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No fair property taxes in Alameda

This week in “Life on the Island,” the column I write for the Alameda Journal, I discuss the legacy of Proposition 13, which leaves newer property owners, of both homes and businesses, paying property taxes much higher—sometimes three or four or five times higher—than those who bought earlier. (Property tax information is public and you can look it up by parcel or address here.)

Measure H, the Alameda school tax passed in June, assesses businesses based on square footage, which is, to my mind, closer to fair than a flat per parcel tax, which taxes the owners of mansions and hovels identically, the owners of large tracts of land the same as those who own a small parcel.

A Prop. 13 supporter once described the 1978 law to me as a ‘double-edged’ sword, by which I think he meant it was bad when you first purchase a property, but gets better over time. But Prop. 13 has created a system of taxation so inequitable that it has turned out to be a very bad thing over time, not just because of its pronounced lack of fairness but, too, because it fails to raise enough money to support the infrastructure and services our state requires.

epearlman

  • Brian Vaughan

    Prop 13 is fair. If one buys and stays in their home for many years, they derive no intrinsic value from the appreciation of their home and should not be taxed on this appreciation while they reside in their home. Those that are currently buying homes are expected to pay taxes on its current value. Once done, they are protected from further appreciation by Prop 13.

  • Susan Davis

    Hi Eve,

    Do the property taxes that you list for Pillow Park and Pauline’s include Measure H payments for this year?

    Thanks for the clarification…

  • Eve

    I think people do derive value from their homes as they increase in worth. Certainly many homeowners take advantage of that value quite tangibly, through home equity lines of credit or refinancing and pulling money out. Others opt for reverse mortgages. And, of course, when homeowners eventually sell (or pass their homes on to their heirs) great value is derived.

  • Eve Pearlman

    Hi, Susan. All the property tax amounts I cited in my column include the Measure H assessments. So, Pillow Park Plaza’s total property tax bill is $10,750, including $1,530 for Measure H. Pauline’s total bill is $5,450, including $1,050 for Measure H. The other two property tax bills I cited also include their Measure H assessments: The owners of the Park Street building who pay $21,740 are paying $960 for Measure H. And the Park Street property with a property tax bill of $20,800 are paying $750 for Measure H. It’s worth noting that the Measure H assessment is a much smaller percentage of the tax bills of people who are paying market value property tax to begin with.

  • Edmundo Delmundo

    Does anyone stop to think about how P13 ignited the climb in property values in CA? Just a thought…

    Prop 13 isn’t going away any time soon, however.

    I’m curious about your property tax statistics for Pillow Park and Pauline’s. Do the owners of those business also own the buildings? Does the BUSINESS own the building? Slight nuance, but nonetheless. What other taxes to Pillow Park and Pauline’s pay the City in the form of sales tax revenue, property tax, business filing taxes?

    Problem with evaluating “fairness” in tax burden is that it is near impossible to compare apples to apples when looking at someone’s full tax burden as opposed to components of taxes they pay.

  • Eve

    Hi, ED: According to public records, the owners of the Pillow Park store own the Pillow Park building and the owners of Pauline’s own the Pauline’s building. –Eve

  • Gary Orzell

    I think that many folks engage the same rationale as stated in Brian’s comment, a rational that obfuscates their responsibility to the community.

    Taxation through property assessment is a means to an end. The value of the services we all receive, as citizens of Alameda, are in no way tied to the value of the property we reside in. Does the person who has lived in their house long enough to benefit from Prop. 13 limits use any less city services than the new homeowner paying many times the property taxes of their next-door neighbor? I think not.

    The cost of maintaining services that are for the collective good should be shared uniformly amongst the population and the funds should be generated as fairly as possible. There are many variations on taxation methods that have differing degrees of fairness, but certainly Prop. 13 is one of the most unfair methodologies imaginable, being based solely on the property owner’s longevity at a site.

