Housing Policy

A Court Rules That San Francisco's Empty Home Tax Is Illegal

San Francisco's tax on vacant homes is bad policy. Now it's also bad law.

Christian Britschgi | 10.2.2026 3:25 PM

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Against the increasingly mainstream view that housing costs are high because new supply is constrained by regulation is an alternative thesis: There are plenty of homes once vacant units deliberately held off the market are accounted for. 

To fix this problem, a handful of California cities have adopted vacancy taxes to try and force these allegedly hoarded homes back onto the market. 

Critics of empty home taxes point to the minimal, consistent tax revenue these levies raise as evidence that only a small number of homes remain persistently unoccupied and the tax does little to bring them back onto the market. 

In addition to the policy case against vacant home taxes is the legal one. 

Earlier this month, a California appeals court upheld a lower court ruling that had struck down San Francisco's empty home tax. In an opinion authored by Judge Kathleen Banke, the court reasoned that the city's tax was superseded by a state law, known........

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