Berkeley City Council Approves Ballot Measure to Tax Landlords and Create Affordable Housing Fund
By Darwin Bond-Graham
East Bay Express
7 June 2016
Photo courtesy Stephen Barton
Image: Measure U1 campaign co-chairs, CED alumnus Stephen Barton (left) and Tim Frank (right) accept the Best Practices Award from APA Northern Section DirectorSharon Grewall, AICP.
Whose fault is it that housing is so expensive in the Bay Area?
Increased population size in the Bay Area has driven up the price of housing, especially in urban hubs like San Francisco and Oakland with booming economies and scarce land. But a broad-based coalition of Berkeley renters, affordable-housing activists, political leaders and even some landlords have now revived the idea of a land tax in hopes of dedicating the millions it could raise toward affordable housing.
Last June, the Berkeley City Council unanimously voted to place a 1.8 percent gross-receipts tax increase on the November ballot with the aim of raising an extra $5 million a year for affordable housing projects and homeless programs. The tax would also minimize Berkeley’s reliance on fees imposed on new housing developments, and provide a more stable source of affordable housing funds. On November 8, 2016 Berkeley voters approved Measure U1 by a margin of 75% to 25%. This will raise at about $4 million annually for affordable housing and homelessness prevention, rising as rents continue to rise.
The driving force behind the landlord tax is College of Environmental Design alumnus and Berkeley’s former Director of Housing Stephen Barton (PhD City & Regional Planning ’85) who ran the city’s housing department from 1999 to 2007. Barton was recognized this June with a Best Practices Award of Merit from the California Chapter of the American Planning Association (APA), Northern Section for the legislation he helped pass.
"Rents are skyrocketing because more people with more money want to live near growing jobs in the Bay Area," Barton said. "But that value is not created by the landlords. It's created by the Bay Area's diverse and creative culture that has attracted people, and by governments that have created the infrastructure that makes the Bay Area work."
Barton’s tenure in the city’s housing department was during a period in which Berkeley landlords reaped large profits due to the passage of the Costa Hawkins Rental Housing Act, a state law that nullified Berkeley’s strong rent-control law. Before the act, the city’s rent-control system prevented landlords from increasing rents on controlled units more than an annually approved amount; after, it required vacancy decontrol for all rental units, which allowed landlords to increase rents by as much as they wanted when a resident vacated a rent-controlled apartment. According to the Berkeley Rent Board, this allowed landlords to increase rents by an aggregate amount of $100 million annually, which Barton described as a huge income transfer from tenants to landlords. “It’s deeply hurtful to low-income people,” he said.
Barton’s proposal draws from a deep well of political and economic thought, including the ideas of Henry George, the newspaperman and political economist who proposed taxing land-value increases after witnessing the San Francisco real-estate boom of the 1870s. The long-term goal, according to Barton, is to create affordable housing that isn’t vulnerable to political decisions or budget cuts that reduce the numbers of housing units available. "We need to create a significant amount of nonprofit housing because it'll be a long time before market-rate housing filters down and becomes available at rents that are affordable to low-income people," he explained.