City Leaders Across California Support Legislation to Make California’s Commercial Property Tax Code Fair


On Tuesday evening, the San Diego Unified School District joined the San Francisco Board of Supervisors and the Oakland and Richmond City Councils in passing a resolution in support of Commercial Property Tax Fairness. The resolution is an endorsement of California Senate Constitutional Amendment 5 (SCA 5), legislation introduced by State Senators Holly Mitchell and Loni Hancock to fix a structural flaw in Proposition 13 that has allowed some wealthy corporations and commercial property owners to dramatically lower their tax bills by avoiding reassessment.

These municipalities are leading the way towards correcting underlying inequities in Prop. 13. Residential property owners in California are increasingly paying a greater share of total property taxes while a minority of commercial property owners benefit from a flaw in the bill that has allowed their properties to avoid reassessment, some of them since the 1970s. SCA 5 seeks to correct the imbalance. It would make California’s property tax code fair by assessing commercial properties at their market value after a phase-in period.

“This growing support for SCA 5 by city leaders indicates a rejection of the status quo and the patent unfairness in the tax system,” said Anthony Thigpenn, a leader of the Make It Fair coalition, which strongly supports SCA 5. “As the San Francisco Board of Supervisors emphasized, cities and towns across our State cannot rely on insufficient and unstable revenue sources to support critical functions like our schools and public safety.”

The USC Program for Environmental and Regional Equity estimates that fixing the flaw would generate $9 billion in additional revenue for public schools, public safety, and improvements to critical infrastructure and quality of life projects starting in 2019.

Under SCA 5, California’s property tax rates will remain unchanged and below the national average. California’s largest cities have property tax rates far below other major U.S. cities, making California a strong competitor for business.

West Coast Commercial Real Estate News