A vacation rental tax proposal is making its way through San Diego’s City Hall and calls for a tax of up to $5,000 per bedroom per year.
If the proposal passes, someone with an empty second home or vacation rental with four bedrooms could face a $20,000 a year tax.
Airbnb is planning to invest $15 million to support political candidates in California, said one of the company’s PR executives. She said a lot of the spending would be in San Diego in order to “champion home sharing and tourism for the community.”
The executive insisted it was not related to San Diego’s tax proposal.
Divided council response
The City Council held a public hearing on Oct. 22 to listen to feedback on the proposal. Vacation rental hosts said it would hurt their small businesses and their ability to live in San Diego.
City Councilmember Sean Elo-Rivera wants to put it on the primary ballot next June.
"You are being used as a pawn in this game,” he said. “This is not an economy that's in crisis, it's a system that's working exactly as it's designed — to let billion dollar corporations thrive while working families, like the ones in this room, fight over the scraps of a shrinking housing market."
Councilmember Raul Campillo opposes the proposal, saying the tax would lead to price increases for both vacation rentals and hotels.
"This negative supply shock will be a double gut punch to the short-term vacation rental hosts and lead to herd behavior, with a major sell off of short-term vacation rental homes and a resulting drop in the tax revenue collected by the city,” Campillo said.
What’s next
The city has directed staff to move forward on a draft of the new tax proposal, and it’s shaping up to be a big fight.
Airbnb is exploring a nuclear option to punish the city. The company polled San Diegans about whether they would support a ballot initiative to kill the new trash fee the city recently imposed.
How this ends up will have a big impact on neighborhoods, tourism and the city’s budget.
