All right, good morning, everyone.

We're going to get this party started.

Good morning, and welcome to the Rules Committee.

Committee meeting of October twenty second, twenty twenty-five.

I am Joel Acaba, Council Member for District One, and Chair of the Committee.

Our committee lays on Sarah Jordan.

We'll go over instruction for today's meeting.

Sarah?

Thank you, Chair Lakava.

Well, members of the public are able to attend the meetings in person.

This meeting is being televised and live streamed on the city's website, and Council administration will continue to make arrangements for the public to comment using the Zoom webinar platform.

Members of the public who wish to provide virtual testimony must enter the virtual queue by raising their hand before the virtual queue closes.

This will allow for better meeting management between the two platforms and ensure the committee is able to manage and conduct city business.

Uh I want to remind everyone about the city's practices and procedures for public comment at both city council and committee meetings.

We certainly welcome the public's participation at our public meetings.

Speakers may address the council during public comment, also in connection with a specific item of business on the agenda.

However, the city must make sure that no one person or group of people disrupt the meeting in a way that prohibits other speakers from expressing their ideas, and that is yellings, talking over other speakers or speaking beyond your allotted time are examples of behavior that disrupts the meeting.

So to make sure that everyone here has an opportunity to address the council and the committee.

And if we have to repeat this process of warning and recessing the meeting, we won't have to do that, right?

All members of the public will be excused from chambers, credential media would be allowed to remain.

Again, we have these practices and procedures to protect the rights of other speakers who wish to address the council and to allow the council to conduct the public's business.

Thank you for your indulgence on that.

I will now call the rules committee meeting of Wednesday, October 22nd, 2025 to order and call the roll.

Vice Chair, Council President Pro Tem Lee is in the building, and I know he will join us shortly.

Councilmember Campillo?

Here.

Councilmember Moreno is absent, and Councilmember Ilo Rivera.

And I'm present also attending the meeting today, Julian Andalina with the Office of the Independent Budget Analyst, Cathy Steinman with the Office of the City Attorney.

Matt Yeah Yagin with the Office of Mayor Tagloria, Abby Reuters, our committee consultant.

Sarah, please continue with public comment instructions.

Thank you, Chair Lakava.

If you're in person, please complete a speaker slip located at the entrance of chambers and place it on the top of the box indicated at the table at the front of the room.

Please do so in a timely manner to ensure proper meeting management in-person testimony will conclude before virtual testimony begins, and members of the public can also join the webinar by computer, tablet, or smartphone by accessing the link, which is listed online in the preamble language of the agenda on the city's webpage.

If you need to participate via telephone, you may dial 1669-2545252.

Inputting webinar ID 161-232-7007 pound.

This information is also available on the agenda and it will appear on the screen during the public comment period for each agenda item.

Please note that if you're watching via City TV 24 or online, there may be delay.

Please participate via the audio on your phone and mute your TV or computer when it is your turn to speak.

If you wish to speak to a particular item, please wait for that item to be called and then raise your hand to speak by tapping the raise your hand icon if you're on Zoom or if you're a call-in participant by pressing star nine on your cell phone or landline.

If you raise your hand during a non-comment period, your hand will be lowered.

Chair.

All right.

Thank you, uh Sarah, for reviewing those instructions.

A quorum is now present.

We will take up non-agenda public, but because of the item and how many folks are in chambers, we will only take non-agenda public comment for those that are in chambers right now, and we will take up remote uh non-agenda comment at the end of today's session.

I want to make sure that we get through this uh agenda here in a timely way and get you all back to where you need to be.

So again, we're gonna take non-agenda public comment only for those folks that are in chambers right now.

Council members respect and appreciate the public's input and are fully committed to protecting every participant's free speech rights at council and committee meetings.

So, Sarah, please proceed with non-agenda public comment only for those that are in chambers right now.

Thank you, Chair.

Pro Rule 2.7, non-agenda public comment is an opportunity for members of the public to comment on items that are not on the agenda but are within the subject matter jurisdiction of the committee, and each speaker will have two minutes.

We have received two speaker slips here in chambers, so we will begin testimony with Scott Chipman, and you will be followed by Paul Krueger.

Good morning.

Scott Chipman, 50-year resident of Pacific Beach.

I was a PTA president for two terms at two schools.

I've been on the planning group about 15 years.

I'm involved.

I hear nothing positive about this city.

Um in five years, budget has gone up 35 percent, employee count up 17 percent.

Um population up one percent.

Uh what do we hear?

Um ADUs, the trash debacle, the bonus ADUs, towers and residential neighborhoods, homelessness taking over public spaces, project after project developed with no parking, taking away parking districts where the funds were promised to the communities.

The only bright spot is our police chief, and our police are doing the best they can, but understaffed because they don't have enough money to pay.

This city is being mismanaged, and the people here will confirm that this city is being mismanaged.

You need to improve.

One of the worst is code enforcement.

And I said, How should code enforcement work?

He said, We're open 24-7.

We take calls 24-7.

We have response vehicles with lights and sirens.

We don't are not to call the police for noise violations.

You call code enforcement.

If they can't control the issue, then they call the police.

One example after another of mismanagement.

Thank you.

Thank you.

Our next speaker is Paul Kruger.

And Paul, you will be followed by Laurie Saldonia.

Thank you.

I had a couple.

Did you get my uh email with the photos?

I had two, so if you only have one, it's not for this.

I sent one last night.

Not important.

Thank you.

I'm here today to bring attention to the issue of surplus lands and specifically Mission Bay, and to urge this committee and the other committees that you sit on to please be much more vigilant when anything is brought forward involving our park plans.

I and thousands of others, not just in the mission Bay area, were extremely disappointed and frustrated that this effort by the mayor's office to put this before the state as a surplus land and allow housing got as far as it did.

And the fact that none of you took the lead to understand and to tell the public in advance what this entailed, and then in fact, um our council president to the end refused to even vote for a measure that would have urged the state not to take this measure.

Um this uh is an example, I think, of uh unfortunate uh abdication of your independent role as council members and your ceding your power as our representatives to the mayor's office.

Um I would urge all of you, and I'll send it to you to look at Greg Moran's story in INUs source that summarizes everything, but um really it took this as an example of how the media saved us from 900 units of housing in the middle of a of a mission bay.

Some of you may want that, that's your prerogative, but um it was only because Jeff Page, Donna Fry, Jeff McDonald, and Greg Moran pushed this uh to the top, and in the end, the mayor found it was politically unpalatable to move it forward and dropped it.

So I urge you to please be more vigilant.

Thank you.

Thank you for your testimony.

Laurie Saldonia.

Good morning, council members.

Uh last night I was in a meeting that reviewed uh short or the uh issue that's before us today, but it also reviewed license plate readers that are being used by law enforcement increasingly to uh track vehicles for various reasons, but really what they're doing is tracking people.

And I realize the council has taken some action to work to make sure that this information is not shared with federal authorities, but the fact is that that's impossible.

Big data and the easy access to data that is collected by law enforcement makes it literally impossible for you as elected officials to have full control over how that data is shared.

We are increasingly in a surveillance state, and that surveillance state, as we can see, cracking down on people all across this country is leading to high rates of incarceration, especially criminalization of people who are already living in poverty, sometimes without housing, and any type of surveillance that brings them to the attention of law enforcement only exacerbates their suffering and their criminalization.

So I just want to encourage you as the rules committee that makes uh policy and judges which issues are going to go before the whole council to be aware that anything to do with surveillance is immediately going to be out of your control once you approve it, out of the city's control.

The private data miners that collect that information will share it regardless of local ordinance, regardless of state law, regardless of federal regulations.

That is just the reality of the profit making venture that they have entered into with these contracts.

So if you are going to approve surveillance technology for the city of San Diego, be aware you are likely contributing to the violation of people's privacy and civil rights, as we see with these crackdowns all across the country by this current administration.

And I say that to you not to ban things going forward, but to put more regulations in place as you were able.

Thank you.

Thank you for your testimony and chair.

This concludes an on agenda public comment here in chambers.

And as a reminder to those on Zoom, we will be taking non-agenda public comment virtually at the end of the meeting.

All right.

Thank you, Sarah.

We will now move on to comments by committee members, mayoral staff, city attorney, independent budget analysts.

Not seeing anybody has any comments.

Do we have any requests for continuance for the items on the consent agenda?

Not seeing any.

As a note to the public, actually, there's a couple of notes to the public.

One, we will be hearing our agenda out of order today.

We'll begin with consent items one and two, then take information item five, and then follow with discussion items three and four.

And when I read the disruption, what I forgot to mention for those of you that are here for the very first time.

We love your enthusiasm.

Applause kind of disrupts.

So if you hear things you like, thumbs up.

It's very visible to us up here.

It sends a strong signal.

If you hear things you don't like, thumbs down.

Comes across very strongly as well.

So that will help us out.

So we will now take up the consent agenda.

Sarah, please introduce items one and two on the consent agenda.

Thank you, Chair.

Item number one is the approval of the committee minutes from July 9th, 2025.

And item number two is the second amendment to the contract for electronic filing system.

All right.

I didn't hear any request to polling these items.

So Sarah, please proceed with public comment on item one and number two.

Thank you, Chair.

We've received one speaker slip here in chambers.

Lori Soldania, you have indicated you wish to provide comment for item number one, so I will place one minute on the clock.

Thank you.

There were 13 comments, public comments uh at your committee in July.

Ten of those had to do with the apprehension and disappearance, frankly, of residents of San Diego by federal authorities.

This week, two congressmen went to the federal court facilities to inspect the holding areas where people who had, as these commenters were referring to, to inspect the facilities where people are being held.

That is not a jail.

The federal courthouse is not a jail.

And the reason that 10 of the 13 people commented to you last time was to bring attention to the fact when these people are apprehended, they are often disappeared into a system or they're disappeared in the courthouse when they go to try and uh be on the legal process towards citizenship, towards legal immigration.

So I just wanted to bring attention to those comments from the minutes last time because in July we were observing this in real time.

And I hope that you continue to take action on that issue.

Thank you for showing up at court, Ms.

Thank you for that final remark.

And chair with no other speaker slips and seeing no hands go up in the virtual queue.

This concludes testimony for the consent agenda items one and two.

All right, thank you, Sarah.

So we'll turn it over to committee members for questions, comments, entertain a motion to move the consent item.

Second.

Second by So we have a motion by Councilmember Hilo Rivera and a second by council member Campillo to move the consent items.

Uh all in favor say aye.

Aye.

Any opposed?

All right, that passes.

Move wrong in my script.

Okay, we will now hear our information item.

Sarah, please introduce item five.

Thank you, Chair.

Item number five is the presentation from the funds commission, Council Policy 000-26.

And if you're on City TV or the live stream online and you'd like to call into the meeting to speak, please dial 1669-2545252 inputting webinar ID 161-232-7007 pound.

Chair.

All right, staff, as you settle yourself in, please introduce yourselves for the record and let us know how much time you will need.

All right, thank you.

Okay, good morning, Committee Chair Lakava and Committee members.

Again, I'm Liz Correa, City Treasurer.

And today I have Skylar McKieron, our funds commission chair.

Miss McKieron is a financial advisor at Edward Edward Jones Investments.

She was appointed to the Commission in January of 2025 and appointed to chair in August of 25.

Ms.

McKieron, I just want to thank you so much for being here today and for being our chair and for volunteering your time.

Also presenting today and joining us virtually are Miss Alison Bonney and Mr.

Jeff Nip.

Ms.

Bonnie is a senior portfolio manager for Northern Trust, and she serves as the investment manager for the Mount Hope Cemetery Perpetuity Fund.

Miss Mr.

Nip is a senior vice president for Siegel Marco Advisors and is the investment advisor for the remaining funds under the Funds Commission supervision.

Additionally, we have representatives from the parks and recreation library departments also joining us virtually to assist with any operational questions.

And it's now my pleasure to turn it over to Ms.

McCurin to provide an overview of the funds.

Good morning, everyone.

Oh, I have to turn it on.

Good morning, everyone.

Um, I'm sure for all of you woke up this morning just elated to discuss fixed income and equity investments, uh, stocks and bonds, um, especially before having coffee or some type of energy drink that had a product that ends in the word ean.

Um, but I want you to remember and think about that all of us have a collective experience of over 50 years of investment management.

And I want us to also think about um while we may not have control over the what of how these funds are um how these funds are spent, um, what we do have the control of is how we are able to, and most importantly, the why.

Um, just a show of hands for all of you, not just sitting here, but for those of you here that are part of the city.

How many of you here have spent time in a public library in the last year?

Yes.

So I don't know if you've really recognized the grit and grace that it takes to manage a public library, but it is one of the last few public spaces that we have in this city, and it is a beautiful space that requires and allows for all different types of walks of life to be there.

And um, while we are required to just have um and volunteer our time, it is with tremendous pleasure and privilege that we do so.

So the funds commission was established by City Charter Section 41A, which states in part that the commission shall have supervision and control over all trust, perpetuity and investment funds of the city, a shell be placed in its custody.

The membership of the commission consists of one bank official and two unclassified citizens and the city attorney and city treasurer.

There are a total of seven trust funds that are overseen by the commission.

There are two separate investment policies, one for the Mount Hope Cemetery Perpetuity Fund, which must adhere to specific investment requirements as outlined in the city charter, and one investment policy for all other funds.

Each fund is for a specified use, and we will cover each of the individual funds in slides that follow.

So I want to talk about also just a brief moment about trusts, which are um truly a symbol of a legacy.

Now, we know that the legacy of some of our greatest leaders have not been honored, but the thing about trusts is that they truly are legal documents that we are beholden to the specifics of what an individual has chosen that their money and legacy must be spent on.

So the first, as I just mentioned, the Mount Hope Cemetery Perpetuity Fund must adhere to specific investment requirements and therefore has its own unique policy.

The remaining funds, which are listed on this slide, are guided by the same investment policy.

The policy is a long-term investment strategy with which incorporates both capital appreciation and income with a target asset allocation of 65% stocks and 35% bonds.

Next, we will cover each fund's specified use.

The funds are exclusively for the benefit of the Benjamin Memorial Branch Library, which is located in Allied Gardens.

The funds are to be used to improve library resources, services, and construction or improvement of the building.

The funds does not have regular distributions.

The next fund is the FEE Sargent Memorial Fund, which was transferred to the funds commission in 1994.

The fund was established by Chloe B.

Sargent in the memory of her mother exclusively for enhancements to the North Park Branch Library.

