LA Landlords Who Let Apartments Sit Vacant Could Be Taxed

There are more than 110,000 empty rental units in Los Angeles. Filling those spaces won't solve the housing and homelessness crises, but some people think it might help chip away at them.

L.A. City Councilmember Mike Bonin introduced a motion Tuesday that would tax landlords who leave rentable units vacant.

At last count, there were about 111,810 empty housing units in the city, as reported by the 2017 American Community Survey of the U.S. Census. According to Bonin's motion, the city needs about 500,000 units.

Beverly Kenworthy, the vice president of the California Apartment Association Los Angeles -- a trade group representing owners, investors, developers, managers and suppliers of rental properties -- says that the city should focus more on examining "fees and regulations" it places on landlords, rather than implementing a tax.

"Rental housing providers do not like keeping units vacant," she said in an email. "But given strict rent control laws, and the regulations, costs, and lifetime tenancies they bring, owners face a choice: rent out the unit, or keep it vacant, even if it loses them money. The city's rent control law and the efforts to make rent control more strict across California only make this choice simpler for landlords."

Daniel Yukelson, a representative for the Apartment Association of Greater LA, agrees.

"The vacancy rate here in Los Angeles is low and represents normal 'unit churn,' and not some owner conspiracy to hold units off market," he said in an email. Bonin's motion, he adds, is "just one more example of poorly thought out housing policy that will only cause more property owners to want to exit the business."

But Bonin said that the motion wouldn't affect smaller, mom and pop landlords. Rather, he noted that "anecdotal evidence" points to foreign investors who are scooping up hot property and then not doing anything with it.

They're "leaving it vacant as an investment," he said. "That can't happen in Los Angeles."

Bonin added that if written into law, his motion would aim to restore a number of empty properties to those in need of a roof over their heads.

"Our hope is that this will then put some of those rental units back on the market," he said, "increase supply, and lower some of the rents."

Next steps:

• The Housing and Community Investment Department will report on the number of vacant, habitable housing units in L.A.
• L.A.'s Chief Legislative Analyst will examine other cities' and jurisdictions' empty homes policies, and report on how L.A. might implement something similar.

Bonin hopes to get the issue in front of voters as soon as March 2020.

Reporter Emily Elena Dugdale and Leo Duran contributed to this story.

Correction: A previous version of this story incorrectly referred to Census numbers on empty housing units as an exact count. They are estimates. LAist regrets the error.