SAN FRANCISCO, Calif. (KRON) — A new report shows more than 40,000 homes in San Francisco are sitting vacant, nearly one out every ten residential units.
According to a report published by the city’s Budget and Legislative Analyst, the total number of vacant units in San Francisco has increased by 20% since 2015, to roughly 40,500 units in 2019.
“This report makes clear what we have long suspected – real estate speculators and wealthy people with second homes are holding thousands of units off the market,” said Supervisor Dean Preston, who commissioned the study.
“At the same time, we now have the data showing that policy intervention could activate thousands of homes and generate tens of millions of dollars annually.”
The report shows the vacant units were concentrated in SOMA, Downtown, and the Mission District, generally the same areas where new housing construction has been concentrated.
San Francisco ranks among the lowest vacancy rates for units on the rental market or for sale in comparison to other U.S. cities — but a higher overall vacancy rate.
The numbers suggest that many units are being held off the market as either second homes or investments.
The report breaks down vacancies by category, showing the most significant increases in the category of “sold, not occupied,” which includes instances where a buyer is using property for investment purposes and does not intend to live in it.
“With over forty thousand San Francisco housing units vacant at any one time, the damning data in this report is a reflection of both market failures and policy failures,” said Fernando Martí, Co-Director of the Council of Community Housing Organizations (CCHO).
“Tackling the City’s affordability crisis is not just about development, but as much about responsibly managing our existing housing stock. A housing market that artificially constrains supply by cannibalizing homes into pied-a-terres or cash havens, as this report seems to call out, warrants some kind of City policy intervention.”
The report also sheds light on residential vacancy rates eclipsing the rate of new housing production in recent years.
According to the report, the vacancy rate has increased from 8.5 percent in 2015 to 10 percent in 2019, compared to a 4.2 percent increase of new housing units during that period.
Additionally, the report analyzes policy interventions taken by other cities, including Oakland and Vancouver, to combat rising residential vacancies.
One suggestion is for San Francisco to adopt a tax-based on the Vancouver model — where the city could see an additional 4,460 units within two years, the equivalent of approximately 90 percent or more of the average annual number of new housing units added over the last five years.
The report suggests the tax could raise between $12 million and $61 million.