Yolo County Assessor Joel Butler on Friday released the 2010/11 Tax Roll which confirmed that Yolo County experience its largest decline in property values since Proposition 13 was passed in 1978. The results are a net decrease to the Yolo County tax roll of almost 2 % to a value of $19,873,514,684.
“In recognition of the declining home prices, staff has been diligently working for months to review more than 21,000 properties for possible decreases in value,” said Yolo County Assessor Joel Butler.
Homes in Davis have not experienced the magnitude of declines as West Sacramento (-2.6%), Woodland (-4.7%) and Winters (-10.5%).
“Home values have declined and foreclosures are up, but not to the same extent as in some neighboring counties,” said Butler. “This is a tribute to the leadership within Yolo County that works to preserve the quality of life for its residents. Employees have done a tremendous job in reviewing home values to help avoid the need for filing appeals.”
The counties press release reports, “More than 16,000 properties are being assessed below their Proposition 13 Factored Base Year Value. This year, residential properties in most areas of the county that had been purchased since January 2001 were reviewed. The reduction to this year’s Roll was partially offset by new construction, properties changing ownership that had older base year values and agricultural properties. In a historic first since Proposition 13 was passed, the inflation factor for properties at their Proposition 13 value declined by about one quarter percent with the result that all remaining properties in the county will receive a reduction, even though it may be minor.”
Paul Navazio, Finance Director from the City of Davis said on Friday, “it is still a little early to tell” in terms of how this will impact the city’s budget.
“As you may recall, we assumed a 0.0% increase in assessed values for purposes of developing the FY2010/11 budget,” Mr. Navzio said, “the information from the Assessor’s Office suggests that we will be right around “on-target”.”
In fact, the city had originally projected two percent growth and had to downwardly revised that figure to zero growth.
However, Mr. Navazio cautioned, “the change in assessed values impacts several revenue line-items, and we will need the more detailed break-down before we can assess the budgetary/revenue impacts.”
The three major revenue items affected are a) general fund property taxes, b) Redevelopment Agency Tax Increment (and 20% contributions to to Housing set-aside), and c) our Vehicle License Fee (VLF) In-lieu payments.
The latter (VLF In-Lieu) is the only one that tracks with changes in the citywide AV, and as such, will be slightly higher than projected. “This is good news for the General Fund,” he said.
The Property Tax and RDA Tax Increment revenues will, however, depend on how the citywide change in AV is allocated between parcels within the Redevelopment Agency, and outside the agency. “Most likely,” he said, “we would only anticipate a very slight impact one way or the other.”
“The growth rates are not THAT far off,” he added.
“Bottom line,” he said, “while it would be premature to declare the AV results “good news”, I would suggest that this does not represent bad news, as it appears as though our property value-based revenues will be more or less in-line with our projections.”
Commentary
In the last decade, the city was able to keep solvent based on an exploding real estate market. Property tax rolls increased by huge amounts annually. From 2003-04 to 2007-08 property tax revenues nearly doubled from $7.3 million to $14.3 million. Sales tax revenue increased over that time as well but almost exclusively from the half-cent sales tax increase.
However, while revenues were increasing, expenditures increased tremendously as well. Nearly all of the expenditures went to employee compensation.
While Davis’ property values have maintained themselves they will likely not see a repeat of what happened from 2003 to 2008 in terms of the explosive increase in property taxes. The problem is that during that time, not only did Davis put increased commitments to employee compensation that showed up immediately, we made promises to employees without having the money to fund them. These unfunded liabilities are coming due in the next the five years and right now it looks like Davis will not have the real estate market or sales tax base to keep up with the increases to compensation based on decision made five to seven years ago.
The economic picture is not improving. There is talk about a double-dip recession as a weaker expected jobs report hit on Friday showing that the nation added just 83,000 private sector jobs in June, the unemployment rate fell to 9.5 percent from 9.7 percent, but only because the nation’s workforce shrank by over half a million. Economists dispute whether this is a sign of slipping back into recession or simply that the recovery is unequal.
“The economy is still in the gravitational pull of the Great Recession and all the booster rockets for getting us beyond it are failing. The odds of a double dip are increasing,” the former Secretary wrote. “In June the nation added fewer jobs than necessary merely to keep up with population growth (private hiring rose by 83,000 after adding only 33,000 jobs in May). The typical workweek declined. Average earnings dropped. Home sales are down. Retail sales are down. Factory orders in May suffered their biggest tumble since March of last year.”
“No one in their right mind would have wished for another Great Depression, of course. But we seem to have got the worst of all worlds,” he continued. “The bank bailout, the stimulus, and the Fed brought us back from the brink just enough to dampen zeal for anything more.”
“As a result, we are now slouching toward a tepid recovery that could just as well fall into a double dip recession, while a large portion of our population suffers immensely,” he concluded.
