In 1978, California voters passed Proposition 8, which amended the California Constitution to allow a temporary reduction in assessed value when the market value of a property has fallen below its factored base year value as of the January 1 lien date (a “Prop. 8 Reduction”). Because residential properties change hands much more frequently, California Assessors have access to enough information to understand what the market value of a residential property is for purposes of reviewing applications for Prop. 8 Reductions.
Commercial properties, however, do not produce such a consistent flow of data. Because commercial properties in the City involve any number of leases, some of which have been honored throughout the pandemic, and some of which have operated at a reduced rent or have been completely vacated, the Assessor-Recorder’s office believes that the collection of data from commercial property owners will help the City better understand the effects the pandemic has had on these properties, giving it the information it needs to accurately analyze applications for Prop. 8 Reductions based on the January 1, 2021 valuations.
The City plans to send these voluntary surveys to large commercial property owners during the month of February, 2021. Due to the economic impact of COVID-19, many commercial and residential property owners will be requesting Prop. 8 Reductions for the upcoming 2021-2022 fiscal year. This can be done by filing an Assessment Appeal Application with a county’s Assessment Appeals Board commencing July 1, 2021.