San Francisco has been in a struggle to find and provide affordable housing in recent years.
And according to a new report, the city contains approximately 40,458 total vacant housing units, around 10% of San Francisco’s total 406,399 housing units.
The report, commissioned by Supervisor Dean Preston of District 5, explores the possible adoption of a vacancy tax in the city, which would incentivize homeowners to fill their properties by enforcing a fine.
The city has increased its housing production since 2016, and is on track to meet the state market-rate housing goals for 2015 to 2023, which was 28,869 new units. But the city is currently approximately 10,617 affordable housing units short, but has produced 6,000 more units of market-rate housing than was required.
With the implementation of a vacancy tax, this may change.
The report cited some cities, like Vancouver, British Columbia, that has imposed a similar tax as an example. In 2016, Vancouver enacted the Empty Homes Tax, which led to their vacancy rate dropping from 4.3 to 3.1%, with 1,676 units filled in 2018, and 220 more in 2019.
The tax in Vancouver generated the equivalent of about $21.3 million dollars in 2019, which the net proceeds of which were used by the city for affordable housing initiatives, according to the report.
Other cities, like Washington, D.C., have imposed similar taxes. In Washington, D.C., the tax is $5 for every $100 of assessed value for vacant properties and $10 for every $100 of assessed value for blighted properties, according to the report. In 2016, this brought in an estimated $9.4 million in gross revenue.
In San Francisco, if such a tax is passed, and approximately 4,600 to 7,300 vacant units would be subject to the tax, "we estimate San Francisco could generate between $12.2 and $61.2 million per year in net revenue initially," said the report.
The number of vacancies in San Francisco rose from 2015 to 2019 by about 20%, according to the report. The majority of empty housing is due to new construction.
But affordable housing has continued to fall short. Of new units added in 2020, only 20%, 818 units were affordable for very low, low, and moderate-income groups, said the report.
The highest number of vacant units were concentrated in areas like SOMA, downtown, and the Mission District.
"While a certain level of vacancy can be expected due to normal turnover of housing units, some units may be vacant due to owner preferences and actions that are inconsistent with policy goals of maximizing the City's housing stock for residents," said the report.
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