City of Sacramento
Law and Legislation Committee Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2026-00397 3/17/2026
Status Update on Prior Vacant Property Tax Exploration (LR25-004) File ID: 2026-00397
Location: Citywide
Recommendation: Receive a status update on prior exploration of a vacant property tax and related outreach.
Contact: Greta Soos, AICP, Senior Planner, (916) 808-2027, [email protected]; Remi Mendoza, Long Range Planning Manager, (916) 808-5003, [email protected]; Community Development Department
Presenter: Greta Soos, AICP, Senior Planner, (916) 808-2027, [email protected], Community Development Department
Attachments:
1-Description/Analysis
2-Outreach Summary
3-Vacant Property Tax Adoption Pathways
Description/Analysis
Issue Detail: The topic of vacant parcels and properties has received increased attention in recent years due to concerns about blight, empty buildings and storefronts, and prolonged periods of inactivity on vacant parcels.
A formal discussion on taxing vacant properties was requested by City Council on January 31, 2023.
Staff brought a discussion item to the Law and Legislation Committee on March 7, 2023, and again on December 5, 2023. At the December 2023 meeting, Committee members requested that staff conduct voter polling and outreach before moving forward with a potential measure. The results showed that while a solid majority of survey participants (57%) backed the establishment of a vacant property tax, this support fell short of the required two-thirds threshold. As a result, the City did not advance a vacant property tax measure at that time.
At the September 16, 2025 Law and Legislation Committee meeting, staff requested Committee direction to conduct additional voter polling and outreach to inform the development of a draft ballot
File ID: 2026-00397 3/17/2026
measure for City Council consideration. The committee did not authorize staff to conduct voter polling, however requested that staff conduct outreach and return with findings.
This report provides a summary of feedback received during outreach with property owners and representatives (Attachment 2), as well as a summary of potential pathways that were evaluated as part of this effort (Attachment 3). Due to prior direction provided by Committee members, feedback from property owners, and other potential 2026 tax measures, staff is not recommending moving forward with a tax but instead focusing on an Enhanced Vacant Lot and Vacant Building Monitoring and Code Enforcement Program which will address the primary concerns and negative impacts associated with vacant properties. An update on this program will be provided separately.
Policy Considerations: The following policies provide context for consideration of incentives related to vacant properties.
The consideration of additional incentives to develop or improve vacant properties and/or buildings is consistent with the following 2040 General Plan Policies:
· H-1.4 Facilitate Infill Housing Development. The City shall facilitate infill housing along commercial corridors, near employment centers, near high-frequency transit areas, and in all zones that allow residential development as a way to revitalize commercial corridors, promote walkability and increased transit ridership, and provide increased housing options. · LUP-4.15 Vacant Property. The City shall develop regulations, mechanisms, programs, or incentives to facilitate the development or temporary active use of vacant buildings and property.
Economic Impacts: A special tax may incentivize property owners to develop or sell properties, leading to revitalization and potential increases in housing development and City revenue; however, they may also pose a hardship to certain property owners. Exemptions should be considered to equitably administer the tax.
Environmental Considerations: The discussion of incentives to develop or improve vacant lots and/or buildings consists of an administrative activity such as general policy making and is not a project under the California Environmental Quality Act (CEQA), per Guidelines Section 15378 (b)(4) and 15378(b)(5).
Sustainability: Development of infill properties is in alignment with smart growth principles and has the potential to reduce greenhouse gas emissions due to increased proximity of housing, jobs, and services.
Commission/Committee Action: The Law and Legislation Committee discussed the concept of a vacant property tax at meetings on March 7, 2023, December 5, 2023, and September 16, 2025.
File ID: 2026-00397 3/17/2026
While the Committee requested additional information and outreach at various points, at the most recent meeting it did not authorize further voter polling or advancement of a ballot measure.
Rationale for Recommendation: The purpose of this report is to provide the Committee with a summary of prior analysis, outreach, and considerations related to a vacant property tax, and to formally conclude this phase of work. Based on prior Committee direction, voter polling thresholds, and outreach feedback, staff is not recommending further advancement of a vacant property tax at this time.
Financial Considerations: Not applicable.
Local Business Enterprise (LBE): Not applicable.
