The City of Sacramento plans to poll voters for their thoughts on a vacancy tax designed to encourage property owners to sell or improve their empty lots and buildings.
Members of the City Council law and legislation committee requested the poll on Tuesday, telling staff they want to hear public opinion before discussing a potential vacancy tax any further.
City staff shared a timeline for putting a vacancy tax measure on the November 2024 ballot, but it’s unclear whether the committee will move forward with a proposal in the next few months. Council member Lisa Kaplan requested data on how vacancy taxes have worked in other cities and questioned whether Sacramento should wait until 2026 to draft a ballot measure.
“Is this even the right time to move forward in 2024, or do we park it?” Kaplan asked. “Or is it do we pivot and look at the vacant lot, you know, because I want the vacant lot ordinance on the table as well. Are there ways to potentially strengthen that that might actually get at some of the issues we’re talking about?”
There are about 3,670 vacant parcels and 450 vacant buildings in the city, according to a staff report. Prior to Tuesday, the committee last discussed exploring a vacancy tax in March. Since then, Associate Planner Greta Soos said city staff have talked with the City of Oakland, which began implementing a vacancy tax in 2019.
“They do have anecdotes of obviously seeing that property owners are trying to avoid the tax whether that is movement of property, donating it to the city, trying to qualify for an exemption,” Soos said. “So they’re seeing it as a working incentive, but they don’t have data on how that’s impacted development of those vacant properties yet.”
Other cities that have passed a vacancy tax include San Francisco and Berkeley, according to a staff report. Los Angeles, Santa Cruz and Richmond have also considered vacancy property taxes.
The Sacramento committee on Tuesday didn’t tell staff to begin drafting a ballot measure. But the committee asked staff to poll voters on a tax on vacant parcels as well as vacant commercial and mixed-use buildings.
City staff estimated a tax on those issues could generate $19 to $22 million a year. In a ballot measure, the city could specify the funds be spent on affordable housing, help for vacant property owners or other uses.
Council member Katie Valenzuela, who represents a district that includes downtown and Midtown, said she also wanted to look into a tax on vacant housing units, but was outnumbered by the rest of the committee. In addition to Valenzuela and Kaplan, Council members Eric Guerrra and Rick Jennings sit on the committee.
“Vacant properties have a real impact on communities, including mine,” Valenzuela said. “Not just by being a magnet for things we don’t want to see in our community, but also in terms of stopping new development. Both for interim things like safe camping and for longer-term projects like housing and business developments.”
A couple business group representatives opposed or raised concerns over a vacancy tax during the committee meeting. Matt McDonald of the California Apartment Association urged the committee to reject any vacancy tax proposal, given how the city already put a business operations tax increase on the March 2024 ballot.
“Many of the existing blighted businesses and homes aren’t vacant because those owners don’t want the businesses to be successful, they’re vacant because those businesses are struggling to survive for a variety of reasons,” McDonald said. “The message you’re sending to those businesses is, ‘we don’t care why you’re struggling; we want our cut.’”
Committee members said they plan to discuss the possibility of a vacancy tax measure further after they see polling results. If the committee approves a ballot measure proposal, the full City Council would then need to vote on it.
City staff proposed putting the issue before voters in the November 2024 election. It would need a two-thirds vote to pass.
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