Berkeley City Council
July 26, 2022

19 Vision 2050 Program Plan
of all levels of ability and accessibility, and use
materials that help filter stormwater and reduce
surface temperatures. At present, the City faces a
backlog of thousands of sidewalk repairs that have
been requested by residents. While Measure T1
has significantly reduced that backlog, the backlog
is about to grow again as City staff complete the
first proactive assessment of the City’s sidewalks to
identify repair locations. This proactive assessment
is being conducted as part of the City’s update to
its Americans with Disabilities (ADA) Transition Plan.

The City addresses sidewalk repairs with short-term
grinding and filling of problem areas and long-term
replacement of damaged sidewalks. Where conflicts
with the urban forest exist, tools like meandering
sidewalks are used to reduce or resolve those
conflicts and make tree removal a last resort.

The expected outcome is for the backlog of
Berkeley’s sidewalk repairs to be completed and to
have adequate resources to address future
repair needs.

Asset Category 3 – Bicycle and
Pedestrian Plans
Eighty percent of the collisions that result in deaths
or severe injuries on our streets involve someone
riding a bike or walking. Making our streets safer
means prioritizing bicycle and pedestrian safety.

This is especially important to help more residents
and workers choose these fossil fuel-free active
transportation modes, and is why Berkeley’s vision
for the future of its transportation network is to be
multi-modal, fossil-fuel free, and equitably accessed.

The City has adopted the 2017 Bicycle Plan and the
2020 Pedestrian Plan, and has identified projects
to help to bring the City closer to these safe and
accessible multi-modal goals.

The City is transforming the City’s bicycle network
into a low-stress experience with a goal of reducing
motor vehicle conflicts and connecting cyclists with
the most utilized portions of the City. At the end
of the program, over 50 miles of city streets will
comprise bikeways, with 15.8 miles of these streets
being full bicycle boulevards that criss-cross the City.

Walking is also a core mode of transportation in
Berkeley. Improving walkability makes Berkeley
safer, more inclusive, and more connected.

As the most accessible and affordable form
of transportation, walking lies at the core of
an equitable mobility network and a healthy
community. In addition to enhancing Berkeley’s
quality of life, improving walking will help the City
to achieve its Vision Zero Policy goal of zero traffic
deaths and severe injuries.

The Berkeley Pedestrian Plan includes an
infrastructure inventory and an assessment of
pedestrian dema
nd and safety. The plan identifies ten
priority street segments requiring projects to improve
pedestrian safety and walkability. Projects provide
improved street design, upgraded pedestrian crossings,
installed speed management and traffic calming, and
improved sidewalk maintenance and accessibility.

The expected outcome is for Berkeley’s Bicycle and
Pedestrian plans to be fully implemented.

20 July 2022
Outcome 2 – Protect the Environment
Infrastructure is Resilient, Protects the Environment, and is Adapted to Climate Change Impacts
Global warming is a significant threat to
communities globally and to the City of Berkeley.

Berkeley’s 2009 Climate Action Plan, 2016 Resilience
Strategy, and 2019 Local Hazard Mitigation Plan
establish city-wide actions to reduce greenhouse
gas emissions and adapt to climate change impacts.

The message is clear that the City’s infrastructure
must be resilient to prepare the City for these risks.

Key goals of the City’s climate action plans are to
use energy more efficiently, transition to renewable
energy as a power source for both buildings and
transportation, improve access to sustainable
transportation modes, recycle our waste, and build
local food systems. The asset categories to achieve
this outcome are described below.

Asset Category 1 - Stormwater and
Watershed Management
The 2012 Watershed Management Plan (WMP)
identified projects to improve storm drains,
restore creeks, attenuate peak flows and to reduce
pollutants entering San Francisco Bay. That project
modelled the Potter and Codornices watersheds.

The City is in the process of updating the WMP .

The updated plan will consider flooding and
drought caused by extreme storm events, sea
level, and groundwater rise, implementation of the
Green Infrastructure Plan, and modelling of all the
watersheds. Infrastructure improvements will include
storm drains, flow attenuation basins, permeable
surfaces, bio-swales, and improvements at
Aquatic Park.

The expected outcome is to have a stormwater
system that addresses future climate impacts,
reduces impervious surfaces, minimizes flooding,
meets the City’s stormwater discharge permit into
San Francisco Bay, prevents pollution from reaching
the San Francisco Bay, and revitalizes the
urban watershed.

Asset Category 2 - Sewers
The City’s wastewater collection system includes
approximately 254 miles of City-owned sanitary
Asset Category 4 - Traffic Controls,
Streetlights, and Parking
In support of creating safe, accessible, and easy to
use streets, the City of Berkeley is planning upgrades
to existing traffic signals, including detection at 67
locations, ADA accessibility, pedestrian push buttons
at 103 locations, and battery back-ups at 124
locations. Public Works maintains 8,011 streetlights
and is planning replacements and upgrades of
2,100 parking meters and 240 pay stations.

The expected outcome is for these traffic controls,
streetlights, and parking needs to be addressed.

21 Vision 2050 Program Plan
sewers, 7,200 manholes and other sewer structures,
seven pump stations, and approximately 31,600
service laterals. The City is responsible for
maintenance and repair of the lower portion of
the service laterals (located within the public right-
of-way) from the property line cleanout to the
connection to the City’s sewer main. Wastewater
generated in the City’s collection system is conveyed
to the East Bay Municipal Utility District (EBMUD)
wastewater interceptor system and is treated at
EBMUD’s Main Wastewater Treatment Plant.

During the 1980s, EBMUD and the seven Satellite
agencies conducted studies to address the problem
of overflows and bypasses of untreated wastewater
that occurred during large wet weather events
due to excessive infiltration and inflow (I/I) into the collection systems. These studies resulted in a long-
term program of construction of collection system
relief sewers and sewer rehabilitation. The City has
rehabilitated or replaced over 200 miles of its gravity sewers and associated lower laterals over the past
30 years. Since 2006, the City has also implemented
a private sewer lateral (PSL) certification program
requiring the inspection and/or repair or
replacement of private (upper) sewer laterals at the
time of property transfer or major building remodel.

The seven Satellites and EBMUD are in a Consent
Decree with the U.S EPA, the State Water Resources
Control Board, and the Regional Water Quality
Control Board, which establishes requirements for
achieving the elimination of untreated wastewater
overflows and bypasses over the next 20 to 25 years.

The expected outcome is to comply with the City’s
requirements in the Consent Decree and seal the
sewer system from storm water intrusion, thereby
reducing the risk of untreated sewage reaching the
Bay during wet weather. This will become even more
important as storms intensify due to the
climate crisis.

Asset Category 3 - Undergrounding
Overhead Utility Wires
The City of Berkeley’s stated goal, as outlined in
the General Plan, Disaster Preparedness and Safety
Element, is to ensure the City’s disaster related
efforts are directed toward preparation, mitigation,
response and recovery from disaster shocks. The
Berkeley Local Hazard Mitigation Plan states that our
two greatest disaster challenges are a Hayward Fault
rupture and Wildland Urban Interface (WUI) fire.

The climate crisis will result in periods of drought
followed by very wet winters, producing heavy
vegetation, dry summers, and hot easterly winds
in the late summer. These conditions are known to
create significant fires such as the 1991 Oakland
Hills Tunnel Fire and fires in many parts of California in the past five years.

Methods to reduce the threat of overhead
wires creating WUI fires include aggressive
vegetation management and other fire hardening
techniques. Overhead power lines, more so than
undergrounded wires, can exacerbate unsafe
conditions either by contributing to the disaster itself or hampering public safety efforts and evacuations.

Earthquakes and landslides can knock over utility
poles creating a special hazard. In an earthquake,

22 July 2022
poles have a tendency to sway in opposite directions
causing wires to snap and throw sparks. Some of
California’s biggest fires have started because of live wires in contact with combustible fuel.

The Public Works Commission led a three-phase
study to underground overhead utility wires in
Berkeley. The Phase 3 report recommended
undergrounding along evacuation routes to support
public safety through ingress of first responders
and egress of community members in the event of a
major disaster.

The expected outcome is to implement the Phase 3
study recommendations to underground overhead
utility wires along Berkeley’s evacuation routes and
to support neighborhoods in fire zones that choose
to underground.

Asset Category 4 – Electrification
of Buildings Neighborhoods
and Transportation
A major goal of Vision 2050 is to decrease the City’s
overall climate impact. This effort requires both the
reduction of City-wide energy use and transition
away from fossil fuels to renewable energy. The
Existing Buildings Electrification Strategy in 2021
transitions existing buildings in Berkeley from natural gas appliances to all-electric alternatives in a way
that benefits all residents, especially members of
historically marginalized communities. As identified
in the City’s Resilience Strategy and Climate Action
Plan, Berkeley seeks an energy system that, by 2045,
is carbon neutral and delivers carbon-free electricity
across a highly distributed system. Multifaceted
changes to existing infrastructure and its uses are
required to achieve carbon neutrality. Improvements
to the existing energy grid may include, among
other items:
› Increasing electricity distribution capacity to
accommodate neighborhood electrification and
mobility charging, in coordination with streets
and other infrastructure improvements
› Improving or expanding access to transformers,
vaults, and switchgears
› Seeking opportunities to decommission
gas pipes in areas where buildings or
neighborhoods are transitioning to all-electric
› Supporting solar energy and storage for critical
facilities that prioritizes renewable backup
power over diesel generators, including mobile
batteries and electric vehicle-to-
building connections
› Increasing electric vehicle infrastructure
for municipal fleet and distributed mobility
charging for residents
The expected outcome is to achieve the City’s goal
of becoming a fossil fuel-free city as soon
as possible.

Asset Category 5 – Urban Forest
The City’s municipal forest includes approximately
42,000 street, park, and median trees. These are
often referred to as “city trees” or “public trees.”

CLIMATE EQUITY FUND

PILOT PROGRAMS
In 2021, the Berkeley City Council allocated
$600,000 for Climate Equity Fund Pilot
Programs that provide decarbonization
and resilience programs for low income
community members to retrofit homes,
increase access to electric bikes or other
forms of electric micro mobility, and gain
access to resilience measures and other
electrification measures.

23 Vision 2050 Program Plan
They are maintained by the Parks, Recreation, and
Waterfront’s Urban Forestry Unit, which performs
pruning, removing, and planting trees. These trees
are hard at work. They remove pollutants and carbon
dioxide from the air, help cool the City during the
summer, absorb stormwater during storms, and help
the City stay green and support a high quality of life.

However, there are approximately 10,000 vacant tree
locations and many of these locations are in areas
with higher proportions of low-income residents
of color. The expected outcome is to increase our
City’s tree canopy by planting thousands more trees
for the purpose of enhancing our urban forest,
sequestering carbon, addressing equity, mitigating
urban heat island impacts, and improving quality
of life.

Asset Category 6 - Specific Resilience
Infrastructure Assets
While limiting City-wide climate impact is necessary,
the effects of global warming are already testing
traditional infrastructure and will continue to push
our resources to their limits. Worsening drought
conditions, increased risk of extreme weather
events such as flooding and sea level rise create
major challenges for our water supplies, watershed
management, and resilience of our underground
infrastructure systems. These events also have
implications on the safety, health, and well-being
of the community. The City has identified several
new technologies and infrastructure to build while
working towards climate adaptation and resilience.

Some of the new infrastructure and adaptation
strategies include:
› Develop rainwater catchments, expanding
the use of gray water and expanding the
distribution and use of EDMUD recycled water
(purple pipe) for landscaping irrigation.
› Use natural green infrastructure solutions
including infiltration basins, wetlands,
bioswales, permeable paving, etc. to mitigate
flooding from the combined effects of
groundwater, sea level rise, and extreme
rain events.
› Increase the urban forestry canopy and use cool
paving technologies to protect against
extreme heat.
› Upgrade Community Resilience Centers
and Resilience Hubs to ensure respite and
evacuation capacity.
› Identify and manage urban – wildland forest
canopy to mitigate wildfire risks.
› Install technologies such as air filtration to
mitigate wildfire smoke impacts.
› Use “cool” paving and reduce dark asphalt
street surfaces to combat urban heat
island effects.
› Improve seismic safety systems in City facilities
to reduce impacts from future earthquakes.

24 July 2022
Outcome 3 – Promote Quality of Life
Open Space, Parks, and Recreation Improve Our Quality of Life A key outcome of the Vision 2050 initiative is to
improve our overall quality of life through the
promotion of open spaces, parks, and recreational
opportunities. The asset categories to achieve this
outcome are described below.

Asset Category 1 - Parks
The City has 52 parks that contain 15 athletic fields,
49 sports courts (basketball and tennis), and 63 play
areas. Many parks need significant improvements
to pathways, lighting, irrigation systems, play
structures, and athletic fields. The expected outcome
is to implement these improvements.

Asset Category 2 – Pools
The City has two swimming pools, one by King
Middle School and the other at West Campus. The
pools require improvements to the locker rooms and
office areas, and improvements to piping, decking,
tiling, and roofs. While the King pool has a 30-year
lease, the West Campus site has a five-year lease
with the possibility that a new pool will be built at
San Pablo Park that serves south and west
Berkeley residents.

Asset Category 3 – Park Buildings
and Restrooms
The City has four community centers, 2 clubhouses,
29 restrooms, and outbuildings. Many of the
required improvements have been made with
funding from Measure T1. Future improvements
include seismic/deferred maintenance at some
park buildings, renovation of existing restrooms,
and construction of new restrooms. The
expected outcome is to implement the required
improvements, including electrification, elimination
of natural gas connections, and the addition of solar
and battery storage, where feasible.

Asset Category 4 – Camps
The City of Berkeley’s non-resident camps include
Cazadero Camp located off the Russian River, Echo
Lake Camp located just above South Lake Tahoe,
and Berkeley Tuolumne Camp located just east of
Yosemite Park. These camps include hundreds of
facilities, amphitheaters, bridges, pathways, water
systems, and swimming pools.

There are two significant camp projects in progress.

The rebuilding of Berkeley Tuolumne Camp is
nearly completed and is scheduled to reopen in the
summer of 2022. At Cazadero Camp, the Jensen
Dorm, which was destroyed by a landslide in 2016,
has been reconstructed. These projects are primarily
funded by insurance.

The expected outcome is to complete the
construction at the camps and to have them back
in operation.

Asset Category 5 – Waterfront
The Waterfront is the largest public marina in the
Bay Area located on 125 acres of land and 50
acres of water, and includes approximately 1,040
berths, public access docks, pilings, channels,
streets, pathways, parking lots, buildings, restrooms,
buildings, and small boat launch ramps.

25 Vision 2050 Program Plan
Outcome 4 – Have Safe Public Facilities
Public Facilities are Safe, Resilient, and Provide Community Placemaking The City is responsible for maintenance of 95
facilities, not including Library facilities and facilities leased to other entities. These facilities include 39
facilities in the Parks, Recreation, and Waterfront
inventory and 56 facilities in the Public Works
inventory. These facilities house City staff and are
places where residents receive public services.

These facilities need to be safe, healthy, and resilient, and provide community placemaking, where the
connection between people and these places is
strengthened. The asset categories to achieve this
outcome are described below.

Asset Category 1 – Public Buildings
In 2013, staff retained a consultant to perform
assessments and provide updated condition reports
and cost estimates for the City’s facility inventory.

The recommended improvements are extensive.

All projects included in these assessments are
considered either major maintenance or capital
projects. Despite support from a variety of City
funds, the cost for routine maintenance, major
maintenance, and capital improvements far exceeds
currently existing sources of funds.

The expected outcome is that condition
assessments of the City’s public buildings will be
conducted regularly, and necessary improvements
identified and completed. These improvements
include electrification, elimination of natural gas
There are many funding needs at the Waterfront,
where many of the facilities have reached the
end of their useful life and are starting to fail.

As documented in multiple reports, there is a
diminishing ability to pay for the pressing capital
needs in the Waterfront. The Marina Fund is the
City’s mechanism for managing all Waterfront
revenues and expenditures. Revenues steeply
declined in the last two years as a result of safety
and security concerns and failing infrastructure.

The combination of falling revenue and increasing
expenditure needs have strained the relatively small
Marina Fund to a breaking point.

The City has begun a long-term planning effort
– the Berkeley Marina Area Specific Plan (Figure
9)– to establish the community’s vision for the
Waterfront and to plan for making the Marina
Fund viable and stable. There is still a need to
address urgent infrastructure repairs to finger
docks, pilings, electrical systems, and restrooms.

If these investments are not made, facilities and
infrastructure will either require more costly
emergency funding or be closed as in the case of
the Berkeley Pier.

