News

San Mateo County property values reach record highs

Menlo Park experienced the highest growth in assessed value

San Mateo County's property assessment roll increased for the 2019-20 fiscal year, the ninth consecutive year of upward movement.

From Jan. 1, 2018, to Jan. 1, 2019, it increased to a record high of over $238.4 billion in assessed value -- up $15.9 billion, or 7.1%, year-over-year, County Assessor Mark Church said in a press release. 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, according to the press release.

Menlo Park experienced the highest growth in assessed value, according to the county.

"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 said. "With the lowest annual unemployment rate in the state at 2.2% for 2018 and continued growth of the labor force, San Mateo County's local economy remains one of the strongest in the nation."

Within The Almanac's coverage area, property assessment values rose 10.5% in Menlo Park (down from 11.06% in 2018); 6.62% in Atherton (down from 7.06% in 2018); 5.78% in Portola Valley (up from 5.59% in 2018); and 5.29% in Woodside (up from 4.86% in 2018), according to the press release.

The property tax funding base is approximately 1% of the county's property assessment roll and will increase to $2.38 billion, according to the press release. Around 45% of revenue goes to local schools, 25% to the county, 18% to cities, 10% to special districts and 2% to former redevelopment agencies.

New construction

About 55 million square feet of new construction is expected to be completed in the county over the next six to eight years, according to the press release. Of that, approximately 21 million square feet is under construction. Planners have approved 7 million square feet of new construction, and 27 million square feet is under review. About 8.6 million square feet of new construction has been completed in the last four years.

Commercial projects account for 67% of all major construction projects tracked by the Assessor's Office.

• Office: 28%

• Life science: 20%

• Master planned community: 11%

• Hotel: 3%

• Senior care facility: 2%

• Retail: 2%

• Hospital: 1%

Redwood City, Menlo Park, South San Francisco, Brisbane and San Mateo have the most major development -- defined as projects that are 80,000 square feet or more -- pending, approved or under construction, according to the press release. Menlo Park has 10.4 million square feet of development in that category.

Facebook has continued to drive new office development on the Bay side of Menlo Park, including opening its new headquarters building, "MPK 21." The two-story building, completed in June 2018, is about 524,000 square feet, according to the building's general contractor Level 10 Construction.

Residential sales

Residential sales accounted for about 75% of the dollar growth, while commercial sales accounted for 25%, according to the press release.

The county's residential real estate market declined in the second half of 2018, ending seven years of growth. The total dollar value of sales declined by 7.1% and the number of sales decreased by 2.6% during 2018, according to the California Association of Realtors (CAR).

Median home prices decreased after spring, but prices were still slightly up from January 2018 to January 2019, at $1.45 million (an increase of 0.9% year-over-year), according to CAR.

For more information on the county's 2019-20 property assessment roll, go here.

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Comments

23 people like this
Posted by Brian
a resident of Menlo Park: The Willows
on Jul 17, 2019 at 2:59 pm

Let me see if I understand this correctly. The assessed property value has gone up over 7% from last year (10.5% in Menlo Park and 6.6% in Atherton). Assessed value only increases when a house is sold or improvements are made that trigger a reassessment (on the part that was improved), correct? Property tax is based on the assessed value so that means that property tax revenue will increase by about the same percentages. The Menlo Park School District gets most of its revenue directly from property tax (~62% with another 16% coming from Parcel taxes), so they will see a significant increase in funding, correct? back of the envelope math would say average 8% increase of 62% means that the district is getting about 5% more in funding than they did last year (based on property taxes alone). Please check my math...

Couple the 5% increase with the fact that enrollment in the Menlo Park School District is declining slightly year over year and then explain to me why the School District is discussing a new parcel tax for the next election?


9 people like this
Posted by Menlo Voter.
a resident of Menlo Park: other
on Jul 17, 2019 at 3:25 pm

Menlo Voter. is a registered user.

