8 21-0878 Subject: Blue Ribbon Equitable Business Tax Task Force Recommendations
From: Council President Fortunato Bas
Recommendation: Receive An Informational Report From The Finance Department On Analyses And Policy Recommendations Prepared And Adopted By The Blue Ribbon Equitable Business Tax Task Force Regarding The Proposed New Rates And The Economic Impacts Of The Recommended Business Tax Rates As Requested By The City Council Pursuant To Resolution 88478 C.M.C
As the owner of a duplex in Oakland I am struggling to make strategic decisions about what to do next. Do I continue to invest dwindling retirement savings into maintaining and operating this rental unit, knowing expenses of operation, and now taxes are likely to increase so much? With the real possibility that a moratorium on evictions could return in response to a new Covid variant, I am struggling to see how keeping this unit on the market makes any financial sense. The Ellis act is looking like an existential option for me and thousands of other small landlords who have been asked to shoulder the entire burden for not-very-good housing policy decisions over the past 20 years.
Its also worth saying that ADUs remain a really questionable investment in light of the proposed changes, further dampening housing options.
Applying such a huge tax increase to small landlords like me is a certain way to erode from the housing inventory in the long term and directly countermands the reasoning behind the state's policies around ADUs.
I am a small minority property owner in the Hoover/Foster district. I am retired, I am not a corporation, I don’t have deep pockets nor do I come close to making $250k/year in earnings. Therefore, as a small mom & pop property owner, I should not be taxed as if I’m a corporation making $74mil/yr.- with deep pockets and financially padded with the benefit of having economies of scale. I don’t have that luxury. When I have a vacancy in my property, I get no rent. I as a small owner carry the full burden and loss, unlike corporations with 100’s of units of rental inventory. The city’s proposed Equitable Business Tax structure can only be balanced if businesses pay their fair share. Small property owners should pay at the same rate as small businesses. In addition, small property owners are essential housing providers and they should be incentivized and receive a discounted rate for providing much needed essential natural occurring housing in our community. I ask that you support small and minority property owners by correcting this gross error in the Equitable Business Tax proposal.
I would support this proposed businesss license tax if it were more equitable to rental property owners who earn less than $250,000 /
year and are treated the same way as small businesses. To exclude rental properties from the progressive business license tax as a small business seems an arbitrary and illogical plan to encourage more affordable housing. Small rental property owners have higher overhead, more compassion for their tenants by working with them, and provide essential services by keeping their units available for rent. COVID has hit many owners quite hard, and separating this sector from the small business license tax is not only discriminatory, punitive, and discourages this small business to continue. Most owners are minorities, low-income, elderly, and / or struggling to make ends meet, and in similar dire straits as their tenants, yet shouldering more financial and legal responsiblitites.
As Sharon Rose stated so well below, I "want to support the progressive aspects of this legislation but cannot support it in its present form." I "urge the Council to amend the new business tax rates to include mom and pop landlords within the definition of small businesses."
Please include rental properties into the small businesses category.
I am co-chair of Block by Block Organizing Network, a citywide, district-based organization, which is a member of Neighbors Defending our Homes. We have fought for fair taxation of landlords of owner-occupied rental housing who often rely for their own housing stability on modest income from renters. The people throughout Oakland who fall in this category of landlord are providing affordable housing for fellow Oaklanders. They are not millionaire housing developers; they are small businesses like others covered under this legislation. We want to support the progressive aspects of this legislation but we cannot support it in its present form. We urge the Council to amend the new business tax rates to include mom and pop landlords within the definition of small businesses.
Sharon Rose
If, as the Mayor and City Council have expressed. there is a need for more affordable housing in Oakland; why does the proposed business tax not describe and include small rental providers as small businesses and tax them accordingly. This would certainly encourage and enable more of us (taxpayers) to become rental providers. Must Oakland again be an outlier in the Bay Area
Fairness in tax rules will encourage small owners to stay in the business. Please demonstrate support for the moms and pops who are struggling out here and make this progressive/ equitable tax reform reflect the value we bring to the housing market.