The expected outcome is to make the urgent repairs,
complete the Berkeley Marina Area Specific Plans,
and to return the Marina Fund to solvency.
› Ensure Structural Integrity
› Develop for Recreational Use
Figure 9: Marina Community Vision

26 July 2022
connections, and addition of solar and battery
storage, where feasible.

Asset Category 2 – Civic Center
The Civic Center comprises portions of the area
surrounding Martin Luther King Jr. Civic Center Park
including the Maudelle Shirek Building “Old City
Hall” (1909) and the Veterans Memorial Building
(1928). Presently, the historic buildings have
decades of accumulated deferred maintenance
and are seismically unsound. As part of the city’s
Measure T1 program, the Veterans Memorial
Building and Old City Hall were slated for structural
analysis and visioning of possible conceptual design
alternatives, in concert with Civic Center Park. A
consultant was retained to conduct a community
outreach strategy, perform an assessment of the
existing infrastructures, identify programs and
functions for the two buildings, develop concepts
for improvements for the Park. The consultant
completed this work and presented a suite of
financing and revenue generation strategies for the
facility. City Council approved the following vision:

The expected outcome is to design and construct
a Civic Center consistent with this vision and to
provide placemaking.

Asset Category 3 – Transfer Station and
Recycling Center
The city’s current solid waste transfer station was
opened in 1983. In the late 1980s, Berkeley’s
recycling operations relocated to the site to be
operated by the Community Conservation Center.

In the 1990s, the residential recyclable collection
operator, the Ecology Center, was allocated an area
at the site for its operations yard and office building.

These facilities are not integrated and operations are
not coordinated in a way that provides customers
ease of use, access, or efficient drop-off of materials.

These facilities do not meet current seismic
requirements, have not been upgraded or improved
since constructed, exceed their serviceable life, and
cannot help meet the city’s Zero Waste Goal.

The city retained a consultant to conduct a feasibility study to build a new solid waste transfer and
recycling facility. Through active collaboration and
community participation between November 2018
to May 2019, the city has developed a consensus
around two conceptual facility designs.

The expected outcome is that the CEQA analysis
and design of the approved project will be
completed and a replacement facility constructed
that helps the city achieve its Zero Waste goal.

CIVIC CENTER VISION
The Civic Center will be the heart of Berkeley’s
community. Civic Center will be the prime
space for civic life, culture, and the arts. It will
reflect the city’s diverse identities, celebrating
its history, and contributing to shaping its
future. A place of shared resources and a
platform for free expression accessible to all,
Civic Center aims to manifest the city’s values,
advance social justice, and demonstrate the
power of true public space.

Award Winning Remodel of
the Mental Health Building

27 Vision 2050 Program Plan

3.2 Work Prioritization and Phasing
The Vision 2050 program is planned to be
implemented over 30 years in approximately three,
10-year phases. Due to the work’s complexity and
volume, an understandable prioritization process
is needed to sequence the work. The Program Plan
uses a scoring system based on these components
and weighting:
› Envision criteria, 60% weighting
› Community input criteria, 40% weighting
The Vision 2050 report recommended the use of
multi-criteria decision-making and suggested using
the Envision criteria as prioritization tool. Envision
is a program that is organized by the Institute for
Sustainable Infrastructure and provides an objective
framework of criteria designed to help identify
ways in which sustainable approaches can be used
to plan, design, construct, and operate individual
infrastructure projects.

The Envision framework includes 64 sustainability
and resilience indicators organized around five
categories: quality of life, leadership, resource
allocation, natural world, and climate and resilience.

Envision is now widely applied to civil infrastructure
projects akin to LEED certification. This criteria is
given a weighting of 60%.

The other criteria comprises community input
from the surveys, online feedback and community
meetings. What the community wants for Berkeley
is important and this criteria is given a weighting of
40%. The resulting criteria and score sheet is shown
on Table 2.

Envision Criteria (Weight 60%)
Community Input Criteria (Weight 40%)
TABLE 2:

PRIORITIZATION SCORE CARD

28 July 2022
Each asset category was rated using the score sheet,
and initial scoring was completed by managers
in the Public Works and Parks, Recreation and
Waterfront departments. A summary of the scoring
results is shown on Table 3. This rating is intended as a general guideline for resource allocation. It does
not dictate when the works gets done as there may
be other project requirements.

For planning purposes, the work can be placed
in three priority groups as shown in Table 3. This
can serve as a start for the planning of a 30-year
program. More details of the 3-phase program will
be developed by the program team, should voters
approve new funding for the program. Ultimately,
the City Council will select the projects to fund and
their timing.

The Program Plan’s goal is to ensure all of these
asset categories become Priority 1 well before
2050. Asset categories in Priorities 1 and 2 are most
aligned to resilience and sustainability measures in
the criteria and are closest to being able to move
into construction. Many of the asset categories
in Priorities 2 and 3 require more public process,
planning, and/or engineering, some of which may
be supported by a revenue measure or measures.

Some of these asset categories, such as sewer, have
sufficient, dedicated funding sources that make
them unnecessary to prioritize for new
revenue funding.

When sufficient funding mechanisms and the project
team are in place, the work of selecting projects will
begin. The process will be carried out separately for
each 10-year program phase. The project selection
process is shown on Figure 10. This process is
being used successfully on the second phase of the
Measure T1 program. Projects that are identified as
high priority for implementation within each 10-year
phase will move forward to final acceptance after
staff analysis, community and Commission input, and
City Council review and approval. The prioritization
of the projects will use the scorecard shown on Table
2, or as updated at the time.

TABLE 3

SUMMARY OF PRIORITY SCORING
Priority Asset Category by Score
1 Streets
Bicycle and Pedestrian
Plan projects
Sidewalks
2 Undergrounding
Stormwater
Parks
Trees
Waterfront
3 Traffic Controls, Streetlights,
and Parking
Transit projects
Civic center
City buildings
Transfer station
Sewer

29 Vision 2050 Program Plan
Figure 10: Project Approval Process

30 July 2022
04 THE PLAN’S FUNDING,

RESULTS, AND TAX IMPACT
This section describes a high-level funding approach to achieving resilient and sustainable infrastructure by 2050, the various sources of funds available for this work, results that could be delivered, and a review of the tax impacts on residents for implementing a Vision 2050 program. 30 July 2022

31 Vision 2050 Program Plan

4.1 Funding Sources
Achieving a resilient and sustainable infrastructure
by 2050 will require new revenue from a variety of
sources, including new voter-approved measures.

Adjustment to user fees and rates that are dedicated
to certain services will be another important source
of infrastructure funding. For example, Berkeley’s
sewer system is operated and maintained through
user fees charged to customers. Through financial
analysis, staff have determined that the $194
million needed in the city’s sewer systems can be
addressed in the next decade or so with cost-of-
living adjustments to existing rates. Other services
have dedicated funding sources (or rates), but
that funding falls short. This is true of the city’s
stormwater fee and a special parcel tax for parks
and trees. Other sources of funds include grants
(federal, state, and other), developer fees, city funds (including the General Fund), and property owner
fees, e.g., 50/50 sidewalk repairs.

Figure 11 shows the anticipated funding sources
that will be available to complete each of the four
Program outcomes and deliver sustainable and
resilient infrastructure by 2050. This is a high-level
projection with many assumptions yet to be proven,
but is offered to show a funding path to the Vision
2050 destination and its dependence on a variety of
revenue sources.

Figure 11: Vision 2050 Funding Sources

32 July 2022

4.2 Funding Alternatives
For the November 2022 ballot, two types of
infrastructure revenue measures are being
considered: a General Obligation Bond (or
Infrastructure Bond) and Parcel Tax.

General Obligation Bonds (GO Bonds) are paid
by an ad valorem property tax based on taxable
property assessed value and can only be used
to fund capital improvements (no maintenance,
operations or services). GO Bonds are considered
the most secure type of municipal debt and carry
the lowest interest rates given the taxing power
for repayment of the debt service. GO Bonds can
also be structured to match the life expectancy of
the infrastructure improvements and be issued in
independent series as required based on project
costs and timing. This phasing can allow for a better
alignment of infrastructure utilization and repayment
of the debt. Also, bond measures are generally
considered progressive forms of taxation since they
are based on the assessed value of properties.

The city has historically managed its GO Bond
program for each authorization (Measures G, S, I,
FF, M, T1 and O) through the issuance of individual
bond series calculated to meet the capital funding
requirements of the projects. Bonds were issued
in amounts that minimized the impact on the tax
rate required to make debt service payments. Since
1992, the city has maintained annual tax rates below
original projections represented to voters for each
of the GO Bond authorizations.

A Parcel Tax is a property tax that generates
annual special revenues for capital, operations,
maintenance and services. State law provides for
a number of different tax formulas for levies to all
properties (residential and commercial) including
per parcel, building square footage or land use.

A parcel tax cannot be based on property value.

A parcel tax based on building square feet is
generally considered a progressive form of taxation
since larger properties pay more than smaller
properties, exemptions for seniors and low-income
property owners are allowed.

Given the scale of the infrastructure need, the
Program Plan assumes two 2022 Revenue Measures.

First, a parcel tax of $0.30 per building square foot
for 14 years, raising approximately $25 million
annually, that is dedicated to streets, sidewalks, and
traffic safety as described under Outcome Number

1. Second, an infrastructure bond of $300 million
with $150 million to address affordable housing for
low-income persons and the unhoused and $150
million to improve resilience to climate change,
wildfire prevention and protection, and to improve
other select public infrastructure, as described in
Outcome Numbers 2, 3, and 4.

These measures fund the community’s top priorities
voiced in the public outreach: affordable housing,
street repair, and resilience to climate change.

Multiple measures provide more flexible sources
of funding that could address maintenance needs
in addition to capital improvements. Street repair,
sidewalk repair, and traffic safety are also top needs
identified by online survey respondents, and is
supported by the city’s prioritization using the
Vision 2050/Envision scorecard. These measures
would significantly reduce the city’s risk related to
infrastructure unfunded liabilities, and improve the
City’s streets for all users.

33 Vision 2050 Program Plan
TABLE 4

FUNDING MECHANISMS
Type GO Bond Parcel Tax
TAX BASIS Assessed Value (AV) Building square footage
USE OF FUNDS Capital only Capital + Maintenance
TAX PROGRESSIVITY Progressive Progressive
EXEMPTIONS None Low income/senior
PROS Relative tax burden decreases as
total AV increases
Fixed payments with cost of living
adjustments, funds capital and
maintenance
CONS
Cannot pay for maintenance
or operations
Does not adjust for future costs
Increases tax burden if building
square footage increases
Why is affordable housing included in these possible revenue measures? The Vision 2050 Framework focused on infrastructure, not affordable housing. However, on April 27, 2021, City Council approved exploring revenue measures that addressed both infrastructure and affordable housing, given both were top priorities for residents. Housing and infrastructure are connected. Ensuring affordable housing in a city such as Berkeley reduces greenhouse gas emissions because it affords lower and middle-income residents an opportunity to live closer to where they work, which means less emissions getting to work. At the same time, ensuring affordable housing is an important tool for ensuring a diverse and equitable city, which is an important priority of our community and City Council.

34 July 2022
Per Section 4.1, these results assume:
› The City continues its track record of
successfully leveraging state, federal, and
regional grants.
› City Council allocates a total of $15 million
to annual paving from non-revenue measure
sources in order to ensure proper ongoing
maintenance of the City’s streets, as
accomplished for FY 2024.
› Parcel tax revenue of $25M annually is
distributed roughly two-thirds to paving
condition and one-third to traffic safety
and sidewalks.
› GO bond revenue is distributed roughly 60%
to climate change, resiliency, and wildfire
protection projects; and 40% to public realm
and other infrastructure projects.

These investments would:
› Improve streets to good paving condition and
repave 97% of street mileage across the City.
› Implement 100% of adopted traffic safety plans
(bike/ped) and achieve Berkeley’s vision of a
low-stress bike network
› Begin to underground the City’s evacuation
routes to enable emergency responders’
ingress and evacuating residents’ egress in the
event of a wildfire, earthquake, or other disaster
› Complete selected sea level rise projects at
the Waterfront
› Replace and improve Aquatic Park, storm drain,
and green infrastructure citywide to prevent
pollution from reaching the Bay and improve
the City’s resiliency from climate-infused storms
› Assist in advancing the city’s park and public
realm projects, e.g., Waterfront, Civic
Center Renovation, and San Pablo Park pool
Results

35 Vision 2050 Program Plan
Property tax rates for Berkeley property owners are
comparable to neighboring cities. After accounting
for ad valorem taxes, city voter-approved taxes and
assessments, school district taxes, and other fixed
charges, FY 2021 tax rates in Berkeley (1.58%) were
on par with Oakland (1.54%) and lower than in
Albany (1.89%).

The city’s prior bond issuances include Measure
FF (neighborhood libraries), Measures G, S, and I
(public safety, main library/seismic retrofit, animal
shelter), Measure O (affordable housing), Measure
M (streets and watershed), and Measure T1
(infrastructure and public facilities). Debt service
from prior bond measures constitutes only 3.2% of
the average property owner’s tax bill.

The city has a current debt service of $52.90 per
$100,000, which is low compared to nearby cities
and their school districts, as shown in the table
below. Even after implementation of a $300M GO
bond, the city’s debt service will continue to be
lower than nearby cities and school districts.

The city has historically maintained low GO Bond
tax rates as shown in Figure 12. This represents
the previously approved bond measures including
the remaining bonds for Measures T1 and O to be
issued over the next four years.

If voters approved a $300 million GO bond, the
average tax required for the new bond authorization
will be $27 per $100,000 of assessed value.

Assuming the existing GO bond authorization
capacity are issued as scheduled, the cumulative
debt service on all GO Bonds will increase through
2036, and then begin to decrease as prior bonds are
paid off.

4.3 Review of Tax Implications
TABLE 5

EXISTING DEBT SERVICE

AND TAX IMPACT
2021/22 Tax Rates Total GO Bond
Tax Burden
Per $100,000 $52.90
Average Tax
(based on assessed
property value of
$647,972)
$342.78
TABLE 6

DEBT SERVICE COMPARISON
City or District
Debt Service per
$100,000 of
Assessed Value
City of Oakland $201.10
Albany School District $195.00
Berkeley School District $145.10
City of Albany $130.30
Oakland School District $120.20
City of Berkeley plus
$300M bond
$79.75
(average)
City of Berkeley
(current)
$52.90
(average)

36 July 2022
Figure 12: Historical & Projected Property Tax
TABLE 7

SUMMARY OF TAX IMPACTS
$300M
GO Bond + Parcel Tax
Tax Rate ($100,000 A.V.)
Avg Bond =
Parcel =
$27
30 cents per sq. ft.

Tax (Avg Home: $647,972;
1,900 sq ft)
Avg Bond =
Parcel =
Total =
$166
$570
$736
Assuming average developed property size of 1,900 square feet, a parcel tax of 30 cents per square foot would add $570 annually to the average property owner’s tax bill, which is comparable to the annual cost of refuse service based on a 32-gallon cart.

Below is a summary of the tax impacts on an average property, assumed to be an average valued house at $647,972 (assessed value) with 1,900 sq ft.

37 Vision 2050 Program Plan
Infrastructure spending has other benefits. It creates
jobs. The U.S. Department of Transportation has
found that for every $1 billion in infrastructure
investment, 13,000 jobs are created. In a place like
Berkeley, which follows both state law on public
works expenditures and local law via a Community
Workforce Agreement, this means jobs that pay
prevailing wages and benefits.

Infrastructure spending also can add art to our
public spaces. If 1 percent of a revenue measure is
dedicated to local public art, as was the case with
Measure T1, or City Council commits an annual
General Fund allotment of a similar amount, then
Berkeley’s public spaces will get more public art.

Public art plays an integral role in improving our
community’s wellbeing by creating inspired spaces
that reflect the unique character of our city. Public art breathes life into the built environment, engages the
community with creative art experiences, and fosters
a sense of belonging.

4.4 Other Benefits of Infrastructure Spending
Art Installation at Civic Center Garage
Statue of William Byron Rumford
Art Installation at Shattuck & Center
Figure 13: Public Art in Berkeley

38 July 2022
05 PROGRAM DELIVERY
The City has well-established capital project divisions in the Public Works Department and Parks, Recreation, and Waterfront Departments, delivering a wide range of infrastructure projects. Given this major 30-year program to rebuild infrastructure, this section looks ahead on how the City will deliver the program, evaluating the City’s current capabilities, sharing information on other cities’ approaches to implementing large capital programs, and recommending actions to implement the Vision 2050 program. 38 July 2022

39 Vision 2050 Program Plan

5.1 Current Organization and Measure T1 Implementation
Capital projects are delivered by the Engineering
and Transportation Divisions in the Public Works
Department, and Capital Projects Division of the
Parks, Recreation and Waterfront Department. Most
of this work is based on regular, annual contributions
from special funds, including ratepayer funds (sewer,
stormwater, and streetlight) and a parks-focused
parcel tax.

