Another gut-punch: LA City Council mulls apartment vacancy tax ballot measure

A city report found that high-priced units are disproportionately vacant

Los Angeles /
Jun.June 17, 2020 11:15 AM
Councilmember Mike Bonin (Credit: Joe Scarnici/Getty Images)
Councilmember Mike Bonin (Credit: Joe Scarnici/Getty Images)

Empty units may cost Los Angeles landlords more than just missed rent in the future.

The L.A. City Council directed city lawyers to draft a vacancy tax ballot measure this week, according to the L.A. Times.

Proponents argue that taxing landlords for empty apartments will motivate them to rent them instead of holding out for higher rents.

The L.A. Housing and Community Investment Department estimates that there are between 85,000 to 100,000 empty units in the city, a vacancy rate of 6-7 percent. Higher-priced units are disproportionately vacant compared to mid- and lower-priced, HCID found.

“Further, neighborhoods with a greater proportion of new, high-end units have some of the highest vacancy rates in the City, while those areas experiencing less residential development have vacancy rates consistently below 5 percent,” according to the report.

The city is around half a million affordable units short of demand and around 67,000 people were experiencing homelessness as of January. The coronavirus pandemic has worsened the financial burden on many renters in the city and has also stretched some landlords financially, particularly smaller family outfits.

HCID estimated that a flat tax similar to one adopted in Oakland would generate up to $150 million for the city each year. Another study estimated around $128 million in tax revenue.
Landlords and affiliated groups strongly voiced opposition to a vacancy tax.

One anonymous landlord wrote in a letter to the Council that they were unable to rent two units recently because “people just are not interested in moving” during the pandemic.

“This initiative is simply another unworkable solution to add to the unworkable solutions forced on rental property owners within the last 2 months…” they wrote. [LAT]Dennis Lynch


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