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Measure W proposes a tax on vacant properties in Oakland

on November 1, 2018

Oakland’s proposed vacant property tax—Measure W on the November ballot—has pitted real estate haves and have-nots against each other. The measure proposes a flat tax of $6,000 on vacant lots, homes, and commercial properties, or $3,000 per unit for empty condos, townhomes and duplexes. It includes a number of exemptions for low-income residents and nonprofits. Most of the funds raised by the tax would go toward solutions for Oakland’s increasing homelessness epidemic, and a quarter would be earmarked for addressing blight and illegal dumping.

The measure was written by councilmembers Rebecca Kaplan (at large), Dan Kalb (District 1), and Abel Guillén (District 2) as a response to difficulties with finding city dollars to manage homelessness—and to encourage development of more than 5,000 vacant properties across the city. Opponents, including property managers, brokers and developers who have lined up nearly $700,000 to defeat it, say property taxes are already too high and that owners should not be punished for using—or not using—property as they choose.

Under Measure W, a property would be considered vacant if it’s used fewer than 50 days per year. A 2018 report by U.C. Berkeley’s Terner Center for Housing Innovation identified 4,000 privately-owned vacant lots in Oakland, most of which are sized for single family homes or duplexes and are in residential areas. The city estimates another 1,000 vacant homes and other structures are potentially eligible for the tax—and this number is conservative, according to Kaplan.

“Part of what’s so powerful about Measure W,” Kaplan said, is that it would be a demonstration that “we can actually solve multiple problems at once. And we need to.”

Pointing to other cities which recently implemented similar taxes, including Vancouver, Melbourne, and Washington, D.C., Kaplan said she expects that more vacant structures would be identified if the tax measure passes. In Vancouver, she said, officials there learned that 5 percent of the city’s fully-built residences were sitting empty.

Voters in Richmond will decide on a nearly identical measure this November, and San Francisco officials have considered a similar measure for 2019. In each city, these taxes are designed to work on housing issues in two ways. First, they’re meant to disincentivize speculative property investing and encourage development—potentially of housing. And second, should owners choose instead not to develop or use their vacant property, the new tax they’d owe would provide funding for affordable housing and homelessness solutions. If Measure W passes, Oakland officials estimate tax revenue of $6.5 to $10 million in the first year, which would decrease over time as properties came into use. This would be a dedicated source of funding on which the city council would not need to vote every budget cycle.

James Vann, who helped push for the measure as a member of Oakland’s Homeless Advocacy Working Group (HAWG), said that funding is badly needed to manage a growing homelessness crisis. In January 2017, Alameda County’s biannual “point-in-time” homeless count identified 2,761 homeless people in Oakland, a 26 percent increase from the previous survey in 2015. Vann calls this number conservative—his organization estimates the number is closer to 6,000.

“If the city does not create a new source of revenue, they just will be stymied in being able to address the homeless crisis at all, which is just growing astronomically,” Vann said.

The city has struggled since at least 2015 with funding for solutions to homelessness, which city officials including Kaplan say is being driven by economic factors, rather than substance abuse or mental health issues. The city has tried controversial programs like sanctioned volunteer-run camps that have been opened, closed, and moved and city-run camps built using Tuff Sheds as temporary living structures. Oakland’s homelessness epidemic was brought to the global stage when a United Nations special rapporteur visited California cities in January, 2018. Her report, released in September, singled out the lack of access to water, sanitation, and health services she witnessed in some Oakland and San Francisco camps as “cruel and inhumane” and “a violation of multiple human rights.”

But the city has other funding challenges, too, which have made it hard to dedicate funds to managing homelessness. This year the Alameda County Grand Jury, which investigates the conduct of local governments, detailed in their annual report an “$860 million crisis” of unfunded pensions, which it concluded may be “too large to tackle” without a radical change in planning. The city also estimates it has $441 million in deferred maintenance costs to repair 830 miles of streets, according to the city’s Department of Transportation. Oakland voters passed a 2016 bond measure to help pay for those repairs, but state dollars could dry up if California voters repeal the gas tax in November by approving Proposition 6.

With all this in mind, Vann said, “the amount available for community facilities and activities is relatively low.”

Vann, a retired architect who specialized in affordable housing, said the proposal is among the best he’s seen for addressing the related issues of vacancy and housing.

Sara Stephens, a housing and cooperatives attorney at the Sustainable Economies Law Center (SELC) in Oakland, agrees. “No bill is going to be perfect,” she said, “but it’s the best we can do, and the overall positive benefit would outweigh the negatives.”

SELC advocates for policies and programs that support the growth of independent businesses and cooperatives, so Stephens’ interest in Measure W has to do with how encouraging the development of vacant properties could boost the local economy and create spaces for businesses that would otherwise be pushed out or couldn’t afford open in the first place. While a lot of attention is paid to people who are evicted or priced out of their apartments, Stephens said the same is true for small businesses, which lack the protections provided to residential renters. Furthermore, she said owners often sit on vacant commercial properties in the hope of attracting a national chain willing to pay higher rent than a small business could. A $6,000 tax could give those owners incentive to rent sooner, to smaller businesses, for current market rent, Stephens said.

The “Yes on W” camp has been endorsed by Mayor Libby Schaaf; Service Employees International Union (SIEU) 1021 (a labor union including nurses and city workers); Oakland Rising (a grassroots coalition for Oaklanders they say are left out of city politics); and the East Bay Young Democrats. But it hasn’t raised any money.