As shown in the table below, capital investments
have more than doubled in the last decade.

This growth has largely been driven by Measure T1
and the large project to rebuild Tuolumne Camp.

In November of 2016, Berkeley voters passed
Measure T1, authorizing the city to sell $100 million
of General Obligation Bonds to repair, renovate,
replace, or reconstruct portions of the city’s
aging infrastructure.

The City of Berkeley has managed all T1 projects
internally with a team that includes administrative,
financial, and project management staff from the
Public Works and Parks, Recreation, and Waterfront
Departments. Five full-time equivalent positions
were allocated across 11 staff within PW and PRW.

One of the five FTEs is a T1 Associate Management
Analyst. While projects are managed by city staff, the
planning, design, and construction management of
projects are largely completed by consultants.

As a part of preparing this Program Plan, interviews
were conducted with the T1 Management Team and
project managers to learn what has worked well and
how things can be done better in the future.

Positive outcomes of T1 implementation:
› The City has completed nearly all of the
39 projects in Phase 1. Phase 2 projects
are approved and are on track to be
completed by 2026
› Interdepartmental collaboration has been very
effective with regular meetings and
open communications
› Community messaging has been regular and
recurring, with ongoing updates to the website
and email distribution lists, periodic reporting
to Council, and a January 2022 informational
brochure mailed to residents
› The program team has been able to staff up
and retain staff during the program
› Staff costs have been kept to a minimum, i.e.,
less than 12% of project costs
› Meetings are held at the conclusion of each
project to discuss challenges, successes, and
lessons learned
› The project teams have largely been able to
keep up with the project schedules

Year Capital Program
2010 $41.6 million
2020 $114.5 million

40 July 2022
Ideas for future improvements:
› Reduce the time it takes to hire staff
› Increase IT and legal support to match the
program size
› Add consultants to help with certain tasks in
project management
› Improve tools to aid in project management
› Streamline contracting policies, including bid
protest procedures and purchasing policies
It is important to note there will be overlap with
the T1 team completing the Phase 2 projects
and the Vision 2050 team ramping up. The future
organization will need to account for this to ensure
the success of both programs.

5.2 Research on Other Programs
The City and its consultants conducted interviews
with three cities implementing large capital
programs. Interview topics included organization,
tools, implementation, and accountability.

Successes, challenges, and lessons learned were
discussed with each group, too. Table 8 summarizes
the cities and their programs.

TABLE 8

CITIES INTERVIEWED AND THEIR CAPITAL PROGRAMS
City Program Description Budget and Staff
City of Oakland
› Measure KK’s funding allocations are a) $350 million for streets and roads, b) $150 million for facilities and c) $100 million for anti-displacement and affordable housing
› CIP projects are delivered through Public Works (PW) and Transportation (OakDOT). PW delivers non-transportation projects, such as sewer, drainage, and parks. OakDOT delivers transportation projects through two divisions: a) Great Streets (large projects) and b) Safe Streets (street repairs)
› Program management is primarily done with City staff with some consultant support. There are about 20 dedicated staff members for program management
› Staffing vacancies have been as high as 25%
$87M / 20 employees =
~$4.4M per employee.

41 Vision 2050 Program Plan
City of Oakland (cont.)
› Oakland’s PCI was 53 in 2019 and increased to 58 in 2021.

They are using $100 M of Measure KK funds over 3 years to improve 350 miles of street surface
› Measure KK has a 9 member Public Oversight Committee.

The members were appointed by the Mayor and report to
the City Council
City of Sunnyvale
› The Public Works Engineering Division delivers all capital projects through four groups: a) special projects, b) project design, c) construction management, and d) land development
› The special projects group manages very large capital projects, e.g., $1 billion wastewater treatment plant re-build. Consultants handle the day-to-day project management but do not have monetary authority › There are 8 staff in the project design group, who manage the smaller on-going capital projects
› The City uses e-Builder software
› Staffing vacancies are a problem
› City Council’s target PCI is 80. Their current PCI is about 76 $176.5M / 30 employees
= ~$5.9M per employee.

City of San Diego
› The City delivers capital projects through two departments: a) Capital Projects and b) Strategic Capital Projects. Capital Projects perform projects that are $5 to 20 million in size, the work is long-term and they have about 700 staff. The Strategic Capital department works on projects over $100 million in size, the work requires special expertise, there are about 50 staff and there is a high reliance on consultants › The current 5-year CIP has a funding need of $8.4 billion › The City uses OCI (overall condition index) instead of PCI. The City’s target for OCI is 70
› Staff vacancies range from 15 – 20%
› A State of CIP Report is provided to City Council twice per year › San Diego is a participant is a California multi-agency benchmarking group
$830M / 750 employees
= ~$1.1M per employee

42 July 2022
While Berkeley uses City staff for project
management and consultants for planning, design,
and construction management, by comparison, the
larger programs are managed by a combination
of City staff and consultants. Berkeley’s 5 full
time equivalent employees are handling $45
million projects at present, a higher ratio than
these other cities. City staff make all financial
decisions, manage City processes, and complete
repeatable tasks. Consultants assist City staff with
a wide variety of tasks involving project planning,
design, construction management, and execution,
and provide necessary specialized expertise
and knowledge. Some program teams include a
dedicated group who administer grant funding.

Challenges experienced during large program
implementation include difficulty in recruiting and
retaining a talented workforce, having sufficient
administrative and support services, and having
effective and efficient hiring and on-boarding
processes, including a continuous
recruitment process.

These issues could be addressed in part by
including dedicated financial and recruiting staff
that are funded through the revenue measure, and
developing program-specific hiring policies
and procedures.

The recommendations presented in the section
below build off the successes and lessons learned
from implementation of Measure T1 and the
City’s regular capital program, and from the three
cities we interviewed and researched. These
recommendations will help in delivering a more
significant investment in the city’s infrastructure:
› Responsible organization – A Vision 2050
program management team should be formed
and report to the Public Works Director for the
first phase of improvements, given this phase’s
focus is likely within the right of way, which is
Public Works’ responsibility. This team would
be multi-discipline, meaning the team would
be responsible for implementing all aspects
of the Vision 2050 program, including projects
outside of the normal purview of Public Works.

In future phases, as determined by future Vision
2050 priorities, this program management team
could report either to Directors of Public Works
or Parks, Recreation, and Waterfront, a Deputy
City Manager, or the City Manager.
› Multiple Benefits – The Vision 2050 Framework
recommended infrastructure improvements that
have multiple benefits. Given this Plan’s initial
focus on streets and traffic safety, the program
management team will ensure projects are
delivered that, to the extent feasible, combine
paving, traffic safety, and green infrastructure
improvements. Recent annual paving projects
demonstrated progress in this regard, as they
have included paving, green infrastructure,
and various traffic safety features such as
traffic circles, traffic diverters, and pedestrian
islands. Given this plan prioritizes the co-
benefits of street paving and traffic safety,
staff have modeled how to meet both goals
simultaneously. By dedicating two-thirds of
streets-focused investments to paving and one-
third to traffic safety, this Plan’s goals can be met
in ten years or so.
› Program management team and
staffing – The City should initiate a recruitment
for a new full-time position, Vision 2050

5.3 Recommendations for Vision 2050 Implementation

43 Vision 2050 Program Plan
Program Manager. The manager should have
an administrative support person and project
managers (the number to be determined
prior to implementation). The City team would
ideally include dedicated staff in lieu of 3-year
limited term positions, given the duration of the
work. In addition, the city team should include
both an in-house construction inspector and a
project coordinator to assist with time-intensive
tasks such as compiling budget data, preparing
public outreach materials, and coordinating
meetings. Outreach support should be included
on this team as well. The Program Manager
should also have a mix of staff and consultant
support in a blended team. Consultant support
may include: a) preparation of a project
management manual, b) project cost tracking,
c) performance indicator tracking, and d)
management of special projects.
› Engineering functions – As discussed above,
the engineering and capital delivery divisions
in the Public Works and Parks, Recreation and
Waterfront Departments will continue to
deliver ongoing projects. These include
aspects of street paving, sidewalk repairs,
sewer rehabilitation, and park and
playground improvements.
› Special projects – Projects that are not
normally handled by the City’s engineering
divisions should be managed by the program
management team or assigned to a consultant.

Examples of these projects may include utility
undergrounding, seismic improvement to
public buildings, public realm projects, etc
› Supporting departments – Advanced
planning needs to be held with the City’s
procurement, legal, human resources and
information technology departments.

Challenges experienced during large program
implementation include difficulty in recruiting
and retaining a talented workforce and having
effective on-boarding processes. In addition,
the City’s procurement procedures need
updating and improvement. The ideal Vision
2050 organization may include dedicated
recruitment and financial staff, as well as new
policies that are developed specifically for the
program. For example, the City of Oakland
cut 500 staff hours and months from project
timelines by reducing the number of project
and procurement approvals.
› Tools, software and procedures – An
evaluation of current and new tools will be
made for delivering the program. This will
include: a) procurement tools for goods and
services, b) project scheduling and tracking
software, c) document management,
and d) reporting.

44 July 2022
06 SUPPORTING STRATEGIES
This section describes the performance monitoring, oversight and reporting and on-going maintenance that will be a part of implementing a successful Vision 2050 program.
44 July 2022

45 Vision 2050 Program Plan

6.1 Performance Indicators
TABLE 9
VISION 2050 KEY PROGRAM PERFORMANCE INDICATORS

1. Streets are Safer, More Sustainable, Improved to a Good Condition, and Maintained Paving condition % of sidewalks in safe condition
Three year average of severe injuries/fatalities % of Bicycle, Pedestrian, and ADA Transition Plans implemented
% of 2020 pavement surface converted to pervious surface Public satisfaction with right of way % of commute trips by solo occupant vehicle % of trips by walking, micro mobility or transit

2. Infrastructure is Resilient, Protects the Environment, and is Adapted to Climate Change Impacts Citywide GHG reductions % of public buildings fossil-fuel free Citywide natural gas consumption % of automobiles that are EV citywide % of Stormwater and GI plans implemented % of sea level rise, undergrounding, and evacuation route projects completed
% of target acres treated by Green Infrastructure % of 2022 vacant street tree sites planted % of public buildings seismically retrofitted

3. Open Space, Parks, and Recreation Improve our Quality of Life % of Backlog Addressed Annually Diversity of the Urban Forest # of Street Trees/Tree Canopy Ratio Public satisfaction at Parks and open spaces

4. Public Facilities are Safe and Provide Community Placemaking % of public realm/placemaking opportunities implemented % of Backlog Addressed % of ADA Transition Plan implemented in buildings Public satisfaction in public spaces % of public buildings with battery storage
A large complex program like Vision 2050 can benefit from identifying Key Performance Indicators (KPIs) to track progress. An initial list of KPIs is shown on Table 9 and are organized around the four Vision 2050 outcome objectives. The indicators go beyond the traditional tracking of cost and schedule progress and incorporate indicators that reflect sustainability and resilience goals.

It will be important to update these KPIs at the beginning of each phase of this thirty-year program, and more frequently in some areas, in order to incorporate changing conditions, new technologies, and new priorities.

46 July 2022

6.2 Equity

6.3 Reporting and Oversight
Incorporating equity into infrastructure is a core
value of the Vision 2050 Framework, and is
something Berkeley residents want. Three-fourths
of voters said an infrastructure measure should
incorporate equity.

Poorly maintained infrastructure is inherently
inequitable, as it is more detrimental to Berkeley’s
most vulnerable residents. Those with mobility
impairments can find potholes, deficient sidewalks,
failing hand rails, or out-of-service elevators as
insurmountable challenges. Those on bikes or
walking, instead of in vehicles, are more at risk of
death or serious injury on streets with potholes,
failing pavement markings, and lacking traffic safety
controls. As reported by the city auditor, low-income
residents who depend on their automobile to get
to work face greater risk from the estimated annual
$1,049 repair bill attributable to poorly maintained
streets. The state of our parks, recreation and senior
centers has a serious impact on the programs and
services delivered to children of color and lower
income seniors.

In implementing equity into Vision 2050,
Berkeley will build on recent progress. The City’s
transportation plans prioritize projects in historically underinvested neighborhoods in Berkeley, including
improvements like bus bulbouts and dedicated
bus lanes which help lower income residents more
likely to use transit. Many capital projects approved
in Measure T1 implementation advanced equity.

These projects include the African American Holistic
Resource Center, South Berkeley Senior Center,
the Martin Luther King Jr. Youth Services Center,
and public restrooms citywide approved as part of
Measure T1, Phase 2. In addition, Phase 1 projects
such as paving and park improvements at San Pablo
Park and 10 play structures in West Berkeley also
advance equity.

A Vision 2050 program team will prepare a Program
Management Manual. The manual will include the
performance indicators and a format for reporting
progress. Typically, performance monitoring reports
are prepared on a semi-annual basis. The reports will
be provided to Council and will be available to the
public via the Vision 2050 website.

To ensure accountability, independent oversight
for the revenue measures will be provided by two
of the City’s Commissions: Transportation and
Infrastructure, and Parks, Recreation, and Waterfont.

These Commissions will review expenditures
for conformance with the measure’s purposes,
propose how future revenue measures proceeds are
spent, and monitor progress toward Vision 2050’s
outcomes and performance indicators.

47 Vision 2050 Program Plan

6.4 Lifecycle Maintenance
Asset Management is an important concept in
which the city’s infrastructure systems are managed
throughout the life cycle from ‘cradle to grave.’
Taking an asset management approach was
a key part of the City Council adopted Vision
2050 recommendations.

A Strategic Asset Management Plan (SAMP) was
recently submitted to City Council and the Council
adopted an Asset Management Policy. The SAMP
develops policy guidance, reviews the city’s
current maintenance practices, and prepares a
roadmap of key initiatives for implementing a full
Asset Management Program (AMP) in Berkeley’s
Public Works and Parks, Recreation & Waterfront
Departments. Critical systems that we depend on
every day are simply wearing out. Recent budgets
were inadequate for infrastructure capital and
maintenance needs, let alone modernizing them. An
AMP is needed to manage our infrastructure assets
throughout their useful life.

The city retained a consultant to assess the city’s
current asset management practices against a
global standard benchmark on Asset Management
in six areas: asset strategy and planning, asset
management decision-making, lifecycle delivery,
asset information, organization and people, and risk
assessment. Based on the benchmark, Berkeley’s
average assessment was in the ‘developing’ level of
asset management implementation and comparable
to many U.S. cities, but not nearly good enough.

The consultant worked with city staff to develop
a ‘Roadmap’ of key initiatives in the next two
years to implement an effective AMP .

The components include:
› Prepare an Asset Management policy for City
Council’s adoption
› Form an Asset Management team, consisting of
a team leader and two program staff
› Form an AM Steering Committee to guide the
program implementation
› Provide consultant support
› Prepare the strategies, procedures and analyses
to implement an AMP
The SAMP conducted an asset-by-asset review of
annual infrastructure maintenance funding and
found that some asset categories such as streets
and city buildings had insufficient maintenance
funding by a wide margin, while other assets like
sewer and streetlights had adequate maintenance
funding. Assets such as stormwater have sufficient
maintenance funding now. However, climate change
and green infrastructure might make current funding
commitments insufficient in future years.

48 July 2022

6.5 General Fund Support for Infrastructure Maintenance The level of General Fund contribution for public
infrastructure in the last 12 years has remained flat
in nominal terms. Given escalating annual costs,
this led to a decline in General Fund support for
infrastructure. A common theme from community
engagement has been to grow General Fund
support for infrastructure and, at the very least, that revenue from any new measures not replace existing
General Fund commitments to infrastructure.

In recognition of the need for more infrastructure
funding, the City Council has revamped its capital
budget and allocated an additional $14M+ for
street maintenance, $5M+ for the Waterfront and
Parks, and $4M+ for other infrastructure. If these
investments become a new “floor” for the City’s
infrastructure, the City will be on track to achieve a
resilient and sustainable infrastructure by 2050.

