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Posted on 07/02/2004 1:00:40 PM PDT by NormsRevenge
SAN JOSE, Calif. (AP) - Silicon Valley is bracing for even deeper cuts to community programs after politicians announced Friday that property values and tax revenues had shrunk dramatically for the second straight year. The Santa Clara County Assessor's Office said the assessed prices of industrial and commercial property in San Jose - the nation's 11th largest city and epicenter of the global technology industry - fell below prices that owners paid for them. When that happens, a state law goes into effect that allows owners to pay taxes on the lower value.
Assessed property values in San Jose redevelopment areas declined by an estimated 11.5 percent in 2004, after a 10 percent decline in 2003. The numbers are based on a snapshot the county assessor takes each spring.
The decline translates into a $4 billion loss in property value in two years, mostly because of soaring vacancy rates in the office complexes, research parks and other high-rent zones of San Jose.
San Jose Mayor Ron Gonzales warned that lost revenue will mean less money for public investments, including affordable housing construction, neighborhood improvements, job creation programs and downtown revitalization. Such programs will receive an estimated $149 million, down from $168 million city planners projected earlier this year.
"This is bad news for San Jose, but we are not surprised," Gonzales said Friday. "Unfortunately this means we won't be able to make as much progress as we would like on our priorities to build strong neighborhoods and a vibrant downtown, get our families back to work, and create affordable housing."
Lower tax revenues are the latest problem for sprawling San Jose, whose population of about 900,000 eclipses better known cities to the north, San Francisco and Oakland. San Jose is the state's third largest city, after Los Angeles and San Diego.
Compounding the pain of reduced property values, the San Jose Redevelopment Agency estimates it will lose an additional $18 million in state funds. The latest state budget proposals by Gov. Arnold Schwarzenegger will erase about $1.3 billion from local government agencies statewide.
Property value declines may force the city council to revise a June 22 decision to allow the San Jose Redevelopment Agency to continue with existing projects for one year, city leaders warned.
"When the agency board considers our budget this September based on this latest information, we will have to adjust our priorities and seriously lower our goals because we won't be able to do as much as our residents would like us to do," said Harry Mavrogenes, interim executive director of redevelopment for the city.
Maybe some of the county and city and government officials could take pay cuts.. It must be rough making 6 digits and looking forward to a 6 digit income a year pension.
They live deliciously on the backs of the taxpayers and expect sympathy when bad times come. Let them make the sacrifices.
Prop 13 is evil, yaknow. ;-)
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The tax and spend elite fascists in charge of San Jose are an amazing group of PC/affirmative action idiots.
The Clintoon bubble burst continues to ooze out its fallout.
Looks like they will not have to spend on 'affordable housing' since there will be plenty of it.
btt
The ruling idiots on the city council are spending upwards of 400 million to build a downtown city center,,, when there are millions of square feet of choice campuses and office space around the area, but the powers that be continue to pump and pump and pump more money into the downtown area in the hope of reviving it.
The downtown shopping base was killed years ago as regional malls opened up and the council has bankrolled billions of dollars of development, building more and more housing and offering sweetheart deals to corps that move downtown.
Here in the central valley (Stockton/Lodi area), it is hard to find a house for less than $250,000.
The counties were so swamped that there wasn't even a debate - just show the paperwork and get the re-assessment rubber stamped. Bonus: property is up 200-300%, but still taxed at their revised assesments unless there's been a change of ownership.
Yeah, because this is what government, in a theoretically-free country, is really supposed to be doing.
The peak was the day of the Microsoft anti-trust verdict.
residential is holding up quite nicely, for the time being.
Amazingly, the state legislature just shot down Santa Clara Co. proposal to put a parcel tax at 195 bucks a pop on residential properties to help make up the loss of local govt school funding/spending, it would coverup a 177 million dollar projected gap here in the county for education...
The legislature is hooked on social programs, like junkies on heroin... Im surprised they don't just say go ahead, tax away.
Send more jobs overseas. Really starve the government of revenue.
that really had little to do with it. it couldn't last, it was an engineered financial bubble. the wall street and corporate gangs all filled their pockets and walked, then shorted it all on the way down and filled their pockets again.
Then, the dual effects of the aerospace meltdown and the dot.com boom reversed the historical balance. Now, things seem to be back to normal; while my parents are happy that their property has held its value, things down here are up 200-300%.
My bro just bought a house in Almaden for $800K - it's pretty comparable to what one would pay for a similar house in OC (ie 4 bd/3ba). Other regions are in sync as well eg Palo Alto=Santa Monica, Atherton=Beverly Hills, etc.
The article was about commercial properties.
Residential prices have been going up amazingly. I'm sure that there will be a bit of a squeeze now that interest rates are starting to creep up. It seems that a large portion of local cash flow in the area comes from real estate arbitrage.
As long as there'an "affordable housing" program there never will be enough affordable housing nor will there ever be enough money to pay for it.
I'm sure that this is the dirty little secret of California politics. The only people that vote are the ones that have stayed in an area for a long time (California has amazingly low rates of voter participation) and are locked in owing to Prop. 13. i.e. if they move their property taxes would go up incredibly. So, the people you get voting in these local elections are those who get the most from these types of programs and pay the least. Of course they're going to vote to spare themselves and "stick it to business".
This is the same with downtown areas everywhere. The thing which I think is most responsible for killing off downtown businesses is the tool of government greed and bureaucratic stupidity called a parking meter. When used in conjunction with 2-hour limits accompanied by hefty fines, it is easy to understand why this is so.
You can't just relax and take your time just browsing around aimlessly, because if you do, you get a ticket. How stupid is that? You spend more time shopping, which usually means you spend more money, which in turn improves the economy, and as soon as you get outside, you are penalized and treated like a criminal. Or, you just pull into a space, and to save a quarter, you just run in and run out, and you still get a ticket. Or you overpay the parking meter and have to leave a balance behind. Then the next time you go looking for something, you don't go downtown. And most other people eventually come to the same conclusions.
So the businesses fold up, and the city leaders wonder where all the tax revenue went, and why the parking meters aren't doing so well. Next thing you know, they raise the parking rates to increase revenues, or they build parking structures, but then they charge people by the hour for using them. Now you can stay longer without worrying about a ticket, but you have to visit the ATM before you leave the place, especially if you have been shopping for a while. This still has a deterrent effect on downtown shopping, although not quite as severe as the parking ticket.
So rather than making parking free, they decide to have all the bus lines in town intersect in the downtown area, and close off streets to traffic, thinking that people will decide they would rather take a bus and shop downtown rather than fighting traffic to go to a mall. This doesn't work, because busses are as bad as parking meters sometimes, or worse: you have to pay to ride in, and you have to pay to ride back; you can't just leave when you are ready, because of the schedules; they can get quite crowded, and there is the danger that you will be accosted by beggars or assaulted by muggers, or catch a disease like the flu or tuberculosis.
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