re-assessed at market value due to a change in ownership, the new value can be substantially higher than the previous assessment. These price-level changes account for the substantial impact residential reassessments have on roll growth overall.
Restoration of Assessed Value: Proposition 8/Decline in Value Program. The Proposition 8/Decline in Value Program provides property tax relief to property owners when the market value of a property falls below its assessed value. The number of residential properties qualifying for the Proposition 8/Decline in Value Program dropped significantly from 34,700 properties in FY 2011-12 to 245 properties in FY 2019-20. On the commercial side, only 37 properties remain in the program from a high of 604 properties in FY 2012-13.
Over the next few days, more than 500 property owners enrolled in the program will be mailed their 2019-20 Assessed Value Notices, with 308 being fully restored to their factored base-year (Prop 13) values.
Annual Inflation Factor. Proposition 13, which governs property taxation in California, ties the annual inflation factor to the California Consumer Price Index (CCPI) issued by the California Industrial Relations Board and limits annual inflation increases to no more than 2%. This year an annual inflation factor of 2% was applied to the 2018-19 assessed value of all real property that did not have a change in ownership or any new construction during 2018.
Foreclosures. There were 47 Trustee’s Deeds recorded in calendar year 2018, a 15% decrease from the 55 recorded in 2017. Notice of Defaults decreased 11% from 465 in 2017 to 415 in 2018, continuing the downward trend in defaults since the high of 5,058 in 2009.
“Foreclosure activities continued to decline, another important indicator of the strength of the local economy,” said Church.
The Unsecured Roll comprises approximately 5% of the Property Assessment Roll and includes the valuations of business/personal property and possessory interests (leased government property). This year, the Unsecured Roll increased to $11.7 billion in assessed value, an increase of about $281 million or 2.5% over the prior year’s Unsecured Roll. Most of the Unsecured Roll is business or personal property, which typically depreciates and is not subject to an annual inflationary value increase, as is real property on the Secured Roll.