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East Palo Alto residents will be tasked with deciding on Nov. 5 whether to approve a citizen initiative to amend the parcel tax ordinance (Measure JJ), which would limit the use of money generated by an existing 2.5 percent levy on certain rental units and prevent the money from being used for general government purposes.
If approved by a majority, the measure would require that funds generated by the 2.5 percent tax on gross rental income from certain types of residential units be used only for rental assistance for tenants, administrative expenses and other housing-specific purposes.
This ballot initiative measure was developed by citizens through review and signature collection.
The current code imposes a 2.5 percent tax on gross receipts from residential rental units, with certain exceptions, including landlords who demonstrate economic hardship, apartments rented to people with federal assistance vouchers, rooms rented in single-family homes, new rental construction for the first three years, and accessory dwelling units.
While the amendment does not change the tax rate, it ensures that the money will not be used for general government purposes.
At least 30 percent of the funds must be used for rental assistance for tenants, while no more than 20 percent of the funds can be used for personnel and general expenses to administer the tax.
Remaining revenues may be used, at the City's discretion, to support affordable homeownership, preserve affordable housing, provide rental assistance for tenants, or protect residents from displacement or homelessness.
In turn, a new subsection, 5.08.125.H., has been added to ensure that the council periodically reviews housing policy, housing programs, and related issues to determine how and to what extent the city should fund such programs.
The question that appears on the ballot is:
To fund tenant rental assistance and other specific housing purposes, such as affordable homeownership, affordable housing preservation, protecting residents from displacement or homelessness, and administrative costs, shall the initiative measure requiring funds raised through the existing $2.5 million tax on gross receipts (which cannot be passed on to tenants) on renting certain types of rental units, which raises approximately $1.45 million annually, be adopted until repealed by the voters?
A "Yes" vote would mean that City funds generated by the tax could only be used for the following purposes: rent assistance for tenants, other housing purposes specified by the City, and administration costs of the tax, subject to the spending limitations of the measure.
While a "No" vote would mean that funds generated by the tax can be used by the City for any purpose deemed necessary and appropriate for the benefit of the city's residents.
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