Housing activists in Los Angeles are targeting people and corporations that are keeping housing units vacant instead of renting them out, according to KABC.
The group, Strategic Action for a Just Economy, said in a press conference that 76% of the units in the Solair Condominium building in Koreatown sit empty because their owners are seeking rents that are too high.
A study by the group 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.
"It would put a fine or a penalty on owners who leave units vacant for more than three months out of the year," said Terra Graziani of the Los Angeles Center for Community Law and Action.
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."
A recent report by HSH found that Los Angeles was ranked as the third most expensive market in the nation during Q3 2019. Its average home price of $649,600 was behind San Francisco’s $964,000 and San Jose’s nation-high $1.24 million.
Home prices in Los Angeles declined just $5,466 from the prior quarter.