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Reassessment Is Tough for O.C. Homeowners : Taxes: For many, bills keep going up 2% a year while values decline. Appeal process is long and confusing.

September 13, 1993|MARK PLATTE and KEVIN JOHNSON | TIMES STAFF WRITERS

For four straight years, Mary and Michael Stout have watched helplessly as their property investments in Costa Mesa and Huntington Beach slid south along with the rest of the Southern California real estate market.

Since 1988, dwellings in their upper-middle-class neighborhoods have sold for $20,000 to $150,000 less than their purchase prices.

What really galled them, though, is that their property assessments came in each year with an automatic 2% increase tacked on--as permitted by state law.

"It's absolutely insane that our property taxes are increasing when the newspapers are full of stories about the drop in Orange County real estate," Mary Stout said.

While some property owners have received sizable tax breaks--at least 60,000 parcels were devalued this year alone--the Stouts' bewilderment over their assessments is shared by many who wonder why the reduction in their home values hasn't resulted in a property tax decrease.

And when property owners like the Stouts have chosen to appeal their assessments, they have become mired in one of the state's worst administrative logjams, which takes nearly two years to unravel: a backlog of more than 17,000 appeals with 25,000 more expected this year. The deadline for filing this year's claims is Wednesday.

Interviews and documents show that Orange County Assessor Bradley L. Jacobs' system for adjusting property values has caused long delays and widespread confusion, and that Jacobs is reluctant to inform the public of how to seek reductions outside the time-consuming appeals process.

Orange County officials said they have stretched their resources to handle the mounting appeals and have already reduced the values of 74,000 properties in the last three years, based on reviews of at least 600,000 parcels.

By comparison, Los Angeles County Assessor Kenneth P. Hahn this year reviewed all 350,000 pieces of single-family residential parcels that had transferred ownership between 1988--when values began to fall--and 1992. He decided to reduce 270,000 parcels, or 77% of the total.

"We knew that market conditions had changed and we had the technical ability with a computer program to do this," said Gary Townsend, the chief deputy assessor for Los Angeles County. "We were egalitarian about the process and reduced homes from East L.A. to the Pacific Palisades."

The assessor in Ventura County has lowered assessments on 107,000 properties out of 230,000 parcels in the county since 1991. In San Diego County, officials reduced 30,000 properties out of 40,000 reviewed just this year. However, San Diego assessors analyzed only properties brought to their attention by homeowners and businesses.

Though the Southern California economy continues to decline, valuations of many area homes continue to rise 2% each year because assessors' offices cannot appraise every piece of property each year, nor are they required to, officials say.

Jacobs defends his method of handling assessments.

"Our approach is that we look at properties one at a time," he said. "We are very careful, very efficient. The number of appeals has nothing to do with the quality of assessments. It has to do with the state of public confusion. When people are unsure about what's going on (in the economy), they move to protect themselves. We attempt to do the right thing even if people don't ask us to."

Still, the waiting game continues.

While Orange County's tax roll is less than one-third the size of Los Angeles County's and has fewer new appeals each year, residents here still must wait about two years before their claims for property assessment reductions are heard--about the same as in Los Angeles County.

In fact, many Orange County property owners have agreed to delay their rights to a hearing within two years at the request of the assessor's office.

In San Diego County, which is similar in size to Orange County, officials report that residents receive nearly immediate responses on their appeal requests. And in Ventura County, the backlog is just 500 to 600 properties.

Anaheim resident Robert P. Stahovich received a $644.95 property tax refund check only two weeks ago after filing a property appeal in 1991. He has filed another appeal this year on the same property, but does not expect a decision for another year and a half.

"It's so mind-boggling that it has me laughing by the time I get all my paperwork together," Stahovich said of the protracted process. "They just burn you out. This is so crazy. I know I'm not the only one who feels this way.

"In the meantime, you pay your taxes," he said. "They don't give you a delay on paying your taxes. They want the money right away."

The county provides tax refunds with interest to those who are ultimately granted property tax reductions.

Webster J. Guillory, a manager in the assessor's office, acknowledges that appraisers have been buried in appeals because of falling real estate values, but he says they work as fast as they can to resolve appeals.

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