Berkeley voters will have their say this fall on a proposed $650 million bond measure to raise money for infrastructure projects and affordable housing, as well as a new tax on vacant houses and apartments.
The City Council voted to place the measures on the 2022 ballot during a special meeting Wednesday. Councilmembers declined to do the same with a third potential measure that would have strengthened eviction protections for renters who live in certain duplexes.
The infrastructure and housing proposal would be by far the biggest revenue measure in Berkeley’s history if it’s approved by two-thirds of voters.
Mayor Jesse Arreguín and other officials backing the measure contend that while it asks residents to make a big financial commitment by increasing property taxes by hundreds of dollars per year, it pledges significant improvement to their quality of life in return.
“If we are successful to pass this bond it will have a positive, transformative impact on our city,” Arreguín said Wednesday. “It will be a lot of work, but I think it’s important that we put this vision to the voters of an affordable, safe and resilient Berkeley.”
The median property tax increase over the life of the bond would be $40.91 for every $100,000 of a home’s assessed value.
That works out to $265 per year for a home at Berkeley’s average assessed value of just under $650,000. The cost to specific homeowners will vary significantly, though, because of Proposition 13’s limits on assessed property values and the sky-high cost of housing in Berkeley, where the median home sale price now stands at over $1.6 million, according to Redfin. Someone with a home assessed at that value would be looking at a $654 average increase from the measure.
If it’s approved by two-thirds of voters, the measure would raise $300 million to improve Berkeley’s streets, sidewalks and bike and pedestrian infrastructure, of which $231 million would go toward repairing roads. Public works officials say that would be enough to raise the average rating of streets city-wide to a “good” score on the Pavement Condition Index, an annual report gauging road quality that currently grades Berkeley’s streets as “at-risk.”
Another $200 million from the measure would be devoted to affordable housing. Lisa Warhuus, director of the city’s health, housing and community services department, said that when combined with other funding sources such as the state or federal government, that could be enough to build or acquire as many as 2,000 affordable homes.
Of the remaining $150 million, a third would go toward moving power lines underground along two wildfire evacuation routes, with the rest funding a long list of other infrastructure priorities such as improvements to Berkeley’s waterfront, parks, pools and civic center.
Several speakers during the public comment period of Wednesday’s meeting opposed the revenue measure, arguing property taxes are already too steep and that Berkeley should provide more money for street paving from its existing revenue sources.
Tax would charge thousands for vacant units
The City Council was more closely divided on a measure creating a tax on unoccupied houses and apartments.
Property owners would have to pay $3,000 to $6,000 per year for each single-family home or apartment that sits vacant for at least six months in the first year of the tax, with the penalty doubling in its second year. Owners of apartments with four or fewer units who live on their property, and don’t own any other homes, will be exempt.
The city estimates nearly 700 homes would be subject to the tax in its first year, and that it could raise $3.9 million to $5.9 million per year.
If approved with a majority vote the tax would take effect in 2024, and end in 2035 unless voters extend it.
Proponents argue the measure — which is modeled on similar taxes in Oakland and Vancouver, and another that will go before San Francisco voters this fall — is one step toward unraveling the housing crisis, saying it will discourage speculation and push property owners to add hundreds of units to Berkeley’s housing market.
“Units held off the market cause other units to be more expensive and keep prices artificially high,” said Councilmember Kate Harrison, who proposed the tax. “Supply and demand is always invoked in Berkeley when we’re asked to approve new housing, but hoarding and creating false scarcity is the one law of supply and demand that opponents refuse to acknowledge.”
Kiran Shenoy, government affairs director for the Bridge Association of Realtors, which opposes the vacancy tax, doubted its revenue projections and called the measure “regressive” since it would apply the same penalty regardless of the value of the vacant unit. Other opponents question how effective vacancy taxes are in easing housing costs.
The measure made the ballot by a single council vote, with Arreguín and Harrison joining councilmembers Ben Bartlett, Rigel Robinson and Sophie Hahn in voting to advance it.
Councilmember Susan Wengraf, who said she was concerned having two tax increases on the ballot could weaken support for the infrastructure measure, voted against the vacancy tax. Councilmembers Rashi Kesarwani and Terry Taplin, who said they had not been able to take input on late changes to the measure ahead of Wednesday’s meeting, abstained from the vote; Lori Droste did not attend the meeting.
‘Golden duplex’ rules won’t change
A package of changes to Berkeley’s rent control ordinance and eviction protections failed to reach the ballot, meeting the same fate as a similar proposal from 2020.
The measure from the Rent Stabilization Board would have asked voters to extend eviction protections to renters in hundreds of owner-occupied properties known as “golden duplexes.”
It could have also put certain units in newly constructed buildings under the jurisdiction of the rent board, and eliminated a never-used provision of Berkeley’s rent control ordinance that allows the City Council to repeal those protections.
But the measure faced resistance from duplex owners and tepid support from members of the council. Members ultimately voted to take no action on the measure, effectively killing it for this election cycle.