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  There are two pressing problems we have: housing and inequality. Everyone seems to be searching for an answer to the housing situation, but ideas need to be examined carefully.  Citizens might want to take a look at the April 28/29 weekend issue of the Financial Times' House & Home section.  There is a study by the FT staff on
second, third, fourth etc. houses of the wealthy and the effects such housing
has on cities.  Generally this is negative given their findings. Cities get less in sales tax, have less sales in areas, less foot traffic, neighborhoods become ghost towns, character is lost.  This is consonant with the findings of Saskia Sassen of Columbia U., see her book, Cities in the World Economy, 2011.

    With this in mind one can then feel rather uncertain on reading
about the recent demolitions of homes in American cities (  Banks, mortgage companies and services are not paying property taxes or maintenance degrading towns and cities' budgets and the neighborhoods where their homes are located (  These "walk aways" are further aggravating  conditions by these entities simply abandoning the housing.  Efforts to force them to do so have been introduced (

  There are a number of considerations, however, that should be investigated.
  The point  is that many housing units  that were used for  working Americans are now owned by absentee tenants as investments ( We also have a problem of luxury homes. These include vacation homes  are making
existing housing more expensive.  A 2011 study by the National Home
Builders’ Association found that 5% of the country’s housing stock is
held as second homes (  Nationwide the 1990 Census found that about 3.1% of the housing stock of the country was held as second homes


with California registering about 2.0% of its housing stock as second
home status.  This figure has been relatively stable since 1950, rising
about 1% from 1940 to 1950.  There is evidence that second home sales
soared in the period 1990 to 2011


     However, do we know how many homes  are second homes
or vacation homes?  Some are simply investments.   The 2010 Census
tells us that in some towns like Ross (California) almost 10% of the housing units
are vacant, while in the county as a whole the rate is 7.2%.  While all
these units may not be second homes the fact that so many homes are not
being used for dwellings is certainly a waste.  Towns in California are being pressed
by legislative mandates (contained in ABAG’s numbers and new State laws) to build more housing, it seemscontradictory that so many units are unused. This is worse if the real use figures should be a combination of vacant homes (under construction, damaged, abandoned or held off the market for investment purposes)and second and vacation homes.
   If this is the case then the total underused housing is at between
10% and 15% for California as a conservative estimate because the data also
 show that many, perhaps as much as, 5% of condos and townhouses
 are held off the market as investments.
    Second homes have been found to have negative effects on cities by a Financial Times study and the work of Saskia Sassen (book, Cities in a World Economy).  Character of neighborhoods degrades as vacant and ill used homes increase, less foot
traffic, sales, need for services,and as the percentage of these houses increase
a ghost town feel takes hold.  Sales tax drops and since many wealthy owners are not citizens there is less income tax, or property may be owned as Limited Liability Corporations and the owners hidden as well as the tax liability.  All this increases tax on the other citizens or causes municipalities to reduce services.

     I think we need an incentive for owners to rent or sell their homes
if they are not going to use them.  Since housing is in an emergency
condition in some people’s estimation, it seems like a nation-wide
emergency legislative initiative is in order.  A vacant housing fee of
$10,000 a year should be sufficient incentive to motivate owners to use
their property.  This is certainly justified by a number of measures,
not just the need for housing, but the fact that most fires in
structures take place in vacant buildings and these are often the
target of vandals and burglaries.    

  Such problems impact municipal services and budgets.  This vacancy fee
could be used to provide a housing subsidy for low paid workers in our towns and counties.


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Comment Preferences

  •  niccolo - how would you do it? (3+ / 0-)
    Recommended by:
    kck, in the Trees, FG

    If someone has a second home that they maintain and pay the property taxes how could you charge them another fee? Even if they only reside there a few months a year under what possible current law could any city, or state impose a "vacant housing fee"? The right to own property is a fundamental right and I can't think of any way you could tax someone who uses fewer local resources more than full time residents.

