Dealing with vacant lots

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Yesterday, Curbed described Long Beach’s attempt to beautify the city by placing a $55 annual surcharge on vacant lots.

The argument is that the fee will be used to pay for monitoring these lots, which can be magnets for blight and misbehavior.

This fee does not go anywhere near far enough.

At a time when all of coastal CA is suffering from an acute housing shortage, having land in the middle of major cities sit unused is an outrage against decency.

So, at a time when land inside cities is expensive, why are there vacant lots at all?

In normal states, property taxes rise in proportion to the value of the lot. So, if you have a vacant lot sitting in an expensive neighborhood, the property taxes will eventually rise to the level where you need to do something… either develop yourself or sell to someone who will.

But CA hasn’t been normal since 1978, when Proposition 13 was passed, limiting the amount by which property taxes can rise to 2% / year. Here, if you have a lot you bought a million years ago, your total annual carrying costs (property tax and insurance) are tiny, and certainly lower than the amount by which your property appreciates annually. So, you’re in no particular rush to do anything with the land.

So, cities can’t just increase the taxes to prompt development. What can they do?

Well, Long Beach is doing its monitoring fee.

But, if I were in charge, I’d target the biggest lots with the densest zoning and use eminent domain to force the owners to sell. Then, I’d partner with affordable housing developers to build 100% affordable complexes on the lots.

 

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