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LA Takes Step Towards Taxing Vacant Units

A post on a street light in Boyle Heights listing rooms for rent. (Chava Sanchez/LAist)
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Los Angeles is in a housing crisis. Yet up to 100,000 units, many of them luxury apartments, sit empty.

City lawmakers think a vacancy tax could help. At today's council meeting, they voted 13-0 to ask City Attorney Mike Feuer to draft a ballot measure. But before landing on ballots in November, the proposal would have to survive another council vote by July 1, and then garner two-thirds support at the polls.

The tax is modeled after a similar measure passed by Oakland voters in 2018, which penalizes property owners whose units are in use for fewer than 50 days. Oakland's Measure W garnered 70% of the vote; it exempts low-income and non-profit owners.

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L.A.'s tax could garner as much as $150 million annually for affordable housing, renter protections or affordable housing, according to the city's housing department.


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On Tuesday, L.A.'s councilmembers voted to exclude commercial property and some single family homes from the tax. Several expressed displeasure with the fast-moving item, but Mike Bonin and David Ryu, who introduced it, argued urgent action is needed.

"The market is broken, and the disparity is affecting everything from skyrocketing rent prices to an increase in homelessness," Bonin said. He argued that the tax would push some units back onto the market, create a desperately needed revenue stream for the city, and could counteract the commodification of housing.

In recent weeks, California politicians have expressed alarm that corporate landlords could swoop in and buy up single-family housing -- in a repeat of the aftermath of the 2008 financial crisis.

"We now have corporations and family trusts that are perfectly comfortable with leaving buildings unoccupied," Councilmember Mitch O'Farrell said at the meeting.

The report from the city's Housing and Community Investment Department estimated the citywide vacancy rate is between 6% and 7%. Pricier units are more likely to sit empty, third-party data shows.

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The vast majority of recently-built and under-construction units in Los Angeles are in the high-end of the market, while the city has been losing low-income housing, data from the real estate information company CoStar indicates.


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