What has been left are large lots that are filled by the least expensive use of commercial land - parking lots. The city has seen a steady migration of employers large and small to surrounding suburbs where property taxes are lower. Hartford flirted with the idea of vacant property tax to spur development. In smaller cities like Hartford, Conn., which has much of its land locked up by tax-exempt landowners, policymakers don’t have nearly as much leverage as their big city counterparts in using vacant property fees to drive down vacancies and spur better use of land. I am not sure a tax can do anything about that,” she says. “They’ll say the neighborhood used to be so interesting and now it's so boring. Youngman points to the common complaint leveled by residents who point to national chains displacing local retailers in neighborhoods. Levying a tax might drive a landlord to fill a vacancy, but the new tenant may not be the type that made neighborhoods like Greenwich Village, the Mission District in San Francisco or Columbia Heights in Washington, D.C., attractive in the first place. Real estate markets are contextual, she says. Washington, D.C., San Francisco and New York have been hot markets.The empty storefronts in those cities are less often the result of landlords looking to jack up rents and more often those property owners seeking long-term leases, Youngman says. Youngman calls the use of special taxes on vacant property “a blunt instrument” in spurring development. Early indications suggest homeowners might not be declaring their homes empty. Vancouver's vacant house tax went into effect in 2017, despite hard data suggesting the vacancy rate for housing in the city had remained steady for more than a decade. The District's city council eventually tightened the loophole through a bill that regulates how long a property owner can keep filing for exemptions. It also appears that some owners of vacant property have tried to skirt the law by filing for exemptions, or asking for building permits and then never making improvements.
When asked, the city could not say how many properties were leased, improved or sold as a result of the tax, according to the Pew report. Still the effectiveness of the tax remains unclear, according to a 2017 report from Pew Charitable Trusts. In 2016, Washington, D.C., collected $9.4 million in vacancy taxes.
Property considered blighted is taxed at $10 per $100 of assessed value. The Washington, D.C., model raises the normal commercial property tax rate from between $1.65 and $1.85 for $100 in assessed value to $5 per $100 when the property is vacant. The moves follow similar taxes levied in Washington, D.C., and one aimed at addressing the residential housing crisis in Vancouver, Canada. San Francisco, Oakland, Calif., and most recently New York City have all considered levying vacancy taxes on landowners to force them to develop, lease or sell their empty properties. If the market is soft, the vacant land tax might force the landowner to allow it to fall into disrepair.” “In a hot market, the landlord might wait for a high-end renter. “The idea that if you tax the development, you will force the landlord into renting is complicated,” says Joan Youngman, a senior fellow with the Lincoln Institute of Land Policy.
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