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May 9, 2022 - Epoch Times
28:22
Behind San Francisco's Vacancy Tax | Tony Hall
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A proposed vacancy tax in San Francisco, which could go into effect in the year 2024, would charge real estate owners a tax if their property is vacant for more than six months.
This is nothing more than an attempt, the first opening a door to the confiscation of private property.
This goes against one of the very basic tenets of our American way of life, the concept of private property.
This opens the door to attack that concept.
And ultimately will lead to the confiscation of private property on different moral grounds or whatever they're trying to say.
My guest today is Tony Hall, former County Supervisor of San Francisco.
Today he'll explain the details of this proposed vacancy tax and what it means for homeownership in San Francisco.
There's no way 10,000 to 11,000 units are going to bring in the 40 million a year that they're promising.
This isn't about housing or subsidized housing or money for it.
This is about your property and getting the government to get control of that.
I'm Siamai Korami.
Welcome to California Insider.
CMC, thank you for having me back.
And before we go further, congratulations on everything you're doing for California.
You're really putting some good stuff out there.
Thank you.
Thank you so much.
We want to talk to you about a topic that we have been covering housing and housing shortages.
Rent's going up, and a lot of people have been telling me we have a lot of empty houses, empty apartments, empty houses that foreign investors or other investors are buying.
Something that's happening in San Francisco now, they want to do a vacancy tax.
We want to know more about this.
Yeah, that's a tax that has been initiated or put forth by one of the supervisors, a guy named Dean Preston.
Nice guy.
Good guy.
Democratic socialist.
So, as long as you understand where he's coming from, this thing I'll be able to explain it easy.
He's a socialist.
Out and out socialist.
Has very little personal knowledge of the free market and how that affects True housing, rents, jobs, mortgages.
So there's very little respect now.
The vacancy tax that he's putting forward is to take place in 2024.
Make no mistake about it.
With the vacancy tax that he's putting forth, and evidenced by other places they've done this, this is nothing more than an attempt, the first opening the door to the confiscation of private property.
This goes against one of the very basic tenets of our American way of life, the concept of private property.
This opens the door to attack that concept and ultimately will lead to the confiscation of private property on Different moral grounds or whatever they're trying to say.
The vacancy tax that he's proposing in San Francisco is being taken through the signature process.
Well, I'll get into that in a minute.
What it basically calls for is if your residential unit, the house you own, the apartment or the condo you own, if that's vacant for six months or more, you're going to pay a tax.
Okay.
The tax is, they're very clever how they go about this, and this is why I break this down for you, because this is what I always tell people, look behind the legislation.
It skirts Prop 13.
Prop 13 protects homeowners against Increased local taxes based upon the assessed value of their property.
Well, this doesn't go there.
This says, we're going to tax you based upon your square footage.
If it's vacant, if you own a home or a condo, if that's not used for six months, we're going to tax you.
We're up to a thousand square foot residence.
Your tax is going to be $2,500 a year.
If you have 1,000 to 2,000 square foot residents, it's going to be $3,500 a year.
If you have anything over that, it's $5,000 a year.
Also, if it's vacant for a second year, it doubles.
So we're looking at $5,000, $7,000, and $10,000.
If it's vacant for a third year, guess what?
It doubles again.
So we're looking at $10,000, $15,000, and $20,000.
Here's the interesting thing about his legislation and why he's taking it the way he is.
He's taking it through the signature, the public signature process, which requires by the state 9,000 signatures to put it on the ballot in November, this coming November.
He's not taking it through his comrades on the board of supervisors, his colleagues, I should say.
Why?
Because at the board level, it requires two-thirds of the vote to forward it on to the ballot in November.
That means he's got to have public comment, the public gets to weigh in on it, all kinds of debate at the committee level before the board votes on it.
Knowing the board in San Francisco, they probably would vote on it, right?
Because they're pretty far to the left.
They do all this under the guise of providing housing and money for subsidized housing.
They're saying that they can raise $40 million a year and also put on the market some 1,700 vacant properties.
So can you explain what does this mean?
How would this impact?
Yes.
They're claiming that they can provide $40 million a year To subsidized housing and that they can bring some 1700 units on the market for long-term housing for the underprivileged or wherever they're going to use it.
Well, let's look at the numbers.
The last general census, U.S. Census done...
So they're going to use the money for the underprivileged?
Yes, for subsidized housing for whoever needs it.
That's what they're claiming.
In San Francisco you have 409,000 residential units, homes, apartments, condos, whatever you want, 409,000.
The last census snapshot in time showed we had 35,000 empty residences.
35,000.
Of that 35,000, that was just a snapshot in town.
That was residents that weren't lived in.
They were homes and apartments that were sold.
