County’s property values rise

With roll growth exceeding 7 percent in the last three years, Church said seeing the growth push past 8 percent in 2017 was remarkable and indicative of a robust economy. The rise and expansion of commercial campuses in the southern part of the county near Facebook’s campus in Menlo Park and in the northern part of the county where biotech and life sciences expansions by Genentech and Prologis are taking shape were among the driving forces behind the roll growth logged in 2017, said Church, who added the strength in the county’s job market also has a role to play in heightened demand for real estate in every sector.

“The strength of the biotechnology and life science sectors along with commercial construction spurred by commercial new generation campus development, such as Facebook, stand out prominently in the increase of the county’s 2018-19 assessment roll value,” he said in an email. “Adding to the county’s economic viability are the lowest unemployment rate in the state of California, one of the highest median household incomes in the nation, and the highest residential median price of a single-family home in the state ($1.77 million).”

Though total assessed values rose in the county’s 20 cities and unincorporated areas, three of the five cities logging the most growth in property tax values were also among the cities with the highest number of pending, approved or under-construction commercial projects larger than 80,000 square feet, according to a press release.

Though East Palo Alto and Daly City reached 11.4 percent and 11.3 percent growth in total assessed value in 2017, respectively, South San Francisco, Menlo Park and Brisbane followed closely behind with 11.1 percent, 11.1 percent and 10.8 percent growth, respectively, according to the release.

Menlo Park, South San Francisco and Brisbane were also among the cities with the most commercial development, with 9.7 million square feet, 8.8 million square feet and 8 million square feet of pending, approved or under-construction commercial projects. Redwood City led the county with 12.9 million square feet of new commercial space and San Mateo was also among the cities with the most office space at 5 million square feet of commercial space to become available, according to the release.

More than 1.1 million square feet of major commercial projects were logged in the 2017-18 fiscal year. Another 18.7 million square feet of new development is under construction, 9.4 million square feet have planning approval, and 28.8 million square feet are under review, according to the release.

Driving the increase in assessed value for Menlo Park was office development owned and leased by Facebook, accounting for more than $700 million of new construction. Projects and transfers related to the Facebook developments were also behind the increase in the combined roll value in Menlo Park and East Palo Alto, according to the release.

Church said the dip in the number of properties in Proposition 8’s Decline in Value Program to 488 in the 2017-18 fiscal year from nearly 35,000 in the 2011-12 fiscal year also reflects the strength of the local real estate market. Aimed at providing property tax relief to residential and commercial property owners when a property’s market value falls below its assessed value, the program is expected to include fewer properties as the residential market continues to improve, said Church.

Approximately 1 percent of the county’s assessment roll, the county’s shared property tax funding base will increase to $2.2 billion, of which an estimated 45 percent will be allocated to county schools, 25 percent will be allocated to the county, 20 percent to cities and former redevelopment agencies and 10 percent to districts, according to the release. Church noted the county’s share increased $41 million over last year to reach at total of $556 million.

Though this year’s assessment roll included many promising economic indicators, Church emphasized assessment values are subject to fluctuations in economic conditions and a reduction in the value of the county’s roll would directly affect the revenue available to schools, cities, special districts and the county.

“Assuming all local, state and national economic factors remain stable, San Mateo County’s economic base is very strong and should continue to experience a reasonable growth in value in the coming fiscal year,” he said. “However, any major fluctuations in interest rates, global economic and trade markets and national fiscal and economic policies could have a dramatic effect on the rate of growth of the county’s roll.”

anna@smdailyjournal.com

(650) 344-5200 ext. 106

Note to readers: This story has been changed to correct a mistake. Ten percent of the county's shared property funding base will go to districts.