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Using Taxes to Fight Urban Blight

In an attempt to fight homelessness and blight, Oakland, California will vote in November to decide whether or not to tax privately-owned vacant properties around the city, after the Oakland City Council voted six to two to place the tax on the ballot. According to Candice Elder, Founder and Director of The East Oakland Collective  nonprofit the rise in homelessness is correlated with the rise in affordability in the city, and turning vacant lots into affordable housing is a possible solution.

“There's a lot of vacant properties that haven’t been used for years,” Elder said in an interview with KQED News. “As a city and as a community, we need to take a look at these vacant public and private lands and see how we can use them.”

The urban blight problem goes beyond Oakland. The National Mortgage Servicing Association (NMSA) had called for an industry-wide discussion on such policies in a white paper.

“Vacant and abandoned properties is a complex and difficult issue that is detrimental to surrounding homeowners and communities,” said Ray Barbone, EVP, BankUnited EVP and Chairman of the NMSA upon the release of the white paper. “The issue is evidenced by recent legislation in Ohio and Maryland. However, the industry remains challenged in protecting those impacted due to inconsistent and disparate definitions and guidelines relative to such properties."

Oakland estimates the new tax will bring in up to $10 million in revenue, which will be put toward homeless services, blight remediation and to stem illegal dumping. The city also states that funds will be put toward affordable housing.

If the tax receives a two-thirds vote, properties in used for less than 50 days can be taxed up to $6,000 a year. Additionally, it would mean vacant property owners would pay the same additional amount, no matter the lot size.

The tax plan does have its detractors. Some welcome the plan but still cite the difficulty of obtaining building permits in Oakland.

“It doesn't make sense to just try to penalize people with taxes for not having something built on their lot when they are making it difficult for everybody to build something,” said Oakland resident Francisco Acosta.

Councilwoman Rebecca Kaplan, who authored the measure, said that she understands the problem these lot owners may face, and her tex measure will financial assistance to these owners.

“We are looking not only to get rid of the trash, the weeds, the types of problems you might see, but also to encourage people to do something that would be of benefit to the community,” said Kaplan.

About Author: Seth Welborn

Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer.
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