UPDATE ON FEASIBILITY OF A VACANT COMMERCIAL
PROPERTY TAX AND PLACEMENT ON 2026 GENERAL
ELECTION BALLOT AS BALLOT MEASURE
Council Legislation / Environmental Committee
July 28, 2025
Item 3.2
What is a Vacancy Tax?
• Taxing mechanism aimed at reducing vacant buildings
• Vacant property owners will receive a special tax
• Requires a Prop 218 vote (Ballot Measure):
• Formal process required in California to approve certain types of local government fees, assessments, and taxes:
• Property owners or utility ratepayers.
• Prop 218 was passed by California voters in 1996 and is part of the California Constitution (Articles XIII C and XIII D).
• Ensures taxpayer and property owner approval before local governments can impose or increase:
• Property-related fees (e.g., water, sewer, refuse)
• Assessments (e.g., lighting districts, landscaping)
• Special taxes
Need for Consultants
Prop 218 Ballot Measure:
• Prepare ordinance
• Public Outreach
• Prepare ballot measure
• Approximately $ 1 million in cost for entire ballot measure process Implementation Partner:
• Consultant helps remain within statutory cost caps (admin. overhead up to 15% of revenues) • Outsourcing administrative workload lightens burden on in-house staff, improves program efficiency, and ensures reliable technical implementation • Consultants provide core toolkit needs: vacancy detection, exemptions, portal management, enforcement, and reporting
Steps for Implementation
August 2025
• Council Approval Ballot Measure
October 2025
• Ordinance and Ballot Measure Consultant Selection
March 2025
• Ordinance and Ballot Measure Work Complete
November 2026
• RFQ for Implementation Consultant Selection
November 2026
• Election
January 2027
• Program Implementation Begins
July 2027
• Go Live with Program