The bottom line here is that we are not yet out of the woods in this recession and looks like at least locally things could get a lot worse before they get better.
—David M. Greenwald reporting
“and the legislature is not even meeting right now”
Why are they not meeting? Because they took a VACATION ! What a bunch of careless A**ES !
The ‘plebs’ get minimum wage, and their representatives are on vacation..
WAKE UP PEOPLE !!!
Don’t get too complacent thinking that your property values have not come down.. THEY WILL EVENTUALLY.
And here’s a link to Reich’s column:
[url]http://wallstreetpit.com/33705-slouching-toward-a-double-dip-or-a-lousy-recovery-at-best[/url]
And the Yolo County press release on 2010/11 tax rolls:
[url]http://yolocounty.org/index.aspx?recordid=1366&page=26[/url]
In a line of thinking similar to Reich’s, Paul Krugman has been writing several columns in the past weeks arguing that a policy of austerity at this time is not going to help us get out of this recession:
[url]http://www.nytimes.com/2010/07/02/opinion/02krugman.html?_r=1[/url]
Krugman frequently models the current recession to policies surrounding the Great Depression (Hoover vs. FDR).
What really bothers me is how often the enabling news media puts out “economic indicators” that things are getting better/improving, when they clearly are not. Then a week later it predicts things are not looking so good to cover itself/achieve sensationalism. As if the economy goes up and down significantly in a matter of a few days. Any idiot can see that with each state budget revise, the state/counties/local gov’ts ultimately have less money to work with when they lay people off. People who are laid off cannot pay taxes, and thus every time there is a round of layoffs by federal/state/local gov’ts, it spirals things downward into a deeper recession. The news media has zero credibility IMHO…
Meanwhile, the ridiculous stimulus money spending is getting siphoned off into ludicrous projects – such as the $1.8 million dollar grant given to UCD to research how to better prepare students for college! This at a time when teachers are being fired, student tuition to college is being raised by 32% in one year, college classes are being eliminated and college staff are being let go. Could our federal gov’t be any more stupid in the use of federal stimulus money? But they keep insisting it is “creating jobs” as the unemployment rate remains stubbornly high, and doesn’t even truly reflect the extreme depth of the real unemployment numbers.
And local politicians don’t seem to be paying attention to programs that leverage federal funding, instead cutting tiny programs to save a few bucks that bring in literally millions of federal dollars. Or they cut programs that will result in more money being spent in the long run for minimal short term gains. Honestly, too many of our politicians are literally “stuck on stupid”, posturing to the cameras for political attention, thinking the average voter doesn’t get it. But I think the public is becoming pretty fed up and ready to revolt for change – angling for more moderates with common sense to step up to the plate and throw the current incumbents out of office.
However, neither party seems ready to put forth sensible candidates. I predict some very rough years ahead for some time… It took us about ten years to totally recover from the dot-come bubble burst. I predict this housing bubble burst is going to take a lot longer to recover from…
“the governor has now ordered state workers, which would include UC Davis employees, to receive minimum wage salaries…”
David, where did you get the information UCD Employees are subject to pay cuts?
Did the governor specify State workers AND UC workers?
Did the Regents announce they were implementing this as well?
I ask because people often mistakenly believe UC employees are California State employees. You work for UCD and you work for the Regents. The Regents pay you.
I was a UCD employee back in the Pete Wilson IOU fiasco days. While state workers were getting Bobble Head Wilson IOU’s, the Regents paid their employees in cash and had cash reserves to do this for a year if necessary.
Excellent assessment in you commentary, by the way…
why anyone would want to pay the bloated property values to live in this giant overrated shiphole is a loss to me. I live in east davis by college square apartments, and there has been a group of wyotech kids that live there and harrass the community speeding through the neighborhood with mufflers detached at all hours of the night. apparently the company chose davis to live, because they knew it was an easy target for people to come and do what ever the hell they want. and i pay a higher rent for this fuxking ghetto? trust me ppl it’s not worth the bloated price. slum lords are running this town and they come here by the thousands because they know they can collect ridiculous rents and get away with barely any maintenance. people let their dogs shi… everywhere, the smoke from fires is ridiculously high in the winters, there are loud parties everywhere, the water is polluted and disgusting, the city employees make way too much money and do way too little work..
this place is a shi..hole people. it’s not worth it.
i wish the city workers got paid the federal minimum wage, then we could justify the laziness and stupidity of public works and the likes.
this place sucks asss to say the least. if they cleaned up the students with racing cars, got rid of the wood smoke, and dealt with the dog shi.., loud parties and bloated salaries of the city employees, then i could justify living here, but other than that! i’m out of here.
I live in east davis by college square apartments….this place is a shi..hole people. it’s not worth it.
It’s a free market democracy. You are free to find some other place to live if you genuinely feel this way. There are definitely bargains to be had in neighboring cities, whether you rent or pay a mortgage.
