San Francisco Proposition D: Vacancy Tax
Some of San Francisco’s most popular neighborhoods have an empty storefront problem. In North Beach, one in every five storefronts were vacant in 2018. The city says this problem’s on the rise, though it doesn’t know how widespread it is.
There are a lot of reasons this is happening, including high rents and labor costs, San Francisco’s onerous permitting process, and online shopping. Landlords are also a contributing factor, some of whom are leaving storefronts empty while they wait for a higher-paying tenant.
Proposition D — or the vacancy tax — is tackling that problem by taxing landlords for their empty storefronts. Beginning in 2021, any landlord with a storefront that’s been empty for more than six months would be charged a fee, which goes up based on how big their ground-floor storefront is and how long it’s been empty. This would only apply to neighborhood commercial districts.
San Francisco’s Board of Supervisors voted unanimously to put Prop D on the ballot, and the city controller says it could raise up to $5 million for the city every year. Real estate groups and business associations also support the measure, and proponents have raised over $32,000.
Some landlords are critical of the measure. They argue the vacancy tax will just make doing business in San Francisco harder and would fail to cut down on vacancies much. Critics also say San Francisco’s empty storefronts are mostly the city’s fault anyway, because of its permitting process.
So, just to recap: A yes vote for Prop D approves a new property tax on certain empty storefronts. A no vote opposes that tax. The measure needs a two-thirds vote to pass.