    "let's talk about that"

    by VClib on Tue May 22, 2012 at 11:57:10 AM PDT

    •  A Vacant Housing Fee... (0+ / 0-)

      would be a dangerous road.

      Where would it stop?  Could a family of 4 who sends two kids to a monthlong summer camp be charged a fee for the time that the kids are at summer camp?

      How about a single person that is in sales or entertainment that is gone half the year on business?

      On the flip side, should the city pay the homeowner if they allow an exchange student to live with them?  they are increasing sales, right?

      Where would it stop?

      •  ON (0+ / 0-)

        the first example you are talking about behavior taxes, or consumption tax and yes, unless you had not noticed, we do this, tax on take out food, tickets to sports events, etc. on your second point we do this too, only when someone rents out a room in most cities and towns that is not only taxable income, but it engages a tavern tax or bed and breakfast fee.  Here you have to balance the values of people who do not rent rooms with those who do, and to regulate how the ones who profit from renting impact the environment and property values of those who do not.

    •  We (0+ / 0-)

      do this with a lot of property.  We charge a vehicle registration fee for cars, then we charge an area parking fee in may towns due to congestion in addition even if you buy a parking permit you will have to pay timed parking in some zones, as in the commercial areas of  San Francisco, and then there is smog tests and repairs.  Aviation fees are another area, or boating fees, etc. all these pay also fuel taxes

      •  In areas with high vacation home density (0+ / 0-)

        a great deal of the surrounding community is in place to support the summer or winter seasonal use. Any attempt by local towns, cities, or counties to create a discriminatory tax on the milk cows of the region will bring with it a political backlash. A special fee for vacation homes is not a politically feasible idea.

        "let's talk about that"

        by VClib on Tue May 22, 2012 at 02:42:43 PM PDT

        [ Parent ]

  •  Where is there a shortage of housing? (2+ / 0-)
    Recommended by:
    in the Trees, VClib

    Most 2'nd homes are in high cost areas or remote locations and I'm surprised if they're left to degrade since use, rental, or resale all depend on the condition of the property.

    The very best tax basis for a community prioritizes senior citizens and retirement communities since there's low demand for schools and family services yet high revenues...but that's not an approach I'd want to promote.

    Perhaps a focus on foreclosed vacant properties would fit your thesis better. Especially the hard to sell ones. They're in areas co-located with increases in demand for rental housing, the banks are not maintaining them, the housing GSA's are already exploring ways to convert them to rentals, and they're affordable.

    Eliminate the Bush tax cuts Eliminate Afghan and Iraq wars Do these things first before considering any cuts

    by kck on Tue May 22, 2012 at 12:18:17 PM PDT

    •  There Is NOT A Shortage of Housing... (1+ / 0-)
      Recommended by:

      We currently have a glut of housing.  That is the cause of the high vacancy rates.

      Until we reduce this oversupply of housing, it will be difficult to come out of the current recessionary period.  Many industries rely on a strong housing market.  Construction, sawmills, timberland, appliance manufacturing are all dependent on new house construction which is at a near standstill.

      •  right (0+ / 0-)

        we need to build bigger and more housing even if we do not need it to keep people working.  It is not sustainable, but damn who cares!  The average home today is about twice the size of homes in 1950 and then the average family was three times as big.  Talk about irrational.  If we had a housing policy that was sustainable we would stop subsidizing the construction industry (most components of houses are now made in China, and even much of the lumber is from Canada) and instead invest in education and research and development.

        •  No one said anything about home sizes. (0+ / 0-)

          Your support for a sustainable housing and construction strategy more aligned to the nations real actual needs seems to be a god goal that needs more fleshing out.