Hi indigo, Davis Wiki is a great place to check out locations before you rent. [url]http://daviswiki.org/College_Square_Apartments[/url] definitely has a reputation, based on comments there.
“The good news for Davis, is that its property faired the best in the county, increasing by a modest 0.36% over 2009/10.”
This is only good news for those already landed. Since 2/3 of Davis residents are renters this is actually bad news for the majority. Still there is a silver lining in that we are not at the bottom yet as real estate prices are about to have another leg down as soon as all the efforts to prop up prices unwind.
wdf1, it’s people like you that make it easy for gang bangers and assholes to settle in and wreak havoc on the surrounding communities that are unfortunate enough to be living close to places like college square apartments. dumb people like yourselves continue to justify the ridiculous rents and mortgages, you keep lying to yourselves that this is actually a great place. well it’s not. it’s been overtaken by a bunch of low class assholes that have been bussed in from other communities so that the slum lords can justify raising the rents every year. don’t you get it?
don, I don’t live in this giant shi,.hole, I live in a house close by, and have been assailed with ppl peeling out, speeding, and causing sound vibrations for miles through their mufflers. so anyway, i checked out the rents over there, and they are like 1200 bucks for a tiny shifty 2 bedroom apartment. it’s ppl like wdf that allow for slumlords of apartment complexes charge ppl exhorbidant amounts of money for ghetto slums, and get away with not caring about the surrounding communities.
as long as we have ppl like wdf1, that continue to think this place is some grand liberal/safe,/environmental mecca, the more this place will continue to decline. it’s only a matter of time before real estate professionals will have to print the truth when selling their bloated homes to unsuspecting customers. they wil have to eventually fess up and let them know that davis california is actually NOT a safe place to live, it’s NOT environmentally friendly, it’s NOT a liberal haven.
it was overtaken by a bunch of rednecks and right wing republicans a long time ago, coming to take advantage of stupid liberals like wdf1.
there are so many places like college sq apartments. it’s funny too, it got voted the”best apartment complex’ to live in Davis. ha ha ha..i wonder how much they paid for that vote.
i heard that this gang of travelling wyotech college students have been kicked out from every place they’ve lived…so the dumb ass greedy landlords of davis stupidly keep accepting new students, just for a quick buck.
ppl. vacancy rates are higher than they care to admit. in fact, they’re bussing in seniors, students, and low income ppl to fill up the empty slots in apartment complexes.
so when the numbers come out, they get to claim that there’s a low vacancy rate, and use this to justify the continued higher rents year after year. don’t you ppl get it? you’re being played and the ones that are being screwed are ppl like myself that have to live by these assholes…
i was stuck with a high mortgage, thinking that somehow i was living in a nice town.
get with the program ppl, davis california is NOT as grand as you think..it’s just a big fat ghetto and that’s thanks to greedy land lords and greedy home owners that don’t want to admit that they got RIPPED OFF and lied to by their real estate professionals.
Indigo you rock
It is important to emphasis that the .36% increase in Davis property tax revenue is an aggregate figure, and does not refer to the sales price or the value of houses. Recently, our property tax revenue has greatly exceeded the change in sales price of our houses, which are well below what they were a few years ago.
This is because the property tax has a built in annual increase, because some new units and commercial properties are being built (with associated new property tax and additional annual city service costs), and because some homes bought bought before well before 2006 or so are being turned over.
indigorocks: How would you propose to fix things in Davis for the better?
“First, right now Davis’ slow growth policies are saving it from worse fiscal attrition. Davis has experienced a hit in the real estate market, but its homes have much better maintained their value. Part of that is due to slow growth policies, part of that is simply due to the fact that despite everything else, Davis remains a place that most people would like to live – low crime, good schools, good quality of life. “
David, Sue Greenwald and other slow/no growth advocates have consistently argued against growth by maintaining, among other arguments, that we can’t build enough houses in Davis to cause lower prices, because the demand is so high. If that is your position, you can’t now argue that Davis’ real estate prices are the product of low growth. Consistency requires that you stay with the “Davis is a great place to live and people are just willing to pay 20 – 30 percent” more to live in Davis.
I think, however, that David’s statement is the correct version, it just isn’t consistent with other statements that he has made on this subject. At least one other factor is very significant for home prices in Davis – that is the median income levels and the stability of that income over time. Historically, the city, state and university employees have had a very stable and increasing income, combined with a huge future pension benefit. This, combined with the public schools, the way of life and low growth, inflate home prices in Davis.
To the extent that we see any significant decrease in the stability or level of income for the public sector employees, we will also begin to see further cracks and declines in home prices in Davis.
I think slow growth policies are part of the equation, but it’s interesting that you focused on the first sentence, when the second sentences was the rest of the story – schools, good place to live, low crime. And btw, they are non-separable.
And I also believe that we would have to add a lot of housing to drop the prices because of regional demand.