West Coast Cities Turn to Vacancy Taxes to Grapple with Housing Crisis

[Yo_Mama_Been_Loggin]

If you walked through Portland, Tacoma, or Seattle today, you would no doubt note the vacant, seemingly abandoned parcels of land sitting collecting weeds and litter. You might also note the empty storefronts and “For Lease” signs that have become permanent fixtures of the streetscape. This leads one to wonder: who owns these properties, why are they empty, and what could they be better used for?

By Q4 2025, Colliers reported Portland, Oregon reached another post-pandemic high of downtown office vacancies – 27%. Consequently, the City of Portland has been considering implementing fees on vacant commercial properties in an effort to drive prices down since 2025.

Further north, Seattle saw its highest commercial vacancy rate since the pandemic, with reported rates falling between 25% and 34.7%. As part of her campaign, Seattle Mayor Katie Wilson pledged to consider a “well-designed vacancy tax or fine” as a means to drive small businesses back to the downtown core. As major cities in the Pacific Northwest consider commercial vacancy taxes, there is a question about the results and what it would look like for cities like Tacoma.

Taxes as a Means of Development


The economic model of vacancy taxes works in theory: property owners are taxed for their vacant properties and therefore incentivized to sell or rent the vacant property at a market occupying rate. In reality, properties are still vacant for a number of reasons including, high rents or high costs to convert the property to housing. Policymakers want to lower commercial rents and increase focus on adding housing downtown. A vacancy tax could help further those aims.

https://www.theurbanist.org/west-coast-cities-turn-to-vacancy-taxes-to-grapple-with-housing-crisis/

[pfitz59]

1. Do it for apartments, condos and houses.

No tax breaks for 'un-rented properties'. Also should have an 'occupancy tax' on Airnb and Vrbo listings in areas zoned non-commercial, residential.

[LearnedHand]

2. Except the pandemic fundamentally changed where people want to work

And it’s typically not in some downtown highrise. Instead of forcing people back into those horrible buildings we should be imagining what future working spaces would look like. Build communities around hot-desking spaces for example.

[GenThePerservering]

3. In Seattle it's tough because office space is overbuilt

but people desperately want affordable housing in town where the amenities are, whether they telecommute or work in-house - they don't want to live in some faceless suburban strip-mall development. But it's very difficult to convert office space into flats.