{"id":404336,"date":"2026-07-19T13:14:13","date_gmt":"2026-07-19T13:14:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ca\/404336\/"},"modified":"2026-07-19T13:14:13","modified_gmt":"2026-07-19T13:14:13","slug":"should-oakland-squeeze-money-out-of-its-downtown-foreclosures-voters-will-decide-2","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ca\/404336\/","title":{"rendered":"Should Oakland squeeze money out of its downtown foreclosures? Voters will decide."},"content":{"rendered":"

OAKLAND \u2014 Large banks and investment firms that foreclose on properties<\/a> could soon face city taxes under a new ballot measure prompted by the collapse of high-profile office buildings<\/a>, apartment complexes<\/a>, hotels<\/a> and downtown storefronts<\/a>.<\/p>\n

Oakland and San Jose are among a few dozen California cities that collect their own taxes<\/a> whenever properties change hands, taking a cut of every sale on top of an existing statewide rate that funnels revenue to counties.<\/p>\n

Now, voters here will be asked to get rid of exemptions for lenders that seize properties over unpaid loans, which would provide a new source of public dollars amid Oakland\u2019s long-term budget woes.<\/p>\n

It is an unusual proposal. Although about a dozen states in the country tax foreclosures, no other California city until now has taken this step, mainly because most governments do not treat lenders as conventional property buyers.<\/p>\n

The city does not track foreclosures, so officials project a wide range of potential yearly revenues \u2014 anywhere from $400,000 to $1 million \u2014 that would represent a small fraction of overall transfer-tax dollars, which this past year totaled more than $68 million.<\/p>\n

The measure, which requires majority approval, is also far from guaranteed to win over voters. In June, a tax measure failed in Oakland for the first time in 15 years<\/a> after 54% of voters sided against it.<\/p>\n

But with city leaders praying for tax revenues to stabilize after a turbulent few years, Councilmember Charlene Wang hopes to effectively establish a backup plan for a slow-to-recover downtown economy.<\/p>\n

\u201cThis is to help the city help the city avoid \u2014 the next time we enter a recessionary period or economic event \u2014 not having revenue from these foreclosures,\u201d said Wang in an interview about her proposal, which the Oakland City Council earlier this month unanimously voted to place on the November ballot.<\/p>\n

\"NewlyNewly elected Oakland City Councilmember Charlene Wang arrives at her swearing-in ceremony at City Hall in Oakland, Calif., on Tuesday, May 19, 2025. (Dai Sugano\/Bay Area News Group)\u00a0<\/p>\n

Oakland collects property transfer taxes at higher rates for more lucrative sales. The sale of a home at median price, $830,000, is taxed at 1.5% and generates more than $12,000 in revenue.<\/p>\n

The city is slowly climbing back to revenue levels seen before 2023, when higher federal interest rates led them to plummet following an inflationary spike during COVID-19\u2019s peak years.<\/p>\n

For a building worth tens of millions of dollars, the revenue generated by a foreclosure sale could range into the hundreds of thousands.<\/p>\n

Lenders would be taxed at the fair-market value of the real estate they foreclose on, though it is unclear when and how those properties would be appraised. Wang did not provide specific information about implementing \u2014 and enforcing \u2014 the additional taxation.<\/p>\n

Upon voter approval, the only remaining exemptions to the tax would apply to properties owned by smaller community banks, housing with fewer than four units and buildings that within three years of foreclosure are transformed into homeless shelters.<\/p>\n

Wang, who is pursuing reelection in November, also wants the measure to incentivize larger banks and Wall Street speculators who buy up distressed debts to not seek foreclosure as the first option when borrowers default on payments.<\/p>\n

Some real-estate experts contend, however, that institutions shelling out millions to underwrite a property are already dead set on recouping their investments.<\/p>\n

