SAN DIEGO (KGTV) — A proposed tax on empty second homes and short-term vacation rentals in San Diego is generating heated debate as it approaches another review by the city's Rules Committee next week.
The measure, proposed by Councilmember Sean Elo-Rivera, would impose a $5,000 tax per bedroom on vacant second homes and vacation rentals, leaving primary residences and long-term rentals untouched.
He says it could potentially generate up to $135 million annually.
Supporters say it would apply to fewer than 1% of San Diegans while tackling the city's housing affordability crisis and budget deficit.
"This tax on the 1% could also be used to fund affordable housing projects like the Skyline project behind me," said David Zepeda, a member of IUPAD DC Local 36, at a press conference Wednesday.
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Bridgette Browning, President of the San Diego Labor Council, argues the tax targets a specific group of people.
"It asks those who have profited so much from our housing crisis to finally pay their fair share and give back to our community," Browning said.
Labor union members say they're struggling to afford homes in areas where they work. Zepeda pointed to "homes that at one point were available to working class people."
Many say the housing shortage affects public safety workers as well. George Duardo, President of San Diego City Firefighters Local 145, warned, "A city that can't house its firefighters is a city that puts public safety at risk."
Elo-Rivera says students are being "pushed out of the city where they study, work, and plan their futures."
However, business leaders strongly oppose the measure. Chris Cate, President and CEO of the San Diego Regional Chamber of Commerce, argues the tax threatens a vital revenue source.
"We feel that this proposal looks at an industry that's the golden goose for this city in driving tourist tax revenue to pay for basic city services, and they're going to go after and try to get their hands on more money from this industry," Cate said.
Cate questions whether the tax would actually create affordable housing.
"There's no guarantee that the money from this proposal will pay for one new home or new student housing or the like. We do believe that we have a housing crisis in San Diego, absolutely, and the solution to that is to build more housing," Cate said.
He also warns the tax could reduce rental availability and hurt small businesses that depend on tourism revenue.
"The number of small businesses that rely on these visitors to come into San Diego, not just to stay in those homes, but the money that's being spent in these neighborhood businesses and small businesses are gonna also see an impact," Cate said.
Airbnb reports more than 80% of its hosts in San Diego are owned by people who live there.
The Rules Committee will review the proposal next Wednesday. The committee previously advanced it in October with a 3-1 vote.
By early March, the full City Council will determine whether the measure should appear on the June ballot for voters to decide.
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