You can’t get something for nothing.
That’s the lesson of a scheme that at first glance looked like a
good way to preserve a property tax break for the hundreds of
county landowners about to get kicked out of the Williamson
Act.
Gilroy – You can’t get something for nothing.
That’s the lesson of a scheme that at first glance looked like a good way to preserve a property tax break for the hundreds of county landowners about to get kicked out of the Williamson Act.
The idea was to transfer property owners who don’t meet Williamson’s requirements into the state’s open space easement program, where they could enjoy a tax break but not have to farm. That isn’t likely to work because the requirements of an easement that would provide true tax relief are so restrictive that very few of the property owners facing eviction from the Williamson Act either won’t qualify or won’t want to.
Santa Clara County Assessor Larry Stone said Thursday that properties with lenient development easements are typically assessed at or near fair market rate, which will make their taxes much higher than Williamson properties, which are taxed according to their much lower economic value as farmland.
“I think the county is trying to find a way to help folks who have non-performing Williamson Act properties because the county got them into this jam in the first place,” Stone said. “I can respect that objective. It’s possible to make [an open space easement] so restrictive that it would diminish the land value to Williamson Act levels, but I don’t think that’s what the county is trying to do.”
What county officials are trying to do is conform to the law’s standards, as ordered by the state, and avoid fueling what’s already been a three-year firestorm over the county’s failure to properly enforce the state law.
Enacted in 1965, the Williamson Act provides a tax break in exchange for keeping the land in agriculture. About 1,000 of the county’s 3,000 Williamson Act parcels don’t meet the law’s minimum size requirements or have no agriculture. Next year, the county will non-renew those contracts and the owners will see their tax breaks – often thousands of dollars annually – evaporate over the next decade.
“It appears, in the abstract, that there will not be a significant tax advantages for most properties,” Interim Planning and Development Manager Jody Hall Esser said of open space easements. “It will depend, ultimately, on the specifications of parcels, but generically, we don’t see a tax advantage.”
But county planners, and a group of stakeholders representing farmers, Realtors and environmental advocates, do believe they’ve hit on a formula that Hall Esser said adheres to Williamson Act guidelines without being unduly hard on landowners.
“We’ve tried to craft these so they carry out the spirit and intent of the law, but are also mindful of the concerns of our stakeholders,” she said. “What changes there will be, there will be, but we’ve tried pretty hard to address all of the issues.”
County supervisors will have the final say on the guidelines. And after six months of negotiations and contentious public hearings, planners are almost ready to present final Williamson rules for approval. In draft form, the rules set minimum size and income requirements, and call for monitoring to ensure that property owners continue to farm their land. There has been virtually no monitoring in the county for decades.
Some have complained that cattle ranchers will have difficulty meeting the income requirements, but Jenny Derry, executive director of the Santa Clara County Farm Bureau, said Thursday that the rules are necessary to keep the state from revoking the county’s right to issue Williamson contracts.
“We’re riding a very fine line between making it possible for true farmers to continue getting the break, and keeping out the people who shouldn’t be in it. It was very hard to come up with the combination [of income and size],” Derry said. “Monitoring is very important to the future of the Williamson Act if we’re going to ensure that people continue to do agriculture.”
Planners will present the guidelines to the county’s Housing and Land Use Environment & Transportation Committee after two public hearings that are slated for early October. The county will also seek approval from the California Department of Conservation, which has oversight of the law. Prior to the community meetings, which have not been scheduled, every Williamson property owner will receive a copy of the proposed guidelines.
Williamson act: Why it matters
The Williamson Act is a 1965 state law that provides a tax break for farmland and specific types of open space. In 2002, state auditors discovered that Santa Clara County had done a poor job of enforcement.
Of the 3,000 pieces of land covered by Williamson contracts, about 1,000 of them either have no agriculture or don’t meet the law’s minimum acreage requirements. Three years after the audit, officials are poised to evict non-compliant landowners, many of whom save thousands each year in property taxes. The new guidelines, which will be considered later this year by county supervisors, include:
Parcels of fewer than 10 acres of prime (valley floor) farm land, and 40 acres of non-prime (hillside) land, will be evicted in 2006; property owners have 60 days to appeal.
New contracts must meet size requirements. Current Williamson parcels below the size requirements can stay in the act by meeting farm income requirements of $3,500 for prime land and $2,000 for non-prime.
Owners who want to build on their properties must show agricultural use and prove that a new house will not interfere with that use. There are no size limits for new homes.
Increased monitoring. Property owners who don’t document a farm use every year will be subject to eviction.
