San Diego Council Rules Committee Blocks Proposed Tax on Empty Homes and Short-Term Rentals

Measure aimed at vacant second homes and full-time vacation rentals stalls on a 3-2 committee vote

A proposal to ask San Diego voters to approve a new annual tax on empty second homes and certain short-term vacation rentals failed to advance Wednesday after the City Council’s Rules Committee voted 3-2 against sending it to the full Council for consideration.

The plan, introduced by Councilmember Sean Elo-Rivera, sought to place an $8,000 annual charge on homes kept vacant as second (or additional) residences and on homes operated as short-term rentals. The proposal included additional add-ons of $4,000 for corporate-owned homes and another $4,000 for repeat municipal code violators, along with listed exemptions for certain circumstances, including military service, disaster-related situations and specific accessory dwelling unit scenarios.

What the proposal targeted

City estimates presented during the debate described a combined pool of 10,856 properties: 5,115 identified as empty homes and 5,741 licensed vacation rentals. The geography of short-term rentals was described as heavily concentrated, with 45% located in La Jolla, Downtown, Pacific Beach and Mission Beach.

• Base tax: $8,000 annually on targeted vacant homes and short-term rental homes
• Additional $4,000 for corporate-owned properties
• Additional $4,000 for repeat municipal code violators
• Exemptions described for specific hardship and occupancy situations

Revenue projections and trade-offs

Preliminary analysis from the city’s Independent Budget Analyst estimated the tax could generate roughly $17 million to $27 million annually, depending on market behavior. However, the same analysis highlighted a key fiscal uncertainty: if a large share of vacation rentals were removed from short-term use, the city could lose transient occupancy tax revenue that currently supports general city services.

Committee discussion emphasized this tension between two stated goals: raising revenue and shifting housing supply back toward long-term residential use. Speakers and committee members argued over whether the measure would materially increase housing availability, and whether any gains would be offset by reduced tourism-related revenue.

Committee debate: housing affordability, small business impacts and legal considerations

The committee hearing drew nearly 200 public speakers, including residents, short-term rental operators and organized labor representatives. Supporters argued the policy would reduce the number of homes held out of the long-term market and make housing access more equitable. Opponents countered that many households rely on short-term rental income and that the proposal could negatively affect tourism-related activity.

Debate centered on whether the measure would return homes to local residents, how it would affect city revenues and whether its structure would be defensible if challenged.

During the hearing, city officials stated the measure was drafted to be legally defensible. Elo-Rivera also pursued last-minute adjustments intended to differentiate between corporate ownership and locally owned properties, but the changes did not secure a majority.

What happens next

Because the proposal did not pass the Rules Committee, it does not advance to the full City Council through this pathway. Any future attempt to place a similar measure before voters would require a new legislative push, with revised language and another round of committee consideration.