For this fund, only the income earned annually may be used for this purpose.

This fund has quarterly distributions using a three-year average of the fund's market value.

The quarterly distributions are 1.25% or 5% annually of the average.

Next, we have the Los Penisquitos Canyon Preserve Fund, which was transferred to the Funds Commission in 1996.

The funds were a result of a lands land exchange in 1986.

Approximately 1 million was received for the ongoing maintenance and enhancement of the preserve.

Therefore, only the investment earnings may be used for this purpose.

This fund also has quarterly distributions, again using a three-year average of the fund's market value.

The quarterly distributions are 1.25% or 5% annually of the average.

The funds are for the benefit of the Rancho Bernardo branch library to be used exclusively for the procurement and maintenance of large print books and magazines and related equipment and supplies.

Again, the distributions are calculated using the same methodology as previously described.

The quarterly distributions are 1.25 of the calculated average or 5% annually.

The Jane Cameron La Jolla Library Fund.

Excuse me, the Jane Cameron Fund was transferred to the Funds Commission in 2009.

The funds are to be used exclusively for the expansion or improvement of the La Jolla Branch Library or the improvement or maintenance of its collection.

This fund does not have regular distributions.

The Philip L.

Green Memorial Fund was transferred to the funds commission in 2019.

The funds are to be used exclusively to enhance city funds budgeted to purchase plant, or excuse me, to purchase, plant, replace, and maintain trees and shrubs in Balboa Park.

This fund does not have regular distributions.

And now my favorite, the whole reason why I joined the funds commission.

Mount Hope Cemetery Perpetuity Fund.

And before you think I'm another member of the Adams family, that I love a cemetery.

Every memorial day, we go and build flower arrangements and clean our loved ones' graves and tell stories and pray over them.

Located right on market and ocean view.

It's the entire reason why I'm sitting here today, and it is absolutely a privilege to be able to sit here and to oversee the management of the funds for this gorgeous space.

So Mount Hope Cemetery Perpetuity Fund was established by City Charter Section 55 in 1931 for the purpose of preserving and maintaining all public burial grounds and cemeteries.

As required by city charter, 20% of net proceeds from the sale of all cemetery lots are deposited into the fund, leaving the remaining 80% plus all investment earnings derived by the fund available to support operating expenses of the cemetery.

The city charter does not allow for the use of the principal of the funds and requires that all that investments are made into income-producing securities, which drives the asset allocation of this fund towards emphasis on bonds and dividend-paying stocks.

The target asset allocation for this fund is stated in terms of risk.

And 34% is allocated to risk assets such as stock and real estate.

This chart summarizes the income derived from Mount Hope Cemetery Investment Fund for the last several fiscal years.

The income derived from investments along with remaining 80% of lot sales are available to cover cemetery maintenance cost.

As in past years, the general fund continues to subsidize any shortfall in revenue to cover all operating expenses of the cemetery.

The average annual subsidy provided by the general fund from fiscal year 2020 through 2025 was approximately 428,000.

We also want to make the committee and public aware that we provide ongoing performance reports on a quarterly basis on the City Funds Commission website, and the link is provided on the slide.

Additionally, when we meet quarterly, the public is more than welcome to attend and make comment on any of our meetings.

I'm now going to pass over to Miss Bonnie to discuss the performance of the cemetery fund, followed by Mr.

Jeffrey Nip to discuss the performance of the remaining funds.

But first, I would like to say something.

I would like to re-route everyone's mindset regarding portfolio and performance.

Every portfolio has a goal, which I mentioned for each fund.

Remember that each portfolio's goal and objective has to produce a certain amount of earnings.

Portfolio has to have a certain structure, asset allocation.

And you know, we have market volatility, things change, the introduction of tariffs, the way in which it was done, things fluctuate and swing.

Every single day a portfolio's balance changes.

The portfolio that we are shown here, the date and balances as of August 31st, not to date.

Is that are we delivering on the objective?

And yes, that has been done, in fact, far exceeding.

So yes, do things swing?

Absolutely.

Are the objectives being met?

Absolutely.

Are they being met not just by investment performance, but also by a city attorney and treasurer and the funds commission?

That's precisely what we're there to do.

So that being said, I'm going to pass it over to Ms.

Bonnie and to Mr.

Nip.

Good morning.

Thank you, everyone.

I'm hoping you can hear me.

This is Alison Bonnie.

That was an excellent overview of the cemetery, so it's really an honor to be able to manage this on your behalf.

And I agree that cemeteries can be just a beautiful environment in which to you know nourish, frankly, your soul and remembrance of your loved ones.

You can see here, based on the asset allocation of the portfolio, which, as was described, is on a conservative basis where the primary goal is income performance and distribution coming from both your fixed income assets as well as your equity assets that produce dividends.

Okay.

As of the end of August, the value is 13.2.

And as of yesterday, the value was 13.4 million.

Now, one of the things I do want to underscore and the comments we just heard are true that from year to year, quarter to quarter, month to month, we see volatility in markets, and the purpose of a perpetual fund is to maintain discipline and not stray from the strategy of the portfolio.

So that's how this is designed, and it has delivered on expectations.

But let me give you just a few comments regarding Northern Trust view on the markets at this point in time, as we know those of you who do wake up and follow the capital markets on a daily or weekly or weekend basis, what have you, um, that you know we have seen incredible gains both in US equities as well as in non-US equities.

So that's the risk portion of your portfolio, which is roughly 35%.

Um, we've also seen the fixed income markets um basically be actually perhaps as volatile as the equity markets, which has to do with expectations from the Federal Reserve as well as central banks around the globe in terms of what they will do.

We would argue that the current frothiness of the equity markets and markets overall has due to expectations for continued accommodative monetary policy by the Federal Reserve.

Uh, we expect the Federal Reserve over the next 12 months to reduce um rates and an additional 100 basis points, or that's one percent quarter of that coming uh probably next in the next two weeks, and then the balance uh 25 basis points the end of this year, and then another 50 basis points next year.

The market is also acknowledging the fact that we will be seeing fiscal stimulus from the uh one big beautiful bill act uh or otherwise the reconciliation act.

Um clearly this is going to provide a tailwind to consumers uh with you know reduction in taxes, uh, but particularly to the business side of our economy.

And speaking of that, we are seeing corporate earnings continue to outpace expectations.

Uh that is continue to uh that is the expectation going forward.

But finally, we also have what we would call this AI frenzy.

Uh a lot of investors will say, well, what's driving that?

Is it true?

Is it a bubble?

Um, it is our expectation at this point that it is not a bubble.

There could be pockets of incorrect valuations in the markets, but overall, we are beginning to see initial signs of improved productivity in the corporate arena, uh, which would lead to produce uh greater profitability and greater expectations for uh capital expenditures.

We will acknowledge that the markets have been incredibly resilient, but we need to be steadfast in managing the risk in the portfolio, um, and also to allow the portfolio continue to grow um with the expectations of the market and to and to keep up with the market based on this how this portfolio is designed.

I'm going to stop there.

Okay, I will uh now talk about the other funds besides the cemetery fund.

Good morning, everybody.

Um first thing I would point out here is just the market value of each of these funds.

You can see the the value ranges from about 500,000 on the small end for the Peters Fund to almost 9 million dollars in the Cameron fund.

Uh and everything else is somewhere in between uh those.

Uh as Commissioner McCurin explained, these all have the same investment policy, uh, which is 65% stocks, 35% bonds, and in more detail, if you look at the footnote at the bottom, that 65% in stocks is 40% US stocks and 25% international stocks.

Uh you can see the returns again, these are through August.

Uh I can tell you September was a very good month for stocks and bonds, so the returns are even higher now year to date, uh, probably 12, 13 percent.

Um again, these have a long-term uh investment approach.

Uh we're going to see, and I'll I'll show you calendar years in a minute where we see volatility.

Uh, but I draw your attention maybe to the five-year column here, uh, you know, a little over 8% returns, very healthy returns for for these portfolios, despite that volatility.

These are invested in a combination of passively managed index funds and some actively managed funds.

Uh these are all cost effective investments, they're in mutual funds, uh, and we pay a lot of attention to the fees charged by those funds.

Um, so these these have all done very well.

And on the next page, uh I referenced the sort of year-to-year volatility, and and you can see that 2022, we would like to forget, but was a really really ugly year.

Both stocks and bonds were down double digits that year, but despite that, uh, we've had good long-term results in these portfolios.

That's where diversification comes into play.

That's where a long-term investment approach comes into play.

We will continue to see year-to-year, month to month, even day-to-day volatility.

Uh, but these are designed for the long term and to provide the the funds necessary uh for the goals of of each of these pools of money.

That's all I have.

Okay, and that concludes our presentation, and we're happy to take any questions.

All right, thank you for the presentation.

Sarah, I'll proceed with public comment.

Thank you, Chair.

We've not received any speaker slips here in chambers for item number five, but we have one hand up in the virtual queue.

So we will start with John Brady.

I will give you permission to speak.

You will have one minute to share testimony.

Hi, yes, John Brady with Lived Experience Advisors.

I am calling in because I'm curious to know what our plans are for the impact of uh uh automated uh AI on our job market.

Uh we project a loss of 40 to 80,000 jobs here locally.

Uh I think that there's going to be a huge transference of jobs away uh that we're not preparing for, and are we looking at taxation of uh automation uh for jobs that are lost in our market?

Thank you.

Thank you for your testimony.

And chair, no other hands are in the virtual queue.

So this concludes testimony for item number five.

All right, uh, thank you.

So I'll turn it over to my colleagues.

Uh this is an information item.

I don't see anybody else on the light, so I'll just express um behalf of oh, Councilmember Your Thank you.

Council President Local, just to thank you, uh Skylar, thank you for the work that you're doing and along with your colleagues.

Um you made that far more entertaining than it typically is.

That's not surprising, knowing your skills and talents.

Um, but I do truly appreciate the time that you all spend um making sure that these funds are um provided the oversight um and respect that they are due.

Thank you.

Uh thank you, council member.

Um, and I'll just add my thanks as well to Liz.

To you and the your the everybody at the Treasurer's Office and your management of this, and of course the funds commissioner who did this on a volunteer basis and clearly with enthusiasm, as my colleagues said.

Um I appreciate all the good work uh and the detail to really honor the the original donors that created the endowments and what their intentions were uh to preserve the capital, to generate the income, to fund our libraries, the cemetery, uh, make sure that that's all in good shape.

So thank you for the good work on that.

And um, the next item will be speaking to the council policy that kind of governs that for that other piece of the puzzle, which is when the funds are distributed, what happens to them, and how is the public informed about how those funds are used.

But for the investment, I think it's in very good hands.

So thank you for that good work.

So with that Sarah, please uh introduce item three.

Thank you, Chair Lakava.

Item number three is updates to council policy 000-26, City Funds Commission reports.

If you're watching on City TV or the live stream online, and you'd like to call into the meeting to speak, please dial 1669-2545252 inputting webinar ID 161-232-7007 pound.

Chair.

All right, thank you.

And Abby, when you settle in, uh introduce yourself for the record and let us know how much time you need.

Thank you, Chair Lakava and members of the rules committee.

My name is Abby Reuters, senior policy advisor for Council President Joe Akava and Rules Committee Consultant.

I will need four minutes for the item.

The item before this committee is consideration of proposed amendments to council policy 000-26, the city's funds commission reports.

As you just heard, this funds commission was established by Charter Section 41A, but this policy was adopted in 1983 with the stated purpose of establishing a procedure for the committee to make for the commission to make semi-annual reports to the rules commission.

At the time, the commission only had two funds under its supervision: the cemetery perpetuity fund and the Edwin A.

Benjamin Memorial Fund.

Since then, additional funds have been added, and now it is at seven total funds.

Additionally, the council policy requires semi-annual reports with the treasurer's office reaching out to the rules committee consultant in the months of January and July in order to coordinate this.

Given the long-term nature of the investments, and additionally with committee scheduling issues, this has regularly been reduced to one annual report.

The amendments that are in front of this committee and which are included in the backup materials include a reduction in frequency to an annual report matching current practice.

It also includes an additional report information from the relevant departments who distribute the funds, which are the parks and library departments, which will include information in the backup material moving forward.

It is envisioned that these two departments and any others which may be added over time will provide a narrative summary in the backup materials for the prior fiscal year.

For example, this might be how many large print books were published or purchased for the Rancho Bernardo Public Library with the Gladys Edna Pierce Memorial Fund or whatever is most relevant for each individual fund.

Additionally, it is envisioned that there will be staff from those departments there to answer questions if the committee has any on the distributions.

Finally, the proposed amendments include additional cleanup and add information about each fund so that the public and other members of future councils know exactly what the governing documents are for each one.

Our office has worked with the city treasurer's office, parks and rack, and libraries on these edits and thank them for their time and expertise.

Finally, the requested action is to recommend that the council president's office works with the city attorney's office to draft a resolution to update this council policy for consideration by the city council.

Thank you.

I'm going to bill for any questions.

All right.

Thank you, Abby, and for the presentation.

Thank you for good work on this.

Do we have any public comment on this one?

Thank you, Chair.

I've not received any slips here in chambers and no hands are going up in the virtual queue.

So this will conclude testimony or for item number three.

All right, thank you, Sarah.

Um I'll kick off the conversation here.

Um we bundled this up intentionally with the annual report on the investment strategies.

And as my colleagues know, um, as chair of the rules committee, we've been working on updating uh old council policies.

As was mentioned, this has not been touched since the original adoption in 1983, despite the addition of more funds and more endowments.

I appreciate the good work by the city treasurer, parks and recreation, and library departments.

Uh I appreciate the good work of the funds commission.

But as my colleagues may have heard, when we get these annual reports, we don't get actually any transparency on how the distribution of funds is actually spent.

We have clearly get annual reports to make sure that the funds are being managed in a way that respects the original donors, but I think it it is important for the public and the council to know how those monies are actually being spent.

And that's really the primary intent of the edits to the policy, along with some overdue refinements as well.

So again, I think uh city attorney's office, I think appreciate the city treasurer, parks and recreation library departments who have worked together to support this, and of course, the good work of my senior policy personality writer on that.

So with that, I will move the staff recommendation and turn it over to my committee members for questions and comments, entertain a second, and we'll go to council member Elo Rivera.

Uh thank you, Council President.

I want to uh start by thanking you and your team, Abby, for bringing this item forward.

Um good measures to increase transparency and accountability.

