Taxes on Second Homes Are Popping Up Across America. Could Boulder Be Next?

Across the country, cities are exploring new taxes aimed at vacant homes and underutilized properties. The idea is gaining traction in places where housing affordability and limited inventory have become defining local issues.

Now, Boulder may soon join that conversation.

A local group is currently working to place a vacancy tax measure on Boulder’s November ballot. While the proposal would apply to both residential and commercial properties, much of the public discussion so far has centered around housing, second homes, and the broader question of how communities should balance property rights with affordability concerns.

Here’s a high-level look at what vacancy taxes are, why cities are considering them, and what supporters and critics say.

What Is a Vacancy Tax?

At a basic level, a vacancy tax is an additional tax placed on properties that sit vacant for extended periods of time.

Most policies are designed to encourage owners to either:

• Occupy their property more consistently
• Place it on the long-term rental market
• Contribute additional tax revenue if the property remains unused

Every city structures these taxes differently, but they generally apply to homes that are not used as a primary residence and remain vacant beyond a certain threshold during the year.

Supporters argue these taxes help increase housing availability in supply-constrained markets. Critics argue they place additional burdens on homeowners without meaningfully addressing affordability at a larger scale.

What’s Being Proposed in Boulder?

The Boulder Vacancy Tax initiative is still in its early stages, and final details could evolve before anything reaches voters.

According to the campaign’s website, the proposal would target both residential and commercial properties that remain vacant for significant portions of the year. Revenue generated from the tax would reportedly support affordable housing and community-focused programs.

Supporters point to several local factors driving the proposal:

• High home prices
• Limited land supply
• Low vacancy rates
• Concerns around underutilized housing

At the same time, opponents have raised concerns about:

• Government overreach
• Homeowner flexibility
• Administrative complexity
• Potential impacts on second-home ownership

While the measure would also impact commercial properties, much of the debate in Boulder has focused on residential housing and second homes.

Why Are Cities Considering Policies Like This?

The argument behind vacancy taxes is relatively straightforward: in markets where housing supply is tight, unused homes are increasingly viewed as part of the affordability problem.

Supporters often argue that even a modest increase in available housing inventory can help improve overall market conditions. Some also point to the impact vacant homes can have on neighborhoods, local businesses, school enrollment, and year-round community activity.

Many cities also view these taxes as a way to generate funding for affordable housing initiatives or community programs.

Critics, however, question whether vacancy rates are actually large enough to materially improve affordability. Others argue that homeowners already contribute significant property tax revenue and should have flexibility in how they choose to use their property, whether it’s occupied full-time, seasonally, or held as a second residence.

Some opponents also worry these policies could:

• Discourage investment
• Reduce demand for second homes
• Create uncertainty for buyers and homeowners
• Add costly reporting and compliance requirements

What Have Other Cities Seen?

Boulder is not the first city to explore this type of policy.

Cities including Vancouver, Toronto, Oakland, and San Francisco have all implemented some form of vacancy or empty homes tax in recent years. The results have been mixed and continue to be debated.

Supporters often point to Vancouver as a successful example, citing:

• Thousands of previously vacant homes reportedly returning to the market
• Millions in revenue generated for affordable housing programs
• Declining numbers of declared vacant properties over time

Critics counter that affordability challenges in many of these cities remain severe despite the taxes. They argue broader supply constraints, construction costs, and population growth continue to have a much larger influence on housing prices than vacancy alone.

Many cities have also faced practical challenges around:

• Enforcement
• Occupancy verification
• Exemptions
• Administrative costs

The broader takeaway is that vacancy taxes are unlikely to fully solve affordability issues on their own, but many cities increasingly view them as one piece of a larger housing strategy.

How Could This Affect Boulder Homeowners?

If Boulder ultimately adopts a vacancy tax, the impact would depend heavily on the final structure of the measure, including how vacancy is defined, what exemptions exist, and how the policy is enforced.

For second-home owners or part-time residents, the most direct impacts could include:

• Additional annual costs
• Occupancy reporting requirements
• Increased incentive to rent homes long-term

For the broader housing market, supporters believe the policy could:

• Modestly increase available inventory
• Encourage more year-round occupancy
• Generate funding for housing programs

Opponents argue the effects on supply may be relatively limited while introducing new uncertainty for homeowners and buyers.

Like many housing policy debates, much of the disagreement ultimately comes down to philosophy: should cities play a more active role in influencing how housing is used, particularly in markets where affordability remains a challenge?

A Conversation That’s Growing Nationwide

As affordability pressures continue across high-demand markets, cities are increasingly experimenting with policies aimed at encouraging more active use of existing housing stock. Vacancy taxes are becoming part of a broader housing conversation alongside:

• Zoning reform
• Density changes
• Short-term rental regulations
• Affordable housing initiatives

Whether these policies meaningfully improve affordability remains heavily debated, but they are becoming increasingly common in cities grappling with limited inventory and rising housing costs.

For Boulder homeowners, it’s a conversation worth watching closely as more details around the proposed measure continue to emerge.

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Resources

Interested in learning more? Take a look at these resources:

• “Taxes on Second Homes Are Popping Up Across America” (The Wall Street Journal)
• “Boulder residents launch vacancy tax push targeting empty homes and commercial spaces“ (Boulder Reporting Lab)
• Vacancy to Vitality website