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S.F. landlords, property owners sue to block voter-approved vacancy tax

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Re: S.F. landlords, property owners sue to block voter-approved vacancy tax

#81

Post by ryandrake »

humanistbot wrote: post #69
rgifford wrote: post #31

Earlier quoted context omitted.

It's pretty coercive. Taxes are levied against transactions. A tax in the absence of a transaction is really just a fine. And fining people for not selling something violates most folks conception of basic property rights and privacy. I get that the city is looking for a way out of 50 years of systematic underdevelopment, but this just feels wrong. I don't trust government overreach to fix decades of bad governance.

> It's pretty coercive. Taxes are usually levied against financial transactions. Taxing not selling something violates most people's conception of basic property rights. First off, it isn't taxing "not selling something," it is taxing "buying a 2nd/3rd/999th home that nobody will live in and holding it vacant as an investment strategy." It is a financial transaction in that sense. Second, baseline property taxes have…

That seems like the fairest way to do it, make it part of your property taxes. Before, your property taxes are $T. Now, your property taxes are $T + $T x F x M, where M is the number of months in the year the property is unoccupied, and F is some factor. For everyone whose home is actually lived in, your property taxes don't change. A supercharged version of the homestead exemption.

Re: S.F. landlords, property owners sue to block voter-approved vacancy tax

#82

Post by camgunz »

dragonwriter wrote: post #67
camgunz wrote: post #63

Earlier quoted context omitted.

Most people don't think you should be able to buy up a precious thing and squander it. Locke--the guy who came up with life, liberty, and property, based the property right on the owner's ability and duty to improve. Leaving apartments vacant doesn't sound like improvement. Taxes also aren't coercive; even SCOTUS hasn't held that. They've held that benefits can be, but not taxes. That's a right-wing anti-tax talking…

> Taxes also aren't coercive; even SCOTUS hasn't held that They are, and it has; see McCulloch v. Maryland , 17 U.S. 316 (1819). Coercion doesn’t generally make them unconstitutional (coercion is, ultimately, what governments do ,the states under their broad general police powers, and the feds, Constitutionally, under more limited powers, but including explicit taxation poeers), though it can when, e.g., states attem…

IDK if McCulloch established that. Maryland wanted to tax the Bank out of existence, and Marshall clearly addressed that use of taxation, not taxation in general:

"An unlimited power to tax involves, necessarily, a power to destroy; because there is a limit beyond which no institution and no property can bear taxation. A question of constitutional power can hardly be made to depend on a question of more or less. If the states may tax, they have no limit but their discretion; and the bank, therefore, must depend on the discretion of the state governments for its existence. This consequence is inevitable."

This is about destruction, not coercion. In this case, an example of a destructive tax would be "we levy a tax 100% of the value of your property. That isn't what's happening here.

FWIW governments do more than coerce. Ours does stuff like pay millions of teachers and explore space. That takes money, so governments raise revenue. That's not coercion, that's funding stuff we want and need.

Re: S.F. landlords, property owners sue to block voter-approved vacancy tax

#83

Post by voisin »

jasonpeacock wrote: post #80
voisin wrote: post #74

Earlier quoted context omitted.

A landlord can’t unilaterally opt out of the vacancy tax though. It takes a tenant to agree to rent it and if society has done a shit job collectively to make the area viable for tenants (due to lack of crime or amount of foot traffic or tenants working from office) then the landlord is penalized with taxes for something the landlord can’t control. Paying income taxes is the “cost” of having income. You can opt out u…

The landlord can move into the property themselves, sell the property, or make the property more appealing to rent. There is plenty the landlord can control. What this tax does is say the landlord can't just sit on empty properties without penalty. Heck, the landlord could even work collectively with society to make the area viable for tenants!

> The landlord can move into the property themselves, sell the property, or make the property more appealing to rent.

The Landlord occupying vast swathes of vacant space in its portfolio is the same as it being vacant. You realize landlords don’t have 1 employee for every employee it’s tenant has, right? That doesn’t scale.

Selling just transfers the issue to someone else.

Making the property more appealing isn’t as groundbreaking a proposition as you might think it is. Every landlord with vacancies in the country is trying to do just that.

