In the midst of a historic real estate boom — in which home prices and rents have hit record highs and the supply of housing is falling well short of demand — the Oakland City Council has begun considering a bedeviling factor: the city’s high number of vacant properties. According to a recent analysis of data from the Alameda County Assessor’s Office and the City of Oakland, there are approximately 4,000 vacant parcels in Oakland. These include over 3,200 parcels zoned for residential uses, 434 zoned for industrial uses and 405 zoned for commercial uses.
In a move that could prompt owners of these properties to build on them — and in the process generate revenue for purposes including homeless services — Oakland City Council Member Rebecca Kaplan has proposed imposing a tax on vacant properties. As Kaplan told the East Bay Times, “vacant properties add to the blight to our neighborhoods, attract illegal dumping, and deprive our community of the opportunity to have those vacant properties be used to house people and provide other productive uses.”
Cities such as Washington, D.C., and Seoul, Korea, have used vacant parcel taxes to help move vacant land into active use and to eliminate blight, and others are considering doing the same. Given the need for more of every type of building in Oakland, including but not limited to housing, SPUR supports the concept of this tax — provided it is implemented effectively. By that, we mean it should follow our criteria for good tax policy:
1) The tax raises sufficient revenue.
2) The tax is easy to administer and collect.
3) The tax is easy to understand and comply with.
4) The tax revenue is not volatile.
5) The tax is equitable and fair.
6) The tax sends an appropriate signal to achieve socially desired behavior.
7) The tax policy does not cause economic flight or reduce economic competitiveness.
8) The tax was developed through a broad and effective process.
In the case of the proposed tax, which could appear on the November ballot, we are excited about the idea, but of course the devil is in the details. Creating a clear definition of what constitutes a vacant parcel is of key importance, especially in making the tax easy to enforce and ensuring that it will achieve its desired impact of moving vacant parcels into active use. We want to make sure that the measure is clear, fair and easy to implement — goals that city officials share. We communicated our initial concerns in a recent letter, and we are pleased that the measure’s sponsors are moving it in the right direction.
While a vacant property tax cannot singlehandedly resolve the housing crisis or do away with blight, it is a tool that has benefitted other cities. We look forward seeing it enacted in a way that can provide measurable benefit for Oakland.