We tried to do a Q&A with Santa Clara County Assessor Larry Stone back in late March. That didn’t happen, but it wasn’t Stone’s fault—there weren’t enough questions at the time. But here we are, three months later, and we’ve got the tax man’s answers to a couple submitted questions, relayed in a telephone conversation, as well as his thoughts on the fight between the county and Redevelopment Agencies, the odds the Oakland A’s will relocate to San Jose and how he views the local housing market five years after the subprime mortgage crisis.
Q: What have you heard recently on the possibility of an A’s stadium in San Jose?
A: I’ve talked to Lew Wolff a couple times, and I don’t know what’s going on. Here’s what I think, and I really believe this is kind of a change of attitude of mine over the last six to nine months: I really believe Commissioner Bud Selig wants to make this move from Oakland to San Jose. I really believe he supports that. So, the only thing you can conclude is he doesn’t have the votes of the owners, because you have to have 70 percent support of the owners.
This is about market share; baseball just happens to be the product. The San Francisco Giants want to keep the A’s in Oakland, because they know they can’t survive there. If they keep them there, they know the A’s will have to sell or move, and then the Giants will control the entire Bay Area market.
What is going on with the county Redevelopment Agency oversight board and the fight over $30 million that was expected to go to the San Francisco 49ers stadium project?
I was one of a few people who attended the hearing the other day. The county has significant influence over the (RDA) oversight committee. What they were doing was essentially trying to cancel contracts that the 49ers had with the city of Santa Clara.
The point is that this whole process is not very transparent. Part of (the stadium funding deal) was on the agenda, but not the action that they took. The 49ers got a letter 24 hours before the hearing was held, saying what this oversight agency was proposing to do. They didn’t have much time to respond. It was technical so they contacted their lawyers. Then they contacted me about going.
There are also questions if the action to put the $30 million toward schools instead of the stadium was a violation of the Brown Act on public meetings.
This was a fast-track railroad job, not very transparent. The arguments came down to—they met the Brown Act requirements to holding the hearing, but the question is if they met Brown Act requirements to taking action on the agenda.
Aside from that, the meeting was a high-speed railroad job. One of the members (George Putris), he was arrogant; he tried to limit the testimony and presentation of the San Francisco 49ers to three minutes. The 49ers obviously have a significant financial interest in this whole issue. He was rude and that’s not the way we do business here. I completely understand his vote, he’s a member of the county staff here and I didn’t expect him to vote any other way. I’m not taking exception to his vote, but we treat people who are going to spend a billion dollars on a major construction project that creates jobs, we treat people better than that. It was embarrassing, and if he’s not embarrassed, I’m embarrassed for him.
What was the deal with that press release sent out by County Executive Jeff Smith over San Jose not telling the truth about its Redevelopment Agency debt?
Part of my testimony to the oversight board was: Where do we go from here? All of the complexity of unwinding the RDAs and distributing the assets and money they have means that the county and the city, both, need to stop looking at this issue from narrow interests. We need to think of the city and the county as one economic engine. I don’t think anyone benefits—not the voters, the economy and certainly not the school children—when local governments fight like this.
How have things changed since the housing bubble burst? Are we headed back to a similar place as housing prices continue to rise?
Prices are beginning to rise, but it depends on the geographic area. And the quality of the school district drives residential property values. The condo market is still very, very weak. Generally speaking, the condo market is still down. The realtors will tell you, and it’s true, they’re seeing multiple offers and sales above the asking price, and schools are driving a lot of that. But what does that mean?
You have houses in Gilroy and Morgan Hill that were selling for $1.2 million in 2006-07, and they dropped to $600,000. They might be up to $700,00 now and maybe even $800,00, but is that progress? Realtors are transaction-oriented but you’re still seeing sales at the levels of the high $600,000 and $700,000 range. That doesn’t mean prices have returned to before the Great Recession. Yeah, the housing market is improving, but it’s not anywhere near to where it was before the Great Recession. The apartment market, on the other hand, is on fire.
But would we want to even go back to pre-Great Recession levels since those prices were inflated?
Right, I agree. There was no way that market could be sustained. And part of the reason the apartment market is so strong is because the underwriting for home loans is so rigid. So, people can’t get loans today. Part two is that a large part of the economic growth is technology and a lot of people being hired are young engineers. Gen X and Gen Y folks today don’t believe, or many don’t believe, that home ownership is a necessary part of the American Dream anymore. So we’ve seen trillions of dollars evaporate through the housing crash.
Here’s a reader question from a few months ago that could still apply in the future:
I’m a week away from moving into my first house in Plant 51, a condo complex across the street from the planned stadium if the Oakland A’s move to San Jose. How will the new stadium and development impact property values in The Alameda region of San Jose?
Well, if history is repeated, it should have a very strong impact on property values and property development. As a matter of fact, if you look at the impact Pac Bell Park, which is now AT&T Park, had on the south beach area of San Francisco, it was significant. Now, you can’t just put a ballpark in an undeveloped area. There has to be something there beforehand.
Pac Bell Park was clearly an incentive for young people to live there. And I think the same thing would happen here. I also think the downtown ballpark would be a catalyst to the downtown area. Office development, which has been practically nonexistent, would also be accelerated in San Jose and that would drive jobs and people living there. You need a balance to make a downtown work, and retail doesn’t come there yet because we don’t have enough people living there.
It’s been proven, not just in San Francisco, but also Seattle. I grew up in Seattle. The term “Skid Row” came from Seattle, and the loggers would cut the trees from the hills—Seattle is built on seven hills, very much like SF—and so these logs would have a skid and they’d send them down into the bay and they would be picked up there and taken by boat and barge. Well, these loggers were tough guys—a lot of prostitution, a lot of alcoholism. I grew up there and I know it used to be a real ghetto. But now, with the ballpark, there’s been a complete renovation of that area.
But it’s not all the ballpark. I think people who support ballparks and stadiums; they try to justify them on economic grounds. The 49ers stadium will be a financial success on its own, but libraries don’t pay for themselves, museums don’t pay for themselves. To be a major metropolitan area, like San Jose is trying to be, you need many different things. You need the Rep, the Opera, the Tech Museum, a world-class airport and a world-class convention center; you need venues like HP Pavilion and the California Theatre, public transit, freeways and parks. You don’t have to be a senior citizen to understand the value of senior centers—same with golf courses and tennis courts.
If you have a choice between professional sports and the arts, I would say the arts should come first. But some people like sports. It’s not that everything should be for everybody, but to be a major metropolitan area, you need the components of the things that I mentioned.
Here’s another reader question:
I keep filing out forms and calls to get a real property adjustment of my property taxes but no reply. Who do I need to call to get a real person on the phone? (My) property (value) has obviously dropped like everyone else in the valley. Why do you make it so hard?
— Rick Heller
The questions I always ask are: How long have you owned your property? Where is it located? And what type of property is it? I say to them: wait until you get your assessment notice next week, and if you believe the market value of your property is less than the value on the notice, contact our office, go online, and ask for an informal review. And between July 2 and the middle of August, we do as many of those informal reviews that we have time for. If we agree that you’re overassessed , we’ll make an adjustment. We proactively reduced the assessments on 130,000 properties, reducing the assessment roll by $26 billion. without being asked by the property owners.
Anybody who says they can’t get ahold of somebody in our office is flatly incorrect. And if you don’t, I want to know about it. Once in a while people get stuck on a loop, but very rarely.