"explain to me why the School District is discussing a new parcel tax for the next election?"

It's "for the kids".


4 people like this
Posted by Educator
a resident of another community
on Jul 18, 2019 at 7:57 am

School districts are facing increasing costs, primarily due to increasing salaries and pensions (here is an article on rising costs of pensions: Web Link). MPCSD's pension costs increased 98% in just four years, from $803 to $1,589 per student. Even though there is an increase in property taxes, unfortunately this increase isn't near enough to cover their costs.


94 people like this
Posted by Brian
a resident of Menlo Park: The Willows
on Jul 18, 2019 at 9:51 am

Educator,

When my bills are greater than my income I have to reduce my expenses, I don't get to go to my manager and tell him that he has to pay me more. I understand pensions are a problem, what is the district doing to address that? As for salaries they are not giving teachers a 5% raise per year (not even close) so the added income far exceeds any costs there. I also read that the district is adding staff which I can't understand if enrollment is declining.

I guess if they try to add a new parcel tax it will meet stiff opposition. I guess we will see if it passes or goes the way of their last attempt (How much money was wasted trying to pass that one?)


8 people like this
Posted by Jennifer Bestor
a resident of Menlo Park: Allied Arts/Stanford Park
on Jul 18, 2019 at 1:56 pm

The tragedy is that over $200 million of this exploding property tax revenue -- earmarked for our poorest schools -- won't get there. So Redwood City has had to proceed with closing 25% of its elementary schools and now Ravenswood is planning its consolidations.

Why? Because our elected legislators (Senator Jerry Hill, Assymbrs. Mullin and Berman) won't propose a regional cost supplement to the flat statewide student funding formula. So exploding property prices -- and property taxes -- across San Mateo County generate educational augmentation funding (ERAF) that is handed off instead to the county, cities and special districts as an added windfall. All four high-cost counties in the state have this same issue, tens (or hundreds) of millions of dollars of education property taxes collected from every property across the county, that are redistributed outside of education rather than go to the poorest, state-funded schools.

If one of our local school districts plans a parcel tax, each of us can have his say in the school board meeting or at the ballot box -- but when our Legislature won't give the poorest kids in the most expensive counties their own property tax ... well, that's "politics."


92 people like this
Posted by Peter Carpenter
a resident of Atherton: Lindenwood
on Jul 18, 2019 at 3:56 pm

Peter Carpenter is a registered user.

"educational augmentation funding (ERAF) that is handed off instead to the county, cities and special districts as an added windfall. "

Wrong - ERAF is a tax transfer FROM these agencies TO schools and, when not enough schools qualify for the funds the remaining funds are returned to the agencies from which those funds were taken.

"In 1992, the State of California found itself in a serious deficit position. To meet its obligations
to fund education at specified levels under Proposition 98, the state enacted legislation that shifted
partial financial responsibility for funding education to local government (cities, counties and special
districts). The state did this by instructing county auditors to shift the allocation of local property tax
revenues from local government to “educational revenue augmentation funds” (ERAFs), directing that
specified amounts of city, county and other local agency property taxes be deposited into these funds
to support schools.
In fiscal 2012-13, the annual impact of the ERAF shift is a shortstopping of some $6.8 billion
from cities, counties, special districts and the citizens those entities serve. Since their inception, the
ERAF shifts have deprived local governments of nearly $110 billion. Counties have borne some 73
percent of this shift; cities have shouldered 16 percent."


4 people like this
Posted by Jennifer Bestor
a resident of Menlo Park: Allied Arts/Stanford Park
on Jul 19, 2019 at 8:17 am

ERAF (which began in 1992) reversed the effects of the AB 8 (1979) shift of school property tax away from schools, which began a year after Proposition 13. (See below * for a fuller, cited explanation.)

