Los Angeles County property values have reached record high of $1.6 trillion dollars according the LA County Assessor Jeff Prang who recently closed the County’s fiscal year.
According to Prang’s official press release, there has been record growth and new all-time highs in real estate and business property values across LA County thanks to property sales and construction, including new construction of the NFL and LAFC stadiums in Inglewood and Exposition Park.
“The roll grew by a record $94.41 billion (or 6.25%) over the prior year to an all-time high of $1.604 trillion in total net value. In addition to the values of the County’s 2.38 million real estate parcels, this total amount includes $84.8 billion in business property (e.g. boats, aircraft, machinery, equipment), which rose by $3.9 billion from 2018 and is itself a new record,” reported the Assessor’s office.
The leading indicators for the growth in the local property assessment roll are: a) property sales, which added $48.34 billion to the roll as compared to 2018; b) the CPI adjustment prescribed by Proposition 13, which added another $28.74 billion; and c) new construction, which added a further $11.09 billion. Among the greatest single additions to the roll are $1.95 billion for partially-complete construction of the Rams/Chargers stadium in Inglewood and $200 million for the Banc of California stadium in the City of Los Angeles.
“My job is to make sure that everything that should be counted, is counted, to maximize revenue for services and programs for the county’s 10 million residents,” Mr. Prang told the Buzz in an interview Tuesday adding that teachers, police, public health, etc., are all funded property tax revenue.
Prang said this year is the ninth year of consecutive growth in property values since 2008 recession and the second highest, reaching 6.25 percent growth rate, which translates to $94.4 billion added to the tax rolls providing the county with $1 billion of additional revenue.
“From education, healthcare, and mental health services, to public safety, transportation, and alleviating the homeless crisis, our schools, cities, and county programs will have approximately an additional $1 billion for vital local public services.”
In May, Prang provided the LA County Board of Supervisors a forecast for budget and planning. At the time, he forecast 5.8 percent growth, so he was very pleased when he could deliver the news that actual growth turned out to be closer to 6.25 percent.
But the good news of increased property values is a double edged sword, explained Prang when we asked about affordability and homelessness.
“If you own property, your equity is going up; if you are looking to buy a home, it’s a challenge because property values are becoming more unaffordable,” said Prang, who told us he couldn’t afford to buy a house in West Hollywood where he rented for over 20 years. He bought in Baldwin Hills.
“Those increased values put more pressure on livability and make it harder to hold affordable housing in the market. Property values drive development,” said Prang.
But will it last?
Prang said he is watching some indicators to gauge longterm growth. For example, while year over year there has been an increase in property values, the increase has slowed this year, with rates going up but not as fast. Also, he has noticed that homes that are for sale are sitting on the market longer — many weeks versus ten days. This could indicate the price may be too high or that fewer and fewer people can afford housing. He’s also watching to see how the federal income tax changes will affect property values since mortgage reductions have been reduced. And finally, Prang is wondering if the trade tariffs recently imposed by the Trump administration will have an impact locally at some point.
Though he is an elected official, Prang doesn’t see his role as making policy, he leaves that up the County Supervisors but he wants to they have the resources to spend. Since taking office five years ago, he was worked to increased efficiency in his office by digitizing millions of paper files associated with the 2.5 million assessable parcels in the county. He also raised the threshold of taxable business property to $5000 to relieve small businesses of the tax burden that was costing his office more to collect than it returned. In addition, Prang said the improvements in technology have allowed his staff to process more work in the current fiscal year so it doesn’t carry over. Soon he hopes to have an electronic signature form online to expedite filings. His office’s website offers information for homeowners and business owners, including a newsletter that Prang says he tries to make as useful as possible.
Below are more highlights. Click here for more numbers:
The 2019 Assessment Roll comprises 2.57 million real estate parcels and business assessments, including 1,878,470 single-family homes, 249,972 apartment complexes, 248,109 commercial and industrial properties, and more than 200,000 business property assessments.
Below are additional highlights from the 2019 Assessment Roll:
Cities with the greatest percentage growth:
1. Inglewood 25.7%
2. Vernon 13.2%
3. West Hollywood 11.6%
4. Santa Fe Springs 9.3%
Cities with the greatest amount of growth:
1. Los Angeles $41.7 billion
2. Long Beach 3.1 billion
3. Santa Clarita 2.5 billion
4. Inglewood 2.4 billion
Cities with the highest total assessed values:
1. Los Angeles $652.9 billion
2. Long Beach 60.2 billion
3. Santa Monica 39.5 billion
4. Beverly Hills 36.6 billion