The Empire’s New Clothes:
The Failure to Assess Commercial Property at Market Value: a Powerpoint presentation
Addressing Property Tax Issues: Rational Discussion in a Charged Environment in pdf
Presentation to the Commission on the 21st Century Economy
One Response to “Presentation to the Commission on the 21st Century Economy”
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In understanding what the tax issues are on commercial properties, one has to get into the minds of property owners and what drives them to act. I have over 20 years experience in the San Francisco Bay Area working for small and large companies and owning small businesses. There is a common denominator amongst all the hundreds of people I have met over the years who were property owners, and that commonality is the disincentives of taxation. They absolutely abhor taxes. To them taxes are nothing more than the antithesis to the American Dream. If you want to change the tax code you have to create incentives.
Tax incentives should be geared to solving urban blight. How many derelict buildings and properties do we see around our urban centers? Almost every commercially zoned block has at least one property that is blighted. If there was an incentive to rebuild rather than what the status quo of taxation is, these property owners might do something with their properties. With incentives, cities stand a chance at wining the war on blight, and without tax payer’s money in eminent domain actions that sometimes result in challenges.
It costs cities countless millions to have developers come in and redevelop. Case in point: in San Jose, California the condominium projects that are going unsold and many of them are a bigger blight to the overall aesthetic landscape. Instead of the wasted millions spent, why not have the original owners rebuild because they find it favorable to do so. If they do not rebuild, then heavily tax them; however, if they do rebuild, give them a moratorium on taxation just like you do when someone forms a corporation. First year state taxes are waived for startup corporations. Do the same thing with commercial property owners that substantially rebuild their properties. It could also be a sliding scale according to the scale of the blight mitigation.
Proposition 13 will never be tinkered with nor overturned while non-progressive people are involved. Gaining a foothold towards a meaning dialog on Proposition 13 changes there has to be movement from the status quo to invigorate the local landscape. Otherwise the conversation is moot as the voters will never vote for more taxation with changes in Proposition 13 regardless of zoning classification.