The FY 2022 CIP in Brief was the beginning of
melding Vision 2050 into the City’s capital budget

49 Vision 2050 Program Plan
07 APPENDICES
A. Acknowledgements
City of Berkeley
Paul Buddenhagen, Deputy City Manager
Liam Garland, Director, Public Works
Scott Ferris, Director, Parks, Recreation and Waterfront Ray Yep, Vision 2050 Implementation Team Member (volunteer) Margo Schueler, Vision 2050 Implementation Team Member (volunteer) Gordon Wozniak, Vision 2050 Implementation Team Member (volunteer) Andrew Brozyna, Deputy Director, Public Works
Christina Erickson, Deputy Director, Parks, Recreation and Waterfront Farid Javandel, Deputy Director, Public Works
Joe Enke, Manager of Engineering, Public Works
Input from the Leadership Teams in the Public Works and Parks, Recreation and Waterfront Departments

Consultant Team
V.W. Housen and Associates:

Dave Richardson, Principal
Daniel Windsor
Josh Uecker
Stephanie Hubli
Vivian Housen, Project Manager
Morgan DeAngelis, Project Engineer
Woodward & Curran:

50 July 2022
B. GLOSSARY OF TERMS AND ABBREVIATIONS
Terminology Definition
ADA Americans with Disabilities Act
AMP Asset Management Program
Asset categories A logical grouping of similar assets or equipment types used to categorize, organize, and manage the asset portfolio.

Asset management
Data driven planning that improves operational, maintenance and capital forecasting of potential needs, and optimization of investments to realize the greatest value from assets while operating over their lifecycle.

CEQA California Environmental Quality Act
CIP Capital Improvement Program
City City of Berkeley
Council City Council of Berkeley
EBMUD East Bay Municipal Utility District
Envision
Developed by the Institute for Sustainable Infrastructure and Harvard University, Envision provides industry-wide sustainability metrics for all types and sizes of infrastructure to help users assess and measure the extent to which their project contributes to conditions of sustainability across the full range of social, economic, and environmental indicators.

KPI Key Performance Indicator
General obligation bond
A General Obligation bond is a common type of municipal bond that is secured by a government’s pledge to use legally-available resources, including tax revenues, to repay bondholders.

Parcel tax
The parcel tax is a tax on parcels of real property collected as part of a property tax bill.

Unlike the property tax, the parcel tax cannot be based on property value. To impose a parcel tax, governments must win support from two-thirds of voters.

PCI Pavement Condition Index, which is a scale of 0 to 100 (with 100 being the best) that indicates the condition of an asphalt street surface.

Program plan A structured approach to organizing a long term complex array of subcomponents. The plan typically describes the project components, schedule, outcomes, funding, and reporting.

SAMP
Strategic Asset Management Plan. This is a high level plan that reviews an organization’s policies, assesses its maturity on maintenance, and develops a roadmap to implement a lifecycle maintenance management program.

U.S. EPA United States Environmental Protection Agency
Vision 2050
An initiative of Berkeley’s Mayor Jesse Arreguin to take a long term approach to improving Berkeley’s aging infrastructure. The approach incorporates sustainability and resiliency and anticipating a future world with climate impacts.

WMP Watershed Management Plan

51 Vision 2050 Program Plan
C. Reference Documents

1. Information on Vision 2050 can be found on its website: BerkeleyVision2050.org. 2 . Refer
ence documents referenced in this program plan can be found on the City of Berkeley website (BerkeleyCA.gov) using the search feature

3. Information on Berk
eley’s Measure T1 program can be found on its website:

BerkeleyCA.gov/your-government/our-work/ballot-measures/measure-t1.

4. Information on the Envision pr
ocess can be found on the Institute for
Sustainable Infrastructure’s website: SustainableInfrastructure.org.

MEET YOUR COUNCILMEMBERS
MAYOR DISTRICT 1 DISTRICT 2

JESSE ARREGUIN RASHI KESARWANI TERRY TAPLIN
Term Expires 11/30/2024 Term Expires 11/30/2022 Term Expires 11/30/2024 DISTRICT 3 DISTRICT 4 DISTRICT 5

BEN BARTLETT KATE HARRISON SOPHIE HAHN
Term Expires 11/30/2024 Term Expires 11/30/2022 Term Expires 11/30/2024 DISTRICT 6 DISTRICT 7 DISTRICT 8

SUSAN WENGRAF RIGEL ROBINSON LORI DROSTE
Term Expires 11/30/2024 Term Expires 11/30/2022 Term Expires 11/30/2022 VISION TO REALITY A March to 2050 A CIP IN BRIEF • 2021 JULY 2022VISION 2050 PROGRAM PLAN

Office of the City Manager
2180 Milvia Street, Berkeley, CA 94704 ● Tel: (510) 981-7000 ● TDD: (510) 981-6903 ● Fax: (510) 981-7099 E-Mail: [email protected] Website: http://www.CityofBerkeley.info/Manager

ACTION CALENDAR
July 26, 2022
To: Honorable Mayor and Members of the City Council
From: Dee Williams-Ridley, City Manager
Submitted by: Mark Numainville, City Clerk
Subject: Placing a General Tax Measure on the November 8, 2022 Ballot to Tax Vacant Residential Units

RECOMMENDATION

1. Adopt a Resolution submitting a ballot measure to tax vacant residential units to a vote of the electors at the November 8, 2022 General Municipal Election.

2. Designate, by motion, specific members of the Council to file ballot measure arguments on this measure as provided for in Elections Code Section 9282.

FISCAL IMPACTS OF RECOMMENDATION
No direct fiscal impacts related to the recommended action. Election services have seen a steep increase since 2018, with the City’s first million-dollar election in 2020. It is uncertain at this time how recent state mandates and the pandemic will affect election costs in an ongoing basis. In addition, the number of measures placed on the ballot, and the length of the measures, are the primary driving factors in the fluctuation of election costs.

CURRENT SITUATION AND ITS EFFECTS
See attached report submitted by Vice Mayor Harrison, and Councilmembers Robinson and Bartlett (Attachment 1).

BACKGROUND
The City Manager is presenting this measure for addition to the November 8, 2022 ballot pursuant to the direction provided by the City Council at the June 14, 2022 regular City Council meeting.

Adoption of the resolution attached to this item will place the measure on the ballot. In addition, with respect to who can author arguments for measures placed on the ballot by the Council, Elections Code Section 9282(b) provides that the legislative body may submit an argument in favor of the measure. The City Council may authorize the Council as a whole, or certain members of the Council, to submit an argument in favor of the measure.

Placing a General Tax Measure on the November 8, 2022 Ballot ACTION CALENDAR To Tax Vacant Residential Units July 26, 2022

ENVIRONMENTAL SUSTAINABILITY AND CLIMATE IMPACTS
There are no identifiable environmental effects, climate impacts, or sustainability opportunities associated with the subject of this report.

RATIONALE FOR RECOMMENDATION
The City Clerk is presenting this action in accordance with the direction given by the City Council at the June 14, 2022 meeting.

ALTERNATIVE ACTIONS CONSIDERED
None.

CONTACT PERSON
Mark Numainville, City Clerk, (510) 981-6900
Attachments:
1: Report submitted by Vice Mayor Harrison, and Councilmembers Robinson and Bartlett
2: Resolution
Exhibit A: Text of Measure
3: Previously submitted information, submitted by Vice Mayor Harrison

Kate Harrison
Vice Mayor, District 4
2180 Milvia Street, Berkeley, CA 94704 ● Tel: (510) 981-7000 ● TDD: (510) 981-6903 ● Fax: (510) 981-7099 E-Mail: [email protected] Website: http://www.CityofBerkeley.info/Manager

ACTION CALENDAR
July 26, 2022
To: Honorable Mayor and Members of the City Council
From: Vice Mayor Harrison, and Councilmembers Robinson and Bartlett Subject: Placing an Empty Homes Tax Ordinance on the November 8, 2022 Ballot

RECOMMENDATION
Submit an Ordinance to a vote of the electors at the November 8, 2022 General Municipal Election adding Chapter 7.54 to the Berkeley Municipal Code taxing property owners for keeping housing units vacant for more than 182 days in a single year, for units that 1) are not under permitted renovation or in probate, and 2) are in multi-unit buildings or are single family homes or condominiums whose owners are not natural persons or family trusts.

CURRENT SITUATION AND RATIONALE FOR RECOMMENDATION
The City of Berkeley is experiencing a historic housing crisis. Between 2005 and 2019 gross median rent increased by over 50%. This has been particularly burdensome in a city where 58% of residents are renters.1 While in recent years Berkeley has met its RHNA goals for those earning above 120% Area Median Income (AMI), it has failed to build sufficient housing for everyone else. Further, housing at the >120% AMI category has not significantly improved affordability for lower income residents and has increased displacement in low-income neighborhoods.2 The extraordinary gap between the housing needs of residents and the availability of housing can only be bridged through the use of numerous policy interventions, including a vacancy tax intended to incentivize owners of housing property to bring units back on the market and discourage speculation.

In a recent poll of top policy priorities among Berkeley voters, increasing affordable housing for low-income and homeless residents received by far the most support, at 58%.3 While Berkeley is actively building new affordable units, siting and constructing 1 Anti-Eviction Mapping Project: Densifying Berkeley: Potential Impacts on Displacement and Equity, 2022, https://www.berkeleyside.org/wp-content/uploads/2022/04/AEMP-UpzoningReport-Draft4-3.pdf 2 Ibid.
3 City of Berkeley Community Survey, Live Phone and Text to Online, April 28-May 3, 2022, https://berkeleyca.gov/sites/default/files/documents/2022-05- 31%20Item%2037%20Discussion%20and%20Direction%20Regarding.pdf.

Attachment 1

Placing an Empty Homes Tax Ordinance on the November 8, 2022 Ballot ACTION CALENDAR July 26, 2022

new units is a longer-term process, and it is incumbent on the City to maximize the availability of existing units that are already built and could be available for rent or sale.

Unfortunately, Alameda County’s housing remains unaffordable for many of its residents, and this burden does not fall evenly across income and racial groups. While 47% of renters in Alameda County are rent burdened, the rate is 58% for Black renters and 87% for extremely low-income renters.4 Meanwhile, as this crisis continues to unfold, Berkeley Rent Stabilization Board data indicates that 1,128 fully or partially regulated5 units have been classified by their owners as not available to rent (NAR).6 Around 40% of the 1,128 NAR units are in properties that are completely vacant, and almost 80% of NAR units are in properties that are half or more empty. A few of these are actively being renovated but the majority are not. Many have not been occupied for some time or actually are rented but not reported as being so to the Rent Board. Based on a review of Rent Board data and Google Street View, approximately 100 of these units are in buildings that are entirely vacant and dilapidated. This contributes to neighborhood blight and requires costly vector control and fire inspections. Thus, much of the vacancies in the city are not due to natural turnover.

A recent report examining vacancies in San Francisco found that there is no single force driving the vacancies7. It also found that vacancies were disproportionately in multi- family apartment complexes and tended to be in areas with older housing stock and higher rates of new construction— suggesting that property owners are holding older units vacant to capitalize on new construction. Notably, in interviews with numerous landlords, the report found that landlords contradictorily listed rent control as a reason for both low and high vacancy rates8. In other words, landlords themselves did not agree there is a clear connection between rent control and vacancy rates.

Oakland and Vancouver, both experiencing their own challenges with housing unaffordability, use a vacant housing tax to encourage owners of vacant units to find tenants or sell to those who will. In 2016, Vancouver passed a measure that placed a surcharge on the assessed value of vacant units. Within two years of its implementation, 21.2% of vacant units returned to occupancy and the city generated 4 California Housing Partnership Housing Needs Dashboard, 2019, https://chpc.net/housingneeds/?view=37.405074,-
119.26758,5&county=California,Alameda&group=housingneed&chart=shortfall|current,cost- burden|current,cost-burden-re|current,homelessness,historical-rents,vacancy,asking- rents|2022,budgets|2021,funding|current,state-funding,lihtc|2010:2021:historical,rhna- progress,multifamily-production
5 Partially regulated units are only partially covered by the rent ordinance, while fully regulated are completely covered by the ordinance
6 Berkeley Rent Stabilization Board. There are also units classified as “vacant”, for which property owners are actively seeking tenants.
7 Paige Dow, Unpacking the Growth in San Francisco’s Vacant Housing Stock, 2018, https://ternercenter.berkeley.edu/wp-content/uploads/2020/08/CR_Final_2.3.19-

1.pdf?fbclid=IwAR1a_6T8DJR-p6qZ05u-oeIplpBzfeTabdxNeG_-I39vQ-vNlBwe6FT7D8A&fs=e&s=cl 8 Ibid.

Placing an Empty Homes Tax Ordinance on the November 8, 2022 Ballot ACTION CALENDAR July 26, 2022

$46 million Canadian dollars. Oakland enacted a vacant property tax of $3,000 to $6,000, varying based on property type. In its first year of implementation, the city collected over $7 million in revenue.9 San Francisco voters will consider a vacant housing tax measure on the November ballot.

Addressing vacant units is a critical part of addressing Berkeley’s housing crisis. Every year that a significant percentage of Berkeley’s housing stock remains vacant exacerbates the housing affordability and displacement crises. This item includes a modified version of San Francisco’s proposed tax adapted to Berkeley. It is in the public interest to refer to the City Attorney and City Manager to prepare and submit a resolution taxing empty homes that would be submitted to a vote of the electors at the November 8, 2022 General Municipal Election.

BACKGROUND
Berkeley’s housing challenges are significant, requiring numerous policy interventions across many years to remediate. However, of the units that were built as part of the 2023 RHNA goals, the majority have been unaffordable to most residents.10 In 2019 the City’s median rent was $3,165, making it affordable to only households earning over $130k annually. Median rents have also increased by greater than 50% between 2005 and 2019. Rising rents in the city are of particular concern given that the City has a high renter population, and the impact of high rents falls disproportionately on BIPOC residents11.
9 San Francisco Budget and Legislative Analyst’s Office: Residential Vacancies in San Francisco, 2022, https://56a418ca-94d2-476c-9a45-
f491ca4a0387.usrfiles.com/ugd/56a418_74b82803e4fb434bb1b13010828a4c01.pdf 10 2020 General Plan APR: City of Berkeley, Table 2
11 Anti-Eviction Mapping Project: Densifying Berkeley: Potential Impacts on Displacement and Equity, 2022, https://www.berkeleyside.org/wp-content/uploads/2022/04/AEMP-UpzoningReport-Draft4-3.pdf

Placing an Empty Homes Tax Ordinance on the November 8, 2022 Ballot ACTION CALENDAR July 26, 2022

Percent Renter Occupancy vs. Percent Berkeley Population, 201912 Fortunately, the City of Berkeley has taken numerous steps in recent years to tackle its affordable housing crisis, including issuing a $100 million affordable housing bond, permitting Berkeley residents (outside of the fire zones) to receive near-automatic approval to build certain types of ADUs, and rezoning BART stations to allow significant affordable housing. A potential 2022 affordable housing bond is under consideration.

While these efforts will increase the supply of housing in Berkeley, it will take years for the City to reap the benefits. Developments still need to be proposed, approved, and then constructed. Berkeley’s large supply of vacant homes presents a unique opportunity for the City to immediately provide new units to renters, as there are no approval processes or lengthy construction timelines.

Additionally, hot housing markets often attract real estate speculation. Redfin data shows that 13% of homes in Oakland were purchased by an institutional investor or business in the fourth quarter of 2021, a 16.9% increase over the year before. In San Francisco, 18% were acquired by institutional investors. This follows a concerning nation-wide trend where large institutional investors have since the beginning of the pandemic purchased an enormous number of homes; over 75% of these offers are in all cash,13 and many without any inspections, pricing prospective homeowners out of the real estate market. Large financial institutions, like Blackrock, are now some of the largest owners of real estate in the country. However, unlike traditional homeowners, they treat homes as a commodity to build wealth. This is made clear by private equity- backed landlords being 18% more likely than non-equity backed corporate landlords to evict tenants, who are themselves more likely to do so than small landlords. In a 12 Ibid.
13 Route Fifty: Governments Begin Pushing Back on Investors Snatching Up Homes, 2022, https://www.route-fifty.com/infrastructure/2022/07/while-investors-are-snatching-homes-governments- fight-save-properties-residents/368927/

Placing an Empty Homes Tax Ordinance on the November 8, 2022 Ballot ACTION CALENDAR July 26, 2022

particularly acute instance of the commoditization of housing, one company packaged rental debt from 3,000 homes and sold it to investors for $500 million,14 similar to what happens with mortgage debt.

In Berkeley, it is likely that some vacant units are in buildings purchased for the sole purpose of accruing more wealth, with no intention of housing tenants. For instance, there is one property owner who owns 9 units, across 4 properties of two or fewer units in the city—of these, 8 are listed as not available to rent. While the extent of this is unknown, applying a tax on vacant homes will discourage this practice that, in aggregate, raises rents and home prices for everyone else. The proposed Measure fulfills one of the key anti-speculation recommendations of the 2022 report by the Anti- Eviction Mapping Project (Densifying Berkeley: Potential Impacts on Displacement and Equity).

