With housing activists in Los Angeles targeting people and corporations that are keeping housing units vacant instead of renting them out, how would a vacancy tax address the issue? In a piece on WBUR, while a vacancy tax may help some who are suffering as a result of the housing affordability crisis, it doesn’t get at the core of race and class inequality within housing economics.
“If you think about eviction, if you think about homelessness, if you think about the negative impacts of segregation, both by race and class in our housing markets, this is a problem that is often very concentrated in particular communities amongst households of color,” said Michael Lens, associate professor of urban planning and public policy at UCLA on WBUR. “And so a vacancy tax is not getting at those root problems.”
As Lens notes, a vacancy tax may not address the issue as it relates to race and homelessness. A study by Strategic Action for a Just Economy reveals there are three empty housing units for every homeless person in Los Angeles. In Los Angeles County, there are four vacant units per home person. The group’s solution is to impose a vacancy tax on units that sit empty.
“A vacancy tax can have some positive outcomes for people who are struggling the most if we use the money that the tax would raise in an appropriate way," Lens adds. "But again, it's not getting at the root causes of our housing problems, which are myriad, but certainly have a lot to do with race.”
A vacancy tax was enacted in Vancouver, British Columbia, two years ago, with the city assessing a 1% levy on a home’s assessed value if it was occupied less than half of the year.
Reports say the number of vacant units fell 15% and the tax generated $38 million for affordable housing projects.
The tax was met with opposition from those who own the vacant units, with the California Apartment Association saying the vacancy rate in Los Angeles is low. The U.S. Census reports the city’s vacancy rate is 3.6%.
"We have seen no evidence that owners are deliberately keeping units vacant, which makes no financial sense," said Beverly Kenworthy of the California Apartment Association. "If a unit is vacant it could be for a number of reasons—new buildings typically take 8 to 12 months to fully lease or a unit could be undergoing rehab work. We believe a vacancy tax is a solution looking for a problem."