Property assessment values hit record $44.3 billion in Stanislaus

The assessed value of property in Stanislaus County has reached an all-time high, reflecting a stronger residential real estate market and new construction in the commercial and industrial sectors, the county assessor said.

The 2016-17 assessment roll, on which property taxes are based, is $44.3 billion, an increase of nearly 6 percent over the previous year.

That figure is $1.3 billion higher than the previous record in 2007-08, before the crash in the real restate market. While the property value increase is a sign the economy continues to improve and families’ homes are worth more, it will translate into higher property tax bills.

“It’s nice to have a record,” Assessor Don Gaekle said. “It is only after we crawled out of a deep hole.”

The largest increases in property values were in Patterson, up 8.79 percent, and in Turlock, an increase of 8.63 percent. Patterson’s values improved with completion of the Restoration Hardware distribution center on Rogers Road, while Hilmar Cheese built a new plant on West Canal Drive in Turlock.

In the fiscal year that began Friday, Stanislaus County’s assessment roll will produce $443 million in revenue to be shared by county government, cities, public schools and special districts.

After the real estate market collapsed, triggering five straight years of decline in property values, the county assessment roll bottomed out at $33.5 billion in 2012-13. When a slump like that occurs, local agencies are deprived of property tax revenue to pay for police, fire protection and parks upkeep.

Since 2012-13, the county’s property values have increased for four consecutive years.

With an upswing in values, the county reassesses parcels that were charged lower taxes because their market values had dropped. In preparing the 2016-17 roll, the Assessor’s Office again reviewed the values of more than 35,000 residential properties with values that had been less than their Proposition 13 base level.

Gaekle said those owners will see significant tax increases as their market values are updated.

During the downturn, almost 60 percent of parcels in the county were reassessed to market values of less than their Proposition 13 base values, which lowered their taxes temporarily.

The Assessor’s Office said about 20,000 homes, apartment properties and ranchettes are still at less than their Proposition 13 base levels. Those properties were purchased near the last peak in the real estate market in 2006.

The Assessor’s Office follows two tax reform laws that determine how property taxes are set in California.

Proposition 13, approved by voters in 1978, established a 2 percent cap on annual property tax increases, which applied so long as there was no change in ownership. When a property is sold, the county assessor determines a new base-year value that is usually higher and applies the 2 percent cap to future years.

Under a second law, Proposition 8, the assessed value of parcels may be reduced for a time when there’s a downturn in the real estate market. That lowers the property taxes until the market value goes back up and parcels are reassessed at their Proposition 13 base values.

For many parcels in Stanislaus County, property tax increases will be 1.525 percent in 2016-17 based on the inflation factor applied to the Proposition 13 base value. Most of the farmland in Stanislaus County is valued for assessment purposes under the separate rules of the state’s Williamson Act.

Gaekle attributed the record property values to the real estate recovery and new construction.

“The residential real estate market is strong in terms of value,” Gaekle said. “The increase in 2015 was not quite as robust as in 2014 but still significant. There is not nearly as much inventory as in the last housing market, but that may be changing as builders work on new homes and infill projects.”

Property owners can look at their 2016-17 assessed property values at http://qa.co.stanislaus.ca.us/AssessorWeb/public/ValueNotice-Search.jsp. Those with questions about their assessed value may call the Assessor’s Office at (209) 525-6461 or talk with staff on the second floor of Tenth Street Place, at 1010 10th St., suite 2400, in Modesto, between 8:30 a.m. and 4:30 p.m. Monday through Friday.

This story was originally published July 2, 2016 at 6:58 PM with the headline "Property assessment values hit record $44.3 billion in Stanislaus."