Discouraging blight, encouraging investment.
Another revenue source the city could consider if we pass a City Charter would be a vacancy tax. This type of tax has been considered in a number of California cities. It’s important in implementing a vacancy tax to allow for legitimate, temporary vacancies — renovations, periods where a previous tenant has left and another just hasn’t moved in yet, etc. But when we look at long-term vacant properties in our downtown, it’s important that owners have an incentive to either fill the space, or sell to somebody that wants to invest in making the space more attractive to tenants, or perhaps entirely rebuild the site. Similarly, to the extent there’s any truth to the theory that investors are holding empty residential units as speculative investments, that’s obviously bad, and creating the incentive to let tenants rent the units is good.
This isn’t a silver bullet, of course, and it’s possible to structure a vacancy tax poorly. But even critics acknowledge that a reasonably designed tax can reduce long-term vacancies. On the commercial side, this would mean cleaning up blighted spaces on El Camino, and getting more new businesses in on San Mateo Avenue. For housing, one model based on a thorough study of how a national vacancy tax played out across different cities in France suggested that a similar tax in California could add nearly 120k units to the supply of rental homes.