They were homes and apartments for the occupants who bought them, hadn't moved in yet.
They were homes that were being renovated.
They were vacation homes for people who have homes in San Francisco or residents there.
So it included all that.
Then there's a little segment of what is vacant homes that are going through probate or foreclosure or being renovated.
Those are the homes that were This tax will really find a few homes to take back on the market.
That's about 10,000 to 11,000 homes in San Francisco.
Now, number one, how are they going to get 40?
This is how it's sold to the public.
How are they going to get 40 million out of that?
It's impossible.
Out of the figures I just gave you.
So it's 10,000 homes.
You're not going to get 40 million.
On top of that, the backers of his program himself are claiming there's going to be another 7,000 units.
They're going to come in the market because people just say, well, I'd rather pay the taxes or I'd rather give up the unit.
Let it go to affordable housing.
It's not going to happen.
So together, they're looking at about 17,000 units to put back in the market.
That's half of all units are available in San Francisco.
So he's not after just the homes that are vacant because they're either run down or people have abandoned them.
He's trying to institute an attack on private property.
He's going after the concept of private property.
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Now we will continue the interview.
Also a question I have is how would they figure out which one is vacant and which one is not?
Well I just told you they go by the census.
What the census didn't tell you was...
But on a yearly basis they will do a survey?
Oh yeah, yeah, yeah.
They would start with the last census which was two or three years ago and then there would be a yearly basis to determine.
But those homes, those surveys take into account everything, everybody.
People that are sold a home but the guy hasn't moved in, just like I said.
So the real fertile ground for that movement is in about 10,000 to 11,000 units.
There's no way 10,000 to 11,000 units are going to bring in the 40 million a year that they're promising.
That's number one.
They know that.
This isn't about housing or subsidized housing or money for it.
This is about your property and getting the government to get control of that.
First of all, people from that mindset consider anybody wealthy and privileged who has a piece of property.
Anybody who owns homes are privileged and therefore they shouldn't be allowed to be vacant on the market because there's people that need a home.
Why is he taking it to the public signature, as I explained to you, because through his own colleagues in the board?
So do you think that in this process, if he takes it to the board, there are more sophisticated people there?
There's going to be some questioning.
It'll be exposed for what it is.
It's easier to go to the public.
His numbers don't add up.
So what he does, very clever, they take it to the public to get 9,000 signatures.
That's easy.
If he marries his signature gathering effort with, say, the effort to get rid of the district attorney up there, Chesa Boudin, he's going to get 9,000 signatures.
The same group collects the signatures.
He's going to get 9,000 signatures.
It's easy.
When it goes that process, you only need 9,000 signatures to put it on the ballot.
In that legislation, you have to know what's behind it.
You have to look at what's behind it.
Once that's approved, say it gets on the ballot and it's approved, what people don't realize, that legislation gives the Board of Supervisors to change the terms of that deal any time they want.
It doesn't need to go to public vote again, ever.
And that's written in the legislation.
So what do you mean by changing the terms?
Well, they can say instead of...
Six months empty.
Instead of six months empty, we're going to make it six weeks empty.
They did this in Washington, D.C. Instead of $5,000 a year, we're going to charge you $10,000 a year.
So they can change the terms of the deal without it going public at all.
It's decided by the Board of Supervisors once it's voted in.
To get it voted in, he's doing a very clever thing.
He's exempting owners of one and two units.
You're saying above three.
I saw that.
Well, actually, the sale is, look, let the big guys who got 20, let the property owners who have 25, 30, 40 units in a building, let them pay it.
They're the fat cats.
They're privileged.
Let them pay it.
So the average guy with one or two units, you know, if it does good, maybe I'll vote for it.
So they're trying to get the numbers up by approaching it that way.
What they're going to do once that's in there The board has the right to change that and say, guess what, you have one or two units, you're exposed to it.
You have one or two units, now you're going to pay a tax.
So all the details can be changed.
All the details of this program can be changed.
Now, let's ask ourselves, are these people really for housing?
And raising money for subsidized housing, are they really?
Is $40 million a lot for San Francisco?
Well, I'm getting to that point.
We're mandated by the state to build 80, I think it's 82 or 85,000 units within the next seven years.
That's part of the state mandate on affordable housing.
San Franciscans, just in 2017 to 2019, We have approved bond measures and the building up to $1.8 billion in housing.
We've already committed to that.
So it's not that the money isn't there to build affordable housing.
In all fairness to the mayor, she has brought three proposals before the board of supervisors to increase housing.
She said, let's streamline the process on all units of all housing of 25 units and more.
And in exchange for that, we give a higher affordable housing ratio.
The board voted it down.
They voted all three housing programs down that this mayor, who's left of center, So the board itself is not interested in providing more housing.
