RICHMOND -- Seeking to benefit from the mending housing market, the West Contra Costa school district has hired a media firm to lead a campaign to get the county to raise assessed valuations on properties where they were lowered during the real estate downturn.
The real estate market is recovering rapidly, said school district trustee Charles Ramsey, and it's time for the rebound to be reflected in higher valuations that will lead to more tax revenues for the district.
Beginning in 2008, thousands of properties statewide were eligible for reductions in their assessed value under Proposition 8, a 1978 law designed to realign valuations during downturns in the real estate market.
Proposition 8 was enacted in tandem with Proposition 13, which caps increases in valuations at 2 percent per year no matter how high prices rise.
The county assessor is required to raise valuations that were reduced under Proposition 8 to reflect their current market values.
"We believe that property values have skyrocketed in West Contra Costa and that the economy has recovered," Ramsey said. "The assessed valuation has to improve for the district to be successful."
Not so fast, said Contra Costa County Assessor Gus Kramer.
Kramer said he thinks the housing market recovery is artificially inflated by a number of factors, including market manipulation by banks.
He said he wants to make sure another housing bubble isn't forming before moving ahead with wholesale reassessments.
"We have banks spoon feeding the foreclosures they own back on the market," Kramer said. "We have limited inventory causing what little is out there to be selling at a premium."
What's more, Kramer said, a large percentage of housing activity has involved foreclosures. When banks foreclose on distressed property owners, the homes change hands, so the new assessment is based on the values at the time of the takeover, which were usually very low.
These foreclosures never received Proposition 8 reductions, so their reassessments are limited to 2 percent a year, per Proposition 13.
"All have visions of grandeur that all these properties are going to go back to pre-recession levels," Kramer said. "It's not going to happen."
Ramsey said he thinks Kramer is exaggerating the number of foreclosures in West Contra Costa, particularly compared with some other parts of the county.
"There weren't a lot of foreclosures in El Cerrito and Kensington," Ramsey said. "Don't allow people to have the benefit of something (Proposition 8) that's a temporary measure."
Principals from the San Francisco-based Whitehurst/Moser campaign strategy and media firm will make a report to the school board at its Wednesday meeting on "an advocacy campaign," as Ramsey put it, "to engage local officials and communities to ensure that the 2014 assessments are aligned with Prop. 13 values."
"We have seen all our houses go up (in value)," board President Madeline Kronenberg said. "We would like to have a conversation around his decision to keep assessments low."
Although lower property values are typically associated with lower taxes, the district argues that the drop in values has actually resulted in higher tax rates for property owners to pay off the district's bond measures.
The district has also scheduled a public meeting on the issue for June 19, which Kramer has said he will attend, Kronenberg said.
What: West Contra Costa school district board meeting
When: 6:30 p.m. Wednesday
Where: Auditorium, LaVonya DeJean Middle School, 3400 Macdonald Ave., Richmond