Should landlords be taxed for keeping rentals empty?

With Election Day fast upon us, it's interesting to see what kinds of measures are on local ballots. Sometimes they address issues that are important to the local community – but sometimes they reflect only the political biases of local politicians and bureaucrats.

If you are looking for such examples, it is quite fitting that you take a look at the issues on the ballot in Berkeley, California.

On Election Day, voters there will see "Measure M," which sounds good if you don't look at it too closely. On the surface, it would force landlords to rent their vacant properties. An aside to it is that if the measure passes, the city would reap a windfall in new income from the new tax imposed on non-complying landlords.

The idea behind the proposed tax is that landlords are holding their rental units off the market to force rents up. According to studies of the issue, there is no evidence to show this is true.

Despite that, supporters believe that when landlords see how much the fines would cost them, they would put the units on the market for rental.

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How much would it cost them not to rent the properties? Measure M would tax housing units that are vacant for 182 days in a year. The tax would be $3,000 for the first year and $6,000 for subsequent years. This would apply to duplexes, condos, single-family houses and townhouses.

For all other units, the first-year tax would be $6,000 and $12,000 annually thereafter.

There are exemptions – homes under construction and owners who live in their property. With those figures in mind, city officials calculate there are at least 1,100 rental units that would be affected, which would bring in $3.9 to $5.9 million annually for the general fund.

It's a nice financial haul, considering that all cities complain that they need more income, and Berkeley is no different. But the purpose of Measure M is not to raise money, it's supposed to be to get more housing units on the market for people who need a place to live.

It's reported that only five of the nine city council members voted to put the measure on the ballot. Some of the naysayers said property owners are holding units off the market to drive prices up. Others said that Measure M addresses the "fact" that Berkeley has too many vacant properties.

However, an examination of the situation reveals that simply isn't true. A new draft of the city's housing element shows that the problem is too few vacancies, not too many – and it's not just Berkeley, it's the entire San Francisco Bay Area.

While local politicians and citizen groups have discussed the issue of housing from a whole variety of points of view, the conclusion is that Measure M is not the solution. They say that to adequately solve the housing crisis, the first aim should be to speed up the approval of new construction. That action alone would relieve the housing pressures.

But Measure M doesn't address that. How Berkeley voters respond to this question will be seen on Election Day. My suspicion is that it will pass, given the antagonism against landlords. Unfortunately, they are not the enemy.

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