This whole thing is a camouflage to set up one of the avenues that they can attack the principle of private property, the concept of private property, and have the government tell you what you can do with your property.
Now, what do you think will happen to property owners in San Francisco?
Probably a lot of people would want to Well, a lot of property owners in that 11,000 I was telling you about, the one area that they can really get people would be in that area where people are old and they're in home care and their family gives it up or whatever.
Yeah, some of them will give it up, but the majority won't.
Certainly not enough to raise $40 million a year and certainly not enough to make a difference when we're already spending $1.8 billion on affordable housing.
So it's a drop in the bucket.
This is a smokescreen.
The whole thing is, it's a very insidious plan for the government to get a hold of your property and tell you what to do with it.
That's all it is.
It'll get worse and worse and worse.
So let's look at other jurisdictions where it's happened.
They've done it in Canada and Washington, right?
Well, yeah.
In California, you're bound by Prop 13, so it's very interesting they go around and say it's not on assessed value, it's going to be on square footage.
I mean, that's in itself kind of a joke.
In Oakland, A couple years ago, I think three years ago, they instituted the...
If it was vacant for 10 months or more, they put a 1% tax, which I think became a 3%.
I'm not sure on that.
But anyway, they did the vacancy tax in Oakland.
Oakland, in the fine prints, said it supplied everything.
Anything residential.
Units, housing, and vacant lots.
Well, when it...
The fine print came out and the tax was already in existence.
There's an uproar now.
They want to do away with it because people who have vacant lots in Oakland are not...
What are they going to do with it?
These are people that they want to build their dream home there.
Maybe they want to get out...
They may not have money to build it.
They're getting taxed on it.
And so that program has flopped in Oakland.
The proponents of this concept also cite Vancouver as a great example.
Let's look at Vancouver.
In 2017, they did the same thing that they want to do in San Francisco.
And they started out at 1%.
The market in 2017 in Vancouver, the real estate market, was collapsing.
It had a bad, bad turn.
The vacancies went up because people were abandoning their houses.
They were moving out of Vancouver.
So the results from the vacancy tax were up for one year.
Then the market started to correct itself, and the results for the vacancy tax money, the money that came in, went down.
So what does the city do?
They upped it to 2%.
Still kept going down because the market got better.
More people were staying in their house.
Then they upped it to 3%.
So it's a matter of them controlling your property, not raising money to do affordable housing.
That's the smokescreen.
And all these jurisdictions, the money they're spending for affordable housing dwarfs what these people think they're going to raise.
So there's something to it.
If you look at Washington, D.C., one of the classical misled or misguided cities in the country, They put a 5% vacancy tax across the board on any unit that is vacant more than 30 days.
Wow.
Strict.
What happened?
The only way it could fly is if they set up an online registry where people had to, by law, Register their house as vacant for 30 days or pay the 5% tax.
They encouraged a program where neighbors would turn in neighbors.
I mean, it's been a total flop.
So that's going nowhere.
On top of that, they're trying to do something else there to counterbalance the loss in revenue.
It's been done in the city of Paris.
Paris instituted a long time ago.
Complete flop.
They've never made anything out of it.
The last time that the vacancy tax was collected there, it was 30% below what their original expectation was.
Barcelona is now, instead of collecting the tax, they're impounding the houses and putting them on the open market and selling them for half of the value.
It's a concept, CMAC, that's not about housing.
It's a concept that is about getting your house.
So essentially what they're doing is for raising a little bit of money.
So essentially this is going to not raise much money because they're already spending a lot more.
And they're not able to build with the money they have.
Right.
And they are using this to find a way to, in the future, control and regulate your private property.
Well, yes.
This is what the socialist movement is all about.
It's control of private property.
And this is the way you get your foot in the door.
And all this vacancy tax movement, no matter where it's been instituted in the world, is coming from the socialist mindset.
That has very little respect for the open market and how the open market regulates rents, mortgages, cost of living, and everything else.
So it's a social...
Make no doubt about it.
So essentially the government can tell you what to do with your property.
Exactly.
You're not allowed to do this.
Exactly.
And it's, again, they push it off as being, well, it's the wealthy privilege they're going to pay the freight.
That's not true.
That's not true.
Everybody's going to pay the freight who has a house.
And, I mean, let's get back to the concept of private property.
It's guaranteed in our Constitution, not only the United States Constitution, but by the state of California.
Under Section 1 and 1A, you have the right to enjoy.
You're paying taxes on that property.
You have the right to enjoy freedom of expression, association, and especially when it comes to your private property.
This is the way they're attacking that.
So this is not about a vacancy tax that's going to do any good for anybody.
It's a drop in the bucket as far as what communities are already spending.