Using the assumptions made in the San Francisco Budget Analyst report on a prospective vacancy tax, and Berkeley Rent Board data on length of vacancies, it is estimated that Berkeley will generate between $5.8 million and $8.7 million in revenue annually and that several hundred vacant units could become occupied within two 14 Tech Equity Collaborative: Sold to the Highest Bidder: How Tech is Cashing in on the American Dream, 2022, https://techequitycollaborative.org/2022/06/29/sold-to-the-highest-bidder-how-tech-is-cashing- in-on-the-american-dream/

Placing an Empty Homes Tax Ordinance on the November 8, 2022 Ballot ACTION CALENDAR July 26, 2022

years.15 This is likely a conservative estimate as it only includes units that have been registered as NAR with the Berkeley Rent Board—other vacant units are not included.

The Finance Department has confirmed that the methodology behind these numbers is valid and logical and will affirm them for the ballot statement.

Applicable Units
Years since implementation Year 1 Two + Years** Year 1 Two + Years ** Year 1 Two + Years** Units Subject to Tax 249 187 841 631 1090 818
Revenue $747,000 $1,120,500 $5,046,000 $7,569,000 $5,793,000 $8,689,500 *Excuding 38 single family homes owned by non-corporate owners of less than 3 single-family homes **Assumes 75% of buildings remain vacant after one year Small properties have 1 - 2 units
Large properties have more than 2 units
Small Properties* Large Properties TOTAL

POTENTIAL REVENUES FROM BERKELEY VACANCY TAX
Berkeley’s proposed vacancy tax is built off San Francisco’s 2022 proposed Empty Home Tax proposal. The San Francisco vacancy tax applies only to owners of properties with three or more units when at least one has been unoccupied for more than 182 days in a year. Single family homes and two-unit properties are exempt, and the vacancy tax increases for larger properties and units that have been empty for longer. The proposed vacancy tax for Berkeley would likewise be imposed when a unit is left vacant for more than 182 days in a calendar year, providing time extensions for units under active reconstruction or in probate. It will also contain the following exemptions:
 Owners of up to two single family homes and/or condominiums so long as they are owned by natural persons or family trusts. Single family homes and/or condominiums owned by corporations, real estate trusts, and LLCs would not be exempt. Additionally, single family homes with an ADU or JADU will be classified as “one unit”;
 Duplexes, triplexes, and quadplexes where one unit is owner occupied and the owner indicates that another unit is not available to rent due to owner or family use for no compensation;
 A property of four or fewer units whose owner is over 65, makes under 80% of the Area Median Income, and resides in the property;
 Organizations that are exempt from paying property taxes in California, such as non-profit organizations and religious institutions;
 The Empty Homes Tax will be suspended if an eviction moratorium is in place in Berkeley.
15 These estimates are calculated using Berkeley Rent Board data

Placing an Empty Homes Tax Ordinance on the November 8, 2022 Ballot ACTION CALENDAR July 26, 2022

The exemption for very low-income owners over the age of 65 has not been included in these estimates as only around 100 of all 30,000 Berkeley residences use this exemption for City parcel taxes. The Berkeley Department of Finance found that, given the low number of property owners who would qualify for and use this exemption, revenues will not be materially impacted.

The tax rate would vary between $3,000 and $6,000 depending on the type of unit. Non- exempt condos, duplexes, townhomes and single family homes would pay $3,000 per year. Remaining units would pay $6,000 annually. Both tiers of fees double, to $6,000 and $12,000 annually, respectively, for units vacant for more than two years.

The tax would go into effect on January 1, 2024, and a home will only be considered vacant if it remains vacant for at least 182 days of the year. As such, the vacancy tax provides time for property owners to return units to occupancy or inform the city that a property is exempt before any tax comes into effect.

The vacancy tax in Berkeley would have numerous benefits. It will almost immediately increase the City’s housing stock while complimenting more time-consuming approval and construction processes. Further, the tax has the potential to bring hundreds of units online within a year and generate millions in affordable housing revenue as a byproduct.

A vacancy tax will also disincentivize property owners from engaging in real estate speculation, which will help limit rent and housing price increases across the City.

Finally, units that are occupied will be brought in line with the city’s housing regulations.

The City has much data related to properties that assist in applying the vacancy tax.

Measure MM requires owners to register partially covered units and Measure U1 taxes owners of more than four units. In addition, Berkeley’s long-standing rent registration for fully covered units has provided the city with extensive data on the housing stock in the City.

The draft Measure is currently drafted as a general tax. If passed, funds would be placed into the general fund with the non-binding intention of putting all revenue into the Housing Trust Fund. The Housing Trust Fund supports the following activities:
● Construction of new affordable housing, including by providing pre-development to non-profit affordable housing developers, for households with an income of 80% or less of Area Median Income;
● The acquisition and rehabilitation of multi-unit buildings for affordable housing, and the operation of such buildings acquired and/or rehabilitated for households with an income of 80% or less of Area Median Income;
● The administration of the Empty Homes Tax and administration of the Housing Trust Fund.

Placing an Empty Homes Tax Ordinance on the November 8, 2022 Ballot ACTION CALENDAR July 26, 2022

ALTERNATIVES CONSIDERED
The authors considered expanding the existing owner-occupied low-income senior exemption for properties of four or fewer units to all seniors regardless of income. This alternative would respond to the fact that certain seniors may have purchased property decades ago and may no longer be able rent units in the property. The City does not have specific data for properties of owner-occupied four or fewer units that are owned by seniors. However, according to census data, there are around 19,000 seniors in the city. Using the Rent Board’s NAR data, it is reasonable to expect such an exemption would impact far fewer than 74 NAR units in buildings of four or fewer units estimated to be owned and occupied by seniors.

The authors did not include this alternative because there is already a similar exemption in Section 7.54.030 M. providing owners exemption for a unit that is kept vacant for use by owner or a family member for no compensation.

ENVIRONMENTAL SUSTAINABILITY
Existing buildings embody carbon. Maximizing utilization of existing units is a prudent use of embodied carbon.

FISCAL IMPACTS OF RECOMMENDATION
Staff time will be necessary for a legal review and to prepare a Council item placing the ordinance on the ballot. However, significant savings are anticipated as the ordinance and resolution are already drafted and included as part of this referral.

CONTACT PERSON
Councilmember Kate Harrison, Council District 4, 510-981-7140

RESOLUTION NO. -N.S.

SUBMITTING TO THE BERKELEY ELECTORATE AN ORDINANCE ADDING CHAPTER 7.54 TO THE BERKELEY MUNICIPAL CODE TO IMPOSE AN EXCISE TAX

ON KEEPING RESIDENTIAL PROPERTY VACANT TO FUND GENERAL MUNICIPAL

SERVICES
WHEREAS, the Berkeley City Council has elected to submit to the voters at the November 8, 2022 General Municipal Election, a measure adding Chapter 7.54 to the Berkeley Municipal Code imposing an “Empty Homes Tax” on property owners who keep residential properties vacant, to fund general municipal services; and WHEREAS, residential vacancies are an ongoing concern in Berkeley. According to the 2020 Decennial Census, 9% of Berkeley’s housing units, or a total of 4,725 units, sat vacant at the time of the Census; and
WHEREAS, of total vacancies, the Berkeley Rent Stabilization Board data from 2022 indicates that 1,128 fully or partially regulated units in buildings with more than two units have been classified by their owners as not available to rent. Returning these units to the housing market is a key strategy for ensuring long-term affordability; and WHEREAS, prolonged vacancy restricts the supply of available housing units and runs counter to the City’s housing objectives. Prolonged vacancies can also decrease economic activity in neighborhoods and lead to blight; and WHEREAS, the housing affordability crisis has created an urgent need to pay for additional services and programs including, but not limited to, construction of new affordable housing for households with a household income of 80% or less of Area Median Income, including by providing pre-development funding to non-profit affordable housing developers, and the acquisition and rehabilitation of multi-unit buildings for affordable housing, and the operation of such buildings acquired and/or rehabilitated; and WHEREAS, Berkeley is also working to ensure all public funds available to build affordable housing are being maximized, from the City, Alameda County, State and Federal governments; and
WHEREAS, even with the addition of City, County, State, and Federal resources, Berkeley is unable to house all of its residents; and
WHEREAS, the increased costs of meeting the challenges of the housing crisis have impacted Berkeley’s General Fund; and
WHEREAS, the City needs new funds to pay for municipal services. The Empty Homes Tax is intended to disincentivize prolonged vacancies, thereby increasing the number of housing units available for occupancy, while also raising funds for municipal services, Attachment 2

including but not limited to constructing, acquiring, and rehabilitating affordable housing; and
WHEREAS, the Council desires to submit this measure to be placed upon the ballot at the November 8, 2022 Statewide General Election, consistent with the Council’s Resolution No. 70,336-N.S., adopted on May 10, 2022, calling for a General Municipal Election to be consolidated with said statewide election; and NOW THEREFORE, BE IT RESOLVED by the Council of the City of Berkeley that this resolution is hereby adopted and a ballot measure adding Chapter 7.54 to the Berkeley Municipal Code imposing an “Empty Homes Tax” on property owners who keep residential properties vacant, to fund general municipal services, shall be placed before the voters at the election on November 8, 2022.

BE IT FURTHER RESOLVED that the Board of Supervisors of Alameda County is hereby requested to include on the ballots and sample ballots the measure enumerated above to be voted on by the voters of the qualified electors of the City of Berkeley.

BE IT FURTHER RESOLVED that, pursuant to California Elections Code sections 10002 and 10403, this City Council does hereby call an election on Tuesday, November 8, 2022, and requests that the Alameda County Board of Supervisors consolidate said election with the Statewide General Election on that same date in the manner and schedule established by Resolution No. 70,336-N.S., adopted on May 10, 2022, and submit the Measure to the qualified voters of the City at said consolidated election.

BE IT FURTHER RESOLVED that the City Council acknowledges that the consolidated election will be held and conducted in the manner prescribed in Elections Code Section 10418.

BE IT FURTHER RESOLVED that the City of Berkeley hereby requests that the Alameda County Board of Supervisors permit the Registrar of Voters of Alameda County to perform services in connection with said election at the request of the City Clerk. These services to include all necessary services related to official ballot creation, sample ballot and voter information pamphlet preparation, vote-by-mail, polling places, poll workers, voter registration, voting machines, canvass operations, and any and all other services necessary for the conduct of the consolidated election; and BE IT FURTHER RESOLVED that the full text of the measure shall be printed in the Voter Information Pamphlet mailed to all voters in the City of Berkeley.

BE IT FURTHER RESOLVED that the above enumerated measure requires a majority vote threshold for passage.

BE IT FURTHER RESOLVED that the City Clerk is hereby directed to cause the posting, publication and printing of notices, pursuant to the requirements of the Charter of the City of Berkeley, the Government Code and the Elections Code of the State of California.

BE IT FURTHER RESOLVED that the City Clerk is hereby directed to obtain printing, supplies and services as required.

BE IT FURTHER RESOLVED that the City Clerk is hereby authorized to enter into any contracts necessary for election consulting services, temporary employment services, printing services, and any such other supplies and services as may be required by the statutes of the State of California and the Charter of the City of Berkeley for the conduct of the November General Municipal Election.

BE IT FURTHER RESOLVED that Pursuant to Elections Code Section 9285 (b), the City Council hereby adopts the provisions of Elections Code Section 9285 (a) providing for the filing of rebuttal arguments for city ballot measures.

BE IT FURTHER RESOLVED that the City will reimburse the Registrar of Voters for the costs associated with placing the measure on the ballot.

BE IT FURTHER RESOLVED that said proposed Ordinance measure shall appear and be printed upon the ballots to be used at said election as follows:

CITY OF BERKELEY ORDINANCE
YESShall the measure to tax property owners who keep residential units vacant more than 182 days per year, $3,000 for each condominium, duplex, single family dwelling, or townhouse vacant in the first year, increasing to $6,000 for each subsequent year, and $6,000 for all other residential units vacant in the first year, increasing to $12,000 for each subsequent year, with exceptions, from January 1, 2024 to December 31, 2034, estimated to generate between $5,800,000 and $8,700,000 annually, be adopted?
NO
BE IT FURTHER RESOLVED that the text of the Ordinance be shown as Exhibit A, attached hereto and made a part hereof.

Exhibits
A: Text of Ordinance

Exhibit A
ORDINANCE NO. #,###-N.S.

ADDING CHAPTER 7.54 TO THE BERKELEY MUNICIPAL CODE TO IMPOSE AN

EXCISE TAX ON KEEPING RESIDENTIAL PROPERTY VACANT TO FUND GENERAL

MUNICIPAL SERVICES
BE IT ORDAINED by the people of the City of Berkeley as follows:

Section 1. That Chapter 7.54 of the Berkeley Municipal Code is added to read as follows:

Chapter 7.54
Empty Homes Tax
Sections:

7.54.010 Short Title.

7.54.020 Findings and Purpose.

7.54.030 Definitions.

7.54.040 Imposition of Tax.

7.54.050 Returns; Presumption of Vacancy.

7.54.060 Exemptions and Exclusions.

7.54.070 Administration; Penalties.

7.54.080 Housing Trust Fund; Deposit of Proceeds.

7.54.090 Technical Assistance to the City Manager; Annual Reports.

7.54.100 Authorization and Limitation on Issuance of Bonds.

7.54.110 Severability.

7.54.120 Savings Clause.

7.54.010 Short Title.

This Chapter shall be known as the “Empty Homes Tax Ordinance,” and the tax it imposes shall be known as the “Empty Homes Tax.”

7.54.020 Findings and purpose.

The People of the City of Berkeley find and declare as follows:

A. Residential vacancies are an ongoing concern in Berkeley. According to the 2020 Decennial Census, 9% of Berkeley’s housing units, or a total of 4,725 units, sat vacant at the time of the Census.

B. Of total vacancies, the Berkeley Rent Stabilization Board data from 2022 indicates that 1,128 fully or partially regulated units in buildings with more than two units have been classified by their owners as not available to rent. Returning these units to the housing market is a key strategy for ensuring long-term affordability.

C. Prolonged vacancy restricts the supply of available housing units and runs counter to the City’s housing objectives. Prolonged vacancies can also decrease economic activity in neighborhoods and lead to blight.

2 D. The housing affordability crisis has created an urgent need to pay for additional services and programs including, but not limited to, construction of new affordable housing for households with a household income of 80% or less of Area Median Income, including by providing pre-development funding to non-profit affordable housing developers, and the acquisition and rehabilitation of multi-unit buildings for affordable housing, and the operation of such buildings acquired and/or rehabilitated.

E. Berkeley is also working to ensure all public funds available to build affordable housing are being maximized, from the City, Alameda County, State and Federal governments.

F. Even with the addition of City, County, State, and Federal resources, Berkeley is unable to house all of its residents.

G. The increased costs of meeting the challenges of the housing crisis have impacted Berkeley’s General Fund.

H. The City needs new funds to pay for municipal services. The Empty Homes Tax is intended to disincentivize prolonged vacancies, thereby increasing the number of housing units available for occupancy, while also raising funds for municipal services, including but not limited to constructing, acquiring, and rehabilitating affordable housing.

7.54.030 Definitions.

Unless otherwise defined in this Chapter, the terms used in this Chapter shall have the meanings given to them in Chapters 2.44 and 9.04, of the Municipal Code, as amended from time to time. For purposes of this Chapter, the following definitions shall apply:

A. “Affiliate” means an entity under common majority ownership or common control, whether that ownership or control is direct or indirect, with any other person or entity, including but not limited to a person or entity that majority owns or controls, or is majority owned or controlled by, any other person or entity.

B. “Building Permit Application Period” means the period following the date that an application for a building permit for repair, rehabilitation, or construction with respect to a Residential Unit is filed with the City through the date the Planning Department or its successor agency grants or denies that application, not to exceed one year.

Notwithstanding the preceding sentence, if more than one building permit application is filed by or on behalf of one or more persons in the Owner’s Group for the same Residential Unit, the Building Permit Application Period shall mean only the applicable period following the date the first application is filed with the City by or on behalf of anyone in the Owner’s Group. In the case of an owner qualifying for the Disaster Period in subsection D, the Building Permit Application Period may be extended beyond one year if the owner makes a good faith effort, as determined by the building official, to obtain a building permit.

