Here in Berkeley and other SF Bay Area cities, we have imposed an "Empty Home Tax" [0][1] at some $ and % per year. As a proponent, I figured it would incentivize people to either rent or sell their unused properties which will house people and get rid of blight. Neither has happened much and these owners just take the hit. Housing as a speculative asset has some pretty terrible consequences.
There is no Y other than 0 which would be allowed under the California Constitution (Prop 13 limits ad valorem property taxes to a fixed 1% of allowed tax basis value, as well as limiting the annual increase in tax basis value, local entities can't add selective additional ad valorem property taxes on top of this), and there is no X which would make them sell which would not be regulatory taking without compensation in violation of the 5th Amendment to the US Constitution (as well as provisions of the State Constitutions.)
> Here in Berkeley and other SF Bay Area cities, we have imposed an "Empty Home Tax" [0][1] at some $ and % per year.
It's not $ and % in Berkeley, its a fixed $3,000 for the first year the unit stands vacant for 182 days or more, $6,000 in the second and subsequent years.
Oakland's measure (which is older) is also a fixed dollar amount (varies by the specific kind of unit, either $3,000 or $6,000 per year), and only applies if the property isn't occupied for at least 50 days in a year.
San Francisco's new one (like Berkeley's, passed in 2023 and would have gone into effect for 2024 with payments in 2025) was struck down as a violation o both the Federal and State Constitution, so until and unless that decision is overturned on appeal, it effectively doesn't exist.
> I figured it would incentivize people to either rent or sell their unused properties which will house people and get rid of blight. Neither has happened much and these owners just take the hit.
Well, the only significant one that is in effect at all (Berkeley's) hasn't had much time to have an impact (it only applies to rental properties with units vacant for more than 182 days in a calendar year, and it went into effect Jan. 1, 2024, with the first payments due in 2025 based on 2024 vacancies.)
I don’t disagree that speculation on a critical resource like housing is a really harmful phenomena. Another concern is when people use housing as a store of value for diversity in their portfolio. These long term “investors” are less likely to care whether their houses are rented or occupied as they have enough wealth to weather the loss of revenue or even fluctuations of the asset prices.
The empty home tax is a great idea, but my guess is the tax/fee is not significant enough to change investor behavior. Or possibly it’s not being enforced at the level it should be?
If you want to do that, you have to first pass a federal Constitutional amendment repealing the 5th Amendment (well, just the part requiring just compensation for takings), or reverse the existing jurisprudence on regulatory takings. And while the current Supreme Court is unusually willing to toss precedent, its ideological alignment is more on the side that would read the takings clause restrictions more expansively, so you're back to an amendment.
[0] https://www.berkeleyside.org/2022/10/23/election-2022-measur...
[1] https://rentboard.berkeleyca.gov/sites/default/files/documen...