Politicians can sometimes be rather creative in finding new ways to coerce individuals to act as the politicians’ desire. And they can be equally creative in how they present their schemes to the public. Several Canadian cities provide an interesting example of this.
Following the lead of Vancouver, both Hamilton and Ottawa are considering a “tax” on rental properties if the homes remain vacant past an “acceptable amount of time.” A housing advocate claims that “the tax would help renters by upping the housing supply and preventing affordable units from becoming vacant in the first place.“ The advocate didn’t explain how a landlord is supposed to prevent a vacancy from occurring, but that will presumably be the landlord’s problem. Nor did the advocate explain what an “acceptable amount of time” would be.
Calling this scheme a tax is disingenuous. It is a fine imposed upon landlords who don’t act as politicians and housing advocates desire. It is a financial penalty imposed on those who don’t rent their properties within whatever arbitrary timeframe advocates find acceptable.
The advocates behind this act as if landlords somehow benefit from having vacant properties. The advocates ignore the fact that landlords must still pay a mortgage, taxes, and insurance on the property, even if it is generating no income. As a landlord, I try to rent properties as quickly as possible, but finding a desirable tenant can take time. I have had properties sit vacant for more that two months, and that certainly wasn’t because I was benefitting from the vacancy—I wasn’t. But it’s not surprising that activists and politicians evade these facts. It is much easier to force landlords to comply with their dictates than to actually consider the full context.
It won’t be long before “enterprising” American cities like Seattle will adopt this strategy. When they do, the attacks on landlords will have come full circle. The eviction moratorium has prevented landlords from evicting deadbeat tenants. Many jurisdictions are making it illegal to consider certain criminal convictions when screening tenants. Others are forcing property owners to accept housing vouchers, regardless of the owner’s own judgment.
Cities are making it increasingly difficult for landlords to be discerning when selecting tenants, much to the property owner’s peril. And if his property is vacant past an “acceptable amount of time,” he will be penalized. Landlords are being forced to rent to tenants they don’t want, and then they are forced to keep tenants that don’t pay the rent.
A “tax” on vacant houses isn’t going to solve the housing shortage. Along with all the other shackles being placed on landlords, this “tax” will cause property owners to sell their properties to owner/occupants. The rental market will lose sorely needed housing, but at least the houses will no longer be vacant.