Week in Insights: San Francisco’s Vacancy Tax Will Be Major Test

Curated by Daniel Xu

San Francisco is infamous for its expensive real estate and its unhoused population. To address those issues, voters last year approved Proposition M, which will tax owners of vacant residential properties starting on Jan. 1, 2024.

The underlying policy logic is that property becomes vacant long-term when landlords intentionally set rent much higher than what current supply and demand supports.

The initiative aims to encourage property owners either to reduce the rent they ask until a suitable tenant can be found or sell the property. In the latter case, the city itself may purchase properties ...