Economy

City Council may be interested in a vacancy tax on property owners

Written by Amanda Angulo

Some San Diego City Council members have shown interest in implementing a vacancy tax, which will allow for the city to charge property owners who leave their homes vacant, in order to combat the homelessness issue facing the city. 

The San Diego Housing Commission had failed to go through with their plans to study the issue, back in 2019.

However, the Commission looked for, and found, data needed to not only conduct a study, but also plans to finalize agreements with contractors this month. 

If the city accepts the study and goes through with a vacancy tax, it will pose a major infringement on the freedom and rights of property owners’. 

By implementing a tax on homeowners and landlords who do not fill in vacancies as fast as Democrats would like, San Diego will quickly become an undesirable place for investors and economic opportunity in the region could suffer.

Additionally, the vacancy tax has the potential to do more harm to smaller property owners and landlords, as it will most likely increase continuously if the Democrats are not happy with their results. California is no stranger to continuous tax hikes, like the ever-increasing gas tax. Big developers can usually afford higher taxes, but the average investor may not be able to survive. 

A clear example of this was demonstrated in Vancouver, where they implemented a similar vacancy tax. Vancouver’s Empty Homes Tax (EHT), launched in 2017, has tripled for the 2021 tax year. The reason behind this was because the initial rate did not coax landlords to fill as many units as hoped. 

The same scenario could be seen here in San Diego if the vacancy tax is implemented. The infringement of property owner’s rights that this tax would pose wasn’t much of a threat when the city was controlled by a Republican majority City Council. However, Democrats took control of the Council in the most recent election and have quickly moved to push San Diego as far left as other big cities in California like Los Angeles and San Francisco.