New Report on San Francisco Experiencing Huge Increase in Vacant Homes

Between 2019 and 2021, the number of vacant homes in San Francisco increased by more than 50%, which is a reflection of the pandemic-era exodus from the city.

As reported recently in the San Francisco Examiner, the Budget and Legislative Analyst’s office released a report that found that San Francisco had over 61,000 vacant homes in 2021, or an estimated 15% of all housing units. That’s a major increase over 2019 when there were nearly 40,000 vacant homes, and almost triple the rate in 2013, when there were just 26,000 vacant homes.

Based on US Census data, the report comes as San Francisco is ready to vote on Proposition M, the “empty homes tax,” which is intended to discourage people from owning second homes in San Francisco or keeping them vacant as investment properties.

“In a city where the cost of housing is out of reach for most working people, and with thousands of homeless people living on our streets, it is immoral and inhumane to have tens of thousands of homes sitting empty,” said Supervisor Dean Preston, who introduced the vacant homes tax. “The dramatic increase in just two years shows the dire need for policy intervention to turn these empty units into places where people can live.”

However, the new data, like all U.S. Census vacant home information, comes with an asterisk. Those 61,000 homes are not all sitting unused. As a matter of fact, many of those homes are currently occupied, and others have since become vacant. A large percentage of those homes are vacant due to renovations or because they are actively on the market. Few of those homes would probably be subject to the vacancy tax on the November ballot.

The vacant home type with the biggest increase was the “for rent” category, going from 7,000 homes in 2019 to 17,000 in 2021. With so many more apartments vacant and on the market, average rents went down nearly 30 percent by mid-2021 as compared to pre-pandemic prices.

San Francisco’s nearly 15% residential vacancy rate is above the 10% median among nine major cities added in the report. The amount of empty units under repair is another reason why San Francisco is an outlier, according to housing activist Darrell Owens, who wrote an analysis of San Francisco’s vacant homes data last month. “That would suggest it’s probably a permitting issue,” Owens said. “For some reason, it’s taking a long time to renovate properties in San Francisco.”

Proposition M would levy a tax on homes vacant for over six months, with the tax increasing based on the square footage of the property and the number of years it has been sitting vacant. The tax excludes single-family homes and duplexes to avoid creating opposition from the real estate industry.

Owens says that the “popular appeal of the tax is that it’s aimed at the supposedly vacant high-rise buildings that people see,” rather than single family homes, which have a different cultural connotation.

The tax is estimated to impact about 4,000 units, according to a report from the city controller that was published in September and based on vacancy data from 2020. According to the report, landlords of 175 units would lower the rents to avoid paying the tax, while another 80 would sell their properties to an owner-occupier. Around 3,000 homeowners are estimated to pay the tax, which would generate about $15 million per year for affordable housing by 2026.

The new analyst’s report, on the other hand, suggests that those figures could change based on the new data and substantially higher vacancy rates for 2021.

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