Assessed property values surge.
Assessments indicate strong growth led by large companies such as Apple, Google
Bay Area counties’ assessed property values have surged significantly higher than a year ago, with Santa Clara County seeing a rise of more than 7 percent, and Apple and Google each seeing a $1.5 billion increase in assessed value within the county.
Santa Clara County’s 2018-2019 assessment roll shot up 7.34 percent higher than a year ago to $483.2 billion. The county’s Assessor Larry Stone, in an emailed statement Thursday, attributed the strong growth to large companies with a Silicon Valley presence — like Apple, Google and Samsung — buying land and properties across the county.
Alameda County said it sawa 7 percent increase year-over-year in net assessed values in its new assessment roll, reaching $288.2 billion.
Contra Costa County Assessor Gus Kramer told this news organization his county’s upcoming assessment roll saw similar year-over-year growth to last year’s, when assessed value rose 5.78 percent froma year earlier. For Contra Costa County, “anything above 4.5 percent growth is considered to be a really good, healthy increase,” Kramer said.
“Santa Clara andAlameda (counties) are the epicenters of rapid high-tech and housing booms,” said Kramer. “We are a county focused on manufacturing, and of commuters.”
Contra Costa County did not disclose precise 2018-2019 assessmentroll figures to this news organization, as it was waiting until the official July 1 deadline.
San Mateo County Assessor Mark Church said his office would be closing the county’s assessment rolls late Thursday, or on Friday, and would
release the data once the rolls were closed.
The assessment rolls reflect the total net assessed value of all real and business property within the counties up to January 1, 2018, and will be used to determine property taxation.
In Santa Clara County, Apple’s assessed value totaled $7.8 billion, up from $6.3 billion last year.
Google’s assessed value in the county was $6.6 billion, up from$5.1 billion last year. Nearly $1 billion of Google’s assessed value this year came from land acquisitions.
Google is working to expand in the county beyond its Mountain View headquarters, buying up properties in Sunnyvale and downtown San Jose. It aims to build a massive village in San Jose where up to 20,000 of its employees could eventually work.
Stone attributed Apple’s $1.5 billion increase in assessed value primarily to its construction of the Apple Park “Spaceship” campus in Cupertino, and its acquisitions of business property nearby.
Santa Clara County Deputy Assessor David G ins borg also noted that Apple saw a huge rise in new equipment and machinery.
“What the numbers tell you is (Apple) is busy building a building and moving employees, and (Google) is acquiring land to build a campus themselves,” said Ginsborg.
The current assessed value of the new Apple Park campus was around $3.5 billion, according to Ginsborg. But since Apple Park is not fully completed, the final assessed value of the campus is not yet known, he said.
The Cupertino tech giant paid more than $45million in property taxes in 2016-2017, the second highest in the county after utility PG&E’s $47.6million, according to the Santa Clara County Assessor’s Office’s 2017 annual report. This is the most recently disclosed tax payment for Apple to the county, as tax payments typically run 18 months after they are first calculated, according to Ginsborg.
The Santa Clara County Assessor’s Office last year told this news organization it estimated the construction cost for Apple Park would likely be around $5 billion. It said at the time, however, that Apple Park’s final assessed value — the basis for the tax bill for the new campus — may be less than its final construction costs. That’s because certain materials and constructed goods may be valuable only to Apple and can’t factor into the assessed value, which also considers the fair market value of the property.
Apple and other businesses have disputed the assessed values from the county in the past.
Cupertino— with an 8.83 percent increase in assessed values from last year — had the third-highest year-overyear growth among cities in Santa Clara County. Santa Clara had the highest growth, at 11.71 percent, followed by Sunnyvale with 11.39 percent growth. San Jose had 6.54 percent growth.
No city in Santa Clara County saw a year-over-year increase of less than 6 percent.
The technology sector’s boom following the Great Recession has boosted Bay Area demand for jobs and properties. Since 2010, Santa Clara County assessment values have soared 63 percent higher and its unemployment rate has dropped to 2.3 percent from 11.2 percent, Stone noted.
“Employment growth during the past eight years has triggered an incredible demand for office and industrial space, apartments, and homes,” Stone wrote. “The result has been a nearly twothirds increase in the County’s net assessed values.”
But Stone warned of signs in Santa Clara County pointing to a possible economic downturn. The office vacancy rate jumped during the first quarter of 2018 to 17.4 percent from 11 percent at the end of 2017, and the pre-leasing of office space under construction fell to 46 percent last year from80 percent in 2016, which may indicate “an oversupply of new office space,” according to Stone.
Stone also noted that the apartment market may have already peaked.
“The six-year apartment market ‘ boom’ is also beginning to soften as price fatigue sets in,” Stone said of Santa Clara County’s housing situation. “Rent growth in 2017 dropped dramatically to less than 3 percent.”
But Stone said apartment rents in the metropolitan San Jose area have increased “a whopping 52 percent since 2010, a level that is unsustainable for a healthy local economy.”
In Alameda County, Dublin, Newark and Alameda saw the highest growth in assessed property values. Dublin’s assessed value rose 9.6 percent from last year, while Union City saw the lowest rise in assessed value at 4.8 percent— the only city in Alameda Countywith less than a 5 percent increase.
Staff writer Ethan Baron contributed to this article.