Vacant and Vacancy Tax Spreading?

[ultrarunner]

Easy… follow the model used by many countries that forbid foreign purchases.

Also… don’t encourage foreigners with deep pockets to invest.

My good friend was born in Vancouver and he told me the Canadian government actually has or had programs encouraging foreign investment and even citizenship to those with significant money to invest.

The Philippines is another country where foreigners cannot buy land…

Austria has a very strict policy as do many Euro countries…

Bottom line is if cities want to encourage building on vacant parcels the cities need to stop with the roadblocks…

The reason stated across the board is declared housing crisis yet the people leaving are leaving for one of two reasons not counting family… its out of control crime and/or high cost of living.

Every sale here also comes with a 1.5% city tax on the sale price.

If a family builds a modest cabin 75 years ago it’s a slap in the face to say 6k additional tax unless you live in your cabin 180 days annually.

 

[mikester]

Vacant parcel taxes sometimes called vacancy tax is real and spreading.

$6,000 is a typical surcharge slapped on in addition to whatever property tax is due.

The triggers vary depending on how long the parcel is vacant or not occupied in the calendar year.

South Lake Tahoe is hoping to join the list having declared a housing emergency… either live in your cabin or have it rented at least 6 months out of 12 months otherwise pay an extra $6k Vacancy Levy.

A few years back many of these jurisdictions banned short term rentals such as by the week or month or even several months.

To enforce the property owner is required to submit annual declaration attesting to occupants and length of stay and subject to audit.

Some jurisdictions have taken it to include vacant land such as a building lot bought with future plans to build… these vacant parcels must now pay an extra 6k per year in addition to property tax just to hold the property.

I can’t believe this is legal on so many fronts but it is fact.

I manage a small parking lot that is leased to a car dealer for 1250 per month… the city claims it appears under utilized and sent a 6k invoice giving me a time frame to respond… no matter the rental is registered and done with a city business license and tax on rent paid.

Tahoe which has a lot of vacation cabins is in turmoil because few can meet the 6 months of 12 occupancy…

Canada also imposes this and Washington DC has similar so it’s not just a SF Bay Area thing.

You have a first world problem my friend

 

[plowhog]

That's what this is all about. Outside rich people driving locals out of the market, and making it unaffordable for them

I have not experienced the foreign investment like you describe in Vancouver, but I did read about that. It seems to me "vacancy" taxes are misapplied to fix that situation versus regulating foreign ownership. Regulations on foreign ownership would be a targeted fix, but "vacancy" taxes also sweep up innocent local residents and owners.

Seems in the cases described here, the "outside rich people" are local neighbors and friends. Have we reached the point where "other people," if they have more money than others, should be singled out for punishment? Or special taxation?

I own a ski cabin in the Sierra mountains. But suppose you are a renter in a city who has not yet bought a first home. That person views me as an "outside rich person." They rent, while I own two residences. Should I be punished? What if I am much older, worked for decades to earn money to afford that, while they are still in their early 20's and have not yet hit prime earning years? What if my wife also worked and contributed, while the other party is a single person with only a sole income? Still fair? It's a slippery slope. It's politicians pitting "haves" against the "have-nots."

The community where my cabin is caters exclusively to part time residents who love to ski, hike the wilderness, whatever. There is no industry, just a very small town. Owning a local cabin lets (us) enjoy the wilderness in ways that would be impossible if we had to drive hours each day to get there and return. My entire community was purpose built. There are not local jobs to support these cabins being occupied full time. If a vacancy tax had existed in years past, this development would not even exist today. About 80% of the cabins are part-time use. Maybe a few locals and the other 20% are retirees who finished a career in the city, sold their main house, and now live in their cabin. (Helping ease the city housing problem, btw.)

I don't think those who push for "vacancy" taxes have projected the future ramifications of stifling new developments elsewhere. The above community would never been built in the face of a vacancy tax. How does dissuading construction of similar developments in the future factor in against the claimed problem of trying to ease a housing shortage? After all, about 20% are occupied by "transplants" who moved from the city after retirement.

I am beginning to feel like these taxes are not problem-driven, but instead politicians in the endless quest to raise taxes to fund projects elsewhere. Seems the concept of working hard to get ahead is now out of favor, replaced by claims that if you have more than others, that is a "problem" that needs to be "fixed."

 

[plowhog]

They heard it from their son and his wife, who had their children in school in the Bend, OR school district.

Just by chance I was in Sacramento, CA yesterday and visited with these same friends.

I asked about whether the "litter box" was instead a hoax. They had never heard such a thing. A hoax, what? So the story obviously came from their son-- who knows, maybe he was the "perp" who started the whole thing?

