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San Francisco To Consider Taxing Owners Of Vacant Homes

SAN FRANCISCO (KPIX 5) -- A new study by San Francisco's Office of Budget and Legislative Analysis says that 10% of all the homes in the city are vacant. And housing activists are weighing in with ways to change that.

The headlines are breathtaking: on a given day, 40,458 housing units in San Francisco sat vacant, according to a study of 2019 figures commissioned by District 5 Supervisor Dean Preston.

"We wanted to move from anecdotes to actual data," said Preston. "And what the data in this report shows, is that we're talking about one in 10 units in San Francisco that sit vacant."

The data shows the majority of vacancies lie in the Downtown, Mission and South of Mission Districts; the very areas where the most new housing has been constructed. Preston believes a lot of the units were purchased as investments to be held, unoccupied, and resold as housing prices increase.

"If you really want to disincentivize this, really want to get these vacant units activated, get people living in them, the most powerful tool we have, as a city, is an empty homes tax," he said.

Preston is advocating a city-wide vacant home tax imposed on owners who leave units empty for a long period of time. The study said, if landlords don't fill their houses, it could generate millions in tax revenue. But another housing activist disagrees.

"It will make a marginal difference in creating some additional funding for affordable housing, sure, that's great. But it will in no way move the needle," said Todd David, Executive Director of the Housing Action Coalition.

David said the study counted all empty units, not just the long-term ones. He says if you look closely, the data shows it's closer to 8,000 properties held vacant, and the "40,000" number is being used to justify the tax proposal.

"To me, this feels like a quintessential, San Francisco Board of Supervisors suggestion," said David. "A proposal like this is really a distraction that makes it look like we're doing something when we're really not doing much of anything."

He said the real answer is to significantly change zoning so that denser, multi-unit complexes can be built in the city's single-family neighborhoods. But while the activists argue about the best way for the city to force housing growth, Coldwell Banker realtor Karen Mai said it is the city's tenant protection policies that are keeping landlords from leasing their properties after rent prices dropped by 25%.

"They are afraid of renting it to the tenant," Mai said. "When they want it back, they don't leave. And it's going to cost them money to pay them a relocation fee and hire an attorney to evict them."

And the housing wars are just getting started. As it stands now, California law will require San Francisco to make room for 82,000 new homes by the year 2031. Housing activists seem certain that it will take a stick, rather than a carrot, to create more housing. They just don't seem to agree which stick to use.

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