Santa Clara, San Mateo county assessment rolls see record growth, Google and Apple play key role

Driven by a booming tech sector, local assessment rolls saw record growth last year.

Santa Clara County’s assessment roll, which is the total net assessed value of all real and business property as of Jan. 1, 2019, soared above half a trillion dollars — marking the longest stretch of growth in decades, county assessor Larry Stone said Tuesday.

According to Stone, the annual roll hit $516 billion, up nearly 7 percent from the previous year.

The San Mateo County roll value also saw around a 7 percent increase, to a record $238.4 billion — the ninth consecutive year in which a new high has been set, according to assessor Mark Church. Menlo Park and Foster City both saw more than a 10 percent bump in assessed value.

In Santa Clara County, Google and Apple alone accounted for 3 percent of the increase. The assessed value of Google properties jumped by $759 million. The tech giant has been buying up property around San Jose’s Diridon Station, in Sunnyvale and elsewhere.

In an unusual turn, San Jose, which typically ranks in the bottom third of cities in the county in terms of the percentage of roll growth because the city is so heavily residential, jumped to the top third.

“It has to be because of the commercial and industrial roll growth, primarily driven by Apple, Google, Adobe and so forth,” Stone said in a phone interview.

In San Mateo County, growth in both the tech and life science sectors is driving demand for office, housing, hotel and retail space. Redwood City has more than 13 million square feet of development in the works. Facebook is developing new office space in east Menlo Park and new homes have opened at Bay Meadows in San Mateo.

While the residential real estate market in the county saw an uptick in median price in spring 2018, the market saw a decline in the second half of the year, breaking a seven-year trend.

Since the Great Recession, Santa Clara County’s assessment roll has ballooned more than 50 percent — more than any time since the hyperinflation of the early 1980s. Spurred on by the tech sector, the Bay Area continues to add jobs. The region now has four million jobs for the first time ever and the unemployment rate in Santa Clara County sits at 2.1 percent. In San Jose, the median household income has increased nearly 22 percent in the last three years to $122,000, the 10th highest figure in the country.

In spite of record home prices, traffic nightmares and other drawbacks, Stone said, job growth has persisted to the point that “if the Bay Area was a country, it would be the 18th largest economy in the world.”

The growth has meant more property tax revenue for public schools, community colleges, cities and the county itself.

But, Stone warned, there are signs that the economy is slowing. The assessed value of business property — such as machinery, equipment and computers — grew by little more than 3 percent, about the same as the prior year. Companies are having trouble hiring employees willing to put up with the region’s astronomical housing costs. Consumer confidence is at its lowest level since September 2017.

“The downside is probably the value of residential real estate, which has gone so high that it’s pricing people out of the market, particularly younger, first-time home buyers,” Stone said in a phone interview, “who are saddled with the greatest student loan debt ever.”

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Big credit union plans new downtown San Jose branch While the region is due for a recession, Stone said, there are significant differences between the bursting of the dot-com bubble in the early 2000s and today. In the past, most commercial development was speculative, with developers building office space with no tenants in mind and then renting to startups who leased more space than they needed.

“When the bust hit, they walked or went under,” Stone said.

Today, companies like Apple and Google and Adobe are buying land and building their own buildings, which, according to Stone, means a much more consistent property tax base going forward.

“It bodes well for stability,” he said, adding that when a recession does hit, it likely won’t be a meltdown like in the past.

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