Berkeley City Council
August 3, 2022

Wednesday, August 3, 2022 AGENDA Page 1

P R O C L AM AT I O N

C AL L I N G A S P E C I AL M EE TI NG O F T HE

B E R K E LE Y CI T Y C O U N CIL
In accordance with the authority in me vested, I do hereby call the Berkeley City Council in special session as follows:

Wednesday, August 3, 2022
9:00 AM

JESSE ARREGUIN, MAYOR
Councilmembers:

DISTRICT 1 – RASHI KESARWANI DISTRICT 5 – SOPHIE HAHN
DISTRICT 2 – TERRY TAPLIN DISTRICT 6 – SUSAN WENGRAF
DISTRICT 3 – BEN BARTLETT DISTRICT 7 – RIGEL ROBINSON
DISTRICT 4 – KATE HARRISON DISTRICT 8 – LORI DROSTE
PUBLIC ADVISORY: THIS MEETING WILL BE CONDUCTED EXCLUSIVELY THROUGH

VIDEOCONFERENCE AND TELECONFERENCE
Pursuant to Government Code Section 54953(e) and the state declared emergency, this meeting of the City Council will be conducted exclusively through teleconference and Zoom videoconference. The COVID -19 state of emergency continues to directly impact the ability of the members to meet safely in person and presents imminent risks to the health of attendees. Therefore, no physical meeting location will be available.

Live captioned broadcasts of Council Meetings are available on Cable B -TV (Channel 33) and via internet accessible video stream at http://berkeley.granicus.com/MediaPlayer.php?publish_id=1244.

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Please be mindful that the teleconference will be recorded as any Council meeting is recorded, and all other rules of procedure and decorum will apply for Council meetings conducted by teleconference or videoconference.

To submit a written communication for the City Council’s consideration and inclusion in the public record , email [email protected].

This meeting will be conducted in accordance with the Brown Act, Government Code Section 54953. Any member of the public may attend this meeting. Questions regarding this matter may be addressed to Mark Numainville, City Clerk, (510) 981 -6900. The City C ouncil may take action related to any subject listed on the Agenda. Meetings will adjourn at 11:00 p.m. - any items outstanding at that time will be carried over to a date/time to be specified.

Wednesday, August 3, 2022 AGENDA Page 2

Preliminary Matters
Roll Call:

Consent Calendar
The Council will first determine whether to move items on the agenda for “Action” or “Information” to the “Consent Calendar”, or move “Consent Calendar” items to “Action.” Three members of the City Council must agree to pull an item from the Consent Calendar for it to move to Action. Items that remain on the “Consent Calendar” are voted on in one motion as a group. “Information” items are not discussed or acted upon at the Council meeting unless they are moved to “Action” or “Consent”.

No additional items can be moved onto the Consent Calendar once public comment has commenced. At any time during, or immediately after, public comment on Information and Consent items, any Councilmember may move any Information or Consent item to “Action.” Following this, the Council will vote on the items remaining on the Consent Calendar in one motion.

For items moved to the Action Calendar from the Consent Calendar or Information Calendar, persons who spoke on the item during the Consent Calendar public comment period may speak again at the time the matter is taken up during the Action Calendar.

Public Comment on Consent Calendar and Information Items Only: The Council will take public comment on any items that are either on the amended Consent Calendar or the Information Calendar. Speakers will be entitled to two minutes each to speak in opposition to or support of Consent Calendar and Information Items. A speaker may only speak once during the peri od for public comment on Consent Calendar and Information items.

Additional information regarding public comment by City of Berkeley employees and interns: Employees and interns of the City of Berkeley, although not required, are encouraged to identify the mselves as such, the department in which they work and state whether they are speaking as an individual or in their official capacity when addressing the Council in open session or workshops.

Consent Calendar

1. Additional Allocation of Measure P Funding to “Step Up Housing” Project From: Councilmember Bartlett (Author), Councilmember Wengraf (Co- Sponsor), Councilmember Kesarwani (Co-Sponsor)
Recommendation: Adopt a Resolution allocating an additional $114,660 per year for 10 years, from Measure P transfer tax receipts to support the increased costs for the lease and operation of a new permanent supportive housing project for the unhoused at the Step-Up Housing Project at 1367 University Avenue. In addition, refer to the next meeting of the Budget and Finance Policy Committee to confirm the availability of requested funding.

Financial Implications: See report
Contact: Ben Bartlett, Councilmember, District 3, (510) 981-7130

Action Calendar
The public may comment on each item listed on the agenda for action as the item is taken up. For items moved to the Action Calendar from the Consent Calendar or Information Calendar, persons who spoke on the item during the Consent Calendar public comment period may speak again at the time the matter is taken up during the Action Calendar.

Action Calendar

Wednesday, August 3, 2022 AGENDA Page 3
The Presiding Officer will request that persons wishing to speak use the "raise hand" function to determine the number of persons interested in speaking at that time. Up to ten (10) speakers may speak for two minutes. If there are more than ten persons interested in speaking, the Presiding Officer may limit the public comment for all speakers to one minute per speaker. Speakers are permitted to yield their time to one other speaker, however no one speaker shall have more than four minutes. The Presiding Officer may, with the consent of persons representing both sides of an issue, allocate a block of time to each side to present their issue.

Action items may be reordered at the discretion of the Chair with the consent of Council.

Action Calendar

2. Placing a General Obligation Bond Measure on the November 8, 2022 Ballot for Affordable Housing, Climate Change Resiliency, Wildfire Protection, and Other Public Infrastructure Improvements (Continued from July 26, 2022) (Item contains revised material)
From: City Manager
Recommendation:

1. Adopt a Resolution determining public interest and necessity for issuing a general obligation bond in the amount of either $600 million or $650 million for affordable housing, climate change resiliency, wildfire protection, and other public infrastructure improvements, submitting to the Berkeley electorate on the November 8, 2022 ballot a measure to authorize a general obligation bond in that amount, and finding that the proposed measure is not a project under the California Environmental Quality Act.

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.

Financial Implications: See report
Contact: Mark Numainville, City Clerk, (510) 981-6900

3. Placing a General Tax Measure on the November 8, 2022 Ballot to Tax Vacant Residential Units (Continued from July 26, 2022) (Item contains revised material) From: City Manager
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.

Financial Implications: See report
Contact: Mark Numainville, City Clerk, (510) 981-6900

Action Calendar

Wednesday, August 3, 2022 AGENDA Page 4

4. Placing a Measure on the November 8, 2022 Ballot Amending the Rent Stabilization and Eviction for Good Cause Ordinance (B.M.C. 13.76) (Item contains revised material)
From: 4 x 4 Joint Committee on Housing City Council/Rent Board Recommendation:

1. Adopt a Resolution placing the proposed amendments to the Rent Stabilization and Eviction for Good Cause Ordinance on the ballot of 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.

Financial Implications: See report
Contact: Matt Brown, Rent Stabilization Board, (510) 981-7368

Adjournment
I hereby request that the City Clerk of the City of Berkeley cause personal notice to be given to each member of the Berkeley City Council on the time and place of said meeting, forthwith.

IN WITNESS WHEREOF, I have hereunto set my hand and caused the official seal of the City of Berkeley to be affixed on this 1st day of August, 2022.

Jesse Arreguin, Mayor
Public Notice – this Proclamation serves as the official agenda for this meeting.

ATTEST:

Date: August 1, 2022
Mark Numainville, City Clerk

NOTICE CONCERNING YOUR LEGAL RIGHTS : If you object to a decision by the City Council to approve or deny a use permit or variance for a project the following requirements and restrictions apply:
1) No lawsuit challenging a City decision to deny (Code Civ. Proc. §1094.6(b)) or approve (Gov. Code 65009(c)(5)) a use permit or variance may be filed more than 90 days after the date the Notice of Decision of the action of the City Council is mailed. Any lawsuit not filed within that 90 -day period will be barred. 2) In any lawsuit that may be filed against a City Council decision to approve or deny a use permit or variance, the issues and evidence will be limited to those raised by you or someone else, orally or in writing, at a public hearing or prior to the close of the last public hearing on the project.

Archived indexed video streams are available at:
https://berkeleyca.gov/your-government/city-council/city-council-agendas.

Channel 33 rebroadcasts the following Wednesday at 9:00 a.m. and Sunday at 9:00 a.m.

Communications to the City Council are public record and will become part of the City’s electronic records, which are accessible through the City’s website. Please note: e-mail addresses, names, addresses, and other contact information are not required, but if included in any communication to the City Council, will become part of the public record. If you do not want your e-mail address or any other contact information to be made public, you may deliver communications via U.S. Postal Service to the City Clerk Department at 2180 Milvia Street. If you do not want your contact information included in the public record, please do not include that information in your communication. Please contact the City Clerk Department for further information.

Wednesday, August 3, 2022 AGENDA Page 5

Any writings or documents provided to a majority of the City Council regarding any item on this agenda will be made available for public inspection at the public counter at the City Clerk D epartment located on the first floor of City Hall located at 2180 Milvia Street as well as posted on the City's website at https://berkeleyca.gov/.

Agendas and agenda reports may be accessed via the Internet at:
https://berkeleyca.gov/your-government/city-council/city-council-agendas and may be read at reference desks at the following locations:

City Clerk Department - 2180 Milvia Street, First Floor Tel: 510-981-6900, TDD: 510-981-6903, Fax: 510-981-6901 Email: [email protected]

Libraries: Main – 2090 Kittredge Street,
Claremont Branch – 2940 Benvenue, West Branch – 1125 University, North Branch – 1170 The Alameda, South Branch – 1901 Russell

COMMUNICATION ACCESS INFORMATION:

To request a disability-related accommodation(s) to participate in the meeting, including auxiliary aids or services, please contact the Disability Services specialist at (510) 981-6418 (V) or (510) 981-6347 (TDD) at least three business days before the meeting date.

Captioning services are provided at the meeting, on B-TV, and on the Internet.

Communications
Council rules limit action on Communications to referral to the City Manager and/or Boards and Commissions for investigation and/or recommendations. All communications submitted to Council are public record. Copies of individual communications are available for viewing at the City Clerk Department and through Records Online.

3. Placing a General Tax Measure on the November 8, 200 Ballot to Tax Vacant Residential Units

1. Barbara Gilbert

2. Lynnda Ohama

3. Harvey Sharp

4. Jim Furuichi

5. Adriel Hampton

6. Carole Marasovic

4.Placing a Measure on the November 8, 2022 Ballot Amending the Rent Stabilization and Eviction for Good Cause Ordinance (B.M.C. 13.76)

7. Elaine Bloom

8. Michael O’Heaney

2180 Milvia Street, Berkeley, Floor 5, CA 94704 ● Tel: (510) 981-7130 ● E-Mail: [email protected] 1 CONSENT CALENDAR
August 3, 2022
To: Honorable Mayor and Members of the City Council
From: Councilmember Ben Bartlett (Author), Councilmember Susan Wengraf and Councilmember Rashi Kesarwani (Co-Sponsors)
Subject: Additional Allocation of Measure P Funding to “Step Up Housing” Project

RECOMMENDATION
Adopt a resolution allocating an additional $114,660 per year for 10 years, from Measure P transfer tax receipts to support the increased costs for the lease and operation of a new permanent supportive housing project for the unhoused at the Step-Up Housing Project at 1367 University Avenue. In addition, refer to the next meeting of the Budget and Finance Policy Committee to confirm the availability of requested funding.

BACKGROUND
California has the highest real world poverty rate of any state, 17.2% over the previous three years and much higher than the national rate. 1 A major contributing factor to the state’s high poverty indices is that many California residents spend much of their income on housing due to high construction costs. 2 Throughout the state, many affordable housing development projects are stalled, burdened, and have incurred higher than the median costs for development.

For example, in Alameda, CA, Everett Commons, which is a low-income development that provides housing for only 20 families, costs $947,000 per unit.3 The notoriously high price of land and the rising cost of construction materials are contributing factors. On the other hand, the Step- Up Housing Initiative uses an efficient and cost-effective modular construction model that provides 39 individuals with not only stable housing, but a safe and supportive environment where they can access critical employment, health, substance abuse, and community resources and services. Berkeley can help address the shortage of homes and effectively alleviate the City’s homelessness crisis through this innovative and practical project.

CURRENT SITUATION
On October 13, 2020 the Council unanimously passed Resolution # 69,586-N.S. to authorize use of $900,000 a year to fund a new 39-unit Step Up Supportive Housing project at 1367 University Ave. (See attachment.) BOSS is the operator of the facility, and Panoramic Interests/Swinerton Builders would construct and furnish it.

Since then, dramatic increases in construction prices and materials, supply chain complications and dramatic increases in interest fees have caused the project construction costs to rise more than 50%. At current rents of $1,400 per unit per month, the project is infeasible and cannot be financed. If, however, rents can be raised to $1,645 per month, the project can proceed. The higher rents would justify a larger construction loan to finance the additional costs.

To cover these increased rents, additional Measure P funds of $114,660 per year are needed, beyond the $900,000 already allocated. This is an increase of 12.7%.

A RECAP OF THE PROJECT -

2180 Milvia Street, Berkeley, Floor 5, CA 94704 ● Tel: (510) 981-7130 ● E-Mail: [email protected] 2 The project will include 39 fully furnished studio apartments, private bathrooms for each studio, a 400-square-foot community room, a community kitchen, two offices for support staff and services, permanent on-site property management, and 24/7 security. The building will be constructed with modular units built around an approximately 615-square foot private central courtyard.

BOSS will provide services for Step-Up Supportive Housing including connecting residents to mental health resources, substance abuse recovery services, employment, education, and legal services and will accompany them to service providers when appropriate. The program will ensure participants obtain health insurance coverage and connect them to primary care providers.

Opportunities for socialization and peer support will be provided through the organization of on- site support groups, learning workshops, social activities, community meals, and service visits by outside providers. BOSS will also manage an on-site food pantry in collaboration with Alameda County Community Food Bank. These services will help residents maintain stable housing, improve mental and physical health, and decrease social isolation. On-site service hours will be provided Monday-Friday, 9 am-5 pm, but the case manager or designated staff will be on-call as needed at all times.

The program will be staffed by several employees, including a program manager, housing manager, property manager, cook, maintenance worker, and overnight monitor.

REVIEW OF EXISTING POLICIES AND PLANS
Berkeley voters overwhelmingly passed Measure P in November 2018 with 72% of the vote. The Measure raised the transfer tax on property sales over $1.5 million from 1.5% to 2%, which is expected to generate approximately $6-8 million annually. These funds were intended to be allocated towards various homeless services, including permanent housing, supportive services, and navigation centers.

Measure P also created an independent commission, the Homeless Services Panel of Experts, to provide recommendations on funding allocations to the City Council. In December 2019, the Homeless Services Panel of Experts published its first set of recommendations for initial investments from the General Fund to address homelessness in Berkeley. The Panel’s recommendations prioritized certain categories of activities and set forth a percentage of funding for each category. Permanent housing was listed as the top priority, with 30% of the funds recommended to be allocated towards such projects. The remainder was recommended to be allocated towards shelter and temporary accommodations, immediate street conditions and hygiene, supportive services, flexible housing subsidies, and infrastructure. The City Council approved on June 30, 2020, Measure P allocations for FY 2020-21 that included $2.5 million for permanent housing subsidy.

In 2017, the City Council also referred staff to create a 1000 Person Plan, which seeks to end homelessness for 1000 people in Berkeley. In 2019, City staff responded to this referral and concluded that the Council needed to provide up-front investments in targeted homelessness prevention, light-touching housing problem-solving, rapid rehousing, and permanent subsidies.

This proposal to lease and operate the StepUp Housing initiative at 1367 University would help move forward the 1000 Person Plan and accomplish the Homeless Services Panel’s top priority of providing stable and permanent supportive housing for individuals experiencing homelessness.

2180 Milvia Street, Berkeley, Floor 5, CA 94704 ● Tel: (510) 981-7130 ● E-Mail: [email protected] 3 In addition, this project also fulfills the goals of the original StepUp Housing initiative, which passed unanimously on February 14, 2017.

CONSULTATION/OUTREACH OVERVIEW
Councilmember Bartlett’s office collaborated with BOSS and Panoramic Interests to ensure the long-term success of this new permanent supportive housing project, the StepUp Housing initiative. By bringing together BOSS’s expertise in the field of supportive services and Panoramic’s efficient modular construction model, this project can be operational and begin providing stable housing to 39 individuals within twelve months of receiving this funding commitment, resulting in dramatic savings in costs and delivery time.

BOSS was founded in Berkeley in 1971 to serve severe and persistent mentally ill homeless individuals and their families, and has since expanded to serve over 3,000 families and individuals per year across Alameda County, including persons experiencing homelessness, mental illness, former incarceration/justice system involvement, domestic or community violence, unemployment, and other crises. BOSS has 49 years of experience serving the target population, and 45 years of experience operating emergency, transitional, and permanent housing programs.

Panoramic Interests has been building high density infill development projects in the Bay Area since 1990. Its work in downtown Berkeley and San Francisco includes 15 projects, adding more than 1,000 new units of housing, and 100,000 square feet of commercial space. From 1998-2004, Panoramic built seven new mixed-use apartment buildings in downtown Berkeley. During this time, Panoramic housed more than 80 Section 8 tenants, making it the largest private provider of Section 8 housing in the city.

This collaborative effort between the city, the service provider, and the developer can serve as a regional model for future permanent supportive housing projects in Berkeley and throughout the Bay Area.

RATIONALE FOR RECOMMENDATION
The City committed to funding a Step-Up Supportive Housing facility in October of 2020. The project was expected to be completed sometime in 2021-2022 but saw escalating prices, supply chain complications and rising interest rates as the final budgets were established.

The additional project costs rose by more than 50% making the project infeasible, at the original rents of $1,400 per unit per month. (See attached documents.) The City’s additional funding commitment will enable the project to be completed as planned. It will help the homelessness crisis by allowing for the long-term and stable housing of 39 individuals experiencing homelessness as well as the provision of on-site services to help those individuals retain housing, improve their mental and physical health, connect with employment and education opportunities, and decrease social isolation. In addition, this project will serve as a regional model for other jurisdictions to consider when dealing with the homelessness crisis in their cities.

