March 16, 2019
In the wake of the Great Recession, when many properties were sitting vacant, I began pushing a vacant property tax. The idea is that the tax would make it more costly to hold unoccupied housing. This gives owners more incentive to rent out a unit or to sell it, putting more property on the market and bringing prices down.
The tax has several nice features. First, we already have an assessed value on the books, so it doesn’t require a new administrative apparatus to impose a tax of say, 1–2 percent on property sitting vacant. The second is that if we don’t get them to rent or sell the place, we can raise money that can be used for things like affordable housing. The third feature is that even if they find ways to cheat, we still have raised the cost of keeping property vacant.
Vancouver implemented a vacant property tax in 2017 and in 2018 reported a 15 percent decline in the number of properties counted as vacant. Apparently, London and other cities are now considering one as well. This is very nice to see since this sort of tax is likely too simple for many economists and other policy types to understand.
Comments