A proposed tax aimed at discouraging empty second homes and short-term vacation rentals in San Diego has been defeated in a City Council committee. The measure, championed by Councilmember Sean Elo-Rivera, sought to generate revenue and potentially increase housing availability for residents. However, after extensive debate and public testimony, the Rules Committee voted 3-2 against advancing the proposal, effectively ending its immediate prospects.
Key Takeaways
- A proposal to tax empty second homes and short-term vacation rentals in San Diego failed to pass a City Council committee.
- Supporters argued the tax would incentivize property owners to rent to long-term residents and increase housing stock.
- Opponents raised concerns about the economic impact on small business owners, potential revenue loss for the city, and legal challenges.
- The committee’s decision means the proposal will not move forward to the full City Council for consideration.
The Proposal and Its Aims
Councilmember Sean Elo-Rivera introduced the "Empty Second Home and Vacation Rental Tax" with the primary goal of addressing San Diego’s housing crisis. The proposal aimed to tax homes that were either vacant second residences or operated as short-term vacation rentals. Elo-Rivera argued that such a tax would incentivize property owners to offer their homes for long-term rental to San Diego residents, thereby increasing the available housing stock. The tax was estimated to affect a small percentage of San Diego properties and was not intended to impact primary residences or long-term rentals.
Arguments For and Against
Proponents of the tax, including some community groups and labor unions, echoed Elo-Rivera’s sentiments, emphasizing the need to prioritize housing for residents over short-term profit. They highlighted the struggles of students and working families to find affordable housing in the city. Some also suggested that powerful corporations were exploiting the short-term rental market.
Conversely, opponents, including the San Diego Regional Chamber of Commerce and many short-term rental hosts, argued that the tax would harm small business owners, many of whom rely on rental income to make ends meet. They expressed concerns about potential job losses in the tourism sector and a significant decrease in transient occupancy tax revenue for the city, which funds essential services. Councilmember Raul Campillo, a vocal opponent, argued that the city would lose more revenue than it could gain and that the tax could face legal challenges. Councilmember Kent Lee cited uncertainty about the tax’s outcomes, its potential impact on the city’s budget, and the shifting focus from revenue generation to housing stock.
The Committee Vote and Next Steps
The Rules Committee, chaired by Council President Joe LaCava, heard from nearly 200 speakers before voting. Despite an amendment by Elo-Rivera to focus the tax solely on corporate-owned short-term rentals and empty second homes, the measure failed to gain sufficient support. Councilmembers Raul Campillo, Kent Lee, and Vivian Moreno voted against advancing the proposal. Council President Pro Tem Kent Lee noted that while he believed short-term rentals impact local housing, the proposed tax’s outcomes were too uncertain. Councilmember Vivian Moreno emphasized the need for fiscal responsibility and suggested looking inward before imposing new taxes. Councilmember Joe LaCava and Elo-Rivera voted in favor of the amended proposal. The failure of the measure in committee means it will not proceed to the full City Council for a vote, and thus will not appear on the ballot for voters to decide.
Sources
- Why it Matters: Proposal to tax empty second homes and vacation rentals fails, KPBS.
- Committee kills Elo-Rivera proposal to tax short-term vacation rentals, Times of San Diego.
- San Diego vacation home/short term rental ballot measure plan dies in committee – NBC 7 San Diego, NBC 7 San Diego.
- Proposal to tax San Diego vacation rentals and second homes up to $12,000 fails in council committee – San
Diego Union-Tribune, San Diego Union-Tribune. - San Diego councilman floats taxes on short-term rentals, vacation second homes – NBC 7 San Diego, NBC 7 San Diego.