6 ms·

SF is latest city to consider tackling its housing crisis by taxing empty homes

46 points by jelliclesfarm 5y ago

deleted 5y ago
[deleted]
phendrenad2 5y ago
The simple solution to fix the housing crisis in SF is to build more housing. However, due to NIMBYs, that's impossible. Incentivizing landlords to lower rates to fill vacant homes will do very little to tackle the problem, but hey, at least it's possible.
- youeseh 5y ago
  It seems that taxing vacant homes strengthens NIMBYism. Landlords will fight new construction even more to ensure maximum occupancy. Despite the rhetoric, if they go through with it, I think the consequences will be entirely intentional and the opposite of whats being advertised at the same time.
aluminum96 5y ago
This is a misled effort which is doomed to fail. 1. A healthy nonzero vacancy rate of 5-10% reduces landlord pricing power. Unnaturally low vacancy rates work against tenants, not for them. 2. Did you know that rental properties which have been re-leased, but for which the tenant has taken occupancy within the last 15 days, are considered “vacant?” There are many other data problems like this — renovations, family homes, etc. Vacancy rates under 5% indicate essentially no available housing. The solution has been obvious since the 1970s. It’s time to stop futzing around and build housing at the rate of population growth.
- klipt 5y ago
  > It’s time to stop futzing around and build housing at the rate of population growth. We could start by taxing the vacant space above the SF supervisors' large single family homes, which could hold many apartments...
  - deleted 5y ago
    [deleted]
- greendude29 5y ago
  > 1. A healthy nonzero vacancy rate of 5-10% reduces landlord pricing power. Unnaturally low vacancy rates work against tenants, not for them. Can you explain your rationale here? Can you also explain/cite "unnaturally low"?
  - rahimnathwani 5y ago
    If tenants stay in a property for an average of 2 years, a 5% vacancy rate means the gap between tenants is 4-5 weeks. This is normal in many cities (source: have personally been on both sides of this many times), because it takes time to negotiate terms with a new tenant, perform minor repairs, and have them move in.
  - profile53 5y ago
    AFAIK the theory is simple. If there’s only a single available property in an area and someone needs it, the landlord can charge whatever they want. If there’s 100, the landlords are forced to compete. At a metropolitan scale, having 5% of apartments vacant guarantees a few will be available in any given area and prices cannot be excessive as someone will undercut them.
    - phendrenad2 5y ago
      Clearly the landlords are not forced to compete, because there are many more people who want to live in SF than there are vacant properties.
    - jtsiskin 5y ago
      How does taxing “housing units unoccupied for more than six months” change this at all? These aren’t units that are up for sale. These are empty units not for rent or sale
      - profile53 5y ago
        Fair point, I didn’t consider that. If the units aren’t on the rental market, it won’t affect pricing power even if they’re unoccupied.
- MengerSponge 5y ago
  Check out https://twitter.com/holz_bau https://twitter.com/holz_bau for a frustrated contemporary take on urban planning, building design, etc. As an American it's so heartbreaking to see his analysis of American cities interspersed with absolutely gorgeous developments abroad.
- lifeplusplus 5y ago
  low vacancies due to high demand = bad thing for renters low vacancies due to penalties but same demand = high supply = good thing for renters nothing really ground breaking simple economics, not sure why would someone argue against it
  - aluminum96 5y ago
    In this case, since the vacancy rate is a dramatic overstatement of actual units that are likely rentable, the impact of vacancy taxes on supply will be low. A much more fruitful avenue to increase supply would be construction.
    - rahimnathwani 5y ago
      Yes. And repeal rent control, which prevents newcomers from competing for space on an equal footing.
- jtsiskin 5y ago
  “housing units unoccupied for more than six months” don’t apply to either of these points.
- mint2 5y ago
  Walking around SF the other day, my opinion evolved. SF is experiencing the result of a nationwide housing crisis. While some steps need to be take in SF, expecting SF to solve a nationwide crisis by fundamentally changing itself could be a solution but doesn’t seem ideal. We need to build more places like SF, not just keep packing more people in sf. Incentives for developers is broken, they are incentivized to build massive boxy McMansions sprawling out in suburbs that are built around cars not human livability, like all the new boxes along i5 near tracy that expect people to commute
