San Diego property owners with vacant second homes could face annual taxes of up to $12,000 under a measure the City Council voted 8-1 to place on the June 2 ballot.

The California Apartment Association formally opposes the proposal, warning it carries the same constitutional and statutory defects that led a California trial court to strike down a similar tax in San Francisco.

The measure, introduced by Council member Sean Elo-Rivera, targets approximately 5,100 homes left vacant for more than 182 days a year. If voters approve it in June, owners would pay $8,000 annually beginning in 2027, rising to $10,000 in subsequent years. Corporate-owned vacant properties would face additional surcharges of $4,000 in 2027 and $5,000 thereafter. Primary residences and rental properties are excluded, as are owners of small residential properties of four units or fewer who occupy one unit as their primary residence. Additional exemptions cover documented hardship, military service, disaster damage, probate, and long-term care situations.

In a Feb. 27 letter to the City Council, CAA warned that the San Diego proposal closely mirrors San Francisco’s Proposition M vacancy tax, which a trial court ruled constituted an unconstitutional taking and conflicted with the Ellis Act — the state law protecting property owners’ right to exit the rental housing market. Although that ruling is under appeal and does not yet constitute binding statewide precedent, CAA argued it places local governments on notice that vacancy taxes face serious constitutional and statutory challenges.

CAA also cautioned that penalizing property owners with punitive taxation risks discouraging the rehabilitation, redevelopment, and property management essential to maintaining San Diego’s housing supply.

The council’s sole dissenting vote came from Council member Raul Campillo, who cited concerns about insufficient legal analysis of the city’s ability to defend the measure against litigation — an objection that echoed CAA’s arguments.

Proponents contend the measure will free up housing inventory in a constrained market. The city’s Independent Budget Analyst projects the tax could generate between $9.2 million and $21.4 million in its first year, depending on how many property owners claim exemptions.

If voters approve the measure in June, the first tax bills would be due in April 2028.