Vacancy Taxes: The Next Frontier In Housing Policy?Play
In Oakland, California, a collective of homeless mothers known as Moms 4 Housing recently occupied an abandoned property — highlighting a housing problem that's growing across the nation.
According to the U.S. census report, a little over 12% of units in the U.S. were vacant in the third quarter of 2019. And an estimated 4,000 parcels are empty in Oakland, a city that’s also grappling with rising homelessness.
One way to address the issue is a so-called vacancy tax, a new tool cities are implementing to ensure all available housing is used.
But there’s little active data collected on the number of vacant units — and why no one is residing in them, according to Michael Lens, associate professor of urban planning and public policy at UCLA.
“We have to collect good data and timely data to know exactly what is vacant for how long, why and is there some reason to believe that there is land speculation that is driving some of this vacancy,” he says.
Vacancy taxes would likely take many different forms. Lens says some laws may treat landowners differently based on characteristics such as income or residency. For example, the vacancy tax in Vancouver, Canada, is defined by an amount of time that the property is unused, while in Washington, D.C., blighted homes are assessed then taxed accordingly.
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, he says.
“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,” he says. “And so a vacancy tax is not getting at those root problems.”
On using vacancy tax as a solution to high housing demand
“I think a classic refrain that you hear right now in a hot housing market like Los Angeles is that we're building too many, quote-unquote, luxury housing units. And so we're only building for a certain market segment at the very top of the income range and the price range. And we're overbuilding in that sector, and we're not building enough for people who are of lower means. And so if we're building too much, a lot of that stock goes unused and remains vacant. I think there's still a lot to learn about how frequent that is. You know, a lot of times new housing remains vacant for a period of time while buildings fill up, whether that's leasing up or selling condos.”
On housing in Detroit, where 16% of homes are vacant, and the Detroit Land Bank has become the owner of thousands of foreclosed homes
“The story in Detroit is often that you may have bought this house 20, 30 years ago and it's impossible to sell, you know, above, say, $50,000 to $100,000 and that's not going to make up for the amount that you've lost or you're underwater on a loan or something like that. Hanging on to a vacant property and that's the situation, hoping that at some point things turn around is a very different process, but mirrors really what we think of as speculation. We're in a hot market. The speculators holding onto something that they hope they can sell at a profit later on. But, you know, in one case, we've got, say, a grandmother in Detroit, and the other case, you've got a foreign investor in Los Angeles. We want to treat those two people very differently, but they might be hoping for the same outcome in the end.”
On whether a vacancy tax gets to the core issue of race and economics
“I think it's a good time to reflect on [Martin Luther King Jr.]'s legacy, certainly in the context of the housing question. And later in his career, he did a lot of work on housing segregation, particularly later in his career. And I think the vacancy tax is another colorblind solution to a problem that involves race very commonly….
“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. 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.”
On the push backs against a vacancy tax
“Well, some of the pushback that you get is like is the pushback that you get for any tax, that there's there are already too many taxes for too many purposes and people are overburdened whether they're landowners or not. And also, you can scare away investment that you might actually want. I can move across borders pretty easily if a city is the implementer of a tax like this.”
On tangible ways of getting at the issue of housing inequality
“Well, I think the time is right now to directly target people who are struggling the most in a more generous way. We do not allow housing subsidies to be considered an entitlement. We do not give people housing subsidies if they qualify all of the time. We have long waiting lists for lotteries to get into public housing, to get into other below market-rate housing, to obtain vouchers for affording a home. And we have these massive homelessness crises and we can't build fast enough to accommodate that. But we also need to build faster. And so I think subsidies increase supply and trying to protect tenants in the places where they are, whether that is through eviction, defense, rent control or other means of protecting tenants where they are, making sure they don't have to move.”
On who deserves housing in a capitalist society
“I don't think we've resolved that question in housing in particular. You know, there's always been a strong movement that housing is a human right. But we tend to protect property interests and property as something that people earn in ways that are not universal.”
Cristina Kim produced and edited this interview for broadcast with Kathleen McKenna. Serena McMahon adapted it for the web.
This segment aired on January 27, 2020.