{"id":2114,"date":"2022-03-28T10:00:00","date_gmt":"2022-03-28T14:00:00","guid":{"rendered":"https:\/\/www.deeds.com\/articles\/?p=2114"},"modified":"2024-04-25T23:18:46","modified_gmt":"2024-04-26T03:18:46","slug":"cities-zero-in-on-empty-homes","status":"publish","type":"post","link":"https:\/\/www.deeds.com\/articles\/cities-zero-in-on-empty-homes\/","title":{"rendered":"Cities Zero In on Empty Homes"},"content":{"rendered":"\n
\"An<\/figure><\/div>\n\n\n\n

Vacant \u201cZombies\u201d? Someone\u2019s Investments?<\/em><\/strong><\/p>\n\n\n\n

More than 16 million homes in the United States are empty. Right in the middle of a painful housing shortage. What is going on?<\/p>\n\n\n\n

One issue involves mortgage default. A few people are starting to walk away from their mortgage debt, now that lenders are allowed to foreclose on borrowers<\/a>. There are other reasons \u2014 owners moving into care settings, people holding second homes, or investors accumulating real estate as a store of value \u2014 that account for empty homes.<\/p>\n\n\n\n

Census data indicate high rates of vacant homes in Vermont, Maine, Alaska, West Virginia, Alabama, and Florida. Some, of course, are vacation homes. Some are on the market, waiting for buyers \u2014 but usually not for long. Some have been collecting cobwebs for years<\/a>.<\/p>\n\n\n\n

Whatever the reasons, something needs to be done. And cities are being pressed to bring unattended living spaces back to the market for people who need them.<\/p>\n\n\n\n\n\n\n\n

Mortgage Debt in Covid\u2019s Wake<\/h2>\n\n\n\n

While the U.S. Census defines vacant<\/em> broadly, the term unoccupied<\/em> is generally used to mean a furnished home (such as a vacation home), whereas vacant can mean foreclosed and abandoned.<\/p>\n\n\n\n

As for the latter group, the numbers in Maine and Connecticut are on the rise. Maryland and Iowa, too, are witnessing the rise of these so-called zombie homes<\/a>. Across the country, nearly 230,000 U.S. homes are in the process of foreclosure, up more than 30% in a year\u2019s time. Thousands have reportedly been abandoned to the mortgage lenders. And bank action on an abandoned house title can lag for a year or more, leaving the home empty for a while.<\/p>\n\n\n\n

It\u2019s a tragedy we\u2019ve awaited with concern throughout the past year. When the moratorium on foreclosures was lifted in the second half of 2021, the clouds of default and foreclosure began to form.<\/p>\n\n\n\n

The problem last spiked in 2008, when banks were overwhelmed by defaults. But the market is much more energetic today, and many people\u2019s homes have increased in value. That is sparing the market from a full-blown crisis.<\/p>\n\n\n\n

In some pockets of the country, the problem has<\/em> reached a critical mass. Consider the City of Rockford, Illinois, where more than 6,000 homes are vacant for various reasons. Rockford frequently deals with related problems: pranks, squatters, or fires. Frustrated city officials have budgeted for the demolition of scores of homes every year.<\/p>\n\n\n\n

Early Vacancy Tax Adopter: Washington, D.C.<\/h2>\n\n\n\n

Back in 2011, Washington, D.C. made property taxes higher for vacant storefronts and homes. Since that time, several other jurisdictions have followed. A number of Pennsylvania cities, for example, have waded into the land value tax<\/em> concept, to try to improve struggling areas and raise revenue.<\/p>\n\n\n\n

Vancouver, Canada has lots of empty apartments and condos. Many are accumulated by international investors. Vancouver has placed a surtax amounting to an additional 1% on non-primary residences.<\/p>\n\n\n\n

The strategy of these cities is interesting to any local government struggling with a lack of available housing. And leaders are typically most willing to strike while the housing market is hot.<\/p>\n\n\n\n

With so many cities short so many units, we can expect to hear more about policy makers clamping down on foreclosed zombies and acquisitive real estate collectors. In California, for example, the debate is very much a front-burner issue.<\/p>\n\n\n\n

San Francisco Seeks Funds From Absentee Condo Owners<\/h2>\n\n\n\n

About a tenth of San Francisco\u2019s housing units have absentee owners. Again, to be clear, not all of these are abandoned; some are waiting for renovations, and others are second homes. But the city, struggling with sky-high housing prices amidst a homelessness crisis, is ready to use its tax authority to speed the return of empty condo and apartment units back into the market.<\/p>\n\n\n\n

\u261b<\/em> <\/em>Remote work means less need for office buildings. <\/em><\/strong>Can former office spaces be repurposed as city housing<\/em><\/a>? Converted business space could mean more housing units where they\u2019re needed most.<\/em><\/strong><\/p>\n\n\n\n

If a November ballot measure passes, owners who leave San Francisco units stranded for six months or more will be charged an \u201cempty homes tax\u201d proposed by Supervisor Dean Preston.<\/p>\n\n\n\n

Nearby Oakland already taxes empty homes \u2014 all <\/em>empty homes, including detached houses and townhomes. The proponents of San Francisco\u2019s ballot initiative, which focuses on multi-unit buildings, insist their plan is fair. They argue that the condos and apartment buildings of San Francisco are the core of the vacancy problem.<\/p>\n\n\n\n

And yet, many of San Francisco\u2019s vacant units reportedly stand in the areas where townhomes and single-unit homes predominate. Some \u2014 indeed, a growing number \u2014 belong to investor owners<\/a>. Why, some are asking, won\u2019t they be taxed for their extra homes, too?<\/p>\n\n\n\n

Granted, it\u2019s possible that supply-chain delays and worker shortages are responsible for a certain portion of the vacancies.<\/p>\n\n\n\n

In any case, the goal in 2023 is to collect $38 million a year and shift the funds into financially accessible housing. If enough voter signatures can be gathered by Jul. 11, 2022, affected unit owners will face new taxes somewhere between $2,500 and $5,000, based on square footage. By the third year of owner absenteeism, they\u2019ll be paying between $10,000 and $20,000 per year. The investor-owners of San Francisco will then have a strong reason to put their units on the market for renters, or sell them to hopeful buyers.<\/p>\n\n\n\n

Each year, the owners would submit a statement to San Francisco\u2019s assessor recorder declaring the status of their units. Some real estate speculators are expected to simply fork over the extra taxes if the measure passes, betting on the Bay Area\u2019s property values to keep going up.<\/p>\n\n\n\n

Keeping Our Communities Safe<\/h2>\n\n\n\n
\"Image<\/figure><\/div>\n\n\n\n

Do you (or does someone you know) need to leave a house unoccupied? It\u2019s always wise to have someone check in on an empty house. Why? Unattended houses can quickly fall into disrepair. Drips, broken pipes, security breaches\u2026 Eventually, the value of a home deteriorates, and so can the surrounding real estate.<\/p>\n\n\n\n

Water inundation and fires are not uncommon. This is why most insurance policies only cover vacated homes for a limited time. Home insurance policies have vacancy clauses<\/em> that specify when coverage stops. Some companies offer special policies for vacant and unoccupied houses<\/a>.<\/p>\n\n\n\n

If the home will be unoccupied only temporarily, then hiring a house-sitter is an excellent idea. The sitter can take various precautions, such as:  <\/p>\n\n\n\n