I asked what other issues drove them away from living in Bend, OR. They cited school arranged overnight field trips with co-ed living arrangements with boys and girls, which they objected to. They were not punished over that, but their children did not get to participate since they had no parental control about their daughter being exposed to boys in an environment which they did not feel was appropriate nor properly supervised. Plus opposition to the local policies enacted during Covid. I don't want to touch off that whole Covid issue but that's what they cited.

 

[ultrarunner]

View attachment 861859

You have a first world problem my friend

Are you venturing a prediction more to come?

 

[ultrarunner]

I have not experienced the foreign investment like you describe in Vancouver, but I did read about that. It seems to me "vacancy" taxes are misapplied to fix that situation versus regulating foreign ownership. Regulations on foreign ownership would be a targeted fix, but "vacancy" taxes also sweep up innocent local residents and owners.

Seems in the cases described here, the "outside rich people" are local neighbors and friends. Have we reached the point where "other people," if they have more money than others, should be singled out for punishment? Or special taxation?

I own a ski cabin in the Sierra mountains. But suppose you are a renter in a city who has not yet bought a first home. That person views me as an "outside rich person." They rent, while I own two residences. Should I be punished? What if I am much older, worked for decades to earn money to afford that, while they are still in their early 20's and have not yet hit prime earning years? What if my wife also worked and contributed, while the other party is a single person with only a sole income? Still fair? It's a slippery slope. It's politicians pitting "haves" against the "have-nots."

The community where my cabin is caters exclusively to part time residents who love to ski, hike the wilderness, whatever. There is no industry, just a very small town. Owning a local cabin lets (us) enjoy the wilderness in ways that would be impossible if we had to drive hours each day to get there and return. My entire community was purpose built. There are not local jobs to support these cabins being occupied full time. If a vacancy tax had existed in years past, this development would not even exist today. About 80% of the cabins are part-time use. Maybe a few locals and the other 20% are retirees who finished a career in the city, sold their main house, and now live in their cabin. (Helping ease the city housing problem, btw.)

I don't think those who push for "vacancy" taxes have projected the future ramifications of stifling new developments elsewhere. The above community would never been built in the face of a vacancy tax. How does dissuading construction of similar developments in the future factor in against the claimed problem of trying to ease a housing shortage? After all, about 20% are occupied by "transplants" who moved from the city after retirement.

I am beginning to feel like these taxes are not problem-driven, but instead politicians in the endless quest to raise taxes to fund projects elsewhere. Seems the concept of working hard to get ahead is now out of favor, replaced by claims that if you have more than others, that is a "problem" that needs to be "fixed."

I think you are right… the stated goal is more housing but a vacancy tax and severe restrictions on rentals and even being able to build are having the opposite affect…

 

[mikester]

Are you venturing a prediction more to come?

 

[dodge man]

We visited Sedona Arizona a couple of years ago and rented a house for a week. This is the first time we got an anti VRBO vibe. It was a nice neighborhood and I can understand the resentment. It used to be VRBO was people with a second home renting it out when they weren’t there and of course where money is to be made corporations will step in.

There were several of these signs up in the neighborhood we stayed. We stopped and talked to a local resident who was not a full time resident but spent several months there a year. We asked him about the signs. He said he didn’t mind the short term rentals and then talked for 5 minutes how he hated short term rentals.

 

[2manyrocks]

Bottom line is if cities want to encourage building on vacant parcels the cities need to stop with the roadblocks…

The reason stated across the board is declared housing crisis yet the people leaving are leaving for one of two reasons not counting family… its out of control crime and/or high cost of living.

Every sale here also comes with a 1.5% city tax on the sale price.

If a family builds a modest cabin 75 years ago it’s a slap in the face to say 6k additional tax unless you live in your cabin 180 days annually.

You'd think the politicians would get it that their own building permits, zoning, codes, and taxes are a substantial reason for the lack of affordable housing contributing to the homeless problem which has radically undermined city life in Oakland and San Francisco.

I think one of the reasons government is hostile to affordable tiny homes in particular is they think they will cut into their property tax base, but the government will still incur the cost of schools, police and other government services.

 

[plowhog]

You'd think the politicians would get it that their own building permits, zoning, codes, and taxes are a substantial reason for the lack of affordable housing contributing to the homeless problem

There is an article in the LA Times this morning about how CA has spent billions in the last 5 years on the homeless problem but with little-to-none oversight or accountability how the money was spent. Or, if the billions spent was even effective-- at anything. I won't link to it since the site requires revealing an email address to read the article. But you could go to latimes.com to read it.

But, in the same period while billions were spent, the ranks of the homeless swelled by another 180,000 people. Seemingly good evidence the money was not well spent. And without oversight, how do you know?

So, with little oversight on billions in spending, there is continued thirst on the "taxation side" to vacuum up another $6,000 from Ultrarunner because of his vacant parcel.

Reminds me of a famous quote from Ronald Reagan:

"The Federal Government budget is like a baby's digestive tract. A healthy appetite at one end, and no responsibility at the other!"