Um I will note that this is um yet another step that you've taken to kind of uh dive deep into longstanding policies that have either um been in need of update or in other cases um are we'd be better off doing away with them completely.

I know that that's not um always the flashiest work.

Um it requires a lot of uh thought and attention and appreciate you and your team being willing to do that.

So uh with that, um happy to provide a second uh for this uh to your motion.

All right, so we do have a motion by myself and a second by councilmember Elo Rivera to move the recommendation seeing nobody else in the lights.

All in favor say aye.

Any opposed?

That does pass unanimously with council member Moreno absent.

So with that, um we will take up item four.

And I want to do a very brief introduction because we are now uh so to speak in ballot uh season.

We do this every couple of years, and we start with consideration of ballot measures uh for June.

We have one on today's agenda, I think as you all know.

Uh we'll be having a lot more that will come in front of us uh in November, either introduced by the mayor, council members, or members of the public.

So there is a process for us to consider going forward.

Um action today on today's agenda is only a recommendation to continue whether the committee agrees that there should be continued work on the proposal uh that would introduce both the IBA and the city attorney's office uh to participate in any refinements or development of ballot language.

It then has to come back to the committee uh for a final recommendation.

And then it goes to the city council, uh, takes a city council vote to actually agree to put it on the ballot.

That information then gets forwarded to the county of San Diego for them placing on the ballot.

In this case, presumably the June ballot.

The deadlines is for council consideration if I get this right for the June ballot.

I don't see any objection to that.

And then the last excuse me, the council would not take any consideration until at least January 5th.

And the last day that the council has to take action to put anything on the ballot is March 6th.

So that is kind of the time frame for any of these proposals, either being talked about today or that will be talked about at our November rules committee.

So with that brief and lengthy and poorly worded introduction of mine, Sarah, please introduce item four.

Thank you, Chair.

Item number four is the initial committee review of a ballot measure proposal by Councilmember Sean Ela Rivera regarding a vacation home operation tax to preserve housing.

And as a reminder, if you're watching on City TV or the live stream online, you'd like to call in in the meeting to speak, please dial 1669-2545252 inputting webinar ID 161-232-7007 pound.

Chair.

All right, with that, I'll turn it over to Councilmember Ela Rivera for opening comments.

All right.

Thank you, Council President.

Appreciate you docketing this item.

Before we dive into the presentation, I will start to lay out the framework of the proposal.

I wanted to give some context for uh what we're bringing forward here.

Um and that starts with what type of San Diego we want to be.

And our office is committed to working with San Diegans to create a city that works for the people who live here and for the people who live here to be able to see a future for themselves, for their families, and their friends.

The proposal before you, the framework at least, has four goals in mind.

One is to make housing more affordable, and that's by keeping homes available for local families to reduce pressure that drives up rent and home prices.

The second is to protect San Diegans from displacement.

We'd like to stop investors, especially foreign and out-of-state investors and short-term rentals from pushing working families out of their neighborhoods.

Third, we want to protect San Diego's neighborhoods, preserve the character, safety, and community fabric of the places that San Diegans call home.

And fourth, make vacation property investors pay their fair share for profiting from this city.

And that's by ensuring those profiting from our housing market help fund housing infrastructure, public safety, and the city services that make San Diego thrive.

That being said, I do want to address some of the missed mistruths that seem to be floating around about this proposal.

99% of San Diegans would not pay this tax.

That is a fact.

As proposed, if you live in your home, you will not that home will not be taxed.

That means if you are a person who rents out a portion of your home, if you're an empty nester who is depending on renting out a room or two in order to help pay your mortgage, you're not paying this rent.

If you're someone who rents your home while you're on vacation as part of the home share that some of these platforms were intended to be at the beginning, uh you would not pay this rent or pay this tax.

If you pay if you rent to a full-time tenant or even a traveling nurse, you would not pay this tax.

And of course, there'd be exemptions for um in certain circumstances.

For example, we don't want to disrupt folks who've been uh uh whose families have owned properties for generations.

So, in other words, 98% of San Diego homes are not taxed, 99% of San Diegans are not taxed, and 100% of homes that are lived in by San Diegans are not taxed in the framework that you were about to see.

Um again, this is the beginning of a conversation.

The input from committee members is super important, as well as obviously the public.

Um, but that's the framework, that's the vision, those are the goals, and with that I'll hand it over to Maya.

Good morning.

My name is Maya Rossas, Deputy Chief of Staff for Policy for Councilmember Sean Ela Rivera.

I'm here to present the initial committee review of a ballot measure proposal regarding a vacation home operation tax to preserve housing, and I will need eight minutes.

The council member already provided the overview of our vision and our goals today.

Um this is what motivates our office to bring this forward.

Um the proposed vacation home operation tax to preserve housing is a general tax on the operations of vacation homes to be placed on the June 2026 ballot in the city of San Diego.

The intent behind this ballot measure is to work towards fulfilling our vision and goals.

The requested action for this item is as follows.

Request that the Council District 9 office work with the independent budget analyst and the office of the city treasurer to furnish background information and provide preliminary fiscal and operational analyses of the proposal and work with the city attorney's office to prepare ballot measure language and return to the rules committee for further consideration.

Councilmember Ila Rivera reviewed this, but I want to go over it one more time to make this crystal clear.

We're jumping straight to the point of who will not be affected by this tax since there has been so much misinformation sent to the public about this proposal, leading to confusion and unnecessary panic.

To be explicit, this tax will not apply to homes where San Diegans live.

If you live in the home you own, this does not apply to your home, including tier one and two short-term rental license holders where owners rent only a portion of their home or rent their whole home for less than 20 days per year.

If you are a renter in San Diego, you do not pay this tax.

If you own multiple homes and you rent them to San Diego tenants, you and your renters do not pay this tax.

Certain vacation homes will even qualify for reasonable limited exemptions, as Councilmember Ila Rivera referred to, such as following the death of an owner, following a catastrophic event, or if you own up to four homes on one property and live in one of them as your primary residence.

These properties would be eligible to receive an exemption.

In other words, 98% of San Diego homes are not taxed, 99% of San Diegans are not taxed, and 100% of homes lived in by San Diegans are not taxed.

Many people have reached out to our office about this proposal.

Unfortunately, many of those reaching out have been misinformed.

One person submitted public comment saying, I'm a homeowner in San Diego County.

I rent one bedroom to supplement my income to be able to pay the mortgage.

I'm retired and my social security is not to not enough to pay mortgage and bills.

We want this person and everyone here to know the vacation home tax would not apply to someone renting out a bedroom to help pay the mortgage.

We received a call from a renter working a minimum wage job who was concerned this would apply to them.

We received a call about renting out a garage when the owner lives in the house, and we even received a call from a landlord who rents to tenants who is concerned this would apply to their properties.

The vacation home tax would not apply to these circumstances, these circumstances, and it is it is unfortunate that they were so concerned it would apply to them that they felt the need to reach out to our office.

What is a vacation home?

Vacation homes are second homes that are not the primary residence of a San Diego.

For example, properties owned by foreign or out-of-state investors that are kept vacant, like the pictured Sand Castle in La Jolla, which is on the market for over 100 million dollars.

And year-round whole home short-term vacation rentals that have received a tier three or four license.

These rentals are either hosted independently or through a hosting platform like Airbnb or VRBO.

In other words, vacation homes are not being used as homes for San Diegans.

We actually have robust data about vacation homes in San Diego.

As of this summer, there were 4,996 vacation homes that are not a primary residence and are not rented out as housing for San Diegans.

They are not used as short-term vacation rentals either.

They are somebody's second home or even third or fourth home and are currently receiving an exemption from the rental unit business tax.

The second type of vacation home are tier three and tier four licensed short-term rentals.

As we said, that is whole home short-term rentals that can be rented out year-round, and the host does not live on site.

They are required to be used as short-term rentals for at least 90 days of the year.

There were 5,648 tier 3 and 4 properties when we conducted our analysis.

Combined, this is about 2% of the city's housing stock that San Diegans can't live in because of how they are currently being used or not used.

I also wanted to share more detail about these properties from the data we were able to collect.

The data shows that while these properties exist across the city in every community, they're especially concentrated.

Forty-five percent of second homes are in La Jolla, downtown, and Pacific Beach or Mission Beach.

57% of Tier 3 and 4 short-term rentals are in Pacific Beach or Mission Beach, Point Loma or Sunset Cliffs, and La Jolla.

The average size for both second homes and short-term rentals are two and a half bedrooms.

Our proposed vacation home tax would impact those who can afford to own a second home or investment home in some of the most expensive neighborhoods in San Diego.

These are family-sized homes in high opportunity areas.

These vacation homes keep family housing off the market and force those who could have afforded these homes to then find other suitable housing.

We have developed revenue projections based on a tiered tax of $5,000 per bedroom.

We believe this tiered tax makes sense as each bedroom represents a bedroom a San Diegan could be living in, but that is not currently available for their use while the home is being used as a short-term rental or is not being used at all.

Today is the beginning of the process to place a measure on the ballot.

We do not have draft ballot language yet.

The drafting is the next step if approved today.

In addition to continuing to work with the IBA and the city treasurer's office, we also commit to meeting with impacted stakeholders who approach us in a good faith effort to work towards our vision and goals.

Once ballot language is drafted, it will come back to the rules for a second consideration to receive additional feedback before going to council to be placed on the June 2026 ballot by early March.

Our requested action once again is to request that the Council District 9 office work with the independent budget analyst and the office of the city treasurer to furnish background information and provide preliminary fiscal and operational analyses of the proposal and work with the city attorney's office to prepare ballot measure language and return to the rules committee for further consideration.

I'm available to answer questions, as is the treasurer's office and the city attorney's office.

Thank you.

All right, thank you, Maya, for the presentation.

Gillian and Alina of the Office of the Independent Budget Analyst has a few comments.

Thank you, Chair Lakava.

I'm Jillian Andalina with the Office of the Independent Budget Analysts.

As the presentation outlined, this would create a general tax applied to second or vacant or vacation homes in San Diego that aren't being rented out, and whole home short-term vacation rentals, the tier three and tier four that was specified.

As you consider this proposal today, I'd like to highlight a few factors that would impact revenue generated by the ballot measure if approved.

First is the tax structure and rate established.

For example, if the tax is charged per bedroom, it would be important to consider how the structure affects multi-bedroom properties as compared to smaller ones.

Second are exemptions to the tax, which would reduce the pool of properties taxed.

A third would be the market response where property owners may change behavior to avoid the tax, for instance by changing their proper primary resident address, removing the property as a short-term vacation rental, and selling or renting the property long term.

And finally, the degree to which the tax is enforced and property owners comply.

We would also like to note the connection between short-term vacation rentals and the city's revenue from its transient occupancy tax or TOT since they are subject to this tax.

If short-term vacation rentals convert to long-term housing as rentals or are sold, those rentals would no longer pay TOT.

Our office would want to examine impacts to overall TOT revenue further in conjunction with other potential revenue and cost impacts.

If approved today, our office would analyze a proposal and report back on estimated fiscal impacts, since it would be likely difficult to predict the impact of the factors I've mentioned.

A conservative fiscal estimate would be prudent.

Thank you.

All right, thank you, Gillian.

So with that, Sarah, please proceed with public comment.

Thank you, Chair.

We've received 103 slips here in chambers.

When I read your name, if you can please come up to the reserve seats at the front of the room, we'll begin testimony with Jonathan Cortillo, followed by Zach Schlegel, Scott Chipman, Michael Zuket, and Gary Wanacott.

We will begin with Jonathan Cortill.

Each speaker will have one minute.

Good morning, Council President and Council.

My name is Jonathan Castillo, and I serve as the CEO of San Diego Youth Services.

Every day our team works with young people who are doing everything right, finishing school and working hard, but still can't find a uh or keep stable housing in the city.

San Diego's housing crisis doesn't just impact adults.

It starts early with youth who never had a fair shot.

Data shows that roughly half of adult homeless population has spent time in the foster care system.

That means if we don't want to, that means if we want to reduce homelessness long term, we must start with prevention by investing in housing stability and supportive services for young people now, not later.

That's why this proposed vacation home and short-term rental tax is so important.

It's fair, it doesn't touch homeowners or long-term rentals.

It simply ensures that those using San Diego's housing stock as vacation or investment properties are contributing their fair share to restore balance in our community.

Every dollar generated can help expand affordable housing and fund prevention programs that keep youth and families from falling into homelessness in the first place.

By moving this measure forward, you're not just advocating policy, but you're investing in a future where fewer young people end up on our streets.

Thank you for your comment.

Zach Schlegel.

Good morning.

I'm Zach Schlegel here on behalf of PAF.

While tourism is an integral part of our local economy, short-term vacation rentals have had the unfortunate impact of taking much needed housing stock offline and making the remaining homes less affordable to all San Diegans.

As housing prices skyrocketed, so have the number of people experiencing homelessness across our city.

We appreciate Councilmember Ilu Rivera bringing forward this proposal that will help ensure that those profiting off of these short-term rentals are contributing back to address some of the challenges that have emerged amidst the proliferation of these units.

An ongoing funding source like this is critically needed, especially at a time with significant cuts threatening to stabilize the work of homeless service providers like PAF.

For instance, we are expecting that the uh emergency housing vouchers will be running out of funding at the end of next year, and that'll be at least 500 families here in San Diego that will be on the streets as a result of that federal action.

We urge the committee to move this proposal forward if Path stands ready to provide data and feedback for more work here and across the state to help inform the council of best practices and where gaps in the system occur.

Thank you.

Thank you.

Our next speaker is Scott Chipman, and you have been seated time by Jim Ogsley.

Jim, can you please raise your hand?

Is Jim in the room?

Michael Collin.

Ricardo Sanchez and Kristen Gasper.

Is Kristen here?

Okay, we have four that's four minutes total.

How many of you live here?

We live here.

This proposal is ridiculous, represents a serious overreach of municipal authority and a troubling precedent for property rights, which are protected under both California Constitution and the U.S.

Constitution as a cornerstone of individual liberty.

You've already limited it to two percent.

That's great.

You way overestimated how many vacation rentals there were, and there's still a thousand permits available.

Imposing heavy taxes on one lawful category of ownership crosses the line from regulation to punishment, penalizing people not for misuse, but simply for lawful possession.

Neighborhoods, oh, you want to protect our neighborhoods.

Many of us recommended distance separations when this thing came up, but it didn't happen.