Most interesting, however, was that the return of the property tax share taken from schools was not to the districts from which it had originally been taken, but instead into in a countywide fund -- for the benefit of all local schools falling below the state's funding target. This certainly had the effect of bailing out state finances (which, it turned out, could not support that AB 8 Shift of 1979, dragging California "From First to Worst" in school funding, per the Merrow documentary film) -- but, significant from an equity standpoint, allowed the least advantaged schools in a county to benefit from property tax growth anywhere in the county.

The 'rebate' of any ERAF not required by these disadvantaged schools was an overflow giveback before a flat statewide funding formula was introduced in 2013, but has since then become a gusher in high-cost counties. While their state-funded districts fail for lack of competitive funding, it has allowed cities, the county government, and special districts to benefit from both the growth in their own property taxes but also the growth in 30% of the schools' pre-Prop 13 share.

I am a little surprised that anyone who has argued for years that other local schools should share their base property tax revenue with Ravenswood would argue that a growing share of property tax revenue should move outside education -- and away from the least advantaged schools in the county.

* "AB 8 created a local property tax allocation scheme that allowed local agencies to benefit from the growth in property tax revenues produced by growth in assessed values. Instead of an annual bailout from the State General Fund, AB 8 shifted some of the school districts’ property tax revenues to counties, cities, and special districts and then replaced the schools’ losses with increased state subsidies. Before Proposition 13, schools received about 53% of all property tax revenues. By 1985-1986, their share was just 37%. This “AB 8” shift increased each local agency’s share of the property tax by the amount of its SB 154 block grant, as reduced to hold down the state’s cost.” (California State Senate Committee on Local Government. (1999, September 21). Property Tax Allocation, The Summary Report from the Interim Hearing of the Senate Committee on Local Government. Sacramento: Richard Rainey, Chair.)

Basic background reading, the Legislative Analyst Office's "Understanding California’s Property Taxes," Nov 2012, does an excellent job of explaining this, while exhibit A-2 shows the reduction from 53% down to 37% and its subsequent restoration with the ERAF shift.


14 people like this
Posted by Peter Carpenter
a resident of Atherton: Lindenwood
on Jul 19, 2019 at 8:26 am

Peter Carpenter is a registered user.

"While their state-funded districts fail for lack of competitive funding, it has allowed cities, the county government, and special districts to benefit from both the growth in their own property taxes but also the growth in 30% of the schools' pre-Prop 13 share."

Wrong - These taxes were ALL paid to the cities, the county government, and special districts to start with. ERAF then took part of THEIR property tax revenues away and when the unused ERAF revenue was returned to the original agencies is was still THEIR property tax revenues.

"I am a little surprised that anyone who has argued for years that other local schools should share their base property tax revenue with Ravenswood would argue that a growing share of property tax revenue should move outside education -- and away from the least advantaged schools in the county. "

I have never made that argument - my concern is your misrepresentation of the ERAF process and to whom those property taxes belong. I would love to see Prop 13 abolished - even at great expense to me.


48 people like this
Posted by Train Fan
a resident of Menlo-Atherton High School
on Jul 19, 2019 at 2:30 pm

Educator wrote:
"Even though there is an increase in property taxes, unfortunately this increase isn't near enough to cover their costs."

NOT TRUE.

From the 2016-2017 school year to now, CalSTRS-related expenses have increased approximately $2 million.

In that same timeframe, revenue has increased about $8.2 million.

In that same timeframe, attendance has DROPPED from 2996 students to about 2924.


Despite CalSTRS, MPCSD is rolling in cash. To anyone who doubts this, note that everyone who is pro-5-parcel taxes always points at the expense side, and NEVER on the revenue side. They don't mention the revenue side because it undermines their narrative.


They know they don't need the money for CalSTRS. They need it for raises above and beyond inflation (which staff almost always gets anyways, but they want ot go even higher). To anyone who doubts this, just read MPCSD's own words, where they plainly spell out that they want raises above-and-beyond the 'typical comparable' districts.

See for yourself: Web Link


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