What this is, is a tax Set up to fool the public, to vote for it, to get in for the government, local government, telling you how you could use your property.
That's all it is.
Now, you mentioned this is a socialist agenda.
So what is this going to do?
How does it impact the private property?
Well, it impacts those number of units that either pay a tax or they can take over.
If the bill should pass, they will go after certain properties that have been abandoned.
Or whether they're in probate, or whether they're in some kind of difficulty, or the owner is now in a senior care facility or something.
They'll go after those properties if the tax passes.
So now you've got the government telling people who formerly made their own decisions about their own property, and now you've got the government telling, we're going to tax you.
We're going to tell you what to do.
We're going to tell you what to do.
We're going to extract the tax.
And this is going to go a long way to solving our affordable housing solution, or affordable housing problem.
I've heard them even talk about, we're going to take that money and apply it to homelessness, as if you need any more money going into homelessness in San Francisco.
It's not about that.
This is about a step of the government telling you how you're going to use your property.
Do you think this is going to impact how we live in this country?
Because this is a big...
If it's passed across the country...
Yeah, of course.
In San Francisco, anything goes in San Francisco, CMAC. And it's a very wealthy city, as I think I've alluded to before.
It's not going to affect things there in the long haul.
It just means we're moving, one city is moving closer to a socialist agenda.
If it should pass...
Nationwide, if this type of thing grows from community to community, yeah, we're in trouble.
We're one step closer to a socialist government-run society.
I don't know how else to put it.
It's an insidious, camouflaged approach which is really an attack on private property, the concept of private property.
And they'll go crazy when they hear this because they know Number one, they know it's the truth.
That's why they're doing it.
Number two, they've got every excuse and reason in the world.
Why they should do it.
We've got homeless people on our street.
This is a drop in the bucket to the money we're spending.
And if they were really concerned about housing, they would have approved Mayor London Breed's last three proposals for affordable housing.
They're not interested in more housing.
They're interested in control.
This board has never, this current board, has never voted anything For affordable housing or new housing, anything related.
They're not interested in that.
They're interested in telling people how to use their property.
That's where they're coming from.
What about the ballot?
How can people...
Well, that's when people should...
Well, don't forget now, it's got to be interpreted how it's put on the ballot.
And we have a city attorney Right now, David Chu was the author of Statewide Rent Control for California.
So he's going to word that initiative on the ballot as soft as he can.
He'd like to see this thing pass.
And I don't think I'm speaking out of school by saying that, and if I am, it's too bad.
There's a lot of people in San Francisco who would like to see this thing pass.
It gives the government more control over what they consider the toys of the privileged, to own a house.
You know, it's not that at all.
But that's something very basic, owning a house or having a house.
It's not that privileged.
Not at all.
It's part of the American dream.
Again, understand where it's coming from.
It's not coming from Americans for Freedom.
This is coming from the Socialist Party.
Dean Preston is a member of the Democrat Socialist Party of California.
His whole life has been working that way, and I don't think I'm speaking out of school with that.
So now what do you tell those average San Franciscans that are going to vote on this?
Read the legislation behind it.
Read the legislation.
Number one, there's no way in the world they're going to come up with 40 million a year.
There's no way in the world they're going to confine their outreach Or the tax to those houses which have been abandoned or are being renovated or where the owner has left him because he's in some kind of care or something like that.
There's no way they're going to limit that to that.
It doesn't say that in their legislation.
It talks about we can do it in 17,000 homes.
Well, that's half of the vacant homes in San Francisco.
If someone has a home and they're selling it, the new owner hasn't moved in, They're going to be exposed to it.
See, that census that they're talking about doesn't take into account the houses that have been vacant for six months.
It doesn't take into account the houses that are pending sale with new owners coming in.
It's a snapshot in time.
So we have 40,000 vacancies at any one time in San Francisco for a myriad of reasons, of which only maybe 10% are even fertile ground for these guys to go after, or at least in their minds.
I don't think that things should happen at all.
But in their minds, the only thing they've got to work with are the 10,000 or 11,000, and half of them are not valid.
They're going to be constitutionally challenged.
Now, do you have any other thoughts for our audience?
For the audience on this?
Don't vote for it, folks.
Don't be fooled by this one.
This is a smokescreen.
This is a smokescreen to get their foot in the door on the concept of private property.
Your freedom to enjoy your property as you see fit.
This is the first step to them opening the door and saying the government's going to tell you how to use your property.
Because, proven, this is not going to stay at the level of what they're talking about.
Otherwise, they would have written stuff in the legislation that said any change has to be voted on by the public.
They haven't done that.
Tony Hall, former County Supervisor of San Francisco, it was great to have you on the show.
Thank you.
Thanks, man.
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