  - closeparen 5y ago
    Suburban sprawl is the law. These subdivisions off the side of the highway full of large lot single family homes aren’t even what developers think people want. They are prescribed by the building and planning codes of nearly every jurisdiction. Developers do sometimes build new places in the urban style but every element of that is a hard-fought battle against the government for variances, zoning changes, special permits, etc. The New Urbanists have an interesting approach to this: “open source” planning codes that prescribe urbanism rather than sprawl, which they try to convince municipalities to adopt as their default. They don’t seem to have much uptake though. The postwar sprawl style is what was popular when the regulatory regimes as we know them today came to be, and there’s a lot of inertia behind that, whether or not people actually like it. https://youtu.be/NMvwHDFVpCE https://youtu.be/NMvwHDFVpCE
  - chelical 5y ago
    Places can be built like SF, but they won't have the same access to the same opportunities. People don't realize that a lot of inequality is driven by where you live or are forced to live. SF needs more affordable housing. It needs more housing period.
- Jasper_ 5y ago
  But we've been building new homes and apartments, they just aren't priced appropriately and are mostly vacant. Let's get people in the housing we've already built before building more. A vacancy tax could accomplish that. Vacancy rates sit at around 10% in SF right now and continue to grow. [0] [0] https://sfgov.legistar.com/View.ashx?M=F&ID=10441217&GUID=3331928E-0574-4AEA-90DB-35D04F638EDB https://sfgov.legistar.com/View.ashx?M=F&ID=10441217&GUID=33...
lifeplusplus 5y ago
all states need to start differentiating property taxes for primary residential house vs 8th investment property. Property Taxes should be something like this: Primary residential house : 1% Secondary residential house : 3% 3rd investment house: 8% .. 30th investment house: 60% The housing shouldn't be used as investment vehicles and speculative assets. Too critical to COL and Economy.
- JumpCrisscross 5y ago
  Countries that do this have a curious tendency for everyone in the family, from the kids to the dog, to have a primary residence. Those houses then sit empty instead of being rented as the latter clearly identifies it as an investment property.
  - lifeplusplus 5y ago
    even with that loophole the trend of buying 20 units will evaporate
- Dracophoenix 5y ago
  1) States do not currently levy property taxes. Localities do. 2) It's unconstitutional for states to tax property directly without federal apportionment.
  - lifeplusplus 5y ago
    semantics, point is taxes should be harsh to disincentivize buying/holding housing as an investment than residence. Which governing body should do it is not the point. Let me bid 150% on all 50 units of housing this year but no problem, I'll just rent it at 200% more so that will cover the increased mortgage payments, as long as I can hold it for the next 10 years, and given govt has decided inflation is always a good thing prices will definitely 2x in a decade. It's a fail-safe strategy to get rich while partaking in vicious decentralized grand scheme that robs the poorest. Imagine a city with 1000 families and 1000 housing units, investors come in bid against each other, buy up all properties at inflated prices then rent it out at inflated rent. Now all 1000 population is paying 50% of salary in rent, banks are richer, investors also make few bucks along the way. People who actually live on the land and work, end up as biggest losers. Sure their house prices also appreciated, but they can't sell house they live in? If they do sell where would they move? prices have increased everywhere else too? The population isn't growing fast enough or housing supplying isn't short enough to cause such inflation adjusted increase in value as we have seen in last 10 years. It's all driven by 'investors' retail and institutional. Why worry about the cost when it can be offloaded to renters? What are the renters gonna do? Leave? Go where? it's same story in every city! This has detrimental effect on health, education, mental well being, economic prosperity, quality of life, economic mobility, and everything that is affected by money... like the entire economy.
joshsyn 5y ago
Tangokat 5y ago
In Denmark we have "Bopælspligt", residency requirement. As the owner of an apartment you are required to make sure someone lives there at least 180 days a year. It seems to work pretty well.