FISCAL IMPACTS
The new permanent supportive housing project, known as the Step-Up Housing at 1367 University

2180 Milvia Street, Berkeley, Floor 5, CA 94704 ● Tel: (510) 981-7130 ● E-Mail: [email protected] 4 is requesting an additional $114,660 per year for 10 years to cover an increase in the rental rate from $1,400 per unit per month to $1,645 per unit per month. The $114,660 allocation represents a 12.74% increase from the original allocation of $900,000 per year.

ENVIRONMENTAL SUSTAINABILITY
The project itself was determined by the Planning Department to be categorically exempt from the provisions of the California Environmental Quality Act pursuant to Section 15332 (In-Fill Development Projects) of the CEQA Guidelines.

CONTACT PERSON
Councilmember Ben Bartlett 510-981-7130
James Chang [email protected]

ATTACHMENTS AND MATERIALS

1. Proposed Resolution

2. Letter from Donald Frazier, Exec. Dir. BOSS to Mayor Arreguin, 6-6-22

3. Budget from Swinerton Builders, June 3, 2002 showing cost increases of $3M+.

4. Past Resolution NO. 69,586-N.S. October 13, 2020

5. Articles: “Soaring material prices, supply chain delays spook owners and developer.” Construction Dive, 4-12-21. “Mortgage rates spike to their highest level in nearly 13 years.” Washington Post, 5-5-22. Step Up Housing Council Item from February 14, 2017:

6. Additional Links
a. https://www.census.gov/content/dam/Census/library/publications/2020/demo/p60- 272.pdf
b. https://www.sacbee.com/article245815115.html
c. https://www.latimes.com/homeless-housing/story/2020-04-09/california-low- income-housing-expensive apartment-coronavirus
d. https://drive.google.com/file/d/1sUgEAKJfpRaNMBAzSFdd9ajV9CA06HOe/vie w?usp=sharing

2180 Milvia Street, Berkeley, Floor 5, CA 94704 ● Tel: (510) 981-7130 ● E-Mail: [email protected] 5 RESOLUTION NO. ##,###-N.S.

ALLOCATING AN ADDITIONAL $114,660 ANNUALLY FOR 10 YEARS OF MEASURE P

FUNDS TO LEASE AND OPERATE THE NEW PERMANENT SUPPORTIVE HOUSING PROJECT FOR THE HOMELESS AT 1367 UNIVERSITY AVE.

WHEREAS, the City Council passed unanimously the original Step Up Housing Initiative introduced by Councilmember Bartlett, Councilmember Wengraf, Councilmember Kesarwani, and Mayor Arreguin on October 13, 2020; and
WHEREAS, Measure P was passed by Berkeley voters in November 2018 to raise the transfer tax on roughly the top-third of properties from 1.5% to 2% and allocate those funds towards various homeless services, including permanent housing, supportive services, and navigation centers; and WHEREAS, Measure P designated the Homeless Services Panel of Experts to advise the Council on expenditures for homeless services; and
WHEREAS, in December 2019 the Homeless Services Panel of Experts published their recommendations for initial allocations under Measure P, including highlighting permanent housing as the City’s top priority and recommending 30% of Measure P funds be allocated to permanent housing; and
WHEREAS, the City Council approved on June 30, 2020 Measure P allocations for FY 2020-21 that included $2.5 million for permanent housing subsidy; and WHEREAS, the Berkeley Zoning Adjustments Board approved the permanent supportive housing development project at 1367 University on July 9, 2020.

WHEREAS, construction costs, materials costs, and interest rates have increased dramatically in the past 18 months, making the project infeasible at the current rent of $1,400 per unit per month NOW THEREFORE, BE IT RESOLVED by the Council of the City of Berkeley that the following be approved for the StepUp Housing at 1367 University Ave:
 A reservation of approximately an additional $114,660 year in ongoing funds annually for 10 years for the leasing and operation of the proposed project, with funding adjusted annually based on the Consumer Price Index for Oakland-Hayward-Berkeley, CA.  In the event BOSS is unable to perform its function as the service provider, an alternative qualified service provider may operate the project with the review and approval of the City Manager, or her designee.
 Further, the City’s commitment is contingent upon the funding of the balance of the project.

BE IT FURTHER RESOLVED that the City Manager, or her designee, is hereby authorized to execute all original or amended documents or agreements to effectuate this action; a signed copy of said documents, agreements, and any amendments will be kept on file in the Office of the City Clerk.

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
August 3, 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 Obligation Bond Measure on the November 8, 2022 Ballot for Affordable Housing, Climate Change Resiliency, Wildfire Protection, and Other Public Infrastructure Improvements

RECOMMENDATION
1) Adopt a Resolution determining public interest and necessity for issuing a general obligation bond in the amount of either $600 million or $650 million for affordable housing, climate change resiliency, wildfire protection, and other public infrastructure improvements, submitting to the Berkeley electorate on the November 8, 2022 ballot a measure to authorize a general obligation bond in that amount, and finding that the proposed measure is not a project under the California Environmental Quality Act. 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
On April 27, 2021, City Council approved a referral to the City Manager to “explore various options for a future city bond measure in November 2022 to support the growing need for infrastructure investment, including street repaving, Complete Streets infrastructure that promotes bike and pedestrian safety, restoration of public buildings and facilities, and affordable housing citywide.” On June 30, 2021, City Council adopted a budget that included Vision 2050 implementation and exploration of revenue measures for the November 2022 ballot. In partnership with dedicated Vision 2050 volunteers, staff completed meetings with 25+ City Commissions and community

Placing a General Obligation Bond Measure on the November 8, 2022 Ballot ACTION CALENDAR for Affordable Housing, Climate Change Resiliency, Wildfire Protection, and August 3, 2022 Other Public Infrastructure Improvements

organizations; conducted a scientific survey on infrastructure priorities in October 2021; updated City Council on progress on November 16, 2021; updated and gained City Council’s direction at the January 20, 2022 work session; sent an informational brochure to all Berkeley residents inviting them to one of four large area public meetings; held those public meetings on March 30, April 6, April 13, and April 20; conducted this project’s second scientific survey of Berkeley voters in late April; reported to City Council on the City’s bond capacity on April 26, 2022; drafted a Vision 2050 Program Plan and incorporated public comments received between May 2 and May 12, 2022; submitted to City Council a Strategic Asset Management Plan and gained adoption of an Asset Management Policy on May 10, 2022; issued off agenda memos related to this project on October 4, 2021, December 13, 2021, March 28, 2022, and May 3, 2022; provided direction to staff at the May 31, 2022 City Council meeting; and had an in-depth discussion of the revenue measure at the June 21, 2022 City Council meeting and the July 26, 2022 meeting.

At the July 26, 2022 City Council meeting the council directed staff to schedule a special meeting to be held on August 3, and to return with a revised single bond measure in an amount from $600 million to $650 million, and provide analysis of the various bond amounts, including average tax rate and various bond terms. Bond measure text was directed to include funding categories of $300 million for street paving, sidewalks, and complete streets, $150 million for affordable housing and $150 million for other public infrastructure, undergrounding on evacuation routes, civic center improvements, infrastructure at the waterfront, the pier, parks, pools, or other public infrastructure.

Additionally, council directed that information for a $650 million bond be included so there could be two options from which to choose. This item includes resolutions for both for council’s consideration.

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 May 31, June 21, and July 26, 2022 City Council meetings.

ENVIRONMENTAL SUSTAINABILITY AND CLIMATE IMPACTS
Implementing Vision 2050 would result in more resilient public infrastructure that creates fewer greenhouse gases, and reduces conflict between our built and natural environment. More affordable housing in Berkeley would reduce greenhouse gas emissions caused by employees finding lower cost housing farther away from employment centers and requiring longer commutes.

RATIONALE FOR RECOMMENDATION
The City Clerk is presenting this action in accordance with the direction given by the City Council at the May 31, June 21, and July 26 2022 meetings.

ALTERNATIVE ACTIONS CONSIDERED
None.

Placing a General Obligation Bond Measure on the November 8, 2022 Ballot ACTION CALENDAR for Affordable Housing, Climate Change Resiliency, Wildfire Protection, and August 3, 2022 Other Public Infrastructure Improvements

CONTACT PERSON
Mark Numainville, City Clerk, (510) 981-6900
Attachments:
1: Resolution for $600 Million Bond
Exhibit A: Text of Measure
Exhibit B: Tax Rate
2: Resolution for $650 Million Bond
Exhibit A: Text of Measure
Exhibit B: Tax Rate

RESOLUTION NO. -N.S.

DETERMINING THAT PUBLIC INTEREST AND NECESSITY DEMAND THE

ISSUANCE OF GENERAL OBLIGATION BONDS TO FINANCE THE ACQUISITION OR

IMPROVEMENT OF REAL PROPERTY FOR AFFORDABLE HOUSING, STREET AND

SIDEWALK REPAIR, TRAFFIC SAFETY, UNDERGROUNDING OF UTILITIES,

CLIMATE CHANGE RESILIENCE, AND OTHER PUBLIC INFRASTRUCTURE AND

FACILITIES, AND SUBMITTING TO THE BERKELEY ELECTORATE ON THE NOVEMBER 8, 2022 BALLOT A MEASURE TO AUTHORIZE GENERAL OBLIGATION

BONDS FOR SUCH PROJECTS
WHEREAS, the City of Berkeley (the “City”) is committed to creating and maintaining an equitable, affordable, and resilient City with housing opportunities, well-maintained infrastructure, and a public commons that welcomes and supports people of all ages, abilities, and backgrounds; and
WHEREAS, the urgent need for affordable housing and preventing homelessness, the accelerating impacts of climate change, and aging public buildings and infrastructure create challenges for safety, equity, sustainability, and resilience; and WHEREAS, the Berkeley City Council (the “City Council”) has identified critically needed investments in affordable housing; improved streets and sidewalks; green, vibrant, and well-maintained parks, streetscapes and other open spaces; pedestrian and bicycle safety improvements; public and historic buildings and facilities; parks, pools, and the waterfront; and above- and below-ground infrastructure as integral to protecting the quality of life of all Berkeleyans and to the City’s long-term community and economic vitality; and
WHEREAS, the City Council recognizes the existence of an acute housing crisis that has caused housing to become increasingly scarce, expensive, and out of reach for teachers, seniors, people with disabilities, students, veterans, the homeless, and for other families and individuals with incomes at extremely low-, very low-, low-, median-, and middle- income levels; and
WHEREAS, affordable housing has been demonstrated to improve health, education, and employment outcomes and allows people to enjoy stable homes and still have enough money for groceries, medicine, transportation, and other basic needs; and WHEREAS, the housing crisis is causing displacement of long-time communities, impacts local businesses’ ability to retain workers, and contributes to homelessness and housing insecurity, threatening the public health, peace, and safety; and WHEREAS, successful programs initiated in recent years have decreased overall homelessness in Berkeley, but estimates project there are still roughly 1,000 homeless people in the City on any given night; and

WHEREAS, providing affordable housing for low-income and unhoused persons is important to alleviate the housing crisis and reduce the impacts of unsheltered homelessness on our streets, parks, and other public spaces; and WHEREAS, in November 2018, Berkeley voters overwhelmingly approved Measure O, authorizing the City to issue $135 million dollars in general obligation bonds for the purpose of building and preserving affordable housing; and WHEREAS, leveraging Measure O funds with County, State, and Federal dollars, the City has provided 20 affordable housing projects with predevelopment or development funding, supporting the construction and rehabilitation of approximately 800 affordable housing units citywide; and
WHEREAS, in 2022 Berkeley’s first Measure O-funded affordable housing projects opened their doors at 1601 Oxford Street in North Berkeley and 2012 Berkeley Way in the Downtown, welcoming seniors, working families, veterans, and formerly homeless individuals into dignified new homes with on-site supportive services; and WHEREAS, the pace of affordable housing production has exceeded expectations and all Measure O funds have been allocated through commitments to existing and pending affordable housing projects; and
WHEREAS, the Regional Housing Needs Allocation for the San Francisco Bay Area requires that Berkeley plan for and incentivize production of over 3,800 affordable housing units over the next eight years, and current funding is insufficient to finance this volume of affordable homes; and
WHEREAS, funds available through this bond measure can support production of up to 1,000 additional affordable housing units citywide, providing urgently needed housing for extremely low-, very low-, low-, median-, and middle-income families and individuals, and help the City achieve its goal of at least 10% reserved affordable housing citywide by 2030; and
WHEREAS, the City’s Vision 2050 Framework and Program Plan are comprehensive plans to build, upgrade, and repair Berkeley’s infrastructure to be more sustainable, safe and resilient and to meet the needs of future generations, including addressing climate and environmental challenges; and
WHEREAS, much of Berkeley’s public infrastructure was built over 75 years ago and is in need of refurbishment, modernization, and repair; and

WHEREAS, over $1 billion dollars in infrastructure needs have been identified citywide, including street paving and reconstruction; improvements to sidewalks, paths, and bikeways; Bike and Pedestrian Plans ; undergrounding of utilities on evacuation routes and improvements to evacuation routes; measures to reduce the risk and impacts of climate change, including flooding through stormwater and sea level rise; improvements to City parks, camps (including the Tuolumne Family and Echo Lake Camps) and pools,

including a proposed pool at San Pablo Park; revitalization of Berkeley’s historic Civic Center as a cultural and civic hub for the community; improvements to the Berkeley Waterfront and Municipal Pier; construction of a new Transfer Station and Recycling Center; improvements to public buildings; measures to make the City’s public spaces more attractive, vibrant, and green; and other improvements to the City’s infrastructure that will, among other things, make it more sustainable, enjoyable, and resilient; and WHEREAS, in addition to hundreds of millions in infrastructure needs, the City has identified $248 million in deferred street repairs and Berkeley’s pavement is currently in an “at risk” condition as identified by the Metropolitan Transportation Commission, and failure to make street repairs in a timely manner results in costlier repairs in the future; and
WHEREAS, additional delay in addressing the City’s critical infrastructure needs further escalates costs, and building climate-resilient infrastructure, including undergrounding of utilities on evacuation routes and managing stormwater runoff and sea level rise, will reduce the risk and costs of flooding and wildfires and make Berkeley a safer and more sustainable place to live; and
WHEREAS, in 2016 Berkeley voters overwhelmingly approved Measure T1, a $100 million general obligation bond whose proceeds are being used to rehabilitate parks, infrastructure, and facilities citywide, including at the Frances Albrier Community Center, Live Oak Community Center, Strawberry Creek Park, Tom Bates Regional Sports Complex, Willard Park, George Florence Park, North Berkeley Senior Center, The Rose Garden, San Pablo Park, Harrison Park, the Marina, Aquatic Park, John Hinkel Park, King Pool, Grove Park, Civic Center Park, Ohlone Park, and Cazadero Camp; and at streets, sidewalks, storm drains, and other infrastructure citywide; and WHEREAS, the full $100 million of Measure T1 bond monies has already been allocated or committed to identified projects and the City has successfully leveraged regional, County, State, and Federal funds for these improvements, representing a significant gain for Berkeley; and
WHEREAS, to build on the success of projects funded through Measures O and T1 and to continue financing affordable housing and necessary improvements to facilities and infrastructure citywide, the City requires additional funds, which may be leveraged with regional, County, State, and Federal funds; and
WHEREAS, Chapter 7.64 of the Berkeley Municipal Code provides for the issuance of general obligation bonds to finance, among other things, any municipal improvement and the acquisition or improvement of affordable housing projects; and WHEREAS, the City is authorized to issue general obligation bonds pursuant to certain provisions of the California Government Code, including Article 1, commencing with Section 43600, of Chapter 4 of Division 4 of Title 4 or Article 4.5, commencing with Section 53506, of Chapter 3 of Part 1 of Division 2 of Title 5 (each, the “Bond Law”); and

WHEREAS, under the Bond Law and Chapter 7.64, the City intends to issue general obligation bonds (the “Bonds”) to finance the acquisition or improvement of real property for affordable and social housing (“Affordable Housing Improvements”), including the application of bond proceeds by the City directly, or indirectly through third parties as loans, grants, or other disbursements to qualified individuals, not-for-profit entities acting alone or together with tax credit investors, not-for-profit corporations, partnerships, associations, and government agencies, to acquire real property for the purpose of constructing, rehabilitating or preserving affordable housing, or to construct, rehabilitate or preserve affordable housing; including but not limited to supportive housing, nonprofit rental housing, and limited-equity housing cooperatives affiliated with community land trusts; and
WHEREAS, under the Bond Law and Chapter 7.64, the City further intends to issue the Bonds to finance the acquisition or improvement of real property for public infrastructure and facilities (“Infrastructure Improvements”; together with Affordable Housing Improvements, “Improvements”), including but not limited to the City’s streets (including traffic safety improvements), sidewalks and paths; above or on ground utilities, including the undergrounding of utilities for fire safety; evacuation routes; pedestrian and bicycle facilities; parks, waterfront, the Municipal Pier, and other natural and landscaped areas; pool, recreation, and senior facilities; camps; buildings; storm drains, streetscapes, and green infrastructure; civic, historic, and cultural sites; zero waste facilities; retaining walls; and other public open spaces, buildings, infrastructure, facilities, and amenities, including building, repair, renovation, replacement, or reconstruction, so that the public can continue to benefit from more sustainable, resilient, and enjoyable public infrastructure and facilities, and the Infrastructure Improvements will include any public art integrated into the Infrastructure Improvements consistent with Berkeley Municipal Code Chapter

6.13; and
WHEREAS, the City may have the opportunity to leverage Federal, State, County and regional funds allocated for these affordable housing and infrastructure projects if it issues the Bonds to address these needs; and
WHEREAS, fiscal accountability protections including public disclosure of all spending, annual audits, and independent oversight help ensure funds will be spent as promised; and
WHEREAS, funding from the Bonds should be guided by the City Council’s plans and policies, including the Vision 2050 Framework and Program Plan whose vision for a renewed City includes safe and enjoyable community facilities; safer, more sustainable streets; resilient and climate-friendly infrastructure; and open space, parks, and recreation facilities that improve quality of life; and
WHEREAS, funding from the Bonds should be applied to create attractive, green streetscapes that invite walking and biking and support the vitality of local businesses and commercial districts; spaces for community gathering and enjoyment; and native,

drought-resistant, and habitat-restoring landscaping with trees for cooling, improved air quality, and shade; and
WHEREAS, by law, all funds must remain under local control in the City and cannot be taken away by the State or the County or used for other purposes; and WHEREAS, the City Council recognizes the importance of ensuring adequate maintenance funding from existing sources for Infrastructure Improvements financed by the Bonds and not supplanting existing City infrastructure funding with proceeds of the Bonds; and
WHEREAS, the City Council through Resolution No. 70,456-N.S. has adopted a fiscal policy to allocate $8 million annually in General Fund monies for street maintenance (the “Street Maintenance Funding Policy”), to be adjusted annually for inflation. The allocation is intended to augment the existing street paving budget of $7.3 million, for a total street maintenance commitment of $15.3 million annually, adjusted for inflation; and WHEREAS, the Street Maintenance Funding Policy will help ensure that deferred street maintenance is supported by adequate ongoing General Fund contributions, as one-time infusions of paving resources provide only temporary improvements in pavement conditions, which deteriorate again without appropriate funding for maintenance; and WHEREAS, the City’s adopted plans and policies, including the Vision 2050 Program Plan; pavement management system; and adopted Transportation, Bicycle, and Pedestrian plans, will guide how proceeds of the Bonds are spent to rehabilitate pavement and other elements of the City’s transportation network and streetscapes; and WHEREAS, United States Income Tax Regulations section 1.150-2 provides generally that proceeds of tax-exempt debt are not deemed to be expended when such proceeds are used for reimbursement of expenditures made prior to the date of issuance of such debt unless certain procedures are followed, one of which is a requirement that prior to the payment of any such expenditure, the issuer declares an intention to reimburse such expenditure; and
WHEREAS, it is in the public interest and for the public benefit that the City declares its official intent to reimburse certain of the proposed expenditures referenced herein; and WHEREAS, proceeds from the sale of the Bonds will be used to finance the Improvements, and all expenditures will be subject to annual independent financial audits and oversight by multiple City commissions; and
WHEREAS, the Council desires to submit the measure described herein 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

WHEREAS, the Council’s Resolution No. 70,336-N.S., adopted on May 10, 2022, adopted the provisions of Elections Code Section 9285(a) providing for the filing of rebuttal arguments for city ballot measures, pursuant to Elections Code Section 9285(b).

NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Berkeley that the public interest and necessity require the issuance of one or more series of general obligation bonds in the amount of $600 million to fund the Improvements, subject to completion of the proceedings required by the Bond Law.

BE IT FURTHER RESOLVED that this resolution is adopted pursuant to and in conformance with Chapter 7.64 of the Berkeley Municipal Code.

BE IT FURTHER RESOLVED that:

A. A ballot measure authorizing the City to issue general obligation bonds to finance the acquisition and improvement of real property for the Improvements (the “Measure”), a copy of which is attached hereto as Exhibit A, shall be placed before the voters at the election on November 8, 2022.

B. The estimated cost of the Affordable Housing Improvements to be funded by the Bonds is $150 million.

C. Infrastructure Improvement projects to be funded by $450 million in Bonds include but are not limited to the following. All dollar amounts included are estimates at the time of adoption of this Resolution and are not a commitment or guarantee that any specific amounts of Bond proceeds will be spent on particular Infrastructure Improvement projects or categories of Infrastructure Improvement projects.

1. The estimated cost for the Infrastructure Improvements related to streets, roads and sidewalks to be funded by the Bonds is $300 million of which:
$231 million is for street paving and reconstruction, with the balance for sidewalks and bike, pedestrian and traffic safety improvements.

2. The estimated cost of climate resiliency and other Infrastructure Improvements funded by the Bonds is $150 million, of which $40 million is for undergrounding utilities on evacuation routes, with the balance for improving evacuation paths, improving and reconstructing the waterfront and pier, funding streetscape beautification/resiliency projects and improving other parks, camps, pools and public infrastructure.

D. The maximum rate of interest on the Bonds shall not exceed the maximum interest rate permitted by law, in accordance with Government Code Section 53531.

E. The estimated cost of the Improvements may include legal and other fees, and the cost of printing the Bonds, and other costs and expenses incidental to or connected with the issuance and sale of the Bonds.

F. Proceeds of the Bonds shall be used to finance the acquisition and construction of real property for the Improvements, and to pay any fees and costs in connection with issuance of the Bonds, including but not limited to, legal fees and bond printing costs.

G. The Improvements will be completed as needed, and each is assumed to include its share of costs, including planning, program management and construction costs. The final cost of each Improvement will be determined as real property is purchased, plans are finalized, construction bids are awarded, or projects are completed. In addition, certain acquisition or improvement funds are expected from sources other than the Bonds, including funds which have not yet been secured.

Therefore, the City Council cannot guarantee that the Bonds will provide sufficient funds to allow completion of all needed Improvements.

H. For the Affordable Housing Improvements, proceeds of the Bonds shall be used to finance the acquisition or improvement of real property for affordable or social housing, including the application of bond proceeds for the City directly, or indirectly through third parties as loans, grants, or other disbursements to qualified individuals, not-for-profit entities acting alone or together with tax credit investors, not-for-profit corporations, partnerships, associations and government agencies, to acquire real property for the purpose of constructing, rehabilitating or preserving affordable housing, or to construct, rehabilitate or preserve affordable housing; including but not limited to supportive housing, nonprofit rental housing, and limited-equity housing cooperatives affiliated with community land trusts.

I. As part of the process to adopt a budget and any budget updates, the City Manager shall provide to the City Council a comprehensive report of funds received from any Bonds authorized by this Measure, of previous appropriations and expenditures of such funds received, and a proposal for expenditure of additional funds received, if any, for review and approval by the City Council.

J. The following commissions or their successors shall provide oversight by reporting to the City Council on an annual basis regarding projects funded by the Bonds and the expenditure of proceeds of the Bonds, whether those expenditures are consistent with the purposes of the Bonds set forth in this Resolution, and recommendations on projects proposed to be funded by the Bonds and proposed expenditures of the proceeds of the Bonds:

1. The Housing Advisory Commission shall provide oversight on the Affordable Housing Improvements.

2. The Parks, Recreation, and Waterfront Commission shall provide oversight on Infrastructure Improvements related to properties and facilities identified

in Municipal Code Section 3.26.040.A, including all parks, recreation, and waterfront improvements.

3. The Transportation and Infrastructure Commission shall provide oversight on the Infrastructure Improvements related to transportation and other public infrastructure.

K. All expenditures will be subject to an annual independent financial audit to confirm that expenditures of proceeds of the Bonds are consistent with the intent of this Resolution.

BE IT FURTHER RESOLVED that the City hereby declares that it reasonably expects (i) to pay certain costs of the acquisition and improvement of real property for the Improvements prior to the date of execution, delivery or issuance of the Bonds, and (ii) to use a portion of the proceeds of the Bonds for reimbursement of such expenditures that are paid before the date of execution, delivery or issuance of the Bonds.

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 and conduct the election in the manner prescribed in Elections Code Section 10418 and in the manner and schedule established by Resolution No. 70,336-N.S., adopted on May 10, 2022, and submit to the qualified voters of the City, at said consolidated election, the Measure, such approval to constitute the authorization to issue the Bonds.

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.

BE IT FURTHER RESOLVED that the City proposes to issue and sell general obligation bonds of the City, in one or more series, in the maximum amount and for the objects and purposes set forth above, payable from and secured by ad valorem taxes levied and collected in the manner prescribed by laws of the State of California, all equally and ratably secured, without priority, by the taxing power of the City, if two-thirds of all qualified voters voting on the Measure vote in favor thereof.

BE IT FURTHER RESOLVED that said proposed Measure shall be placed on the ballot for the November 8, 2022 election with the statement of the Measure to be printed in the ballot in the following form:

CITY OF BERKELEY GENERAL OBLIGATION BOND MEASURE
BONDS
YES
Shall the measure to create/preserve affordable housing for seniors, working families, and homeless individuals, repave streets, repair sidewalks, improve pedestrian safety, underground utilities, enhance parks, pools, public buildings, and the waterfront, and improve other public infrastructure, authorizing $600 million in bonds with a projected $35.50 per $100,000 assessed value levy ($230 on the average home with a $647,000 assessed valuation), raising $23,000,000 annually until repaid, with City commission oversight/independent audits, be adopted?
BONDS
NO
BE IT FURTHER RESOLVED that at this time, the best estimate of the average and highest tax rates expected to be levied for debt service on the Bonds is set forth in the Tax Rate Statement attached hereto as Exhibit B.

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, and that ballots for the election shall be provided in the form and in the number provided by law.

Voters shall be provided an opportunity to vote for or against the Measure on the ballot, in accordance with procedures to be adopted by the authorized officers of the County.

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 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, and to file a certified copy of this Resolution, including all exhibits, no later than the close of business on August 12, 2022, with the County Registrar of Voters and the Clerk of the County Board of Supervisors.

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 the City will reimburse the Registrar of Voters for the costs associated with placing the Measure on the ballot.

BE IT FURTHER RESOLVED that the Mayor, the City Manager, the Finance Director, the City Attorney and the City Clerk, and any of their designees, are hereby authorized to execute any documents and to perform all acts necessary to place the Measure on the ballot, and to make any changes to the text of the Measure, the statement of the measure or the Tax Rate Statement to conform to any legal requirements of the County Registrar, in order to cause the election to be held and conducted in the City.

BE IT FURTHER RESOLVED that the City Council directs the City Clerk to transmit a copy of the Measure to the City Attorney, who shall prepare an impartial analysis of the Measure showing the effect of the Measure on the existing law and the operation of the Measure. The impartial analysis shall be filed by the date set by the City Clerk for the filing of primary arguments.

BE IT FURTHER RESOLVED that the filing of ballot arguments shall conform to the manner and schedule established by Resolution No. 70,336-N.S., adopted on May 10, 2022.

BE IT FURTHER RESOLVED that the City Council, having reviewed the Measure, hereby finds that this action is not subject to the California Environmental Quality Act ("CEQA") because it involves the establishment of a government financing mechanism that does not involve any commitment to specific projects to be constructed with proceeds of the Bonds. The use of the proceeds of the Bonds to finance any project or portion of any project will be subject to approval of the applicable decision-making body at that time, upon completion of planning and any further required environmental review under CEQA.

BE IT FURTHER RESOLVED that this Resolution shall take effect from and after the date of its passage and adoption.

BE IT FURTHER RESOLVED that the City Clerk shall certify to the passage and adoption thereof.

Exhibits
A: Text of Measure
B: Tax Rate Statement

EXHIBIT A

MEASURE TO BE SUBMITTED TO THE VOTERS AUTHORIZING THE CITY

OF BERKELEY TO ISSUE GENERAL OBLIGATION BONDS TO FINANCE

THE ACQUISITION OR IMPROVEMENT OF REAL PROPERTY FOR

AFFORDABLE HOUSING, STREET AND SIDEWALK REPAIR, TRAFFIC

SAFETY, UNDERGROUNDING OF UTILITIES, CLIMATE CHANGE

RESILIENCE, AND OTHER PUBLIC INFRASTRUCTURE AND FACILITIES Section 1. Findings.

WHEREAS, the City of Berkeley (the “City”) is committed to creating and maintaining an equitable, affordable, and resilient City with housing opportunities, well-maintained infrastructure, and a public commons that welcomes and supports people of all ages, abilities, and backgrounds; and
WHEREAS, the urgent need for affordable housing and preventing homelessness, the accelerating impacts of climate change, and aging public buildings and infrastructure create challenges for safety, equity, sustainability, and resilience; and WHEREAS, the Berkeley City Council (the “City Council”) has identified critically needed investments in affordable housing; improved streets and sidewalks; green, vibrant, and well-maintained parks, streetscapes and other open spaces; pedestrian and bicycle safety improvements; public and historic buildings and facilities; parks, pools, and the waterfront; and above- and below-ground infrastructure as integral to protecting the quality of life of all Berkeleyans and to the City’s long-term community and economic vitality; and
WHEREAS, the City Council recognizes the existence of an acute housing crisis that has caused housing to become increasingly scarce, expensive, and out of reach for teachers, seniors, people with disabilities, students, veterans, the homeless, and for other families and individuals with incomes at extremely low-, very low-, low-, median-, and middle-income levels; and
WHEREAS, affordable housing has been demonstrated to improve health, education, and employment outcomes and allows people to enjoy stable homes and still have enough money for groceries, medicine, transportation, and other basic needs; and WHEREAS, the housing crisis is causing displacement of long-time communities, impacts local businesses’ ability to retain workers, and contributes to homelessness and housing insecurity, threatening the public health, peace, and safety; and WHEREAS, successful programs initiated in recent years have decreased overall homelessness in Berkeley, but estimates project there are still roughly 1,000 homeless people in the City on any given night; and

WHEREAS, providing affordable housing for low-income and unhoused persons is important to alleviate the housing crisis and reduce the impacts of unsheltered homelessness on our streets, parks, and other public spaces; and WHEREAS, in November 2018, Berkeley voters overwhelmingly approved Measure O, authorizing the City to issue $135 million dollars in general obligation bonds for the purpose of building and preserving affordable housing; and WHEREAS, leveraging Measure O funds with County, State, and Federal dollars, the City has provided 20 affordable housing projects with predevelopment or development funding, supporting the construction and rehabilitation of approximately 800 affordable housing units citywide; and
WHEREAS, in 2022 Berkeley’s first Measure O-funded affordable housing projects opened their doors at 1601 Oxford Street in North Berkeley and 2012 Berkeley Way in the Downtown, welcoming seniors, working families, veterans, and formerly homeless individuals into dignified new homes with on-site supportive services; and WHEREAS, the pace of affordable housing production has exceeded expectations and all Measure O funds have been allocated through commitments to existing and pending affordable housing projects; and
WHEREAS, the Regional Housing Needs Allocation for the San Francisco Bay Area requires that Berkeley plan for and incentivize production of over 3,800 affordable housing units over the next eight years, and current funding is insufficient to finance this volume of affordable homes; and
WHEREAS, funds available through this bond measure can support production of up to 1,000 additional affordable housing units citywide, providing urgently needed housing for extremely low-, very low-, low-, median-, and middle-income families and individuals, and help the City achieve its goal of at least 10% reserved affordable housing citywide by 2030; and
WHEREAS, the City’s Vision 2050 Framework and Program Plan are comprehensive plans to build, upgrade, and repair Berkeley’s infrastructure to be more sustainable, safe and resilient and to meet the needs of future generations, including addressing climate and environmental challenges; and
WHEREAS, much of Berkeley’s public infrastructure was built over 75 years ago and is in need of refurbishment, modernization, and repair; and

WHEREAS, over $1 billion dollars in infrastructure needs have been identified citywide, including improvements needed for street pavement and reconstruction, sidewalks, paths, and bikeways; Bike and Pedestrian Plans ; undergrounding of utilities on evacuation routes and improving evacuation routes; reducing the risk and impacts of climate change, including flooding through stormwater and sea level rise; improving City

parks, camps (including the Tuolumne Family and Echo Lake Camps) and pools, including a proposed pool at San Pablo Park; revitalizing Berkeley’s historic Civic Center as a cultural and civic hub for the community; improving the Berkeley Waterfront and Municipal Pier; building a new Transfer Station and Recycling Center; improving public buildings, and making the City’s public spaces more attractive, vibrant, and green; and otherwise improving the City’s infrastructure and making it more sustainable, enjoyable, and resilient; and
WHEREAS, in addition to hundreds of millions in infrastructure needs, the City has identified $248 million in deferred street repairs and Berkeley’s pavement is currently in an “at risk” condition as identified by the Metropolitan Transportation Commission, and failure to make street repairs in a timely manner results in costlier repairs in the future; and
WHEREAS, additional delay in addressing the City’s critical infrastructure needs further escalates costs, and building climate-resilient infrastructure, including undergrounding of utilities on evacuation routes and managing stormwater runoff and sea level rise, will reduce the risk and costs of flooding and wildfires and make Berkeley a safer and more sustainable place to live; and
WHEREAS, in 2016 Berkeley voters overwhelmingly approved Measure T1, a $100 million general obligation bond whose proceeds are being used to rehabilitate parks, infrastructure, and facilities citywide, including at the Frances Albrier Community Center, Live Oak Community Center, Strawberry Creek Park, Tom Bates Regional Sports Complex, Willard Park, George Florence Park, North Berkeley Senior Center, The Rose Garden, San Pablo Park, Harrison Park, the Marina, Aquatic Park, John Hinkel Park, King Pool, Grove Park, Civic Center Park, Ohlone Park, and Cazadero Camp; and at streets, sidewalks, storm drains, and other infrastructure citywide; and WHEREAS, the full $100 million of Measure T1 bond monies has already been allocated or committed to identified projects and the City has successfully leveraged regional, County, State, and Federal funds for these improvements, representing a significant gain for Berkeley; and
WHEREAS, to build on the success of projects funded through Measures O and T1 and to continue financing affordable housing and necessary improvements to facilities and infrastructure citywide, the City requires additional funds, which may be leveraged with regional, County, State, and Federal funds; and
WHEREAS, Chapter 7.64 of the Berkeley Municipal Code provides for the issuance of general obligation bonds to finance, among other things, any municipal improvement and the acquisition or improvement of affordable housing projects; and WHEREAS, the City is authorized to issue general obligation bonds pursuant to certain provisions of the California Government Code, including Article 1, commencing with

