REVIEW AND DISCUSS FINDINGS AND CONSIDER
APPROVING A VACANT COMMERCIAL PROPERTY TAX AND
DIRECTING STAFF TO PROCEED WITH PREPARING A 2026
BALLOT MEASURE AND PROGRAM DEVELOPMENT
City Council Meeting
October 14, 2025
Item 16.3
Purpose
• Review and discuss findings and consider approving a Vacant Commercial Property Tax (VPT)
• Direct staff to proceed with preparing a 2026 ballot measure and program development
What is a Vacancy Tax?
• A new taxing mechanism aimed at reducing vacant buildings • Vacant property owners will be subject to an additional special tax • Requires a Prop 218 vote:
• A Proposition 218 vote is a formal process required in California to approve certain types of local government fees, assessments, and taxes, particularly those imposed on 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). • It 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
Background
• Vacant and unmaintained commercial buildings contribute to blight, fire, and safety risks.
• July 29, 2025 – Council adopted Vacant Commercial Registration Ordinance (SMC 15.34).
• Next step: Explore Vacant Property Tax (VPT) as a companion policy.
Impacts of Vacant Properties in Stockton
• Fire Department: Dozens of fires annually in vacant structures. • Police Department: Frequent calls for trespassing and loitering. • Economic Impacts: Depressed property values and reduced private investment.
Potential Results of VPT
• Encourage productive use or redevelopment of vacant
buildings.
• Reduce blight and safety risks.
• Generate revenue for blight abatement, homeless programs, and revitalization.
Examples from Other Cities
• Oakland – Measure W (2018):
• $3,000 per vacant home
• $6,000 tax per parcel
• Estimated $5M -$7M annual revenue, but no decrease in vacant properties • Sacramento: Initial support but did not proceed after 2024 polling. • San Francisco – Proposition M: Residential Tax struck down at District Court; City appealed decision; ongoing appeal.
Potential Benefits for Stockton
• Blight reduction
• Incentive for redevelopment and maintenance
• Equity for compliant property owners
• Revenue would be reinvested into expansion of
blight abatement and economic development
programs
Potential Concerns
• Legal: Must comply with Props 13 & 218; requires 2/3 voter approval.
• Administrative: Define 'vacant', create tracking systems, set exemptions.
• Economic: Potential hardship for small property owners. • Timing: November 2026 General Election.
Two Phases
• Phase 1- Prop 218 vote
• Ordinance development
• Public outreach
• Preparation of the Ballot Measure
• Requires a consultant
• Phase 2- Implementation
• Technical Subject Matter Expert (SME)
• Administrative
• Logistical: Parcel analyzation and exemption claims
Consultants Needed
Ballot Measure
• City needs to be neutral in effort
• Expert needed for Ballot Measure creation
• Ordinance creation expertise
Implementation
•Helps City remain within statutory cost caps (Admin. overhead up to 15% of revenues).
•Lightens the burden on in-house staff, improves program efficiency, and ensures reliable technical implementation.
•Covers core toolkit needs: Vacancy detection, exemptions, portal management, enforcement, and reporting.
Proposed Ballot Measure Timeline
• Jan–Feb 2026: Stakeholder Outreach
Selection of Consultant for Measure
• May 2026: Council Approval of Ballot Measure
• June 2026: Call Election
• Aug 2026: County Review
• Nov 3, 2026: General Election
Implementation Timeline (If Approved)
March 2026: RFQ for Implementation Consultant
Nov 2026: Election
Jan 2027: Consultant Selection
June 2027: Program Launch
Phase 1 - Financial Summary
COSTS
• Start-Up Election & Ballot Measure: $1 million
• Consultant: $70K–$100K/year
• Internal Staffing: $800K/year
• Total Annual Cost: $1 million + start-up
REVENUE
• Potential Annual Revenue: $2.5–$4.5 million
Policy Direction Requested
• Proceed with VPT ballot measure development.
• Authorize staff to procure consultants.
• Continue stakeholder outreach and fiscal
modeling.
Potential Revenue
Recommended Action
Recommended Action:
• Review and discuss findings and consider approving a Vacant Commercial Property T ax (VPT).
• Direct staff to proceed with preparing a 2026 ballot measure and program development.
• Authorize or appropriate any budgetary actions related to the preparation of a 2026 ballot measure for a Vacant Commercial Property Tax.