San Diego Union-Tribune (Sunday)
VACANCY TAX IN SAN DIEGO?
Los Angeles voters are scheduled to consider what city officials there call ‘an empty homes tax’ in 2022.
ECONOMISTS NO
Few U.S. cities have implemented a vacancy tax so there is no clear record that such a tax can significantly improve the local housing situation. Defining and identifying the rental units and properties that are subject to the tax and setting the criteria for exemptions will be challenging. Expanding housing subsidies may be desirable, but vacancy tax proponents will need to explain why placing the funding burden on a subset of landlords is fair.
YES
The tax probably won’t make a difference in terms of unoccupied units, given the low vacancy rate and high rents in San Diego. There is a high opportunity cost to keep units off the market. A tax on undeveloped land could have a higher impact, as a shortage of buildable land is one thing that is limiting the supply of housing. A tax on vacant land could spur development or sale of the land to developers, particularly for infill land.
NO
We make it impossible for some landlords to collect rent and then wonder why they’re leaving some properties vacant. If we want to increase the supply of affordable housing, we need to reduce the cost to property owners of renting or building instead of trying to increase the cost of leaving properties vacant. Adding more regulations and restrictions, even if well-intended, can sometimes make the outcome worse for everybody.
NO
The vacancy rate in
San Diego is low. The imposition of vacancy taxes is unlikely to add many units of occupiable inventory. Better to encourage the construction of new housing. The city is doing a commendable job on this front. I also anticipate that tampering with private property rights in this way will only serve to open the city to litigation, perhaps ultimately costing the city far more than they might collect in vacancy taxes.
NO EXECUTIVES
While a vacancy tax is perhaps prudent in certain localities, it would be a regressive measure in San Diego. Most vacant, infield development sites in the city are concentrated in economically challenged neighborhoods — primarily council districts four, eight and nine. Infield development is stifled in these areas by building costs for unsubsidized, affordable housing compared to attainable market sales or rental rates. Examining policy barriers to development should be the priority instead of tax measures.
NO
Imposing another tax is not a solution. It likely will result in higher costs passed on to the end-user and doesn’t address the primary issue. If our state and local officials want to make an impact on affordable housing then look at California Environmental Quality Act reform, relax zoning, reduce development and regulation red tape, and create incentives (carrot versus stick approach).
YES
San Diego has a housing shortage. Pricing increases consistently outpace wages. Yet, look downtown and along the coast; there is an abundance of empty, expensive real estate. Most expensive homes and condos in San Diego are purchased as investments by the global wealthy. Taxes on unused real estate and empty lots will not solve the crisis but may incentivize local occupancy (renting out investment properties) or serve to directly fund new housing.
NO
Property taxes are a sufficient incentive for owners to either occupy the property, rent it out, or in the case of empty lots, develop it. California already has the highest taxes. We are chasing individuals with resources and employers out of state. I’m a supporter of many progressive agendas, especially for housing. I believe we need to decrease — not increase — regulations and bureaucracy to reduce the cost of housing and of doing business in California, as Texas has done.