| Real estate investors make a bet that the rents they receive will cover the mortgage payments. Markets are cyclical. The full reason why any particular system oscillates or is chaotic is complicated, however in this case the fact that there is a long lead time measured in years for any new supply to be created and the decision to build is partially based on prevailing interest rates and the supply of money. Most cities lock the use type of any particular building in by the use of zoning and all kinds of regulation. That means the owners or potential owners aren't free to just change the building use to attempt to provide supply to match demand. Should people be able to make predictions about future business and economic conditions and then undertake business based on those predictions? They are going to bet wrong a lot. In fact due to the nature of feedback systems, there will always be some investors that bet wrong. Let's simplify this a little and just take one example of something the city and county of SF has control over, property tax. SF is a little unique by being both a city and county. In California the counties have control over lien tax sales for non payment of property tax. How quickly should the county of SF auction off properties that haven't paid their property tax? https://sco.ca.gov/ardtax_public_auction.html Tax-Defaulted Land Sales Property becomes tax-defaulted land if the property taxes remain unpaid at 12:01 a.m. on July 1st. Property that has become tax-defaulted after five years (or three years in the case of property that is also subject to a nuisance abatement lien) becomes subject to the county tax collector’s power to sell in order to satisfy the defaulted property taxes. The county tax collector must attempt to sell the property within four years of becoming subject to sale. The county tax collector may offer the property for sale at public auction, a sealed bid sale, or a negotiated sale to a public agency or qualified nonprofit organization. Should the County of San Fransisco increase the number of property tax delinquent properties that they slap with nuisance abatement (they could pick any kind of reason such as dirt and graffiti, squatters, crime incidents, etc) in order to expedite these properties being put on the market? |