City officials have proposed a ballot measure for November that would force banks to pay a tax when they repossess a property — a move that aims to curb foreclosures in San Francisco, especially in the poorer southeastern neighborhoods.
“Everybody loses when you have a foreclosure,” Assessor-Recorder Phil Ting said at a news conference announcing the Foreclosure Fairness Initiative, which Supervisor John Avalos, who co-wrote the proposal, will introduce at today’s Board of Supervisors meeting.
Under current city law, lenders foreclosing on mortgaged properties are exempt from paying the tax that applies when deeds are transferred. This measure would remove that exemption, forcing banks to pay The City what would amount to a few thousand dollars per foreclosure.
Ting said though the ordinance was not designed to raise revenue, it could generate as much as $8 million in a foreclosure-heavy year, as 2011 was.
“I don’t think it’s a measure that really dings the banks in any significant way, but I think it will give them pause,” Avalos said.
Ting’s office released an audit in February that found most of the hundreds of foreclosures in The City included irregularities or legal violations. After that report, which Ting called the first of its kind in the state, the Board of Supervisors passed a resolution in April calling for a halt to foreclosures.
Neither the report nor the resolution, however, had an immediate effect.
“This is finally something that actually has some teeth to it,” Avalos said.
A spokesman for San Francisco-based Wells Fargo said bank officials had to review the proposed measure before they could comment.
Avalos praised community groups, including Causa Justa :: Just Cause, based in Oakland and in the Mission, for raising awareness about foreclosures.
“I think summer 2012 should be the summer no one leaves San Francisco,” said Causa Justa housing organizer Maria Zamudio. “This should be the summer we hold banks accountable.”
Julien Ball, a member of Occupy Bernal, a neighborhood group that works to stop foreclosures in Bernal Heights, said the San Francisco initiative was a step forward, but more legislation is needed at the state and federal level.
“I think it will make them think twice,” he said. “It at least makes the banks begin to pay for what they’ve done to create the financial crisis.”
State law requires voter approval for measures that would increase local taxes. If the measure is approved by the Board of Supervisors, it will appear on November’s ballot.