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San Francisco vacant houses tax headed to poll, marketing campaign says

The Empty Homes Tax campaign announced Thursday that it was submitting 13,734 signatures to the city — well above the nearly 9,000 needed to appear before voters this fall.

If approved by a simple majority in the Nov. 8 election, the tax could make about 4,500 vacant units available over two years and generate more than $38 million in annual revenue, according to a January report from the Board of Supervisors’ Budget and Legislative Analyst .

The tax measure, backed by Supervisor Dean Preston and some of his allies, is an attempt to make inroads on the city’s housing shortage by freeing up more of the existing supply of units that are currently unoccupied.

It’s also an effort to emulate taxes imposed in other expensive cities, including Oakland and Vancouver, British Columbia. Berkeley is considering placing a similar tax before voters as well.

“Even among folks who may disagree on other issues, I think everyone’s really frustrated by prolonged vacancies,” Preston told The Chronicle. “This is the strongest tool to address that problem.”

The January analyst’s report, which was prepared for Preston, found that San Francisco had more than 40,000 vacant homes in 2019. Many of them were listed for rent or sale, or they were empty because a tenant hadn’t moved in yet, the unit was intended for part-time use or it was unoccupied for some other reason such as ongoing repairs.

However, the fastest-growing segment of vacant housing identified by the report was more than 8,000 empty units that were “sold but not occupied.” That category may include some homes that owners bought “as investments or cash havens with no intention of moving in or renting them out,” the report said.

The proposed tax would range from $2,500 to $5,000 in the first year, depending on the size of the unit. It would increase to a maximum of $20,000 in later years. The tax would apply to owners of vacant homes in buildings with three or more units, if the units in question had been vacant for more than 182 days. Single-family homes and duplexes would be exempt.

“This is targeted at the real estate speculators who have the business practice of buying and holding these properties,” Preston said. “They’re just not really in the single-family home space in San Francisco and haven’t been.”

Money raised from the tax would be earmarked for affordable housing acquisitions and rent subsidies for seniors and low-income households.

The potential ballot measure comes as San Francisco sees a huge slowdown in construction and Mayor London Breed is looking at strategies to jump-start residential building. The city is also facing state mandates to plan for the construction of 82,000 new homes by 2031.

JD Morris is a San Francisco Chronicle staff writer. Email: jd.morris@sfchronicle.com Twitter: @thejdmorris

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