Implicit in your entire statement is that somehow Landlords are choosing to keep space vacant, against their own business interests, to… what? Spite the community? It makes no sense what you are saying. They are being punished with this tax while already paying property taxes, utilities, security, maintenance, etc, when the issue is that a pandemic hit and everyone started working from home. Now they should be punished with another tax because the angry masses want to shift the tax burden to them. Democracy at its worst.

Re: S.F. landlords, property owners sue to block voter-approved vacancy tax

#84

Post by tomcam »

camgunz wrote: post #19
tomcam wrote: post #8

Earlier quoted context omitted.

Are there any limiting principles to your perspective? Do you feel it would be acceptable for your municipality to tax your disuse of expensive guitars, riding mowers, boats, or graphics cards you don't actually employ to their satisfaction?

Yes, housing is a fundamental human need and expensive guitars aren't. Call it the Shkreli principle.

> housing is a fundamental human need

Not sure what that means in practice. If I pay for my own house, what percentage of my income should be set aside to pay for other people's houses?

Re: S.F. landlords, property owners sue to block voter-approved vacancy tax

#85

Post by humanistbot »

dragonwriter wrote: post #67
camgunz wrote: post #63

Earlier quoted context omitted.

Most people don't think you should be able to buy up a precious thing and squander it. Locke--the guy who came up with life, liberty, and property, based the property right on the owner's ability and duty to improve. Leaving apartments vacant doesn't sound like improvement. Taxes also aren't coercive; even SCOTUS hasn't held that. They've held that benefits can be, but not taxes. That's a right-wing anti-tax talking…

> Taxes also aren't coercive; even SCOTUS hasn't held that They are, and it has; see McCulloch v. Maryland , 17 U.S. 316 (1819). Coercion doesn’t generally make them unconstitutional (coercion is, ultimately, what governments do ,the states under their broad general police powers, and the feds, Constitutionally, under more limited powers, but including explicit taxation poeers), though it can when, e.g., states attem…

No, McCulloch said taxation can be coercion, but not necessarily. Maryland wanted to tax every local branch of the national bank $15k/year, which is $350k/year in 2023 dollars. That was seen an unconstitutional state usurpation of a policy that had been approved by the US Congress.

Re: S.F. landlords, property owners sue to block voter-approved vacancy tax

#86

Post by fshbbdssbbgdd »

AdrianB1 wrote: post #50
fshbbdssbbgdd wrote: post #22

Earlier quoted context omitted.

Sure, if voters elect politicians who enact taxes like that, the judicial branch shouldn’t stand in their way. The remedy for that problem would be the ballot box.

No, the judicial branch has the role to check that democracy does not become mob rule. There are some basic rights and liberties, but there are others not clear written on paper, but still not removable by vote.

Taxes on land and personal property in the US date back to colonial times. And tax policy often distinguishes between property utilized in different ways (eg. personal vs. business). I doubt you’d convince a judge that a tax that varies based on whether property is unused impinges on some fundamental right in a materially different way.

Re: S.F. landlords, property owners sue to block voter-approved vacancy tax

#87

Post by ProAm »

camgunz wrote: post #73
ProAm wrote: post #32

Earlier quoted context omitted.

> Taxation is not compulsion. It's the threat of imprisonment if you do not comply.

You're making an argument against all laws here.

For sure but this would be a new one (law). The government telling you what to do with your property, else lose your liberty and go to jail.

Re: S.F. landlords, property owners sue to block voter-approved vacancy tax

#88

Post by camgunz »

yonran wrote: post #77
camgunz wrote: post #5

"“The government cannot compel a property owner to rent his or her property to third parties without violating” the Takings Clause of the U.S. Constitution, the lawsuit said." A vacancy tax no more compels someone to rent their property than an income tax compels me to be unemployed. Feels like the kind of lazy argument you'd lob up just to give your fellow rich people an opportunity to bail you out in a hyper undemo…

> A vacancy tax no more compels someone to rent their property than an income tax compels me to be unemployed This is a bad analogy because an income tax is supposed to be for raising revenue, and it is generally understood that it should not be too high that it discourages too much economic activity. On the other hand, the Proposition M vacancy tax is explicitly intended to “disincentivize prolonged vacancies” by ta…

> On the other hand, the Proposition M vacancy tax is explicitly intended to “disincentivize prolonged vacancies”

Disincentivizing (hopefully not an actual word) is not compulsion.

