City ballot measure U1 regressive tax break that favors developers

William Pan/Staff

Dear editor:

Normally we would cry foul that The Daily Californian would allow us just one quote and our opponents four in what is supposed to be an even-handed election story.

But, in the case of your article about competing rental housing tax measures appearing on the Nov. 8 ballot, everything the folks behind Measure U1 are quoted as saying about their own proposal does a great job making the case against it.

Please allow us to highlight some of it.

First, Berkeley City Councilmembers Kriss Worthington and Jesse Arreguin rightly sound embarrassed that they voted to place on the ballot a rental housing tax that exempts developers and owners of big, new, luxury apartment complexes — properties that charge far and away the highest rents and that already are exempted from Berkeley rent control. Councilmember Worthington conceded Measure U1 wasn’t the council’s finest moment, calling it watered down and “not a visionary, progressive policy.” That would be an understatement, Councilmember Worthington.

Councilmember Arreguin meanwhile, offered a laughable fallback. He is quoted as saying that, if Berkeley voters pass regressive Measure U1, the council could try to repair it after the fact by passing separate, fix-it legislation to eliminate the tax break for big developers. Seriously? Note to the chief sponsor of Measure U1: You should’ve gotten it right the first time, Councilmember Arreguin. Berkeley voters are smart enough not to fall for that ploy.

Then, there’s the assertion from Measure U1 campaign co-chair Tim Frank attempting to defend the developer exemption, presumably with a straight face. The illogic of his argument speaks for itself.  

Frank told the Daily Cal that big developers and their investors get a tax break under Measure U1 because otherwise they might not be able to afford to build big, new, market-rate apartment complexes in Berkeley. Keep in mind these properties charge in excess of $2,700 a month for a studio apartment and more than $3,600 for two bedrooms. Keep in mind that the owners of these projects tend to be big institutional, out-of-town investors, such as Wall Street-traded Real Estate Investment Trusts, or REITs, and international sovereign wealth funds.

At the same time, according to Frank, individual and small business owners of rent-controlled properties in Berkeley should be able to absorb Measure U1’s 166 percent increase in their tax rate — and somehow, magically, without any negative effect on tenants or on the city’s supply of privately owned and operated below-market-rate rental housing. So much for looking out for the little guy!

Measure U1 is a regressive tax break for big developers and full of unintended negative consequences for Berkeley tenants and the city as a whole. Vote no on U1.

Krista Gulbransen is the executive director of the Berkeley Rental Housing Coalition