Section 43600, of Chapter 4 of Division 4 of Title 4 or Article 4.5, commencing with Section 53506, of Chapter 3 of Part 1 of Division 2 of Title 5 (each, the “Bond Law”); and WHEREAS, under the Bond Law and Chapter 7.64, the City intends to issue general obligation bonds (the “Bonds”) to finance the acquisition or improvement of real property for affordable housing (“Affordable Housing Improvements”), including the application of bond proceeds by the City directly, or indirectly through third parties as loans, grants, or other disbursements to qualified individuals, not-for-profit entities acting alone or together with tax credit investors, not-for-profit corporations, partnerships, associations, and government agencies, to acquire real property for the purpose of constructing, rehabilitating or preserving affordable housing, or to construct, rehabilitate or preserve affordable housing; including but not limited to supportive housing, nonprofit rental housing, and limited-equity housing cooperatives affiliated with community land trusts; WHEREAS, under the Bond Law and Chapter 7.64, the City further intends to issue the Bonds to finance the acquisition or improvement of real property for public infrastructure and facilities (“Infrastructure Improvements”; together with Affordable Housing Improvements, “Improvements”), including but not limited to the City’s streets (including traffic safety improvements), sidewalks and paths; above or on ground utilities, including the undergrounding of utilities for fire safety; pedestrian and bicycle facilities; parks, waterfront, the Municipal Pier, and other natural and landscaped areas; pool, recreation and senior facilities; camps; buildings; storm drains, streetscapes, and green infrastructure; civic, historic, and cultural sites; zero waste facilities; retaining walls; and other public open spaces, buildings, infrastructure, facilities, and amenities, including building, repair, renovation, replacement, or reconstruction, so that the public can continue to benefit from more sustainable, resilient, and enjoyable public infrastructure and facilities, and the Infrastructure Improvements will include any public art integrated into the Infrastructure Improvements consistent with Berkeley Municipal Code Chapter

6.13; and
WHEREAS, the City may have the opportunity to leverage Federal, State of California (“State”), regional, and County of Alameda (“County”) funds allocated for these affordable housing and infrastructure needs if it issues the Bonds to address these needs; and WHEREAS, funding from the Bonds should be guided by the City Council’s plans and policies, including the Vision 2050 Framework and Program Plan whose vision for a renewed City includes safe and enjoyable community facilities; safer, more sustainable streets; resilient and climate-friendly infrastructure; and open space, parks, and recreation facilities that improve quality of life; and
WHEREAS, the City Council recognizes the importance of ensuring adequate maintenance funding from existing sources for Infrastructure Improvements financed by the Bonds and not supplanting existing City infrastructure funding with proceeds of the Bonds; and

WHEREAS, the City Council through Resolution No. 70,456-N.S. has adopted a fiscal policy to allocate $8 million annually in General Fund monies for street maintenance (the “Street Maintenance Funding Policy”), to be adjusted annually for inflation. The allocation is intended to augment the existing street paving budget of $7.3 million, for a total street maintenance commitment of $15.3 million annually, adjusted for inflation; and
WHEREAS, the Street Maintenance Funding Policy will help ensure that deferred street maintenance is supported by adequate ongoing General Fund contributions, as one- time infusions of paving resources provide only temporary improvements in pavement conditions, which deteriorate again without appropriate funding for maintenance; and WHEREAS, the City’s adopted plans and policies, including the Vision 2050 Program Plan; pavement management system; and adopted Transportation, Bicycle, and Pedestrian plans, as amended by the City Council from time to time, will guide how proceeds of the Bonds are spent to rehabilitate pavement and other elements of the City’s transportation network and streetscapes; and
WHEREAS, fiscal accountability protections including public disclosure of all spending, annual audits and independent oversight help ensure funds will be spent as promised; and
WHEREAS, by law, all funds must remain under local control in the City and cannot be taken away by the State, County, or Federal governments or used for other purposes; and
WHEREAS, this measure is adopted pursuant to and in conformance with Chapter 7.64 of the Berkeley Municipal Code; and
WHEREAS, the City Council has therefore determined that the public interest requires additional funding for the Improvements; and
WHEREAS, the People of the City of Berkeley find that the public interest requires the issuance of the Bonds in the amount of $600,000,000 to fund the Improvements.

Section 2. Object and Purpose of Bonds.

This measure (the “Measure”) authorizes the issuance of general obligation bonds (the “Bonds”), the object and purpose of which is to finance, by the City of Berkeley or a third party, as applicable, the acquisition or improvement of real property for the Improvements.

The Improvements will be completed as needed, and each is assumed to include its share of costs, including planning, program management and construction costs. The final cost of each Improvement will be determined as real property is purchased, plans are finalized, construction bids are awarded, or projects are completed. In addition, certain acquisition or improvement funds are expected from sources other than proceeds of the Bonds,

including funds which have not yet been secured. Therefore, the City Council cannot guarantee that the Bonds will provide sufficient funds to allow completion of all needed Improvements.

For the Affordable Housing Improvements, proceeds of the Bonds shall be used to finance the acquisition or improvement of real property for affordable and social housing, including the application of bond proceeds for the City directly, or indirectly through third parties as loans, grants, or other disbursements to qualified individuals, not-for-profit entities acting alone or together with tax credit investors, not-for-profit corporations, partnerships, associations and government agencies, to acquire real property for the purpose of constructing, rehabilitating or preserving affordable housing, or to construct, rehabilitate or preserve affordable housing; including but not limited to supportive housing, nonprofit rental housing, and limited-equity housing cooperatives affiliated with community land trusts.

Proceeds of the Bonds may be used to reimburse the City for expenditures on the Improvements that are paid before the date of execution, delivery or issuance of the Bonds.

Section 3. Estimated Cost of Improvements.

The estimated cost of the Affordable Housing Improvements to be funded by the Bonds is $150 million, and the estimated cost for the Infrastructure Improvements to be funded by the Bonds is an additional $450 million.

The estimated cost includes legal and other fees and the cost of printing the Bonds and other costs and expenses incidental to or connected with the authorization, issuance or sale of the Bonds. The cost of the Improvements includes planning, programs management and construction costs.

Section 4. Principal Amount of Bonds.

The aggregate principal amount of Bonds to be issued shall not exceed $600 million.

Section 5. Maximum Interest Rate.

The maximum rate of interest to be paid on the Bonds shall not exceed the maximum interest rate permitted by law, in accordance with Government Code Section 53531.

Section 5. Accountability Requirements.

The following accountability measures apply to the issuance of Bonds pursuant to this Measure:

A. The specific purpose of the Bonds is to finance the acquisition or improvement of real property for the Improvements; and

B. The proceeds from the sale of the Bonds will be used only for the purposes specified in this Measure, and not for any other purpose; and C. The proceeds of the Bonds will be deposited into an account to be created and held by the City; and
D. The proceeds from the sale of the Bonds may be used to reimburse the City for amounts advanced from the general fund or other funds or accounts to acquire real property for Improvements, when such purchases are made prior to the availability of Bond proceeds; and
E. As part of the process to adopt a budget or budget update, the City Manager shall provide to the City Council a comprehensive report of funds received from any bonded indebtedness authorized by this Measure, funds expended, funds allocated or proposed to be allocated, and the status of the Improvements.

F. The following commissions or their successors shall provide oversight by reporting to the City Council on an annual basis regarding projects funded by the bond and bond expenditures, whether those bond expenditures are consistent with the purposes of the bond, and recommendations on projects proposed to be funded by the bond and bond expenditures:

1. The Housing Advisory Commission shall provide oversight on the Affordable Housing Improvements.

2. The Parks, Recreation, and Waterfront Commission shall provide oversight on Infrastructure Improvements related to properties and facilities identified in Municipal Code Section 3.26.040.A, including all parks, recreation, and waterfront improvements.

3. The Transportation and Infrastructure Commission shall provide oversight on the Infrastructure Improvements related to transportation and other public infrastructure.

G.All expenditures will be subject to an annual independent financial audit to confirm that Bond expenditures are consistent with the intent of this Measure.

EXHIBIT B

TAX RATE STATEMENT
An election will be held in the City of Berkeley (the “City”) on November 8, 2022, to authorize the sale of up to $600 million in bonds of the City to finance the specific projects listed in the measure. If such bonds are authorized, the City expects to sell the bonds in one or more series. Principal and interest on the bonds will be payable solely from the proceeds of ad valorem tax levies made upon the taxable property in the City. The following information is provided in compliance with Sections 9400-9404 of the California Elections Code. Such information is based upon the best estimates and projections presently available from official sources, upon experience within the City, and other demonstrable factors.

Based upon the foregoing and projections of the City’s assessed valuation:

1. The best estimate of the average annual tax rate that would be required to be levied to fund the bond issue over the entire duration of the bond debt service, based on a projection of assessed valuations available at the time of filing of this statement is 36 cents per $100 (or $36.00 per $100,000) of assessed valuation of all property to be taxed. The best estimate of the final fiscal year in which the tax is anticipated to be collected is 2067/68.

2. The best estimate of the highest tax rate that would be required to be levied to fund the bond issue, based on a projection of assessed valuations available at the time of filing this statement is 65 cents per $100 (or $65.00 per $100,000) of assessed valuation of all property to be taxed. The best estimate of the first year in which the highest tax rate will apply is 2038/39.

3. The best estimate of the total debt service, including the principal and interest, that would be required to be repaid if all the bonds are issued and sold is $1,040,000,000

Voters should note that such estimated tax rates are specific to the repayment of bonds issued under this authorization and will be in addition to tax rates levied in connection with other bond authorizations approved or to be approved by the City or any other overlapping public agency.

Voters should note that the estimated tax rate is based on the ASSESSED VALUE of taxable property on Alameda County’s official tax rolls, not on the property’s market value. In addition, taxpayers eligible for a property tax exemption, such as the homeowner’s exemption, will be taxed at a lower effective tax rate than described above. Property owners should consult their own property tax bills to determine their property’s assessed value and any applicable tax exemptions.

Attention of all voters is directed to the fact that the foregoing information is based upon projections and estimates only, which amounts are not maximum amounts or durations and are not binding upon the City. The actual debt service amounts, tax rates and the years in which they will apply may vary from those presently estimated, due to variations from these estimates in the timing of bond sales, the amount of bonds sold and market interest rates at the time of each sale, and actual assessed valuations over the term of repayment of the bonds. The dates of sale and the amount of bonds sold at any given time will be determined by the City based on need for funds and other factors. The actual interest rates at which the bonds will be sold will depend on the bond market at the time of each sale. Actual future assessed valuation will depend upon the amount and value of taxable property within the City as determined by the Alameda County assessor in the annual assessment and the equalization process.

Dated: July __, 2022

/s/ DEE WILLIAMS-RIDLEY
City Manager, City of Berkeley

RESOLUTION NO. -N.S.

DETERMINING THAT PUBLIC INTEREST AND NECESSITY DEMAND THE

ISSUANCE OF GENERAL OBLIGATION BONDS TO FINANCE THE ACQUISITION OR

IMPROVEMENT OF REAL PROPERTY FOR AFFORDABLE HOUSING, STREET AND

SIDEWALK REPAIR, TRAFFIC SAFETY, UNDERGROUNDING OF UTILITIES,

CLIMATE CHANGE RESILIENCE, AND OTHER PUBLIC INFRASTRUCTURE AND

FACILITIES, AND SUBMITTING TO THE BERKELEY ELECTORATE ON THE NOVEMBER 8, 2022 BALLOT A MEASURE TO AUTHORIZE GENERAL OBLIGATION

BONDS FOR SUCH PROJECTS
WHEREAS, the City of Berkeley (the “City”) is committed to creating and maintaining an equitable, affordable, and resilient City with housing opportunities, well-maintained infrastructure, and a public commons that welcomes and supports people of all ages, abilities, and backgrounds; and
WHEREAS, the urgent need for affordable housing and preventing homelessness, the accelerating impacts of climate change, and aging public buildings and infrastructure create challenges for safety, equity, sustainability, and resilience; and WHEREAS, the Berkeley City Council (the “City Council”) has identified critically needed investments in affordable housing; improved streets and sidewalks; green, vibrant, and well-maintained parks, streetscapes and other open spaces; pedestrian and bicycle safety improvements; public and historic buildings and facilities; parks, pools, and the waterfront; and above- and below-ground infrastructure as integral to protecting the quality of life of all Berkeleyans and to the City’s long-term community and economic vitality; and
WHEREAS, the City Council recognizes the existence of an acute housing crisis that has caused housing to become increasingly scarce, expensive, and out of reach for teachers, seniors, people with disabilities, students, veterans, the homeless, and for other families and individuals with incomes at extremely low-, very low-, low-, median-, and middle- income levels; and
WHEREAS, affordable housing has been demonstrated to improve health, education, and employment outcomes and allows people to enjoy stable homes and still have enough money for groceries, medicine, transportation, and other basic needs; and WHEREAS, the housing crisis is causing displacement of long-time communities, impacts local businesses’ ability to retain workers, and contributes to homelessness and housing insecurity, threatening the public health, peace, and safety; and WHEREAS, successful programs initiated in recent years have decreased overall homelessness in Berkeley, but estimates project there are still roughly 1,000 homeless people in the City on any given night; and

WHEREAS, providing affordable housing for low-income and unhoused persons is important to alleviate the housing crisis and reduce the impacts of unsheltered homelessness on our streets, parks, and other public spaces; and WHEREAS, in November 2018, Berkeley voters overwhelmingly approved Measure O, authorizing the City to issue $135 million dollars in general obligation bonds for the purpose of building and preserving affordable housing; and WHEREAS, leveraging Measure O funds with County, State, and Federal dollars, the City has provided 20 affordable housing projects with predevelopment or development funding, supporting the construction and rehabilitation of approximately 800 affordable housing units citywide; and
WHEREAS, in 2022 Berkeley’s first Measure O-funded affordable housing projects opened their doors at 1601 Oxford Street in North Berkeley and 2012 Berkeley Way in the Downtown, welcoming seniors, working families, veterans, and formerly homeless individuals into dignified new homes with on-site supportive services; and WHEREAS, the pace of affordable housing production has exceeded expectations and all Measure O funds have been allocated through commitments to existing and pending affordable housing projects; and
WHEREAS, the Regional Housing Needs Allocation for the San Francisco Bay Area requires that Berkeley plan for and incentivize production of over 3,800 affordable housing units over the next eight years, and current funding is insufficient to finance this volume of affordable homes; and
WHEREAS, funds available through this bond measure can support production of up to 1,000 additional affordable housing units citywide, providing urgently needed housing for extremely low-, very low-, low-, median-, and middle-income families and individuals, and help the City achieve its goal of at least 10% reserved affordable housing citywide by 2030; and
WHEREAS, the City’s Vision 2050 Framework and Program Plan are comprehensive plans to build, upgrade, and repair Berkeley’s infrastructure to be more sustainable, safe and resilient and to meet the needs of future generations, including addressing climate and environmental challenges; and
WHEREAS, much of Berkeley’s public infrastructure was built over 75 years ago and is in need of refurbishment, modernization, and repair; and

WHEREAS, over $1 billion dollars in infrastructure needs have been identified citywide, including street paving and reconstruction; improvements to sidewalks, paths, and bikeways; Bike and Pedestrian Plans ; undergrounding of utilities on evacuation routes and improvements to evacuation routes; measures to reduce the risk and impacts of climate change, including flooding through stormwater and sea level rise; improvements to City parks, camps (including the Tuolumne Family and Echo Lake Camps) and pools,

including a proposed pool at San Pablo Park; revitalization of Berkeley’s historic Civic Center as a cultural and civic hub for the community; improvements to the Berkeley Waterfront and Municipal Pier; construction of a new Transfer Station and Recycling Center; improvements to public buildings; measures to make the City’s public spaces more attractive, vibrant, and green; and other improvements to the City’s infrastructure that will, among other things, make it more sustainable, enjoyable, and resilient; and WHEREAS, in addition to hundreds of millions in infrastructure needs, the City has identified $248 million in deferred street repairs and Berkeley’s pavement is currently in an “at risk” condition as identified by the Metropolitan Transportation Commission, and failure to make street repairs in a timely manner results in costlier repairs in the future; and
WHEREAS, additional delay in addressing the City’s critical infrastructure needs further escalates costs, and building climate-resilient infrastructure, including undergrounding of utilities on evacuation routes and managing stormwater runoff and sea level rise, will reduce the risk and costs of flooding and wildfires and make Berkeley a safer and more sustainable place to live; and
WHEREAS, in 2016 Berkeley voters overwhelmingly approved Measure T1, a $100 million general obligation bond whose proceeds are being used to rehabilitate parks, infrastructure, and facilities citywide, including at the Frances Albrier Community Center, Live Oak Community Center, Strawberry Creek Park, Tom Bates Regional Sports Complex, Willard Park, George Florence Park, North Berkeley Senior Center, The Rose Garden, San Pablo Park, Harrison Park, the Marina, Aquatic Park, John Hinkel Park, King Pool, Grove Park, Civic Center Park, Ohlone Park, and Cazadero Camp; and at streets, sidewalks, storm drains, and other infrastructure citywide; and WHEREAS, the full $100 million of Measure T1 bond monies has already been allocated or committed to identified projects and the City has successfully leveraged regional, County, State, and Federal funds for these improvements, representing a significant gain for Berkeley; and
WHEREAS, to build on the success of projects funded through Measures O and T1 and to continue financing affordable housing and necessary improvements to facilities and infrastructure citywide, the City requires additional funds, which may be leveraged with regional, County, State, and Federal funds; and
WHEREAS, Chapter 7.64 of the Berkeley Municipal Code provides for the issuance of general obligation bonds to finance, among other things, any municipal improvement and the acquisition or improvement of affordable housing projects; and WHEREAS, the City is authorized to issue general obligation bonds pursuant to certain provisions of the California Government Code, including Article 1, commencing with Section 43600, of Chapter 4 of Division 4 of Title 4 or Article 4.5, commencing with Section 53506, of Chapter 3 of Part 1 of Division 2 of Title 5 (each, the “Bond Law”); and

WHEREAS, under the Bond Law and Chapter 7.64, the City intends to issue general obligation bonds (the “Bonds”) to finance the acquisition or improvement of real property for affordable and social housing (“Affordable Housing Improvements”), including the application of bond proceeds by the City directly, or indirectly through third parties as loans, grants, or other disbursements to qualified individuals, not-for-profit entities acting alone or together with tax credit investors, not-for-profit corporations, partnerships, associations, and government agencies, to acquire real property for the purpose of constructing, rehabilitating or preserving affordable housing, or to construct, rehabilitate or preserve affordable housing; including but not limited to supportive housing, nonprofit rental housing, and limited-equity housing cooperatives affiliated with community land trusts; and
WHEREAS, under the Bond Law and Chapter 7.64, the City further intends to issue the Bonds to finance the acquisition or improvement of real property for public infrastructure and facilities (“Infrastructure Improvements”; together with Affordable Housing Improvements, “Improvements”), including but not limited to the City’s streets (including traffic safety improvements), sidewalks and paths; above or on ground utilities, including the undergrounding of utilities for fire safety; evacuation routes; pedestrian and bicycle facilities; parks, waterfront, the Municipal Pier, and other natural and landscaped areas; pool, recreation, and senior facilities; camps; buildings; storm drains, streetscapes, and green infrastructure; civic, historic, and cultural sites; zero waste facilities; retaining walls; and other public open spaces, buildings, infrastructure, facilities, and amenities, including building, repair, renovation, replacement, or reconstruction, so that the public can continue to benefit from more sustainable, resilient, and enjoyable public infrastructure and facilities, and the Infrastructure Improvements will include any public art integrated into the Infrastructure Improvements consistent with Berkeley Municipal Code Chapter

