- What’s the goal of Measure DD?
- How does Measure DD work?
- How will the tax increase impact me?
- What happens to landlords that can’t afford to pay the increased tax because their tenant is paying a very low rent?
- How did Measure DD get on the ballot?
- Why are there two ballot measures on the same topic?
- What’s wrong with Measure U1?
- What happens if both ballot measures pass?
- What is the Committee for Real Affordable Housing?
To increase city funding to be made available for affordable housing and homelessness prevention programs.
It’s simple. Measure DD is an increase in the annual Business License Tax (BLT) paid by owners of three or more residential rental units in Berkeley. Measure DD increases the gross receipts tax paid by owners of residential rental units by 40 percent—from 1.081 percent to 1.5 percent. This means for every $1,000 of rental income, owners will have to pay $15.50 worth of taxes.
Immediately, Measure DD will increase annual funding from this revenue source by 40 percent from about $3.5 million to approximately $5.0 million. Thereafter, revenue would rise year-after-year with corresponding increases in total rent payments.
If you own three or more residential rental units, your tax rate will increase. If you are a tenant, your landlord may seek to pass along some or all the tax increase, as allowed by law either by increased rents or deferred maintenance.
What happens to landlords that can’t afford to pay the increased tax because their tenant is paying a very low rent?
A provision in the measure allows for any landlord who cannot afford to pay the tax – whether they themselves are low income or their tenant is paying a very low rent – to put in for a hardship exemption.
More than 3,300 Berkeley voters signed petitions to qualify the initiative ordinance for the ballot. The Berkeley City Council then voted unanimously to place it on the ballot.
Two Berkeley City Council members (Laurie Capitelli and Jessie Arreguin) also authored a measure – Measure U1 – that increases the tax 166% and exempts new development from paying the tax increase for 12 years.
There are three main problems. Measure U1 exempts new luxury apartment complexes, a big gift to big developers. Measure U1 fails to provide any assurance that new revenue will be used as intended. And, Measure U1 raises the tax rate by so much—a 166 percent jump, from 1.081 percent to 2.88 percent to of gross receipts—that it is virtually certain to hurt tenants by being passed along in rent hikes, or reduced spending on tenant improvements, or both.
If Measure DD and Measure U1 both receive a majority of yes votes, only the measure with the greatest number of affirmative votes would become law.
The Committee for Real Affordable Housing is the Berkeley campaign for fair, effective and accountable responses to our housing affordability crisis. We are working to pass Measure DD, a fair way to increase revenue for affordable housing and homelessness prevention.
The Committee for Real Affordable Housing was formed and is sponsored by the Berkeley Property Owners Association (BPOA). Established in the year 1980, the BPOA is a grassroots trade association of small, medium and large residential rental property owners. As owners and operators of rent-controlled properties, its members are a primary source of below market-rate housing in Berkeley.