I believe that large corporations based in and who are doing business in the city of Oakland pay higher tax rates then small businesses. It is a moral issue. Corporation should have to pay their fair share. Too many small businesses are dying because the inability to meet their financial and legal obligations.
Landlords renting part of their own occupied homes are often elderly, minority and/or low income Oakland residents and should not be lumped in with huge businesses. Please fix this inequity.
JUSTICE and FAIRNESS for Small Businesses and Seniors!!! The Equitable Business Tax is supposed to be tiered with larger businesses paying more taxes and small businesses paying less because small businesses earn less and we need to support local, small businesses. However, the proposal is NOT equitable or fair in its current form. Local small businesses earning less than $250k are supposed relatively less tax yet that is not the case for many minority, elderly residents on fixed incomes. Those who rely on rental income much less than even $250k/year are being lumped in the same tax brackets as giant corporations earning $74 million/year. Please FIX is egregious INEQUITY and treat these small businesses the same as other small businesses. FAIRNESS local small businesses, especially those that have stepped up and shouldered the most during the pandemic.
Regarding landlords who rent out living spaces, IF THEY ARE OWNER OCCUPIED BUILDINGS, they should be taxed at a much lower rate than if the building owners are businesses.
This has been the way things have worked in San Francisco where I owned a flat since 1976. I lived in the lower and rented out the upper. I had to put up with renters as a part of my lifestyle.
Yes, I provided a service and it also impacted my own life in negative ways.
It’s only fair and if you tax small building owners too much, they may decide to take their studio, or small unit off the market and further decrease available housing.
I am STRONGLY in favor of equitable and progressive taxation and of enacting a more equitable business tax structure for Oakland. But it is absurd to count small, mom and pop landlords as huge businesses, rather than as the small businesses that they are. What could possibly be the justification for this? A high percentage of these landlords are people of color, or older people trying to hang on to our homes. Most of us have annual rental income well below $250K. We provide low cost housing in a city where that is so desperately needed. Yet we are taxed at the same rate as corporations earning over $70 million! Any proposal that leaves small landlords in the "large business" category cannot in any way be considered a progressive tax and, therefore, I oppose it. It is neither "equitable", nor effective in stabilizing naturally occurring affordable housing. The solution is to tax small rental providers with less than $250K income at the same rate as other small businesses. Making this change is the only way the Council can meet its stated goal to bring parity and fairness to taxation rates for ALL small businesses. Anything less gives the lie to the Council's stated intent.
As a small business owner and landlord in Oakland, I provide rooms for rent on a sliding scale and have helped keep a number of people from falling into homelessness. Please support us in lowering taxes, fees, and filing requirements so we can help our community stay housed.
The Equitable Business Tax proposal provides an opportunity for City Council to revisit application of the same business tax rate to all housing providers regardless of size or income. From page 7 of the report, “When it created the BLT Task Force, the City Council identified several goals for a modernized business tax structure, including making the system progressive or tiered (i.e., larger businesses would pay higher rates than otherwise comparable smaller businesses) ….”
Small essential housing providers (SEHP) are small businesses and must be separated from higher earning providers. SEHPs are often people of color, on fixed income, have no reserves, and the rental is their sole retirement asset. Covid rental losses and external factors (i.e., moratorium, utility increases, taxes, repairs) caused added strain. To illustrate the stark difference between small buildings and large ones, one vacant unit in a 4-plex results in 25% reduction in income, where one vacant unit in a 20-unit building is only 5% income reduction.
Most SEHP’s annual rental income is well below $250K. Yet we are taxed at the same rate as corporations earning over $70 million! The solution is to tax SEHP’s with less than $250K income at the same rate as other small businesses. This helps SEHPs stabilize naturally occurring affordable housing by reducing operating costs. The change would also help Council meet its stated goal and bring parity and fairness to taxation rates for all small businesses.
