A push to tax vacant homes in San Diego just cleared its first hurdle

San Diego officials took the first step Wednesday to put a question before voters: Should property owners who keep homes vacant and off the market have to pay an additional tax?

After about two hours of back-and-forth public debate, a City Council committee voted unanimously to start working out the details of a proposed empty homes tax to be placed on the June 2 ballot. The full council would have to approve the proposal by next week to make the ballot in time, according to the City Clerk’s Office.

Councilmember Sean Elo-Rivera, who brought the proposal forward, said the goal is return housing to the market.

“San Diegans are paying too much for housing and families can’t wait for action,” he said. “When homes sit empty for most of the year during a housing shortage, that hurts all of us — renters, first-time home buyers and the communities that depend on teachers, firefighters and other essential workers being able to live where they serve.”

The proposal would apply only to vacant homes that are not claimed as a primary residence, and it 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 city’s independent budget analyst projects the proposal could generate between $12 million and $24 million annually, but it depends on how owners respond. There are more than 5,100 homes that would qualify for the tax — about 40 are corporate owned.

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.

“Owners retain the full right to keep a home vacant if they choose to do so,” Elo-Rivera said, adding that it sets a threshold for vacancy for half the year. “If an owner chooses to keep a residential property vacant beyond that threshold, during a housing shortage, the property is subject to a tax.”

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.

Elo-Rivera started Wednesday’s meeting by recognizing the oddity of bringing forward a proposal similar to the one that was shot down weeks before. But he said he wanted to move on the clearest point of consensus, and that was homes sitting empty and serving no economic benefit.

Dozens of residents gathered at City Hall and called into the meeting to voice opposition and support. Some thanked Elo-Rivera for trying again, describing their struggle to make ends meet. Others described the latest proposal as a cash grab, warning that city officials will next propose a tax on empty spare bedrooms.

Councilmember Raul Campillo, one of the members who shot down the previous proposal, said this new proposal is more focused and represents a step in the right direction.

“The amount of people impacted by this proposal is far, far less than what it was last time,” he said. “Urgency does not mean we abandon diligence or rush ideas.”