    I often think it ironic that the proponents of Prop. 13, through their support of low taxes through longevity, are espousing a method of taxation that explicitly states that each person should NOT have to pay their fair share; that some folks should be able to underpay at the direct expense of others, such as the young family that lives next-door.

    The argument is often made that these low paying folks are often seniors, they paid little for their houses, are on fixed incomes, etc. My question would be to ask if that means they should be less responsible than a younger person, do they use less services or derive less benefit from living in the city?

    Eve, I agree completely with your statement that you are OK with taxes because you appreciate the services provided. You realize both the individual and collect benefits of being a citizen and the responsibility that goes with citizenship.

    If only your sentiment was universally shared, we could have fair taxation and avoid the ongoing ballot measures needed to raise money for community services that benefit us all.

  • Jill

    It astounds me that no one has proposed an initiative to eliminate Prop 13 property tax reduction to commercial properties. Even if there aren’t enough votes to overturn Prop 13 as it applies to homes, surely there are enough highly taxed people to pass a proposition making commercial properties pay taxes based on current market value.

  • Jill

    I should mention that I would personally support overturning Prop 13 altogether, even though I personally benefit from it. The law is simply unfair. And heaven knows our state and local governments – and schools – desperately need the money.

  • Terry

    I happen to own a piece of property that is zoned commercial….one block from downtown, but it is not commercial. It is residential and has always been residential. We paid $115k for this property in 1982 and our current tax debt is about $5,000 per year. I will be paying an additional $1125 this year thanks to Measure H. Again, let me state…..this is not a property that is being used on a commercial basis, and most of my neighbors are residents – not businesses. I’m all for helping schools, but lets spread it around a little. I also own another piece of property in Alameda in a residential area and will gladly pay my $120. I think it is entirely fair.

  • http://www.actionalameda.org/redevelopment/redevelopment.php David Howard

    If Eve were to do a little more digging, I bet she’d find that both Pillow Park Plaza and Pauline’s Antiques are in the Business and Waterfront Improvement Project Redevelopment district. You can see that most of Park Street is in that district, on the map here: http://www.actionalameda.org/Media/redev%20map.pdf

    A good portion of those property taxes, outside of Measure H and other special taxes aren’t going to fund any general services at all – instead, they are going to pay back debt that the redevelopment district issued to pay for the Civic Center Parking Garage and the megaplex.

  • Distressed

    I have called the Assessor’s office countless times looking for answers and the answers are never consistent. Sometimes the answers are even completely inaccurate. Does anyone find it strange that you must file an appeal the same time you file an informal request to have your property tax re-evaluated? You are essentially saying “I know you won’t lower my property tax so I’ll see you at an appeals hearing prepared for battle”. We were initially told that we needed to file the informal request and if it was denied, we could then file the appeal. We *WERE NOT* told we needed to file both at the same time!!! And doing so is not at all logical. Wouldn’t you wait to see what their decision on the informal request is before appealing their decision? I should add that we filed in August and called several times to find out the status but no one could tell us what was going on. We were asked to call back in Dec 2008 (which we did) and that’s when we learned our request was denied (surprise, surprise). No paperwork was sent to us and we had to call the Assessor TWICE asking for paperwork before it was finally sent. It amazes me that the Assessor believes that property values have not declined. There is simply no way I could sell my home today for it’s assessed value. It’s as if the Assessor is blind to the current economic crisis and doesn’t read a paper. Inflated property taxes are simply going to drive more and more people out of their homes as more people get laid off and the economy worsens.

  • Useless Assessor

    I’ve called the assessor office today (thursday) and message on the machine said they are closed in honor of a county holiday.. on a THURSDAY??, i send in the request months ago last year and haven’t heard of anything back yet..i think he just sit on his ass and don’t do nothing to help the truggling home owner, but making sure he takes his lunch and go home on time at work. I bet he assess his own home years ago and give a rat-ass about everyone else’s.