When Jack and Jill’s Valuation Goes Up the Hill

The end of July brings summer vacations and barbecues but it also brings out the county assessor’s valuation notices each year.

Although the vast majority of assessed property in Ventura County will only have a 2% adjustment in accordance with Proposition 13, thousands of property owners are receiving notification of larger increases in assessed value. Our office mailed about 15,000 notices each day during the past week. They were mailed only to owners of properties experiencing an adjustment greater than 2%.

Here is some background on the valuation changes. Between 1991 and 1996, during a statewide economic recession, real estate prices in Ventura County slipped to their lowest levels in recent history. The assessor’s office reduced approximately 75,000 property assessments below their Proposition 13 factored base year values. These properties were in a temporary decline-in-value status.

Under Proposition 13, the base year value established at their time of purchase must be increased by an inflation factor, not to exceed 2% per year. This adjusted value is known as the factored base year value.

There is no limit as to how rapidly the assessor could reduce a value to track market conditions. Although there is also no limit as to how rapidly we restore values in a recovering market, our policy has been to phase in the restoration as we follow the market over time.

The assessment’s upper limit remains the Proposition 13 factored base year value. In 1998, we followed the market and restored some properties to their factored base year value while only partially restoring several thousand other properties. In 1999, the market restored many more properties to their factored base year value, and we partially restored about 30,000 assessments. During 1999 and early 2000, the market has recovered further with some properties selling for more than the asking price after multiple offers. Many sales are still above the prices paid during the last peak in the market, 1989 and 1990.

This boom has impacted almost all classes of property in Ventura County. The assessor’s office has now reviewed agricultural, commercial / industrial, oil, multifamily apartment and single-family residential properties, which were in a decline-in-value status.

This year, about 17,000 of the 60,000 properties that were still in a partial decline-in-value status will be restored to their Proposition 13 factored base year values. However, more than 40,000 single-family dwellings, condominiums, multifamily apartment and commercial / industrial properties will remain only partially restored.

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To understand the process, look at a hypothetical example. In March 1990, Jack and Jill purchased a home for $250,000, at the height of the market. By 1995, their Proposition 13 factored base year value had increased to $279,275. However, the real estate market had suffered a severe decline during that same period, and as of March 1995, their home was only worth $200,000, which we enrolled as a temporary decline-in-value.

By 1998, the factored base year value had gone up to $293,800. However, the real estate recovery was just kicking in, and the market value of their home as of January 1998, had only recovered to $245,000, which we enrolled for that tax year.

By 2000, the factored base year value of their home had increased to $305,200. The market had fully recovered in their neighborhood and the market value as of January 2000 was $320,000. Thus for 2000, we will enroll Jack and Jill’s factored base year value, which is now once again below the current market value.

All owners whose properties are restored to their Proposition 13 values or remain in a decline-in-value status with a partial restoration should have received a value notification card from our office. Should you have any questions, please contact the Ventura County Assessor’s Office at (805) 654-2181.