Friday, October 31, 2008

Oakland: Where Property Taxes Soar And The City Burns

My advice to the prospective Bay Area homeowners: Don't move to Oakland.

Or, if you can't tear yourself away from the prospect of horrible schools, murder as a way of life and a mayor who looks and sounds like Ronald McDonald in grayscale, at least make sure you read the fine print.

As October ends, we unlucky Oakland homeowners receive our annual property tax assessments. They read like a comedy routine -- as if the government designed them to cause the gap between amount paid and services received to be as wide as possible.

Actually, now that I think about it, that is exactly the objective of liberal government, and Oakland does it well.

Let's take a look at some aggregate numbers and then dive into the specifics of Oakland's annual property extortion. This information is all available at the Alameda County property tax site. The numbers provided are for a typical house, and they do vary from house to house.
Ad Valorem tax rates:
Berkeley - 1.26%
Oakland - 1.33%
Piedmont - 1.17%
Fremont - 1.11%
Hayward - 1.10%

Parcel taxes:
Berkeley - $1,183
Oakland - $740
Piedmont - $3,407
Fremont - $355
Hayward - $205

These tables are pretty self explanatory. Most other East Bay cities have numbers that look similar to Fremont and Hayward. By choosing to live in Berkeley or Oakland, a homeowner is paying an outrageous and indefensible amount of tax.

There is no reasonable explanation for why these cities need to tax citizens so much more than other cities -- no explanation other than pure shameless liberalism, that is. The only tax with some explanation is the high parcel tax rate in Piedmont, which pays for one of the country's best public school systems and is well worth paying for.

How do Berkeley and Oakland get away with this? Simple. Because many higher-income residents choose to live here to be close to their jobs in San Francisco or on the peninsula, those cities can charge a higher tax without providing them any return on investment. Think of it as a toll or an entry fee.

The situation becomes even more absurd when looking at the specifics of Oakland's parcel taxes:

  • $80 annually goes to pay for one of the Bay Area's worst library systems -- one which still doesn't even have free wi-fi.

  • $110 goes to the "LLAD" which is a well-known fraud and slush-fund for local politicians to grease their supporters.

  • $200 goes to schools through Measure E. Residents would do just as well to light two hundred dollar bills on fire. Oakland schools are garbage.

  • $88 goes to the Violence Prevention tax. As far as I can tell, they should rename this the "Violence Promotion Tax." Evidently, the more we pay, the more they rob and murder us.

  • If you live in the hills area, $65 goes to pay for your own private fire department, because the city government refuses to pay for those pesky middle-class people's fire protection.

The 1.33% ad valorem tax is one of the highest in the state (if not the highest -- I haven't had time to check). Along with the real estate transfer tax, it helps ensure that Oakland real estate remains depressed. That tax is so high because city agencies -- schools included -- have managed to max out their credit cards on bonded projects which, as usual, haven't managed to help any of the city's obvious problems.

Meanwhile, Mayor Dumbledore and his buddies continue to lobby for even higher property taxes. It's an ugly situation, and one which should discourage anyone from buying a house in Oakland.

One piece of advice for homeowners just receiving their tax extortion notice. Each parcel tax has a phone number next to it. I strongly suggest you call each one to verify that you should in fact be paying that tax. I own a vacant lot in the city which Oakland repeatedly attempts to tax for items which specifically exempted vacant lots.

I have reason to believe this practice is widespread. And why not? It makes the city plenty of money.

So, call those numbers and demand a refund if the taxes have been levied in error. If the taxes are accurate, at least you've wasted the time of someone in city government.

A minor victory indeed, but at least it means you'll have received some sort of service from the city. Just don't get used to it. Pay your taxes and shut up. This is Oakland.


  1. As someone who has been looking at purchasing a home in the east bay, I thank you for that informative list. Every time i have considered purchasing in OAK I am cautioned by the outrageous taxation in OAK, and at least in Pied. or Lamorinda one can at least send their child to public school and gets some value for $. I perceive getting no/or little value for taxes that one must pay in OAK- the streets are in disrepair- the maintenance backlog must be high and only going higher, the schools just holding pens, the police force overwhelmed, overpaid, and probably need a high cash infusion for modernization and ultimately ineffective.

  2. One main reason I'm living in San Leandro, and not B/Oakland. For the same amount of money, I'm paying
    ~ $100/month less in taxes/junk fees and way less than Berkeley.

    I disagree with you on Berkeley though--it's less convenient to SF than San Leandro is (same BART time, but more frequent trains here, etc). Misguided folks just think it's cooler.

