San Diego’s Measure A: Understanding the New Empty Homes Tax

San Diego voters have given the green light to Measure A, officially known as the Vacant Home Tax (VHT), marking a significant shift in how our city addresses housing affordability. This new measure aims to tackle the housing crisis head-on by discouraging speculative vacancies and generating dedicated funds for crucial housing and homeless services within the city.

What is San Diego’s Measure A?

Measure A establishes an annual tax on residential properties that remain vacant for more than six months in a calendar year. Its primary goal is to incentivize property owners to utilize their homes, whether by living in them or making them available for rent or sale, thereby potentially increasing housing supply in our tight market.

The Vacant Home Tax Explained

The tax applies to residential units within the City of San Diego that are unoccupied for over 182 days during any calendar year. While it targets single-family homes and condominiums, it can also extend to multi-family units not actively occupied. The city aims to identify these vacant properties through annual declarations required from property owners.

Who Will Be Affected?

The most direct impact will be felt by owners of residential properties that fall under the vacancy criteria without qualifying for an exemption. However, the measure’s broader implications could touch renters, prospective homebuyers, and developers as it influences the overall housing landscape and resource allocation for social services.

Tax Rates and Property Sizes

The annual tax rate is tiered based on the size of the residential unit, designed to reflect property values and potential rental income. These rates are a fixed amount per vacant property per year.

Key Exemptions to Know

Understanding the exemptions is crucial for property owners. Measure A includes several provisions designed to protect owners from unfair taxation due to legitimate circumstances. Exemptions apply to properties vacant because of:

• An owner’s medical needs or caregiving responsibilities.
• Probate proceedings or active construction/renovation with valid permits.
• Being actively listed for sale or rent on the market.
• Being registered as a short-term vacation rental.
• An owner’s military deployment or a student’s primary residence.
• Occupancy by a tenant, even if there are short gaps between leases, provided the property is actively offered for lease.

These exemptions ensure the tax targets truly underutilized properties rather than those temporarily vacant due to life events or market cycles.

Why Was Measure A Proposed?

San Diego faces a severe housing affordability crisis, characterized by high housing costs, a shortage of available units, and a growing homeless population. Proponents of Measure A argued that a significant number of residential properties sit empty, contributing to the scarcity and driving up prices. The tax aims to free up some of these units while simultaneously generating much-needed revenue.

The Promise of New Funding

The revenue generated from the Vacant Home Tax is specifically earmarked for critical initiatives. Seventy-five percent of the funds will be directed towards affordable housing projects, including the acquisition, rehabilitation, and construction of new affordable units. The remaining twenty-five percent is allocated to homeless services and prevention programs, addressing a pressing humanitarian issue in our city.

What Happens Next for San Diego?

With Measure A now passed, the City Treasurer’s office will begin the process of implementing the tax. This includes establishing the annual declaration system for property owners and setting up enforcement mechanisms. Property owners will be required to declare their occupancy status annually, a system that will require clear communication and robust city infrastructure.

Impact on Housing Market and Rents

The long-term impact on San Diego’s housing market is a subject of ongoing debate. Optimists hope the tax will prompt owners of vacant homes to put them back on the market, increasing supply and potentially stabilizing or even slightly lowering rental prices. Others express concern that the tax might be passed on to renters in the form of higher rents or that it will have a negligible effect on overall supply, especially given the various exemptions.

Monitoring the Outcomes

The city will be closely monitoring the effectiveness of Measure A. Key metrics will include the number of previously vacant homes brought back into use, the amount of revenue generated, and the measurable impact on affordable housing initiatives and homeless services. Community members and advocacy groups will likely play a role in scrutinizing the implementation and outcomes of this new policy.

FAQs About San Diego’s Vacant Home Tax

• When does the tax officially begin?
  The tax collection will commence on January 1, 2024, based on the vacancy status of properties during the 2023 calendar year.
• What if I rent out my home but have short vacancies between tenants?
  Properties actively listed for rent or sale, or those with an active lease agreement, are exempt. Short periods of vacancy between tenants while the property is being prepared or marketed are generally covered by this exemption.
• Does this apply to vacation rentals like Airbnbs?
  No, properties that are properly registered and actively operating as short-term vacation rentals are explicitly exempt from the Vacant Home Tax.
• How do I declare my property’s occupancy status?
  The City Treasurer’s office will establish an annual declaration process, likely an online portal, where property owners will attest to their property’s occupancy status for the preceding year.
• What if I own multiple properties in San Diego?
  The tax applies to each eligible residential property that meets the vacancy criteria individually. If you own multiple properties, each one will be assessed separately based on its occupancy.

For San Diego property owners, understanding the nuances of Measure A is critical to ensure compliance and avoid unexpected costs. For all San Diegans, this measure represents a significant step in the city’s ongoing efforts to create a more equitable and accessible housing market.

San Diego Approves Empty Homes Tax