Election Section

A group sponsored by the Berkeley Property Owners Association (BPOA) has already spent more than $497,000 this year to defeat a common-sense measure to fund affordable housing. Measure U1, endorsed by every member of the City Council, would increase the business license tax paid by landlords who own five or more rental units in Berkeley from 1.08% to 2.88% of their gross receipts.

With rents soaring, landlords in Berkeley now collect $82 million more a year than five years ago. Measure U1 would collect an estimated $4 million in year one, with revenues gradually increasing over time. The median rent for new tenancies in two bedroom apartments in rent controlled buildings increased by 53% between 2011 and 2015.

The BPOA group sponsored an alternative measure, DD, which would raise the tax to only 1.5% and which does not exempt owners of fewer than five units from the increase. Measure DD is projected to raise only about $1.4 million each year. 

Record Campaign Spending 

The more than $497,000 spent so far this year by BPOA’s “Committee for Real Affordable Housing” already dwarfs previous spending on local ballot measures. Only Measure D, the 2014 soda tax, saw higher spending than this year’s assault against U1, with Big Soda spending $2.4 million that year. 

Spending on local ballot measures campaigns has usually been in the range of 25 cents to $1.25 per registered voter, with a few exceptions like Big Soda, but big landlords this year have already spent over $6 per voter. 

Proponents of U1 had, as of September 24, spent only $1,163 out of $43,647 contributed. Their contributions come from affordable housing developers such as Bridge Housing, with smaller contributions from individuals such as a BUSD teacher, UC professor, and an economist. 

Who is contributing to defeat Measure U1? 

The money to oppose Measure U1 is coming almost exclusively from large landlords and individuals identifying themselves as real estate investors. About 36% of the contributors to Measure DD report addresses outside Berkeley. 

Twenty largest contributors  

to NO on U1, Yes on DD 

As of September 24, 2016 

The largest contribution to defeating Measure U1 comes from Vero Properties. A google search produces business listings that name Jay Lakireddy, 2278 Shattuck, as the principal at Vero Properties. 

If you’d like to see all the landlords, LLCs and “real estate investors” who have contributed to defeating Measure U1, you can find the reports on the City’s campaign finance disclosure page here. 

Big Lies from Big Landlords 

Where’s all this landlord money going? According to the form 460 campaign statements filed with the city, some of it is going to campaign consultants, lawyers, polling. And some is going to pay for deceptive mailers and doorhangers that have begun to turn up in local mailboxes and on local doorkobs. 

They claim that Measure U1 will hurt “mom and pop Berkeley landlords” even though it’s Measure U1, not Measure DD, that exempts small landlords from the tax increase. 

They cynically claim that the money raised by the increased tax won’t be used for affordable housing. But Measure U1 directs the city’s Housing Advisory Commission to make specific affordable housing recommendations to the City Council. Berkeley’s affordable housing developers support Measure U1 because they are confident that the additional revenue will be used for affordable housing. 

As with the soda tax measure in 2014, the City Council opted for a tax that only requires a simple majority to pass. To earmark funds so that Council could not even consider spending the money for something other than affordable housing would require a two-thirds vote. But affordable housing supporters knew that Big Landlords would borrow from the Big Soda playbook and would throw a lot of money into a campaign to defeat the measure. Last year the BPOA announced that their new organization would raise at least a half a million. It should be noted that Big Landlord-backed DD also only requires a simple majority to pass. 

DD’s backers distort why U1 temporarily exempts new housing from the tax. The real purpose of the exemption is to avoid discouraging new housing by adding additional costs in the first years after construction. Proposition 13 already taxes new housing more heavily than older housing and housing developers also have to pay local affordable housing fees. U1’s exemption is only temporary, so after 12 years this newer housing will be taxed as well, bringing in still more revenue for affordable housing. 

It is ironic that Berkeley’s landlords, who always tell us the solution to the housing crisis is to build more housing, now attack a temporary exemption for new housing as a “give-away”. But of course if Measure U1 didn’t have such a temporary exemption they would attack it for discouraging new housing. 

You can find a full response to the deceptive statements made by the YES on DD/No on U1 campaign in the first round of their literature here.