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April 13, 2008

 

Christopher Heredia, Chronicle Staff Writer

 

 

Assessors flooded with tax reduction requests

 

 

Larry Ellison isn't the only Bay Area homeowner who has sought to cut his property tax bill to reflect the falling value of his home. Thousands of others have flooded county tax assessors' offices in recent weeks in an attempt to lower their taxes, officials say.

 

The trend is particularly evident in the East Bay and in Santa Clara County, which have pockets of some of the steepest declines in home values.

 

Take Paul Harrison of San Ramon, who bought his two-bedroom condominium for $605,000 two years ago. Based on what he sees his neighbors are selling their adjacent units for, he believes the value of his condo has dropped to the low 500s.

 

Harrison, who recently lost his job at ATA airlines when the company went bankrupt, already received a $500 reduction in his property tax from the Contra Costa County assessor, but plans to appeal for a greater reduction.

 

"I'd love to see my taxes go down as much as anybody," he said. "Now it's especially important. The only reason I'm getting by and holding on to my home is because I have savings."

 

Across the Bay Area, phones at county assessors' offices are ringing off the hook and requests for property tax reductions like the one received by Oracle chief executive Ellison are coming in by the hundreds by e-mail, fax and letter.

 

"We've been flooded with requests for property tax reductions," said Gus Kramer, Contra Costa County assessor, adding that calls to his office have quadrupled in the past few months. They're now receiving up to 500 calls a day from people eager to have their assessments reduced.

 

The higher call volume is partly a response to notifications that Kramer's office sent to all homeowners who purchased properties since 2003, stating that they may be able to save on their taxes.

 

It's also a result of the housing market tanking in the fast-growing eastern Contra Costa cities of Pittsburg, Antioch and Brentwood. Inflated home prices are dropping, people who went through foreclosures are moving on, and it's a buyer's market.

 

A four-bedroom, four-bath home with a pool on a golf course that sold for $890,000 in August 2005 just sold for $530,000, Kramer said. That home is eligible for a $3,500 tax cut, with the caveat that it will be reassessed annually for further reductions or an increase.

 

"When I see that number drop that fast, it makes me take pause," Kramer said. "I think we've got to review a lot more of these properties."

 

Kramer increased the number of properties countywide that his office will review automatically for possible reductions from 50,000 last year to 150,000 this year.

 

Cuts could hurt services

 

While homeowners are cheering possible tax reductions, the impact of such cuts on county, city and school district budgets hasn't been determined. Some local government officials anticipated the reduced tax revenue in their budgets, while others say the fallout will lead to reduced services.

 

Ellison received a $3 million reduction in taxes on his sprawling Woodside estate, and San Mateo County officials estimate that his gain will mean a loss of $1.4 million to county schools.

 

Alameda County has been similarly hard hit by the decline in real estate values. The county assessor's office has received about 2,000 requests for property tax reductions in the past several weeks.

 

The county will automatically review the assessments of 65,000 properties and take additional requests individually, county Assessor Ron Thomsen said. Areas most likely to receive reductions include parts of Livermore, Castro Valley and Union City, which have seen declines in some cases greater than 10 percent.

 

In Solano County, Assessor Marc Tonnesen is doing a blanket review of 38,000 properties sold between 2004 and 2007. Between August and December 2007, his office received 1,145 requests for reductions. Since January, the office has received 1,875 requests.

 

San Mateo County has seen pockets of decline. County deputy Assessor Terry Flynn said his office is receiving 25 inquiries a day from people wanting to be considered for property tax reductions. Each May, his office does a blanket review of condominium projects and newer subdivisions and welcomes anyone to request a re-evaluation for a reduction.

 

"We're not seeing wholesale declines," Flynn said. "We're seeing requests coming in from the entry-level buyers largely in areas such as Daly City, San Bruno and South San Francisco."

 

Few appeals in pricey areas

 

Some areas of the Bay Area have remained insulated from the downturn in the real estate market. Homeowners in Berkeley, San Francisco, the Oakland hills, most of Marin County as well as affluent parts of Santa Clara County such as Palo Alto aren't filing many requests to cut their taxes.

 

San Francisco's real estate market has held steady, and officials are seeing a decline in requests for property tax reductions, Assessor Phil Ting said.

 

Santa Clara County Assessor Larry Stone has already reviewed the values of homes sold between 2005 and 2007 and reduced the assessments of 41,000 of them. In May, he will send out a notice to all 450,000 property owners in the county letting them know they may apply for a re-evaluation.

 

"We've had a process in place for 30 years to deal with it," he said. "It's a success story about how to do business."

 

Marin County Assessor Joan Thayer said while other county officials might bemoan reducing taxes, she is pleased when she is able to give a reduction. Her office has been receiving about four or five calls a day requesting reviews for reductions.

 

"If we see a pattern, we'll jump right in," Thayer said. "It's easy to lower values and taxes. It's a happy day. Every once in a while, it's great to do something nice for the public."

 

E-mail Christopher Heredia at cheredia@sfchronicle.com.

This article appeared on page B - 1 of the San Francisco Chronicle