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 (http://www.washingtonpost.com/...). 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 (http://blog.cleveland.com/...). These "walk aways" are further aggravating conditions by these entities simply abandoning the housing. Efforts to force them to do so have been introduced (http://www.rilin.state.ri.us/...).
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 (http://www.msnbc.msn.com/...). 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 (http://www.secondshelters.com/...). 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.