Committee reviews short-form proposal to tax chronically vacant properties

Committee members discussed a short-form bill that would create a tax on chronically vacant residential and commercial properties during a Ways & Means committee meeting on Friday, April 18. Legislative counsel Kirby Keene introduced H.443 and said it “proposes to create a new tax on residential and commercial properties that are left vacant.”

Committee members spent most of the discussion defining the problem the bill is intended to address and weighing how a vacancy measure would operate. Lawmakers described downtown commercial buildings that have sat empty for more than a decade, contrasted those with short-term unoccupied homes targeted by some municipal vacancy levies, and debated whether a statewide law, a municipal option, a fine or a dedicated “splinter” tax would be the appropriate tool.

The short form presented to the committee did not contain statutory detail; Keene said the council could develop the draft further by looking at models used elsewhere. Members cited other jurisdictions as examples: Washington, D.C., and Vancouver were mentioned as places that levy charges on unoccupied properties, and Burlington’s assessment timing (an April 1 assessment date) was raised as an example of how local tax practice affects owners’ behavior.

During discussion, one lawmaker described a downtown commercial parcel that has been vacant for about 15 years; the speaker said the estimated assessed value of the parcel was “well below half a million dollars,” while the owner sought a sale price “upwards of $3,000,000,” and that the property’s state of disrepair has harmed downtown commerce and created safety hazards. Committee members repeatedly cautioned that vacant-property situations fall into different categories: some parcels are high-value and potentially developable, others are strategically held empty by investors, and some have such low market value that demolition may be the only practical remedy.

Members raised several implementation questions: whether a measure should target parcels or buildings, how to treat mixed-use properties, how to define “chronically vacant,” and whether the authority should be statewide or permissive for municipalities. One member noted municipalities may already have tools to levy fines but not taxes, and another framed vacancy levies employed in other cities as a way to raise housing funds (an example discussion compared vacancy rules that tax homes empty for six months to raise housing revenue).

There were no committee votes on the substance of H.443 during the meeting. Representative North withdrew an amendment she had planned to offer; the withdrawal occurred before the amendment was considered on the record. Committee discussion repeatedly described the short form as a “bookmark” — a starting point for further drafting and research rather than a ready-to-enact statute.

The conversation closed with members saying the short form raised issues that would require substantial additional drafting, definitions, and legal review. Several speakers urged caution about blunt penalties for owners of very low-value properties and recommended distinguishing among different categories of vacant real estate if the committee develops the bill further.

The committee moved on to other agenda items after the vacancy discussion.