San Francisco’s tax on vacant residential units is invalid because it runs afoul of a landlord-friendly state law, a California appeals court ruled Friday.
The city’s Proposition M, adopted by voters on the 2022 ballot, would charge property owners an escalating amount for each residential unit that was vacant for more than half of the preceding year. It was estimated to raise at least $20 million annually for the city, or reduce the number of residential vacancies to address a housing shortage, until a trial court struck it down in 2024.
The tax is preempted by California’s Ellis Act, which …