County property values top $1 trillion

County property values top $1 trillion
LA Daily News
Article Last Updated:07/09/2007 11:05:48 PM PDT
The assessed value of properties in Los Angeles County has topped $1 trillion — the first county in the nation to reach the 13-figure milestone that paves the way for better services and fatter reserves.

Despite a decline in real-estate prices elsewhere in the state, L.A. County’s home prices — which have doubled since 2000 — continue rising and beefing up tax rolls.

“This is very, very good news,” said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp.

“This is money that the county can (use) not only to deliver basic services, but more services at a higher quality — new fire engines, new police cars for deputies, new jails.

“It means more social services, as well.”

Last year, the assessed value of homes and businesses in the county rose 9.3 percent — or $88 billion — to more than $1 trillion, County Assessor Rick Auerbach said. The year before, the tax roll was $950 billion.

Auerbach said the county’s real-estate market has held steady because of low interest rates, the strong economy, a growing population and a short supply of low- to medium-price residences.

“The trillion-dollar roll moves us in a new era of property values in Los Angeles County,” Auerbach said.

Auerbach noted that the Antelope Valley and other areas with booming residential construction have seen prices slip, but said most of the county is holding strong.

“The increase this year is significant,” said Supervisor Zev Yaroslavsky. “It helps — the robust economy we have, especially in the property tax area, and our fiscal policy.”

Boosting reserves

The $1 trillion property value means nearly $1 billion in additional tax revenue for schools, state and local governments, including $428 million folded into this year’s $21.8 billion budget for Los Angeles County.

That boost, officials say, will be used to upgrade jails, juvenile facilities and aging infrastructure. The money will also pay for jail staffers, medical services and gang-reduction initiatives.

But Yaroslavsky said it was wise not to spend it all.

“We’re putting a portion of that in reserves so that we’re in a position to handle economic downturns,” he said.

Strong reserves also help boost the county’s rising credit rating, which makes it cheaper to borrow money.

The average price of a home in the county has more than doubled since 2000, from $276,400 to $626,900.

The assessor’s office used average home prices, while the real-estate market typically uses median home prices — the point at which an equal number of homes sold for more and less — to measure growth in the market. According to DataQuick Information Systems, the median price for a home in Los Angeles County was $515,000 in 2006.

James Link, executive vice president of the Southland Regional Association of Realtors, said that while home sales have fallen, prices are still strong in most areas.

“We are going to see the rest of this year continue as we are — prices relatively flat with a slowing in the number of transactions,” Link said.

“That trend will continue into next year. But by next year, I think we’ll see the number of sales start to increase. And I think in the long term, maybe a year from now, we might see prices starting to inch upward.”

As the assessed value of homes and businesses has nearly doubled — from $541 billion in 1999 to more than $1 trillion — a similar increase in property tax revenues has helped reverse the budget crises that many schools districts and government agencies were facing during the recession at the beginning of the decade.

“This does a couple of things,” county Chief Executive Officer David Janssen said.

“It pays for the increased cost of maintaining existing services and it allows us to do things like pay for new jails, increase the dollars to fight gangs, add attorneys to the District Attorney’s Office and increase services in unincorporated areas from libraries to code enforcement.”

The city of Los Angeles saw its property values jump 10 percent, to $384 billion, while Long Beach experienced a 9 percent increase, to $42 billion.

Among cities with the greatest increases in values were Lancaster, up 21 percent; Palmdale, 16 percent; Santa Clarita, 14 percent; Calabasas, 13 percent; Westlake Village, 13 percent; and Hermosa Beach, 12 percent.

In Westlake Village, the new Four Seasons Hotel and Countrywide office buildings helped drive the increase in assessed values, Auerbach said.

Index adjustment

Another major factor in the increased valuation was the annual Consumer Price Index adjustment required by Proposition 13 for properties that did not change ownership. The adjustment was the maximum allowed of 2 percent, adding $17.5 billion compared with $15.6 billion in the previous roll.

The third-largest factor was construction, which increased the rolls by $9 billion compared with $7 billion the prior year. That includes homes, apartment buildings and commercial structures.

The number of appeals filed with the Assessment Appeals Board dropped from 12,000 to 11,500. This compares with a record 110,000 cases in 1996.

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