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Tax on empty SF housing units to appear on November ballot

Fred Sherburn-Zimmer, Dir. of Housing Rights committee of San Francisco speaks on the steps on City Hall on Thursday, June 30, 2022 in San Francisco, Calif during a rally supporting the Empty Homes Tax which will be on the November ballot. | Camille Cohen/The Standard

A tax on vacant housing units will be on the ballot in November, members of the Democratic Socialists of America and other advocates said on the steps of San Francisco City Hall this morning.

The group said it had gathered a total of 13,734 signatures for the proposal, past the threshold of 8,979 valid signatures needed to qualify the measure for a vote. The vacancy tax proposal is likely to be one of several housing-related measures voters will consider in the November 8 general election.

If passed, the tax would would affect owners of vacant residential units “in buildings with three or more units if those owners have kept those units vacant for more than 182 days in a tax year and where no exception applies,” the measure reads. Depending on a unit’s size, landlords would owe $2,500 to $5,000 per unit; if a unit is vacant for two consecutive years, the tax would increase to a maximum of $20,000.

Properties exempt from the tax include vacant single-family homes, units where the owner is in permanent care elsewhere—like an elderly resident living in a care facility—and during the probate period following an owner’s death, among several other exemptions. Units undergoing repairs or construction would also be exempt from the tax for one year starting the day that permits for that work are issued.

Revenue would go into a Housing Activation Fund intended to finance rent subsidies for seniors and for low-income households, as well as the acquisition, conversion and operation of affordable housing.

Proponents of a vacancy tax, who include District 5 Supervisor Dean Preston, argue that it will incentivize landlords to rent out vacant units more quickly to boost the city’s housing supply.

“People say build, build, build, but we need to use the housing stock we got,” said Pat Cochran, campaign coordinator for the proposed tax.

Advocates of the tax pointed to one key statistic. That was a report from the city’s Budget and Legislative Analyst, commissioned by Preston and based on census estimates, which found that there were 40,458 vacant housing units in San Francisco. The figure includes not just a rentable apartment sitting empty, but also vacation homes, corporate housing, and units where the tenant plans to move out within two months.

Laura Foote, Executive Director of YIMBY Action, said she supports a vacancy tax as a way to increase housing supply without building, but wants a “well-structured tax” that would not exempt vacant single-family homes, as the proposed tax does. Foote also said that San Francisco’s rate of vacancy is in line with peer counties across the country.

“My read is that we’ll swallow it and support it, but in a sort of irradiated way…because of the exemption for single family homes,” Foote said, noting that YIMBY has yet to take an official stance on the tax.

Cochran said that the reason behind the tax was to go after “corporate landlords,” which he blamed as the main culprit in vacant units. He pointed to figures from the BLA report, which found that most vacancies were in buildings with at least 5 units.

The proposed vacancy tax is one of several other housing-related proposals which may appear on November’s ballot. The tax measure joins several proposed charter amendments, including one introduced by and another introduced by Preston that would create a new department to supersede the Mayor’s Office of Community Housing and Development.

In addition, voters may also consider two competing proposals related to housing development. One, championed by Mayor London Breed, would exempt a swath of new housing developments from discretionary review. A second proposal, introduced by District 1 Supervisor Connie Chan, is also meant to streamline new developments but adds additional conditions related to size and affordability.