West Coast Cities Turn to Vacancy Taxes to Grapple with Housing Crisis
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Re: West Coast Cities Turn to Vacancy Taxes to Grapple with Housing Crisis
#2As long as they don't let anyone build more housing: that'd ruin the character of the neighborhood.
Re: West Coast Cities Turn to Vacancy Taxes to Grapple with Housing Crisis
#3This article is terrible. It starts off talking about high vacancy rates for commercial properties, then segues to talking about housing shortages. Vacancy rates for housing is definitely not in the 27% range implied by the article. They're in the single digits, with the hottest housing markets also having the lowest rates.
https://www.census.gov/housing/hvs/current/index.html
https://www.census.gov/housing/hvs/data/rates.html
Sorting by the census areas with the highest rates gets you areas like Jacksonville, FL, Baton Rouge, LA, and San Antonio-New Braunfels, TX. Superstar cities like SF and NY have rental vacancy rates of 5.5 and 5.4 respectively.
Re: West Coast Cities Turn to Vacancy Taxes to Grapple with Housing Crisis
#4As long as they don't let anyone build more housing: that'd ruin the character of the neighborhood.
In my experience, the same people who oppose building more housing also oppose vacancy taxes.
Re: West Coast Cities Turn to Vacancy Taxes to Grapple with Housing Crisis
#5As long as they don't let anyone build more housing: that'd ruin the character of the neighborhood.
Why not both? Subsidize development and permitting fees with vacancy taxes.
Re: West Coast Cities Turn to Vacancy Taxes to Grapple with Housing Crisis
#6As long as they don't let anyone build more housing: that'd ruin the character of the neighborhood.
Why not both? Subsidize development and permitting fees with vacancy taxes.
Because development and permitting fees aren’t the problem. People already want to build new homes. We just don’t allow them to do so.
In fact, those subsidies are often part of the problem. The only way to get new development approved in many cases is to include a number of below-market units in the development… even though they are subsidized, that mandate kills the economics of the project. It happens often enough that you start to wonder if maybe that isn’t the point.
Re: West Coast Cities Turn to Vacancy Taxes to Grapple with Housing Crisis
#7I can’t see it being a bad thing.
The kind of landlord who is willing to keep a property vacant is not usually a struggling enterprise, unless we are talking about a completely hollowed out declining metropolitan area (which most west coast cities absolutely are not).
In my city, one development in a highly desirable area basically demolished a historic building, built a new one with far more prime retail space including small storefronts and flagship retail (think grocery store or big box store), built it out completely in the interior, totally ready to lease. But in the years since they built the development, the bank branch is the only occupant.
My guess is the bank is squatting on the property. It was probably easy to get a big “revitalizing” property approved, and now they can take a tax write off on multiple retail spaces that they apparently never intend to bother leasing out.
Presumably they don’t want to bother leasing to anyone and actually have to deal with the management overhead of landlording unless someone comes in and pays inflated prices. So they’re happy to sit on it until someone bites. Meanwhile, it’s been an empty eyesore for years now.
Re: West Coast Cities Turn to Vacancy Taxes to Grapple with Housing Crisis
#8Vancouver development is in bad shape now thanks to these taxes and a glut of new supply that was built with financing not available to the average developer
Pre sales are dead. Some projects are in receivership. New Projects are not going ahead
Re: West Coast Cities Turn to Vacancy Taxes to Grapple with Housing Crisis
#9Earlier quoted context omitted.
Why not both? Subsidize development and permitting fees with vacancy taxes.
Because development and permitting fees aren’t the problem. People already want to build new homes. We just don’t allow them to do so. In fact, those subsidies are often part of the problem. The only way to get new development approved in many cases is to include a number of below-market units in the development… even though they are subsidized, that mandate kills the economics of the project. It happens often enough…
Well whatever. Hand vacancy taxes to developers as straight cash incentives to build more. Bonus per unit completed or any other metric that isn't subject to gaming. The point is, make it cheaper to build.