Second home buyers in Healdsburg could be subject to an additional property tax

Recently elected Healdsburg City Councilwoman Leah Gold says she has no gripes with people who want to have a second home in her desirable town in the heart of Wine Country. But she also believes they should pay more for the privilege.

It’s the empty homes held for investment or occasional use that Gold is targeting because she says they diminish housing stock, drive up real estate prices and alter the face of the community.

Gold last week persuaded her fellow council members to look into the possibility of adding an annual property tax on rarely used homes with the idea of using the revenue for affordable housing programs.

She said it could take the form of an annual 1 percent tax on the assessed value of a home if it is neither someone’s principal residence, nor leased to a full-time tenant, similar to a tax that’s levied in Vancouver, British Columbia. Healdsburg voters would have a final say over any such proposed tax.

“Housing prices are high. Availability is limited for people who want to live here. We have these kind of hollowed-out neighborhoods,” Gold said of her motive to push for some form of a tax in Healdsburg.

“Empty houses can’t contribute to a community project. They don’t send their children to schools,” she said. “They don’t shop at local stores. They can’t lend a helping hand to a neighbor.”

Sky-high housing costs have been a perennial concern in many California communities, including Healdsburg, which has some of the priciest real estate in Sonoma County. The city prohibits vacation rentals in residential neighborhoods.

There are many factors that drive up costs, including the price of land, growth controls and environmental regulations. But second homes snapped up by wealthy individuals are seen as exacerbating the problem.

“Many residents are frustrated that second-home purchases continue to eat up our housing stock,” Healdsburg resident Bruce Abramson told the council.

“It’s a major problem if there are empty, or rarely used second homes at a time when people are being driven from their homes,” said housing activist Robert Nuese.

Gold, a former mayor who returned to Healdsburg politics after an absence of more than a dozen years, was the top vote-getter in a special election in June to fill a council vacancy. During the abbreviated campaign, she brought up the idea of a tax on second homes, which prompted some skepticism from at least one of her opponents about how it would be implemented and whether it was fair.

Councilman David Hagale last week voiced “serious reservations” about the proposal. “I want to make sure we understand the problem before we start looking for solutions,” he said.

“I live in Parkland Farms. There’s no issue of second homes or vacant homes,” he added. “I have 17 kids on my block.”

But Gold, who lives in an older central part of Healdsburg, said there are numerous townhomes and condominiums near her home on Grant Street that are unoccupied and apparently are second homes.

“They’re shuttered. You don’t see garbage cans out,” she said of the lack of occupants.

“A house sold on my block six months ago for $1.85 million. It’s a fine Victorian, but there’s no sign of life,” she said. “A gardener comes and maintains the grounds. No one comes, or moved in.”

Although there is no firm data on how many dwellings are second homes in Healdsburg, Gold said one city study in 2015 estimated ?40 percent of recent sales were to ?second-home buyers.

Last week, the City Council unanimously agreed to have the city attorney and staff look into the issue and the possibility of a tax on second homes, before placing the matter on the agenda for a public hearing, possibly in late September.

In an interview Friday, Gold said there are a number of large cities that have some form of taxation on second homes, including Paris, London and Hong Kong.

In some cases it is imposed as a transfer tax during the property transaction if the buyer does not intend it as a primary residence. Or, she said, there is a tax if the home is not rented out.

Any new tax would need to be approved by Healdsburg voters, likely with a two-thirds majority, Gold said.

It’s “an early exploration,” but a concept she hopes will work.

“I feel if someone can afford to buy a million-dollar home and afford to keep it empty, then another $10,000 a year to kick into affordable housing is fair,” she said.

You can reach Staff Writer Clark Mason at 707-521-5214 or clark.mason@pressdemocrat.com. On Twitter@clarkmas