Controversial property tax is tabled after public outcry at city council meeting
on October 16, 2019
Oakland City Hall was packed Tuesday night, with nearly every seat filled by a resident who had something to say. As the meeting crept towards the midnight hour, people trickled out and one man left huffing in exasperation.
Most of the people were there to talk about the last agenda item of the evening, the impending Vacant Property Tax Act authored by 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 the homeless, to reduce illegal dumping and to minimize the holding of vacant lots by corporate real estate speculators and developers. When the tax goes into effect, it will tax the owners of vacant parcels up to $6,000 a year, but contains some exemptions for low-income owners, nonprofits and people suffering financial or medical hardships.
When the tax passed, its language allowed the city council to add exemptions, delay the tax, or reduce the tax rate, all of which were the subjects of much of Tuesday night’s debate.
Before the item was taken up in the meeting, staffers from the finance and management committee met with dozens of residents in a hearing room downstairs to talk about who is subject to the tax and who is exempt. A staffer showed a slideshow with frequently asked questions: Are residents exempt if the lot is next to the house they live in, or if they use it as a community garden or for keeping bees? (Yes to both.) The staffer also listed some examples that would fall under “exceptional circumstances,” including property with an extreme slope, in an extreme fire risk area, or a property denied building permits for environmental reasons.
During the city council meeting’s public forum, several residents offered impassioned pleas or angry tirades, saying it was unfairly taxing a small segment of the population an unmanageable sum. Lot owner Raymond Terry called it an “injustice,” saying that there are 244,000 registered Oakland voters and only 4,400 vacant lot owners. He said that the tax will force him to sell his lot. “I ask you to think carefully: Is this really justice for all?” he asked.
“Even though I’m protected [by exemptions], this is a discriminatory tax. You have to stop taxing the hard-working people,” said resident Gail King, a sales executive who owns two separate parcels, adding “I’m very good at fundraising and I would personally raise a million dollars for you, Rebecca Kaplan, to move to Canada.”
James Keith, an Oakland resident of 60 years, said he’d been a city employee for decades. “I’ve seen the good, the bad, the ugly. I think this tax is unfair. It’s unjust,” he said. “I think the city needs money, but why not have a tax spread evenly among taxpayers?” The crowd applauded.
A woman named Dolores Allen told the council that she doesn’t have the $750,000 needed to build a new house on the lot where her house had burned down years ago. She said she’s now homeless and wants to put a garden on her land.
Lot owner Dave Serani said the city council is putting a huge burden on “Mom and Pop,” and if they want people to develop land, they should “give them incentives to build on it.” He said $6,000 is more than his entire tax bill.
Lot owner Danny Aarons urged the council to limit the tax to between $100 and $200, and that a $6,000 tax would cost him more than his property had when he bought it.
Resident and activist Gene Hazzard asked if the city was itself exempt from this tax. (Later the city attorney said, yes, it is.)
After all members of the public had spoken, the council debated how and when the tax would go into effect. Kaplan said that the ballot measure was intentionally written to allow the council to add exceptions or exemptions. Kaplan said it was important to have an effective “pathway for resolving any disputes with property owners” to keep everyone out of court, and that she wanted to add provisions to encourage people to put the land into use.
Councilmember Larry Reid (District 7) spoke against taking votes on the tax. “I didn’t vote to put this on the ballot. I hope we will not move forward,” he said. “We would be doing ourselves an injustice if we vote on this tonight.”
Councilmember Loren Taylor (District 6) agreed. “I think it’s premature to vote on this tonight,” he said, because of the confusion about who is exempt and because he feels there hasn’t been fair notice to give property owners enough time to comply with new regulations. But, he said, “We cannot change the vote, because it’s beyond our authority.”
Taylor also suggested adding an incentive to allow RVs to park on vacant land, which Kaplan said was a great idea. Both agreed it was something that they should consider, and agreed to look into what city codes would need to be changed to allow RVs to park on the vacant parcels.
Councilmember Lynette Gibson McElhaney (District 3) also said she voted no on this before it went to ballot and still sees many problems with it. She said it puts a burden on members of the middle class and disproportionately affects people in the flatlands of District 3.
A motion to table the issue passed unanimously, which means that the council will take the issue up again at a future meeting.
The other main vote of evening was on whether to authorize a development agreement between city officials and the developers of Panoramic Interest at 500 Kirkham in West Oakland. The proposal is to turn the area around the West Oakland BART station into a new neighborhood of residential, retail and industrial spaces. The developers agreed to include 85 very low-income units on-site and make a $7.1 million payment to the Affordable Housing Trust Fund.
In addition to the trust fund, the developer will also pay a $1 million workforce training payment directly to four organizations, including the West Oakland Job Resource Center, the Workforce Collaborative, Civicorps, and the West Oakland Youth Center.
Tessa Nicholas, the executive director at Civicorps, spoke about the organization’s work helping 18- to 26-year-olds get paid job training and learning skills to earn salaries that can sustain a family. Several current Civicorps members also spoke about how the organization has helped them. “This has given me a second opportunity to get a high school diploma and go forward,” said Ena Garcia.
“This work has really changed my life in helping out the community. I pick up illegally dumped tires and recycle them,” said Jesus Fernandez. And Calvin Moons said he had dropped out of high school, but through his work at Civicorps, “I’m walking that stage December 12.”
Many councilmembers and residents applauded this arrangement as a model for developers working closely with city officials and West Oakland residents to determine what people would like to see built in their communities. They especially celebrated the funding of the workface training and local employment efforts, and allowing community members to help decide what type of businesses will go into the development.
The motion passed unanimously to a hearty round of applause and hugs from the crowd.
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Many people hit with this tax are going to choose to not pay and will eventually have their properties foreclosed and sold. People who have held land for a long time, maybe passed down from relative and protected by Prop 13, are going to face the decision of suddenly paying a property tax bill that is 5x, 6x, 7x higher or allowing the delinquency to pile up.
There’s some real potential for many black people to lose their property to whiter developers.