111–120 of 151 posts
Earlier quoted context omitted.
A "vacant storefront tax" would easily be circumvented by a legal entity with a vending machine business or the "owner" themselves putting one of their "offices" there (a table).
Any realistic vacant land tax with teeth would obviously need to define vacancy such that silly tricks like this wouldn't work.
Interesting, but It doesn't answer why a bank would hold a completely vacant building for 15 years. I think we need Vacancy taxes that go up based on the percentage of time vacant over different spans of time. Anything that makes owning an empty building a bad investment in all circumstances. This needs to apply to all units in a multitenant building.
A property tax is intended to be this, I think. You pay for owning an expensive commercial plot. If you are making enough money with it to pay the tax, great. If not, sell it or lose money. I suppose the model sucks because the community is highly benefited by a low profit cozy coffee shop or book store, which might not be able to afford the property tax rate needed to discourage the "keep it vacant" strategy. Maybe…
I think the only viable businesses left in the neighborhood are a sub shop and a liquor store. Even the gas station is pretty low traffic.
There's a lovely little coffee shop within a couple of miles away, close to the city center. It has nice events in the evening, such as trivia nights, contest nights, etc. Plenty of parking. But do I really want to go to where almost everybody is on their phone when I can stay at home and pet my cats? I think that's one of the major competitors' stores have, especially small, targeted-audience stores. Home is much more comfortable and rewarding than going out, especially if you have a cat or a dog.
Earlier quoted context omitted.
We need to repeal Prop 13 completely. The fact that my neighbors pay 1/10th the property tax that I do, despite being younger and less at risk of being forced out of their home due to going fixed income or some financial crisis, is absurd.
I'm a former (i.e. not irrelevant to the question) Californian who also thinks Prop 13 should be repealed, and am probably supportive of LVT; Can you walk through the scenario that younger neighbors pay a tech of the property tax you do? Are they legacies and benefiting from some sort of inherited trust or something?
This was recently modified, due to Prop 19, so that only the first million of property value can escape fair taxation. Since it was passed, there have been two attempts to bring back the landed gentry aspect of Prop 13, and there is a third attempt under way:
https://www.mercurynews.com/2025/11/30/third-attempt-to-repe...
The example house used in the story was taxed at $1,300/year before inheritance, on a $2M home value. After inheritance, it's an annual $18,000 bill, discounted from something like $30k-$40k.
Let's say I have a building that's sitting vacant. Under the current system, I pay property tax, which is based on the land plus the improvements (the building). So it costs me to hold the building vacant.
If we switch to a land tax, then that would be taxed on the value of the land only (though presumably at a higher rate). But if moving to a land tax is revenue neutral, then the tax on vacant land would be higher than it was before, and the tax on improved land would be lower.
The net effect of a land tax, then, would be to lower the tax on this unoccupied building. How is that supposed to fix the situation?
Interesting, but It doesn't answer why a bank would hold a completely vacant building for 15 years. I think we need Vacancy taxes that go up based on the percentage of time vacant over different spans of time. Anything that makes owning an empty building a bad investment in all circumstances. This needs to apply to all units in a multitenant building.
> Interesting, but It doesn't answer why a bank would hold a completely vacant building for 15 years. I had the exact same question before I fully read the article. This is answered in the article in the "Extend and Pretend" section. > "And so long as the operator can afford to keep losing $140k per year on the building… they can!" > [...] > "The only sticking point here is that the building operator is still losing…
Usually, if you have a problem and you know why, you'd consider doing something about the cause of the problem.
Earlier quoted context omitted.
I’d support a land value tax myself so don’t take this following comment as criticism, but you don’t even need a land value tax in the case of LA. You do need to repeal Prop 13 for investment properties. I wager most of those years-vacant properties have a generous Prop 13 assessment and so the owner can just sit on it because their carrying cost is closer to zero than what it would be in any other tax regime. Then a…
We were very close to repealing Prop 13 on commercial property a few years ago (via Prop 15). One of the biggest objections to a straight repeal Prop 13 on commercial property is that most commercial leases are triple-net, meaning that the businesses directly pay the taxes. Which means that a bunch of small businesses that are just barely on the edge of profitability will shut down when they finally have to pay their…
You note that a bunch of small business just won't be viable if you up the taxes, but you agree on the need to do it. So do you just keep upping the taxes until nothing is profitable except giant soulless corporations (who will then probably subvert the tax system anyway)?
Why can you bullshit about an empty building but not a temporarily low rent building? Why doesn't this just lead to "Month-to-month and Pretend"?
Because rent on the books is dollars and cents. If you (a landlord) pretend to rent a building to me at $1m/year but give me a $500k 'rebate' that's arguably a fraud on the bank and/or tax fraud. Doing it month-to-month might be a workaround but any commercial operation will want to write off the rent against tax, which makes it official again. You could probably make this work by donating office space to nonprofit o…
Said another way why isn't a vacant space treated as renting it for $0? I can see why you wouldn't want to lock in a long-term low rate but why isn't a short-term rate as excusable as a vacancy?
Earlier quoted context omitted.
Because rent on the books is dollars and cents. If you (a landlord) pretend to rent a building to me at $1m/year but give me a $500k 'rebate' that's arguably a fraud on the bank and/or tax fraud. Doing it month-to-month might be a workaround but any commercial operation will want to write off the rent against tax, which makes it official again. You could probably make this work by donating office space to nonprofit o…
This still doesn't quite explain why vacant is excusable but under priced isn't also excusable. Said another way why isn't a vacant space treated as renting it for $0? I can see why you wouldn't want to lock in a long-term low rate but why isn't a short-term rate as excusable as a vacancy?
While the income is $0, the landlord can say they're actively seeking tenants, and the bank can pretend to believe this and exercise its right of forbearance. Lower actual rent payments break the illusion of how much the property is worth, and both the landlord and the bank have to put that unpleasant reality on the books.
Real world example: the fanciest mall in downtown San Francisco was valued at $1.2 billion a few years back. Great location, great building design, a nice place to shop for many years. Things started to go bad after COVID, and after 2 years of no rent the banks pulled the plug and foreclosed. They ended up buying the deed for $133 million. This would be a great deal, except that they'd loaned $566 million. So they are not the proud owners of an empty mall, which is only worth about 25% of the money they initially invested, and they have to tell their shareholders that they lost $433 million. Now that the cat is out of the bag they could start renting out retail units at affordable prices, but a bank does not want to be a landlord/property manager.
https://www.sfgate.com/local/article/2-buyers-scoop-former-s...
Earlier quoted context omitted.
Any realistic vacant land tax with teeth would obviously need to define vacancy such that silly tricks like this wouldn't work.
And in response, owners would do something slightly less silly - just enough to technically fall within the rules, and so not be subject to the tax.
We shouldn't just always default to doing nothing because someone, somewhere is going to try to rules-lawyer their way out of it.
I've seen in here a couple people saying that Land Tax is the answer. But... Let's say I have a building that's sitting vacant. Under the current system, I pay property tax, which is based on the land plus the improvements (the building). So it costs me to hold the building vacant. If we switch to a land tax, then that would be taxed on the value of the land only (though presumably at a higher rate). But if moving to…
Your tax would go up in the following situations. Maybe there is very little, or no vacant land. Maybe every other land plot has a 30-story mixed use office tower/apartment building that is currently paying many multiples of your property tax.
The discussion about land value taxes often involve dense areas where these situations are more likely.