If you have a distance separations of, say 300 feet, then you don't have zones.

Mr.

Ilavera using the example of a hundred million dollar mansion as a reason to tax second homes and bedrooms and caught and a cause for homelessness is an embarrassing example of the worst kind of politics, attempting to generate class envy, pitting citizen against citizen, deepening social and economic division.

By framing certain property owners as the problem, it turns housing frustration into a form of economic scapegoating that will do nothing to solve affordability.

And of course, you want to isolate the one percent, because then you can get the 99% to say, oh, look at those bad people who have two homes.

My family has a second home, my wife's childhood home, and we use it as a gathering place for extended family who can't afford to live in San Diego and who come back to visit to make some of the cost back we short-term rent when family isn't using it.

Mr.

Elo Vera, why not use my case as your example?

Because it doesn't create envy and so division.

Vacation rentals are family friendly.

What kind of city do we want?

We want families to come and vacation.

When you have a multi-generational family who wants to come to San Diego, they want individual bedrooms, they want to be together, they want a family room, they want a TV room, they want a backyard so they can be together as a family.

You do this, and you're basically forcing everybody into hotels that are not family friendly.

The policy would invite legal challenges.

Oh, Ben, with all your policies, you guys are fueling a lot of legal action.

And it would chill the very entrepreneurial activity that funds our tax base and supports local jobs in hospit hospitality, maintenance, and construction.

Instead of punitive taxation, we should let current policies have time to work.

That's land use policies, housing policies.

You've already implemented a bunch of things on a population growth of one percent.

This is not going to do anything to bring, oh, we're going to put homeless people in the sand castle.

We are already allowing more development.

Continue to pursue balanced housing reform, streamline permitting incentivized long-term rentals, enforce the one short-term rental per person code.

You're already wasting our money not using it properly.

Let's not advance a measure that undermines constitutional rights, divides our community, and invite more lawsuits.

Vote no on the 5,000 per bedroom tax and choose fairness, freedom, and real solutions instead instead.

Thank you.

Our next speaker is Michael Zuket.

You will be followed by Gary Wanacott, Barbara Bree, Jesse Garcia, and Jorge Viramontes.

Good morning, Chair, members of the committee.

The San Diego Municipal Employees Association strongly supports the action before you this morning.

We note what has been described as a negative but is an unequivocal positive and why this is going to be supported by San Diegans, which is its revenue measure that, unlike many in the past, not just in the past couple of years but in the past decades, will not increase the cost of living for 99% of San Diegans, but will benefit 100% of San Diegans with more critical services, uh improved neighborhoods, infrastructure, public safety, libraries, and parks and recreation.

It's interesting that some of the opponents of the sales tax who uh criticize that as a regressive tax are now looking at the most progressive tax proposal in a long time and criticizing it on that basis also.

Um but instead it's why it deserves your consideration.

And in advance, MEA also stands with uh the comments that are about to be made by Bridget Browning.

Thank you very much.

Thank you.

Our next speaker is Gary Wanicott.

Good morning, council members.

Uh my name is Gary Wanacott.

I'm a long-term resident of Mission Beach and past president of the Mission Beach Town Council.

Um I support, I strongly support this tax.

Uh this tax is more than about fairness, it's about fiscal responsibility.

A ten year 10 city study found that neighborhoods with high STR concentrations, and that includes La Jolla and Mission Beach, have experienced uh an additional artificial rent inflation.

And that rent pricing algorithms like Real Real Page propagate these rent increases across the city, pushing some of our most vulnerable to homelessness.

The cost to house these homeless people exceed the TOT collected.

The presence of concentrated whole homes STRs results in a negative cost benefit to the city.

I'm looking forward to hearing what the independent budget analyst has on this.

This tax is a fair targeted step towards protecting San Diego's neighborhoods.

I urge you to support it.

Thank you.

Thank you.

Our next speaker is Barbara Bree, and you have been seated time by Denise Fried.

Denise.

Thank you.

Okay, so two minutes will be placed on the clock.

Good morning.

I'm Barbara Bree.

I'm a member of a new organization called San Diegans for Housing.

I've been a resident of San Diego for more than 50 years.

And for the first five years, I lived in Mission Beach, which was then a cohesive community of long-term residents where you knew the names of your neighbors.

I'm here today to support Councilmember Ila Rivera's proposal as an important step in returning San Diego's neighborhoods to Sandy Aegens and making sure that short-term vacation rentals pay their fair share of the disruption that they cause.

I hope that you have the courage today to do the right thing for our city.

Thank you.

Thank you.

Our next speaker is Jesse Garcia.

Good morning.

My name is Jesse Garcia.

I'm a representative with the Carpenter's Union local 619, representing nearly 7800 union carpenters that reside here in San Diego.

We are in support of the short-term rental community, and we oppose this tax.

Airbnb, I've I've seen firsthand the commitment that Airbnb has done in our community.

Our organization, we live here, we build here.

That's our model.

This is our community.

We're proud to be a part of San Diego, and we're proud to actually help those in need weekly, every week.

And Airbnb doesn't like to boast and brag about what they do, but they have been a partner with us and helping us with those that have been impacted.

Whether it's a disaster relief or whether it's you know their homes not suitable to live in.

They have provided vouchers.

Not many people can say that they've done that without wanting something else in return.

So I stand with Airbnb and we support them.

Thank you.

Thank you.

Our next speaker is Jorge Viramantes.

Okay, get the energy out.

Uh there's gonna be a lot of passion here this uh morning, but please refrain from uh clapping thumbs up really comes across very, very strongly.

Thank you.

Good morning, city council.

Juar, you Jorge Viramontes, uh proud hard work and union carpenter resident of San Diego.

I've had the opportunity in the last 28 years that I've built San Diego.

I picked a great career that's paid me a livable ways to be able to be a host of a two-bedroom.

Before this whole Airbnb got big, I had a consideration to build something for my daughter for her future, because we all know young people can't buy anything here in San Diego.

They all want to leave the state.

Now, with that said, I built this two bedroom with these hands and the hard work, and I find it tough standing in front of you, Sean Ilo, to tell me that I have to pay $10,000 extra a year for something I work my ass off for for my daughter's future.

I'm against it.

Thank you.

Thank you.

Our next speaker is Heidi Ventura.

Heidi, you will be followed by Jonathan Love, Carol Weiler, Kyle Miller, and Anton Awig.

If those individuals can please come up to the reserve seats at the front of the room, and we will begin with Heidi Ventura.

Good morning.

I'm Heidi Ventura.

Um I moved to San Diego.

I did it for uh personal reasons.

This was what, like 10 years ago.

Um I was a single mom, I am, of three kids.

I didn't have an education.

I had my baby at 19 years old, so I came here alone.

I worked my butt off.

I worked as a property manager full time.

I drove lift and I even rented a bedroom in my three-bedroom apartment just to make ends meet.

And I did a lot, I sacrificed so much time with my children, and just like I had no time for me.

My goal was to create something that will give me that time to be with my children.

And when I finally acquired my my first property, I was able to do that.

I get to spend time with my children.

I was also able to help other owners that have no choice but to rent furnished.

They they don't have the luxury to sell their home.

They're be well thank you.

Thank you for your comment.

Our next speaker is Jonathan Love.

Morning, council.

Jonathan Love, I'm a San Diego resident and short-term rental host as a disabled veteran.

Sharing my home helps me to keep up with rising costs and allows me to stay here in San Diego.

I was it was upsetting to hear through a text poll that city officials may impose a $5,000 yearly tax, which has been proposed.

I'm here today to strongly oppose the council member Ila Rivera's proposal tax residents.

Like me, uh thousands and thousands more each year, especially when we have already faced repeated tax hikes.

I'm not a big commercial company, and I can't afford to pay a massive tax increase at a time when so many are trying to just get by.

Please don't make us pay even more excessive taxes when we cannot afford it.

The vast majority of short-term rental hosts in San Diego are local residents and responsible neighbors who share their home with guests to earn extra income.

What's more, we already contribute millions of dollars in taxes each year to the city annually.

If this additional hefty tax is implemented, many of us will be forced to stop hosting, and the city will end up losing revenue.

Thank you.

Thank you.

Our next speaker is Carol Weiler.

Hi, my name is Carol Weiler.

Um I'm an Airbnb host as well as a property manager.

I've been real estate broker and doing this for over 30 years.

Um we do help a number of tier three owners.

Um this proposed vacation rental tax is unfair and it would do more harm than good.

It will hurt San Diego families and hurt San Diego tourism.

It will hurt all the support industries we use, like cleaning people, it will hurt tourists because hosts will have to raise prices to cover the extra tax expenses.

It will drive hosts out of business and give tourists fewer choices of places to stay.

The city just raised the TOT tax, property taxes keep rising, and now we also have to pay the STR license fees.

San Diego government needs to learn how to manage the billions of dollars it already receives from us to help homeless and to fix our roads.

Thank you.

Thank you.

Our next speaker, Kyle Miller.

Good morning, Council members.

My name is Kyle Miller, owner of Super City's property management and a lifelong San Diego resident.

I manage licensed short-term rentals that already contribute thousands in lodging taxes, business fees, and local jobs.

For one property alone, the city collects $13,000 a year before expenses.

The proposed $5,000 per bedroom tax would devastate small locally run vacation rentals like mine.

And short-term rentals are already tightly capped, licensed, and taxed at up to 13.75 tot.

Now the city wants to add another fixed cost that isn't tied to nights booked or impact.

Tourism has already slowed, international travel's down, and even with a hundred percent five-star ratings, bookings have dropped.

If this tax passes, many hosts will be forced to stop renting or sell their homes, and a few will switch to long-term rentals due to strict rental laws and limited flexibility.

These homes would rent for $3,000 to $6,000 a month, not enough an affordable range where the shortage really exists.

Meanwhile, the city would lose visitor spending, lodging taxes, and neighborhood jobs at short-term rental support.

This business is my livelihood.

Thank you for that concluding remark.

Anton Ewing, you will be followed by Colette Colette Stark, Greg Smith, Jessica Solano, and Kimberly Jackson.

Good morning, honorable members of the council.

Anton Ewing.

I graduated law school in 1997 and I was a Navy nuclear reactor operator before that.

I was wondering if you could help me in filing a lawsuit against you for passing this tax.

If you could make it so it just applies to a very specific group of people, that would help me with my lawsuit.

So I would encourage you when you do look at this tax, the power to tax is the power to destroy.

And Senator Daniel Webster in 1913 said, I want to register my dissent to a 1% tax, because as soon as we see this 1% tax, our children or grandchildren will see a 2% tax.

And what are we at today?

39.6.

When you pass this tax, it only applies to the 1%, right?

But soon it will creep over to the rest of us.

So please make it a really onerous tax so that my federal district court lawsuit will succeed.

Thank you.

Thank you, Colette Stark.

Thank you.

I occasionally rent out a spare room for short-term rental.

In our experience, a room on a short-term rental will fetch about $3,000 a month, while the same room long-term brings about $15.

The short-term option isn't about profiteering.

It's the difference between barely covering today's ownership costs and falling behind.

What does that mean?

For a homeowner renting one room a few nights a month to help pay bills.

This is $5,000 a year, or seven or excuse me, $417 a month before paying mortgage insurance, utilities, or TOT that operators collect and remit.

For three rooms, it's $15,000 or $1,250 a month.

Plug that into carrying in cost math.

It articulates that you can see a problem on a typical home with 8,000 100 month carrying costs, a family.

A family.

Oops.

Oops.

Ran out of time.

Thank you.

Thank you.

Greg Smith.

Is Greg Smith here?

Jessica Solano.

Good morning, Council members.

My name is Jessica, and I'm a local resident, and here on behalf of vacation rentals by Kimberly, we're a local San Diego company that manages homes for families who love sharing our city with visitors.

I'm asking you to please take a pause and commission an independent study before moving forward with this proposed $5,000 tax.

We need to understand what this would really mean for local housing, for our tourism economy, and for everyday people, cleaners, maintenance crews, and small vendors whose jobs depend on these homes.

Cities like Encinitas and Escondido have implemented balanced approaches that work using fair cost-based fees instead of flat penalties that hurt responsible operators.

Short-term rentals aren't the problem.

In fact, during fires and floods, many of these same homes have provided shelters for displaced families when hotels were full.

Please take the time to look at the data before passing something that could unintentionally harm the people who are already doing things the right way.

Thank you.

Thank you.

Our next speaker is Kimberly Jackson.

You have been seated time by Gabe Kubanda.

Is Gabe here?

Thank you.

And Diane Edwards.

Diane Edwards in the room.

Okay, so that will leave you with two minutes.

Please begin.

Honorable council members.

Hello, my name is Kimberly Jackson.

I run a local vacation rental firm called Vacation Rentals by Kimberly.

We've been around for 15 years and we manage homes for many San Diego local families.

I'm here to oppose item number four.

This 5,000 bedroom tax will not convert these units to long-term housing, nor will it turn them into vacant homes.

It also won't address the city's housing affordability issue.

The owners I work for have invested lots of money in their furniture, and they will not unfurnish these units.

In fact, instead, they'll convert them to midterm rentals, which are stays of 30 nights in length or more.

These type of rentals serve people like insurance displacements, snowbirds visiting for multiple months, and families in between escros or remodels, remodeling their homes.

This means the city will lose out on the STVR permit fee, the RUBT tax, and most importantly, the TOT tax, which will be avoided because we will be renting for over 30 nights in length.

This measure won't achieve the intended goal and will result in a significant loss of funds.

And if not, why not?

Are his constituents the hotel unions?

Thank you.

Thank you.

Our next speaker is Manuela Bump Marillo.

You will be followed by Justine Murray, Fang Buen Jaime Gonzalez.

Good morning.

My name is Manuela Bump.

And I'm here to ask Mr.

Rivera and the rest of the city council to stay out of my bedroom.

I'm a 75-year-old, and instead of spending time with my grandchildren or a bishop in Hawaii in my bikini and drinking a pinacolada, I spend my time cleaning floors on my Airbnb to mitigate the cost that I have to keep it going and to keep offering the people that come from Arizona with their children that have never seen the ocean.

And I don't want this tax to take away that joy from those people because this is United States of America, not just San Diego State or Syria America.

I spend my spare time on my niece cleaning, scrubbing floors, and I have to do that to mitigate my costs.

So I can keep this Airbnb going.

So I am totally conclusion time.

Justine Murray.

Good morning, Council President Lakov and Council members.

