California has the nation’s highest average rents and housing prices. It also has the largest population of homeless people in the United States, according to the most recent state analysis.
Local leaders and state lawmakers are trying to find ways to address the problem. New taxes to fund affordable housing development and related programs is one approach.
San Diego is the latest city to consider a vacancy tax on apartments and other residential properties that sit empty for long periods of time. The City Council’s Land Use and Housing Committee is calling for a feasibility study on the tax as a way to raise funds for rental assistance. Details about which properties would be taxed and the amount of the tax would need to be determined. The study results are expected by the end of the year.
In 2019, Oakland enacted a voter-approved tax of $6,000 per parcel on residential properties or units that sit vacant for more than 50 days in a calendar year. The city of Los Angeles was considering a similar tax on owners of vacant residential properties, but the ballot measure has been postponed until 2022. San Francisco passed a vacancy tax last year targeting retail and other commercial properties. Implementation of that vacancy tax was also postponed amid the COVID-19 pandemic.
Industry groups representing property owners have rallied against vacancy taxes. “There is a big difference between a property owner intentionally keeping a property vacant and a property owner who is actively trying to lease a property but can’t find a tenant,” Craig Benedetto, legislative advocate for the San Diego Building Owners and Managers Association (BOMA) told CoStar News.
Improving the coordination between state and local efforts to address homelessness is the goal of newly filed legislation. Assembly Bill 816 requires local governments to come up with an action plan by 2023 that will reduce their homeless populations by 90% in the next eight years.
The state’s “approach to homelessness is disjointed,” State Auditor Elaine Howle wrote in a letter to the Legislature. “At least nine state agencies administer and oversee 41 different programs that provide funding to mitigate homelessness, yet no single entity oversees the state’s efforts or is responsible for developing a statewide strategic plan.”
Article 34 Repeal
Other legislation has been introduced that would repeal the California Constitution’s Article 34, which requires cities and counties to get voter approval before allowing publicly funded low-rent housing projects to be built. Officials call it a significant contributor to the state’s affordable housing shortage because it allows voters to block low-income projects in predominantly wealthy neighborhoods.
Analysts say the major challenge isn’t passing the Article 34 repeal in the Legislature, it’s getting it passed by a two-thirds margin of California voters to change the state constitution. Three prior ballot measures to repeal the provision have failed.