46 points by jelliclesfarm 5y ago

deleted 5y ago

[deleted]

The simple solution to fix the housing crisis in SF is to build more housing. However, due to NIMBYs, that's impossible. Incentivizing landlords to lower rates to fill vacant homes will do very little to tackle the problem, but hey, at least it's possible.

youeseh 5y ago
It seems that taxing vacant homes strengthens NIMBYism. Landlords will fight new construction even more to ensure maximum occupancy. Despite the rhetoric, if they go through with it, I think the consequences will be entirely intentional and the opposite of whats being advertised at the same time.

aluminum96 5y ago

This is a misled effort which is doomed to fail. 1. A healthy nonzero vacancy rate of 5-10% reduces landlord pricing power. Unnaturally low vacancy rates work against tenants, not for them. 2. Did you know that rental properties which have been re-leased, but for which the tenant has taken occupancy within the last 15 days, are considered “vacant?” There are many other data problems like this — renovations, family homes, etc. Vacancy rates under 5% indicate essentially no available housing. The solution has been obvious since the 1970s. It’s time to stop futzing around and build housing at the rate of population growth.

klipt 5y ago
> It’s time to stop futzing around and build housing at the rate of population growth. We could start by taxing the vacant space above the SF supervisors' large single family homes, which could hold many apartments...
- deleted 5y ago
  [deleted]
greendude29 5y ago
> 1. A healthy nonzero vacancy rate of 5-10% reduces landlord pricing power. Unnaturally low vacancy rates work against tenants, not for them. Can you explain your rationale here? Can you also explain/cite "unnaturally low"?
- rahimnathwani 5y ago
  If tenants stay in a property for an average of 2 years, a 5% vacancy rate means the gap between tenants is 4-5 weeks. This is normal in many cities (source: have personally been on both sides of this many times), because it takes time to negotiate terms with a new tenant, perform minor repairs, and have them move in.
- profile53 5y ago
  AFAIK the theory is simple. If there’s only a single available property in an area and someone needs it, the landlord can charge whatever they want. If there’s 100, the landlords are forced to compete. At a metropolitan scale, having 5% of apartments vacant guarantees a few will be available in any given area and prices cannot be excessive as someone will undercut them.
  - phendrenad2 5y ago
    Clearly the landlords are not forced to compete, because there are many more people who want to live in SF than there are vacant properties.
  - jtsiskin 5y ago
    How does taxing “housing units unoccupied for more than six months” change this at all? These aren’t units that are up for sale. These are empty units not for rent or sale
    - profile53 5y ago
      Fair point, I didn’t consider that. If the units aren’t on the rental market, it won’t affect pricing power even if they’re unoccupied.
MengerSponge 5y ago
Check out https://twitter.com/holz_bau https://twitter.com/holz_bau for a frustrated contemporary take on urban planning, building design, etc. As an American it's so heartbreaking to see his analysis of American cities interspersed with absolutely gorgeous developments abroad.
lifeplusplus 5y ago
low vacancies due to high demand = bad thing for renters low vacancies due to penalties but same demand = high supply = good thing for renters nothing really ground breaking simple economics, not sure why would someone argue against it
- aluminum96 5y ago
  In this case, since the vacancy rate is a dramatic overstatement of actual units that are likely rentable, the impact of vacancy taxes on supply will be low. A much more fruitful avenue to increase supply would be construction.
  - rahimnathwani 5y ago
    Yes. And repeal rent control, which prevents newcomers from competing for space on an equal footing.
jtsiskin 5y ago
“housing units unoccupied for more than six months” don’t apply to either of these points.
mint2 5y ago
Walking around SF the other day, my opinion evolved. SF is experiencing the result of a nationwide housing crisis. While some steps need to be take in SF, expecting SF to solve a nationwide crisis by fundamentally changing itself could be a solution but doesn’t seem ideal. We need to build more places like SF, not just keep packing more people in sf. Incentives for developers is broken, they are incentivized to build massive boxy McMansions sprawling out in suburbs that are built around cars not human livability, like all the new boxes along i5 near tracy that expect people to commute
- closeparen 5y ago
  Suburban sprawl is the law. These subdivisions off the side of the highway full of large lot single family homes aren’t even what developers think people want. They are prescribed by the building and planning codes of nearly every jurisdiction. Developers do sometimes build new places in the urban style but every element of that is a hard-fought battle against the government for variances, zoning changes, special permits, etc. The New Urbanists have an interesting approach to this: “open source” planning codes that prescribe urbanism rather than sprawl, which they try to convince municipalities to adopt as their default. They don’t seem to have much uptake though. The postwar sprawl style is what was popular when the regulatory regimes as we know them today came to be, and there’s a lot of inertia behind that, whether or not people actually like it. https://youtu.be/NMvwHDFVpCE https://youtu.be/NMvwHDFVpCE
- chelical 5y ago
  Places can be built like SF, but they won't have the same access to the same opportunities. People don't realize that a lot of inequality is driven by where you live or are forced to live. SF needs more affordable housing. It needs more housing period.
Jasper_ 5y ago
But we've been building new homes and apartments, they just aren't priced appropriately and are mostly vacant. Let's get people in the housing we've already built before building more. A vacancy tax could accomplish that. Vacancy rates sit at around 10% in SF right now and continue to grow. [0] [0] https://sfgov.legistar.com/View.ashx?M=F&ID=10441217&GUID=3331928E-0574-4AEA-90DB-35D04F638EDB https://sfgov.legistar.com/View.ashx?M=F&ID=10441217&GUID=33...

