[rgifford]

Why are these properties vacant?

I'm pretty familiar as a renter and property owner with tenants rights in SF. If I were to buy a duplex in the city I would never ever ever rent out the extra unit. I'd lie about tenancy, ask a friend to pretend to rent it, or pay this proposed tax rather than rent it out. I'd recommend the same to everyone.

Tenants are a liability for landlords in SF. You cannot end a tenancy, not with any amount of notice. That's a big deal and a huge policy mistake. Really messes up incentives. Let's say you and your partner have a duplex with two 2B/2BA units. You eventually decide to have kids and your parents are retiring. You want them to move into that unit so they can be near and babysit now and again. You could evict, but it's going to be costly and time consuming especially if the tenants are protected. Lawyers are going to tell you to buy the tenants out. Tenant buyouts in the city are usually mid five figures and they end up restricting some of your uses of the property forever. It will take months (maybe more than a year) and may end up creeping up towards six figures. You would've been better off never renting it out in the first place.

Landlords aren't idiots and they aren't evil, at least not more so than anyone else. Put yourself in their shoes and figure out how the incentives would cause you to act. IMO it's as simple as fixing the policy issue: Landlords can terminate tenancies in good faith with two years notice. Seems very fair for everyone and I bet you get reduced vacancies without needing to increasingly ratchet up heavy handed market interventions that are themselves prone to unintended consequence.

[bubblethink]

But then why own property beyond your primary residence ? Them's the rules. If you don't want the hassle, sell and move on. The fundamental issue is lack of liquidity in the market coupled with artificially low supply. This applies to both buying and renting. Nobody moves because everyone has a sweet deal (renters locked in rent control, owners locked in low property tax rates).

[baggy_trough]

The rules are terrible and should be changed, that's the point.

[camgunz]

I mean, very few of them are; SF's vacancy rate is crazy low. If the dynamic you're describing exists, very few people are doing it. Places with even stronger renters rights regimes have higher vacancy rates. SF's problem is just supply.

[rgifford]

The vacancy rate doesn't tell the whole story. Short term rentals and self reporting likely mask the effect I've mentioned.

I generally agree, SFs problem is 100% supply. But I think that ends up being caused by slow approval processes and highly restrictive tenants rights. Why would you ever subdivide your property in SF to add another dwelling unit? You can't give a tenant any amount of notice to end a tenancy. You can't ever merge those units back together. SFs property market is really crazy in this regard: older buildings with lots of units are often worth less than large single family houses. Properties with tenants sell for 25-50% less than vacant comparables.

[AndyMcConachie]

You're literally whining about your inability to kick someone out of their home.

[beej71]

This is the crux of it. You say "their home", they say "my home".

"This is my house. I own it. I should be free to kick anyone out at any time for any reason or no reason."

One's reaction to the above sentence probably shows which side of the fence one is on fairly quickly.

[rgifford]

I don't own multifamily property in SF, so I'm not whining about my ability to do anything.

When tenants rights are restrictive enough property owners view tenants as a liability and that sets up perverse incentives that cause inefficient markets and underdevelopment. Occupied multifamily properties sell at steep discounts compared to their vacant counterparts. Property owners price in the potential longterm loss of use caused by a tenant. Do we want to heavily incentivize property owners to sell their properties without tenants? Do we want a housing market where multifamily properties sell for the same amount as much smaller single family homes? Do we want a development market where subdividing property is inadvisable and actually lowers property value?

At the end of the day, everyone deserves dignity. Part of that means acknowledging property owners take significant risk tenants do not and as such deserve fair use of their property. That means owners need to be able to give notice to end a tenancy amicably without eviction -- maybe that required notice is measured in years. That's plenty of time for any tenant to find another place. It means we need to stop conflating romantic ideals of "home" with actual ownership. If tenants watched themselves priced out over a decade, they're going to have a hard time. City programs should provide safety nets there, but it isn't their landlords burden to take carry them like a dependent. Tenancy is a very simple proposition: renters don't have to come up with downpayment, if the city goes to shit they can leave in a month, if the foundation gets water damage or an electrical fire breaks out they have no liability, their monthly payment is significantly less than a comparable mortgage payment. Tenants trade optionality for equity. As a tenant I never lost a single night of sleep worrying about electrical fires or new sewage pipes or the heater going out. I'd never have the gall to squat on a place for 10 years while paying inflation adjusted rent (far under market rate) and come out the other side with my hand held out for a tenant buy out. I would be absolutely ashamed of myself as a tenant in such a situation. If I'm being honest, I suppose I'd still do it and find ways to justify it. I'd tell myself it was after all "my home" and the landlord had more than one house so it was only fair. The story is just all too common in SF.

[Gigachad]

Yep, If you don’t want to manage a rental, don’t own one. If later you need 2 properties instead of 1 + 1 rental, sell the duplex and buy somewhere else.

[hrunt]

According to the article, as the owner of the duplex, you would not be subject to the vacancy tax ("It applies to buildings with three or more units, not to single-family homes or duplexes").

As for your other points, yes, the government is trying to incentivize that inventory back on to the market (by disincentivizing keeping it off). Yes, they are doing it in response to a situation they took part in creating. Is this more or less likely than tenant termination freedom to result in more housing being available? That sounds like every market de-regulation argument ever.

[unethical_ban]

So if I sign a 12 month lease, you can't decline to renew my lease at 12 months? All leases are indefinite?

[darkwizard42]

There are schemes to knock a tenant out, but generally in SF county, 12-month leases roll over into monthly terms with very little the landlord can do as long as the tenant keeps paying and abiding by the terms of the original lease.

Now, raising the rent (in a non-rent controlled unit) and then renegotiating the lease are options but if the tenant does not comply and keeps paying the original lease's rent there are a LOT of protections in favor of the tenant.

Won't comment on if these are all fair or not, but there has been lots of bad behavior on both sides to cause regulation to come up. Being a landlord in SF is not easy, but simultaneously, finding a place to live which is affordable is tough as well as a renter.

[jeezfrk]

Investors are investing. You own it? The values go down too. That's how it works.