C. “Rehabilitation Period” means the two-year period following the date that the City issues a building permit for repair, or rehabilitation, with respect to a Residential Unit, provided that if the City issues multiple building permits to or for the benefit of one or more persons in the Owner’s Group for the same Residential Unit, the Rehabilitation

3 Period shall mean only the two-year period following the issuance of the first building permit to or for the benefit of anyone in the Owner’s Group.

D. “Disaster Period” means the two-year period following the date that a Residential Unit was severely damaged and made uninhabitable or unusable due to fire, natural disaster, or other catastrophic event.

E. “Homeowners’ Exemption Period” means the period during which a Residential Unit is the principal place of residence of any owner of that Residential Unit and for which such owner validly has claimed either the homeowners’ property tax exemption under Section 218 of the California Revenue and Taxation Code or the disabled veterans’ exemption under Section 205.5 of that Code, as those sections may be amended from time to time.

F. “Lease Period” means the period during which any owner of a Residential Unit or any person in the Owner’s Group of that owner leases that Residential Unit to one or more tenants under a bona fide lease intended for occupancy, but not including any lease or rental of that Residential Unit to anyone in the Owner’s Group or to travelers, vacationers, or other transient occupants.

G. “New Construction Period” means the one-year period following the date that the City issues a certificate of final completion and occupancy with respect to a Residential Unit in a newly erected building or a newly added Residential Unit in an existing building.

H. “Owner Death Period” means, with respect to a co-owner or decedent’s estate, heirs, or beneficiaries, the period during which a Residential Unit is unoccupied, uninhabited, or unused because of the death of any owner of a Residential Unit who was the sole occupant of that Residential Unit immediately prior to such owner’s death, provided that such period shall not exceed the longer of two years or the period during which the Residential Unit is subject to the authority of a probate court.

I. “Owner In Care Period” means the period during which a Residential Unit is unoccupied, uninhabited, or unused because all occupants of the Residential Unit who used that Residential Unit as their principal residence are residing in a hospital, long term or supportive care facility, medical care or treatment facility, or other similar facility.

J. “Owner’s Group” means for each owner of a Residential Unit, with respect to each Residential Unit, the owner, any current or former co-owner, and any Related Person or Affiliate of the owner or any current or former co-owner.

K. “Related Person” means a spouse, domestic partner, child, parent, or sibling.

L. “Residential Unit” means a house, an apartment, a mobile home, a group of rooms, or a single room that is designed as separate living quarters, other than units occupied or intended for occupancy primarily by travelers, vacationers, or other transient occupants. Separate living quarters are those in which the occupants live and eat separately from any other persons in the building and which have a kitchen and direct access from the outside of the building or through a common hall. For purposes of this Chapter, a Residential Unit shall not include a unit in a currently operational nursing home, residential care facility, or other similar facility, or any unit that is fully exempt from property tax under the welfare exemption under Section 214(g) of the California Revenue and Taxation Code, as may be amended from time to time.

4 M. “Vacancy Exclusion Period” means the Building Permit Application Period, Rehabilitation Period, Disaster Period, Homeowners’ Exemption Period, Lease Period, New Construction Period, Owner Death Period, or Owner In Care Period, or where the owner has affirmatively indicated through filings with the Rent Board that a single unit in an owner-occupied duplex, triplex, or quadplex is being used by the owner or a family member for no consideration.

N. “Vacant” means unoccupied, uninhabited, or unused, for more than 182 days, whether consecutive or nonconsecutive, in a calendar year.

7.54.040 Imposition of Tax.

A. Except as otherwise provided in this Chapter, the City imposes an annual Empty Homes Tax on each person that owns a Residential Unit for keeping that Residential Unit Vacant.

B. The tax on an owner keeping a Residential Unit Vacant shall be as follows:

1. For the first calendar year that the Residential Unit is Vacant, the tax shall be $3,000 per vacant condominium, duplex, single family dwelling, or townhouse unit under separate residential unit ownership and $6,000 per any other vacant Residential Unit.

2. For the second consecutive calendar year and each subsequent calendar year thereafter that the Residential Unit is Vacant, the tax shall be $6,000 per vacant condominium, duplex, single family dwelling, or townhouse unit under separate residential unit ownership and $12,000 per any other vacant Residential Unit.

C. The rates set forth in subsection B. of this Section shall be adjusted annually in accordance with the increase in the Consumer Price Index: All Urban Consumers for the San Francisco/Oakland/San Jose Area for All Items as reported by the United States Bureau of Labor Statistics, or any successor to that index, as of December 31st of the preceding year, beginning with the 2025 calendar year.

D. The Empty Homes Tax shall be payable by the owner or owners of the Residential Unit kept Vacant. Not more than one tax per Residential Unit shall be imposed under this Section for a calendar year by reason of multiple liable owners. If there are multiple liable owners, each owner shall be jointly and severally liable for the tax, which shall be the highest amount of tax payable by any owner for that Residential Unit for that calendar year.

E. A person shall be liable for the Empty Homes Tax only if that person, while owning a Residential Unit, has kept or is deemed to have kept that Residential Unit unoccupied, uninhabited, or unused, for more than 182 days, whether consecutive or nonconsecutive, in a calendar year. In determining whether an owner has kept a Residential Unit Vacant during a calendar year, days within any Vacancy Exclusion Period shall be disregarded if that Vacancy Exclusion Period applies to that owner for that Residential Unit, as shall days in which the Residential Unit was not owned by the owner, but the owner shall be deemed to have kept the Residential Unit unoccupied, uninhabited, or unused on all other days that such Residential Unit is unoccupied, uninhabited, or unused during the calendar year.

5 F. The Empty Homes Tax shall take effect on January 1, 2024. The Empty Homes Tax shall expire on December 31, 2034, unless reauthorized by the voters prior to such date.

G. The Empty Homes Tax shall be suspended for as long as the Berkeley COVID-19 Residential Eviction Moratorium is in effect pursuant to BMC 13.110 and shall resume upon expiration.

7.54.050 Returns; Presumption of Vacancy.

A. Each person that is required to pay the Empty Homes Tax shall file a return in the form and manner prescribed by the City Manager.

B. Each person that owns a Residential Unit at any time during a calendar year and that is not exempt from the Empty Homes Tax with respect to that Residential Unit under any one of subsections A. through E. of Section 7.54.060 shall file a return for that calendar year in the form and manner prescribed by the City Manager. A person that fails to file the return required by this subsection B. for a Residential Unit shall be presumed to have kept that Residential Unit Vacant for the calendar year for which such return is required. The person who fails to file the required return may rebut the presumption by producing satisfactory evidence that such person did not keep the Residential Unit Vacant during the calendar year for which the return is required.

7.54.060 Exemptions and Exclusions.

A. For only so long as and to the extent that the City is prohibited by the Constitution or laws of the State of California or the Constitution or laws of the United States from imposing the Empty Homes Tax on any person that person shall be exempt from the Empty Homes Tax.

B. Any organization that is exempt from income taxation under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, shall be exempt from the Empty Homes Tax.

C. The City, the State of California, and any county, municipal corporation, district, or other political subdivision of the State shall be exempt from the Empty Homes Tax, except where any constitutional or statutory immunity from taxation is waived or is not applicable.

D. A natural person or family trust that is the owner of no more than two Single Family Dwellings or condominiums shall be exempt from the Empty Homes Tax for Single Family Dwelling Residential Units or condominiums. For purposes of this subsection D. only, “Single Family Dwelling” is inclusive of a single accessory dwelling unit and a junior accessory dwelling unit. Additionally, for the purposes of this subsection D. only, the “owner” of such Rental Property shall not be any of the following set forth under California Civil Code Section 1947.12(d)(5)(A)(i)-(iii) (“AB 1482”): a real estate investment trust, as defined in Section 856 of the Internal Revenue Code; a corporation; or a limited liability company.

E. The tax imposed by this Chapter shall not apply to a property of four or fewer units which is owner-occupied and whose owner (1) is sixty-five (65) years of age or older and

6 (2) whose combined family income, from all sources for the previous year, is at or below the income level qualifying as eighty percent (80%) of area median income for a Family of such size under Section 8 of the United States Housing Act of 1937 (42 U.S.C.A.

Sections 1437 et. seq.), or successor legislation, for such year. Any taxpayer claiming the exemption under this section shall be required to demonstrate their entitlement thereto annually by submitting an application and supporting documentation to the City Manager or their designee in the manner and at the time established in regulations and/or guidelines hereafter promulgated by the City Manager subject to review by the City Council in its discretion. Such applications shall be on forms provided by the City Manager, or their designee, and shall provide and/or be accompanied by such information as the City Manager shall require, including but not limited to, federal income tax returns and W-2 forms.

7.54.070 Administration; Penalties
A. The City Manager shall enforce the provisions of this Chapter and may prescribe, adopt, and enforce rules and regulations relating to the administration and enforcement of this chapter. The City Manager shall cause all moneys collected pursuant to this chapter to be deposited to the credit of the general fund.

B. The tax required by this Chapter is delinquent if not received by the tax administrator on or before February 28 of each year.

C. Any person who fails to pay the tax required by this Chapter to the City or any amount of tax required to be collected and paid to the City within the time required shall pay a penalty of ten percent of the tax or amount of the tax, in addition to the tax or amount of tax, plus interest at the rate of one percent per month from the date on which the tax or the amount of tax required to be collected became due and payable to the City until the date of payment.

D. Transactions with the principal purpose of avoiding or evading all or a portion of the Empty Homes Tax shall be disregarded for purposes of determining the amount of the Empty Homes Tax and whether the Empty Homes Tax is due. Any owner determined to have engaged in one or more transactions with the principal purpose of avoiding or evading all or a portion of the Empty Homes Tax shall be liable for the Empty Homes Tax and also liable for a penalty in an amount equal to the Empty Homes Tax.

E. Any tax required to be paid by an owner under the provisions of this chapter shall be deemed a debt owed by the owner to the City. Any person owing money to the City under the provisions of this chapter shall be liable to an action brought in the name of the City for the recovery of such amount, along with any collection costs incurred by the City as a result of the person’s noncompliance with this chapter, including, but not limited to, reasonable attorneys’ fees, plus interest and penalties as herein provided.

7.54.080 Housing Trust Fund; Deposit of Proceeds.

A. The Council may deposit any portion of the general revenue purposes proceeds generated by the Empty Homes Tax into the Housing Trust Fund, subject to its operating rules.

7 7.54.090 Technical Assistance to the City Manager; Annual Reports.

A. The Department of Public Works, the Planning Department, and the Rent Board, shall provide technical assistance to the City Manager, upon the City Manager’s request, to administer the Empty Homes Tax.

B. Commencing with a report filed no later than February 15, 2026, covering the fiscal year ending June 30, 2025, the City Manager shall file annually with the Council, by February 15 of each year, a report containing the amount of monies collected from the tax during the prior fiscal year.

7.54.100 Authorization and Limitation on Issuance of Bonds.

The City shall be authorized to pledge revenues generated by the Empty Homes Tax to the repayment of limited tax bonds or other forms of indebtedness authorized under this Section. The Council shall by ordinance or resolution, as applicable, establish the terms of any limited tax bonds or other forms of indebtedness authorized hereby, including but not limited to, the amount of the issue, date, covenants, denominations, interest rate or rates, maturity or maturities, redemption rights, tax status, manner of sale, and such other particulars as are necessary or desirable.

7.54.110 Severability.

If any word, phrase, sentence, part, section, subsection, or other portion of this ordinance, or any application thereof to any person or circumstance is declared void, unconstitutional, or invalid for any reason, then such word, phrase, sentence, part, section, subsection, or other portion, or the prescribed application thereof, shall be severable, and the remaining provisions of this chapter, and all applications thereof, not having been declared void, unconstitutional or invalid, shall remain in full force and effect. The People of the City of Berkeley hereby declare that they would have passed this ordinance, and each section, subsection, sentence, clause and phrase thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases had been declared invalid or unconstitutional.

7.54.120 Savings Clause.

No section, clause, part, or provision of this Chapter shall be construed as requiring the payment of any tax that would be in violation of the Constitution or laws of the United States or of the Constitution or laws of the State of California.

Section 2. Increase Appropriations Limit. Pursuant to California Constitution Article XIII B and applicable laws, for four years from November 8, 2022, the appropriations limit for the City shall be increased by the aggregate sum collected by the levy of the general tax imposed under this ordinance.

Section 3. California Environmental Quality Act Requirements. This Ordinance is

8 exempt from the California Environmental Quality Act, Public Resources Code section 21000 et seq., under, including without limitation, Public Resources Code section 21065 and CEQA Guidelines sections 15378(b)(4) and 15061(b)(3), as it can be seen with certainty that there is no possibility that the activity authorized herein may have a significant effect on the environment and pursuant to Public Resources Code section 21080, subdivision (b)(8), and CEQA Guidelines section 15273 as the approval of government revenues to fund existing services.

Section 4. General Tax; Majority Vote Requirement. This Ordinance imposes a general tax for general revenue purposes and shall be effective only if approved by a majority of the voters voting thereon.

Kate H
arrison
Vice Mayor, District 4
2180 Milvia Street, Berkeley, CA 94704 Tel: 510.981.7140 TDD: 510.981.6903 E-Mail: [email protected]

REVISED AGENDA MATERIAL
Meeti
ng Date: July 12, 2022
Item #: 16
Item Description: Placing a Special Tax Measure on the November 8, 2022 Ballot to Tax Vacant Residential Units to Fund Construction, Acquisition and Rehabilitation of Affordable Housing
Submi
tted by: Vice Mayor Harrison
This revised agenda material regarding the Empty Homes Tax includes an updated background document and ordinance for informational purposes, reflecting Council comments and feedback at the May 31 Council meeting.

Purs
uant to the May 31 referral to the City Attorney and City Manager, Vice Mayor Harrison continues to work with the departments to prepare a finalized and legally sound draft for Council consideration before the Council recess.

Summ
ary of substantial changes in the updated measure:
• Expand Vacancy Exclusion Period to include instances where the owner has affirmatively indicated through filings with the Rent Board that a single unit in an owner-occupied duplex is being used by owner or family members for no consideration;
• Clarify that the tax shall expire on January 1, 2034, unless reauthorized by voters prior to such date.
• Add condominiums to the natural person/family trust exemption; • Add exemption for own-occupied properties of three or fewer units where the owner (1) is sixty-five (65) years of age or older and (2) whose combined family income, from all sources for the previous year, is at or below the income level qualifying as eighty percent (80%) of area median income. • Added clarification that the tax would not apply during periods of emergency.

Summ
ary of changes in the background document:

Attachment 3Page 22 of 41

• Information showing that a significant number of vacant properties in Berkeley are entirely or mostly vacant. This provides further evidence that much of the vacancies in the city are not due to natural turnover;
• Data showing that institutional investor purchases of homes are at an all-time high nationally. In Oakland and SF 13% and 18% were acquired by institutional investors respectively and an example from Berkeley added; • Updated revenue projections to a range of $4.8 million and $7.2 million, excluding units that indicated to be for use by owner. Clarify that this is likely a conservative estimate given only units that have registered as not available to rent (NAR) with the rent board are used;
• Exemptions detailed in the above section;
• Information clarifying the long period to prepare for the vacancy tax, as it will not take effect until 2024 and will only be applied at the end of that calendar year if units remain vacant.

Kate Harrison
Vice Mayor, District 4
2180 Milvia Street, Berkeley, CA 94704 ● Tel: (510) 981-7000 ● TDD: (510) 981-6903 ● Fax: (510) 981-7099 E-Mail: [email protected] Website: http://www.CityofBerkeley.info/Manager

ACTION CALENDAR
Julyne 1214, 2022

To: Honorable Mayor and Members of the City Council
From: Vice Mayor Kate Harrison
Subject: Pl acing a Special Tax Measure on the November 8, 2022 Ballot to Tax Vacant Residential Units to Fund Construction, Acquisition and Rehabilitation of Affordable Housing Refer to the City Attorney and City Manager an Empty Homes Tax Ordinance for the November 8, 2022 Ballot

RECOMMENDATION
Refer to the City Attorney and City Manager to prepare and submit a resolution Ssubmitting an Ordinance adding Chapter 7.54 to the Berkeley Municipal Code taxing housing units that 1) have remained vacant for more than one year, 2) are not under permitted renovation or in probate and 3) are in multi-unit buildings or are single family homes or condominiums whose owners are not natural persons or family trusts to a vote of the electors at the November 8, 2022 General Municipal Election.

