NetGain has continually propagated and strongly believes that all good decision making is based on the quality of information collected. Annexation, like all actions, comes with an availability of information - some good, some bad. Knowing whether an annexation is either a good or a bad thing depends on the gathering of all pertinent information. Key questions to ask concerning annexation are: What is gained? What is lost? What are the risks? What are the costs?

All states have some agency or personnel involved in the recommendation process concerning boundary changes. They review the affect on housing, economics and feasibility. California has the Local Agency Formation Commission (LAFCO), a State mandated local agency within a county. The Local Agency Formation Commission was created by the Legislature in 1963 to discourage urban sprawl and encourage the orderly formation and development of local government agencies. There is a LAFCO in each county in California.

The process for annexation is as follows: (1) A proposal. (2) Public hearings. (3) LAFCO’s recommendation. (4) A majority approval from all the registered voters in the area to be annexed. As an income property owner, you may not be a registered voter in the area. This does not prohibit you from testifying at the public hearings.

With eminent domain having an increasing role in the income property landscape, it is important to note the differences between eminent domain and annexation. Annexation refers to an integrated area. Eminent domain refers to a specific property or parcel of land. Under eminent domain, the voters have no say. The only recourse for an owner of a property taken by eminent domain is through the judicial system.

Under annexation there is plenty of time to do your homework, be involved, and come to a reasonable decision as to your course of action.