Vacation Rental Tax Dies in San Diego Committee Vote

The controversial vacation rental tax that had San Diegans at each other's throats is officially dead, at least for now.

After hours of passionate testimony from nearly 200 speakers, the City Council's Rules Committee voted 3-2 Wednesday to kill Councilmember Sean Elo-Rivera's proposed Empty Second Home and Vacation Rental Tax. The measure would have charged property owners $8,000 annually per unit, with corporate owners facing an additional $4,000 hit.

Supporters argued the tax would return homes to actual San Diegans instead of tourists. Opponents called it a tourism industry death sentence.

The numbers told a complicated story. San Diego has 5,115 empty second homes and 5,741 vacation rentals, with nearly half concentrated in La Jolla, Downtown, Pacific Beach and Mission Beach. The city's own analysts warned that if just 48% of vacation rentals converted to long-term housing, the city would actually lose money from vanishing hotel taxes.

Council President Pro Tem Kent Lee summed up the dilemma perfectly, noting the proposal's purpose kept shifting between generating revenue and returning housing stock to market. Those goals, he said, work against each other.

Chamber of Commerce CEO Chris Cate celebrated the decision, arguing the tax would have created fewer visitors, fewer jobs and less revenue without guaranteeing a single new home.

Elo-Rivera tried a last-ditch amendment separating corporate-owned from locally-owned properties, but the votes simply were not there.

San Diego voters will not get their say on this housing hot potato in June after all.

Sources: KPBS | CBS 8 | ABC 10News