lifeplusplus 5y ago

all states need to start differentiating property taxes for primary residential house vs 8th investment property. Property Taxes should be something like this: Primary residential house : 1% Secondary residential house : 3% 3rd investment house: 8% .. 30th investment house: 60% The housing shouldn't be used as investment vehicles and speculative assets. Too critical to COL and Economy.

JumpCrisscross 5y ago
Countries that do this have a curious tendency for everyone in the family, from the kids to the dog, to have a primary residence. Those houses then sit empty instead of being rented as the latter clearly identifies it as an investment property.
- lifeplusplus 5y ago
  even with that loophole the trend of buying 20 units will evaporate
Dracophoenix 5y ago
1) States do not currently levy property taxes. Localities do. 2) It's unconstitutional for states to tax property directly without federal apportionment.
- lifeplusplus 5y ago
  semantics, point is taxes should be harsh to disincentivize buying/holding housing as an investment than residence. Which governing body should do it is not the point. Let me bid 150% on all 50 units of housing this year but no problem, I'll just rent it at 200% more so that will cover the increased mortgage payments, as long as I can hold it for the next 10 years, and given govt has decided inflation is always a good thing prices will definitely 2x in a decade. It's a fail-safe strategy to get rich while partaking in vicious decentralized grand scheme that robs the poorest. Imagine a city with 1000 families and 1000 housing units, investors come in bid against each other, buy up all properties at inflated prices then rent it out at inflated rent. Now all 1000 population is paying 50% of salary in rent, banks are richer, investors also make few bucks along the way. People who actually live on the land and work, end up as biggest losers. Sure their house prices also appreciated, but they can't sell house they live in? If they do sell where would they move? prices have increased everywhere else too? The population isn't growing fast enough or housing supplying isn't short enough to cause such inflation adjusted increase in value as we have seen in last 10 years. It's all driven by 'investors' retail and institutional. Why worry about the cost when it can be offloaded to renters? What are the renters gonna do? Leave? Go where? it's same story in every city! This has detrimental effect on health, education, mental well being, economic prosperity, quality of life, economic mobility, and everything that is affected by money... like the entire economy.

joshsyn 5y ago

Tangokat 5y ago

In Denmark we have "Bopælspligt", residency requirement. As the owner of an apartment you are required to make sure someone lives there at least 180 days a year. It seems to work pretty well.