Small housing providers are the SMALLEST of small businesses, yet the city treats us like we're corporate behemoths. Can you NOT believe that some of US may need a little help as well? Some of us are still reeling from the business complications brought on by Covid, etc. and lowering our tax rate would aid in that help and it would also be a way of showing us homeowning taxpayers, the backbone of this city's population, that you DO listen to ALL your constituents ... not just the crybabies who grab the headlines.
I would like to point out to District 1 councilperson Kalb and all the other councilpersons that small housing providers- yes, mom & pop outfits- are small businesses too, and should fall under the small business tax providers $100 limited tax. We rent our in-law unit for $750 per month and we defy you to find a smaller business than that in Oakland. This is just one more kick in the face for small housing providers in Oakland. Instead we are paying the same rate as corporations making millions. Unconscionable.
The city-wide Neighbors Defending our Homes Coalition (NDH) generally supports a truly progressive Business Tax. However, the so-called “Equitable” Business Tax proposal heavily discriminates against small housing providers. Forcing Mom & Pop landlords to pay a tax rate over 6 times as much as corporations garnering $74 Million/year is an outrage! Small rental housing providers must be separated from commercial landlords & added to the Small Business tax category.
Often small, local rental providers are facing loss of their home, especially during this drastic Covid-induced economic crisis. Yet under the proposal, rent from a duplex, triplex or the basement in your home, even from a family member, will continue to be taxed at the highest rate in Oakland. Other cities exempt such rental providers from local business taxes as responsible public officials understand such rental housing can help slow displacement & homelessness, at no cost to taxpayers. Instead, the City Council is poised to carry on the sad Oakland history of discouraging and punishing providers of lower cost, naturally occurring housing unlike any other Bay Area city.
The City Council & Mayor repeat concerns about the increasing, rampant displacement of long-time Oakland residents, the crisis in affordable rental units, needs for ADUs, and homelessness. Why have Oakland officials totally dropped their equity lens in the matter of taxing small rental providers!?!
As the owner of a duplex in Oakland I am struggling to make strategic decisions about what to do next. Do I continue to invest dwindling retirement savings into maintaining and operating this rental unit, knowing expenses of operation, and now taxes are likely to increase so much? With the real possibility that a moratorium on evictions could return in response to a new Covid variant, I am struggling to see how keeping this unit on the market makes any financial sense. The Ellis act is looking like an existential option for me and thousands of other small landlords who have been asked to shoulder the entire burden for not-very-good housing policy decisions over the past 20 years.
Its also worth saying that ADUs remain a really questionable investment in light of the proposed changes, further dampening housing options.
Applying such a huge tax increase to small landlords like me is a certain way to erode from the housing inventory in the long term and directly countermands the reasoning behind the state's policies around ADUs.
I am a small minority property owner in the Hoover/Foster district. I am retired, I am not a corporation, I don’t have deep pockets nor do I come close to making $250k/year in earnings. Therefore, as a small mom & pop property owner, I should not be taxed as if I’m a corporation making $74mil/yr.- with deep pockets and financially padded with the benefit of having economies of scale. I don’t have that luxury. When I have a vacancy in my property, I get no rent. I as a small owner carry the full burden and loss, unlike corporations with 100’s of units of rental inventory. The city’s proposed Equitable Business Tax structure can only be balanced if businesses pay their fair share. Small property owners should pay at the same rate as small businesses. In addition, small property owners are essential housing providers and they should be incentivized and receive a discounted rate for providing much needed essential natural occurring housing in our community. I ask that you support small and minority property owners by correcting this gross error in the Equitable Business Tax proposal.
