London’s apartment vacancy rate has hit a 15-year high. According to Canada Mortgage and Housing Corporation’s (CMHC) report from December 2025, London’s vacancy rate now sits at 4 percent, up from 2024’s 2.9 percent. Meanwhile, there has been a 19 percent increase in people experiencing homelessness in London. Without urgent action, a new report indicates that homelessness is likely to triple in the next decade.
The urgency for municipalities to act is heightened by recent changes at the provincial level. On November 24, 2025, the Ontario government introduced Bill 60, Fighting Delays, Building Faster Act, 2025, which introduced several alarming changes to the Residential Tenancy Act. The bill cuts tenant notice periods in half, shortens appeal timelines from 30 days to 15, and makes it more difficult for tenants to raise issues such as disrepair, harassment, or repeated above-guideline rent increases during eviction proceedings. It also eliminates compensation for tenants evicted for a landlord’s “own use” when four months’ notice is provided, while expanding the use of enforcement officers to remove tenants more quickly. This bill will inevitably result in more evictions and, in turn, more people experiencing homelessness.
Given these conditions, it is no surprise that more Londoners are advocating for a residential vacancy tax. With vacancy rates rising and tenant protections being rolled back, this is a critical moment for municipalities to act.
What is a vacancy tax?
A residential vacancy tax is a municipal tax imposed on property owners whose residential units remain vacant for a significant portion of the year. Typically, vacancy taxes range from 1 percent to 5 percent of a property’s assessed value and require annual declarations to avoid penalties. Residential vacancy taxes aim to encourage owners to rent out or sell vacant units, increasing the available housing supply. Vacancy taxes have already been implemented in Ontario cities like Toronto, Ottawa, and Hamilton.
In a recent social media post, London Deputy Mayor and Ward 2 Councillor Shawn Lewis attempted to quell these advocacy efforts. He noted that the London City Council commissioned a staff report and an independent consultant in 2024 to assess the feasibility of a residential vacancy tax. Both reports concluded that the program would cost more to administer than the city would collect in revenue.
Abe Oudshoorn, an Associate Director at the Arthur Labatt Family School of Nursing specializing in health and homelessness, offers a different perspective. “I think we’re in a situation where the housing crisis is so desperate that if we can unlock any units, it’s worth the effort,” he explains. “Even if the cost of enforcement doesn’t pay back in terms of taxes or fines, it’s still an investment in unlocking those units.”
Unlocking units through a residential vacancy tax may cost less than other affordable housing programs. The 2022 report Shawn Lewis references, which comes from a time when vacancy rates were much lower, estimates a one-time implementation cost of 5.5 million dollars, and an annual operating cost of $2.1 million. If just 0.5 percent of London residential properties are vacant, the report estimates about 783 units would be subject to the tax, generating just under $2 million in revenue.
Tax landlords, don’t subsidize them
Consider the recent announcement by Farhi Holdings Corporation, which plans to convert commercial office space at 685 Richmond Street into 41 new housing units, containing just over 80 bedrooms. This project dips into the City of London’s Office-to-Residential Community Improvement Project Incentive Program, which offers $35,000 per unit to property owners willing to convert downtown office space into housing. In this case, the city’s contribution amounts to roughly $1.4 million to unlock just 41 units. This is simply one of many examples of the city spending public funds to subsidize private developers to “incentivize” the development of affordable housing units. Meanwhile, city councillors like Shawn Lewis recoil at a vacancy tax program that could pressure over hundreds of units into use at a comparable cost.
The city is not opposed to spending money on housing; it does so regularly and at very high costs. Unfortunately, what the city is opposed to is policies that confront property owners and investors who benefit from the bleak reality of high vacancy rates. London does not need a vacancy tax because it promises a surplus; it needs one because empty homes in a housing crisis are a political failure. In the face of escalating homelessness and eroding tenant protections, residential vacancy taxes, in addition to programs that prioritize people over profit like social housing, housing cooperatives, and tenant unions, are worth fighting for.
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