The San Diego City Council voted 8-1 Tuesday to place a measure on the June 2 ballot that would tax empty homes in an attempt to increase the housing supply.
If approved by voters, the city would impose an $8,000 tax on vacant second homes in 2027 and a $10,000 tax from 2028 on. An additional surcharge of $4,000 for 2027 and $5,000 for 2028 on would be imposed on corporate-owned vacant homes.
"The desire to have a damn chance in this city is so strong. We need to encourage that," said Councilman Sean Elo-Rivera, who proposed the ballot measure. "The overwhelming majority of San Diegans will never pay this tax. It does not require anyone to rent their home. Owners retain the full right to keep their homes vacant."
The measure would apply only to vacant second homes that sit empty for more than half the year and does not apply to primary residences or short- or long-term rental properties. There are 5,140 vacant homes in the city, officials said.
It also includes exemptions for hardship, military service, disaster damage, probate and long-term care
According to the Independent Budget Analyst's office, tasked "to provide clear, objective and unbiased analysis and advice," on the more conservative end with 65%-70% of vacant homes exempt for one reason or another, the measure would bring an estimated $9.2 million to the city's general fund in its first year, $10.4 million in the second. The IBA's more optimist range, where only 45% of those vacant homes are exempt, is $21.4 in the first year and $24.2 in the second.
"This is about fairness and a reasonable use of housing," said Council President Pro Tem Kent Lee. "If someone chooses to keep a home empty, they should contribute a little more.
"We should give the voters an opportunity to decide on a focused and reasonable proposal."
Opponents of the proposal spoke out Monday, stating it would not significantly impact housing supply and homeowners could be penalized for difficult compliance and enforcement mechanisms.
"San Diego families are already shouldering rising costs and increased fees," said activist Shane Harris. "Adding a sweeping vacancy tax that starts with significant annual liabilities — potentially thousands of dollars per home — adds a burden our residents simply cannot afford. This proposal risks penalizing homeowners and small property owners while delivering minimal improvement to housing outcomes."
Councilman Raul Campillo, the lone no vote Tuesday, said his dissent stemmed from the lack of a "robust legal memo" which the city could use as defense in the event of lawsuits opposing the measure.
"I'm all ears on ideas that could potentially put homes on the market, and it seems like this proposal certainly would," he said. "I am hesitant to vote for it today because I have not received the information I needed to be confident in my decision. And confidence in our decisions is something the public truly lacks these days."
If voters approve the measure, it would go into effect Jan. 1, with the first bills sent to homeowners Jan. 1, 2028. That first round of taxes would be due April 2028.
The council approved the ballot measure a little over a month after the Council's Rules Committee killed a similar measure to tax empty homes and vacation rentals.
The sticking point in the 3-2 vote rejecting the proposal in late January was the belief that families, retirees and others rely on vacation home rentals as their source of income. A slimmed-down proposal by Elo-Rivera took that part out and was passed unanimously by the Rules Committee on Feb. 25.
Council President Joe LaCava agreed that the ballot proposal was "not a silver bullet," but said every attempt to get homes on the market was worth looking at.
Stephen Russell, president and CEO of the San Diego Housing Federation, supported the measure.
"San Diegans are being priced out while homes sit empty," he said. "Since 2000, we have lost more than 60,000 affordable homes in the city of San Diego — not because they were demolished, but because they were up-marketed. At a time when housing is scarce, leaving thousands of homes vacant only makes the crisis worse."
