March 2020: Vote YES on Prop D: Tax on Vacant Storefronts
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The increasing number of vacant storefronts across San Francisco’s commercial districts can hardly be ignored. Rent hikes haven’t just hit renters but have driven out shops, cafés and restaurants that contributed to making San Francisco one of the most vibrant and walkable cities in the country. Prop D aims to help fill empty storefronts and retain long term businesses by taxing property owners or lessees who leave their storefronts vacant for more than 182 days in any given tax year.
This proposition is on the ballot because it is a tax, and therefore must pass by a ⅔ vote. Many ballot initiatives, once passed, must go back to voters if amendments are needed. This measure may be amended by a ⅔ vote of the Board of Supervisors. The measure targets bad behavior while not penalizing landlords who are actively attempting to lease their property:
Filing for a building permit or for conditional use exempts property owners from the tax for one year;
The tax rate increases in the 2nd and 3rd years that a storefront is vacant without active attempts to lease it;
The tax applies only to specific designated Commercial Districts and Transit Districts;
The tax revenue goes to a Small Business Assistance Fund where it may be used to help prospective tenants.
Prop D will penalize bad actor landowners and stem the tide of eroding retail and commercial districts that threaten the walkability and urban fabric of San Francisco. Prop D follows a trend across the nation, where more than 1,900 cities have enacted vacant property registration fees. Some have adopted commercial vacancy taxes, including Washington, D.C. and Oakland. Washington’s tax is calculated at a value of 5% of a building’s assessed value, which would violate the California Constitution’s current tax limit of 1% of a property’s assessed value. Oakland’s Vacant Property Tax applies to residential, commercial and vacant lots and was approved by the voters in 2018 by 70.04% of the vote.
San Francisco cannot allow a handful of landlords to erode our neighborhoods and raise the barrier to entry so that only exclusive boutiques and restaurants can survive. Prop D is receiving overwhelming support and features an ample number of off-ramps and considerations to minimize the unintended consequences of taxing well-intentioned landowners. Learn more at neighborsforsmallbusiness.com and Vote Yes on Prop D.