BY BRADEN CARTWRIGHT
Daily Post Staff Writer
Palo Alto City Council is interested in taxing vacant homes to raise money that the city could spend on affordable housing.
Councilman Greer Stone brought up the idea on Monday, pointing to Berkeley where property owners are taxed $3,000 for keeping a home vacant for more than half the year.
Apartment owners are taxed $6,000 per vacant unit, and the tax doubles in consecutive years to raise $3.9 million to $5.9 million each year for the city.
Palo Alto has about 2,000 vacant “ghost homes” that could be taxed, Stone said on Monday (March 17).
“A tax is a good way to disincentivize people from having their vacant homes and put more housing in the housing stock,” he said. “If it’s unsuccessful, we at least have money for affordable housing,” Councilman Keith Reckdahl said. “So it’s a win either way.”
Mayor Ed Lauing said a bond measure for affordable housing should also be on the table.
City Manager Ed Shikada said he could add a vacancy tax to the city’s list of objectives, but he would need to take another project off the list.
Funds depleted
The city’s affordable housing funds have been depleted by three projects that will be finished this year and another six projects that are in the pipeline, Councilman Pat Burt said.
Those projects include an 88-unit homeless shelter east of Highway 101, 50 apartments for disabled residents at Mitchell Park and 110 apartments for teachers next to the Palo Alto Courthouse.
“Those are really tremendous achievements and historic — and grossly inadequate compared to the state mandate,” Burt said.
The state required Palo Alto to plan for 2,452 homes for lower-income residents by 2031, or the city risks losing control over local land-use decisions.
Palo Alto voters approved Measure K in 2022, a business tax with one-third of the revenue set aside for affordable housing and homeless services. The business tax is expected to bring in $6.5 million in the next fiscal year, Finance Director Lauren Lai said in a report for council in January.
Other measures
Santa Clara County voters in 2016 approved Measure A, which authorized $950 million in bonds for affordable housing that’s nearly depleted.
Last year the Bay Area Housing Finance Authority considered putting a regional bond measure on the ballot but pulled out at the last minute after a lawsuit and unfavorable polling. Now the agency is pursuing a sales tax for public transportation in November 2026.
Berkeley passed Measure M in November 2022 with a 65% “yes” vote. Opponents said the tax would result in higher rents for tenants and would cost as much money to administer as it brings in.
Supporters said the measure targets corporate landlords and owners of large or multiple properties, and includes exemptions to avoid burdening small property owners.
In the same election, San Francisco voters approved a vacant homes tax that was scheduled to take effect next month. But landlords and realtors sued the city, and a judge halted the tax in October. The city is appealing the judge’s decision.
Previous attempt to target vacancy
Palo Alto has tried to restrict vacancies before at the Edgewood Plaza shopping center, where Sand Hill Property Company agreed to have a grocery store as part of a development in 2012.
The city fined the company up to $5,000 per day until a judge ordered the city to return $318,250, plus interest. The Market at Edgewood opened in December 2017.
Home owners have good reasons to leave their homes vacant, primarily from existing government regulations. California landlord tenant laws make it very expensive and time consuming to evict deadbeats. Landlords just endured several years of inability to evict deadbeats at all, due to Covid. The law demands that the property be maintained in good condition, which is expensive, imposes many duties on landlords, and taxes any profits you manage to eek out. The more that government beats up landlords, the less incentive there is to rent out property.
If you’re renting property what good reason is there to keeping it vacant? Palo Alto is a very upscale city. Rents are high and you’re not likely to get deadbeat or low income renters. And it’s not a tourist destination where you’re likely to have a second home to use for a getaway.
There are plenty of affluent deadbeats. California law prohibits credit reporting of evictions, reasoning that it would “stigmamtize” the deadbeats.
Stop crying most landlords have garbage property and haven’t updated it since the 80s sell the property and stop putting a strangle hold on the market.
Maybe time to sell the house that is going unused then? What value is the vacant home providing to you?
Have you sold a house recently? The amount of “process” is awful, especially since the fires. The difficulty in getting insurance, and the resulting difficulty for a buyer to get a loan, make it harder. It you are lazy, don’t need the money, and the holding costs aren’t too bad, the temptation to just let it sit there is strong.
Maybe it is time to sell then? What value is the home sitting vacant providing for you?
California has gone crazy! The governments are trying to eliminate private property rights.
It is no business of the government whether a property is vacant or not.
A judge recently (November 2024) struck down the “Empty Homes Tax” passed in San Francisco.
Palo Alto should keep in mind why residents are leaving their homes vacant as well as understanding there are limits on financial penalties for those who choose to travel from their abode throughout the year.
Proposals like this one are why conservatives are making progress and winning voters across the state.
