Could taxing landlords help fight homelessness?
Voters may be asked to decide if city should tax its biggest landlords in order to fund shelters, services
OAKLAND » As the Bay Area struggles with an alarming homelessness crisis, voters may soon decide whether to force Oakland’s biggest landlords to pay up to help house the city’s most vulnerable residents.
Oakland Councilwoman Rebecca Kaplan wants to impose an extra 1 percent annual tax on rental revenue that exceeds $200,000, and use that money to fund homeless shelters, help homeless residents secure permanent housing and clean up the sprawling encampments that line many of the city’s sidewalks.
It would be the city’s first locally generated, ongoing revenue stream dedicated to homeless services, and Kaplan estimates it could raise about $8 million per year.
“The homelessness has been getting worse, and worse, and worse,” Kaplan said. “The number of people out on the streets in Oakland has risen dramatically in the last few years, and the services to deal with it have not any-
where near kept up.”
The city's finance and management committee was set to vote on the proposed tax Tuesday morning, and a full City Council vote could follow on July 24. If the council approves the tax, it will appear on Oakland's ballot in November.
The city's estimated homeless population jumped from 2,191 in 2015 to 2,761 last year, according to an Everyone Counts survey, and the growing number of residents sleeping in tent cities, cars and RVs has officials scrambling for solutions. The city needs more money to tackle the problem, and collecting it from Oakland's biggest-earning landlords makes sense, Kaplan said. Rising rents are pushing people out of their homes, but at the same time, landlords are raking in cash, she said.
“We're capturing revenue where it is,” Kaplan said, “and we're capturing the revenue that has a relationship to the problem of homelessness.”
The California Apartment Association, which represents landlords, could not make a member immediately available for an interview. A spokeswoman from the East Bay Rental Housing Association, which represents local landlords, did not respond to calls or emails requesting comment.
Kaplan emphasized that the tax would not target Oakland's “mom and pop” landlords — just 5 percent of the city's landlords make more than $200,000 a year. Currently, all landlords in Oakland pay a 1.39 percent business tax on their rental revenue. Kaplan originally proposed taxing the owners of vacant buildings to raise money for homeless services, but she determined it would be easier to tax rental revenue that exceeds $200,000, because the city already has a framework in place for collecting business taxes from landlords.
Based on the city's revenue data from this year, adding the extra 1 percent tax would generate $7.8 million in annual funding for the city's homelessness programs.
That money would go toward homeless shelters, sanitation and clean-up services for those living on the street, counseling and assistance, and rapid rehousing — helping homeless residents pay a deposit on a new apartment, and the first and last month's rent.
The money also could help create new temporary housing. Several churches, such as those affiliated with the Interfaith Coalition of Alameda County, have offered to create communities of RVs or tiny homes on their land. But each project would cost several thousand dollars in insurance and administrative costs — money the city doesn't have.
“Those things would
happen more easily if there were a little city funding,” said Blase Bova, executive director of St. Vincent de
Paul of Alameda County, who also works with the Interfaith Coalition. “Our talks with the city always
kind of dead-end with that. They say, ‘We want to help you do this, but there's no budget for it.'”
The landlord tax has the potential to make a real difference in the city's homeless services, he said. St. Vincent, which receives about three-quarters of its funding from the city, runs a seasonal homeless shelter and offers a year-round food bank, dining room and drop-in center.
The City Council allocated $8.6 million in state grants for homelessness services last month, but Kaplan said a tax-fueled fund would provide a more reliable stream of funding.
“Leaving people living in underpasses is not good for anybody. It's not good for the surrounding community, and it's also not good for the homeless people,” Kaplan said. “And I firmly believe that we can do better as a city.”