The Housing and Affordability Context: Why Now?

To understand the political will driving this aggressive schedule, one must look at the underlying housing crisis. Today, the city grapples with a well-documented shortage of housing for all income levels. Rental units are frequently near full capacity, which predictably spikes rental costs for residents. The argument underpinning the VHOT is that every property operating as a full-time, non-owner-occupied short-term rental is a unit taken off the long-term market, directly contributing to this supply squeeze.

Former Councilmember Barbara Bry, a prominent supporter, has framed this clearly: the concern is that short-term rentals are cutting into the housing supply for San Diegans. The hope is twofold:

1. The tax itself will create financial incentives for some owners to put their investment properties back into the long-term rental market, thereby increasing supply.. Find out more about San Diego vacation home operation tax proposal.
2. The revenue generated—estimated at over $100 million annually—will fund critical programs like homelessness prevention and infrastructure repair, addressing issues exacerbated by high housing costs and tourism demands.

This situation brings to mind similar municipal battles seen across the country where cities seek to balance the economic benefits of tourism with the fundamental need for residential housing. Cities in states like Colorado, for example, have seen ballot measures specifically targeting STR revenue toward workforce housing and childcare needs. This is a familiar, if contentious, balancing act for major metropolitan areas.

Practical Takeaways for Property Owners and Residents. Find out more about When is the San Diego vacation rental tax vote 2026 guide.

Whether you are a resident concerned about neighborhood character or an owner leasing a home, here are actionable insights based on the current status of the VHOT proposal:

For Current Short-Term Rental Operators (STRs):

• Know Your Category: The VHOT targets “full-home” rentals and second homes, explicitly *not* the primary resident renting out a spare room or a family renting while on vacation. If you fall into the target category, begin modeling the financial impact of a potential annual, per-bedroom assessment on top of the existing, tiered TOT rates.
• Track the Legislative Language: The specific rate (e.g., $5,000/bedroom) is not yet final. Monitor the full Council’s review in early 2026, as this is the last chance for amendments before it potentially becomes official ballot language. You can find more about the current San Diego TOT via the City Treasurer’s office.. Find out more about Difference between VHOT and TOT San Diego tips.
• Advocacy Matters Now: The most potent influence on the final language is happening now, in these early committee reviews. Understanding the rationale—housing supply vs. visitor revenue—is key to effective advocacy.

For Residents and Voters:

• Follow the Timeline: The next critical public date, beyond today, is the full Council consideration in early 2026. The March 2026 final vote to certify the ballot is the last chance for the legislative body to shape the question before voters receive it in June 2026.. Find out more about San Diego ballot measure for short term rental tax timeline strategies.
• Understand the Distinction: Remember that the TOT funds (which just increased on May 1, 2025) support the Convention Center and homelessness efforts. The VHOT is proposed to be an entirely separate pot of money, aimed at housing stock utilization.
• Engage on the Details: The success of the measure might hinge on the final details, such as the exact per-bedroom rate and how “full-time rental” is defined. Your input to your Council representative on these specifics matters.

The Counter-Narrative: Opposition and Industry Concerns. Find out more about San Diego vacation home operation tax proposal insights.

It is important to note that this proposal has drawn sharp criticism, particularly from the business community and the short-term rental industry itself. Detractors argue that such a hefty, targeted tax—potentially thousands of dollars annually per unit—will force many operators, who are often local residents relying on this income, to cease operations entirely.

The concern is that this shift could lead to two negative outcomes:

1. A significant loss of existing revenue streams—the money hosts currently pay via the TOT—which currently supports police, fire, and parks.
2. A negative impact on tourism, which opponents argue could shrink overall visitor spending and related city tax revenue.. Find out more about When is the San Diego vacation rental tax vote 2026 insights guide.

Furthermore, there is a noted tension regarding the potential for political maneuvering. Some critics suggest that the revenue could end up in the city’s general fund without strict earmarking, leading to questions about political accountability. Councilmember Elo-Rivera, however, has been firm that the measure is designed to address community impacts and will fund specific services. This dynamic—the push for housing supply against the defense of small-business income and tourism revenue—is the central conflict that will play out in the coming months.

Conclusion: A Pivotal Moment in Housing Policy

Today, October 22, 2025, marks a critical juncture. The Vacation Home Operation Tax is moving from concept to concrete legislative steps. The procedural path is laid out: a favorable Rules Committee vote today unlocks the drafting process, leading to a full Council showdown in early 2026, and finally, a potential decision by the voters in June 2026.

The success of this proposal hinges on the public’s ability to clearly distinguish it from the already-implemented, guest-paid, percentage-based TOT. The VHOT proposes an operator-based, potentially per-bedroom annual levy aimed squarely at housing utilization. As we move toward the new year, the conversation shifts from *if* this will be on the ballot to what the final language will look like.

Your Actionable Takeaway: Don’t wait for the June 2026 election. The most impactful discussions about the structure, the rate, and the specific exemptions are happening now, within the Council Chambers. Whether you support the measure to reclaim housing stock or oppose it based on property rights and tourism impact, reaching out to your City Council representative now—before the official ballot language is locked in—is the moment to make your voice heard.

What aspect of this proposed Vacation Home Operation Tax do you believe will be the hardest for the Council to finalize before it moves to the ballot? Share your thoughts in the comments below.