Taxing vacancies breaks the rent logjam caused by financing agreements that allow you to tack missing rent onto the end but require recapitalization for lower rent.
Individuals and small landlords raise or lower rents in response to market conditions as they prioritize cash flow--it's very difficult to make up for lost rent. It's the private equity financed stuff that is artifically keeping rents too high as they have enough cash to ride across an empty property almost indefinitely.
Vacancy taxes stop the idiocy and force the private equity financed stuff to be market responsive as well.
It's not just that. It's the way property owners in renter-majority jurisdictions buy off just enough of the renters to keep other measures to raise housing costs on the books, which both erases the benefit of rent control even for the people who have it and screws over anyone without a rent controlled apartment twice.
> it unfairly punishes property owners in soft rental markets like the one we have now.
Eh? I mean, conversely, allowing the property industry to leave properties vacant unfairly punishes ~all other industries, along with the general public. What's special about the property industry here?
"We should leave people without anywhere to live, and harm the economy in general, to facilitate a small part of the economy" is a pretty weird argument.
(I do think that possibly some individual property investors believe that, rather than running a rather complex and highly regulated business, they are buying into a passive investment magical money machine. These people should probably consider just buying shares in a REIT, instead.)
There's no such thing as a property that can't find a renter, only a property whose rent is too high.
Many landlords are bad at math from what I've found. If you're asking for $2400 and no one is biting, it makes more sense to drop to $2200 than hold out for a month to try and get $2400, because at $2400 it will take a year to catch up.
Not with rent control. If we're in a low price market, it and a renter snags rent at a low price, he gets you locked in at that low price even when the market recovers.
Rent control incentivizes empty housing during bear markets.
This is true, rent control adds a complicated calculus to it. At first they were doing things like "first month free" to get around it, but the city caught on and made that against the rules too. I wonder if they've looked at how that affected vacancy rate.
it's already incredibly expensive for a developer to even go through the review process for a development, let alone build it. a vacancy tax would further deter developers from building in SF (as it's already happening due to the terrible review process)
That story is a bit dated. The California laws are forcing municipalities like SF to fix the review process and in fact a new plan was submitted in December and initially rejected before an updated plan was submitted at the end of December. The hope is that this fixes things and if it doesn’t SF is at risk of losing its zoning powers wholesale which may not be such a bad idea.
the story might be dated but the research that drove the story isn't dated, that's what i was trying to share. the action from the state and the municipalities was informed by a research project from UC Berkeley.
Correct, I was only highlighting that the news story itself is way late and not really relevant as news. The research around zoning laws and their impact on housing development was known probably 5-10 years ago if not more, the state law changes passed within the past 1-2 years ago, and we are in the middle of the time period of the state enforcing all municipalities to conform or lose zoning privileges and SF nominally claims to have ratified changes to be conformant (the initial plan was rejected by the state and they submitted a revision at the deadline)
no this research is new and came out like two years ago. it was a different take on the typical research about zoning. it basically looked at the time it took project to get approved. this was a novel approach (believe it or not)
as a lifelong tenant, i think it's time that the property owners got punished instead of renters. those poor property owners, what happens if we don't look after them?