I would support this proposed businesss license tax if it were more equitable to rental property owners who earn less than $250,000 /
year and are treated the same way as small businesses. To exclude rental properties from the progressive business license tax as a small business seems an arbitrary and illogical plan to encourage more affordable housing. Small rental property owners have higher overhead, more compassion for their tenants by working with them, and provide essential services by keeping their units available for rent. COVID has hit many owners quite hard, and separating this sector from the small business license tax is not only discriminatory, punitive, and discourages this small business to continue. Most owners are minorities, low-income, elderly, and / or struggling to make ends meet, and in similar dire straits as their tenants, yet shouldering more financial and legal responsiblitites.
As Sharon Rose stated so well below, I "want to support the progressive aspects of this legislation but cannot support it in its present form." I "urge the Council to amend the new business tax rates to include mom and pop landlords within the definition of small businesses."
Please include rental properties into the small businesses category.
I am co-chair of Block by Block Organizing Network, a citywide, district-based organization, which is a member of Neighbors Defending our Homes. We have fought for fair taxation of landlords of owner-occupied rental housing who often rely for their own housing stability on modest income from renters. The people throughout Oakland who fall in this category of landlord are providing affordable housing for fellow Oaklanders. They are not millionaire housing developers; they are small businesses like others covered under this legislation. We want to support the progressive aspects of this legislation but we cannot support it in its present form. We urge the Council to amend the new business tax rates to include mom and pop landlords within the definition of small businesses.
Sharon Rose
If, as the Mayor and City Council have expressed. there is a need for more affordable housing in Oakland; why does the proposed business tax not describe and include small rental providers as small businesses and tax them accordingly. This would certainly encourage and enable more of us (taxpayers) to become rental providers. Must Oakland again be an outlier in the Bay Area
Fairness in tax rules will encourage small owners to stay in the business. Please demonstrate support for the moms and pops who are struggling out here and make this progressive/ equitable tax reform reflect the value we bring to the housing market.
I believe that large corporations based in and who are doing business in the city of Oakland pay higher tax rates then small businesses. It is a moral issue. Corporation should have to pay their fair share. Too many small businesses are dying because the inability to meet their financial and legal obligations.
Landlords renting part of their own occupied homes are often elderly, minority and/or low income Oakland residents and should not be lumped in with huge businesses. Please fix this inequity.
JUSTICE and FAIRNESS for Small Businesses and Seniors!!! The Equitable Business Tax is supposed to be tiered with larger businesses paying more taxes and small businesses paying less because small businesses earn less and we need to support local, small businesses. However, the proposal is NOT equitable or fair in its current form. Local small businesses earning less than $250k are supposed relatively less tax yet that is not the case for many minority, elderly residents on fixed incomes. Those who rely on rental income much less than even $250k/year are being lumped in the same tax brackets as giant corporations earning $74 million/year. Please FIX is egregious INEQUITY and treat these small businesses the same as other small businesses. FAIRNESS local small businesses, especially those that have stepped up and shouldered the most during the pandemic.
Regarding landlords who rent out living spaces, IF THEY ARE OWNER OCCUPIED BUILDINGS, they should be taxed at a much lower rate than if the building owners are businesses.
This has been the way things have worked in San Francisco where I owned a flat since 1976. I lived in the lower and rented out the upper. I had to put up with renters as a part of my lifestyle.
Yes, I provided a service and it also impacted my own life in negative ways.
It’s only fair and if you tax small building owners too much, they may decide to take their studio, or small unit off the market and further decrease available housing.
Susan Shawl
District 1
I am STRONGLY in favor of equitable and progressive taxation and of enacting a more equitable business tax structure for Oakland. But it is absurd to count small, mom and pop landlords as huge businesses, rather than as the small businesses that they are. What could possibly be the justification for this? A high percentage of these landlords are people of color, or older people trying to hang on to our homes. Most of us have annual rental income well below $250K. We provide low cost housing in a city where that is so desperately needed. Yet we are taxed at the same rate as corporations earning over $70 million! Any proposal that leaves small landlords in the "large business" category cannot in any way be considered a progressive tax and, therefore, I oppose it. It is neither "equitable", nor effective in stabilizing naturally occurring affordable housing. The solution is to tax small rental providers with less than $250K income at the same rate as other small businesses. Making this change is the only way the Council can meet its stated goal to bring parity and fairness to taxation rates for ALL small businesses. Anything less gives the lie to the Council's stated intent.
