Vancouver's empty homes tax has put an extra $38.7 million into the city's coffers since it was launched in 2016, according to a new report, and the tax seems to be having some effect in motivating owners of vacant properties to put them into the rental pool.

Data collected through the empty homes tax program shows the number of empty or exempt homes in Vancouver dropped by 1,676 units, or 22 per cent from 2017 to 2018.

Over the same time period, seven per cent more homes — 3,332 in total — were declared as having tenants.

The empty homes tax is charged at one per cent of the assessed property value per year.

Homeowners must make an annual declaration about properties that are not principal residences or not rented for at least half the year. An exemption can be granted for things like construction and renovations.

Shaughnessy continues to have the highest percentage of empty or exempt homes at seven per cent, followed by the West End at six per cent and Kerrisdale at five per cent.

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All neighbourhoods east of Main Street had only two per cent empty or exempt homes.

The densely populated downtown district continues to have the highest pure number of empty or exempt homes at 1,443 — four per cent of all the units in the neighbourhood.

The improvements outlined in the report appear to be having little effect on Vancouver's extremely tight rental market, however.

According to Canada Mortgage and Housing Corporation figures, Vancouver's rental vacancy rate rose only 0.1 per cent year over year — from 0 .9 per cent in October 2017 to 1.0 per cent in October 2018.

The city is funding three initiatives with the revenue collected through the empty homes tax:

$17 million will be put toward the 2019-2022 community housing program, which will provide grants to providers of social and co-op housing.

$3.8 million will go toward the purchase of Ross House, a single room occupancy building with 24 rooms in the Downtown Eastside that will increase housing options for LGBTQ, trans, gender diverse and two-spirit people. Funds will also support Japanese-Canadian and Indigenous culture and heritage in the neighbourhood.

$5.83 million will be put toward increasing advocacy and support for renters.

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"The main objective of Vancouver's empty homes tax is to influence property owners to put their empty properties on the rental market and the data shows that is happening," said Mayor Kennedy Stewart.

"For those who choose to keep their properties unoccupied, we appreciate their contributions to the funds that are supporting various, much-needed affordable housing initiatives across the city."