Support for the measure is being led by grassroots organizations with big networks but small budgets. Kaplan and Vann both noted the value of endorsements, especially by organizations also supporting state Proposition 10, which would expand local government authority to enact residential rent control. But beyond doing some email outreach, Vann said his group simply doesn’t have the funding to advertise: HAWG and organizations like it are mostly made up of people who are or were homeless. “We’re essentially hoping that when people read the ballot measure and the pros and cons that are stated in the ballot publications that they’ll see the benefit of passing it,” he said.

Those who feel targeted by the measure do have money to fight it: they’ve raised $692,000 and counting to oppose Measure W, along with Measure Y (which would expand eviction protections to owner-occupied buildings that are currently exempt from them), and Measure AA (a $198 per parcel tax that would fund early education). The property managers, real estate brokers, realtors and developers behind this opposition have also channeled tens of thousands of dollars to fight Proposition 10 at the state level.

In glossy flyers mailed to Oakland households, the Homeowners for Fair Treatment political action committee called the tax “one of the worst ballot measures ever.”

That PAC is one of two committees opposing the three local measures. Both groups were formed and show substantial local support from members, officers, and board members of the East Bay Rental Housing Association (EBRHA). The association has long fought measures that expand eviction protections and increase property taxes, especially when those taxes fund housing solutions. On Measure KK in 2016 (a bond measure that voters approved to fund infrastructure and affordable housing) and this year’s Measure W, EBHRA leaders have called these taxes a scam to fill city coffers in the guise of managing a well-known housing crisis.

Election commission filings show that both committees—Homeowners for Fair Treatment (which opposes measures W and Y) and Committee for Better Choices (which opposes W, Y, and AA)—were formed by Carlon Tanner, who owns Beacon Properties, a company that manages rental properties in Oakland and Berkeley. Major EBRHA-affiliated donations to the PACs include $40,085 from Morse Management, owned by EBRHA board member Fred Morse; a combined $12,310 by seven other EBRHA officers and board members; and $4,450 from the EBRHA itself.

Tina Bocheff, executive director of EBRHA, said her organization is opposed to Measure W because they want property owners to be able to decide what to do with their homes and lots without penalty. They also believe Oakland residents already pay too much in property taxes. “People shouldn’t be penalized for holding units vacant if they want to have a place available for elderly parents or adult children,” Bocheff said. She said the number of property owners fitting this description is probably not significant, but that it was “absolutely” worth fighting for that right.

She also said that with numerous supplemental taxes on top of a base property tax, Oaklanders already pay a lot. “Oakland residents are tired of being taxed to death,” she said. “This is another money grab to fill coffers and unfunded pensions.”

She said members of her organization see few results from the taxes they already pay. “How many years ago did Schaaf say it’s time to fill potholes?” she asked. “We still have potholes, blight, homeless encampments. What are they doing with all the money that they’re getting from taxpayers? There’s no confidence from residents that the money will be spent on the stated purposes. There’s no oversight, no accountability, no plan, just a lot of talk. We can see that things don’t get done.”

The measure does require that all taxes raised would go into a separate account under oversight by a community committee, and the full text of the measure outlines specific ways in which the money can be spent to combat homelessness, blight and illegal dumping. It also includes ten exemptions for properties where vacancy is considered justified or development overly burdensome, including when owners are low-income, disabled, non-profit organizations, using the property as a yard for an adjacent occupied home, or actively developing the property. It limits administrative costs to 15 percent of the total.

In addition to EBRHA support, nearly $40,000 was donated to the Committee For Better Choices by Russell Flynn, a San Francisco-based owner of more than 3,000 Bay Area rental units. Even more substantial support has come from realtor associations outside Oakland. The National Association of Realtors, based in Chicago, donated $225,500, and a California Association of Realtors PAC, based in Sacramento, donated $197,500. Both donations were to the Homeowners for Fair Treatment.

Many other donors to both PACs are identified in filing documents as realtors, real estate brokers, property managers, developers and owners of businesses serving the real estate industry. Many donors contributed to both committees.

Opposition is not confined to those who would face the new tax. SPUR, a regional urban planning research group formerly known as the San Francisco Bay Area Planning and Urban Research Association, has published a local voter guide that argues Measure W would be difficult to implement and won’t raise enough money to be effective against homelessness.

The organization is known for supporting equitable and environmentally sustainable urban and downtown development, and according to their guide they “support the concept of a vacant parcel tax” and argue “it makes sense for cities to tax the behavior they want to discourage.” However, their guide recommends voting no because SPUR leaders are concerned that the city will struggle to implement the tax, that it will disproportionately affect owners of small properties who lack the resources and knowledge to develop them, and that it will not raise enough money to effectively fight homelessness. SPUR is listed in filing documents as a donor of $257 to the Homeowners for Fair Treatment PAC.

The measure needs a two-thirds majority to pass on November 6.


  1. […] Several city councilmembers, including Rebecca Kaplan (at-large), Abel Guillen (District 2) and Dan Kalb (District 1) recently co-authored Measure W, a November ballot measure that would fund solutions to homelessness, blight and illegal dumping via a tax on vacant parcels. […]

  2. […] Council President Rebecca Kaplan, Dan Kalb (District 1), and Abel Guillén (District 2). The tax, on the ballot as Measure W, passed with 70 percent of the vote last November and was intended to raise revenue for assisting […]

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