On the supply side, local governments should penalize owners who stockpile vacant housing, perhaps by imposing increased property tax rates on properties left vacant, and by moving aggressively to seize vacant properties when the owners fall behind on paying those taxes. On the demand side, governments should expand homesteading programs that permit and help low-income people to take over vacant housing—but only after it finds its way into city hands.These are noble proposals and I hope people move forward with them.
There are some pragmatic difficulties, though. In the 80s, a number of community groups fought to get New York City to pass anti-warehousing legislation that would have denied rent increases and pushed other penalties geared to preventing owners from deliberately holding apartments and buildings vacant during a housing crisis. We couldn't even get the bill to a public hearing. That's because the real estate lobby is highly organized and fights fanatically against these kinds of efforts. The industry essentially argued that any attempt to penalize warehousing of vacant units was an attack on property rights. The tax penalty Peñalver proposes may also be a difficult fight, as property tax legislation often has to be authorized at the state level.
Still, I would love to see cities hard hit by both vacancy and foreclosure move in this direction. Laws against warehousing and programs to encourage urban homesteading make sense.