6.13; and
WHEREAS, the City may have the opportunity to leverage Federal, State, County and regional funds allocated for these affordable housing and infrastructure projects if it issues the Bonds to address these needs; and
WHEREAS, fiscal accountability protections including public disclosure of all spending, annual audits, and independent oversight help ensure funds will be spent as promised; and
WHEREAS, funding from the Bonds should be guided by the City Council’s plans and policies, including the Vision 2050 Framework and Program Plan whose vision for a renewed City includes safe and enjoyable community facilities; safer, more sustainable streets; resilient and climate-friendly infrastructure; and open space, parks, and recreation facilities that improve quality of life; and
WHEREAS, funding from the Bonds should be applied to create attractive, green streetscapes that invite walking and biking and support the vitality of local businesses and commercial districts; spaces for community gathering and enjoyment; and native,

drought-resistant, and habitat-restoring landscaping with trees for cooling, improved air quality, and shade; and
WHEREAS, by law, all funds must remain under local control in the City and cannot be taken away by the State or the County or used for other purposes; and WHEREAS, the City Council recognizes the importance of ensuring adequate maintenance funding from existing sources for Infrastructure Improvements financed by the Bonds and not supplanting existing City infrastructure funding with proceeds of the Bonds; and
WHEREAS, the City Council through Resolution No. 70,456-N.S. has adopted a fiscal policy to allocate $8 million annually in General Fund monies for street maintenance (the “Street Maintenance Funding Policy”), to be adjusted annually for inflation. The allocation is intended to augment the existing street paving budget of $7.3 million, for a total street maintenance commitment of $15.3 million annually, adjusted for inflation; and WHEREAS, the Street Maintenance Funding Policy will help ensure that deferred street maintenance is supported by adequate ongoing General Fund contributions, as one-time infusions of paving resources provide only temporary improvements in pavement conditions, which deteriorate again without appropriate funding for maintenance; and WHEREAS, the City’s adopted plans and policies, including the Vision 2050 Program Plan; pavement management system; and adopted Transportation, Bicycle, and Pedestrian plans, will guide how proceeds of the Bonds are spent to rehabilitate pavement and other elements of the City’s transportation network and streetscapes; and WHEREAS, United States Income Tax Regulations section 1.150-2 provides generally that proceeds of tax-exempt debt are not deemed to be expended when such proceeds are used for reimbursement of expenditures made prior to the date of issuance of such debt unless certain procedures are followed, one of which is a requirement that prior to the payment of any such expenditure, the issuer declares an intention to reimburse such expenditure; and
WHEREAS, it is in the public interest and for the public benefit that the City declares its official intent to reimburse certain of the proposed expenditures referenced herein; and WHEREAS, proceeds from the sale of the Bonds will be used to finance the Improvements, and all expenditures will be subject to annual independent financial audits and oversight by multiple City commissions; and
WHEREAS, the Council desires to submit the measure described herein 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

WHEREAS, the Council’s Resolution No. 70,336-N.S., adopted on May 10, 2022, adopted the provisions of Elections Code Section 9285(a) providing for the filing of rebuttal arguments for city ballot measures, pursuant to Elections Code Section 9285(b).

NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Berkeley that the public interest and necessity require the issuance of one or more series of general obligation bonds in the amount of $650 million to fund the Improvements, subject to completion of the proceedings required by the Bond Law.

BE IT FURTHER RESOLVED that this resolution is adopted pursuant to and in conformance with Chapter 7.64 of the Berkeley Municipal Code.

BE IT FURTHER RESOLVED that:

A. A ballot measure authorizing the City to issue general obligation bonds to finance the acquisition and improvement of real property for the Improvements (the “Measure”), a copy of which is attached hereto as Exhibit A, shall be placed before the voters at the election on November 8, 2022.

B. The estimated cost of the Affordable Housing Improvements to be funded by the Bonds is $150 million.

C. Infrastructure Improvement projects to be funded by $500 million in Bonds include but are not limited to the following. All dollar amounts included are estimates at the time of adoption of this Resolution and are not a commitment or guarantee that any specific amounts of Bond proceeds will be spent on particular Infrastructure Improvement projects or categories of Infrastructure Improvement projects.

1. The estimated cost for the Infrastructure Improvements related to streets, roads and sidewalks to be funded by the Bonds is $300 million of which:
$231 million is for street paving and reconstruction, with the balance for sidewalks and bike, pedestrian and traffic safety improvements.

2. The estimated cost of climate resiliency and other Infrastructure Improvements funded by the Bonds is $200 million, of which $50 million is for undergrounding utilities on evacuation routes, with the balance for improving evacuation paths, improving and reconstructing the waterfront and pier, funding streetscape beautification/resiliency projects and improving other parks, camps, pools and public infrastructure.

D. The maximum rate of interest on the Bonds shall not exceed the maximum interest rate permitted by law, in accordance with Government Code Section 53531.

E. The estimated cost of the Improvements may include legal and other fees, and the cost of printing the Bonds, and other costs and expenses incidental to or connected with the issuance and sale of the Bonds.

F. Proceeds of the Bonds shall be used to finance the acquisition and construction of real property for the Improvements, and to pay any fees and costs in connection with issuance of the Bonds, including but not limited to, legal fees and bond printing costs.

G. The Improvements will be completed as needed, and each is assumed to include its share of costs, including planning, program management and construction costs. The final cost of each Improvement will be determined as real property is purchased, plans are finalized, construction bids are awarded, or projects are completed. In addition, certain acquisition or improvement funds are expected from sources other than the Bonds, including funds which have not yet been secured.

Therefore, the City Council cannot guarantee that the Bonds will provide sufficient funds to allow completion of all needed Improvements.

H. For the Affordable Housing Improvements, proceeds of the Bonds shall be used to finance the acquisition or improvement of real property for affordable or social housing, including the application of bond proceeds for the City directly, or indirectly through third parties as loans, grants, or other disbursements to qualified individuals, not-for-profit entities acting alone or together with tax credit investors, not-for-profit corporations, partnerships, associations and government agencies, to acquire real property for the purpose of constructing, rehabilitating or preserving affordable housing, or to construct, rehabilitate or preserve affordable housing; including but not limited to supportive housing, nonprofit rental housing, and limited-equity housing cooperatives affiliated with community land trusts.

I. As part of the process to adopt a budget and any budget updates, the City Manager shall provide to the City Council a comprehensive report of funds received from any Bonds authorized by this Measure, of previous appropriations and expenditures of such funds received, and a proposal for expenditure of additional funds received, if any, for review and approval by the City Council.

J. The following commissions or their successors shall provide oversight by reporting to the City Council on an annual basis regarding projects funded by the Bonds and the expenditure of proceeds of the Bonds, whether those expenditures are consistent with the purposes of the Bonds set forth in this Resolution, and recommendations on projects proposed to be funded by the Bonds and proposed expenditures of the proceeds of the Bonds:

1. The Housing Advisory Commission shall provide oversight on the Affordable Housing Improvements.

2. The Parks, Recreation, and Waterfront Commission shall provide oversight on Infrastructure Improvements related to properties and facilities identified in Municipal Code Section 3.26.040.A, including all parks, recreation, and waterfront improvements.

3. The Transportation and Infrastructure Commission shall provide oversight on the Infrastructure Improvements related to transportation and other public infrastructure.

K. All expenditures will be subject to an annual independent financial audit to confirm that expenditures of proceeds of the Bonds are consistent with the intent of this Resolution.

BE IT FURTHER RESOLVED that the City hereby declares that it reasonably expects (i) to pay certain costs of the acquisition and improvement of real property for the Improvements prior to the date of execution, delivery or issuance of the Bonds, and (ii) to use a portion of the proceeds of the Bonds for reimbursement of such expenditures that are paid before the date of execution, delivery or issuance of the Bonds.

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 and conduct the election in the manner prescribed in Elections Code Section 10418 and in the manner and schedule established by Resolution No. 70,336-N.S., adopted on May 10, 2022, and submit to the qualified voters of the City, at said consolidated election, the Measure, such approval to constitute the authorization to issue the Bonds.

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.

BE IT FURTHER RESOLVED that the City proposes to issue and sell general obligation bonds of the City, in one or more series, in the maximum amount and for the objects and purposes set forth above, payable from and secured by ad valorem taxes levied and collected in the manner prescribed by laws of the State of California, all equally and ratably secured, without priority, by the taxing power of the City, if two-thirds of all qualified voters voting on the Measure vote in favor thereof.

BE IT FURTHER RESOLVED that said proposed Measure shall be placed on the ballot for the November 8, 2022 election with the statement of the Measure to be printed in the ballot in the following form:

CITY OF BERKELEY GENERAL OBLIGATION BOND MEASURE
BONDS
YES
Shall the measure to create/preserve affordable housing for seniors, working families, and homeless individuals, repave streets, repair sidewalks, improve pedestrian safety, underground utilities, enhance parks, pools, public buildings, and the waterfront, and improve other public infrastructure, authorizing $650 million in bonds with a projected $38.60 per $100,000 assessed value levy ($250 on the average home with a $647,000 assessed valuation), raising $23,000,000 annually until repaid, with City commission oversight/independent audits, be adopted?
BONDS
NO
BE IT FURTHER RESOLVED that at this time, the best estimate of the average and highest tax rates expected to be levied for debt service on the Bonds is set forth in the Tax Rate Statement attached hereto as Exhibit B.

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, and that ballots for the election shall be provided in the form and in the number provided by law.

Voters shall be provided an opportunity to vote for or against the Measure on the ballot, in accordance with procedures to be adopted by the authorized officers of the County.

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 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, and to file a certified copy of this Resolution, including all exhibits, no later than the close of business on August 12, 2022, with the County Registrar of Voters and the Clerk of the County Board of Supervisors.

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 the City will reimburse the Registrar of Voters for the costs associated with placing the Measure on the ballot.

BE IT FURTHER RESOLVED that the Mayor, the City Manager, the Finance Director, the City Attorney and the City Clerk, and any of their designees, are hereby authorized to execute any documents and to perform all acts necessary to place the Measure on the ballot, and to make any changes to the text of the Measure, the statement of the measure or the Tax Rate Statement to conform to any legal requirements of the County Registrar, in order to cause the election to be held and conducted in the City.

BE IT FURTHER RESOLVED that the City Council directs the City Clerk to transmit a copy of the Measure to the City Attorney, who shall prepare an impartial analysis of the Measure showing the effect of the Measure on the existing law and the operation of the Measure. The impartial analysis shall be filed by the date set by the City Clerk for the filing of primary arguments.

BE IT FURTHER RESOLVED that the filing of ballot arguments shall conform to the manner and schedule established by Resolution No. 70,336-N.S., adopted on May 10, 2022.

BE IT FURTHER RESOLVED that the City Council, having reviewed the Measure, hereby finds that this action is not subject to the California Environmental Quality Act ("CEQA") because it involves the establishment of a government financing mechanism that does not involve any commitment to specific projects to be constructed with proceeds of the Bonds. The use of the proceeds of the Bonds to finance any project or portion of any project will be subject to approval of the applicable decision-making body at that time, upon completion of planning and any further required environmental review under CEQA.

BE IT FURTHER RESOLVED that this Resolution shall take effect from and after the date of its passage and adoption.

BE IT FURTHER RESOLVED that the City Clerk shall certify to the passage and adoption thereof.

Exhibits
A: Text of Measure
B: Tax Rate Statement

EXHIBIT A

MEASURE TO BE SUBMITTED TO THE VOTERS AUTHORIZING THE CITY

OF BERKELEY TO ISSUE GENERAL OBLIGATION BONDS TO FINANCE

THE ACQUISITION OR IMPROVEMENT OF REAL PROPERTY FOR

AFFORDABLE HOUSING, STREET AND SIDEWALK REPAIR, TRAFFIC

SAFETY, UNDERGROUNDING OF UTILITIES, CLIMATE CHANGE

RESILIENCE, AND OTHER PUBLIC INFRASTRUCTURE AND FACILITIES Section 1. Findings.

WHEREAS, the City of Berkeley (the “City”) is committed to creating and maintaining an equitable, affordable, and resilient City with housing opportunities, well-maintained infrastructure, and a public commons that welcomes and supports people of all ages, abilities, and backgrounds; and
WHEREAS, the urgent need for affordable housing and preventing homelessness, the accelerating impacts of climate change, and aging public buildings and infrastructure create challenges for safety, equity, sustainability, and resilience; and WHEREAS, the Berkeley City Council (the “City Council”) has identified critically needed investments in affordable housing; improved streets and sidewalks; green, vibrant, and well-maintained parks, streetscapes and other open spaces; pedestrian and bicycle safety improvements; public and historic buildings and facilities; parks, pools, and the waterfront; and above- and below-ground infrastructure as integral to protecting the quality of life of all Berkeleyans and to the City’s long-term community and economic vitality; and
WHEREAS, the City Council recognizes the existence of an acute housing crisis that has caused housing to become increasingly scarce, expensive, and out of reach for teachers, seniors, people with disabilities, students, veterans, the homeless, and for other families and individuals with incomes at extremely low-, very low-, low-, median-, and middle-income levels; and
WHEREAS, affordable housing has been demonstrated to improve health, education, and employment outcomes and allows people to enjoy stable homes and still have enough money for groceries, medicine, transportation, and other basic needs; and WHEREAS, the housing crisis is causing displacement of long-time communities, impacts local businesses’ ability to retain workers, and contributes to homelessness and housing insecurity, threatening the public health, peace, and safety; and WHEREAS, successful programs initiated in recent years have decreased overall homelessness in Berkeley, but estimates project there are still roughly 1,000 homeless people in the City on any given night; and

WHEREAS, providing affordable housing for low-income and unhoused persons is important to alleviate the housing crisis and reduce the impacts of unsheltered homelessness on our streets, parks, and other public spaces; and WHEREAS, in November 2018, Berkeley voters overwhelmingly approved Measure O, authorizing the City to issue $135 million dollars in general obligation bonds for the purpose of building and preserving affordable housing; and WHEREAS, leveraging Measure O funds with County, State, and Federal dollars, the City has provided 20 affordable housing projects with predevelopment or development funding, supporting the construction and rehabilitation of approximately 800 affordable housing units citywide; and
WHEREAS, in 2022 Berkeley’s first Measure O-funded affordable housing projects opened their doors at 1601 Oxford Street in North Berkeley and 2012 Berkeley Way in the Downtown, welcoming seniors, working families, veterans, and formerly homeless individuals into dignified new homes with on-site supportive services; and WHEREAS, the pace of affordable housing production has exceeded expectations and all Measure O funds have been allocated through commitments to existing and pending affordable housing projects; and
WHEREAS, the Regional Housing Needs Allocation for the San Francisco Bay Area requires that Berkeley plan for and incentivize production of over 3,800 affordable housing units over the next eight years, and current funding is insufficient to finance this volume of affordable homes; and
WHEREAS, funds available through this bond measure can support production of up to 1,000 additional affordable housing units citywide, providing urgently needed housing for extremely low-, very low-, low-, median-, and middle-income families and individuals, and help the City achieve its goal of at least 10% reserved affordable housing citywide by 2030; and
WHEREAS, the City’s Vision 2050 Framework and Program Plan are comprehensive plans to build, upgrade, and repair Berkeley’s infrastructure to be more sustainable, safe and resilient and to meet the needs of future generations, including addressing climate and environmental challenges; and
WHEREAS, much of Berkeley’s public infrastructure was built over 75 years ago and is in need of refurbishment, modernization, and repair; and

WHEREAS, over $1 billion dollars in infrastructure needs have been identified citywide, including improvements needed for street pavement and reconstruction, sidewalks, paths, and bikeways; Bike and Pedestrian Plans ; undergrounding of utilities on evacuation routes and improving evacuation routes; reducing the risk and impacts of

climate change, including flooding through stormwater and sea level rise; improving City parks, camps (including the Tuolumne Family and Echo Lake Camps) and pools, including a proposed pool at San Pablo Park; revitalizing Berkeley’s historic Civic Center as a cultural and civic hub for the community; improving the Berkeley Waterfront and Municipal Pier; building a new Transfer Station and Recycling Center; improving public buildings, and making the City’s public spaces more attractive, vibrant, and green; and otherwise improving the City’s infrastructure and making it more sustainable, enjoyable, and resilient; and
WHEREAS, in addition to hundreds of millions in infrastructure needs, the City has identified $248 million in deferred street repairs and Berkeley’s pavement is currently in an “at risk” condition as identified by the Metropolitan Transportation Commission, and failure to make street repairs in a timely manner results in costlier repairs in the future; and
WHEREAS, additional delay in addressing the City’s critical infrastructure needs further escalates costs, and building climate-resilient infrastructure, including undergrounding of utilities on evacuation routes and managing stormwater runoff and sea level rise, will reduce the risk and costs of flooding and wildfires and make Berkeley a safer and more sustainable place to live; and
WHEREAS, in 2016 Berkeley voters overwhelmingly approved Measure T1, a $100 million general obligation bond whose proceeds are being used to rehabilitate parks, infrastructure, and facilities citywide, including at the Frances Albrier Community Center, Live Oak Community Center, Strawberry Creek Park, Tom Bates Regional Sports Complex, Willard Park, George Florence Park, North Berkeley Senior Center, The Rose Garden, San Pablo Park, Harrison Park, the Marina, Aquatic Park, John Hinkel Park, King Pool, Grove Park, Civic Center Park, Ohlone Park, and Cazadero Camp; and at streets, sidewalks, storm drains, and other infrastructure citywide; and WHEREAS, the full $100 million of Measure T1 bond monies has already been allocated or committed to identified projects and the City has successfully leveraged regional, County, State, and Federal funds for these improvements, representing a significant gain for Berkeley; and
WHEREAS, to build on the success of projects funded through Measures O and T1 and to continue financing affordable housing and necessary improvements to facilities and infrastructure citywide, the City requires additional funds, which may be leveraged with regional, County, State, and Federal funds; and
WHEREAS, Chapter 7.64 of the Berkeley Municipal Code provides for the issuance of general obligation bonds to finance, among other things, any municipal improvement and the acquisition or improvement of affordable housing projects; and WHEREAS, the City is authorized to issue general obligation bonds pursuant to certain provisions of the California Government Code, including Article 1, commencing with