How will the city know if a home is vacant? Code enforcement takes years to accomplish simple tasks, so that wouldn’t work. Maybe police would drive around and check to see if homes on the suspected vacancy list have had any recent signs of occupancy? Or here’s an idea council will like–create an office of home vacancy with a highly-paid group of city inspectors to ferret out those “in ghost homes.” Yeah, a bigger city bureaucracy!
Palo Alto becoming communist taxing empty houses and apartments to build housing for special interests groups??? Greer Stone wants us to be like Berkeley? Liberal policies have ruined the quality of life unless your rich.
Owning a home in Palo Alto means that you’re rich!
Look around – quality of life is already ruined for those who aren’t rich and it is clear from your comment which comment you belong to or aspire to being to. People keeping extra homes vacant in areas, pricing new people out. This way it’ll end up being a ghost town anyway
Perhaps realtors are paying Greer to help lower demand and churn more real estate. Some people may own a house and want to occupy 2 or 3 months a year. Not all houses are for rent but of the penalties and rules get so entangled just move to Los Altos or Menlo Park. Unfortunately, Palo Alto has not yet cornered the market on desirable real estate so really much to do about nothing. Perhaps Council can focus on the grade separation on Churchill and save some young people’s lives in the process rather than thinking of more obscure ways to tax people and create more bureaucracy with the tax they generate.
Cities are concocting plans to meet the state mandates for affordable housing, but what is the state going to do when a huge majority of cities fail to meet them? They’re going to have to fold their tents and admit defeat. You can promise anything to keep them happy, just don’t follow through.
This is the dumbest thing I ever heard. These owners already pay property tax and should not have to pay an additional tax on an empty home.
Palo Alto wastes your tax dollars at a huge rate, all these affordable housing millions turn into very few unit but work getting line up politicians pockets. Palo Alto badly needs Doge.
Sadly, DOGE is only going after federal agencies, but Palo Alto could sure use having DOGE sicced on its bloated regulatory process.
The purpose is to address, speculative, homebuying, and money laundering which we know occurs through real estate purchases all over Palo Alto now. It is a travesty that many of our nicest neighborhoods are now standing empty while the people in our community struggle to find housing. You can literally walk down the street and if you had a problem, you couldn’t find one neighbor who lived in these houses to help. Everybody wants to live together and be good neighbors, but ghost houses are destroying the fabric of our community. So glad we are finally trying to do something about it.
Council member Greer Stone claims that there are 2,000 ghost homes in Palo Alto. Let’s run the numbers. Palo Alto has 16,000 detached single-family homes. If Stone is right, that’s 12.5% or 1/8. Look around your neighborhood. Does that match your observations? That one in every eight homes is vacant? I might agree with 1 in 50, but 1 in 8 is an exaggeration. Is he fabricating a problem to justify a new tax?
@Smell test, it’s not a matter of everyone looking around our neighborhoods since the ghost houses are mostly found in the higher-priced neighborhoods where they’re reportedly 1/3,
Decades ago I remember a foreign-born worker talk about how his father was visiting specifically to buy up real estate to use the properties as “savings accounts” where he could park their money safely.
Anecdotes are fine for cocktail party discussions, but we need facts before we do this. How do we determine a house is vacant? Let the neighbors vote? Break a window and see how long it takes before somebody fixes it?
And let’s say a homeowner blows off the fines. What’s the city’s recourse? Foreclosure?
The more you think about a vacancy tax, the more stupid it becomes. But it’s what we’ve come to expect from our City Clowncil.
Us voters have approved a countywide property tax for housing, a city business tax for housing — and we still have a housing problem and we need another tax. When do the new taxes stop? When do we see results for what we’ve paid already?
This is tyranny. Vacant owners are still paying property taxes. If an owner accepts a temporary overseas assignment or wants to live in a second home for most of the year, why punish them?
How about we exempt all property owners from paying property taxes if: they have no children, their children no longer use the government schools, the children are home-schooled or attend a private school? That would be fair. Why should homeowners be forced to support other people’s children? Imposing a “vacancy” tax on a homeowner who already pays property taxes and a mortgage is something that only a financially envious communist would support.
Who cares if the owner doesn’t live there? I wouldn’t mind at all if my neighbors moved overseas for most or all of the year.
Doesn’t the vacant tax proposal fly in the face of everything these city council liberals stand for? I would think they preferred vacant homes, as that means a lower, local “carbon footprint”, with less or zero impact on “climate change”. They should come to the defense of vacant homeowners.
They also believe people are net drain on scarce resources and that the planet is overpopulated already. Why doesn’t Greer propose something else, like paying people to terminate their lives early as a means to “save the planet”?
Oakland has run out of tax ideas so they’re proposing to raise the sale tax again, the one tax proposal that’s likely to fail. Berkeley has so many different taxes that people are actually incentivized to buy elsewhere.