CURRENT SITUATION AND RATIONALE FOR RECOMMENDATION
The City of Berkeley is experiencing a historic housing crisis. Between 2005 and 2019 gross median rent increased by over 50%. This has been particularly burdensome in a city where 58% of residents are renters.1 While in recent years Berkeley has met its RHNA goals for those earning above 120% Area Median Income (AMI), it has failed to build sufficient housing for everyone else. Further, housing at the >120% AMI category has not significantly improved affordability for lower income residents and has increased displacement in low-income neighborhoods.
2 The extraordinary gap between the
housing needs of residents and the availability of housing can only be bridged through the use of numerous policy interventions, including a vacancy tax intended to incentivize owners of housing property to bring units back on the market and discourage speculation.

In a recent poll of top policy priorities among Berkeley voters, increasing affordable housing for low-income and homeless residents received by far the most support, at

1 Anti-Eviction Mapping Project: Densifying Berkeley: Potential Impacts on Displacement and Equity, 2022, https://www.berkeleyside.org/wp-content/uploads/2022/04/AEMP-UpzoningReport-Draft4-3.pdf 2 Ibid.

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Refer to the City Attorney and City Manager an Empty Homes Tax Ordinance for the November 8, 2022 Ballot

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58%.3 While Berkeley is actively building new affordable units, siting and constructing new units is a longer-term process, and it is incumbent on the City to maximize the availability of existing units that are already built and could be available for rent or sale.

Unfortunately, Alameda County’s housing remains unaffordable for many of its residents, and this burden does not fall evenly across income and racial groups. While 47% of renters in Alameda County are rent burdened, the rate is 58% for Black renters and 87% for extremely low-income renters.
4 Meanwhile, as this crisis continues to
unfold, Berkeley Rent Stabilization Board data indicates that 1,128 fully or partially regulated
5 units have been classified by their owners as not available to rent (NAR).6 Around 40% of the 1,128 NAR units are in properties that are completely vacant, and almost 80% of NAR units are in properties that are half or more empty. A few of these are actively being renovated but the majority are not. Many have not been occupied for some time or actually are rented but not reported as being so to the Rent Board. Based on a review of Rent Board data and Google Street View, approximately 100 of these units are in buildings that are entirely vacant and dilapidated. This contributes to neighborhood blight and requires costly vector control and fire inspections. Thus, much of the vacancies in the city are not due to natural turnover.

Oakland and Vancouver, both experiencing their own challenges with housing unaffordability, use a vacant housing tax to encourage owners of vacant units to find tenants or sell to those who will. In 2016, Vancouver passed a measure that placed a surcharge on the assessed value of vacant units. Within two years of its implementation, 21.2% of vacant units returned to occupancy and the city generated $46 million Canadian dollars. Oakland enacted a vacant property tax of $3,000 to $6,000, varying based on property type. In its first year of implementation, the city

3 City of Berkeley Community Survey, Live Phone and Text to Online, April 28-May 3, 2022, https://berkeleyca.gov/sites/default/files/documents/2022-05- 31%20Item%2037%20Discussion%20and%20Direction%20Regarding.pdf. 4 California Housing Partnership Housing Needs Dashboard, 2019, https://chpc.net/housingneeds/?view=37.405074,-
119.26758,5&county=California,Alameda&group=housingneed&chart=shortfall|current,cost - burden|current,cost-burden-re|current,homelessness,historical-rents,vacancy,asking- rents|2022,budgets|2021,funding|current,state-funding,lihtc|2010:2021:historical,rhna- progress,multifamily-production
5 Partially regulated units are only partially covered by the rent ordinance, while fully regulated are completely covered by the ordinance
6 Berkeley Rent Stabilization Board. There are also units classified as “vacant”, for which property owners are actively seeking tenants.

Refer to the City Attorney and City Manager an Empty Homes Tax Ordinance for the November 8, 2022 Ballot

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collected over $7 million in revenue.7 San Francisco is actively considering placing a vacant housing tax measure on the November ballot.

Addressing vacant units is a critical part of addressing Berkeley’s housing crisis. Every year that a significant percentage of Berkeley’s housing stock remains vacant exacerbates the housing affordability and displacement crises. This item includes a modified version of San Francisco’s proposed tax adapted to Berkeley. It is in the public interest to refer to the City Attorney and City Manager to prepare and submit a resolution taxing empty homes that would be submitted to a vote of the electors at the November 8, 2022 General Municipal Election.

BACKGROUND
Berkeley’s housing challenges are significant, requiring numerous policy interventions across many years to remediate. However, of the units that were built as part of the 2023 RHNA goals, the majority have been unaffordable to most residents. 8 In 2019 the City’s median rent was $3,165, making it affordable to only households earning over $130k annually. Median rents have also increased by greater than 50% between 2005 and 2019. Rising rents in the city are of particular concern given that the City has a high renter population, and the impact of high rents falls disproportionately on BIPOC residents9.

Percent Renter Occupancy vs. Percent Berkeley Population, 201910

7 San Francisco Budget and Legislative Analyst’s Office: Residential Vacancies in San Francisco, 2022, https://56a418ca-94d2-476c-9a45-
f491ca4a0387.usrfiles.com/ugd/56a418_74b82803e4fb434bb1b13010828a4c01.pdf 8 2020 General Plan APR: City of Berkeley, Table 2
9 Anti-Eviction Mapping Project: Densifying Berkeley: Potential Impacts on Displacement and Equity, 2022, https://www.berkeleyside.org/wp-content/uploads/2022/04/AEMP-UpzoningReport-Draft4-3.pdf 10 Ibid.

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Fortunately, the City of Berkeley has taken numerous steps in recent years to tackle its affordable housing crisis, including issuing a $100 million affordable housing bond, permitting Berkeley residents (outside of the fire zones) to receive near-automatic approval to build certain types of ADUs, and rezoning BART stations to allow significant affordable housing. A potential 2022 affordable housing bond is under consideration.

While these efforts will likely dramatically increase the supply of housing in Berkeley, it will take years for the City to reap the benefits. Developments still need to be proposed, approved, and then constructed. Berkeley’s large supply of vacant homes presents a unique opportunity for the City to immediately provide new units to renters, as there are no approval processes or lengthy construction timelines.

Additionally, hot housing markets often attract real estate speculation. Redfin data shows that 13% of homes in Oakland were purchased by an institutional investor or business in the fourth quarter of 2021, a 16.9% increase over the year before. In San Francisco, 18% were acquired by institutional investors. Nationally, investor purchases of homes are at an all-time high.

Refer to the City Attorney and City Manager an Empty Homes Tax Ordinance for the November 8, 2022 Ballot

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In Berkeley, it is likely that some vacant units are in buildings purchased for the sole purpose of accruing more wealth, with no intention of housing tenants. An example is one property owner who owns 9 units, across 4 properties of two or fewer units in the city— of these, 8 are listed as not available to rent. While the extent of this is unknown, applying a tax on vacant homes will discourage this practice that, in aggregate, raises rents and home prices for everyone else. The proposed Measure fulfills one of the key anti-speculation recommendations of the 2022 report by the Anti-Eviction Mapping Project (Densifying Berkeley: Potential Impacts on Displacement and Equity).

Using the assumptions made in the San Francisco Budget Analyst report on a prosp
ective vacancy tax, and Berkeley Rent Board data on length of vacancies, it is estimated that Berkeley will generate between $4.8 million and $7.2 million in revenue annually and that several hundred vacant units could become occupied within two years.11 This is likely a conservative estimate as it only includes units that have been registered as NAR with the Berkeley Rent Board—other vacant units are not included..

Revenues projected here assume that units for owner use are predominately in one and two unit buildings, therefore, we are only calculating likely revenues from properties with three or more units.

11 These low-end estimates areis calculated by using Berkeley Rent Board data

Refer to the City Attorney and City Manager an Empty Homes Tax Ordinance for the November 8, 2022 Ballot

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Berkeley’s proposed vacancy tax is built off San Francisco’s 2022 proposed Empty Home Tax proposal. The San Francisco vacancy tax applies only to owners of buildings with three or more units when at least one has been unoccupied for more than 182 days in a year. Single family homes and two-unit properties are exempt, and the vacancy tax increases for larger properties and units that have been empty for longer. The proposed vacancy tax for Berkeley would instead be imposed after a year of vacancy, providing time extensions for units under active reconstruction or in probate. It will also contain the following exemptions:
• Oowners of up to two single family homes and/or condominiums so long as they are owned by natural persons or family trusts. Single family homes and/or condominiums owned by corporations, real estate trusts, and LLCs would not be exempt. Additionally, single family homes with an ADU or JADU will be classified as “one unit” for the purposes of determining how many units are owned. • Duplexes where one unit is owner occupied if the owner indicates that the other unit is not available to rent
• A property of three or fewer units whose owner is over 65, makes under 80% of the Area Median Income, and resides in the property
• Organizations that are exempt from paying property taxes in California, such as non-profit organizations and religious institutions
• The Empty Homes Tax will be suspended if an eviction moratorium is in place in Berkeley
The tax rate would vary between $3,000 and $6,000 depending on the type of unit.

Condos, duplexes, townhomes and Single Family Homes not exempt as described above would pay $3,000 per year. Remaining units would pay $6,000 annually. Both tiers of fees double, to $6,000 and $12,000 annually, respectively, for units vacant for more than two years.

The tax would go into effect on January 1, 2024, and a hom e will only be considered
vacant if it remains vacant for the entire year. As such, the vacancy tax provides a long Formatted: Font: (Default) Arial, 12 pt
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runway for property owners to return units to occupancy or inform the city that a property is exempt before any tax comes into effect.

The vacancy tax in Berkeley would have numerous benefits. It will almost immediately increase the City’s housing stock while complimenting more time-consuming approval and construction processes. Further, the tax has the potential to bring hundreds of units online within a year and generate millions in affordable housing revenue as a byproduct.

A vacancy tax will also disincentivize property owners from engaging in real estate speculation, which will help limit rent and housing price increases across the City.

Finally, units that are actually occupied will be brought in line with the city’s housing regulations.

The draft Measure is currently drafted as a special tax. If passed, Council and City would be required to spend proceeds as specified. While the primary purpose of the proposed tax is to bring vacant units back into the housing market, the proposed Measure includes a Housing Trust Fund supporting the following activities:
● Construction of new affordable housing, including by providing pre-development to non-profit affordable housing developers, for households with an income of 80% or less of Area Median Income;
● The acquisition and rehabilitation of multi-unit buildings for affordable housing, and the operation of such buildings acquired and/or rehabilitated for households with an income of 80% or less of Area Median Income;
● The administration of the Empty Homes Tax and administration of the Housing Trust Fund.

The referral calls on the Author to submit the measure to the City Attorney for legal review.

ENVIRONMENTAL SUSTAINABILITY
Existing buildings embody carbon. Maximizing utilization of existing units is a prudent use of embodied carbon.

FISCAL IMPACTS OF RECOMMENDATION
Staff time will be necessary for a legal review and to prepare a Council item placing the ordinance on the ballot. However, significant savings are anticipated as the ordinance and resolution are already drafted and included as part of this referral.

CONTACT PERSON
Councilmember Kate Harrison, Council District 4, 510-981-7140

Attachments:
1: Draft Resolution

Placing an Empty Homes Tax Ordinance on the November 8, 2022 Ballot ACTION CALENDAR May 31, 2022

Exhibit A: Draft Text of Measure

RESOLUTION NO. -N.S.

SUBMITTING TO THE BERKELEY ELECTORATE AN ORDINANCE ADDING CHAPTER 7.54 TO THE BERKELEY MUNICIPAL CODE TAXING EMPTY HOMES ON THE NOVEMBER 8, 2022 BALLOT

WHEREAS, the Berkeley City Council has elected to submit to the voters at the November 8, 2022 General Municipal Election, a measure adding Chapter 7.54 to the Berkeley Municipal Code taxing empty homes; and

WHEREAS, in accordance with the provisions of Section 10002 and 10403 of the Elections Code of the State of California, the Alameda County Board of Supervisors is requested to consolidate the City of Berkeley General Municipal Election with the Statewide General Election to be held November 8, 2022; and

WHEREAS, the City of Berkeley hereby requests that the Alameda County Board of Supervisors permit the Registrar of Voters of Alameda County to perform services in connection with said election at the request of the City Clerk. These services to include all necessary services related to official ballot creation, sample ballot and voter information pamphlet preparation, vote- by-mail, polling places, poll workers, voter registration, voting machines, canvass operations, and any and all other services necessary for the conduct of the consolidated election; and

WHEREAS, the Regional Housing Needs Assessment requires the City of Berkeley to permit the construction of 3,854 affordable housing units in the next eight years.

WHEREAS, the Council desires to submit this measure to be placed upon the ballot at said consolidated election.

NOW THEREFORE, BE IT RESOLVED by the Council of the City of Berkeley that the Board of Supervisors of Alameda County is hereby requested to include on the ballots and sample ballots the measure enumerated above to be voted on by the voters of the qualified electors of the City of Berkeley.

BE IT FURTHER RESOLVED that the full text of the measure shall be printed in the Voter Information Pamphlet mailed to all voters in the City of Berkeley.

BE IT FURTHER RESOLVED that the above enumerated measure requires a two-thirds vote threshold for passage.

BE IT FURTHER RESOLVED that the City Clerk is hereby directed to cause the posting, publication and printing of notices, pursuant to the requirements of the Charter of the City of Berkeley, the Government Code and the Elections Code of the State of California.

BE IT FURTHER RESOLVED that the City Clerk is hereby directed to obtain printing, supplies and services as required.

BE IT FURTHER RESOLVED that the City Clerk is hereby authorized to enter into any contracts necessary for election consulting services, temporary employment services, printing services, and any such other supplies and services as may be required by the statutes of the State of California and the Charter of the City of Berkeley for the conduct of the November General Municipal Election.

BE IT FURTHER RESOLVED that Pursuant to Elections Code Section 9285 (b), the City Council hereby adopts the provisions of Elections Code Section 9285 (a) providing for the filing of rebuttal arguments for city ballot measures.

BE IT FURTHER RESOLVED that the City will reimburse the Registrar of Voters for the costs associated with placing the measure on the ballot.

BE IT FURTHER RESOLVED that said proposed Ordinance measure shall appear and be printed upon the ballots to be used at said election as follows:

CITY OF BERKELEY ORDINANCE

Shall the measure [ ] YES
NO

BE IT FURTHER RESOLVED that the text of the Ordinance be shown as Exhibit A, attached hereto and made a part hereof.

Exhibits

A: Text of Ordinance

Exhibit A
ORDINANCE NO. #,###-N.S.

ADDING CHAPTER 7.54 TO THE BERKELEY MUNICIPAL CODE TO TAX EMPTY HOMES

BE IT ORDAINED by the people of the City of Berkeley as follows:

Section 1. That Chapter 7.54 of the Berkeley Municipal Code is added to read as follows:

Chapter 7.54

Empty Homes Tax

Sections:

7.54.010 Short Title.

7.54.020 Findings and Purpose.

7.54.030 Definitions.

7.54.040 Imposition of Tax.

7.54.050 Returns; Presumption of Vacancy.

7.54.060 Exemptions and Exclusions.

7.54.070 Administration; Penalties.

7.54.080 Housing Trust Fund; Deposit of Proceeds.

7.54.090 Expenditure of Proceeds.

7.54.100 Technical Assistance to the Finance Department.

7.54.110 Authorization and Limitation on Issuance of Bonds

7.54.120 Amendment of Ordinance.

7.54.130 Severability.

7.54.140 Savings Clause.

7.54.010 Short Title.

This Chapter shall be known as the “Empty Homes Tax Ordinance,” and the tax it imposes shall be known as the “Empty Homes Tax.”

7.54.020 Findings and purpose.

The Council of the City of Berkeley finds and declares as follows:

A. Residential vacancies are an ongoing concern in Berkeley. According to the 2020 Decennial Census, 9% of Berkeley’s housing units, or a total of 4,725 units, sit vacant.

B. Of total vacancies, the Berkeley Rent Stabilization Board data from 2022 indicates that 1,128 fully or partially regulated units in buildings with more than two units have been classified by their owners as not available to rent. Returning these units to the housing market is a key strategy for ensuring long-term affordability.

C. Prolonged vacancy restricts the supply of available housing units and runs counter to the City’s housing objectives. Prolonged vacancies can also decrease economic activity in neighborhoods and lead to blight.

2 D. The Empty Homes Tax is intended to disincentivize prolonged vacancies, thereby increasing the number of housing units available for occupancy, while also raising funds for rent subsidies and affordable housing.

7.54.030 Definitions.

Unless otherwise defined in this Chapter, the terms used in this Chapter shall have the meanings given to them in Chapter 2.44 and 9.04, of the Municipal Code, as amended from time to time. For purposes of this Chapter, the following definitions shall apply:

A. “Affiliate” means a person under common majority ownership or common control, whether that ownership or control is direct or indirect, with any other person, including but not limited to a person that majority owns or controls, or is majority owned or controlled by, any other person.