My name is Justine Marie, and I'm here on behalf of the San Diego Regional Chamber of Commerce.

We're deeply concerned about the proposed vacation rental tax.

Let's be honest, this tax will not build a single home, nor will it solve the housing crisis that the city is facing.

What it will do is raise costs for local families, threaten the small businesses and neighborhood jobs that depend on our visitor economy, and reduce the accessibility of San Diego as a travel destination.

The tax will negatively impact our tourism economy, reducing visitor options, driving up nightly rates, and ultimately decreasing TOT revenue for the city.

Most short-term rental hosts, as you see here today are local residents, retirees, teachers, military families, and veterans using local income to stay afloat.

Punishing them with thousands and new taxes every year is both unfair and short-sighted.

Let's focus on strategies that we know build housing for working San Diegans, streamlining permits, cutting red tape, moving forward with progressing housing policies, delivering housing solutions inside of creating barriers for working San Diegans.

The chamber urges you to reject the proposal and stand with San Diegans who want practical balanced solutions and not another costly experiment.

San Diego doesn't want more taxes.

We want solutions.

Thank you for your time.

Thank you.

Fong boy.

Good morning.

Thanks for your time.

My name is Fong Bui, and I'm speaking on behalf of the California Short Term Rental Association, a coalition of responsible STR operators and industry workers.

We strongly oppose the proposal for the 5k per bedroom tax on vacation rentals in San Diego.

Many of us simply just couldn't afford to stay in business.

And just because we have a vacation rental doesn't mean we are part of the 1%.

Let me outline some of the operating costs for my two-bedroom vacation rental in a neighboring city.

Last month I had eight bookings, which brought in 4,300.

My mortgage is 2,000, house cleaning, 830, property tax, 458.

Insurance, 125, construction loan, 640.

Electric, 430, water, 72, pool and spa cleaning, 350.

My total cost, not including consumables, licensing, and other maintenance costs, is already over 490.

I was over $600 in the red last month.

I support my aging immigrant parents who have no retirements.

We urge you to reject this per bedroom tax in San Diego.

Thank you.

Thank you for that concluding remark.

Jaime Gonzalez.

Hi everyone.

My name is Jamie Gonzalez.

I'm a 20-year San Diego resident, and I am a short-term rental owner that my family operates, and it's not a luxury investment.

And this is actually how we keep afloat when life upends us.

When I lost my job earlier this year, income from my tier three rental covered our mortgage, utilities, and health insurance while I searched for work and continued to do so.

That hosting income was the difference between financial crisis and continuity for my family.

A blunt 5,000 per bedroom in uh per bedroom tax, which would be $20,000 on my home, would eliminate that safety net.

This is one of the worst job markets we've faced in years.

The region has seen meaningful job losses and rising unemployment, and local families are absorbing cuts and uncertainty.

Now is precisely the wrong time to remove another critical income stream from San Diego households.

So you want to protect San Diegans.

Why not protect those in the room?

I ask you that, Councilmember.

Thank you.

Our next speaker is Nicole Bonzel.

You'll be followed by Sarah Cardenas, John Weil, Heather Yorger, and Michael Ma.

If you those individuals can please come to the reserve seats at the front of the room, and we'll begin with Nicole Bonzel.

Hi, my name is Nicole.

I'm a woman of color, a mom to a three-year-old and an expecting mom and a small business owner here in San Diego.

I own one home in this city, and I don't even live in it because it has a nearly 7% mortgage rate.

It was my way to get into the market.

I rent the home I live in.

I heard Councilmember Ila Rivera talk about the 1%, the only the 1% is going to be affected, as though I'm some rich investor hoarding houses, the rich 1%.

I want him to know that I am the 1% that's going to be affected, and I am a resident.

He talked about it as though 99% of the residents in San Diego won't be affected.

What about the 1% looking at you in the face right now, telling you we will be affected?

I am the working middle class trying to survive in a city that keeps moving the goalposts.

We already paid 10.5% hotel tax, a thousand dollars for an annual permit.

We're capped at just 5,000 Airbnbs.

If you think this is actually going to make a difference in affordability, I am also trying to afford to live here.

That's why I pose this tax.

Thank you.

Our next speaker is Sarah Cardenas, and you have been seated time by Anthem Ghee.

Are you here?

Thank you.

All right, so two minutes on the clock.

All right.

Good morning, good afternoon, Council President and Council members.

My name is Sarah, and I'm a San Diego homeowner and short-term rental host.

I am opposing Councilmember Ilo Rivera's $5,000 per bedroom tax, respectfully.

During the pandemic, hosting gave me a way to rebuild, providing safe spaces for people to quarantine, work remotely, and seek medical care.

That's what started my passion for this work.

Short-term rentals provide temporary, flexible, safe housing when it's needed the most.

San Diego faces serious housing challenges.

This bill does not solve them.

It takes away existing temporary safe housing and forces homes to sit empty.

If the goal is to rein in large corporate or absentee investors, then target them, not local homeowners.

A flat tax like this hurts the most hardworking homeowners the most and the wealthiest the least.

Don't punish responsible hosts who keep neighborhoods and local jobs thriving.

Short-term rentals support cleaners, landscapers, maintenance teams, and families, and this bill would devastate them.

We share the goal of strong communities and fair housing, but this proposal isn't the answer.

I urge the council to reject this bill and work with hosts on balanced data-driven solutions.

We're not the problem, but we want to be part of the solution.

And we can help San Diego thrive if responsible hosting continues.

Thank you.

Thank you, John.

Good morning.

I'm a fourth generation San Diegan, and thanks to Airbnb, I am able to provide for my fiance, pay our mortgage, and live in this incredibly expensive city.

I'm not a big corporation.

I'm not a billionaire.

I own one home, and I assist my good friend's elderly parents to operate their Airbnbs in the city.

This income pays for my groceries, my gas, my electricity, and my medications required for my hereditary conditions.

This tax will severely impact my ability to afford the necessities of my life and ultimately the necessities of the cleaners, plumbers, electricians, and handymen that I work with daily.

If you don't have empathy for us house, have empathy for my cleaner, Erica, my handyman Jimmy, or my plumber Mel.

Thank you.

Thank you.

Heather.

Hello, I'm 37 years old, and my husband and I cleared out our 401ks to buy our duplex here in San Diego three years ago.

Um we don't have a lot of resources.

We're just one person, uh, one family with one home.

And um, I waited till I was in my mid-30s to have a child because it was so important to me that I could spend the first few years together with my child.

So I really rely on the income from the second unit to be able to pay my mortgage and to be able to pay all of our living expenses.

My son and I, uh he's two.

We clean the home together.

I do most of the handyman tasks, and um I self-manage it.

I'm not some big billionaire in Texas.

I'm just one family trying to provide for my son and be home with him.

Um, this is a lifeline for me.

And most of the families who come, or most of the guests who come, they are families.

They're either people who are in Espero looking to move here, they've um they've decided to move here and they need a place for a few weeks while they wait for their apartment to become available, or their family is coming to visit SeaWorld and they love the family amenities that I provide.

Thank you.

Thank you.

Our next speaker is Michael Ma, and you have been seated time by Susan Chin.

Susan.

And Carolyn Harris.

Good morning, councilman membros.

My name is Michael Ma.

I live in San Diego for 31 years.

After being laid off in 2021, I retired early.

Social security is not enough to live on.

My family and I are not wealthy.

We used our life savings and took out a mortgage loan to buy a second property and start short-term rental business, using my own time to serve terrorists and earn a very modest income.

In just four years, HOA fees, insurance, utility, inconvenient packages, supplies, have nearly all doubled.

We haven't raised our rates.

We want to keep San Diego affordable for visitors.

Yep.

Councilman Iro Raviras' proposal to charge 5,000 bar per room.

What a crush.

Small operators like me, like us.

And hurt the cities, and economies.

I heard Congressman say on October 4th that visitors don't pay their fair shares for public services.

I respect for the disappointment.

The city raised lodging taxes in May.

Tourists already pay high taxes on lodging, hotels, restaurants, and shops.

Now the city wants to tax property owners who support local business, jobs, and potterism.

Raising taxes every time there is budget short of all is not sustenable.

Sustainable.

Sorry, Marlene.

My English and not as a front.

Protect small business and keep San Diego welcoming.

I support two college kids through short term rental income.

Pretty don't penalize my family and pick my family dream away.

Thank you.

Thank you.

Our next speaker is Dallas Brown.

You will be followed by Michael Palermo, Scott Hafner, Jeff McGurn, and Roger Zhang.

If those individuals can please come up to the reserve seats at the front of the room, and we'll begin with Dallas Brown.

Hey guys, thanks, Council.

Thanks for having me.

My name is Dallas Brown.

I was a Navy SEAL for nine years here in San Diego.

So I've been here for about a decade.

I like to call myself a San Diegan.

I think like you guys are getting the idea here.

There's a lot of small businesses in the Airbnb industry here in San Diego.

We don't have a lot.

I clean my own Airbnb.

I own one with two bedrooms.

I do all the management, all the maintenance myself, and even then I can barely make my mortgage.

So basically, what I wouldn't even call myself middle class.

I think I'm lower middle class.

And I think the idea here is that a lot of us are barely making ends meet as it is.

So I strongly, strongly oppose this measure.

Um and I think that you're going to be crushing small businesses over anything.

And I don't think that's your intent based on your presentation.

So the council members with a little bit more sense.

If you guys could maybe re-re uh rethink what you're trying to focus this measure on.

Thank you.

Thank you.

Michael Palermo.

Good morning and thank you.

My name is Michael Palermo.

I've been in San Diego resident and homeowner for over 25 years.

I love the city.

I love being part of a thriving community.

However, it's getting harder and harder every year to survive here alone and thrive.

Homeowners like me have turned to renting out parts of our homes to be able to pay expenses.

The proposed new tax would make a huge difference in my ability to pay bills, the water bill keeps going up, utilities keep going up, everything keeps going up.

An extra $10,000 would be devastating.

Please help us stay in business.

We are small.

We are not living in the sand castle.

Please help us.

Thank you.

Thank you.

Scott Hafner.

Good morning.

Thank you for the opportunity.

Why are we here?

I thought we had worked through all these problems three years ago.

So now we are looking at the exact same issues that were hashed out.

And if you're so if we're so fortunate for you to not pass this measure, are we gonna be back here in another three years?

You know if I'm trying, I'm trying to make a living, trying to, you know, I'm retired, fixed income, all of that.

Airbnb helps out tremendously.

This feels like a personal attack on my ability to live.

You know, 5,000 is is clearly an effort to drive us out of business.

It's not a it's not a tax, it's a punishment.

And worse than that, I feel slandered.

You know, I didn't realize that I'm responsible for the homelessness in this city.

I'm responsible for the high rent.

I'm responsible for the lack of housing.

And I don't think it's fair, and that's what this is about is fairness.

Thank you for that concluding statement.

Jeff morning, council members.

My name is Jeff McGurden, and I have to say it's always fun to get lectured by an actual multimillionaire one percenter like Barbara Bree about housing affordability.

I myself am a native lifelong San Diegan who loves this city and depends on its vitality, both as a place to live and a place people want to visit.

I urge you, especially Council members Lee and Kempio, um, to vote no in advancing this tax.

It's punishing San Diegans like us.

This proposal sends the wrong message about who we are.

It tells visitors that they're a problem to be taxed, not welcomed, and it tells San Diego who host responsibly that they're the new villains.

But unlike Councilmember Ella Rivera would have you believe, tourism isn't our enemy, it's our lifeblood.

It supports small businesses, it pays for services, and it helps make San Diego neighborhoods vibrant.

Cities like New York tried punishing short-term rentals, and the result was clear.

Housing didn't get cheaper, but tourism shrink and local economies suffered.

Councilmember Lee, you said San Diego must remain accessible and connected.

Councilmember Campillo, you focused on fairness and economic stability.

This tactic on this tax undermines both.

It won't lower rents.

It just makes San Diego less affordable for the people who visit and less fair for the residents who welcome them.

Thank you.

Thank you.

Roger Zhang.

Good morning, Council members.

Uh first of all, I want to thank you guys for all of your service.

Thank you for serving the city of San Diego.

Just to introduce myself, I am a builder.

And San Diego is the best city I've ever worked with in my life.

All up and down the coast of California.

But people want to visit here, right?

It's beautiful.

There's tons of things to do, theme parks, come to vacation.

But this specific topic made me come down here because I'm appalled.

If you want to see what this will do, check Portland, Oregon.

They've done it.

I have I have Airbnbs up there too.

You can look at the statistics of other big cities on how this works out.

People will pull their Airbnbs.

If you're looking at 133 million dollars in revenue and 2% of housing, I think you found the problem there.

It's 2% of housing.

How are you going to solve something bigger?

You want to incentivize people to have lower rents and everything?

Build more.

Allow builders to support the community.

You don't do that by taking things away from the 2%.

It's just not how this works.

Thank you.

Thank you.

Our next speaker is Braden Moreno.

Suzanne Christensen, Debbie Anderson, Kara Chambers, and Catherine Alvarez, if those individuals can please come up to the front of the room at the reserve seats, and we will begin with Brayden Moreno.

Good morning, Council members.

I own and manage multiple vacation rentals here in San Diego.

We pay hundreds of thousands of dollars in TOT taxes on the properties we manage for owners.

I'm here to urge caution on the proposed 5,000 per bedroom tax on short-term rentals.

It's absorbent, risky, and unnecessary.

We already pay among the highest short-term rental fees in the nation.

First, the city's own 2023 short-term rental ordinance.

17% of those permits still remain unused.

If short-term rentals were truly driving housing shortages, that cap would have been filled a long time ago.

Second, the short-term rental industry drives real economic value.

18,000 jobs, including cleaners, electricians, plumbing roofers, everyday blue-collar jobs, and hundreds of businesses for the immigrants that live and pay taxes in the city.

Over 453 million dollars in tax revenue.

A punitive tax risk tax risks, collapsing that ecosystem should be both jobs and city revenue.

Implement this and you'll worsen affordability for long-term rentals and not fix housing.

At a time when costs are high and short-term rentals are down, vote no on this proposal.

Thank you.

Thank you.

Suzanne Christensen.

Good morning, Council members, and thank you for having us here.

Um my name is Suzanne.

I'm a retired teacher.

I rely on my tier three income.

I can't be here without it.

Uh the tax is disproportionately high and unreasonable.

This proposed tax of 5,000 per room per year may far exceed what a short-term rental owner can reasonably absorb.

