A proposal to raise an annual tax on empty second homes and vacation rentals failed at a City Council committee meeting last week. There were two very different world views on display.
Support for the tax
Councilmember Sean Elo-Rivera said his main hope was that the tax would tip the balance for property owners. He thought that if the tax made them pay more to rent a home out to visitors, it would incentivize them to offer it to residents instead.
“Every time we build a home, we are helping make the problem a little less bad and doing what we can to try and make it better,” Elo-Rivera said. “And the same applies to a home that is turned from an empty home or short-term vacation rental into a home for a San Diegan.”
That created a political bridge between him and people who often oppose him. Those people are worried about their neighborhoods getting taken over by short-term rentals, especially near the coast.
The opposition
But Councilmember Raul Campillo spoke for the opposition and delivered a long speech supporting people who rent out to vacationers.
“I bet a bunch of people here who have short-term vacation rentals have at one time been long-term rental owners, had a really bad tenant, lost a lot of money in some way shape or form and decided that’s not their business model,” Campillo said. “That’s totally appropriate for a business owner to decide this is the way I want to allocate my risk.”
In the end, the vote to watch was Councilmember Kent Lee. He said the tax’s outcomes were too uncertain, it may hurt the city’s bottom line and he wouldn’t support it. But he also said the issue isn’t over.
“I just want to note that my position on this specific measure does not take away from my belief that short-term rentals do have an impact on local housing,” Lee said. “And I look forward to continuing the critical discussions necessary to address housing capacity, housing stock and housing affordability on that front.”
What’s next
One of the groups who opposed the tax was the laborers union. The union wants to put a sales tax on the ballot that would be used mostly for infrastructure, and they thought the short-term vacation rentals tax would hurt its chances.
The union hasn’t taken action yet, but Airbnb indicated they would help pass the sales tax.
