From principal-residence rules to vacancy taxes, cities increasingly want to know not only who owns housing, but exactly how it is being used.

New York City Mayor Zohran Mamdani has touched off a furor over the city's new tax on pieds-à-terre, those apartments and homes maintained as secondary residences rather than someone's principal home.

Officially called the Non-Primary Residence Property Surcharge, the tax applies during the 2026–27 and 2027–28 property-tax years to certain New York City properties that are not used as a primary residence. One-, two- and three-family homes valued by the city's Department of Finance at more than $5 million may be subject to the surcharge, as can condominium and cooperative units valued at $1 million or more.

There are exemptions, including when the property is the primary residence of the owner, a tenant, an immediate family member or, under certain circumstances, an individual with a majority interest in an entity that owns the property.

The concept sounds straightforward enough. Its implementation has demonstrated that determining where someone actually lives can be anything but straightforward.

The city sent approximately 17,000 owners notices that their properties may be subject to the surcharge. That prompted complaints from New Yorkers who said the properties identified as potential second homes were, in fact, their primary residences. The Mamdani administration subsequently extended the deadline for exemption applications until September 18.

For some affected owners, the frustration isn't merely the prospect of another tax. It is being asked to establish something they consider self-evident: I live here. Bay Area property owners may find that sentiment strangely familiar.

San Francisco has been asking tenants where they really live for years

We've previously discussed San Francisco Rent Board Rule 1.21, which addresses whether a tenant actually occupies a rent-controlled apartment as his or her principal place of residence. Occupancy under the rule does not mean that a tenant must be physically present every day. The apartment must instead be the tenant's principal residence and "usual place of return."

That distinction can carry significant economic consequences. If an owner can establish that a unit is not the tenant's principal place of residence, and there is no other qualifying tenant in occupancy, the owner may petition the Rent Board for a determination affecting the rent-increase limitations that would otherwise apply.

Naturally, this raises the same question New York is now confronting: How do you establish where somebody really lives?

The San Francisco Rent Board looks at the totality of the circumstances. Depending on the case, relevant evidence can include:

• Motor vehicle and driver's-license records
• Voter registration
• Information supplied to taxing authorities
• Utility billing and usage
• Ownership or use of another residence
• Other evidence indicating where the tenant ordinarily lives and returns

None of these facts necessarily decides a case by itself. People travel extensively, maintain multiple properties, care for relatives, divide their time between cities and sometimes live apart from spouses. A second residence does not automatically mean the first residence has ceased being home.

Yet the answer matters because government has attached an economic consequence to it. In San Francisco, a tenant may need to establish that a rent-controlled apartment truly is home to preserve valuable rent protections. In New York, an affected owner may now need to establish essentially the same thing to avoid an additional property-tax surcharge.

“New York and San Francisco are asking different people the same expensive question: Do you really live there?”

Then there are vacancy taxes

The comparison doesn't end with Rule 1.21.

Bay Area cities have also experimented with another housing policy based not merely on who owns a property, but on whether anyone is actually occupying it.

San Francisco voters approved Proposition M, commonly known as the Empty Homes Tax, in 2022. The measure sought to tax certain residential units in buildings of three or more units when they remained vacant for more than 182 days during a year, with escalating taxes for continued vacancy.

This created an administrative problem inherent in virtually every vacancy tax. Before government can tax a vacant home, somebody has to determine whether it was actually vacant, for how long, and whether one of the law's exemptions applies.

Property owners challenged Proposition M, arguing in part that government could not financially penalize them for exercising a fundamental attribute of property ownership—the decision to leave property unoccupied rather than rent it to someone else.

A San Francisco Superior Court judge ruled against the city in 2024 and enjoined enforcement. San Francisco appealed, leaving the future of the measure in the hands of the courts. Whatever ultimately happens to Proposition M, however, the concept did not stop at the city limits.

Across the Bay, the experiment continues

Berkeley's Empty Homes Tax took effect in 2024 and generally applies when covered residential units are vacant for at least half of the year. Depending on the building, the tax generally starts at $3,000 to $6,000 per vacant unit and doubles when a property remains vacant for a second consecutive year.

The ordinance necessarily contains exceptions because properties can be vacant for reasons having nothing to do with an owner deliberately withholding housing from the market. Fires happen. Buildings become uninhabitable. Renovations require time. Owners die or require medical care. Construction and permitting can drag on.

The difficulty is translating all of those circumstances into an administrable tax.

Berkeley recently provided a striking example. Two apartment buildings damaged by fires years earlier were potentially facing approximately $1.35 million in vacancy taxes for 2024 and 2025. The city ultimately interpreted its disaster exemption in a way that excused those charges, even though the fires occurred before the vacancy tax took effect. Some of the people involved in drafting the measure criticized Berkeley's interpretation as overly generous.

The program has also encountered a collection problem. As of spring 2026, Berkeley had collected roughly $404,000 attributable to the first year of the tax while spending approximately $372,000 implementing it. More than $1.5 million in vacancy-tax bills remained outstanding as of March, and city officials reported that some owners were waiting to see what happened with San Francisco's legal challenge before paying Berkeley.

Oakland has its own Vacant Property Tax, which generally looks to whether qualifying property was in use for more than 50 days during a calendar year, subject to exemptions. Here again, an owner can find himself responding to a governmental determination of vacancy by supplying evidence that the property was occupied or that an exemption applies.

The details differ from city to city, but the administrative tension is familiar. Government makes a determination about how a property is being used; an owner who disagrees may then have to produce the records necessary to establish otherwise.

“Is it occupied? Is it a primary residence? Is it vacant? Increasingly, the answer has a price tag.”

From ownership to utilization

There is a larger housing-policy trend here worth watching.

Traditionally, many of government's questions about real estate concerned ownership. Who owns the property? What is it worth? What taxes are owed? Is it being rented?

Cities confronting severe housing shortages are increasingly asking something more intrusive and considerably harder to answer: What are you doing with it?

New York's position is that certain high-value residences should carry an additional tax when they function as second homes rather than primary residences. Vacancy-tax proponents argue that scarce housing should not remain empty while residents struggle to find somewhere to live. San Francisco's Rule 1.21 approaches the issue from the tenant side, asking whether the extraordinary protections associated with a rent-controlled tenancy should continue when the apartment isn't actually the tenant's principal residence.

There are legitimate policy arguments surrounding each of these measures. Cities face genuine housing shortages and have an interest in how existing housing stock is utilized. Property owners counter that ownership traditionally includes substantial freedom to decide whether, when and how property will be occupied, and that government should be cautious about imposing financial consequences based on its characterization of how private property is being used.

“Owning property is easy to document. Increasingly, how you use it isn't.”

For Bay Area housing providers, the controversy surrounding Mamdani's pied-à-terre tax therefore isn't as foreign as it may first appear. New York has simply become the latest major city to discover that attaching a financial consequence to the use of housing inevitably leads to another question: How do we know?

The courts will continue sorting through the constitutional and statutory limits of some of these policies. Owners and tenants, meanwhile, face the more immediate reality that government may no longer be satisfied simply knowing who owns or rents a home.

Increasingly, it also wants to know who is actually living there, how often—and whether you can prove it.