Um, and probably force us out of business.

Um it seems that the policy makers already recognize the burden of a very high fixed cost on owners.

A flat fee per room per year uh fails to account for utilization, low occupancy years, uh still carry the same cost in years or seasons with fewer bookings, that burdens become heavier relative to income.

STRs are not the sole or even primary cause of inadequate housing.

Thank you.

Thank you.

Debbie Anderson.

Thank you, Council members.

I have to say that's the first time I've ever done anything like this, but this hit to the heart.

I lost my job a year and a half ago.

Um my job was eliminated.

I was 67.

I am now 69.

You know how hard it is to get a job when you're 67 in the financial industry.

Starting to rent out parts of my home and helping others do the same, has allowed me to stay in San Diego.

All I want to do is spend time with my nine-year-old granddaughter that lives here in San Diego.

If I am forced to move away, somebody buying my home is gonna come in and they're gonna be an investor, and guess what they're gonna do to my property?

They're going to turn it into a four-plex, a sixplex, who knows what.

My neighbors are going to be extraordinarily upset.

I'm an ambassador for this city.

I put people in my car.

I take them to the sites.

I tell them, I show them things that they would have never seen, just looking at a map to see this city.

I am passionate about this.

I have not done this before.

I want to stay in San Diego.

This will push me out.

I'm hanging by the threads.

Thank you.

Thank you.

Carrie Chambers.

Good morning.

I am terrified of public speaking, so it says so much that I'm up here right now.

I'm a mom of almost four, a military spouse and a co-owner of a vacation rental management company.

In my business, 100% of our homeowners are local families who worked their entire lives to purchase a vacation home that they use a few times a year and rely on SCR income to help cover their mortgage.

None of our owners are large corporations.

None of our owners are foreign investors.

Taking our industry out of existence will not solve homeland homelessness.

It will eliminate jobs, reduce tourism, and dry up a valuable source of revenue that could be part of the solution if used wisely.

More than 18,000 people in our city rely on this ecosystem for their livelihood from cleaners to maintenance workers to hosts and small businesses who benefit from increased tourism.

We as hosts and professional property managers have been more than accommodating when it comes to working with local politicians in residence.

We just went through the rigorous licensing process two years ago.

We raised our TOT taxes this summer, we pay property taxes, R UBT, and we have done everything the city has asked of us.

Please oppose us.

Thank you.

Thank you.

Catherine Alvarez.

Is Catherine in the room?

All right.

John Benedict.

John Benedict, you will be followed by Rosalind Hafner, Kevin Knickerbocker, James Hemick, and Jennifer Ragsdale.

If those individuals can please move to the reserve seats at the front of the room, and we will begin with John Benedict.

Thank you very much for this time.

I've been in San Diego.

I'm 65 years old.

Um my entire lifetime.

I've never seen uh tax really solve a problem.

There's a uh law called the law of bureaucracy that states that whatever the intention of the rule or the tax, the regulation, the exact opposite will actually happen.

Um there's a scene and unseen effect of this.

The scene obviously you'll you'll raise a little bit of money, you'll put all of us out of business, but the unseen is there'll be tens of thousands of people that will not be able to travel to San Diego.

It'll affect the livelihoods of the local economy, the restaurants, the retail shops, the impact would be huge.

The city will lose out, and really we the little people will suffer.

I literally pay myself $4,000 a year to uh for myself.

I have three um Airbnbs, and I get to pay myself $24,000.

The rest goes to the expenses of this city, which is very, very expensive.

Thank you.

Your time has concluded.

Rosalind Hafner.

Good morning.

As an Airbnb host, I oppose the $5,000 per bedroom short-term rental tax.

I asked for transparency from the city council.

There was no transparency when the city instituted the licensing fee.

Where is the licensing fee income going?

There was no transparency with the TOT taxes.

Where are the TOT taxes going?

There's no transparency from the city where the bedroom tax would go.

I'm a long-term San Diego City resident.

I have an Airbnb in a neighborhood that has very few hotels.

Airbnb guests support hyper-local businesses such as coffee shops, restaurants, and shops.

My short-term rental helps me live in the ninth most expensive city in the U.S.

This year, residents like me have had to deal with the daylighting law, the new Balboa part parking fees, and the new trash fees.

Now you're proposing a huge $5,000 per bedroom tax on short-term rental hosts.

I urge you to reconsider this huge tax.

Thank you.

Kevin Knickerbocker.

Good morning, counsel.

Um, as I say those words, it makes me uh think about the fact that you're I'm speaking of some superior body, and I'm really not.

I'm speaking to the employees of the city of San Diego.

You are here uh to service us.

And as I speak to a number of my friends and relatives around the city, they just don't feel that this council is really working for the city.

And this $5,000 per room, come on, Elo, this is ridiculous.

Five thousand per room.

If you rent out a one bedroom for $125 a night, how are you gonna make any money off of this?

So clearly you should just be a gentleman and stand up and say you're just trying to eliminate the business altogether.

But as your own study has suggested, that was presented by this woman here.

I apologize, I don't know your name.

This is not going to create more housing for people of low income.

The overwhelming are in areas that are wealthy.

So this doesn't do anything to solve that problem.

What you all need to really do is hunker down, roll up your sleeves, and find a solution.

And you can get started today.

James Hemmeck.

Morning, Council.

I've been a proud been proud to call San Diego my home for over 40 years.

My wife and I love the city, and we depend on short-term rental income to afford to stay here.

The proposed $5,000 per bedroom tax would punish local responsible hosts that already pay our fair share.

Our annual short-term rental licensing fees, the transient occupancy taxes, as well as our property taxes.

Our rentals also create jobs.

I employ five San Diego residents, and our guests support local restaurants, shops, and small businesses that rely on tourism.

If this law passes, many small hosts will shut down, jobs will be lost, and the city will lose valuable economic activity.

I urge the council to look at cutting spending before creating new taxes.

Let's keep San Diego affordable, vibrant, and welcoming for our residents, our workers, and our visitors alike.

Thank you.

Thank you.

Our next speaker is Jennifer Ragsdale.

And you will be followed by Aaron Berna, Carlos Escada, Stephanie Lloyd, and Paul Kruger.

If you can please come up to the reserve seats at the front of the room, Jennifer Ragsdale.

Hello, council.

My name is Jennifer Ragsdale.

I'm a registered nurse.

My husband works a nonprofit.

We have two young children.

We have a whole home that we vacation rental.

We use it as a means so that family, when they come stay, we have a way where grandparents can we can comfortably host our family and also not lose out on income that we rely on to live in this city.

When I went through the process of getting our license and getting it all on board, I felt like I did everything right.

I'm paying my fair share.

My guests are paying taxes.

I recently, you know, they're paying increased taxes.

And the fact that this proposal is up, I just it feels very targeted, unfair.

I feel like I'm doing everything right, following the rules, and it just feels like it's a continued target, and I don't really understand where it's coming from.

This city thrives on tourism.

I love hosting families, people with pets.

They don't want to stay in a hotel.

This feels very targeted and unfair.

Thank you.

Aaron Hi, my name is Aaron Beard.

I'm a property manager and host local here in San Diego, born and raised.

You know, it's funny because I we can talk about all this stuff, and I find your $5,000 thing very interesting because in law school I wrote a memo about how to deal with Prop 13.

Because what's really a problem in our community is we have oxygenarians living in four-bedroom homes, they're not moving out because of Prop 13.

So you want to apply a $5,000 bedroom tax, apply it to unused bedrooms and homes that are in neighborhoods that aren't being used for hosts.

All these people out here are making economic value out of what is theirs.

And you're basically saying to them, we don't want you.

And that's not fair.

It's nice that you say, oh, it's only gonna affect 1%.

Well, that's great, let's do all that.

But remember, the 1% could be you pretty soon.

So all these people that are coming up here need to understand that there's danger in this process.

So we've already done our fresh air, we've been brought to the table.

We suffered through that entire licensing tobacco, we've suffered through raised increases in taxes.

And I wonder, you know, where's Doug Manchester?

Where's Convis in all this?

Because that's all they want.

They just want higher hotel tax rates.

And so those aren't gonna bring people to San Diego, and the impact is my $680,000 to went to cleaners and handyman last year, it's gonna be gone, and those people are low-income people who can't find housing either because they won't have jobs.

Thank you.

Carlos Oscaba.

Hello, my name is Carlos.

I have called San Diego my home for 30 years.

I work as a real-term property manager doing work across the entire county.

I help people fulfill their dream of home ownership and make one of the biggest decisions of their life.

I manage a variety of rental, short-term, mid-term, and long-term that range from a two-bedroom condo all the way to high-end luxury homes as well.

Thanks to the work I do, I was able to buy my first home along with my wife just last month.

I strongly oppose this proposed short-term rental by council member Ilo Rivera.

I believe the benefits of benefits of short-term rentals strongly outweigh the effects of this proposed tax.

Through the work I do, I employ at least four to six people that support with maintenance, cleaning, contractors, and marketing.

Trying to get rid of the short-term rental and gate gouge the owners of these rentals will damage our economy beyond the benefits of this tax.

There are much better ways to create more access to homeownership.

You say 99% won't be taxed, but the trickle down effect will be much more detrimental than what you are proposing.

Thank you for your time.

Thank you.

Stephanie Lloyd.

Stephanie in the room.

Paul Kruger.

Thank you.

I had a couple of things I wanted to show here.

Um that's actually fine.

I'm Paul Krueger.

Uh I have no position on this here.

I'm not here for that reason.

Um I'm disappointed by the immense amount of disinformation on both sides of this issue, and I wish that that could be cleared up so people could make a competent decision.

What I am most uh upset about also is the idea that turning these homes in the wealthiest areas of San Diego into full-time rentals by pushing out short-term stays will in any way impact uh the market for the very low income housing we need most.

It will not do it.

Also, Councilmember Elo Rivera's comment about speculators and investors seeing homes as dollar signs is disingenuous to the point of immense frustration.

For four years, we have tried to get this city council to look at the damage done by bonus ADUs and have been ignored.

Thank you.

Our next speaker is Greg Wadsworth.

You will be followed by Laura Roberts, Greg Ross, Ellie Coe, and Bob Otley.

Is Greg Wadsworth here?

Okay.

Hi, I'm Greg Wadsworth.

I'm a San Diego native, former class president of Bird Rock Elementary and a former electric member of the Bird Rock Community Council.

Uh thank you for your service, Councilman Lacava.

Um our family has been in my home for over 70 years, and my uncle played a major role in the development of Prop 13 and later Prop 58 with Howard Jarvis in Los Angeles.

So preserving San Diego neighborhoods and community has always been a part of our family culture.

Now, as the generation next generation custodian, I'm in the difficult position of retaining my family home due to the passage of Prop 19, which basically nullified the benefit of a parent child transfer and increased my property taxes by 2200%.

It's for this reason that I rely on supplemental short-term rental income for renting out my family home for several months out of the year to cover additional property taxes.

Although this is a my primary home, I do have a tier three license in case I need more income to cover taxes.

Thank you for reconsidering this proposal.

Thank you.

Laura Roberts.

Thank you all for your service.

My late husband, Dr.

Roberts, was drafted while he was training at UCSD during the Vietnam War.

After being exposed to Agent Orange, he later became ill and passed this August.

Thanks to our Airbnb income, we were able to pay for caregivers because I myself stopped working to care for him full time.

He was a hard-working doctor, served his country, volunteered at the UCSD free clinic, and among other places.

He was not an oil well tycoon, and we did not have endless funds.

I myself am a doctor.

And this is creating burnout for me.

You're creating apathy for me.

I don't want to be an Airbnb host.

Thank you.

Greg Ross.

Good morning, Council members.

My name is Greg Ross.

I own a property management company called Nancy's Vacation Rentals.

We've been in business for over 25 years.

I've been to council meetings for over 12 years with all this as well.

We've all heard the phrase everyone should pay their fair share, but the city keeps raising taxes and still can't balance its budget from the new trash fee to the TO increase that just happened this past May, adding yet another vacation home tax isn't about fairness.

It's about fiscal desperation.

That's not a revenue problem.

It's your spending problem.

This is double taxation on people who follow the city's own ordinance.

Many of my owners depend on this income for retirement as part of their life savings, and this tax would devastate them.

Put them out of business.

Vacation rentals also fuel our local economy, as you've heard.

Tourists outspend locals by a wide margin, and San Diego's 32 million visitors generate over 14 billion dollars in spending and supporting one in eight local jobs.

One in eight.

Thank you for that concluding remark.

Ellie.

Good morning.

My story is a um a profound story.

So my name is Alan Kajastazad.

I'm a San Diego homeowner and a proud Iranian American and a trauma survivor.

In 2022, my mother took her life after struggling to pay her mortgage and facing impossible city permit costs, over $60,000 to build an ADU for a student.

Cost she couldn't she could not afford.

And the red tape also added to her stress.

I took out a million dollar loan at 7% to save her home and the beautiful flowers, as an investor planned on making an apartment of it.

Long-term tenants couldn't afford the rent, so I turned to Airbnb to survive.

In 2023, I was attacked and nearly killed in a televised uh incident that left me uh having permanent disabilities and injuries, including a dramatic, traumatic brain injury.

Hosting became my only fat path to financial stability, and it's how I pay my bills.

That's it.

Oh geez, I took too long.

Anyway, I employ lots of families, and I met my grief county through Airbnb.

So I oppose the tax.

Thank you.

Bob.

Good morning.

I own a home in South Mission Beach.

STRs impose a tremendous cost on our community, not imposed by hotel rooms.

Every STR removes families from our community.

Each one means one last family in that residence.

Forcing out low and middle class residents.

On my court, rents have gone up 70 to 80 percent for the full-time people in three years.

STRs lower participation in our neighborhood watch.

STRs remove students from our local schools.

It is an undisputable rule of economics that the more you tax something, the less you will have of it.

On that basis, I support a tax on these commercial enterprises that have been placed in our residential neighborhoods.

Thank you.

Thank you for that concluding remark.

Our next speaker is Noah Yuyek.

You will be followed by David Marillo, Kyle Weinberg, and Samuel Estrada.

And Liliana Soriano, if those individuals can please move to the reserve seats at the front of the room, and we will begin with Noah Yuyik.

Good morning, Council members.

My name is Noah Yick.

I am a researcher and policy advocate with the Center on Policy Initiatives and a convener of the Community Budget Alliance.

Housing is a human right and should not be a way to create profit.

