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Vacant Property Taxation Put to the Vote

In Oakland, California, the city’s current estimates indicate a tax on privately owned vacant properties could net $10 million annually. If a November 6 ballot measure is passed by voters, the money raised would be used to pay for civic amenities meant to benefit the community-at-large. These amenities include paying for homeless services, reducing blight, curbing legal dumping, and assisting with the construction of more affordable housing.

The measure requires at least two-thirds of Oakland voters to approve. If they do, owners of properties in use fewer than 50 days a year will be taxed at least $6,000 annually. Due to a California law that forbids a parcel tax being tied to market values, vacant property owners would pay the same amount of additional tax regardless of the value or size of their property.

Over 4,000 bare lots would be subject to the tax if the measure is passed, as well as an undetermined number of vacant residential, commercial, and industrial buildings, according to a report by Katano Kasaine, Finance Director for the city of Oakland. Nonprofits and low-income owners would be exempt from the tax, however, as would those who can prove financial hardship.

Those who champion the tax believe it would act as a catalyst for change and help transform these thousands of vacant properties into homes or businesses. Others, however, fear the tax could put a serious squeeze on small landowners, compelling them to sell their property to investors who can afford Oakland’s ever-increasing property values.   

What makes the proposition of particular interest is the possibility that it could catch on across the nation. Just two weeks after Oakland officials voted 6-2 to put the measure on the ballot, the neighboring city of Richmond approved a similar proposal. Proponents reference Vancouver, British Columbia and Washington, D.C. as establishing a precedent for taxing empty homes and blighted properties.

The tax would not go into effect until at least 2020.

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