A wide shot of a vacation rental home, with a sign advertising who to call for a vacation stay
A group is set to launch a ballot measure to tax vacant properties in the city of Santa Cruz. Homeowners who live in their property fewer than 4 months per year — which could include vacation homes like this one — would be subject to the tax.
(Kevin Painchaud / Lookout Santa Cruz)
Coast Life

Hearts full for an empty homes tax: Santa Cruz set to follow path of other ‘second home’ destinations

In order to put more money toward affordable housing solutions, advocates want to follow steps taken by voters in Oakland and Vancouver by taxing homeowners who live in their homes for fewer than 120 days in a calendar year.

As the city of Santa Cruz deals with continued issues of both housing affordability and limited housing stock, some locals believe they’ve found an answer: taxing homeowners whose properties are empty 120 days or more per year.

On Oct. 7, the group known as the “Yes On Empty Home Tax Santa Cruz” committee filed a notice of intent to launch a ballot measure to tax vacant properties in the city of Santa Cruz. It’s a tactic that’s been approved by voters and established recently in other high-priced West Coast cities, such as Oakland and Vancouver, British Columbia.

From the group’s research thus far — with census numbers showing 9.5% of Santa Cruz’s units as vacant for 120-plus days annually — there are more than 2,000 units in the city that could be eligible for the tax. If only 500 of those homeowners paid the tax, the city could gain $3 million annually that could be put toward affordable housing development.

The group will start collecting signatures on Oct. 22 to be accepted for the November 2022 ballot, and will host a launch party event Saturday at Shanty Shack Brewing to discuss the need and momentum for the initiative.

Should the ballot measure be approved by voters in the November 2022 election, homeowners would have to declare if their home was occupied or vacant by April 15, 2023. Homeowners who declare their home “in use” for at least 120 days per year would be subject to a randomized audit process. At this time, it remains unclear who would be in charge of validating the vacancy status for residences, but the measure would require an oversight committee made up of community members.

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Cyndi Dawson, who was one of the signatories on the filing, was a renter in Santa Cruz from 1999 to 2012. During her time in the city, she’s seen the need to speak up for other renters.

“I’ve continued to see more and more of my friends and colleagues move out of town because they couldn’t afford to live here, given the wage stagnation and the wages available for the majority of workers here,” she said. “My story is the story of everyone who’s been involved in this committee.”

The committee — made up of Santa Cruzans of many backgrounds, income ranges, and renting experiences — first came together in the spring to assess tangible ways the community could make a difference in pushing for more affordable housing. Those conversations led to nearly four months of weekly meetings with research assignments, interviews with housing experts, and comparisons to other cities with similar laws.

Oakland voters approved Measure W, the city’s vacant property tax, in November 2018, which established an annual tax of $3,000-$6,000 on properties vacant for more than 50 days per year. Vancouver implemented its vacancy tax at the start of this year, with properties vacant for more than six months annually subject to a tax of 1.25% of the property’s 2020 assessed taxable value.

From those findings and discussions, some of the research led to a report by UC Santa Cruz professors Miriam Greenberg and Steven McKay, called “No Place Like Home,” which found Santa Cruz to be the least affordable small city in the country.

Dawson noted that while Santa Cruz is an extremely desirable place to live and more people have moved into the area, there is a mismatch for the available housing stock to accommodate new residents, especially for very-low and low-income residents.

“We have a real problem producing stock for the lowest income levels, and that’s what this research really brought out to us,” she said. “This initiative is taking one little piece from this very complex housing affordability crisis, and going directly at it to create funds to fund an increase in that part of the housing stock we’re underperforming in.”

UCSC sociologist Camilla Hawthorne.
(Angelo Matteo Caglioti (Via camillahawthorne.com))

Social scientist Camilla Hawthorne, who teaches at UCSC, has worked to advocate for undergraduate and graduate students, fellow faculty members and staff as a voice for their housing concerns.

“One of the first things I learned when I came here for my job was there’s a lot of turnover for staff positions, because the staff who make the institution run can’t afford to keep up with the rising costs of living, or have to live farther afield,” she said. “The university is incentivized to keep increasing enrollment, but there hasn’t been the construction of student housing to keep pace with the rising student population.”

If the ballot initiative were to pass, Hawthorne said there would be an Empty Homes Tax Oversight Committee which would be required to have no fewer than three renters, no fewer than two in the very-low- or extremely-low-income category, at least one UCSC student, and at least one city worker who is a union member.

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“If the structure is really set up to represent voices of people in the community, it can really represent the people most affected in this housing crisis,” she said.

The group’s communications liaison, Kelsey Hill, who’s lived in Santa Cruz for nearly 10 years after moving to the area to attend UCSC, connected with many community members while running for city council in 2020. During that time, Hill heard a lot of support and interest from the community in relation to a possible empty home tax, believing it could be a positive solution.

“If we get this on the ballot and vote it in, it’s not the only solution to affordable housing, but I truly believe it’s one tool in our toolbox that we can push forward toward a more equitable Santa Cruz,” they said.

Kelsey Hill.
(Via LinkedIn)

Thus far, the committee has already had nearly 100 volunteers sign up, even as Hill says it has “barely gotten started.”

As Dawson reiterated, the campaign isn’t due to just her or her fellow committee members’ experiences, but to the collective troubles associated with finding housing in the city of Santa Cruz.

“This campaign effort is a response to many, many community members coming forward with challenging experiences to find and secure affordable housing,” she said. “All of us on this committee have had this experience, or know someone who’s had this experience, in Santa Cruz.”

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