Attachment 2-Outreach Summary
1 Stakeholder Outreach Meeting Summary
January 22, 2026
On January 22, 2026, City staff convened a stakeholder outreach meeting with representatives from the Sacramento Metro Chamber, Sacramento Association of Realtors, California Apartment Association, Sacramento Region Business Association, Power Inn Alliance, Thatch & Hooper, LLP, and a representative from the development community.
High-Level Feedback
Overall, stakeholders indicated that at this time they do not support a vacant property tax and expressed concerns about the absence of effective enforcement and clearer pathways to address the underlying reasons properties remain vacant. Participants emphasized that property owners should not be penalized for holding property vacant, particularly in situations where market conditions or regulatory barriers make development infeasible.
Stakeholders provided feedback regarding the financial strain experienced by property owners, including maintaining vacant lot insurance, paying annual property taxes, and incurring expenses associated with site cleanup. Participants shared specific examples illustrating these concerns, including instances where property owners incurred substantial cleanup costs and fines while attempting to address site conditions, as well as situations where market conditions prevented redevelopment, leaving owners unable to demolish or improve blighted structures.
In lieu of a tax-based approach, stakeholders emphasized enforcement, incentives, and process improvements as more effective tools to encourage investment and activation. Suggested alternatives included improved coordination between code enforcement and public safety, lowered or waived permit fees, expanded fee deferral programs, broader awareness of existing City incentives and reduced regulatory barriers for temporary activation uses.
Attachment 3-Vacant Property Tax and/or Fee Adoption Pathways
Vacant Property Tax and/or Fee Adoption Pathways
1. Special tax requiring two-thirds voter approval imposed on vacant properties.
Article XIID, section 3, of the California Constitution (enacted via Proposition 218) mandates that taxes assessed on property parcels are considered special taxes, requiring a two-third majority vote for approval. Under this approach, the City would place a vacancy tax measure on the ballot for voter consideration.
City of Oakland Model
The City of Oakland imposes a special parcel tax on vacant property, defined as property used for fewer than 50 days in a year. (Oakland Municipal Code, chapter 4.56). The tax ranges from $3,000 or $6,000 per parcel or unit annually, depending on the property’s use.
City of San Francisco Model
The City of San Francisco levies a special tax on owners of vacant commercial property. (San Francisco Municipal Code, Article 29). The tax is calculated based on the property’s linear frontage feet. Property is classified as vacant if it remains unused for more than 182 days in the year.
2. Special tax by voter initiative requiring simple majority approval imposed on vacant properties.
The California Constitution requirement to obtain two-thirds voter approval does not apply where the special tax is proposed by a voter initiative. Under this approach, Sacramento residents can follow the City’s initiative petition process guidelines and put a vacancy tax measure on the ballot for voter consideration.
3. Inspection fee imposed on an owner of a vacant property covering the cost to conduct the inspections.
Under this approach, a fee is triggered by a property owner’s inaction (i.e., maintaining a vacant property) and is akin more to a regulatory fee linked to the oversight of a specific condition. Crucially, the fee cannot exceed the actual cost of conducting the inspections.
City of Long Beach Model
The City of Long Beach imposes an annual inspection fee of $780 on owners of undeveloped vacant property. This revenue funds monthly inspections to ensure compliance with city maintenance regulations (Long Beach Municipal Code, Chapter 18.29).
Attachment 3-Vacant Property Tax and/or Fee Adoption Pathways
City of Sacramento Model
Similarly, the City of Sacramento operates a Vacant Lot Program (Sacramento City Code, Chapter 8.136) that requires annual registration, establishes nuisance monitoring fees, and sets standards for property upkeep. As discussed previously, there are pathways to create a more robust program to achieve the goal of deterring blighted vacant property.
4. Penalty imposed on an owner of vacant property.
Penalties for keeping vacant parcels must be proportional and cannot be so high that it constitutes an unconstitutional "taking" of property. Furthermore, the penalty must not be an incident of property ownership, but rather a consequence of a code violation.
Under the California Government Code, such administrative fines are generally limited to $1,000.
Under this approach, the City would develop a formal record of the negative community impacts caused by vacancies and establish a legal basis to declare long-term vacancy a violation of municipal code.
This approach is relatively novel; however, if the City successfully mandates that property must be used, it can then impose penalties for non-compliance.