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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

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.
  - greendude29 5y ago
    Where is this 5% coming from that you and the OP are citing? Also there is undoubtedly natural churn rate to rental housing, but there is little relation between that and the proposed legislation which only applies to that property that has been unoccupied for more than 6 months. I'm pro buildling in cities, but buildling for the free market (without an upper cap or max rent regulation) is not the solution to the housing crisis. I see a lot of poorly sourced-data and specious reasoning from the trigger happy YIMBY crowd. I'm hoping for more engagement which would show good faith discussions and critical thought.
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...

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.
- greendude29 5y ago
  Where is this 5% coming from that you and the OP are citing? Also there is undoubtedly natural churn rate to rental housing, but there is little relation between that and the proposed legislation which only applies to that property that has been unoccupied for more than 6 months. I'm pro buildling in cities, but buildling for the free market (without an upper cap or max rent regulation) is not the solution to the housing crisis. I see a lot of poorly sourced-data and specious reasoning from the trigger happy YIMBY crowd. I'm hoping for more engagement which would show good faith discussions and critical thought.

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...