The headline more-or-less says it all. I've blogged on this topic before, but it's never been nearly this bad.
Last year, Oakland's Ad Valorem rate was 1.33% of the tax value of the property. This year, somehow it magically has risen to 1.41%. If anyone understands how this came to be, I'd be very interested in knowing. I was unaware the electorate had passed a bunch of large new taxes.
Just to revisit the topic for a moment, even in the liberal Bay Area, Oakland is all on its own in charging ridiculous property taxes. In Leftist Berkeley, the Ad Valorem rate is 1.26%.
That means that if you buy a house in Oakland, you're stuck paying an extra $150 per year for every $100,000 in home value per year in property taxes.
Things get even worse if you just look a little to the east. In Orinda, which has basically the best school system in the state, the Ad Valorem rate is 1.08%. That is not a misprint.
So, by living in Oakland, you get to pay an extra $330 per year per $100,000 of house value, and you get to switch from having the best schools in the state to having schools so terrible that you pretty much are forced to send your kid to private school.
In case you're going to jump all over me and point that the tax bill includes parcel taxes in addition to the Ad Valorem portion, that is true, and in Orinda you pay about $400 more in parcel taxes per year. So, if your house cost more than $120,000 or so, you're losing in Oakland.
For most home buyers, the difference is far more stark. A typical $750,000 house makes the difference a totally prohibitive $2,500 a year. Who can afford that, and for what? The privilege of living in a city which spends no money on the kind of services a reasonable homeowner would actually want?
And no, the Oakland Housing Authority doesn't count. Most homeowners I know wish they'd shut that thing down and kick everyone out.
The actual upshot of this policy is that Oakland presents a closed door to potential new homeowners. It's fine for renters and those who have owned their houses for years -- those people don't pay much anyway because of the structure of Prop 13.
My assumption is this is also the reason people are willing to vote for whatever they support that causes this rate to go up -- though, I have to say that most of the initiatives I've seen are parcel taxes, not Ad Valorem increases. As mentioned above, I'm not actually sure how that rate got so high in the first place.
This state of affairs should actually worry existing homeowners who aren't paying much. It lowers the value of real estate in the city, since prospective homeowners must adjust their bids to account for the extra thousands per year they'll be paying to the city.
Given Oakland's absurdly high rates, I wouldn't be surprised if this difference cost the average house $50,000 to $100,000 in value -- and that's before the well-documented $200,000 haircut that houses in nicer areas of the city suffer because the school district refuses to redraw boundary lines or set up a magnet school.
While I still have your attention on property taxes, let me bring another matter to your attention. I own a vacant lot in addition to my house in Oakland. Every year, the city illegally charges me the parcel tax for Measure Y on the vacant lot.
And, every year, I call and get a form sent to me which I fill out and mail to the city. The city then sends me a refund of about $90.
The city probably spends $100 every year dealing with my complaint and validating that the parcel is indeed vacant. Believe it or not, twice out of the past four years someone has actually come to verify that it's vacant. I guess they forgot?
So, last year, I asked the gentleman at City Hall if maybe they could put a notation in their computer to simply stop charging me the tax on that parcel.
"No," he said. "We don't use computers for that."
Need I say more?