C.A.R. Legislative Day - Issues of Concern
C.A.R. is sponsoring AB 237 (Daly) to require local taxing authorities to notify all property owners of an upcoming vote on a parcel tax, including non-resident owners. C.A.R. is sponsoring AB 237, because property owners, who pay the parcel taxes approved by the voters, should know when that parcel tax will be voted on.
Since Proposition 13 was approved by voters in 1978, the use of parcel taxes to fund local programs has grown. Parcel taxes, are special taxes assessed on individual parcels and are used to fund education, infrastructure, healthcare, and other local “benefits.” In the last fiscal year, over $1.4 billion in parcel tax revenues were collected by 754 counties, cities and other special assessment districts. Many parcel taxes are layered, so that a property may be subject to multiple parcel taxes. These taxes are typically a flat rate per parcel. Some jurisdictions; however, and this may be subject to legal challenge, assess them based on square footage or acreage, per rental unit or some other custom assessment. Of the parcel taxes currently in place, 26% of them are permanent.
AB 237 requires local governments to inform property owners by U. S. mail of all properties within their respective jurisdictions within one week of making the decision to place the parcel tax on the local ballot. The required notice informs property owners as to the amount, the period of time the tax will be collected; and the date on which the vote by local residents will take place.
It’s important to support this bill, because:
Effective Notice – Property owners find out too late about parcel tax votes! If a
property owner is a resident of the local jurisdiction that is seeking to enact a parcel tax, the property owner doesn’t know about the proposed parcel tax until they receive their ballot pamphlets a month before an election; too late to mount an opposition campaign!
Simple Fairness – Non-resident property owners don’t find out
about a parcel tax until they get their property tax bill! Non-resident property owners (who own a parcel or parcels within a local jurisdiction but reside elsewhere) do not receive any notice whatsoever of a pending parcel tax vote. Non-resident property owners don’t find out about the parcel tax until they open their property tax bill! Status: the bill is currently in the Assembly.
Action Item: Ask Senator Anthony Cannella and Assembly Member Adam Gray to vote YES on AB 237.
C.A.R. is opposing legislation to impose a service tax, which includes a sales tax on real estate transaction services.
Services under SB 8 include appraisal, brokerage, home inspections, Natural Hazard Disclosure (NHD) reports, pest control inspection and repair, title insurance, escrow, loan origination and brokerage fees, home warranty, services to prepare for sale (paint, cleaning, landscaping, staging, etc.)
A service tax negatively affects housing affordability. Housing affordability is already a problem in California, adding a service tax to the transaction will only make the situation worse: keeping significant numbers of low and middle income families from purchasing homes. Service taxes will hurt tenants, too. At a time when the legislature is focused on housing affordability and a re-emergence of a housing shortage, does it make sense to increase the cost of housing? Rents are increasing and service taxes on investment properties will make that worse as those costs are passed on to tenants. It is a regressive tax. It has a disproportionately negative impact on low and middle income families who spend a larger percentage of their income on essential goods and services. Status: the bill in currently in the Senate.
Action item: Ask Senator Cannella and Assembly Member Gray to vote no on SB 8.
SB 364 prohibits rental property owners from taking rental housing off the market for at least five years. SB 364 is an outrageous attack on private property rights, essentially allowing government to seize property by dictating its use.
Existing law already protects tenants in terms of advance notice, relocation assistance, and extended notice protections for seniors and the disabled when property is taken off the market.
In 1985, C.A.R. successfully sponsored the “Ellis Act” preventing local governments from restricting the ability of rental property owners to go out of business. C.A.R. has successfully opposed attempts to weaken the Ellis Act. SB 364 is another attempt that unreasonably and unnecessarily restricts the ability of property owners to “go out of business.” This bill is offensive to private property rights; property owners should not be forced to stay in the rental housing business.
SB 364 empowers San Francisco to prevent property owners from taking rental units off the market unless every owner of the property has owned property for at least five consecutive years. This effectively forces property owners to remain in the rental housing business even if they are losing money or simply wish to occupy their own property.
Under SB 364, an owner who takes a rental off the market cannot remove another property they own or subsequently purchase. While SB 364 only applies to the City and County of San Francisco, since it is a district bill, it sets a dangerous precedent inviting other local governments to do the same.
Action item: Ask Senator Cannella and Assembly Member Gray to vote no on SB 364.