San Mateo County’s 2011-12 Property Tax Roll Mirrors Economy With Anemic Growth

Archive Press Release

Contact: Mark Church, Assessor-County Clerk-Recorder
Phone: 650.363.4988 Fax: 650.363.1903 E-mail: mchurch@smcare.org

Alternate: Terry Flinn, Special Assistant to the Assessor
Phone: 650.599.1271 Fax: 650.363.1903 E-mail: tflinn@smcare.org

Alternate: Angelina Hunter   Phone 650.363.4454  E-mail ahunter@smcare.org

(Redwood City, CA) Mark Church, San Mateo County Assessor, signed the 2011-2012 Property Assessment Roll on June 30, 2011, making the tax roll official.  “The 2011-2012 Property Assessment Roll, while anemic, is now moving in a positive direction, driven by an increase in the consumer price index,” explained Church.  “While the real estate market continues to show signs of weakness, some areas are showing a slight increase in market value.”

The 2011-12 Property Assessment Roll increased 1.12 percent, which represents an increase of over $1.5 Billion in Assessed Property Value as compared with last year’s roll. This increase recaptures a portion of the -1.39 percent or $2 Billion in assessed value that was lost last year.

The 2011-2012 net Property Assessment Roll in San Mateo County is $142.5 Billion.  “Fortunately, the increase in the county’s property assessment roll will increase the shared property tax funding base for all local agencies– schools, the county, cities and special districts–by $15 Million, or 1 percent of the total roll value,” Church said. The County’s share will be approximately $3.3 Million or 22 percent of $15 Million.

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. This year’s 2011-2012 assessment roll reflects the continuing economic stress that these assets have experienced since 2008.

The Property Assessment Roll is comprised of two parts, the secured roll and the unsecured roll. The secured roll makes up the lion’s share of the property assessment roll; it represents 94.4 percent of the total and includes the valuations of commercial and residential real property. This year, the secured roll increased by 1.04 percent or $1.38 Billion from 2010-11 despite pressure from the weak real estate market. The value of the secured roll was 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 .753 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 percent.  “If the monthly trends reported by the Department of Industrial Relations continue, next year’s annual inflationary factor is likely to reach the maximum allowed,” Church noted.

Continuing decline in the local real estate market. Flagging real estate prices, a sluggish market, sporadic new construction and little business expansion put a damper on real estate market value. 

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, however, during periods of high enrollment, the value of the local property tax base is diminished. 

Residential Properties. Nearly 40,000 residential properties were reviewed and almost 35,000 received relief from the Proposition 8 program; this further reduced the value of the roll (from the 2010 roll) by $1.5 Billion. Last year, there were 29,000 enrolled in the program. A summary of this year’s Residential Decline in Value activity delineated by city is available on www.smcare.org.

Commercial Properties. 612 commercial properties were reviewed to determine if they were eligible for property tax relief under the Proposition 8 program. Of those, 546 commercial properties qualified for relief. The majority of these properties remained at their 2010-2011 Proposition 8 value or were reduced further, but some have increased in value. The net effect was a $23 Million increase in assessed value. Although this is welcome news, the difference between the Proposition 13 value and the 2011-2012 roll value continues to be substantial at $1.4 Billion. Last year, there were 451 commercial properties enrolled in the program.

Foreclosures.  There has been a substantial number of foreclosures in 2010; 3,690 Notice of Trustee’s Deeds were recorded, which represents a 6 percent increase over the 3,492 foreclosures recorded in 2009. The slightly good news is that the number of Notice of Defaults recorded in 2010 (3,777) has decreased by 25% from 2009 when there were 5,058 recorded. The 2011 numbers appear to be steady with the 2010 recordings.

The Unsecured Roll, which makes up 5.6 percent of the Property Assessment Roll and includes the valuations of business/personal property, experienced a 2.48 percent increase in value.  This represents an increase of almost $192 Million in assessed value as compared with last year and is due to the increase in value of aviation and concession possessory interest values at the San Francisco International Airport (SFO). While there was a decline in business property values due to the lack of business expansion and reinvestment, the increase in the value of assets at SFO more than offset that decline.

“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 local agencies that depend on property tax revenue continue to face very difficult cuts,” Church explained. “Property is a big ticket item; when buyer and investor confidence picks up, the real estate market picks up, signifying a turn for the better in the economy and the next Assessment Roll.”

2011 Local Secured Roll
2011 Local Unsecured Roll
2011 Local Combined Roll
2011 Residential Decline Report


The press release is displayed in its original format. San Mateo County Assessor-County Clerk-Recorder & Elections website now resides at www.smcacre.org