California should tax empty homes and dead storefronts
San Diego’s vacancy tax points to a much bigger California problem
A lot of California’s problems are made worse when homes and storefronts become investments rather than places where people live, work, shop, and gather. San Diego’s Measure A is a vacancy tax aimed at one very expensive form of killing communities for personal gain.
San Diego residents will vote on Measure A next week, a controversial tax that would charge homeowners if their properties are vacant for more than 182 days a year. If passed, it would go into effect in 2027 and charge up to $8,000 the first year and $10,000 the next, with additional fees for commercial property owners. All the revenue would go into the city’s general fund.
It could amount to 5,140 homes that qualify for the tax, the measure says, resulting in about $24 million generated each year.
I will be watching this one because vacancy taxes are one of those ideas California should take more seriously.
A vacant home in a housing crisis is not neutral. It is a locked box where a home should be. The same logic applies to commercial space. Santa Monica’s Third Street Promenade is a perfect example. I once owned a theater there, and watched up close as the area tried to turn itself into a high-end, LVMH-powered shopping experience. The rents went up, the things that actually made the Promenade feel alive got pushed out, and then the economy proved unwilling to support the expensive fantasy. The start-ups left, the office space sat vacant, the restaurants and storefronts starved.
What followed was the familiar landlord standoff: empty spaces, high asking rents, and owners unwilling to rent for less because lower rents could mean painful refinancing, upside-down mortgages, and admitting the building was not worth what the spreadsheet said it was. The public gets the dead street. The landlord gets to preserve the dream valuation.
Opening the area to waxing parlors and day drinking seems like an odd rescue plan. Inviting Target and other big-box stores into the district does not fix the problem either. A street that once had energy, oddness, food, movies, performers, and reasons to wander does not come back because someone drops a suburban retail box into the corpse.
That is why vacancy taxes matter. They do not solve everything. They do not build enough housing, fix zoning, or magically restore every main street. But they do challenge the economic behavior that lets valuable space sit empty while the neighborhood dies.
Homes are for people. Storefronts are for businesses. Streets are for the community. If an owner wants to keep useful space empty during a housing crisis or while a downtown dies, the city should share in their profit.
San Diego’s measure doesn’t fix all of this, but it puts pressure on folks to open up wasted living spaces, and will show if the idea works.
If vacancy is the strategy, taxation should be the community defense.