> buyers (who might want to become landlords) will price lower if they know there is a vacancy tax in anticipation of future vacancies Prices will... lower, yo

> buyers (who might want to become landlords) will price lower if they know there is a vacancy tax in anticipation of future vacancies Prices will... lower, you say? Sounds like the policy working as intended. > It turns out that newer stock is more expensive Not news to me, and in fact this is one of the first dynamics I considered years ago when trying to figure out why new supply doesn't drive costs down. Especially combined with price feedback (landlords looking at how others are setting prices) I still expect it plays a role. > you have cause & effect backwards. Cause for what? Overrepresentation of "luxury" units in new buildings? Building costs are nearly orthogonal to the question of which economic strata new units get aimed at, except to the degree that they're gently sloped across markets enough that they encourage chasing higher margins at the higher end. > even if it were true that developers are only building permanent luxury/new stock, that would still be key to shifting the price down I'm just barely not skeptical about this. I've seen at least two studies that suggest it, although I have questions about how well they controlled for how much of the downmarket pressure was relieved by people leaving, but it's plausible. What's also plausible is that which price points new stock comes on to the market at what volume affects how the rising cost curve bends. You can dump an extra 5% of stock priced above the top of the market, and you'll have nearly all the potential occupants priced out, and even those with disposable income they could use for that will have to decide the new units have more utility to the point that overcomes the costs in time/money/stress of moving, which makes some things sticky indeed, so the filtering "up" the market will be slow. What might accelerate the disposable income crowd out? Rent increases... but those aren't going to speed the motion of the downmarket into the units they leave behind. It'll filter through eventually, but it will be glacial. Especially compared to what could happen if you dumped the extra 5% of stock in at price points that can work for the average regional income. Those are extremes, in reality I'd expect that developers distribute which income they're targeting a little more carefully, but they illustrate some impact dynamics that probably mean building at the high end doesn't provide cost relief as quickly. > none of the individual units being built by apartment developers are more luxury than owning your own SFH in San Francisco... many more of those homes sit empty as second homes than units in apartment buildings. Oh I'm sure that's a greater luxury, and I see no reason why they should receive any exception to vacancy taxes. In fact, I could see a reason for having them weighted by vacant area.