A push to tax San Diego’s vacant homes — take two

A San Diego city councilmember is once again pushing a tax proposal aimed at property owners who have chosen to keep homes vacant and off the market. 

In a special meeting, the city’s Rules Committee will meet Wednesday morning to discuss a proposed tax on empty homes and whether to place it on the June ballot. The proposed tax would only apply to vacant homes that are not claimed as a primary residence. 

Councilmember Sean Elo-Rivera, who is bringing the latest tax proposal forward, said in a statement San Diegans can no longer stand the weight of the city’s housing crisis.

“This measure creates a simple and fair choice: rent the home, sell the home, or contribute fairly to the impacts of keeping housing off the market,” Elo-Rivera said in a statement. “It is focused, it is urgent, and it reflects a broad understanding that vacant homes during a housing crisis are part of the problem.”

This proposal is similar to the one Elo-Rivera introduced late last year, which called for a tax on both vacant homes and full-time vacation rentals. That proposal was torpedoed last month after hours of heated public debate — fueled at least in part by paid protesters from Los Angeles who were bused into town to oppose the measure, according to reporting by Voice of San Diego.

This latest, more “focused” proposal only deals with vacant homes and calls for an $8,000 tax for the first year beginning in 2027 and $10,000 every following year. Corporate-owned empty homes would have to pay a $4,000 surcharge the first year and $5,000 every following year. The tax and surcharge would be adjusted based on inflation beginning in 2029.

The proposal carves out exemptions for property owners who can prove certain circumstances were present for at least 183 or more days, or half a year and a day. That includes situations where the owner is in long-term care or dies, disaster periods where the home is uninhabitable, a family member is in the home, financial hardship for legacy owners, and qualifying military service. Also, owners can receive an exemption if they reside on the property or have a lease.

On Wednesday, committee members will decide whether to direct officials to work on language to add to the June ballot. It would still have to be approved by the full City Council in time for voters to decide.

City staff thinks this proposal could generate up to $51 million annually — but that’s only if all 5,100 homes in the city that aren’t listed as a primary residence pay the tax without any qualifying exemptions.

San Diego, like many other cities across the state, is grappling with a housing and affordability crisis that experts say is driven largely by underproduction. The city is falling short of new housing construction for all income levels, and half of its current housing supply consists of rental units that are nearly full, which keeps rents high.

“The harm is undeniable. When second, third, fourth and fifth homes sit empty for much of the year, housing costs rise for everyone,” Elo-Rivera said. “San Diegans deserve solutions that match the scale of this crisis. That is exactly what we are working to deliver.”