In Long Beach's Historic Districts, a Mills Act Contract Can Be Worth More to the Buyer Than the Seller

"The Mills Act program is especially beneficial for recent buyers of historic properties." That line comes from the City of Long Beach's own January 2026 Mills Act workshop presentation. The next slide says something buyers rarely hear: a future buyer "may be willing to pay a little more" for a property that already has a contract in place.

Most buyers first see the words "Mills Act" in a seller's disclosure packet. The city requires a seller to disclose the contract, and it stays with the house after the sale. Buyers tend to file it next to the HOA documents and the termite report, as one more set of rules that comes with an old house. For many buyers, the sale is the point where the contract starts lowering the tax bill.

A sale changes which value wins

A Mills Act property doesn't get one fixed assessment. Every year, the Los Angeles County Assessor compares three values and enrolls whichever is lowest.

The operating expenses in that income formula leave out property taxes and mortgage costs. The city says the income approach "usually determines the assessed value" of a Mills Act property.

Now picture an owner who has held a Craftsman for twenty years. Their Prop 13 base is tied to a purchase price from long ago, and it has grown by no more than 2% a year since. That trended base may already be the lowest of the three numbers, so the income value never wins. The city's program guide says so directly: owners with comparatively low taxes thanks to Prop 13 "will not likely benefit," and owners who bought within the last 10 years are the most likely to.

A sale resets the base to the new purchase price. The trended-base column jumps to today's prices, and the income value becomes much more likely to be the lowest. The city's presentation adds two points for buyers. The new owner takes on the contract's tax treatment as of the lien date, and in the city's words, "the buyer will not receive a supplemental bill." That last point comes from the city's materials. The Assessor's public Mills Act page doesn't address it, so confirm how it applies to a specific property before you count on it.

A seller with an old base may feel little benefit from the contract. A buyer at today's price may feel a lot. That's the case for paying the "little more" the city mentions.

You can't count on getting your own later

This part makes an existing contract scarce. You can't buy a historic home and assume you'll add a contract afterward.

Long Beach caps new contracts by property type, per the city's current program guide:

• Single-family homes: up to 12 per year
• Duplexes and triplexes: up to 3
• Fourplexes and larger, or mixed residential and commercial: up to 4
• Nonresidential: 1
• Exceptional, culturally significant or at-risk properties of any type: 2 more

The city also sets value limits. For the 2026 cycle, a single-family home had to be assessed below $1,718,912 to qualify, and a duplex or triplex below $1,031,477 per unit. After a full-price purchase, a buyer's new assessed value may land above that ceiling. A contract the seller already holds doesn't have that problem, because it transfers with the house.

Several rules narrow the field further:

• The property has to be a designated Long Beach landmark or a contributing structure in a historic district.
• Homes that have already been rehabilitated and need no more work aren't eligible. So a fully restored house without a contract may never qualify for one.
• Properties with open code violations or delinquent taxes are out.
• A condominium needs consent from every owner in the building.

The process also takes time and costs money up front. The 2026 cycle required two Saturday workshops, on January 24 and February 21, and applications were due by 3 p.m. on March 20. The schedule then ran through a Cultural Heritage Commission hearing and a City Council hearing, with applicants notified by October. The 2026 pre-application fee was $1,026.75, and the fee for an awarded contract was $3,468.75. For the 2025 cycle, the city's press release listed a pre-application fee of $545, so that fee nearly doubled in one year.

Recent cycles show how few contracts actually get awarded. In the 2025 cycle, the Cultural Heritage Commission recommended 13 contracts on July 29, 2025, and the City Council approved them on October 21, 2025. One of them, as the Press-Telegram reported, went to the Press-Telegram Model Home at 149 Siena Drive in Naples. For 2026, the City Council's September 22 agenda included contracts for six properties: 347 Gladys Avenue, 417 Roswell Avenue, 729 Daisy Avenue, 1048 Magnolia Avenue, 3738 and 3738½ Lemon Avenue, and 3745 California Avenue. A meeting-agenda summary lists the item as passed. We couldn't check that against the city's own document, because its agenda link was down. The city also expected to send 2026 contracts to the County Recorder by year-end, so approval and recording happen at different times.

Across the whole city, six contracts went to the Council in 2026, and the Council approved 13 in the 2025 cycle.

What the buyer takes on

The contract binds every later owner to the same terms. Five obligations come with the contract.

A rolling 10-year term. The contract renews automatically each year on its anniversary. Before it renews past 10 years, the owner has to submit a new work plan showing continued rehabilitation and preservation.

The work plan. Every contract starts with a detailed 10-year rehabilitation plan. The buyer takes over a schedule the seller agreed to. Any items the seller didn't finish become the buyer's to complete.

Design rules. All work has to meet the Secretary of the Interior's Standards for Rehabilitation and the California Historical Building Code. It also needs a Certificate of Appropriateness from the Planning Bureau, plus any building permits. That affects kitchen remodels, window replacements and additions, which are the projects many buyers have in mind for an older house.

Inspections. The city inspects the interior and exterior before a contract starts and every five years after that, and it can ask owners to report their own progress.

Ways out. An owner can give written notice of nonrenewal at least 90 days before the renewal date. The city's deadline is 60 days. Except in cases of default or special circumstances, the contract can't be ended during the first 10-year term. If the city cancels for breach, the County Auditor collects a fee of 12.5% of the property's current fair market value, as set by the Assessor.

The savings aren't guaranteed either. The Assessor reviews these properties every year, and changes in market rents can move the assessment and the tax bill. The city states there is no guaranteed savings. It also says a Mills Act contract can't by itself trigger a tax increase.

Checking a contract before you write the offer

1. Get the recorded contract. State law, under Government Code §50282, requires the city to record each contract with the County Recorder within 20 days, which makes it public notice. Los Angeles County doesn't put these records online. You request copies online, in person, by fax or by mail. Build that time into your contingency period.
2. Get the current approved work schedule. Ask which items are finished and which are still open, and check the claims against the property.
3. Ask when the next inspection is due. Inspections run on a five-year cycle, so the timing matters if open work remains.
4. Email the city. Long Beach answers program questions at [email protected].
5. Run your numbers both ways. Price the home with and without the Mills Act assessment, since the city and the Assessor both say the savings can change from year to year.

Quick answers

Does Long Beach still pause the program? It did pause in 2020, then reopened applications, as the Long Beach Post reported in late 2022. The 2026 window is closed, and the city's Mills Act page says the next one opens in early January 2027.

Do some applications get priority? Yes. Priority can go to historic structures in particularly poor condition, potential new landmarks outside existing districts, and work plans that use Long Beach labor or materials. In 2025 the city added guidance that recognizes the histories of underrepresented communities, including properties identified in its 2022 Suburbanization and Race Historic Context Statement.

How is the restricted value calculated? State law sets the income and capitalization rules in Revenue and Taxation Code §439.2. The capitalization components differ for owner-occupied single-family homes and for other properties. For your own situation, talk with a tax professional.

If a home you're considering has a Mills Act contract, or you're selling one and want buyers to understand what it's worth, The Rogina Group can help you read the contract, the open work items and the timing as part of your offer or listing plan. Call or text us to schedule a consult before the disclosure packet arrives.

This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.