\u201cIf there\u2019s more risk, the banks aren\u2019t just going to accept that and go away,\u201d said Kevin Herzberg, a mortgage-banking consultant based in Los Angeles. \u201cThey\u2019re going to try to pass it on to the consumer or someone else.\u201d<\/p>\n

Because a foreclosure tax is relatively uncharted territory in California, the effects are hard to predict, even among industry experts and pro-housing advocates.<\/p>\n

\"AA person walks near city hall in downtown Oakland, Calif., on Friday, May 23, 2025. (Shae Hammond\/Bay Area News Group)\u00a0<\/p>\n

When a Telegraph Arts apartment building in Uptown recently foreclosed, the lender \u2014 a subsidiary of a large national firm, CW Capital \u2014 acquired the 98-unit apartment complex at auction for roughly the outstanding loan amount, $31.1 million.<\/p>\n

The price point was nearly 50% below the property\u2019s assessed value in January 2025. To proponents of the new measure, the acquisition would represent a sweetheart deal. But real-estate insiders say the corporation also assumes risk by taking on a distressed asset.<\/p>\n

Herzberg warned that lenders would likely bake any new tax burdens into their initial investments. Wang disputed this claim, countering that loan interest rates are determined by national capital markets and industry benchmarks.<\/p>\n

Regardless, almost everyone aligns on the notion that Oakland\u2019s downtown is struggling, despite the lack of available public data tracking foreclosures.<\/p>\n

Downtown office vacancies climbed to 26.5% in the first quarter of 2026, up six percentage points from the same period a couple years ago, according to Colliers. Owners of office buildings have found themselves \u201cbetween a rock and a hard place,\u201d said Dave Sandlin, a Realtor based in San Jose.<\/p>\n

\"AA drone view of the Uptown District in downtown Oakland, Calif., on Tuesday, April 7, 2026. (Jane Tyska\/Bay Area News Group)\u00a0<\/p>\n

Tenants-rights groups and real-estate insiders also agree that large corporations drive much of the downtown real-estate economy. CW Capital, the firm that seized ownership of the Telegraph Arts property, has offices in New York, Texas and Washington, D.C.<\/p>\n

Representatives for the firm \u2014 as well as several other Bay Area real-estate lenders \u2014 did not respond to an interview request for this story.<\/p>\n

Realtors across the region say crime fears continue to plague economic activity downtown, even with the city reaching historic lows in homicides last year and seeing crime reduction across the board since 2024.<\/p>\n

It is a point of frustration for the East Bay\u2019s various pro-housing groups that towering buildings and dense complexes are struggling even in walkable, transit-friendly neighborhoods of the region\u2019s most developed city.<\/p>\n

\u201cIt is a cyclical problem,\u201d said Brianna Morales, the political director at Housing Action Coalition. \u201cHigher rents mean that people don\u2019t move in, which means that the mortgages can\u2019t be paid. Even getting projects to pencil out is so expensive.\u201d<\/p>\n

Shomik Mukherjee is a reporter covering Oakland. Call or text him at 510-905-5495 or email him at shomik@bayareanewsgroup.com.<\/p>\n","protected":false},"excerpt":{"rendered":"OAKLAND \u2014 Large banks and investment firms that foreclose on properties could soon face city taxes under a…\n","protected":false},"author":2,"featured_media":404337,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[34],"tags":[1400,389,184,387,7,409,3010,332,204,181,23,205,100,143,145,144,33494,13,388,385],"class_list":["post-404336","post","type-post","status-publish","format-standard","has-post-thumbnail","category-oakland","tag-2026-elections","tag-alameda-county","tag-bay-area","tag-business","tag-california","tag-city-politics","tag-commercial-real-estate","tag-east-bay","tag-election","tag-latest-headlines","tag-local-news","tag-local-politics","tag-news","tag-oakland","tag-oakland-headlines","tag-oakland-news","tag-oakland-real-estate","tag-politics","tag-real-estate","tag-regional"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/404336","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=404336"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/404336\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/404337"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=404336"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=404336"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=404336"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}