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November 8, 2016 — California General Election
Ballot and voting information for San Mateo County.
This is an archive of a past election.

Business Tax Measure

Local
November 8, 2016California General Election

City of East Palo Alto
Measure O - Majority Approval Required

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Election Results

Passed

4,862 votes yes (77.5%)

1,408 votes no (22.5%)

  • 100% of precincts reporting (14/14).
  • 323,303 ballots counted.

Shall the business license tax a landlord with five or more residential rental units pays the City of East Palo Alto, which shall not be passed on to tenants, be set at 1.5% of gross receipts, until terminated by the voters or reduced by Council, and the approximately $600,000 raised annually used as directed by the City Council for general fund purposes, such as funding programs to increase affordable housing, and protect local residents from displacement and from homelessness?

Impartial analysis / Proposal

The ordinance, placed on the ballot by the City Council, amends Section 5.08.120 and adds section 5.08.125 to the East Palo Alto Municipal Code. Section 5.08.120 currently provides that all rentals shall pay an annual license fee as set forth in the fee schedule. As revised and further amended by Section 5.08.125 an annual general tax of 1.5% will be imposed on gross residental rental receipts and applies to owners of five or more rental residential units in the City who lease the units to tenants.

The following types of units will not be subject to the 1.5% gross receipts tax but will be subject to the annual license fee established by the City:

 a) Dwelling units owned by a nonprofit corporation whosle primary purpose is providing affordable housing

 b) Dwelling units whose rents are controlled at rental rates affordable to households earning no more than 80% of the Average Media income and whose tenants must bei ncome qualified

 c) Units occupied by tenants receiving monthly rental assistance from the County of San Mateo Department of Housing

 d) Any dwelling unit during the first 10 years after the issuance of the certificate of occupancy

Hardship exemptions from payment of the tax may be applied for due to exceptional circumstances. These applications must be approved by the Rent Stablization Administrator for good cause. Any hardship exemption is effective for one tax year only. Taxpayers who seek hardships exemptions must reapply every year.

The City Council may reduce the tax rate and may terminate any such reductions without voter approval.

A "Yes" vote would revise Section 5.08.120 and add Section 5.08.125 to the East Palo Alto Municipal Code to impose a 1.5% gross receipts tax on rentals of five or more units as set forth above.

A "No" vote would leave Section 5.08.120 of the East Palo Alto Municipal Code unchanged and would not approve Section 5.08.125 which would mean all rentals are subject only to an annual license fee as set forth in the then current fee schedule.

— City Attorney of East Palo Alto

Arguments FOR

Vote YES on Measure O. East Palo Alto median asking rents have increased 90% over the last 5 years creating a severe housing affordability crisis that has caused displacement and gentrification, while producing an estimated $9,000,000 annually in increased rental revenue for large landlords. 

Measure O would capture a modest $600,000 of that large landlord windfall, providing funding the City can use annually to help prevent evictions so tenants can remain in their homes, to help homeowners avoid foreclosure, and to support efforts to preserve and develop affordable housing.

Measure O was discussed openly at City Council meetings over the last five months and is based on a recommendation by an expert housing consultant.

Measure O was placed on the ballot by a supermajority of the Council and is supported by every member of the Rent Stabilization Board.

Measure O is also supported by housing and tenant advocates, social justice, and legal services groups.

Measure O is NOT a property tax on homeowners or on tenants.

Measure O requires the City Council to seek annual public input on how to use the funding and review expenditures annually.

Measure O is carefully constructed to assure that the tax cannot be passed on to tenants who have shouldered the burden of exorbitant rent increases.

Measure O includes exemptions that make this tax on landlords fair and that serve the goals of addressing displacement and preserving affordable housing. These exemptions include:

 * landlords who demonstrate financial hardship

 * Very small landlords who own fewer than five units

 * Apartments rented to people with federal rental assistance vouchers

 * New rental construction for the first ten years (to encourage housing development)

Vote YES on Measure O.  Help EPA prevent displacement and assist families in need of stable and affordable housing.

/s/ Donna Rutherford, Mayor, East Palo Alto

/s/ Carlos Romero, Councilmember, East Palo Alto

/s/ Father Lawrence Goode, Pastor, St. Francis of Assisi Church

/s/ Sonja Spencer, Chair, EPA Rent Stabilization Board

/s/ Rev. Paul Bains, Homeless Advocate 

 

Arguments AGAINST

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