San Diego Set to Vote on $15,000 Tax for Empty Second Homes

UPDATE: In a groundbreaking move, the San Diego City Council has just announced that voters will decide on a controversial tax targeting empty second homes, potentially costing owners up to $15,000 annually. This proposal, set for the June ballot, has sparked heated debates among residents and officials alike, as it aims to address the city’s escalating housing crisis.

The council’s decision, made in a near-unanimous vote, comes as San Diego faces a dire need for affordable housing. The proposed “empty homes tax” would impose an initial fee of $8,000 on over 5,000 homes left unoccupied for more than half the year, with an additional $4,000 surcharge for corporate-owned properties. Councilmember Sean Elo-Rivera, the architect of this initiative, emphasized the urgent necessity for the measure: “We heard it from teachers, we heard it from firefighters… homes shouldn’t be sitting empty during a housing crisis.”

Council President Joe LaCava acknowledged the limitations of the tax but stressed its potential to bring “hundreds, if not thousands” of homes back to the market for San Diegans. “Every action we can take… is important,” he stated, highlighting the measure’s dual aim of generating revenue for city services while incentivizing homeowners to rent or sell their properties.

Should voters approve the measure, it will take effect on January 1, 2024, with the first tax payment due on April 1, 2028 for homes deemed empty for 183 days or more in 2027. The Independent Budget Analyst projects the tax could generate between $9.2 million and $21.4 million in its first year, a significant contribution to the city’s finances amid ongoing budget challenges.

However, the proposal has met with substantial opposition. Critics argue that it places an undue burden on homeowners to prove residency, potentially leading to legal complications. George Ching from the Pacific Southwest Association of Realtors warned, “Even if they are exempt, they are going to have to file paperwork to prove they are exempt.” Concerns were also raised by residents like Karen Barton, who highlighted the impact on families utilizing second homes for caregiving.

The council’s decision follows similar measures in other jurisdictions, such as San Francisco, where a previous empty homes tax faced legal challenges. Critics question the measure’s enforceability and its potential to withstand judicial scrutiny. In response, LaCava reassured the public that extensive legal reviews have been conducted, aiming to ensure the measure’s viability if approved.

As San Diego grapples with a housing affordability crisis, many residents are hopeful that this tax will serve as a catalyst for change. Noah Yee Yick, a policy advocate, stated, “There are thousands of San Diegans who struggle to keep a roof over their heads… while homes sit empty.” The upcoming vote will determine whether this bold initiative will move forward, reflecting the city’s commitment to addressing its housing challenges.

With the June ballot approaching, all eyes are on San Diego as residents prepare to voice their opinions on this pivotal tax measure. The outcome could reshape the housing landscape and provide much-needed relief for those struggling to find a home in this vibrant city. Stay tuned for the latest updates as this story develops.