Oaklanders are being asked to change the way the city collects taxes on foreclosed properties by approving Measure FF on the Nov. 3 ballot.
Measure FF was written by City Councilmember Charlene Wang and placed on the ballot by a 7-0 vote of the council, with Councilmember Kevin Jenkins excused.
It would amend the city’s existing real estate transfer tax rules by eliminating an exemption for properties that change hands because of foreclosure. It would also apply to property transfers that are in lieu of a foreclosure, which happen when a lender is given a property to satisfy a defaulted debut outside of the foreclosure process.
‘Just about tax equity’
Buyers who convert properties into affordable housing, homeless shelters or healthcare facilities would receive tax refunds on their purchases.
“In other words, put a vacant building back to productive use and qualify for relief; hold it for speculation, and pay the same tax as everyone else,” according to the ballot argument in favor of Measure FF.
Currently, the tax generates just over $75 million a year for Oakland’s general fund.
An impartial analysis of the measure by Oakland City Auditor Michael Houston says if Measure FF passes, it will raise an estimated additional $10.4 to $13.8 million for the city’s general fund in the first year, based on a sample of commercial foreclosures in 2024, 2025 and the first half of 2026.
“This is, first of all, just about tax equity,” Wang said.
When an average person buys a home in Oakland, she said, they pay the tax, but buyers, including hedge funds and big corporate investors, avoid the tax if they purchase a property from owners who are unable to make their loan payments and end up in foreclosure.
Foreclosures and future recessions
Measure FF would change that and is in response to a couple of trends, according to Wang. The first is a rise in the number of foreclosures, which the real estate research firm ATTOM reports are up 13% nationally from a year ago.
The second trend, she said, is an increase in so-called “loan-to-own” purchases, whereby an investor buys real estate debt at a discount then uses that to acquire property tax-free.
Also, if it passes, Measure FF would “set us up for success the next time that we have a recession,” Wang said.
During economic downturns, municipal revenue tends to shrink because business, sales and property transfer tax income drops — right when the demand for services goes up.
During these periods, foreclosures and real estate transfers that arise from foreclosures tend to increase.
“The goal of this is to ensure that we have counter-cyclical revenue,” Wang said.
Measure FF needs a simple majority vote to pass.
