Moves to tax housing units and storefronts left empty are gathering steam in California and once again will pit government instincts to “do something” with real and perceived problems in conflict with rights of property owners.
In San Francisco tomorrow, voters will decide if storefront properties left empty for 182 days or longer will have to pay a per foot tax that would increase yearly. Last November, across the Bay, Oakland voters did pass a $6,000 per year fee to be levied against properties not in use for 50 days or more, with the funds dedicated for housing and homeless services. In Los Angeles, a city council member wants to create an empty homes penalty to force empty units back on the market to help with the housing problem.
In the state legislature, Senator Nancy Skinner of Berkeley introduced AB 1079 to fine corporate owners of multi single-family homes for keeping them vacant 90 days or more. The bill also allows tenants the right of first refusal to buy a foreclosed home, or offer non-profits or local land trusts the chance to buy a home before it goes on the open market.
The argument behind all these government intervention plans are similar. Because of the expensive cost of land and property, critics claim, landlords hold off renting in order to build demand and create even higher rents getting top dollar from those who can afford to pay. Meanwhile, advocates object to the more than one million vacant homes in California based on census figures at a time of a housing crisis. The argument centers around the issue of local governments and non-profits stalling neighborhood gentrification, which might come if the houses are improved and sold or rented to high end buyers and tenants.
The Wall Street Journal editorial page even pushed into the conversation raised by Senator Skinner’s bill commenting under an editorial headline: Want Fewer Homes? Try This, “It costs $750,000 to build a new low-income apartment in San Francisco, but investors can renovate and sell a foreclosed home in Berkeley for less. There would be less incentive to invest in or improve the housing stock since the government could seize properties for a pittance.”
How far reaching this governmental approach into taking over or forcing the use of properties will go is unclear. Eventually, will second homes or vacation homes that meet the vacancy length-of-time standards in the bills be considered to fall into the net requiring fines or sale?
While homelessness and housing shortages are turning regulators in this new direction, property owners could lose more control over their assets.
These multiple efforts of government intervention under the shield of “common good” to reduce the number of empty property continues the age-old battle over “takings” as most often displayed with government’s power of eminent domain.
The long court record of using the takings clause in the Fifth Amendment to the United States Constitution demanding just compensation for the taking of property might be put into play over these legislative efforts.
Whether a constitutional barrier is crossed, I leave that for the court’s to decide. But, much like the trash compactor scene in the original Star Wars movie, all these moves have the feel of walls moving in on property rights to squeeze more freedoms from property owners.