Prop M in SF to tax property owners who leave vacant rental units – GNT NEWS

San Francisco’s Prop M is a proposed tax aimed at property owners who leave available rental units vacant for more than six months.

Proponents of the measure say it will help make more housing available, while opponents worry about some of the consequences if it passes.

The measure is a proposal created and supported by San Francisco District 5 Supervisor Dean Preston. It was modeled after a similar tax passed in Vancouver.

“This measure targets people who have business practices to keep these units open year after year,” Preston said. “That’s who’s going to pay this tax, unless they’re renting it out.”

According to Preston, there are an estimated 40,000 vacant apartments or condos in San Francisco.

This measure would affect any property owner in a building that has more than two units.

The tax would be charged if the apartment remains empty for more than six months.

The tax is based on square footage and ranges from $2,500 to $5,000 in the first two years of the vacancy and up to $10,000 in the third and any subsequent years.

According to the city comptroller, San Francisco could bring in about $20 million in the first year, if vacancies remain at about the same average as they are now. If they fall, the city will bring in less tax revenue.

Tax revenue raised by Measure M would be split between paying rent subsidies for elderly or poor families and a new fund to buy unused housing.

But Preston said he hopes it won’t bring in more tax revenue.

If Measure M works in San Francisco the way it did in Vancouver, he said the city should see its vacancy rate drop.

“The people behind this tax will be 100% happy if the city doesn’t collect a dime, because what it does instead is activate tens of thousands of homes for people who need homes,” Preston said.

There are a few exceptions to the tax, including long grace periods for buildings that may need to be vacant for a while due to repairs, such as water damage at 33 Tehama or fire damage at 901 Divisadero.

But opponents of Measure M say it’s a poorly written proposal that could have unintended consequences for some property owners.

“The owner of a small TIC, an affordable housing option for property owners, could be subject to the tax if they live in the unit full time, if one of the other tenants doesn’t. That’s a big problem,” said Charley Gross of the San Francisco Apartment Association.

TIC stands for Tenancy in Common, an arrangement that allows multiple owners to share a building.

But the main concern for members of the San Francisco Apartment Association is the possibility of a new tax at a time when they are still uncertain about the city’s recovery from the pandemic.