San Diego rejects tax on second homes left vacant much of year

San Diego voters on Wednesday were rejecting a ballot measure that would impose an $8,000 tax on second homes left vacant for more than half the year, dealing a setback to housing advocates who argued the policy would help ease the city's housing shortage.

Measure A was losing 58% to 42% Wednesday morning, according to county election returns, with about 375,000 ballots still to be counted.

The proposal would have applied an $8,000 tax to homes that were not primary residences and were left vacant for more than half the year, with an additional fee for homes held by corporate owners. The tax was scheduled to rise to $10,000 in 2028 and then increase annually with inflation.

Supporters, including housing advocates and labor unions, had argued the measure would encourage some owners of second homes to rent out or sell their properties, increasing housing supply in a city where the median price of a single-family home exceeds $1 million.

The result means San Diego won't join jurisdictions that have adopted or pursued such taxes. State lawmakers in New York last month approved a budget that includes a tax on second homes valued at more than $5 million.

San Diego's independent budget analyst estimated that about 5,100 properties would have been eligible for the tax and that it could have generated between $9.2 million and $21.4 million in its first year.

Opponents argued the measure would do little to increase housing availability and was primarily intended to help address the city's budget shortfall, which totaled $118 million and prompted plans for cuts to the city's workforce. Critics also noted that revenue from the tax would have flowed into the city's general fund rather than being dedicated to housing programs.