Most San Diegans are struggling to pay rent.

The federal cuts to housing, food assistance, and health care will only make the situation more dire.

Right now in San Diego, more than 11,000 people own not one but two or more homes, while thousands of families can't afford a place to live.

These are homes that could house working families, but instead sit empty or rent it out to tourists for exorbitant amounts of profit.

This is a moral issue.

It's greed and theft.

It's stealing housing from our neighbors, our seniors, our youth, and it's pricing workers out of the city they serve.

The vacation home operation tax is a step toward fairness.

It makes those who are profiting off our housing crisis pay their fair share so that we can invest back into what San Diegans truly need.

Affordable housing, homelessness prevention, parks, libraries, and investments in care, not criminalization.

Housing is for people, not profit.

Please support this measure and stand with San Diegans fighting for the dignity of a home.

Thank you.

David Mario.

I'm a first generation American, not a foreign investor, born and raised in California, and a military veteran of 24 years.

Even with my retirement pay, my disability pay, I am still forced to rely on my vacation rental to survive month to month.

This bill has only one purpose to destroy any chance of homeowners who are already paying massive property tax and short-term tax from surviving.

After 24 years of honorable service, finding four separate foreign wars for my wonderful country.

I earned the hard way.

Thank you.

Kyle Weinberg.

Is Kyle in the room?

Yep.

Okay.

And Sermio.

Good morning, committee.

My name is Answer Milo Jacostrada, A.J.

Estrada with the San Diego Building and Construction Trades Council.

You know, in the 90s, there was a specific type of affordable housing that exists that is no longer available to work in San Diegans.

Short-term vacation rentals, second vacation homes on corporations have eaten away at that affordable housing stock.

San Diegans are forced to choose between the necessities of life, medication, groceries, gas, and the realities of a lacking of a lack of housing.

If the people are going to have second vacation homes, if businesses are gonna operate STVRs, then we need to ensure that the city and all San Diegans in the city are made whole.

We need to re we need revenue to build housing.

We need revenue to invest in the infrastructure, programming, and opportunities we know can alleviate the pain and hardship that working people deal with on a day-to-day basis.

This proposal would still allow for short-term vacation rentals, long-term rentals, and the ability of those fortunate enough to own a second, third, fourth home to do uh to uh to use it as they wish.

Uh however, the working people of San Diego, the majority of San Diegans must receive their fair share.

Thank you.

Liliana Soriano.

Good morning, uh rules committee.

My name is Liliana Sorriano, I'm the director of policy at Youth Will.

We're an organization advocating for young people across San Diego to have equal opportunity.

Today I am representing youth from neighborhoods south of the eight and other siloed communities east and north of the county.

When I look around the room, I don't see that representation.

For the audience here today, I also want to address you all, not just through empathy, but also facts.

Your generation can choose to be selfish and think this item is a posting.

Oh, well, the item that you're opposing will harm you.

This is an opportunity for local government public services and our social infrastructure to be continue to be supported.

If you are here only with the tunnel vision mindset, then you have been fed selfish and one-sided propaganda.

Today's item in front of you is to take this to the ballot.

You are not the only residents in San Diego, and we should all get to decide what happens next.

Please vote yes on this item.

It's a critical step toward ensuring there continues to be opportunity for youth, families, and your constituents, and housing is a human right, not a vacation.

Yeah.

Thank you.

Our next speaker is Aaron Hodgeboom.

Is Aaron Hodgeboom in the room?

Okay, Aaron, you will be followed by Tyler Andre, Melissa Peterman, Nicole Lilly, and Andres Oliva.

If those individuals can please come to the front of the room in the reserve seats, and we will begin with Aaron.

Hello, my name is Aaron Hogaboom.

I'm director of San Diego for every child and a participant of the basic needs coalition.

Too many families with children are living out of their cars or couch surfing.

Hidden homelessness that has a detrimental impact on the healthy development of young children and the educational success of school age children.

New data shows that child poverty has tripled over the last three years.

We must explore how to do things differently.

This proposal begins to do that.

It asks the IBA to explore what putting this question to the people would look like.

We know our city needs revenue to address much needed services for San Diego's children and working families.

Investments in affordable housing, child and youth programming, emergency services, needed infrastructure updates, and more.

While I'm here to advocate on behalf of San Diego's youngest, the youngest San Diegans, I'd like to emphasize that we all benefit from investments like these, including tourists.

On a personal note, as someone who has stayed with many gracious hosts, I would happily contribute more knowing I'm giving back to the community I'm visiting.

I'm hopeful to see this rules committee support the next step and ultimately put this question to Sandy Eagens.

Thank you.

Tyler.

Good morning.

Uh my name is Tyler Andre.

I am a veteran, a small business owner, uh community activist, and a resident of district one.

Uh I think this measure is fair and simple.

If somebody owns a home that they do not live in or that they are renting out short term, they're going to be taxed based off the number of bedrooms, which is equivalent to the number of San Diegan residents that could be living there.

Uh this tax revenue will go to essential city services for everyone.

If the owner does not want to pay this tax, then they can sell the property or rent it long term and make equity on that, mind you.

I asked you to support this measure for San Diegans that own no properties and that struggle with housing.

Thank you.

Thank you.

Melissa Peterman.

Good morning.

I'm Melissa Peterman, Executive Director of Townspeople and a member of the Basic Needs Coalition.

Strongly support Councilmember Elo Rivera's proposed measure.

This measure is about moving us closer to a fully housed San Diego.

If someone chooses to keep a home off the long-term market while San Diegans are priced out or living unsheltered, I think it's reasonable for them to contribute to the community that makes that investment possible.

Yes, the proposal could generate revenue to combat the city's housing crisis, but if an owner chooses not to pay the tax and instead converts their vacation home into a long-term rental, which is an industry that also creates jobs and supports the local economy, it could generate more housing opportunities for San Diegans and opportunities that townspeople, an affordable housing nonprofit, would be happy to help fill with paying families in need.

San Diegans deserve a chance to decide whether housing is for people or for profit, and I please urge you to support this measure.

Thank you.

Thank you.

Nicole.

Hello, my name is Nicole Lilly.

I'm the executive director of Our Time to Act.

We are a youth-led nonprofit in San Diego.

And we've heard a lot today about what about the 1% of people that this tax would impact.

So I want to talk about the 99%.

For the last nine weeks, our Time to Act has been canvassing the entire city of San Diego and talking to everyday residents who can barely afford to stay here in the city.

Everyday residents are struggling.

They don't own property, and housing is not an investment.

It's a place to live, it's a place to build home, it's a place to build community.

The 1% here are overrepresented, clearly, because they make up one percent of the city.

I'm here to tell you 99% would support this measure, and I'm asking this rules committee to support moving it forward.

Housing is a human right, and a majority of us are struggling to make ends meet.

The issues brought up by a lot of the people here are valid, but everyone needs to pay their fair share.

They're valid in that they also are struggling with housing, but not that they shouldn't pay their fair share.

Thank you.

Thank you, Andre.

And you have been seated time by Tim Douglas, is Tim in the room.

Okay, two minutes on the clock.

Good morning.

Andret Salva Cardinal, Sion Representative of Abston Local 127 speaking in support of this measure in its initial actions.

As city employees, our members often lack the tools and equipment required to provide their essential services.

This is mostly because their departments, which rely on the general fund, are underfunded.

Yet our members still get it done, sometimes using their personal tools to supply themselves.

In their personal lives, our members struggle to keep pace with increases to cost of living, especially housing.

Put differently, our members fight to afford to live despite providing essential services to all San Diegans.

Many of our members, in fact, cannot afford to live in San Diego.

So they must commute long distances to afford to work here and to provide services to us.

Regarding this measure, it applies to those who have the privilege and luxury to use their quote unquote vacation home for rent on a short-term basis, which are frequently vacant.

So this measure intends to recover from those who effectively contribute to the unavailability of homes on the market.

This measure generates progressive, not regressive revenue to fill some of its structural deficits in the city, so it may reallocate money to infrastructure and operations, for example.

And this measure chips away at the housing affordability crisis here in San Diego.

Thus, this measure would help our members in two ways.

First, the measure would provide revenue so the city may more adequately fund their departments, supplying them with basics, which they desperately need to do their jobs.

And second, this measure would complement the ongoing efforts of the city through the land development code and community plan, eventually making housing, even if only slightly more affordable to them in the city which they work.

That is why Aston Local 127 supports this measure and its initial actions.

Thank you.

Thank you.

Our next speaker is Stephen Russell.

You will be followed by Bridget Browning, Gregory Cross, Carol Kim, and Christopher O Gomez.

And Stephen, you have been seated time by Denise Larson.

Is Denise in the room?

Okay, thank you.

So I'll place two minutes on the clock for you.

Good morning, honorable chair and members of the committee.

My name is Steven Russell, and the executive direct president and CEO.

I'm sorry, I got an upgrade of the San Diego Housing Federation.

Our our vision is that every member of every citizen should have uh access to a safe and affordable place to call home.

And as we sit here today, San Diegans are being priced out while homes sit empty.

Since two since the year 2000, we've lost over 60,000 affordable homes in the city of San Diego, not because they were demolished, but because they were upmarketed.

They were made more expensive and out of the reach of most of our citizens.

And short-term vacation rentals are one of the many factors that go into driving up these prices because when things are more competitive, when you can generate more revenue off a property, the pricing of that commodity is based on what you can generate.

And short-term vacation rentals have been shown to have an upward impact on rents in neighborhoods where they exist.

The San Diego Housing Federation supports the vacation home operation tax to fund projects and services that benefit everyone.

Today's proposed measure would raise over 100 million dollars to support essential city services like housing, homelessness prevention, infrastructure, parks, libraries, and public safe public safety.

The San Diego Housing Federation supports the idea that homes should be for San Diegans, not just for profit.

Please support the proposal in front of you today.

Thank you.

Thank you.

Bridget Browning.

And you have been seated time by Lupe Rojas.

Is Lupe in the room?

Okay.

Two minutes on the clock.

Good morning.

I'm Bridget Browning from the San Diego Imperial County's Labor Council.

The question before us today is simple.

Do we prioritize housing as a human right for San Diego's working class or as a luxury commodity for tourists and billionaires?

This tax on the 2% of properties used as vacation rentals or vacant vacant second homes is a necessary step toward choosing our communities over corporate greed.

It's about making the wealthy pay for the crisis they have created.

While teachers, service workers, union members face brutal rents and displacement.

Over 10,000 homes in our city are effectively withdrawn from our community, turning into unregulated hotels or sitting empty as investments.

This tax is surgically precise.

It targets the 2% of properties actively harming our housing market.

It does not touch the 98% of San Diegans who live in their homes or rent them long term to their neighbors or share their homes for short-term visitors.

This tax generates an estimated 135 million dollars annually for our general fund.

Let's be explicit about what that means for the working class.

It means fully staffed libraries open on the weekends and with after school programs, not cuts.

It means well-maintained parks and recreation centers for all of our children and all of our families.

It means investing in infrastructure and public transit that workers rely on.

This is how we build a city that works for everyone, not just tourists and landlords.

The Chamber of Carmos Commerce claims this hurts retirees and teachers.

We do not agree with this.

The opposition is coming from real estate and tourism industries that profit from turning our housing stock into a speculative asset.

They have made a business model off of our suffering.

A $5,000 per bedroom tax on a Texas billionaire's empty La Jolla mansion is not a burden.

It's justice.

We must reject these scare tactics and stand with San Diegans who deserve a place to live.

The opposition will be well funded by real estate and corporate barons.

We urge you to vote yes.

Thank you.

Thank you.

Gregory Cross.

Honorable council members.

My name is Greg Cross.

I pay a lot of taxes too.

I'm a native San Diegan.

I currently live in the community of Sara Mesa in a single family residential home.

I have a tier three short-term rental next door to me, and I would like to have a family, working family live there.

I am in favor of putting item four to a vote of the people.

Some of these tier three and four short-term rentals are party houses like the one next door to me.

Where renters, up to 14 of them at a time, come in during the weekends, create disturbances, then leave, leaving the home unoccupied for the balance of the week when a family could be living there full time.

The speculative investing in these homes drives up the cost of housing and decreases availability.

Thank you.

Thank you.

Our next speaker is Carol Kim.

And Carol, you have been seated time by Lucas O'Connors.

Lucas in the room.

Thank you.

Marco.

Luca Barton.

Okay, so that will be four minutes on the clock.

Thank you.

Good morning, committee members.

My name is Carol Kim, and I'm with the San Diego County Building and Construction Trades Council.

And I rise today to speak in support of this item because we have problems in San Diego and we need to solve them.

Income inequality is a crisis that's destroying San Diego and the country.

And we've been drowning.

Lack of housing is a crisis, also destroying San Diego and the country.

We have been drowning in people who are somberly in agreement that these are real and severe problems, but who rarely propose or support any proposed solutions.

So this leads to an inaction that oversees the worsening of the crises, leading to circumstances that make working people so frustrated and anxious that they start looking to less healthy or less socially responsible ways to deal with it, like the demonization and dehumanizing of others who are frequently the most vulnerable in our communities and are often very much the victims of a wildly lopsided economy caused by our collective inaction and the scapegoating of public sector workers.

And that's unacceptable.

Public sector workers are working people who provide essential public services to our communities, to San Diegans, to our neighborhoods.

The underfunding of local and state government in a crisis in San Diego and state is a crisis in San Diego and statewide in a moment when the federal government is being defunded, pillaged, and weaponized.

And every proposed band-aid to the funding problem so far has been the kind that continues to squeeze working people who are already being relentlessly squeezed by an economy and public policy framework that vastly favors the 1% over the 99%.

So we have to be talking about real options and how we get to yes.

Conversations about reasons for an action are no longer acceptable.

No more we want solutions, but we just don't have any ideas that provide revenue and wouldn't support any that do.

No more, now is the wrong time, because magically there's never a right time.

In the meantime, we can't be in the business of killing ideas before they've even been written or attempted.

Because doing that means killing any hope for a healthy and better future for more people, for the very working San Diegans who make San Diego the wonderful place it is.

Also, there's no actual reason that we can't pursue multiple things at once.

The crises we face, in fact, demand many parts in a solution.

And I'm excited to support additional good ideas when they come, as I often have been here in these chambers for many years.

And for those of you who believe that this proposal is bad economics because it's too disruptive to our economy as it currently exists.

Are you suggesting that the status quo amounts to good economics?

