Real-estate interests spend big to defeat rental tax spike

Newer Berkeley by William Newton. Photo taken April 20, 2016
Real-estate groups have spent more than $786,000 to defeat a measure that would almost double the business tax landlords pay and to support an alternative measure with a lower tax. Photo: William Newton

Real-estate groups have spent more than $786,000 in the last few months to defeat a measure that would almost double the business tax landlords pay in Berkeley (Measure U1) and to support an alternative measure with a lower tax (Measure DD). The funds were spent on campaign literature, signature collection, campaign consultants and for professional services from lawyers and others.

The ‘Committee for Real Affordable Housing – Yes on Measure DD, No on Measure U1, Sponsored by Berkeley Property Owners Association,’ raised $417,038 in 2016 and has spent $496,000 so far in this election cycle, according to campaign finance records. A second group, the ‘Rental Housing Coalition, Yes on 10, Sponsored by Berkeley Property Owners Association,’ was formed to fight the city-sponsored business tax measure, U1. That group has spent $290,274 so far to defeat U1, according to campaign records.

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In contrast, the group formed to promote Measure U1 and fight Measure DD, the ‘Committee for Safe and Affordable Housing,’ has raised $43,102, according to campaign records.


The huge amount of money contributed by at least 55 different groups – the bulk of them limited-liability corporations with addresses as their names – shows the high stakes at play in the Nov. 8 election.

Measure U1, which was placed on the ballot by the City Council, would raise the business tax license fee on revenue for landlords with more than five units from 1.081% to 2.8%. Measure DD, which was placed on the ballot after the Berkeley Property Owners Association collected more than 3,300 signatures, would raise the business tax on all rentals from 1.081% to 1.5%.

Proponents of U1 say their business tax increase would raise an estimated $2.98 million to $3.45 million a year that could be used for affordable housing and other things. Proponents of Measure DD say their tax would raise $1.4 million annually, which could be used for affordable housing and homelessness prevention programs.

There are other differences. Measure U1 would exempt new large new apartment complexes — both those recently built and future developments — for the first 12 years of occupancy. Measure DD treats all landlords equally.

The biggest contributors to the Yes on Measure U1 are groups that build affordable housing projects around the Bay Area. Resources for Community Development contributed $10,000 and Bridge Housing and Satellite Affordable Housing each contributed $5,000, according to campaign finance filings. The Northern California Carpenters Regional Issues PAC donated $5,000, as did Stephen Barton, a housing advocate who is the treasurer of the group. Oliver & Company, a large construction firm, donated $1,000. City Councilman Laurie Capitelli donated $1,000 and City Councilwoman Linda Maio donated $1,000 from her campaign fund. Sophie Hahn, who is running for City Council in District 5, donated $500. Karen Chapple, a UC Berkeley professor who specializes in housing issues, donated $250. General contractor Mohammad Hakimi donated $1,500.

The single largest donor to the Yes on Measure DD efforts is from Vero Properties, owned by Jay Lakireddy. Vero Properties donated $60,625. The Lakireddy family are Berkeley’s largest landlords, with various family members owning more than 1,000 rental units. Other donors include Prasad Lakireddy Properties, which gave $21,566.

Other large donors include the Genirberg Siblings, which donated $12,886; Durant Berkeley Partners, which donated $28,697; Kasa Properties, which donated $21,567; Seven Hills Investments, which gave $14,093; and KLS Associates, which donated $21,769 according to campaign finance filings.

Update: This story was updated to include some donations that were inadvertently omitted.

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