San Diego’s “Empty Second Home & Vacation Rental Tax” Just Hit a Wall — Here’s What It Means for STR Owners

On January 28, 2026, San Diego’s City Council Rules Committee voted 3–2 to reject a proposal that would have imposed a major new annual tax on certain short-term rentals (STRs) and largely empty second homes—a measure supporters framed as a housing-supply tool and opponents described as an economic gut punch.

The proposal, introduced by Councilmember Sean Elo-Rivera, carried an attention-grabbing nickname: the “Empty Second Home and Vacation Rental Tax.” While the committee decision doesn’t erase the broader policy debate (or the political pressure behind it), it does send a clear signal: San Diego’s STR regulatory environment remains active, contested, and likely to evolve.

If you’re an STR operator, a “maybe someday” investor, or an owner who relies on vacation rental income to make the numbers work—this is the kind of local-policy flashpoint you need to understand early, not after it’s already on the ballot.

Below is what happened, why it matters, and how owners can prepare for the next round—because there almost always is a next round.

What the proposal aimed to do

At a high level, Democrat Elo-Rivera’s proposal targeted two categories:

Vacant second homes (described by proponents as homes sitting largely unused), and
Whole-home STRs operated year-round (as opposed to a hosted room or a primary residence rented occasionally).

News coverage described the tax as $8,000 annually for applicable properties, with significant debate around how it would be calculated and who would ultimately be captured by the definitions.

The underlying policy logic was straightforward: if the city increases the carrying cost of keeping a home vacant or running it as a full-time mini-hotel, then at least some owners might choose to sell, rent long-term, or otherwise return units to the housing market. Supporters also argued the tax could generate meaningful revenue to address housing and budget pressures.

Opponents countered with a different causal chain: higher costs on STRs reduce supply, reduce tourism spend, reduce related employment, and—depending on implementation—punish small owners who are not the “corporate operators” the policy rhetorically targets.

The hearing: emotion, economics, and a familiar coastal-city fight

Coverage of the multi-hour public hearing makes one thing clear: this wasn’t a polite policy seminar. It was a high-stakes cultural and economic clash over what San Diego is for:

A place where housing stock should be protected primarily for residents, even if that constrains tourism-driven uses; or
A place where tourism is an essential economic engine and property owners should retain broad discretion, especially when STR income funds mortgages, retirement plans, and family expenses.

Testimony included labor and community groups arguing that “empty homes” and STR concentration worsen affordability and neighborhood stability, while STR hosts and allied businesses emphasized how many livelihoods depend on the STR ecosystem—cleaners, maintenance vendors, property managers, and local small businesses supported by visitor spend.

Geography matters here. Coverage notes that a large share of whole-home vacation rentals are concentrated in coastal and visitor-heavy communities—precisely where housing pressure and tourism dependence collide most visibly.

The vote: 3–2 against moving forward

In the end, the Rules Committee voted 3–2 to reject the measure, effectively preventing it from advancing in the form presented.

Reporting identifies the “no” votes as driven by concerns that will sound familiar to anyone who has followed STR policymaking:

Economic ripple effects (what happens to local jobs and tourism spend)
Mismatch between revenue assumptions and actual housing conversion outcomes (will units really convert, or will owners absorb costs / change tactics?)
Public perception and enforceability (will this read as a targeted “corporate accountability” move or as a broad tax on local owners?)

Elo-Rivera attempted a late amendment to narrow the focus toward empty second homes and corporate operators, but it did not gain enough support to change the outcome.

Why this matters even though it “failed”

It’s tempting to file this under “non-event” if you’re an STR owner. That would be a mistake.

1) The policy pressure isn’t going away

San Diego’s housing affordability issues and budget constraints aren’t new—and they are exactly the conditions that produce taxes, fees, and regulatory tightening. When one tool fails, policymakers often return with another: revised definitions, different tax structures, enforcement expansions, or zoning constraints.

2) “Corporate vs. mom-and-pop” will remain the central framing battle

Even opponents of this proposal acknowledged the political appeal of targeting perceived corporate ownership. The hard part is execution: corporate ownership can be structured through entities that don’t look “corporate” on paper, and enforcement frequently becomes a game of definitions and documentation.

If you’re a legitimate small operator, your risk is being swept into a category that was politically branded as something else.

3) Expect more focus on whole-home, year-round STRs

The strongest regulatory heat in many markets lands on the model that looks most like hotel substitution: unhosted, entire-home, full-time STRs. Even if you operate responsibly and comply fully, the business model itself is a visible target.

Practical takeaways for STR owners in San Diego

You can’t control city politics, but you can control how resilient your operation is when policy winds shift.

A) Treat compliance like an asset, not a chore

When hearings turn emotional, public officials look for easy narratives. The best defense is a clean paper trail:

Permits and licensing current
Tax remittance documented
Noise/occupancy/parking rules followed
Neighbor concerns addressed quickly and professionally

Operators who can demonstrate responsible management tend to fare better when broad crackdowns arrive.

B) Build a “regulatory shock absorber” into your pro forma

If your deal only works when everything stays perfect—no new fees, no occupancy restrictions, no enforcement push—you don’t have an STR business. You have a fragile bet.

A smarter underwriting approach includes:

Margin for fee/tax increases
Conservative occupancy assumptions
Capital reserves for slower seasons or compliance upgrades

C) Know your exposure: whole-home + year-round is different

If your property is a primary residence occasionally rented, your risk profile is usually different than a dedicated STR. Likewise, if you operate multiple units, even as a small operator, you may be perceived differently in policy debates.

Understanding where your specific listing sits on that spectrum helps you plan—and helps your manager advocate for you effectively.

D) Don’t underestimate enforcement as “policy”

Even when new taxes or ordinances don’t pass, cities can tighten outcomes through enforcement priorities: audits, complaint response, permit verification, and penalties. For many owners, enforcement intensity matters as much as the written rules.

What to watch next

Based on the way these debates typically evolve, here are the likely next chapters:

A narrower, more “corporate-targeted” revision (harder to oppose politically, but still complex to enforce)
A ballot-measure pathway if council action stalls, depending on political will and coalition strength
Incremental changes (fees, caps, enforcement funding) that don’t carry the headline impact of an $8,000+ annual tax but can still materially affect profitability

Whether you supported or opposed this specific measure, the underlying reality is the same: San Diego is still negotiating the balance between housing needs and a tourism-driven coastal economy—and STRs sit in the center of that negotiation.