NO ON PROP M

The Context

A vacancy tax is based on the theory that property owners are refusing to collect rent in the most expensive rental market in the country and that they are actually the reason the rent is so high. This is factually untrue in San Francisco. Most homes are left vacant because they are in the process of being rented, sold, or going through probate or they are under construction. 

Because this measure also provides exemptions for construction, probate, owners going into long-term care, or even owners claiming their homeowners tax exemption or having a lease in place, it is unlikely to even work the way it says it will. Additionally, single-family homes and duplexes, which account for 110,000 parcels of land in San Francisco, would be exempt.

A similar measure passed in Vancouver in 2016 and housing costs have continued to rise there.

The rent is not high in San Francisco because of vacant homes. It’s because we have the most restrictive housing construction laws in the nation despite the high number of people clamoring to live here. 

The Money

The tax on vacant homes would range from $2,500 to $5,000 in the first year, depending on the square footage of the unit. It would increase to a maximum of $20,000 over three years. If passed, this tax would be in place until 2053 and can be amended by a two-thirds vote (or supermajority vote) of the Board of Supervisors. 

The tax would be paid by owners of vacant homes in buildings with three or more units, if the units in question had been vacant for more than 182 days. 

Additional Details

The tax dollars from this measure would go to a new “Housing Activation Fund,” which would primarily fund two programs. One program would provide rent subsidies for seniors and low-income households, and the other would fund the acquisition and rehabilitation of unoccupied buildings for affordable housing, as well as operating those buildings. The City could also use the funds to repay bonds the City may issue for projects funded under either program. 

Support & Opposition

This law got on the ballot through a signature gathering effort and has been primarily funded by TODCO (a nonprofit led by an anti-growth activist) and Supervisor Dean Preston. Preston has been a vocal critic of building new housing and argued that increasing the supply will not reduce the price of housing, contrary to basic economic principles of supply and demand. Yet here he is, financially backing a proposal that intends to increase the supply of housing with the goal of bringing down the price of housing. 

Paid for by TogetherSF Action. Not authorized by any candidate or a committee controlled by a candidate. Financial disclosures are available at sfethics.org.

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