Section 43600, of Chapter 4 of Division 4 of Title 4 or Article 4.5, commencing with Section 53506, of Chapter 3 of Part 1 of Division 2 of Title 5 (each, the “Bond Law”); and WHEREAS, under the Bond Law and Chapter 7.64, the City intends to issue general obligation bonds (the “Bonds”) to finance the acquisition or improvement of real property for affordable housing (“Affordable Housing Improvements”), including the application of bond proceeds by the City directly, or indirectly through third parties as loans, grants, or other disbursements to qualified individuals, not-for-profit entities acting alone or together with tax credit investors, not-for-profit corporations, partnerships, associations, and government agencies, to acquire real property for the purpose of constructing, rehabilitating or preserving affordable housing, or to construct, rehabilitate or preserve affordable housing; including but not limited to supportive housing, nonprofit rental housing, and limited-equity housing cooperatives affiliated with community land trusts; WHEREAS, under the Bond Law and Chapter 7.64, the City further intends to issue the Bonds to finance the acquisition or improvement of real property for public infrastructure and facilities (“Infrastructure Improvements”; together with Affordable Housing Improvements, “Improvements”), including but not limited to the City’s streets (including traffic safety improvements), sidewalks and paths; above or on ground utilities, including the undergrounding of utilities for fire safety; pedestrian and bicycle facilities; parks, waterfront, the Municipal Pier, and other natural and landscaped areas; pool, recreation and senior facilities; camps; buildings; storm drains, streetscapes, and green infrastructure; civic, historic, and cultural sites; zero waste facilities; retaining walls; and other public open spaces, buildings, infrastructure, facilities, and amenities, including building, repair, renovation, replacement, or reconstruction, so that the public can continue to benefit from more sustainable, resilient, and enjoyable public infrastructure and facilities, and the Infrastructure Improvements will include any public art integrated into the Infrastructure Improvements consistent with Berkeley Municipal Code Chapter

6.13; and
WHEREAS, the City may have the opportunity to leverage Federal, State of California (“State”), regional, and County of Alameda (“County”) funds allocated for these affordable housing and infrastructure needs if it issues the Bonds to address these needs; and WHEREAS, funding from the Bonds should be guided by the City Council’s plans and policies, including the Vision 2050 Framework and Program Plan whose vision for a renewed City includes safe and enjoyable community facilities; safer, more sustainable streets; resilient and climate-friendly infrastructure; and open space, parks, and recreation facilities that improve quality of life; and
WHEREAS, the City Council recognizes the importance of ensuring adequate maintenance funding from existing sources for Infrastructure Improvements financed by the Bonds and not supplanting existing City infrastructure funding with proceeds of the Bonds; and

WHEREAS, the City Council through Resolution No. 70,456-N.S. has adopted a fiscal policy to allocate $8 million annually in General Fund monies for street maintenance (the “Street Maintenance Funding Policy”), to be adjusted annually for inflation. The allocation is intended to augment the existing street paving budget of $7.3 million, for a total street maintenance commitment of $15.3 million annually, adjusted for inflation; and
WHEREAS, the Street Maintenance Funding Policy will help ensure that deferred street maintenance is supported by adequate ongoing General Fund contributions, as one- time infusions of paving resources provide only temporary improvements in pavement conditions, which deteriorate again without appropriate funding for maintenance; and WHEREAS, the City’s adopted plans and policies, including the Vision 2050 Program Plan; pavement management system; and adopted Transportation, Bicycle, and Pedestrian plans, as amended by the City Council from time to time, will guide how proceeds of the Bonds are spent to rehabilitate pavement and other elements of the City’s transportation network and streetscapes; and
WHEREAS, fiscal accountability protections including public disclosure of all spending, annual audits and independent oversight help ensure funds will be spent as promised; and
WHEREAS, by law, all funds must remain under local control in the City and cannot be taken away by the State, County, or Federal governments or used for other purposes; and
WHEREAS, this measure is adopted pursuant to and in conformance with Chapter 7.64 of the Berkeley Municipal Code; and
WHEREAS, the City Council has therefore determined that the public interest requires additional funding for the Improvements; and
WHEREAS, the People of the City of Berkeley find that the public interest requires the issuance of the Bonds in the amount of $650,000,000 to fund the Improvements.

Section 2. Object and Purpose of Bonds.

This measure (the “Measure”) authorizes the issuance of general obligation bonds (the “Bonds”), the object and purpose of which is to finance, by the City of Berkeley or a third party, as applicable, the acquisition or improvement of real property for the Improvements.

The Improvements will be completed as needed, and each is assumed to include its share of costs, including planning, program management and construction costs. The final cost of each Improvement will be determined as real property is purchased, plans are finalized, construction bids are awarded, or projects are completed. In addition, certain acquisition or improvement funds are expected from sources other than proceeds of the Bonds,

including funds which have not yet been secured. Therefore, the City Council cannot guarantee that the Bonds will provide sufficient funds to allow completion of all needed Improvements.

For the Affordable Housing Improvements, proceeds of the Bonds shall be used to finance the acquisition or improvement of real property for affordable and social housing, including the application of bond proceeds for the City directly, or indirectly through third parties as loans, grants, or other disbursements to qualified individuals, not-for-profit entities acting alone or together with tax credit investors, not-for-profit corporations, partnerships, associations and government agencies, to acquire real property for the purpose of constructing, rehabilitating or preserving affordable housing, or to construct, rehabilitate or preserve affordable housing; including but not limited to supportive housing, nonprofit rental housing, and limited-equity housing cooperatives affiliated with community land trusts.

Proceeds of the Bonds may be used to reimburse the City for expenditures on the Improvements that are paid before the date of execution, delivery or issuance of the Bonds.

Section 3. Estimated Cost of Improvements.

The estimated cost of the Affordable Housing Improvements to be funded by the Bonds is $150 million, and the estimated cost for the Infrastructure Improvements to be funded by the Bonds is an additional $500 million.

The estimated cost includes legal and other fees and the cost of printing the Bonds and other costs and expenses incidental to or connected with the authorization, issuance or sale of the Bonds. The cost of the Improvements includes planning, programs management and construction costs.

Section 4. Principal Amount of Bonds.

The aggregate principal amount of Bonds to be issued shall not exceed $650 million.

Section 5. Maximum Interest Rate.

The maximum rate of interest to be paid on the Bonds shall not exceed the maximum interest rate permitted by law, in accordance with Government Code Section 53531.

Section 5. Accountability Requirements.

The following accountability measures apply to the issuance of Bonds pursuant to this Measure:

A. The specific purpose of the Bonds is to finance the acquisition or improvement of real property for the Improvements; and

B. The proceeds from the sale of the Bonds will be used only for the purposes specified in this Measure, and not for any other purpose; and C. The proceeds of the Bonds will be deposited into an account to be created and held by the City; and
D. The proceeds from the sale of the Bonds may be used to reimburse the City for amounts advanced from the general fund or other funds or accounts to acquire real property for Improvements, when such purchases are made prior to the availability of Bond proceeds; and
E. As part of the process to adopt a budget or budget update, the City Manager shall provide to the City Council a comprehensive report of funds received from any bonded indebtedness authorized by this Measure, funds expended, funds allocated or proposed to be allocated, and the status of the Improvements.

F. The following commissions or their successors shall provide oversight by reporting to the City Council on an annual basis regarding projects funded by the bond and bond expenditures, whether those bond expenditures are consistent with the purposes of the bond, and recommendations on projects proposed to be funded by the bond and bond expenditures:

1. The Housing Advisory Commission shall provide oversight on the Affordable Housing Improvements.

2. The Parks, Recreation, and Waterfront Commission shall provide oversight on Infrastructure Improvements related to properties and facilities identified in Municipal Code Section 3.26.040.A, including all parks, recreation, and waterfront improvements.

3. The Transportation and Infrastructure Commission shall provide oversight on the Infrastructure Improvements related to transportation and other public infrastructure.

G.All expenditures will be subject to an annual independent financial audit to confirm that Bond expenditures are consistent with the intent of this Measure.

EXHIBIT B

TAX RATE STATEMENT
An election will be held in the City of Berkeley (the “City”) on November 8, 2022, to authorize the sale of up to $650 million in bonds of the City to finance the specific projects listed in the measure. If such bonds are authorized, the City expects to sell the bonds in one or more series. Principal and interest on the bonds will be payable solely from the proceeds of ad valorem tax levies made upon the taxable property in the City. The following information is provided in compliance with Sections 9400-9404 of the California Elections Code. Such information is based upon the best estimates and projections presently available from official sources, upon experience within the City, and other demonstrable factors.

Based upon the foregoing and projections of the City’s assessed valuation:

1. The best estimate of the average annual tax rate that would be required to be levied to fund the bond issue over the entire duration of the bond debt service, based on a projection of assessed valuations available at the time of filing of this statement is 39 cents per $100 (or $39.00 per $100,000) of assessed valuation of all property to be taxed. The best estimate of the final fiscal year in which the tax is anticipated to be collected is 2067/68.

2. The best estimate of the highest tax rate that would be required to be levied to fund the bond issue, based on a projection of assessed valuations available at the time of filing this statement is 71 cents per $100 (or $71.00 per $100,000) of assessed valuation of all property to be taxed. The best estimate of the first year in which the highest tax rate will apply is 2038/39.

3. The best estimate of the total debt service, including the principal and interest, that would be required to be repaid if all the bonds are issued and sold is $1,126,000,000.

Voters should note that such estimated tax rates are specific to the repayment of bonds issued under this authorization and will be in addition to tax rates levied in connection with other bond authorizations approved or to be approved by the City or any other overlapping public agency.

Voters should note that the estimated tax rate is based on the ASSESSED VALUE of taxable property on Alameda County’s official tax rolls, not on the property’s market value. In addition, taxpayers eligible for a property tax exemption, such as the homeowner’s exemption, will be taxed at a lower effective tax rate than described above. Property owners should consult their own property tax bills to determine their property’s assessed value and any applicable tax exemptions.

Attention of all voters is directed to the fact that the foregoing information is based upon projections and estimates only, which amounts are not maximum amounts or durations and are not binding upon the City. The actual debt service amounts, tax rates and the years in which they will apply may vary from those presently estimated, due to variations from these estimates in the timing of bond sales, the amount of bonds sold and market interest rates at the time of each sale, and actual assessed valuations over the term of repayment of the bonds. The dates of sale and the amount of bonds sold at any given time will be determined by the City based on need for funds and other factors. The actual interest rates at which the bonds will be sold will depend on the bond market at the time of each sale. Actual future assessed valuation will depend upon the amount and value of taxable property within the City as determined by the Alameda County assessor in the annual assessment and the equalization process.

Dated: July __, 2022

/s/ DEE WILLIAMS-RIDLEY
City Manager, City of Berkeley

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
August 3, 2022
(Continued from 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 Obligation Bond Measure on the November 8, 2022 Ballot for Affordable Housing, Climate Change Resiliency, Wildfire Protection, and Other Public Infrastructure Improvements

RECOMMENDATION
1) Adopt a Resolution determining public interest and necessity for issuing a general obligation bond in the amount of $300 million for affordable housing, climate change resiliency, wildfire protection, and other public infrastructure improvements, submitting to the Berkeley electorate on the November 8, 2022 ballot a measure to authorize a general obligation bond in that amount, and finding that the proposed measure is not a project under the California Environmental Quality Act.
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
On April 27, 2021, City Council approved a referral to the City Manager to “explore various options for a future city bond measure in November 2022 to support the growing need for infrastructure investment, including street repaving, Complete Streets infrastructure that promotes bike and pedestrian safety, restoration of public buildings and facilities, and affordable housing citywide.” On June 30, 2021, City Council adopted a budget that included Vision 2050 implementation and exploration of revenue measures for the November 2022 ballot. In partnership with dedicated Vision 2050 volunteers, staff completed meetings with 25+ City Commissions and community organizations; conducted a scientific survey on infrastructure priorities in October 2021;

Placing a General Obligation Bond Measure on the November 8, 2022 Ballot ACTION CALENDAR for Affordable Housing, Climate Change Resiliency, Wildfire Protection, and August 3, 2022 Other Public Infrastructure Improvements

updated City Council on progress on November 16, 2021; updated and gained City Council’s direction at the January 20, 2022 work session; sent an informational brochure to all Berkeley residents inviting them to one of four large area public meetings; held those public meetings on March 30, April 6, April 13, and April 20; conducted this project’s second scientific survey of Berkeley voters in late April; reported to City Council on the City’s bond capacity on April 26, 2022; drafted a Vision 2050 Program Plan and incorporated public comments received between May 2 and May 12, 2022; submitted to City Council a Strategic Asset Management Plan and gained adoption of an Asset Management Policy on May 10, 2022; issued off agenda memos related to this project on October 4, 2021, December 13, 2021, March 28, 2022, and May 3, 2022; provided direction to staff at the May 31, 2022 City Council meeting; and had an in-depth discussion of the revenue measure at the June 21, 2022 City Council meeting.

At the June 21 meeting, City Council requested more details on the affordable housing component of the bond. While there are many variables to consider, staff estimate between 500-1,000 units can be produced with this level of investment. This range considers the City’s experience creating new affordable housing units. For construction of new affordable housing units, the City has historically averaged loans between $150,000-$200,000 per unit over the past five years. For acquisition and rehabilitation (i.e., Small Sites), it has been approximately $284,000 per unit, albeit from a sample of two projects.

Affordable housing units developed from bond funding would follow the City’s Housing Trust Fund (HTF) Guidelines. The HTF Guidelines require eligible developers to designate at least 20% of new construction units for Extremely Low-Income households, which are 30% of area median income (AMI) and 40% to at least Low-Income Households (60% AMI). Projects leveraging tax credits (the most common funding source for affordable projects) must also average 60% AMI.

Historically, local new construction projects leverage additional subsidies to support Extremely-Low and Very-Low Income households, including Section 8 Project-Based Vouchers, Permanent Supportive Housing funding, and other population-specific subsidies for Transition-Aged Youth and people with disabilities. With dedicated local funding from sources such as the GO Bond, the City of Berkeley is at an advantage in competing for affordable housing funding.

While the Finance Department advises on a bond’s specific disbursement schedule, staff anticipates that a bond approved in November could be allocated to support affordable housing at both the North Berkeley and Ashby BART given the current development timelines of between 10 to 15 years projected at both BART sites. The bond could also support other sites throughout the City over the course of the next ten years as the City’s pipeline continues to grow.

Placing a General Obligation Bond Measure on the November 8, 2022 Ballot ACTION CALENDAR for Affordable Housing, Climate Change Resiliency, Wildfire Protection, and August 3, 2022 Other Public Infrastructure Improvements

Staff are confident there is sufficient demand for the bond. Measure O was completely allocated within three years of its adoption. In 2015, the City had eight projects in predevelopment or development. There are currently 20 projects in predevelopment or development at least in part due to Measure O.

Staff anticipates this bond will mirror the requirements of the Measure O Bond, which appropriated funding for the construction and acquisition of new construction affordable housing. The HTF Guidelines also establish standards for sustainability, accessibility, and labor in addition to the affordability requirements.

As to the question of affirmatively furthering fair housing and equitably locating projects in higher income and resource neighborhoods, it is often too difficult to control project locations as so much is reflective of the housing market. However, the scoring for competitive tax credit financing, the primary driver of new construction affordable projects, incentivizes development in high resourced areas. City Council may consider adopting a priority or tiebreaker for site locations according to such criteria. Staff also consider other factors in determining site locations including proximity to transit and other amenities including schools, community centers, and grocery stores.

As to the detail regarding the climate change resiliency, wildfire protection, and other public infrastructure improvements, staff updated the Vision 2050 Program Plan to include the detail provided by staff at the June 21 City Council meeting.

If this bond measure were placed on the ballot and approved by two-thirds of the voters, additional funds would be generated for affordable housing and climate change resiliency, wildfire protection, and other public infrastructure improvements. The average annual amount collected over the projected period the bonds are outstanding would be approximately $130 for a home with the City’s mean assessed valuation of $647,972.

The measure permits the City to issue general obligation bonds to finance the acquisition and improvement of real property for affordable housing, including by the City directly, or indirectly through third parties, and to reimburse City funds for the prior acquisition and improvement of property to be used for affordable housing.

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.

Staff recommends that the City Council make a finding that the proposed bond measure is not a project under the California Environmental Quality Act (California Public Resources Code, Sections 21000 et seq.) (“CEQA”) or the related CEQA Guidelines (15 Cal. Code Regs. Title 14, Sections 15000 et seq.) (“CEQA Guidelines) because, as

Placing a General Obligation Bond Measure on the November 8, 2022 Ballot ACTION CALENDAR for Affordable Housing, Climate Change Resiliency, Wildfire Protection, and August 3, 2022 Other Public Infrastructure Improvements

contemplated by Section 15378(b)(4) of the CEQA Guidelines, the proposed bond measure involves the creation of a government funding mechanism and does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. The use of bond proceeds to finance any project or portion of any project will be subject to approval of the applicable decision-making body at that time, upon completion of planning and any further required environmental review under CEQA.

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 May 31 and June 21, 2022 City Council meetings.

ENVIRONMENTAL SUSTAINABILITY AND CLIMATE IMPACTS
Implementing Vision 2050 would result in more resilient public infrastructure that creates fewer greenhouse gases, and reduces conflict between our built and natural environment. More affordable housing in Berkeley would reduce greenhouse gas emissions caused by employees finding lower cost housing farther away from employment centers and requiring longer commutes.

RATIONALE FOR RECOMMENDATION
The City Clerk is presenting this action in accordance with the direction given by the City Council at the May 31 and June 21, 2022 meetings.