B. “Building Permit Application Period” means the period following the date that an application for a building permit for repair, rehabilitation, or construction with respect to a Residential Unit is filed with the City through the date the Planning Department or its successor agency grants or denies that application, not to exceed one year.

Notwithstanding the preceding sentence, if more than one building permit application is filed by or on behalf of one or more persons in the Owner’s Group for the same Residential Unit, the Building Permit Application Period shall mean only the applicable period following the date the first application is filed with the City by or on behalf of anyone in the Owner’s Group. In the case of an owner qualifying for the Disaster Period in subsection D., the Building Permit Application Period may be extended beyond one year if the owner makes a good faith effort, as determined by the building official, to obtain a building permit.

C. “Rehabilitation Period” means the two-year period following the date that the City issues a building permit for repair, or rehabilitation, with respect to a Residential Unit, provided that if the City issues multiple building permits to or for the benefit of one or more persons in the Owner’s Group for the same Residential Unit, the Rehabilitation Period shall mean only the two-year period following the issuance of the first building permit to or for the benefit of anyone in the Owner’s Group.

D. “Disaster Period” means the two-year period following the date that a Residential Unit was severely damaged and made uninhabitable or unusable due to fire, natural disaster, or other catastrophic event.

E. “Accessory Dwelling Unit,” and “Single Family Dwelling,” shall have the same meanings as defined in Section 23F.04.010.

F.E. “Homeowners’ Exemption Period” means the period during which a Residential Unit is the principal place of residence of any owner of that Residential Unit and for which such owner validly has claimed either the homeowners’ property tax exemption under Section 218 of the California Revenue and Taxation Code or the disabled veterans’ exemption under Section 205.5 of that Code, as those sections may be amended from time to time.

G.F. “Lease Period” means the period during which any ow ner of a Residential Unit or
any person in the Owner’s Group of that owner leases that Residential Unit to one or more tenants under a bona fide lease intended for occupancy, but not including any lease or rental of that Residential Unit to anyone in the Owner’s Group or to travelers, vacationers, or other transient occupants.

3 H.G. “New Construction Period” means the one-y ear period following the date that the City issues a certificate of final completion and occupancy with respect to a Residential Unit in a newly erected building or a newly added Residential Unit in an existing building.

I.H. “Owner Death Period” means, with respect to a co-ow ner or decedent’s estate, heirs, or beneficiaries, the period during which a Residential Unit is unoccupied, uninhabited, or unused because of the death of any owner of a Residential Unit who was the sole occupant of that Residential Unit immediately prior to such owner’s death, provided that such period shall not exceed the longer of two years or the period during which the Residential Unit is subject to the authority of a probate court.

J.I. “Owner In Care Period” means the period during which a Residential Unit is unoccupied, uninhabited, or unused because all occupants of the Residential Unit who used that Residential Unit as their principal residence are residing in a hospital, long term or supportive care facility, medical care or treatment facility, or other similar facility.

K.J. “Owner’s Group” means for each owner of a Residential Unit, with respect to each Residential Unit, the owner, any current or former co-owner, and any Related Person or Affiliate of the owner or any current or former co-owner.

L.K. “Related Person” means a spouse, domestic partner, child, parent, or sibling.

M.L. “Residential Unit” means a house, an apartment, a mobile home, a group of rooms, or a single room that is designed as separate living quarters, other than units occupied or intended for occupancy primarily by travelers, vacationers, or other transient occupants. Separate living quarters are those in which the occupants live and eat separately from any other persons in the building and which have a kitchen and direct access from the outside of the building or through a common hall. For purposes of this Chapter, a Residential Unit shall not include a unit in a currently operational nursing home, residential care facility, or other similar facility, or any unit that is fully exempt from property tax under the welfare exemption under Section 214(g) of the California Revenue and Taxation Code, as may be amended from time to time.

N.M. “Vacancy Exclusion Period” means the Building Permit Application Period, Rehabilitation Period, Disaster Period, Homeowners’ Exemption Period, Lease Period, New Construction Period, Owner Death Period, or Owner In Care Period, or where the owner has affirmatively indicated through filings with the Rent Board that a single unit in an owner-occupied duplex is being used by owner or family members for no consideration.

O.N. “Vacant” means an unoccupied, uninhabited, or unused rental unit as defined in Chapter __ 4(g) for at least more than one tax year.

7.54.040 Im
position of Tax.

A. Except as otherwise provided in this Chapter for the purposes described in Section 7.54.090, the City imposes an annual Empty Homes Tax on each person that owns a Residential Unit for keeping that Residential Unit Vacant.

B. The tax on an owner keeping a Residential Unit Vacant for a single tax year in 2024 and subsequent single tax years shall be shall as follows:

1. $3,000 per vacant condominium, duplex, single family dwelling, or townhouse unit under separate residential unit ownership;

2. $6,000 per other vacant Residential Unit.

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4 C. The tax on an owner keeping a Residential Unit Vacant for the 2025 tax year or subsequent tax years, if that owner has kept that Residential Unit Vacant in the immediately preceding tax year, shall be as follows:

1. $6,000 per vacant condominium, duplex, single family dwelling, or townhouse unit under separate residential unit ownership;

2. $12,000 per other vacant Residential Unit.

D. The rates set forth in subsections B. of this Section shall be adjusted annually in accordance with the increase in the Consumer Price Index: All Urban Consumers for the San Francisco/Oakland/San Jose Area for All Items as reported by the United States Bureau of Labor Statistics, or any successor to that index, as of December 31st of the preceding year, beginning with the 2025 tax year.

E. The Empty Homes Tax shall be payable by the owner or owners of the Residential Unit kept Vacant. Not more than one tax per Residential Unit shall be imposed under this Section for a tax year by reason of multiple liable owners. If there are multiple liable owners, each owner shall be jointly and severally liable for the tax, which shall be the highest amount of tax payable by any owner for that Residential Unit for that tax year.

F. A person shall be liable for the Empty Homes Tax only if that person, while owning a R
esidential Unit, has kept or is deemed to have kept that Residential Unit unoccupied, uninhabited, or unused, for more than at least one tax year.

G. The Empty Homes Tax shall take effect on January 1, 2024. The Empty Homes Tax shall expire on January 1, 2034, unless reauthorized by voters prior to such date.expire on December 31, 2053.

G.H. The Empty Homes Tax shall be suspended for as long as the Berkeley COVID-19 Residential Eviction Moratorium is in effect pursuant to BMC 13.110 and shall resume on upon expiration.

7.54.050 Returns; Presumption of Vacancy.

A. Each person that is required to pay the Empty Homes Tax shall file a return in the form and manner prescribed by the Finance Department.

B. Each person that owns a Residential Unit at any time during a tax year and that is not exempt from the Empty Homes Tax with respect to that Residential Unit under any one of subsections A. through E. of Section 7.54.060 shall file a return for that tax year in the form and manner prescribed by the Finance Department. A person that fails to file the return required by this subsection B. for a Residential Unit shall be presumed to have kept that Residential Unit Vacant for the tax year for which such return is required.

The person who fails to file the required return may rebut the presumption by producing satisfactory evidence that such person did not keep the Residential Unit Vacant during the tax year for which the return is required.

7.54.060 Exemptions and Exclusions.

A. For only so long as and to the extent that the City is prohibited from imposing the Empty Homes Tax, any person upon whom the City is prohibited under the Constitution or laws of the State of California or the Constitution or laws of the United States from imposing the Empty Homes Tax shall be exempt from the Empty Homes Tax.

B. Any organization that is exempt from income taxation under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, shall be exempt from the Empty Homes Tax.

5 C. The City, the State of California, and any county, municipal corporation, district, or other political subdivision of the State shall be exempt from the Empty Homes Tax, except where any constitutional or statutory immunity from taxation is waived or is not applicable.

D. A natural person or family trust that owns no more than two sSingle fFamily dDwellings or condominiums shall be exempt from the Empty Homes Tax for sSingle fFamily dDwelling Residential Units or condominiums. For purposes of subparagraph D only, “Single Family Dwellings” is inclusive of a single aAccessory dDwelling uUnit or and a junior aAccessory dDwelling uUnit. Additionally, for the purposes of subparagraph D only, the “Owner” of such Rental Property shall not be any of the following set forth under California Civil Code Section 1947.12(d)(5)(A)(i)-(iii) (“AB 1482”): a real estate investment trust, as defined in Section 856 of the Internal Revenue Code; a corporation; or a limited liability company.

E. For each Residential Unit qualifying for any Vacancy Exclusion Period in a tax year, an owner shall be exempt from the Empty Homes Tax for that Residential Unit.

F. The tax imposed by this Chapter shall not apply to a property of three or fewer units which is owner-occupied and whose owner (1) is sixty-five (65) years of age or older and (2) whose combined family income, from all sources for the previous year, is at or below the income level qualifying as eighty percent (80%) of area median income for a Family of such size under Section 8 of the United States Housing Act of 1937 (42 U.S.C.A.

Sections 1437 et. seq.), or successor legislation, for such year. Any taxpayer claiming the exemption under this section shall be required to demonstrate their entitlement thereto annually by submitting an application and supporting documentation to the City Manager or their designee in the manner and at the time established in regulations and/or guidelines hereafter promulgated by the City Manager subject to review by the City Council in its discretion. Such applications shall be on forms provided by the City Manager, or their designee, and shall provide and/or be accompanied by such information as the City Manager shall require, including but not limited to, federal income tax returns and W-2 forms.

7.54.070 Administration; Penalties
A. Except as otherwise provided under this Chapter, the Empty Homes Tax shall be administered pursuant to Chapter 2.44 and 9.04.

B. Transactions with the principal purpose of avoiding or evading all or a portion of the E
mpty Homes Tax shall be disregarded for purposes of determining the amount of the Empty Homes Tax and whether the Empty Homes Tax is due. In addition to the Empty Homes Tax due as a result of this subsection B., any owner liable for any Empty Homes Tax as a result of this subsection B. shall be liable for a penalty in an amount equal to the Empty Homes Tax due as a result of this subsection B.

7.54.080 Housing Trust Fund; Deposit of Proceeds.

A. Establishment of Fund. The Empty Homes Fund (“Fund”) is hereby established as a special purpose fund, and shall receive all taxes, penalties, interest, and fees collected from the Empty Homes Tax imposed under this Chapter.

B. The Fund will operate as a subsidiary fund within the Housing Trust Fund and be subject to its operating rules.

6 C. Use of Fund. Subject to the budgetary and fiscal provisions of the Charter, monies in the Fund shall be used exclusively for the purposes described in Section 7.54.090.

D. Administration of Fund. Commencing with a report filed no later than February 15, 2026, covering the fiscal year ending June 30, 2025, the Finance Director shall file annually with the Council, by February 15 of each year, a report containing the amount of monies collected in and expended from the Fund during the prior fiscal year, the status of any project required or authorized to be funded by Section 7.54.090, and such other information as the Finance Director, in the Finance Director’s sole discretion, deems relevant to the operation of Chapter.

E. All monies collected under the Empty Homes Tax Ordinance shall be deposited to the credit of the Fund, established in subsection A. of this Section. The Fund shall be maintained separate and apart from all other City funds and shall be subject to appropriation. Any balance remaining in the Fund at the close of any fiscal year shall be deemed to have been provided for a special purpose and shall be carried forward and accumulated in the Fund for the purposes described in Section 7.54.090.

7.54.090 Expenditure of Proceeds.

Subject to the budgetary and fiscal provisions of the Charter, monies in the Housing Trust Fund shall be appropriated on an annual or supplemental basis and used exclusively for the following purposes:

A. To the Finance Department and other City Departments, for administration of the Empty Homes Tax and administration of the Housing Trust Fund, limited, each year, to 10% of annual proceeds.

B. Refunds of any overpayments of the Empty Homes Tax, including any related penalties, interest, and fees.

C. All remaining amounts to provide funding, including administrative costs, for Eligible Programs, [ ]% of which shall be used for the programs described in subsection

7.54.090 C.(1)(a) and [ ]% of which shall be used for the programs described in subsection 7.54.090 C.(1)(b). The voters intend that these remaining amounts be spent on Eligible Programs at levels in addition to amounts currently spent on such Eligible Programs and that such remaining amounts not be used to supplant existing expenditures.

1. For purposes of this Section 7.54.090, “Eligible Programs” means:
a. C
onstruction of new affordable housing, including by providing pre- development funding to non-profit affordable housing developers. Buildings subject to expenditures under this subsection 7.54.090 C.(1)(B) shall be restricted through a recorded deed restriction or restrictions mandated for the useful life of the building to households with an household income of 80% or less of Area Median Income.
b. The acquisition and rehabilitation of multi-unit buildings for affordable housing, and the operation of such buildings acquired and/or rehabilitated.

Buildings subject to expenditures under this subsection 7.54.090 C.(1)(B) shall be restricted through a recorded deed restriction or restrictions mandated for the useful life of the building to households with an household income of 80% or less of Area Median Income.

2. For purposes of this Section 7.54.090, “Area Median Income” means the median income as published annually by the City Manager pursuant to Chapter 23.328.080

7 (Administrative Regulations), derived in part from the income limits and area median income determined by the United States Department of Housing and Urban Development, or its successor agency, for the Alameda County metro fair market rent area, adjusted solely for household size, but not for high housing cost area. The Council may modify this definition of Area Median Income solely for purposes of subsection 7.54.090 C.(1)(b) to determine area median income by zip code area.

7.54.100 Technical Assistance to the Finance Department.

The Department of Public Works, the Planning Depa
rtment of Building Inspection, the
Rent Board, and the Assessor-Recorder’s Office shall provide technical assistance to the Finance Department, upon the Finance Department’s request, to administer the Empty Homes Tax.

7.5 4.110 Authorization and Limitation on Issuance of Bonds.

The City is hereby authorized to issue from time to time limited tax bonds or other forms of indebtedness to finance the costs of the projects described in Section 7.54.090. The City shall be authorized to pledge revenues generated by the Empty Homes Tax to the repayment of limited tax bonds or other forms of indebtedness authorized under this Section. The Council shall by ordinance or resolution, as applicable, establish the terms of any limited tax bonds or other forms of indebtedness authorized hereby, including but not limited to, the amount of the issue, date, covenants, denominations, interest rate or rates, maturity or maturities, redemption rights, tax status, manner of sale, and such other particulars as are necessary or desirable.

7.54.120 Amendment of Ordinance.

The Council may amend this ordinance in any manner by two-thirds vote, including reducing any applicable tax rates or adding or modifying exemptions that does not result in an increase in the tax imposed herein without further voter approval except as limited by Articles XIII A and XIII C of the California Constitution. If the City Council repeals this ordinance, it may subsequently reenact it without voter approval, as long as the reenacted ordinance does not result in an increase in the tax imposed herein.

7.54.130 Severability.

Severability. If any word, phrase, sentence, part, section, subsection, or other portion of this ordinance, or any application thereof to any person or circumstance is declared void, unconstitutional, or invalid for any reason, then such word, phrase, sentence, part, section, subsection, or other portion, or the prescribed application thereof, shall be severable, and the remaining provisions of this chapter, and all applications thereof, not having been declared void, unconstitutional or invalid, shall remain in full force and effect. The People of the City of Berkeley hereby declare that they would have passed this ordinance, and each section, subsection, sentence, clause and phrase thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases had been declared invalid or unconstitutional.

7.54.140 Savings Clause.

8 No section, clause, part, or provision of this Chapter shall be construed as requiring the payment of any tax that would be in violation of the Constitution or laws of the United States or of the Constitution or laws of the State of California.

Section 2. Increase Appropriations Limit. P
ursuant to California Constitution Article XIII B
and applicable laws, for four years from November 8, 2022, the appropriations limit for the City shall be increased by the aggregate sum collected by the levy of the tax imposed under this ordinance.

Section 3. Cal
ifornia Environmental Quality Act Requirements. This Ordinance is exempt from the California Environmental Quality Act, Public Resources Code section 21000 et seq., under, including without limitation, Public Resources Code section 21065 and CEQA Guidelines sections 15378(b)(4) and 15061(b)(3), as it can be seen with certainty that there is no possibility that the activity authorized herein may have a significant effect on the environment and pursuant to Public Resources Code section 21080, subdivision (b)(8), and CEQA Guidelines section 15273 as the approval of government revenues to fund existing services.

Section 4. S
pecial Tax; Two Thirds Vote Requirement. This Ordinance imposes a Special tax for special revenue purposes and shall be effective only if approved by two thirds of the voters voting thereon.

Communications

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Berkeley, CA 94704
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