Tax of All Trades

Written by JOAQUÍN TORRES

From property tax savings to modernizing systems, read on for an update from San Francisco’s Assessor-Recorder, Joaquín Torres.

This past January, I was honored to be sworn in for my first four-year term as Assessor-Recorder for the City and County of San Francisco. I’m humbled by the opportunity that you, the voters of our city, have given me as I continue to serve you.

In my first two years in office since being appointed by Mayor Breed in 2021—and elected twice by the voters—with the assistance of hard-working staff, we’ve supported San Franciscans through one of the most difficult times in our history. The fundamentals of our government rely on the core services that we provide: assessing property and assigning value, fairly and accurately.

Your Dollars at Work

For the fiscal year 2022-2023, our office identified over 211,500 property parcels and 37,000 business assessments in San Francisco, with a total assessed value of nearly $330 billion. It is estimated that this roll value will generate approximately $4 billion in property tax revenue. Generally, 34% of the property tax revenue goes to the school district, 2% to transportation and air quality management, and 64% (or $2.5 billion) goes to San Francisco’s General Fund. Property tax revenue represents over a third (35%) of the general fund budget.

That value comes to life as we invest in the daily needs of our City—affordable housing, public safety, shelter beds, parks, schools, public transit, our economic recovery efforts, public and mental health needs, firefighters, emergency services, and more. All of these depend on the financial foundation built through the hard work of the Office of the Assessor-Recorder.

Priorities Moving Forward

With a focus on integrity and accessibility, the Office of the Assessor-Recorder will continue to advance our priorities by:

• Balancing our work in assessing all taxable property in San Francisco as we address rising appeals brought on by the pandemic. Effective representation of enrolled values at the Assessment Appeals Board ensures property taxes are appropriately adjusted, and that processing is timely and equitable.

• Further developing tools to eliminate barriers and advance transparency for the public in accessing records.

• Modernizing our property tax assessment system and completing the second phase of a multi-year project, “System for Managing Assessment, Records, and Transactions” (SMART), to enable seamless service for the public.

• Bringing new programs and our services into the community to help families—specifically low-income and families of color—protect their hard-earned assets, secure their long-held dreams, and build intergenerational wealth in San Francisco.

As we move forward over the next four years, this work—performed fairly, timely, and equitably—ensures we may support the City’s financial stability through difficult economic times, so vital public services are there to support you.

We strive to promote financial stability for San Francisco’s diverse communities. Through our new free and low-cost estate plans for residents, our expanded Family Wealth Series, which raises public awareness of tax exemption programs; our hosted forums on issues impacting first-time homeowners, such as securing fair appraisals; and implementing the new state AB 1466 law to ensure that racist covenants are removed from recorded documents, we will continue to advance the ideals of racial equity and economic empowerment through financial literacy.

Excellence and Efficiency in Customer Service

Each year, approximately two hundred thousand documents— such as property deeds, liens, trusts, and maps—are recorded with our office and made part of the public record. While these documents are indeed public, attaining them has not always been free or straightforward. To better serve you, we recognize the need for an easy path to access property records. We are committed to building and maintaining secure and effective technological systems to achieve consistent, superior service for constituents, including upgrades to improve accessibility.

In 2020, for example, we launched a new Recorder Information system, which includes a self-service Public Index Search tool that allows for purchase and instant downloads of recorded documents without having to come to our office in person or mail in requests. This search tool allows constituents and property owners quick access to documents recorded on their property, such as deeds and deeds of trust. This new system also enhances our internal process, creating better and faster workflows as well as providing opportunities for enhanced data validation and tracking capacity.

Additionally, in 2021, the first phase of our property assessment system update, System for Managing Assessment, Records, and Transactions (SMART), was completed. Moving forward, we are excited to complete phase two of this modernization process, which replaces a decades-old system and will allow us to better serve property owners in the following ways:

• Integrate property tax and assessment functions among the Office of the Assessor-Recorder, the Office of the Treasurer and Tax Collector, and the Controller’s Office for enhanced customer service.

• Decrease turnaround time for annual property tax assessments and provide timely tax billing.

• Create taxpayer self-service tools for a better and more transparent experience.

• Build new IT infrastructure, ensuring property owners’ records are housed in a secure and resilient system.

• Enable our office to more easily implement the system changes necessitated by new laws or evolving ownership structures.

• Improve information that is available to the public and policymakers, which will also enable better revenue forecasting and data analysis.

Appealing Your Assessed Value

As changes related to the COVID-19 pandemic, such as remote work, downtown office vacancies, and inflation, continue to impact San Francisco’s economy, I am frequently asked about the increase and rate at which appeals in property assessments are seen by the City, as well as the process for property owners to contest their assessed value. Assessment Appeals are a resource for property owners who believe their assessed value, assigned by our office, is higher than the current market value.

To begin, our staff uses multiple methods to value property, including the sales comparison (market), cost, and income approaches. We select the most appropriate method reflecting market value as of the event date, such as sales or new construction. For example, with apartment buildings, having access to properties’ operational expense data and rent rolls when valuing such properties helps result in a more accurate appraisals. We do this work in accordance with the state’s Revenue and Taxation code, and the state Board of Equalization guidance and are legally unable to make exceptions. Our office is proud to set the gold standard for fair and accurate assessments; during a recent audit of our assessment valuations and operations by the State Board of Equalization, our office received a 99.92% A+ score.

Generally, there are two ways you could appeal your assessed value.

For small residential properties, our office has a free annual informal review process. This service is only available for single-family dwellings, residential condominiums, townhouses, live-work units, and cooperative units. The property owner may request an Informal Assessment Review for the fiscal year beginning July 1, 2023 and ending June 30, 2024 between January 2, 2023 and March 31, 2023. Please note, this deadline is rapidly approaching. If the market value of your property as of January 1, 2023, is determined to be lower than the factored Prop. 13 value (assessed value), your assessed value will be temporarily reduced to the market value. Your property’s value will be re-examined annually until the market value exceeds the Prop. 13 value, at which time the factored Prop. 13 value will be reinstated. Should you wish to file for an Informal Assessment Review, you can either submit your request online via our website or return a complete form to our office at City Hall. (For detailed instructions, turn to the sidebar on page 55).

For all properties, including commercial properties, you may file a formal appeal with the Assessment Appeals Board, an independent board appointed by the Board of Supervisors to conduct fair and impartial hearings on property assessments. Property owners will receive their Notice of Assessed Value in July for their routine annual property value. If you believe the market value of your property is below the assessed value, you can file a formal appeal at the Assessment Appeals Board between July 2 and September 15. You can do this through the Assessment Appeals Board website: sfgov.org/aab. There will be a required form and a filing fee.