Oakland’s vacant lot tax is sowing confusion, property owners say

A lack of affordable housing and the appearance of unused properties and storefronts led Oaklanders last year to overwhelmingly approve Measure W, a special tax of up to $6,000 on vacant lots. But as the city administration continues to iron out details for how it plans to implement the new tax, property owners affected by the special tax said they remain unclear about the exact definition of a vacant lot.

Oakland beatOakland has nearly 112,000 parcels. About 4 percent, or 4,366, are deemed vacant. Two-thirds are vacant land zoned for four units or less, according to city staff. In addition, more than half of the unused parcels belong to property owners who live outside of Oakland.

Measure W, approved by 70 percent of Oakland voters last November, is an annual special tax on vacant properties for 20 years. It intends to raise revenue for homeless services and affordable housing, while also giving property owners a financial incentive for developing properties in Oakland.

Under the implementation ordinance debated last week at the Oakland City Council Finance and Management Committee, a property is deemed vacant if it has been left unused for more than 50 days in a year. The tax rate is $6,000 for residential, non-residential, and undeveloped properties; and $3,000 for condos, duplexes, and town homes.

A large number of property owners last week contend the vacant lot tax will be applied inequitably. The implementation ordinance is also unclear as to what the definitions of what is a vacant lot. “I’m a property owner, maybe with a vacant parcel. It’s hard to tell with the ordinance ” Bob Tuck, an Oakland property owner, told the committee.

Nevertheless, the city has made a significant public outreach effort through a series of public meetings, in addition, to online engagement, the city said, making roughly 1,500 connections with residents.

Some property owners asked for a delay in implementing the ordinance. Doing so, at least past Nov. 11, would preclude the city from adding the new tax receipts for the 2021-22 budget cycle, according to the city.

Postponing implementation of the vacant lot tax is an echo to Oakland’s Measure AA parcel tax controversy earlier this year in which the city decided to hold off assessing the parcel tax while questions over the legitimacy of the measure is determined by the courts. Councilmember Lynette McElahaney, the chair of the Finance and Management Committee, suggested postponement could be a possibility.

However, the Measure W issue will remain in committee for tweaking, at least, through this month, she said, before passing the ordinance to the full city council for consideration in the fall.

Others expressed remorse for the plight of the city’s homeless, but called the tax unfair. Linda Davenport, an owner of two properties in Oakland said, “I find this to be harassment, extortion, a violation of my civil rights, and discrimination.”

Others advocated for carve outs in the ordinance. For example, providing exemptions for vacant properties in the wildfire-prone areas of the Oakland Hills. Councilmember Dan Kalb, a co-author of Measure W, urged city staff to study a possible exemption for areas abutting the city’s rural areas. “That was not the intent of the original law,” he said.

Addressing the large number of property owners describing utter confusion with the proposed ordinance, Kalb lamented, the city is unable to better inform them because the ordinance is not yet set in stone.

Nevertheless, McElhaney, reiterated her past opposition to Measure W, specifically, that it would be costly and sow confusion. In addition, flatlanders and older residents would be compelled to sell properties while more wealthy could absorb the additional tax, said McElhaney, who chair the Finance and Management Committee.

If Measure W is successful in spurring development of vacant properties, it creates a conundrum, McElhaney said. As tax streams from the ordinance dwindle because they have been developed or now contain residents, there will be no revenues to address homelessness, as described in the ballot measure. “We have deceived the public into believing that we would have revenue to address this pressing public issue,” McElhaney said.

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