A proposed ballot measure aimed at expanding housing options for San Diegans calls for levying an annual $8,000 tax on most short-term rentals, along with second homes that owners aren’t occupying. An additional surcharge of $4,000 would target corporate-owned vacation homes.
Although the framework for the tax measure being pushed by San Diego Councilmember Sean Elo-Rivera was formally introduced in October, he confirmed Tuesday that the details have since been revised, with one notable change being the elimination of a $5,000-per-bedroom levy. Instead, the tax, now $8,000, would be on the entire home, regardless of size. The only variation in the total amount paid would depend on the type of ownership, which could trigger the proposed surcharge.
Elo-Rivera also has refined his plan for providing exemptions to owners of second homes who faced special situations that kept them from occupying their properties for 183 or more days of the year. Among those circumstances would be disasters that made a home uninhabitable, the owner was in long-term care or the owner was serving in the military.
Unaffected by the proposed tax would be home-sharing hosts who rent out a room or two or, alternatively, their entire residence for 20 days or less per year.
The council’s Rules Committee, which reviewed the initial proposal in October, will take a second look Jan. 28 when Elo-Rivera will ask members to forward it to the full council for placement on this year’s June ballot. The committee in October voted 3-1 to advance the highly contentious proposal, but on the condition that when the measure came back, there would be more detailed analysis.
The city faces a March 6 deadline for the council to approve June 2026 ballot measures.
“Every house in our city that is not being used as a home impacts our housing supply,” Elo-Rivera said in an interview Tuesday. “So we are basically taxing that choice to take a home off the housing market and use it for either pleasure or tourism, or profit, rather than for housing.”
By Elo-Rivera’s calculations, there are an estimated 11,000 homes that could potentially be affected, including 5,741 whole-home, year-round short-term rentals and 5,115 second homes that are largely empty throughout the year and aren’t being rented long term.
Hosts who rent out their entire home on a short-term basis are already required to pay a two-year license fee of $1,129, money that goes toward the cost of enforcing the city’s vacation rental regulations.
Elo-Rivera’s office estimates that the tax could generate $90 million annually, significantly less than the $133 million that was projected under the original proposal for a per-bedroom levy.
What remains unclear is how many property owners might opt to alter how they use their second homes to avoid the tax.
“The decision to reduce the amount of revenue that this tax is projected to collect is evidence that the revenue is secondary,” Elo-Rivera said. “Returning homes to the housing market is the primary goal. If this tax resulted in zero revenue, that would mean that 11,000 homes were returned to the market for San Diegans to call home, and that would be a monumental win for San Diegans and the neighborhoods that have been hollowed out by homes being used as vacation rentals.”
The proposed tax has triggered strong opposition from vacation rental hosts, as well as the home-sharing platform Airbnb and the San Diego Regional Chamber of Commerce, which argues that rather than creating new housing, it will punish San Diegans who rely on short-term rental income to make ends meet.
“This is an industry that provides so much for small business throughout the region,” said Chamber President Chris Cate. “San Diego relies on our tourism economy, and targeting an industry is not the right approach to take to address the challenges this proposal purports to address. And there’s no guarantee that these homes will return to the market, so instead you’re punishing those who bring tens of millions of dollars to pay for basic city services, parks and police and fire.”
Like the chamber, Airbnb is taking steps to actively lobby against the proposal and has an already existing political action committee that has about $2.5 million in it, much of which is targeting the San Diego proposal, the company said.
“While the tax aims to address corporate-owned vacation rentals, the reality is it significantly impacts local residents who already pay taxes and fees to share their home: Over 81% of Airbnb hosts in San Diego are residents and nearly 75% share just one entire home listing,” Justin Wesson, senior public policy manager for Airbnb said in a statement provided to the Union-Tribune. “We’ve seen how egregious tax proposals targeting hosts do more harm than good for communities. That’s why we plan to aggressively defend residents’ ability to share their home without burdensome taxes.”
Elo-Rivera’s office stresses that the proposal targeting vacant second homes and whole-home short-term rentals would not have any effect on primary residences, renters, or long-term rentals, and as a result, would impact less than 1% of San Diegans.
The surcharge component of the tax, says Elo-Rivera, is meant to go after “those who are bad actors. Surcharges will mean corporate owners and vacation homes with multiple nuisance violations will pay the most for this tax.”
He acknowledges that his proposal was inspired in part by concerns raised more than two years ago about an apparent loophole in the city’s current vacation rental regulations that allow owners of multi-family properties to legally secure multiple vacation rental licenses via willing proxy hosts, as reported by the Union-Tribune.
The worst offender was an Ocean Beach property owner who was able to persuade family members, friends and acquaintances to put their names on more than 100 license applications for his huge portfolio of vacation rentals. He later lost about 40 of those licenses after the city’s enforcement team conducted an investigation into some of the hosts.
“That was one of the things that was a motivator,” Elo-Rivera said. “It’s an example of how Airbnb’s model harms everyday people and destroys neighborhoods. One of the things that this tax would do is increase significantly the cost of folks who are doing that. If they’re using proxies to run these mini-hotels, then they’re going to have to pay the impacts of that across the portfolio that they’ve built.”
Wesson noted in his statement that while the great majority of its hosts are “responsible residents,” the company “is supportive of changes to the (vacation rental) ordinance that prevent bad actors from circumventing the intent of the current rules.”
Elo-Rivera’s proposal is not unique to San Diego. It’s being modeled, he said, after a similar measure in Berkeley, where voters in 2022 passed a tax on vacant homes.
There is no guarantee that the proposed tax will pass muster in the Rules Committee. Councilmember Raul Campillo, who cast the lone “no” vote in October, was highly critical, arguing that the proposal lacked adequate analysis and that any new monies generated would likely be outweighed by reductions in sales tax and room tax revenue.