Retail Vacancy Tax Added to Ballot by San Francisco Supervisors

The New Year promises to be an interesting one both at the national and local level. Locally, the close of 2019 saw the San Francisco Board of Supervisors unanimously approved the landlord vacancy tax during a special late year meeting.

If the voters approve the ballot measure this March, landlords with a storefront vacant for more than 182 days will face a fee that is calculated according to the length of their storefront and the amount of time it has been empty.

Besides the SF supervisors, many local residents have been upset at the number of vacant storefronts dotting their neighborhood streets. Even though San Francisco contains many vacancies, the City doesn’t rank in the top 10 for retail vacancy rates in the country. The Inland Empire just outside of Los Angeles has the highest vacancy rate in the nation at 7.1% according to a July report based on data compiled by CoStar, a commercial real estate information company. Sacramento (6%) maintains the fifth highest rate in the nation and Fresno ranks number 8 (5.6%).

Many outside experts attribute the increase in retail vacancies to factors such as an increase in online shopping not just unreasonable landlords. 

If the measure passes, San Francisco’s tax may be the first of its kind in the United States to pertain specifically to retail space. Across the bay, Oakland implemented a vacancy tax on residential landlords as voters overwhelmingly approved Measure W last November.

The Oakland ordinance allows the city to tax a property owner $6,000 per parcel or $3,000 per condo if units remain vacant for more than 50 days.