Photo By: Randy Gard/Special to the Town Crier
Assessor Larry Stone speaks to the Rotary Club of Los Altos at its March 21 meeting.
Longtime Santa Clara County Assessor Larry Stone discussed the opportunities and dramatic inequities that exist in today’s property markets at a Rotary Club of Los Altos meeting March 21.
Elected four times to four-year terms as county assessor, Stone has witnessed the rise and fall of various property sectors and experienced the effects of Proposition 13 on the local economy.
Although only 19 percent of the state’s population lives in the Bay Area, 35 percent of California’s job growth has occurred in the region, according to Stone.
The Silicon Valley apartment market is “on fire,” Stone said, and the hunt for single-family homes has surged in recent months. Although 27 percent of family residences and 53 percent of condominiums are still assessed below their purchase price, competition in high-end areas like Los Altos and Los Altos Hills is increasing. Excellent schools are the one predictable indicator of stable or increasing market values, he added.
Stone said commercial space in Silicon Valley is filling up. The area experienced the third-highest increase in office rents in the country last year, trailing only San Francisco and New York.
“I believe we are rising from the depths of the bottom of the worst economic decline in my lifetime,” he said.
Stone addressed the unexpected consequences of Proposition 13 – the initiative limiting the tax rate for real estate that passed in 1978. Proposition 13 has created as many problems for first-time homebuyers as it has solved for senior citizens, he said, and “shifted fiscal authority to the state, while leaving local government with the responsibilities.”
The result, Stone noted, is a “convoluted school funding system” that has reduced California to 47th in the country in K-12 school funding.
Stone offered an example of the proposition’s inequity: Take two homeowners with similar residences on the same street. The newer homeowner can pay as much as 10 times the amount of property tax as the homeowner who has owned a comparable property for many more years. This seems “inherently un-American,” he said.
A split property-tax roll, Stone proposed, would establish a different tax process for residential properties than commercial properties, which should be reassessed to market value every one or two years. But any reform would “create winners and losers,” he said.
Marlene Cowan is a member of the Rotary Club of Los Altos.