San Diego’s collective real estate portfolio is worth more than ever before, thriving instead of dying during a pandemic that introduced chaos and uncertainty into the market.
Tuesday, the San Diego County Assessor’s Office reported the assessed value of all taxable property in the county in 2021, as of Jan. 1, grew to a record-setting $627.25 billion. The sum includes residential, commercial and industrial land, and represents an increase of 3.72 percent over 2020. It also reflects property tax reductions for values affected by COVID-19 government restrictions.
The $22.5 billion, year-over-year bump in the county-wide property values, while less pronounced than last year’s 5.18 percent jump, continues the upward trajectory of the region’s expanding valuation following the Great Recession. The most values ever went up was in 2005, at the height of the housing boom, when the value of taxable property increased 13.3 percent.
San Diego’s highest property taxpayer is once again SDG&E, which was assessed $186.2 million in taxes in the 2021 ledger for its local real estate holdings, according to county records. Qualcomm ranks second with a total tax obligation of $26.9 million. Real estate developer Irvine Co. is the third-highest taxpayer with a $14.6 million bill.
This year’s tax roll, as the comprehensive accounting report is called, includes $5.86 billion in property tax proceeds for local government entities, the county department said. San Diego schools will receive the bulk of the revenue — or 45 percent of proceeds. Otherwise, 13.1 percent of revenue will go to the county, 12.6 percent to cities and 3.2 percent for special districts. A little more than 12 percent is reserved for what’s known as the Redevelopment Property Tax Trust Fund with allocations for redevelopment successor agencies and other government agencies.
The increasing value of land in the county has been, perhaps, most prominently on display in the housing market. Most recently, limited housing supply helped propel the median home price to a record $725,000 in May — a 23 percent increase in one year.
“The consumer price index went up about 2 percent (between January 2020 and January 2021) …. so (land value) is growing faster than the consumer price index,” said Haney Hong, who is the president and CEO of the San Diego County Taxpayers Association. “That’s a sign that the housing market is hotter and more expensive than perhaps everything else.”
At the same time, Proposition 13 worked to insulate homeowners from what otherwise would have been skyrocketing property taxes, said Jordan Marks, who is the Assessor’s Office taxpayer advocate.
Approved by voters in 1978, Prop. 13 caps a municipality’s ability to raise property taxes. As a result, the base property tax rate can be no more than 1 percent of its purchase value, and annual tax increases are limited to no more than 2 percent. This year, 86 percent of property owners received a 1.04 percent inflation adjustment, despite home values rising 10.7 percent between in the one-year period, the Assessor’s Office said.
“Had it not been for Prop. 13, I think we would have seen people lose their homes during the pandemic,” Marks said.
In addition, the Assessor’s Office said it facilitated $250 million in exemptions — aka property tax discounts — for homeowners, disabled veterans, and charitable organizations. Separately, staff identified businesses — retail, restaurant, movie theater and office building owners — that may have lost value on their properties during the pandemic, as a result of government restrictions, and worked with them to temporarily reduce their property tax bills.
“The 2021 property tax roll reflects the great work my team did with our key partners, proactively reaching out to small business and property owners impacted by COVID-19 to help them qualify for $1.1 billion in assessed value reductions for property tax relief,” San Diego County Assessor Ernest J. Dronenburg, Jr. said in a statement.
In total, the county’s 2021 assessment included 1,006,991 real estate parcels, 54,148 business personal property accounts, 13,312 boats, and 1,550 aircraft.