Orange County, CA tax assessment for remodel

[roktab]

Anyone have experience with the tax assessment in Orange County CA regrading new construction vs. rehab?

After seeing a recent home built where they left three walls from the original living room standing but then built new walls on a wider footprint surrounding the three original walls, I was curious why it was done. Everything else in the new three story was new construction including all new foundation execpt for the footing under the old walls.

I asked the GC why the old walls were virtually incased in the new 2' thick walls and he said it was to qualify as a remodel and not get taxed as a brand new home.

I called the tax assessors office about this and got a different story. The tax guy didn't sound very familiar with the details but said they judge it on a 70%-30% rule where if more than 70% of a home is changed, it qualifies as a new home and the entire home (including old construction) is reassessed at current construction cost starting at $125 sq.ft. and up depending on the quality of materials used, including things like fancy stoves. Whereas if it's less that 70% new, then only the new additions were taxed.

Based on this it would seem the new three story would have been reassessed as new, but considering all the trouble they went to, I'm guessing it wasn't.

So anyone have any experience in this matter?

[Dick Seibert]

I've had to do that (Bay Area of California) and it's not because of taxes. A new house is years in the permitting process, and has to get approvals from far more agencies than a remodel. Sometimes you can't get near as much lot coverage on a new house as you can on a remodel. Average permit time on a new house is 5 years, a remodel can come in at less than a year; although, I've got a 10 x20 addition on a bedroom which is running to two years now, still fighting the neighborhood groups.

[James Eggert]

Dick
I can't imagine waiting that long for a permit for anything!
Typically, we run into....house on a lot, addition of xx sq. ft. does not infringe into the setbacks, sometimes there may be a view situation which could po the neighbor(but only on the shoreline), permit in 1-4 weeks, 2 is pretty average.

Why do you have these timeframes? It doesn't take a rocket scientist to know that an addition WILL be an accepted variation or a new house WILL be built on a conforming lot? Sure, there are times where extra thought is required to do the work in a relatively normal manner and we deal with wetlands and wetland setbacks, but how do they justify this bs?

What requirements have they created out there in pinky land to account for this? I remember the permit costs we talked about a few months ago, but when do you get any value or return consideration for those fees??

[Bill Robinson]

Even in CA two-to-five years for permits are the extreme.
Developments can take much longer depending on many things including financing and market demand.

A single home can easily take a year if the design is beyond existing parametes.
A remodel can take anywhere from a few weeks to a year.

And then there are the ones Dick sees.

But you all knew that;>}

Bill R

[Chad Fabry]

I built a garage for a friend that lives near me in rural America and the following was the permitting process:

me: I'd like to get a permit to build a garage at 123 anywhere street.

permit guy: how far from the property line is it?

me:uh, it'll be right on the line, but my client's father owns the adjacent lot.

permit guy: have a blue print?

me: it's a 20x40 rectangle, there is no blueprint.

permit guy: I need a drawing (slides napkin and pencil across the table)

me: just the foot print I hope, I can't draw anything but squares and circles.

permit guy: that'll be fine and that's 20 dollars please.

me: thanks

[Dick Seibert]

Let me explain what we go through, what you guys are talking about is what we did 30 years ago (well with Chad 50 years ago). First we take the plans in to the city, they send them out to planning, once we satisfy staff requirements then we go to a Design Review hearing (the architect has to make several changes to satisfy staff, I had one require windows in the garage door when the architect showed none and didn't want any). They post all of the telephone poles and the neighbors can file objections. We then hold meetings with the neighbors (in the 10x20 addition staff required 76 pictures from various streets, some as much as two miles away). After our architect satisfies the neighbors (if he can) then we go in front of the Design Review Commission (I was actually a member of Piedmont's Design Review Commission in the late '70s). At this point there are usually Environmental groups which protest anything and everything. If we lose there we can appeal to the Planning Commission, and if we lose there we can appeal to the City Council. Once we get all of our design approvals then the City sends them out to a plan checking agency. At some point the plans are bounced around through several city agencies, like fire marshal, health, etc.

If we can satisfy the neighborhood that we are not blocking any views, and that the colors and architectural design are all satisfactory to the neighbors, we have to satisfy the environmentalists that we are not killing any endangered species or ruining their habitats. I had a house which was on 11 acres, it took 7 years of fighting and in the end I had to have an arborist tag all of the trees, and I had to post a 7 million dollar bond for 15 years guaranteeing that no trees would die, a price was placed on each of several hundred trees and if any one of those died in the 15 years I would have to pay the price or a claim would be filed with my bonding company. There was also a stream on the property, so Fish and Game had to approve everything, and they have some pretty stiff requirements.

It's almost impossible for a contractor to do this himself, the architect typically does PowerPoint presentations at the various hearings. Don't laugh at all of this, the environmentalists will come to your area sometime soon, seeing what you guys on this forum do is a trip down memory lane for me. All of California isn't this bad, the Bay Area is supposedly the worse, although I read that on the Monterey peninsula a project had to get approvals from 199 different agencies, the most I've had to deal with is about 7 to 10.

There was a recent case where the City approved one color stucco and the owner requested one shade difference, the City wouldn't final the house and it was all over the papers with pictures of the approved color and the owners' alternate, very hard for me to tell the difference.

The environmentalists are very strong and well organized in the Bay Area, they monitor all permit applications and fight most of them. Once I was involved in a fight in Hayward and at the City Council meeting there were TV crews there, I was represented by my attorney and architect. When I got home after midnight my wife said: "I see we are rich", I asked what she meant, and she said: "I saw you on the 11 o'clock news, they were holding a camera on me while we entered City Hall and a reporter said that I was a "rich" Piedmont developer trying to rape Hayward with McMansions.

[Greg Di]

Dick,

It seems to me that the entire CA building department sole purpose in life is to justify their own existence. I used to work for a large tract builder in NJ and we specialized in brown fields conversions. It was routine for those deals to take 2 years in the board phase, but we are talking 700+ townhomes.

I am SO glad I don't live or work in California. You guys have it rough.

[Allan Edwards]

Bill:

I used to have a friend who developed in Orange County and Sand Diego. He told me the same as you are relating. I don’t think it takes 8 years to permit homes in California, but it certainly does take longer than most areas, in some cases up to a year. In Marin County or Carmel or certain environmentally sensitive areas you can find the extreme examples of someone doing something out of the ordinary and it taking several years, and developments probably do take 2-3 years, but for the most case I think its months rather than years. I’m sure there are exceptions.

[Carl Sperry]

Dick,

It seems to me that the entire CA building department sole purpose in life is to justify their own existence. I used to work for a large tract builder in NJ and we specialized in brown fields conversions. It was routine for those deals to take 2 years in the board phase, but we are talking 700+ townhomes.

I am SO glad I don't live or work in California. You guys have it rough.

I could not have said it any better. That's why I left.