> the plaintiffs argue violates the Ellis Act which says that homeowners have the right not to be in the business of being a landlord

This may be true; my legal knowledge is limited to being overzealously pre-law so I'm not an expert in CA law. That said, this sounds like a stupid law corrupted by landlords to duck housing rental regulations... OK checked Wikipedia and that's confirmed. Anyway I don't dispute this claim, just the Takings Clause argument, which again is very very bad.

Re: S.F. landlords, property owners sue to block voter-approved vacancy tax

#89

Post by orwin »

codemac wrote: post #35
kevin_thibedeau wrote: post #17

Earlier quoted context omitted.

Some states have annual property tax on cars and boats.

... they already have those on housing. No one taxes you more or less because of how frequently you use your boat, or if you rent your boat to others, etc.

They should just make a law to decrease taxes on primary house by 75%, on secondary houses by 50%, then augment the taxation by 400%.

I understand having a vacation/family home (not in crowded cities however), but having more than one and leaving it empty just to raise the price of similar unit feel really scammy to me.

Re: S.F. landlords, property owners sue to block voter-approved vacancy tax

#90

Post by rgifford »

camgunz wrote: post #63
rgifford wrote: post #31

Earlier quoted context omitted.

It's pretty coercive. Taxes are levied against transactions. A tax in the absence of a transaction is really just a fine. And fining people for not selling something violates most folks conception of basic property rights and privacy. I get that the city is looking for a way out of 50 years of systematic underdevelopment, but this just feels wrong. I don't trust government overreach to fix decades of bad governance.

Most people don't think you should be able to buy up a precious thing and squander it. Locke--the guy who came up with life, liberty, and property, based the property right on the owner's ability and duty to improve. Leaving apartments vacant doesn't sound like improvement. Taxes also aren't coercive; even SCOTUS hasn't held that. They've held that benefits can be, but not taxes. That's a right-wing anti-tax talking…

> Most people don't think you should be able to buy up a precious thing and squander it.

What does it mean to "squander" and who decides? I'm pretty familiar as a renter and property owner with tenants rights in SF. If I were to buy a duplex in the city I would never ever ever rent out the extra unit. I'd lie about tenancy, ask a friend to pretend to rent it, or pay this proposed tax rather than rent it out. I'd recommend the same to everyone.

Tenants are a liability for landlords in SF. You cannot end a tenancy, not with any amount of notice. That's a big deal and a huge policy mistake. Really messes up incentives. Let's say you and your partner have a duplex with two 2B/2BA units. You eventually decide to have kids and your parents are retiring. You want them to move into that unit so they can be close by to retire and babysit now and again. You could evict, but it's going to be costly and time consuming especially if the tenants are protected. Lawyers are going to tell you to buy the tenants out. Tenant buyouts in the city are usually mid five figures and they end up restricting some of your uses of the property in the future. It will take months (maybe more than a year) and may end up creeping up towards six figures. You would've been better off never renting it out in the first place.

Most landlords are individuals that own a few units [1]. Maybe a couple decided to buy a second home instead of investing in the S&P500. That's a lot more common than you'd expect. These are the folks navigating renters protections. Large companies don't have issues with them. They hire professionals to follow the rules. Or they build newer buildings so those protections don't apply to them.

And really this is the bleak reality of heavy handed, top down market manipulations: They're not going to hurt the big guys. You're not going to get even with some multinational real estate syndicate somewhere. You're mostly going to transfer wealth between varying shades of middle class. And really largely, you're transferring it from folks that saved for a downpayment and risked a 30 year mortgage and financially put their ducks in a row and those that spent years and years renting while knowing full well they were getting an affordable monthly payment in exchange for not building equity.

My point in saying all this is that usually if you look at a market and see folks "squandering," you probably don't understand the market. There are probably competing incentives that cause that market to be inefficient.

1. https://www.pewresearch.org/fact-tank/2021/08/02/as-national...

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