Idle Properties Pile Up Despite Demand (Image Credits: Pixabay)
San Diego – Property owners in this coastal city have left more than 5,000 residential units empty amid soaring rents and a persistent housing crunch. The City Council advanced Measure A to the June 2 ballot in a bid to compel owners to rent or sell these idle second homes. If approved, the levy would generate millions for public services while nudging vacant properties back into productive use.[1][2]
Idle Properties Pile Up Despite Demand
City data revealed 5,115 residential units potentially eligible for the tax, drawn largely from self-reported exemptions under the Rental Unit Business Tax for vacation and second homes in 2025. These properties span single-family homes, condos, and small multifamily buildings, concentrated in areas like Downtown, La Jolla, and Pacific Beach.[1]
Owners cited personal use or maintenance issues for keeping units unoccupied more than 183 days a year. Yet median rents hovered well above affordability thresholds, exacerbating the crisis for local families. The council’s 8-1 vote on March 3 placed the measure before voters, with only Councilmember Raul Campillo dissenting over legal worries.[2]
Unpacking Measure A’s Tax Framework
The proposal imposes an excise tax on owners of dwellings vacant for 183 days or longer annually, excluding primary residences. Rates start at $8,000 per unit in 2027, rising to $10,000 the following year with inflation adjustments thereafter. Corporate owners face an extra $4,000 surcharge initially, climbing to $5,000.[1]
Several exemptions shield certain owners:
- Primary residences claimed by the owner.
- Units under bona fide long-term leases.
- Properties occupied by family members.
- Homes affected by disasters, military service, or owner illness (with time limits).
- Small multifamily buildings where the owner lives on-site.
Revenue projections ranged from $12.1 million to $23.8 million in the first full fiscal year, after subtracting $1 million in administrative costs. Funds would bolster the general budget, potentially aiding rental assistance and affordable housing.[1]
| Year | Base Tax per Unit | Corporate Surcharge |
|---|---|---|
| 2027 | $8,000 | $4,000 |
| 2028+ | $10,000 + CPI | $5,000 + CPI |
Backers Champion Supply Boost, Foes Warn of Court Fights
Proponents, including Councilmember Sean Elo-Rivera and the San Diego Housing Federation, argued the tax targets speculators hoarding homes during shortages. They emphasized that 99% of residents, including renters and primary homeowners, would pay nothing. Labor unions and activists submitted ballot arguments highlighting revenue for community services.[3]
Opponents, led by real estate groups and the San Diego County Taxpayers Association, predicted lawsuits mirroring San Francisco’s failed vacancy tax, struck down on constitutional grounds. They contended the measure coerced owners into renting, violating property rights, and offered no guarantees for new housing construction. Enforcement challenges, like verifying vacancies, loomed large.[2]
Lessons from Peer Cities’ Experiments
San Diego officials studied taxes in places like Berkeley and Oakland, where similar levies curbed vacancies with mixed revenue results. Berkeley collected less than projected after exemptions, while Oakland saw steady yields. Vancouver and Washington, D.C., also trimmed empty units but faced compliance hurdles.[1]
San Francisco’s experience cast a shadow: Voters approved a tax on large vacant buildings in 2022, but courts halted collections amid Takings Clause claims. San Diego’s city attorney deemed its version distinct, focusing on individual homes with exemptions, yet skeptics remained unconvinced.[2]
Key Takeaways
- Targets roughly 5,100 second homes vacant over half the year.
- Could yield $12-24 million annually after startup costs.
- Exempts primaries, rentals, and hardship cases to limit scope.
As campaigns intensify ahead of June 2, the measure tests whether fiscal pressure can unlock housing without legal backlash. San Diego residents must weigh the promise of more rentals against risks to property freedoms. What do you think about it? Tell us in the comments.