  3. Great point about Berkeley versus San Leandro. I really think the best bargain is Piedmont. There are actually a few relatively cheap houses there right now because of the housing crash.

  4. The LLAD was just another way for the city to attempt to grab more property tax dollars. Oakland likes to promote parcel tax propositions in order to save services "save libraries", "save parks", or "save renters". Typically if the proposition passes, the city takes the service's original funding, and lets the new proposition money to pay for it. We get taxed more for the same service, while the original funding goes into the general fund. It's happened so many times here that it's hard to believe that people still fall for it.

  5. the previous blogger is right, these areas are targeted cuz they are close to SF for those that work in the city. But i see the value of paying $100 more in taxes just to be close to gourmet ghetto or culture. the long drive aside, I would choose not living in san leandro or the suburbs.(note: the long drive means less green environment. for those that dont care about the environment, they might care abt the potentially raised gas price.)
    it seems that one pays so much taxes but has nothing in return as services, but berkeley and oakland are close SF, kids-friendly, and the housing market is much more reasonable than that of SF that's allowing many to be home owners.
    these are pretty compelling reasons.
    what's the alternative? SF? it's 1.163%. it's 0.1% less. i.e., on house that's $400k, one would pay $400 less in sf than berkeley or oakland. but where there is $400,000 houses in sf if not in bayview and visitation?
    how about the suburbs, san leandro, antioch? sure, one could send their kids to go to public schools but the kids are sure not to learn a second language and perhaps public schools in all california would not sustain the budget crisis in the next 5 years. so private education is a surer bet.

  6. [...] Obviously, Oakland has been hard hit by the recent economic recession, as have many other cities. What the article fails to mention is that Oakland has some of the highest tax rates in the region: a 9.75% sales tax rate (only the relatively unknown towns of Pico Rivera and South Gate have higher sales taxes) and a property tax rate of 1.33%, one of the highest in the state. [...]

  7. Concerned citizenMay 8, 2011 at 8:29 PM

    I have to say Oakland Tax Office SUCKS ass. They are greedy, they are horrible, and they truly SUCK. I have been paying these horrible taxes for the last 10 years and the only thing that I do get out of it is a shorter commute to the city where I enjoy my time – San Francisco. I also own a property in South Lake Tahoe where my house is appraised higher than my small condo in Oakland (by the lake) and I pay half of what I pay in Oakland. I have an alarm system and I have to even pay extra fee if my alarm goes off on top of a yearly alarm owner fee (what a joke). I have called the stupid Tax Office and spoke to a number of stupid people and told them that I disagree with the raise in taxes every year, especially considering our foreclosure rates and just depressed market in general have brought the value of the condo close to what I have paid for it 10 years ago (not to mention renovations). They said that it's their general practice and I need to jump through fire hoops to try to dispute it which will most likely not work. Finally, I decided to refinance a few years back and found out that idiots put a lean on my condo for having a hot tub on my roof. I called them up and told them that the only tub on my roof is inside of my neighbor’s bathroom as I live on a 2nd floor of a 5 story building. They wouldn't remove the lean for close to 40days until I finally got fed up and told them that I will sue them if my rate goes up for the mortgage difference and all extra fees after which they removed it within 24hours. If that wasn't bad enough, NEVER EVER, buy a place where you have to pay Home Owners Association Fees because you will be paying for the crap you will never use or need. My HOA almost tripled in the last 10 years because of morons on the board. Anyway, happy buying :-)

  8. The worst part of buying in Oakland is paying for police officers who treat you like shit -then there are the schools, the libraries, etc. Right on. And to think: these assholes actually tried to pass a measure that would raise the parcel tax more than it already is, at $740.

  9. If you hate it so much, don't go there. You sound like someone who would like Somalia very much.

    Low taxes
    full second amendment rights
    small government
    personal responsibility

    What else can you ask for?


  10. seriously moving southNovember 23, 2012 at 4:19 PM

    Honestly, that tax rate in Berkeley isn't true - it is 2% in Berkeley. The 1% annual for my property is $3321. PLUS Voter added cost add 821.06 for Schools, Mello Roos, Buses and Parks = 4142.56. PLUS But they never tell you about the non-voter approved taxes $1577.26 = GRAND TOTAL of $5919.82.

    So in the real world, double the Berkeley tax to 2%.
    6 grand is a lil higher than 3 grand YA THINK?

  11. Update...for a property valued at $302K, total Oakland taxes are $6,871, or a net 2.275%, of which the ad valorem rate is 1.44%, and additional "Fixed Charges and/or Special Assessments" are $2,525.50. This is insane.


    Total Fixed Charges and/or Special Assessments 2,525.50