ALTERNATIVE ACTIONS CONSIDERED
None.

CONTACT PERSON
Mark Numainville, City Clerk, (510) 981-6900
Attachments:
1: Resolution
Exhibit A: Text of Measure
Exhibit B: Tax Rate Statement

RESOLUTION NO. -N.S.

DETERMINING THAT PUBLIC INTEREST AND NECESSITY DEMAND THE

ISSUANCE OF GENERAL OBLIGATION BONDS TO FINANCE THE ACQUISITION OR

IMPROVEMENT OF REAL PROPERTY FOR AFFORDABLE HOUSING, AND CLIMATE

CHANGE RESILIENCY, WILDFIRE PROTECTION, AND OTHER PUBLIC

INFRASTRUCTURE AND FACILITIES, AND SUBMITTING TO THE BERKELEY ELECTORATE ON THE NOVEMBER 8, 2022 BALLOT A MEASURE TO AUTHORIZE

GENERAL OBLIGATION BONDS FOR SUCH PROJECTS
WHEREAS, the accelerating impacts of climate change and growing need for affordable housing create new challenges for safety, resiliency, and sustainability within the City; and
WHEREAS, the City has identified over $1 billion in infrastructure needs, including to reduce the City’s environmental footprint, adapt to climate change, reduce the risk of flooding and wildfires, and better withstand the consequences of flooding and fires when they do occur; make the City’s public spaces more attractive, vibrant, and green; and otherwise improve the City’s infrastructure and make it more sustainable and resilient; and
WHEREAS, the Vision 2050 Framework and Program Plan are long-term plans to build, upgrade and repair Berkeley’s aging infrastructure to be more sustainable and resilient in order to meet the serious challenges of the future, including climate change, and, to these ends, the City Council has determined that affordable housing and infrastructure are connected; and
WHEREAS, a regional housing needs assessment showed the City needed an additional 3,854 affordable housing units, a crisis affecting unhoused, low-income and working families and individuals, including, but not limited to, teachers, seniors, veterans, the homeless, students, people with disabilities, and other vulnerable populations; and WHEREAS, the size and scale of local infrastructure need and affordable housing need show the challenge ahead despite the proactive steps taken to address these issues over the last decade; and
WHEREAS, existing funds and funding sources are inadequate for these infrastructure and affordable housing needs; and
WHEREAS, the City is authorized to issue general obligation bonds to finance municipal improvements pursuant to certain provisions of the California Government Code, including Article 1, commencing with Section 43600, of Chapter 4 of Division 4 of Title 4 or Article 4.5, commencing with Section 53506, of Chapter 3 of Part 1 of Division 2 of Title 5 (each, the “Bond Law”); and
WHEREAS, the City is authorized to issue general obligation bonds for the acquisition or

improvement of affordable housing projects, pursuant to the provisions of Section

7.64 of the Berkeley Municipal Code; and
WHEREAS, under the Bond Law and Chapter 7.64, the City intends to issue general obligation bonds (the “Bonds”) to finance the acquisition or improvement of real property for affordable housing (“Affordable Housing Improvements”), including the application of bond proceeds by the City directly, or indirectly through third parties as loans, grants, or other disbursements to qualified individuals, not-for-profit entities acting alone or together with tax credit investors, not-for-profit corporations, partnerships, associations, and government agencies, to acquire real property for the purpose of constructing, rehabilitating or preserving affordable housing, or to construct, rehabilitate or preserve affordable housing; including but not limited to supportive housing, nonprofit rental housing, and limited-equity housing cooperatives affiliated with community land trusts; and
WHEREAS, under the Bond Law and Chapter 7.64, the City further intends to issue the Bonds to finance the acquisition or improvement of real property for public infrastructure and facilities (“Infrastructure Improvements”; together with Affordable Housing Improvements, “Improvements”), including the City’s storm drains; above or on ground utilities, especially those that can be undergrounded; green infrastructure; retaining walls; park, recreation, and senior facilities; parks, natural areas, waterfront, marina, and other open space; public buildings; and other public infrastructure, including repair, renovation, replacement, or reconstruction so that the public can continue to benefit from Infrastructure Improvements as they become more resilient and sustainable, and the Infrastructure Improvements will include any public art integrated into the Infrastructure Improvements consistent with Berkeley Municipal Code Chapter 6.13; and WHEREAS, the City may have the opportunity to leverage State and County of Alameda (“County”) funds allocated for these affordable housing and infrastructure needs if it issues the Bonds to address these needs; and
WHEREAS, fiscal accountability protections including public disclosure of all spending, annual audits and independent oversight help ensure funds will be spent as promised; and
WHEREAS, funding from the Bonds should be guided by the City’s adopted plans and policies, including the Vision 2050 Framework and Program Plan; and WHEREAS, funding from the Bonds should be attentive to creating attractive, green spaces that invite walking and biking, and support community gathering; and WHEREAS, by law, all funds must remain under local control in the City and cannot be taken away by the State or the County or used for other purposes; and WHEREAS, the City Council recognizes the importance of ensuring adequate maintenance funding from existing sources for Infrastructure Improvements financed by

the Bonds and not supplanting existing City infrastructure funding with proceeds of the Bonds; and
WHEREAS, United States Income Tax Regulations section 1.150-2 provides generally that proceeds of tax-exempt debt are not deemed to be expended when such proceeds are used for reimbursement of expenditures made prior to the date of issuance of such debt unless certain procedures are followed, one of which is a requirement that prior to the payment of any such expenditure, the issuer declares an intention to reimburse such expenditure; and
WHEREAS, it is in the public interest and for the public benefit that the City declares its official intent to reimburse certain of the proposed expenditures referenced herein; and WHEREAS, proceeds from the sale of the Bonds will be used to finance the Improvements, and all expenditures will be subject to annual independent financial audits and oversight by multiple City commissions; and
WHEREAS, the Council desires to submit the measure described herein 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 WHEREAS, the Council’s Resolution No. 70,336-N.S., adopted on May 10, 2022, adopted the provisions of Elections Code Section 9285(a) providing for the filing of rebuttal arguments for city ballot measures, pursuant to Elections Code Section 9285(b).

NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Berkeley that the public interest and necessity require the issuance of one or more series of general obligation bonds in the amount of $300,000,000 to fund the Improvements, subject to completion of the proceedings required by the Bond Law.

BE IT FURTHER RESOLVED that this resolution is adopted pursuant to and in conformance with Chapter 7.64 of the Berkeley Municipal Code.

BE IT FURTHER RESOLVED that:

A. A ballot measure authorizing the City to issue general obligation bonds to finance the acquisition and improvement of real property for the Improvements (the “Measure”), a copy of which is attached hereto as Exhibit A, shall be placed before the voters at the election on November 8, 2022.

B. The estimated cost of the Affordable Housing Improvements to be funded by the Bonds is $150,000,0000, and the estimated cost for the Infrastructure Improvements to be funded by the Bonds is an additional $150,000,000.

C. The maximum rate of interest on the indebtedness shall not exceed twelve percent (12%) in accordance with Government Code Section 53531.

D. The estimated cost of the Improvements may include legal and other fees, and the cost of printing the Bonds, and other costs and expenses incidental to or connected with the issuance and sale of the Bonds.

E. Proceeds of the Bonds shall be used to finance the acquisition and construction of real property for the Improvements, and to pay any fees and costs in connection with issuance of the Bonds, including but not limited to, legal fees and bond printing costs.

F. The Improvements will be completed as needed, and each is assumed to include its share of costs, including planning, program management and construction costs. The final cost of each Improvement will be determined as real property is purchased, plans are finalized, construction bids are awarded, or projects are completed. In addition, certain acquisition or improvement funds are expected from non-bond sources, including funds which have not yet been secured. Therefore, the City Council cannot guarantee that the Bonds will provide sufficient funds to allow completion of all needed Improvements.

G. For the Affordable Housing Improvements, proceeds of the Bonds shall be used to finance the acquisition or improvement of real property for affordable housing, including the application of bond proceeds for the City directly, or indirectly through third parties as loans, grants, or other disbursements to qualified individuals, not- for-profit entities acting alone or together with tax credit investors, not-for-profit corporations, partnerships, associations and government agencies, to acquire real property for the purpose of constructing, rehabilitating or preserving affordable housing, or to construct, rehabilitate or preserve affordable housing; including but not limited to supportive housing, nonprofit rental housing, and limited-equity housing cooperatives affiliated with community land trusts.

H. As part of the process to adopt a budget, the City Manager shall provide to the City Council a comprehensive report of funds received from any Bonds authorized by this Measure.

I. The following commissions or their successors shall provide oversight by reporting to the City Council on an annual basis regarding projects funded by the Bonds and the expenditure of proceeds of the Bonds, whether those expenditures are consistent with the purposes of the Bonds set forth in this Resolution, and recommendations on projects proposed to be funded by the Bonds and proposed expenditures of the proceeds of the Bonds:

1. The Parks, Recreation, and Waterfront Commission shall provide oversight on Infrastructure Improvements related to properties and facilities identified in Municipal Code Section 3.26.040.A, including all parks, recreation, and waterfront improvements.

2. The Transportation and Infrastructure Commission shall provide oversight on the Infrastructure Improvements related to transportation and other public infrastructure.

3. The Housing Advisory Commission shall provide oversight on the Affordable Housing Improvements.

J. All expenditures will be subject to an annual independent financial audit to confirm that expenditures of proceeds of the Bonds are consistent with the intent of this Resolution.

BE IT FURTHER RESOLVED that the City hereby declares that it reasonably expects (i) to pay certain costs of the acquisition and improvement of real property for the Improvements prior to the date of execution, delivery or issuance of the Bonds, and (ii) to use a portion of the proceeds of the Bonds for reimbursement of such expenditures that are paid before the date of execution, delivery or issuance of the Bonds.

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 to the qualified voters of the City, at said consolidated election, the Measure, such approval to constitute the authorization to issue the Bonds.

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.

BE IT FURTHER RESOLVED that the City proposes to issue and sell general obligation bonds of the City, in one or more series, in the maximum amount and for the objects and purposes set forth above, payable from and secured by ad valorem taxes levied and collected in the manner prescribed by laws of the State of California, all equally and ratably secured, without priority, by the taxing power of the City, if two-thirds of all qualified voters voting on the Measure vote in favor thereof.

BE IT FURTHER RESOLVED that said proposed Measure shall be placed on the ballot for the November 8, 2022 election with the statement of the Measure to be printed in the ballot in the following form:

CITY OF BERKELEY GENERAL OBLIGATION BOND MEASURE
BONDS
YES
Shall the measure authorizing the City of Berkeley to issue $300 million in general obligation bonds to fund affordable housing and improvements to public infrastructure, including utilities, parks, waterfront, marina, public buildings, and other improvements to increase sustainability and climate change resiliency, subject to oversight by City commissions and independent audits, be adopted?
Projected levy over expected 45-year period bonds are outstanding is approximately $0.02 per $100 of assessed value; raising approximately $11,600,000 annually.

BONDS
NO
BE IT FURTHER RESOLVED that at this time, the best estimate of the average and highest tax rates expected to be levied for debt service on the Bonds is set forth in the Tax Rate Statement attached hereto as Exhibit B.

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, and that ballots for the election shall be provided in the form and in the number provided by law.

Voters shall be provided an opportunity to vote for or against the Measure on the ballot, in accordance with procedures to be adopted by the authorized officers of the County.

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 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, and to file a certified copy of this Resolution, including all exhibits, no later than the close of business on August 12, 2022, with the County Registrar of Voters and the Clerk of the County Board of Supervisors.

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 the City will reimburse the Registrar of Voters for the costs associated with placing the Measure on the ballot.

BE IT FURTHER RESOLVED that the Mayor, the City Manager, the Finance Director, the City Attorney and the City Clerk, and any of their designees, are hereby authorized to execute any documents and to perform all acts necessary to place the Measure on the ballot, and to make any changes to the text of the Measure, the statement of the measure or the Tax Rate Statement to conform to any legal requirements of the County Registrar, in order to cause the election to be held and conducted in the City.

BE IT FURTHER RESOLVED that the City Council directs the City Clerk to transmit a copy of the Measure to the City Attorney, who shall prepare an impartial analysis of the Measure showing the effect of the Measure on the existing law and the operation of the Measure. The impartial analysis shall be filed by the date set by the City Clerk for the filing of primary arguments.

BE IT FURTHER RESOLVED that the filing of ballot arguments shall conform to the manner and schedule established by Resolution No. 70,336-N.S., adopted on May 10, 2022.

BE IT FURTHER RESOLVED that the City Council, having reviewed the Measure, hereby finds that this action is not subject to the California Environmental Quality Act ("CEQA") because it involves the establishment of a government financing mechanism that does not involve any commitment to specific projects to be constructed with proceeds of the Bonds. The use of the proceeds of the Bonds to finance any project or portion of any project will be subject to approval of the applicable decision-making body at that time, upon completion of planning and any further required environmental review under CEQA.

BE IT FURTHER RESOLVED that this Resolution shall take effect from and after the date of its passage and adoption.

BE IT FURTHER RESOLVED that the City Clerk shall certify to the passage and adoption thereof.

Exhibits
A: Text of Measure
B: Tax Rate Statement

EXHIBIT A

MEASURE TO BE SUBMITTED TO THE VOTERS AUTHORIZING THE CITY

OF BERKELEY TO ISSUE GENERAL OBLIGATION BONDS TO FINANCE

THE ACQUISITION OR IMPROVEMENT OF REAL PROPERTY FOR

AFFORDABLE HOUSING, AND CLIMATE CHANGE RESILIENCY, WILDFIRE

PROTECTION, AND OTHER PUBLIC INFRASTRUCTURE IMPROVEMENTS

AND FACILITIES
Section 1. Findings.

WHEREAS, the accelerating impacts of climate change and growing need for affordable housing create new challenges for safety, resiliency, and sustainability within the City; and
WHEREAS, the City has identified over $1 billion in infrastructure needs, including to reduce the City’s environmental footprint, adapt to climate change, reduce the risk of flooding and wildfires, and better withstand the consequences of flooding and fires when they do occur; make the City’s public spaces more attractive, vibrant, and green; and otherwise improve the City’s infrastructure and make it more sustainable and resilient; and
WHEREAS, the Vision 2050 Framework and Program Plan are long-term plans to build, upgrade and repair Berkeley’s aging infrastructure to be more sustainable and resilient in order to meet the serious challenges of the future, including climate change, and, to these ends, the City Council has determined that affordable housing and infrastructure are connected; and
WHEREAS, the City Council recognizes the importance of ensuring adequate maintenance funding from existing sources for infrastructure improvements financed by the bonds and not supplanting existing City infrastructure funding with proceeds of the bonds; and
WHEREAS, a regional housing needs assessment showed the City needed an additional 3,854 affordable housing units, a crisis affecting the unhoused, low-income and working families and individuals, including, but not limited to, teachers, seniors, veterans, the homeless, students, people with disabilities, and other vulnerable populations; and WHEREAS, the size and scale of local infrastructure need and affordable housing need show the challenge ahead despite the proactive steps taken to address these issues over the last decade; and
WHEREAS, existing funds and funding sources are inadequate for these infrastructure and affordable housing needs; and

WHEREAS, the City is authorized to issue general obligation bonds to finance municipal improvements pursuant to certain provisions of the California Government Code, including Article 1, commencing with Section 43600, of Chapter 4 of Division 4 of Title 4 or Article 4.5, commencing with Section 53506, of Chapter 3 of Part 1 of Division 2 of Title 5 (each, the “Bond Law”); and
WHEREAS, the City is authorized to issue general obligation bonds for the acquisition or improvement of affordable housing projects, pursuant to the provisions of Section

7.64 of the Berkeley Municipal Code; and
WHEREAS, under the Bond Law and Chapter 7.64, the City intends to issue general obligation bonds (the “Bonds”) to finance the acquisition or improvement of real property for affordable housing (“Affordable Housing Improvements”), including the application of bond proceeds by the City directly, or indirectly through third parties as loans, grants, or other disbursements to qualified individuals, not-for-profit entities acting alone or together with tax credit investors, not-for-profit corporations, partnerships, associations, and government agencies, to acquire real property for the purpose of constructing, rehabilitating or preserving affordable housing, or to construct, rehabilitate or preserve affordable housing; including but not limited to supportive housing, nonprofit rental housing, and limited-equity housing cooperatives affiliated with community land trusts; WHEREAS, under the Bond Law and Chapter 7.64, the City further intends to issue the Bonds to finance the acquisition or improvement of real property for public infrastructure and facilities (“Infrastructure Improvements”; together with Affordable Housing Improvements, “Improvements”), including the City’s storm drains; above or on ground utilities, especially those that can be undergrounded; green infrastructure; retaining walls; park, recreation, and senior facilities; parks, natural areas, waterfront, marina, and other open space; public buildings; and other public infrastructure, including repair, renovation, replacement, or reconstruction so that the public can continue to benefit from Infrastructure Improvements as they become more resilient and sustainable, and the Infrastructure Improvements will include any public art integrated into the Infrastructure Improvements consistent with Berkeley Municipal Code Chapter 6.13; and WHEREAS, the City may have the opportunity to leverage State and County of Alameda (“County”) funds allocated for these affordable housing and infrastructure needs if it issues the Bonds to address these needs; and
WHEREAS, fiscal accountability protections including public disclosure of all spending, annual audits and independent oversight help ensure funds will be spent as promised; and
WHEREAS, by law, all funds must remain under local control in the City and cannot be taken away by the State or the County or used for other purposes; and WHEREAS, this resolution is adopted pursuant to and in conformance with Chapter 7.64 of the Berkeley Municipal Code; and

WHEREAS, the City Council has therefore determined that the public interest requires additional funding for the Improvements; and
WHEREAS, the People of the City of Berkeley find that the public interest requires the issuance of the Bonds in the amount of $300,000,000 to fund the Improvements.

Section 2. Object and Purpose of Bonds.

This measure (the “Measure”) authorizes the issuance of general obligation bonds (the “Bonds”), the object and purpose of which is to finance, by the City of Berkeley or a third party, as applicable, the acquisition or improvement of real property for the Improvements.