          Eliminate the Bush tax cuts Eliminate Afghan and Iraq wars Do these things first before considering any cuts

          by kck on Tue May 22, 2012 at 05:01:00 PM PDT

          [ Parent ]

    •  Since (0+ / 0-)

      you have not been paying attention today's Financial Times has an article just for you.  See page 6 by Shannon Bond and Anjli Raval on the exploding rents around the country.  The national apartment vacancy rate is at 4.9% the lowest since 2001.  Every year more people are born and more graduate from high school or immigrate to the US, get jobs outside their area and move out from mom and dad.  There is a constant need for housing, but I would agree, we do not have a housing crisis, but a space crisis.  Still, if you read the links I provided you will see that investors are buying even the most distressed homes to drive up the cost so they can make greater profits.

      •  So there is a shortage of rental housing. But (0+ / 0-)

        since rental housing is a small percentage of overall housing, it means nothing.

      •  I read the links but can't find one for the FT. (0+ / 0-)

        I think there are many creative ways to exploit the glut of housing including cities using eminent domain to take  severely unmaintained vacant bank owned properties and covet them to low cost housing.

        But your diary seems to use "housing" as a single generic resource and vacant as a generic descriptor as if a vacation home vacant wen not in use is equivalent to a vacant bank owned property languishing or an unfinished "new" development with a high foreclosure rate and unsold new homes. There are fairly complex different challenges.  

        I don't understand this:

        The point  is that many housing units  that were used for  working Americans are now owned by absentee tenants as investments
        Isn't this a good thing to increase the number of rental housing?

        Basically, I dispute the premise that a significant number of owners are holding "unused" homes and don't see that supported.

        Eliminate the Bush tax cuts Eliminate Afghan and Iraq wars Do these things first before considering any cuts

        by kck on Tue May 22, 2012 at 04:35:24 PM PDT

        [ Parent ]

        •  Ireally (0+ / 0-)

          do not know what you mean here.  There are a ton of articles on vacant housing kept off the market as a strategy, try this one:

          •  That article is about banks holding foreclosures (0+ / 0-)

            ...about which I am very familiar and shouldn't be confused with second homes or owners investments. This article doesn't suggest keeping the props off the market as a strategy - it lowers the prices and reduces the value to the banks. Holding the vacancies are already undesirable.

            Most banks unload foreclosed properties as fast as they can process the resales but some properties are messy for the banks as they're laden with other parties holding 2'nd and 3'rd mortgages or unattractive to the investors interested in buy-hold-lease plans due to awful reno costs or the worst liability, large monthly HOA fees.

            If you look at FANNIE MAE's Homepath national database of unsold foreclosures they're almost all either too costly to repair or to risky for the individual non-corporate investor because they have high HOA-fees. These, I believe, should be taken via eminent domain by the municipalities and used as low rent housing.

            Eliminate the Bush tax cuts Eliminate Afghan and Iraq wars Do these things first before considering any cuts

            by kck on Wed May 23, 2012 at 07:20:23 AM PDT

            [ Parent ]

            •  Sorry (0+ / 0-)

              but we have been involved in the past 40 years in land management and I cannot agree with you.  Holding property off the market has a number of strategic goals, some are tax oriented others are bets against the future.  Here in San Francisco many Asian financial concerns buy property tear the buildings down and leave the lots vacant for more than a decade as they look to see how property values move.  I've also had to make complaints against property owners who do this in single buildings, leave them vacant so they are broken into or have fires.  In court they argue that their investment plans are not ready.  They are hedging.  Know what that means? You need some experience.

  •  While the idea is not politically viable... (0+ / 0-)

    It's good to have some fresh thinking.  California has a law known as Proposition 13 that was passed in the 1970s that limits property tax increase to 2% a year.  Problem is housing has been going up about 5%.  This means that Warren Buffet pays 2K a year for his million dollar house, just average for the desirable locales in this state, while his secretary would pay 10K.

    He brought his up when he was an advisor to Schwartzenegger--so he was canned from the job.  People with such legacy houses get a bonus for keeping them and renting them, and the bonus of low taxes is even handed on to their children.

    This is untouchable in this state.

  •  It's sad to hear (0+ / 0-)

    that some of these empty homes are a mere property investment when housing is a dire issue to many homeless people living out in the streets. Definitely support the idea of renting them's still better than leaving them vacant.

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