The conversation around San Diego’s vacation rental homes has been loud and heated for years. Meanwhile, an equally large part of the housing stock has received much less attention: empty second homes.
These are homes like the 13,000-square-foot Sand Castle in La Jolla, which listed for $108 million in 2024. They are not a primary residence. They are, in many cases, the vacation homes of the very-wealthy and they spend much of their time sitting empty.
There are at least 4,996 of these homes in San Diego, which is nearly the same as the number of short-term vacation rentals (5,648) on the market. They each account for roughly one percent of the city’s housing stock.
The list of vacation homes, created by Councilmember Sean Elo-Rivera’s office, is based on residences which claimed exemption from the rental unit business tax.
The Sand Castle itself — which sits atop the cliffs and has its own private beach — may be a rarity, but La Jolla’s part in the story of homes without a full-time resident is not.
La Jolla’s ZIP code alone has 852 vacation homes. That’s far more than almost anywhere else. Except for the downtown area, which includes Little Italy, East Village and the Gaslamp, no other neighborhoods even come close.
The empty homes create a “visceral response” for Elo-Rivera, he told me.
He spoke of a time several years ago, when many people were living in tents on the street in East Village, while high rise condos were being built right next door.
“To see buildings go up — and so many of those units seemed to not be lived in — while people are sleeping outside on the street. Emotionally that bothers me. It’s not right,” he said.
On Wednesday, Elo-Rivera will pitch a ballot measure to the City Council Rules Committee that would tax these homes (as well as short-term vacation rentals) $8,000 each per year. Berkeley has a similar law.
This would bring in revenue for the city, of course. But a big part of Elo-Rivera’s pitch is that it will also lead people to put their homes back on the market for San Diegans to rent full-time.
“If you look at the number of homes currently sitting empty downtown and think about those being homes for young professionals and families instead, it is very obvious that downtown would be in a better place,” Elo-Rivera said.
Elo-Rivera’s logic is that the unhoused on the street could afford to live in any of those second homes, especially the multi-million dollar ones in La Jolla? And it’s fair to tax the mansion in La Jolla the same amount as a one-bedroom pied-à-terre that a family might have in San Diego for when they come to visit their grandkids? (The latter might just rent an apartment instead, and leave that vacant, making zero change in the housing stock.)
This just seems like a money grab.
What part of a budget deficit don’t you understand?
COMMUNISM
If you want to really address housing, how many empty apartments are there? Government overreach on homeowners needs to stop. And it doesnt sound as though the ADU policies are working if your picking on 5 thousand houses. This is a money grab for the failure of the city to do it’s job and cut staff.
It’s comical to think there could be housing police to implement this. The STVR owners can simply raise their rate $20 or $30 a day, and all these places get another $8K tax writeoff. I believe they may have to put it to a vote and are targeting the June primary. Meanwhile, the budget is still not balanced.
Seems to me that eliminating the prop 13 status for dwellings that are not primary residences is a better fix. Tax revenue would climb for vacation rentals and for second homes as those house values go up, without impacting taxes on primary residences or homes being rented annually.
Not really. Just another punitive tax from the state instead of the city. Using Sandcastle in this story is as bad as Elo being disingenuous with his motives in making a connection with homeless people and empty condos. Empty apartments are a more viable solution than a multi bedroom house few can afford.
I like this idea, if it’s legal.
Yes, a $600 a month tax will definitely convince ultra wealthy to sell their second homes.
How about eliminate capital gains tax on second homes! You would see so many seniors who own 2,3,4 homes and want out of the rental business or in this case sit vacant and appreciate business, sale their homes. It won’t balance your budget but it definitely will increase housing for families as well as bring prices down. As it is why sale a second home in California and give 50 percent of the sales price back to the state and federal government.
How many small houses were sold to investors that took inventory off the market from first time buyers and downsizing seniors? That is where Todd’s ADU folly began this mess.
Yes, this is the key issue. Moreover, many newly-built condos were snapped up by investors to “buy and hold” and in many cases avoid the downsides of renting them out. As Americans we tend to forget how much foreign wealth is floating around with no better, no safer place to go than U.S. urban real estate.
Many short-term vacation rentals don’t even generate enough net income to absorb an additional $8,000 per year. It’s surprising to see STRs treated as a footnote here, because they are the group that will be hit hardest by this policy. For a significant number of small operators, this won’t be a minor inconvenience — it will force them to shut down entirely.
Good!! Sooner the better. Stop ruining neighborhoods with your hotels.
Why don’t you folks ask the three leading contenders in D2 to explain where they stand. LMAO Can the voters really be that dumb?