In 2018 Oakland passed a vacancy tax that would resonate for future legislation proposals in the Bay Area. The idea was simple, tax property owners that had vacant properties they could otherwise be renting in order to add to the limited available housing supply. The problem was that Oakland starting in 2020 is now the only city in the country with an extended eviction moratorium where tenants can no longer be evicted under previous Covid-19 pandemic restrictions. Fast forward to 2023 and now many owners would rather leave their properties vacant than risk issues or liabilities from tenants who could stop paying rent at any moment.
These considerations were all important leading up to November 2022 when voters in Berkeley and San Francisco had the opportunity to approve their own vacancy taxes. In Berkeley the new tax would be similar to Oakland while San Francisco would be limited to buildings with three or more units. Experts do not expect San Francisco will increase rental inventory as a result but it will be interesting to see what happens in Berkeley. I think with the many unknowns in the current market and the city implementing more restrictions we could see more owners in Berkeley begin to sell. This could mean prices would be affected more in all three cities relative to other areas in the Bay Area and beyond that do not have rental restrictions in place.