The Improvements will be completed as needed, and each is assumed to include its share of costs, including planning, program management and construction costs. The final cost of each Improvement will be determined as real property is purchased, plans are finalized, construction bids are awarded, or projects are completed. In addition, certain acquisition or improvement funds are expected from non-bond sources, including funds which have not yet been secured. Therefore, the City Council cannot guarantee that the Bonds will provide sufficient funds to allow completion of all needed Improvements.

For the Affordable Housing Improvements, proceeds of the Bonds shall be used to finance the acquisition or improvement of real property for affordable housing, including the application of bond proceeds for the City directly, or indirectly through third parties as loans, grants, or other disbursements to qualified individuals, not-for-profit entities acting alone or together with tax credit investors, not-for-profit corporations, partnerships, associations and government agencies, to acquire real property for the purpose of constructing, rehabilitating or preserving affordable housing, or to construct, rehabilitate or preserve affordable housing; including but not limited to supportive housing, nonprofit rental housing, and limited-equity housing cooperatives affiliated with community land trusts.

Proceeds of the Bonds may be used to reimburse the City for expenditures on the Improvements that are paid before the date of execution, delivery or issuance of the Bonds.

Section 3. Estimated Cost of Improvements.

The estimated cost of the Affordable Housing Improvements to be funded by the Bonds is $150,000,0000, and the estimated cost for the Infrastructure Improvements to be funded by the Bonds is an additional $150,000,000.

The estimated cost includes legal and other fees and the cost of printing the Bonds and other costs and expenses incidental to or connected with the authorization, issuance or sale of the Bonds. The cost of the Improvements include planning, programs management and construction costs.

Section 4. Principal Amount of Bonds.

The aggregate principal amount of Bonds to be issued shall not exceed $300,000,000.

Section 5. Maximum Interest Rate.

The maximum rate of interest to be paid on the Bonds shall not exceed twelve percent (12%) per annum.

Section 5. Accountability Requirements.

The following accountability measures apply to the issuance of Bonds pursuant to this Measure:

A. The specific purpose of the Bonds is to finance the acquisition or improvement of real property for the Improvements; and
B. The proceeds from the sale of the Bonds will be used only for the purposes specified in this Measure, and not for any other purpose; and C. The proceeds of the Bonds will be deposited into an account to be created and held by the City; and
D. The proceeds from the sale of the Bonds may be used to reimburse the City for amounts advanced from the general fund or other funds or accounts to acquire real property for Improvements, when such purchases are made prior to the availability of Bond proceeds; and
E. As part of the process to adopt a budget, the City Manager shall provide to the City Council a comprehensive annual report of funds received from any bonded indebtedness authorized by this Measure, funds expended, and the status of the Improvements.

F. The following commissions or their successors shall provide oversight by reporting to the City Council on an annual basis regarding projects funded by the bond and bond expenditures, whether those bond expenditures are consistent with the purposes of the bond, and recommendations on projects proposed to be funded by the bond and bond expenditures:

1. The Parks, Recreation, and Waterfront Commission shall provide oversight on Infrastructure Improvements related to properties and facilities identified in Municipal Code Section 3.26.040.A, including all parks, recreation, and waterfront improvements.

2. The Transportation and Infrastructure Commission shall provide oversight on the Infrastructure Improvements related to transportation and other public infrastructure.

3. The Housing Advisory Commission shall provide oversight on the Affordable Housing Improvements.

G.All expenditures will be subject to an annual independent financial audit to confirm that Bond expenditures are consistent with the intent of this Measure.

EXHIBIT B

TAX RATE STATEMENT
An election will be held in the City of Berkeley (the “City”) on November 8, 2022, to authorize the sale of up to $300 million in bonds of the City to finance the specific projects listed in the measure. If such bonds are authorized, the City expects to sell the bonds in one or more series. Principal and interest on the bonds will be payable solely from the proceeds of ad valorem tax levies made upon the taxable property in the City. The following information is provided in compliance with Sections 9400-9404 of the California Elections Code. Such information is based upon the best estimates and projections presently available from official sources, upon experience within the City, and other demonstrable factors.

Based upon the foregoing and projections of the City’s assessed valuation:

1. The best estimate of the average annual tax rate that would be required to be levied to fund the bond issue over the entire duration of the bond debt service, based on a projection of assessed valuations available at the time of filing of this statement is 2.00 cents per $100 (or $20.00 per $100,000) of assessed valuation of all property to be taxed. The best estimate of the final fiscal year in which the tax is anticipated to be collected is 2067/68.

2. The best estimate of the highest tax rate that would be required to be levied to fund the bond issue, based on a projection of assessed valuations available at the time of filing this statement is 3.68 cents per $100 (or $36.77 per $100,000) of assessed valuation of all property to be taxed. The best estimate of the first year in which the highest tax rate will apply is 2038/39.

3. The best estimate of the total debt service, including the principal and interest, that would be required to be repaid if all the bonds are issued and sold is $520,000,000.

Voters should note that such estimated tax rates are specific to the repayment of bonds issued under this authorization and will be in addition to tax rates levied in connection with other bond authorizations approved or to be approved by the City or any other overlapping public agency.

Voters should note that the estimated tax rate is based on the ASSESSED VALUE of taxable property on Alameda County’s official tax rolls, not on the property’s market value. In addition, taxpayers eligible for a property tax exemption, such as the homeowner’s exemption, will be taxed at a lower effective tax rate than described above. Property owners should consult their own property tax bills to determine their property’s assessed value and any applicable tax exemptions.

Attention of all voters is directed to the fact that the foregoing information is based upon projections and estimates only, which amounts are not maximum amounts or durations and are not binding upon the City. The actual debt service amounts, tax rates and the years in which they will apply may vary from those presently estimated, due to variations from these estimates in the timing of bond sales, the amount of bonds sold and market interest rates at the time of each sale, and actual assessed valuations over the term of repayment of the bonds. The dates of sale and the amount of bonds sold at any given time will be determined by the City based on need for funds and other factors. The actual interest rates at which the bonds will be sold will depend on the bond market at the time of each sale. Actual future assessed valuation will depend upon the amount and value of taxable property within the City as determined by the Alameda County assessor in the annual assessment and the equalization process.

Dated: July __, 2022

/s/ DEE WILLIAMS-RIDLEY
City Manager, City of Berkeley

Kate Harrison
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
Meeting Date: August 3, 2022
Item Description: Placing a General Tax Measure on the November 8, 2022 Ballot to Tax Vacant Residential Units
Submitted by: Vice Mayor Harrison
The revised version of the ballot measure ordinance includes clarifying amendments drafted in consultation with the City Attorney in the following sections:
 7.54.020 – Simplifying and clarifying findings.
 7.54.030 E. and L – Adding a definition of Hotel that excludes short-term rentals and clarifying that short-term rentals are only excluded from the definition of Residential Unit;
 7.54.030 F. – Striking New Construction Period definition.  7.54.040 F. – Striking the expiration clause.
 7.54.040 H. – Adding a suspension clause contingent on Council declaring an emergency and taking a two-thirds vote that the emergency has undermined the ability of owners to fill vacancies.
 7.54.040 I. – Adding a narrow amendment clause subject to a two-thirds vote and limited to correcting ambiguities and errors and in furtherance in the objectives of the measure.
 7.54.050 A.-B. – Clarifying that the City Manager’s designee may administer returns.
 7.54.060 D. – Limiting owner-occupied exemption to include one Single Family Dwelling, Condominium, or owner-occupied Duplex.  7.54.060 A. – Clarifying that the exemption applies owner-occupied units owned by natural persons or family trusts owning four or fewer units who are either seniors or low income. In addition, clarified the owner use exemption.

 7.54.080 A. – Clarifying that the City Manager’s designee may enforce the ordinance.
 7.54.090 A. – Clarifying that the Council may use any of the proceeds to fund any general municipal services designated by the Council.  7.54.100 – Striking the extraneous technical assistance to the City Manager clause.

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 26August 3, 2022
To: Honorable Mayor and Members of the City Council
From: Vice Mayor Harrison, Mayor Arreguín 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.

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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 26August 3, 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

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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/

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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,Utilizing data from the Berkeley Rent Stabilization Board concerning units not available to rent and considering the exemptions described here,, it is estimated that Berkeley will generate between $5.48 million and $8.17 million in revenue annually and that several 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/

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hundred vacant units could become occupied within two 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

Applicable Units
Years since implementation Year 1 Two + Years** Year 1 Two + Years ** Year 1 Two + Years** Units Subject to Tax 119 89 841 631 960 720
Revenue $357,000 $535,500 $5,046,000 $7,569,000 $5,403,000 $8,104,500 *Excuding 38 single family homes owned by non-corporate owners of 1 single-family home and 130 owner-occupied duplexes
**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 twoa single family homes and/or condominiums in Berkeley 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, singleSingle family homes with an ADU or JADU will be classified as “one unit”;
 Duplexes where one unit is owner occupied so long as they are owned by natural persons or family trusts.
 A property of four or fewer units, inclusive of ADUs and JADUs, whose owner is a natural person or family trust and is over 65 or, makes under 80% of the Area Median Income, and resides in the property;
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 26August 3, 2022

 T, 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;
 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 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 or for other municipal purposes at the discretion of the Council. The Housing Trust Fund supports the following activities:

Placing an Empty Homes Tax Ordinance on the November 8, 2022 Ballot ACTION CALENDAR July 26August 3, 2022

● 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.

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 Attachments:
1: Draft Resolution
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 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, 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 non-exempt 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 beginning January 1, 2024 to December 31, 2034, estimated to generate between $5,4800,000 and $8,1700,000 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 Waiver.

7.54.070 080 Administration; Penalties.

7.54.080 090 Housing Trust Fund; Deposit of ProceedsUse of Funds for General Municipal Purposes.

7.54.090 100 Technical Assistance to the City Manager; Annual Reports.

7.54.100 110 Authorization and Limitation on Issuance of Bonds.

7.54.110 120 Severability.

7.54.120 130 Savings Clause.

7.54.130 140 Liberal Construction.

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 and other vacant units to the housing market is a key strategy for ensuring long-term affordability.

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

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 The City 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 the City is unable to house all of its residents.

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

H. The City needs new funds to pay for municipal services. The Empty Homes Tax is intended to disincentivize prolonged vacancies and housing speculation, 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.

3 C. “Disaster Period” means the two-year period following the date that a Residential Unit was made uninhabitable or unusable due to fire, natural disaster, or other catastrophic event, except where a negligent, reckless or willful act or omission by the owner or agent of the owner contributed to or caused the Residential Unit to become uninhabitable or unusable due to fire, natural disaster or other catastrophic event.

D. “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.

D.E. “Hotel” means any property registered under Section 7.36.060 of the Municipal Code and excludes any properties regulated under Chapter 23.314 of the Municipal Code.

E.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.

F. “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.

G. “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.

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

I. “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.

J. “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.

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

4 L. “Residential Unit” means a house, an apartment, a group of rooms, or a single room that is designed as separate living quarters .than units occupied or intended for occupancy primarily by travelers, vacationers, or other transient occupants only so long as and to the extent permitted by Chapter 23.314 of the Municipal Code. 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 Hotel, 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.

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 of an owner-occupied Residential Unit is temporarily absent from their unit and the unit is continuously designated as their principal residence, or where the owner of an owner-occupied duplex, triplex, or quadplex has affirmatively indicated through filings with the Rent Board that a single other unit in the 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 for more than 182 days, whether consecutive or nonconsecutive, in a calendar year except for those periods defined as a Vacancy Exclusion Period.

B. The Empty Homes Ttax 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 Residential Unit in a 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 Residential Unit in a 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.

5 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.

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 the tax shall resume upon expiration.

H. Upon declaring a citywide emergency, the Council may suspend the tax in whole or part by a supermajority vote of two-thirds of the entire City Council upon a findings that a declared emergency has undermined the ability of owners to fill vacancies in their Residential Units. Such a suspension shall last for no more than 60 days from its enactment by the Council, but may be extended on or before its expiration by a two- thirds supermajority vote of the Council so long as the emergency continues and the required findings can be made. The Empty Homes Tax shall resume upon the expiration of the emergency.

I. The Council may, by a supermajority vote of two-thirds of the entire City Council, amend this Chapter in furtherance of its purposes or to correct ambiguities or errors in language that do not alter the dollar amounts of the tax as provided in Section 7.54.040 B, or expand the applicability of the exemptions or waivers in Sections 7.54.060 and

7.54.070, or amend subsection H. or this subsection I. of Section 7.54.040.

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 or their designee.

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 or their designee. 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

6 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 one Single Family Dwelling,s or condominiums, or owner-occupied Duplex and no other Residential Units in the City shall be exempt from the Empty Homes Tax. For purposes of this subsection D. only, “Single Family Dwelling” shall only include is inclusive of single family home properties with up to a single accessory dwelling unit and a junior accessory dwelling unit. Additionally, for the purposes of this subsection D. and Section

7.54.070 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 (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 Waiver

7 A. The Empty Homes Tax may be waived by the City Manager or their designee for an owner of Residential Units provided that:

1. The owner or owners are all natural persons or family trusts; and

1.2. The owner or owners all own a single owner-occupied property of four or fewer Residential Units, inclusive of accessory dwelling units and junior accessory dwelling units, and no other Residential Units in the City; and

2.3. The owner or owners are all either sixty-five (65) years of age or older or are low income. For purposes of this Section, “low income” means having a combined family income, from all sources for the previous year, 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.

B. Additionally, a natural person or family trust who is the owner of a single owner- occupied property of four or fewer Residential Units, inclusive of accessory dwelling units and junior accessory dwelling units, and no other Residential Units in the City may seek a waiver for a single Vacant Residential Unit on the property on the basis that it is used by an owner-occupant for personal, non-residential and uncompensated purposes.

C. Any taxpayer seeking a waiver 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.

7.54.080 Administration; Penalties
A. The City Manager or their designee 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

8 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.

7.54.090 Housing Trust Fund; Deposit of ProceedsUse of Funds for General Municipal Purposes.

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, or it may use any of the proceeds to fund any general municipal services designated by the Council.

7.54.100 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.

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.

7.54.110 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.

7.54.120 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

9 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.

7.54.130 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.

7.54.130 Liberal Construction.

This Chapter shall be liberally construed to effectuate its purpose.

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 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 Harrison
Councilmember District 4
2180 Milvia Street, Berkeley, CA 94704 Tel: 510.981.7140 TDD: 510.981.6903 E-Mail: [email protected]

REVISED AGENDA MATERIAL
for Supplemental Packet 3

Meeting Date: July 26, 2022

Item Number: 6

Item Description: Placing a General Tax Measure on the November 8, 2022 Ballot to Tax Vacant Residential Units

Submitted by: Vice Mayor Harrison

The revised version of the ballot measure ordinance includes clarifying amendments drafted in consultation with the City Attorney in the following sections:

• 7.54.030 I. – Clarifying that the Owner In Care Period definition applies to a single occupant;

• 7.54.030 L. – Clarifying that the Residential Unit definition does not include mobile homes;

• 7.54.030 L. – Clarifying that short-term rentals are only excluded from the definition of Residential Unit to the extent that they are permitted under BMC

23.314;

• 7.54.030 M. – Clarifying that the Vacancy Exclusion Period includes instances when the owner of an owner-occupied Residential Unit is temporarily absent from their unit, e.g., on sabbatical, but the unit is continuously designated as their principal residence.

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.

7.54.130 Liberal Construction.

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.

2 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.

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.

3 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 made uninhabitable or unusable due to fire, natural disaster, or other catastrophic event, except where a negligent, reckless or willful act or omission by the owner or agent of the owner contributed to or caused the Residential Unit to become 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 the occupants of the Residential Unit who used that Residential Unit as their principal residence are is 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

4 occupants only so long as and to the extent permitted by Chapter 23.314 of the Municipal Code. 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.

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 of an owner-occupied Residential Unit is temporarily absent from their unit and the unit is continuously designated as their principal residence, or where the owner of an owner-occupied duplex, triplex, or quadplex has affirmatively indicated through filings with the Rent Board that a single other unit in the 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.

5 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.

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 and no other Residential Units in the City shall be exempt

6 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 (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

7 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.

7.54.090 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.

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.

7.54.130 Liberal Construction.

This Chapter shall be liberally construed to effectuate its purpose.

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 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 Harrison
Councilmember District 4
2180 Milvia Street, Berkeley, CA 94704 Tel: 510.981.7140 TDD: 510.981.6903 E-Mail: [email protected]

REVISED AGENDA MATERIAL
for Supplemental Packet 1

Meeting Date: July 26, 2022

Item Number: 6

Item Description: Placing a General Tax Measure on the November 8, 2022 Ballot to Tax Vacant Residential Units

Submitted by: Vice Mayor Harrison

The revised version of the ballot measure ordinance includes clarifying amendments drafted in consultation with the City Attorney in the following sections:

• 7.54.030 D. – Clarifying the disaster period exemption as excluding instances where an owner or agent makes a negligent, reckless or willful act or omission that contributed to or caused the Residential Unit to subsequently become uninhabitable or unusable due to fire, natural disaster or other catastrophic event;

• 7.54.030 M. – Clarifying that the owner use / family member exemption applies to the owner of an owner-occupied duplex, triplex, or quadplex;

• 7.54.060 D. – Clarifying that the Single Family Dwellings and condominiums exemption applies to owners with no other Residential Units in the City.

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.

7.54.130 Liberal Construction.

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.

2 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.

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.

3 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, except where a negligent, reckless or willful act or omission by the owner or agent of the owner contributed to or caused the Residential Unit to become 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.

4 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.

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 of an owner-occupied duplex, triplex, or quadplex has affirmatively indicated through filings with the Rent Board that a single other unit in the 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

5 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.

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.

6 D. A natural person or family trust that is the owner of no more than two Single Family Dwellings or condominiums and no other Residential Units in the City 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 (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.

7 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.

7.54.090 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.

8 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.

7.54.130 Liberal Construction.

This Chapter shall be liberally construed to effectuate its purpose.

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 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.

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
August 3, 2022
(Continued from 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

Placing a General Tax Measure on the November 8, 2022 Ballot ACTION CALENDAR To Tax Vacant Residential Units August 3, 2022

Council as a whole, or certain members of the Council, to submit an argument in favor of the measure.

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