As a small business owner and landlord in Oakland, I provide rooms for rent on a sliding scale and have helped keep a number of people from falling into homelessness. Please support us in lowering taxes, fees, and filing requirements so we can help our community stay housed.
The Equitable Business Tax proposal provides an opportunity for City Council to revisit application of the same business tax rate to all housing providers regardless of size or income. From page 7 of the report, “When it created the BLT Task Force, the City Council identified several goals for a modernized business tax structure, including making the system progressive or tiered (i.e., larger businesses would pay higher rates than otherwise comparable smaller businesses) ….”
Small essential housing providers (SEHP) are small businesses and must be separated from higher earning providers. SEHPs are often people of color, on fixed income, have no reserves, and the rental is their sole retirement asset. Covid rental losses and external factors (i.e., moratorium, utility increases, taxes, repairs) caused added strain. To illustrate the stark difference between small buildings and large ones, one vacant unit in a 4-plex results in 25% reduction in income, where one vacant unit in a 20-unit building is only 5% income reduction.
Most SEHP’s annual rental income is well below $250K. Yet we are taxed at the same rate as corporations earning over $70 million! The solution is to tax SEHP’s with less than $250K income at the same rate as other small businesses. This helps SEHPs stabilize naturally occurring affordable housing by reducing operating costs. The change would also help Council meet its stated goal and bring parity and fairness to taxation rates for all small businesses.
Please put Oakland mom & pop rental housing providers within the Small Business category in the new business tax structure. Thank you.
Small housing providers are the SMALLEST of small businesses, yet the city treats us like we're corporate behemoths. Can you NOT believe that some of US may need a little help as well? Some of us are still reeling from the business complications brought on by Covid, etc. and lowering our tax rate would aid in that help and it would also be a way of showing us homeowning taxpayers, the backbone of this city's population, that you DO listen to ALL your constituents ... not just the crybabies who grab the headlines.
I would like to point out to District 1 councilperson Kalb and all the other councilpersons that small housing providers- yes, mom & pop outfits- are small businesses too, and should fall under the small business tax providers $100 limited tax. We rent our in-law unit for $750 per month and we defy you to find a smaller business than that in Oakland. This is just one more kick in the face for small housing providers in Oakland. Instead we are paying the same rate as corporations making millions. Unconscionable.
The city-wide Neighbors Defending our Homes Coalition (NDH) generally supports a truly progressive Business Tax. However, the so-called “Equitable” Business Tax proposal heavily discriminates against small housing providers. Forcing Mom & Pop landlords to pay a tax rate over 6 times as much as corporations garnering $74 Million/year is an outrage! Small rental housing providers must be separated from commercial landlords & added to the Small Business tax category.
Often small, local rental providers are facing loss of their home, especially during this drastic Covid-induced economic crisis. Yet under the proposal, rent from a duplex, triplex or the basement in your home, even from a family member, will continue to be taxed at the highest rate in Oakland. Other cities exempt such rental providers from local business taxes as responsible public officials understand such rental housing can help slow displacement & homelessness, at no cost to taxpayers. Instead, the City Council is poised to carry on the sad Oakland history of discouraging and punishing providers of lower cost, naturally occurring housing unlike any other Bay Area city.
The City Council & Mayor repeat concerns about the increasing, rampant displacement of long-time Oakland residents, the crisis in affordable rental units, needs for ADUs, and homelessness. Why have Oakland officials totally dropped their equity lens in the matter of taxing small rental providers!?!
The Neighbors Defending our Homes