Local efforts to tax vacant and second homes as a housing policy lever

San Diego is taking a bold step forward in its ongoing effort to combat the housing crisis by considering strategic fiscal policies, notably the implementation of taxes on vacant and second homes. This initiative aims to unlock the city’s unused property assets, incentivize owners to rent or sell, and ultimately expand the affordable housing supply. The recent developments surrounding this policy reflect a broader shift towards leveraging land-use tools and revenue generation to address housing shortages.

Key Developments and Legislative Moves

A pivotal moment arrived with the upcoming Rules Committee meeting scheduled for February 25, where city officials will discuss a proposed ballot measure to establish an Empty Homes Tax. This measure is designed to discourage property hoarding and underutilization, which exacerbate housing scarcity and drive up prices. The tax would target owners of vacant properties, compelling them either to rent out or sell their homes—thus increasing the pool of available housing options.

Simultaneously, Councilmember Sean Elo-Rivera has revived his proposal for a second-home tax aimed at owners of unoccupied second homes. His initiative seeks to motivate owners to convert second homes into long-term rentals or sales, further alleviating the housing crunch. These efforts are not merely about revenue; they represent a strategic push to use fiscal incentives to promote more equitable land use and maximize the utility of existing properties.

Support from the San Diego City Council underscores a significant policy shift. By endorsing these measures, the city is signaling its intention to utilize taxation as a tool for housing policy, aligning fiscal policy with urban planning objectives. The revenue generated from these taxes could also serve as a funding source for affordable housing projects or other land-use reforms.

Broader Land-Use and Community Context

San Diego’s push for vacant and second-home taxes is intricately linked to a broader landscape of land-use reform. For instance, recent legislative efforts like AB-2525 aim to exempt Mission Bay Park lands from surplus land rules, allowing the city to preserve iconic green spaces while enabling higher-density development on other publicly owned lands. Such reforms are part of a comprehensive strategy to balance environmental conservation with urban growth.

Moreover, local zoning debates, such as those in Jamacha, highlight community engagement with land management and housing strategies. These discussions reveal the recognition that zoning flexibility and surplus land policies are critical levers for addressing housing needs and fostering sustainable development. By integrating tax policies with zoning reforms, San Diego aims to craft a cohesive approach that maximizes land utility while respecting community concerns.

Implications and Future Outlook

The move to tax vacant and second homes signals a policy shift towards more efficient land use. If approved, these measures could set a precedent for local governments nationwide seeking to address housing shortages through innovative fiscal tools. Additionally, community support will be crucial; public buy-in can determine whether these policies are adopted, modified, or rejected at the ballot box.

The outcomes of the February 25 Rules Committee hearing will be a decisive step. If the measures advance, they could be placed on the upcoming ballot for voter approval or integrated into legislative action. The success of these initiatives hinges on legislative approval, community engagement, and effective implementation.

Current Status and Broader Significance

As of now, the city is deliberating these proposals, with the potential for formal introduction and public consultation in the coming months. Should the measures pass, San Diego could become a model for leveraging property taxes to unlock housing supply, aligning fiscal discipline with progressive land-use policies.

In summary, San Diego’s efforts to impose taxes on vacant and second homes represent a comprehensive strategy to increase housing affordability, generate revenue for housing initiatives, and refine land-use policies. These policies, if successful, could significantly influence how local governments utilize existing property assets to meet the pressing needs of their communities, paving the way for more sustainable and equitable urban growth.