Are you suggesting that this economy is working?

Let me tell you this.

It is working exactly as it is designed to.

And you can't claim that you actually care about working people that much if you're unwilling to disrupt it and redesign it to be more fair to them.

I urge you to vote to move this proposal forward today.

Thank you.

Thank you.

Our next speaker is Christopher Gomez.

You will be followed by Alison Dressel, Jay Goldberg, Janina Pia, and Hilberto Vera.

If you can please move to the front of the room in the reserve seats, and we will begin with Chris Wolforo.

Good morning, Council members.

My name is Christopher Gomez, and I'm an organizer with the San Diego and Imperial County's Labor Council, and I'm once again happy to be standing here on the side of the 99%.

I walk here down 20th, I live on 20th, I walk down C Street past City College here to City Hall.

It's a walk that I recommend everyone here in a blue shirt takes some time.

And I was thinking about that walk when someone earlier said that this item sows class division.

What is really so in class divisions that there are San Diegans dying on our streets and living in their cars while other San Diegans think it's okay to own a second and third home and treat housing as a speculative asset.

It is past time that San Diegans join a wave of cities worldwide, taking a stand in ensuring that their citizens are at least getting some of the profit generated off the beauty of their city.

We urge your support.

Thank you.

Thank you.

Alison Dressel.

Hello, council members.

My name is Ali Dressel, and I'm speaking as both myself and for climate action campaign.

And I strongly support the vacation home operation tax.

I live in PB, and I can personally attest to the changing neighborhoods due to the vacation rentals.

We are losing that fabric of community when wealthy individuals, foreign investors, corporations, et cetera, buy the houses only to serve as secondary, tertiary, and so on vacation rentals for the sole purpose of profit.

Many of the homes, as I walk around the neighborhood, we see are empty for most of the year.

Meanwhile, we have a housing crisis in San Diego, and the people who have lived here for generations are getting priced out of being able to live in their own neighborhood, including the teachers, our neighbors, our teachers, are getting priced out, as well as other working families.

My generation and younger are also wondering if we'll ever be able to afford a first home, any home at all.

From a climate perspective, we need more long-term housing, not more vacation homes, closer to where we work so that we can build sustainable communities for all.

Thank you.

Thank you.

Jay Goldberg, you have been seated time by Laurie Saldania.

Yes.

Is Laurie still in the room?

Oh no.

All right, then you'll have one minute.

All right, let's speedrun it.

Uh Jay Goldberg, nice neighbors.org.

I volunteer on STR compliance.

Let's be clear.

These are extra homes.

Home sharing happens in your primary residence.

This is not home sharing.

This is business.

Swathes of tenants have been evicted from units in the proposed tier three and four tax category.

Nearly a hundred nearly a thousand apartments in hundreds of buildings converted to Airbnb.

We all pay more because workers can't live where they work.

There is no enshrined right to discounts on extra houses or to operate them as full-time hotels.

It's purely a policy decision.

Almost everywhere in the else in the US charges more tax on non-primary residences.

To appease the one percent, our San Diegans are delegated to live in the hills and trek daily into the city to serve as a minimum wage court gestures for tourists and rich people.

Many hosts say their second houses help them afford to live here.

Is that the end game?

Everyone lives in one house and owns another to subsidize their main house.

77 billion dollar corporation Airbnb is here, and they're scared.

Thank you.

Thank you.

Janina.

Janina Padia.

You have been seated time by Kim.

Is Kim still in the room?

Okay.

And Andres?

All right, so I'll place three minutes on the clock.

Good morning and thank you.

I urge you to watch the audience, the law-abiding citizens that are here using their thumbs up or down instead of all the people that you're allowing to click.

It would be really honorable of you.

Good morning, and thank you for allowing me to voice my opposition to your vacation home per room tax.

My name is Janina Padilla.

I have fulfilled my real estate investment goals by saving to purchase real estate in San Diego, and I have met the demands of property taxes.

I have met the demands of absorbitant fees and licenses to run my business.

This usurpious tax may help to cushion your improper management of the city budget, but I implore you to add to your shortcomings the burdens of the 10 people that will no longer be working for me if this tyrannical tax passes.

You guys have protected them.

Put your own income on the line for each time a bad long-term tenant is protected by your own poorly written Tenant Protection Act.

I urge you to look at your audience.

Please put your own income on the line to show that your proposal helps the law-abiding citizens of America's finest city.

Instead of staring at your computer and not paying attention to these people that have been giving you thumbs up and thumbs down, and all you're doing is looking at your computer while they're out there suffering.

Thank you.

Thank you for your comment.

Hilberto Vera.

Good morning, Council members.

My name is Gil Vera, the director of the Housing Justice Collaborative at Legal Lady Society San Diego.

I'm here to voice a strong support for the proposed vacation home operation tax.

San Diego faces severe housing shortage with thousands of residents struggling to find stable and affordable homes.

Meanwhile, over 10,000 properties in our city are held as vacation or year-round short-term rentals, sitting empty or serving as investment for out-of-towners and not as homes for San Diegans.

This tax is fair and a necessary step.

It only targets those properties not only use primary residents but long-term rentals, ensuring that 99% of San Diego's are not affected.

By asking vacation home investors to pay their fair share, we can generate much needed funds for vital services such as new affordable housing, funding, affordable housing preservation, homelessness prevention services, libraries, and other services to relieve San Diego residents of the high cost of living.

Let's prioritize home for people, not just for profits, right?

It's kind of wild to hear that second homeowners and vacation homeowners are crying poverty.

Thank you.

Thank you.

Our next speaker is Andrea Guerrero.

You will be followed by Jacob Martin, Jesse Schmidt, and Kevin Verno.

If those individuals can please move to the front of the room in the reserve seats, and we will begin with and Andrea.

And you have been seated time by Janica.

Thank you.

And Chris.

All right, so I'll place three minutes on the clock.

Great.

Thank you so much.

Good morning, everyone.

As San Diegans, we all want to live in a vibrant city that we can afford where housing is available and core city services and infrastructure help us not just survive but thrive.

To accomplish this, we all need to do our part and pay our fair share, something we've heard a lot about today.

Fair share for a city where we can raise our families now and for generations to come.

The reality is the city does not have the resources it needs to invest in the core services and infrastructure that help us thrive.

Alliance San Diego supports the vacation home operation tax.

Excuse me.

Alliance San Diego supports the vacation home operation tax to generate resources we need to support the city we love.

It is a fair share tax that would ask the one percent of property owners who operate short-term vacation rentals to pay an annual tax of $5,000 per bedroom.

So what that means is that the tax on a two-bedroom vacation rental would be $10,000 annually, which is the equivalent of less than $30 a day.

To put that in perspective.

Just one second.

To put that into perspective, that's less than $30 a day.

That could be passed on to the renter, or it could be absorbed by the property owner.

That's not a lot to ask.

I looked at Airbnb while we were waiting.

And if I were to rent a property, a two-bedroom property this Saturday for one night, it would cost me about $300.

Less than $30 tax on top of that is something I'd be willing to pay, and I bet we'll many would.

If not, I think that's something reasonable for us to ask of property owners to absorb in order to pay their fair share to support city services that we all need and we all benefit from.

That includes safe streets, clean water, parks, uh naturally beautiful areas that need to be maintained, emergency services that are responsible and available, fully staffed offices of the city to respond to community needs.

These are all the things that we all benefit from, uh, but that we need more resources for.

I think this tax is a fair, just and responsible way to respond to this need.

I commend Shawnee La Rivera for leading on this, and I think uh I urge you to support this, bring it forward for us to vote.

Thank you.

Thank you.

Jacob Martin.

Councilmember Ilo Rivera, uh, I voted for you.

I remember reading in the union tribune editorial section that of all the candidates, you had the strongest grasp of the issues facing our city.

But with all due respect, I sense a high degree of cynicism in this proposal.

It feels like something designed to play well with a particular base of voters rather than to meaningfully address the problem it claims to fix housing affordability.

My wife and her my wife and I are not wealthy people.

We're hardworking residents of San Diego trying to make it work here.

We manage short-term rentals that help us stay afloat, but they also support an entire network of working people, cleaners, landscapers, handymen, electricians, plumbers, etc., who rely on this ecosystem for city income.

It will simply shrink this local economy, reduce transient occupancy tax revenue, and put more working people out of jobs.

I ask you to lead with the same thoughtfulness you that earned my vote by pursuing solutions that actually improve affordability rather than the policies that just sound good on paper.

Thank you.

Jesse Schmidt, you have been seated timed by Aaron Saramoto and Ted Womack.

So I will place three minutes on the clock.

Thank you.

And uh good morning, Council President, members of the committee, Jesse Schmidt East Policy Manager for Alliance San Diego and co-convener of the Coalition for Equitable Development.

We are here today in strong support of uh item number four.

The general uh the revenue generated through this measure can and should help address our city's most urgent housing challenges.

We urge city leadership to ensure that these funds strengthen our collective ability to not just expand but also preserve affordable housing, support renters, and provide stable homes for San Diegans experiencing housing insecurity.

Every dollar raised should move us closer to a city where everyone has a safe and affordable place to live.

Let's be clear.

Working families in San Diego pay their fair share.

They pay it when they commute hours because they can't afford to live near their job.

Meanwhile, some of the wealthiest property owners are sitting on homes that contribute nothing to our housing supply, and in most cases do make this crisis worse.

That's not a free market.

That's exploitation of a market made by working San Diegans.

Too many homes are being pulled off of this market to sit empty or turn into short-term vacation rentals that serve tourists instead of San Diegans.

Every one of these units represents a lost home for a teacher, a nurse, a service worker, and a family who is looking for a hand up in our community.

San Diegans are sleeping in their cars, sleeping in shelters, and sleeping on the sidewalks.

The vacation home tax is about restoring balance to a housing system that's been tilted too long in favor of a speculative investor, speculative investing and profit.

This is about accountability, about making sure that those who remove homes from our city's limited supply for private gain contribute their fair share back to the housing preservation and production goals.

We need to stop letting speculators and short-term rental empires write the rules of our housing system.

San Diegans deserve a city that puts people before profit and neighbors before investors.

We need to stop letting industry tell us what's good for San Diegans.

After all, this is essentially part of the reason why we are here today.

I don't know why there's so much anger and sadness by this opposition today.

Do we not want to help make San Diego livable for all of us?

With that said, members, we ask that you support item four.

Thank you.

Thank you.

Our next speaker is Kevin, and Kevin, you will be followed by Sainara, Iveth, Patrick, John Brady, and Anita Pyle.

If those individuals can please move to the front of the room and we will begin with Kevin.

These are the people who are coming in opposition of this policy.

There are many people who could be benefiting from these homes.

I personally live in Joe Ocava's district D1 and do not know half my neighbors because they are there for vacation rentals, and for those who that I do have the privilege to speak to in my apartment building, many of them are struggling to pay rent.

It is not uncommon to hear families living in one-bedroom apartments with children who are struggling to pay rent and have adequate housing.

Thank you.

Thank you.

Sanara.

Hello, my name is Sonar Velasquez.

I am with Housing for San Diegans.

I live in Northwest Ocean Beach.

I have witnessed firsthand the conversion of my neighborhood from residents to apartment hotels over the last three years.

There are now five hundred full-time vacation rentals in my neighborhood, and the majority were previously naturally occurring long-term affordable housing within four blocks of our home.

I have watched my friends and my daughters, friends, families be forced to move as housing was lost.

I've watched my property value jump from $500,000 to 1.5 million dollars in just 15 years.

And I can take no joy from this because it means the vast majority of my peers can never afford to live here.

Regarding the TOT tax, there is a false assumption that people travel to San Diego for short-term vacation rentals.

But that's not how people vacation.

They decide where they wish to travel, and then they decide where they wish to stay.

Natalie, okay.

Okay.

For me to continue having this Airbnb.

I'm asking for advice, municipal advice.

Oh, uh city council, advice from city council.

Oh, I'm asking I'm asking city council to think of families like mine.

So that we can continue ahead.

And to consider the impact in human on real humans.

My name is Patrick Ferrier.

I'm here with San Diego City Firefighters Local 145.

I'm here to discuss the proposed ballot initiatives impact on public safety.

The areas we're describing are typically those that have high urban density.

We have high seasonal use and at times a large volume of our unsheltered population in these areas.

What that means to first responders and firefighters is that those are areas we typically go to serve frequently.

The generation of revenue from this proposed ballot measure will go a long way to keeping our response times in these areas low, our gear in the condition that we can deliver the service that the public has trusted us to deliver in a meaningful way.

We look at the streets, they'll be kept cleaner.

We look at our parks being green.

What I see from this initiative is that possibly we could continue to deliver the service that we all took an oath to the public and meaning meaningful impacts in our neighborhoods.

Thank you for your time.

Thank you.

Our next speaker is John Brady.

And John, you will be followed by Anita Pyle.

Good morning, committee members.

John Brady with Lived Experience Advisors.

Uh, we're here to support this measure.

Uh we have seen the impact living on the streets.

I myself personally, when I was on the streets, would watch the downtown light up during special events because those empty units became occupied.

Uh and the struggle that we have with the thousands of units that are not available to the general population that lives here is real.

Uh, we see it every day trying to place people that have been displaced into homelessness back into housing.

I want to remind everyone that this is not a vote to put this measure forward.

This is a vote to evaluate this measure further and put more effort into making sure that it is fair and balanced, and so we support that.

Thank you.

Thank you.

Anita Pyle.

Hello, my name is Anita Pyle.

I don't own a short-term Airbnb, so I have no stake in this personally.

Actually, and I am a retired city employee after working for the city for 26 years.

Some of the positions I held before I retired included senior revenue analyst, and I projected TOT and sales tax revenues in the financial management department at the time.

I also worked as the CDBG administrator, so helping the low and moderate income community has always been important to me.

I also worked as a manager in the environmental services department and care very much about the climate.

My points.

One, increasing TOT tax revenues used to be important to the city.

Apparently, they're not as much anymore.

Showcasing our city as America's finest city used to be important to the city.

Attracting people from all over the country and the world to San Diego used to be important to the city.

This tax will affect how much sales tax revenues as tourists usually shop and spend money while they're here.

So it's you.

This does conclude your time.

Okay.

Thank you.

Well, can I just make one last statement?

I understand that there's a lot more that I should have thought about before coming up here because I just heard about it yesterday.

And I I just want to say I agree with the last two gentlemen.

Thank you.

You can you could submit written public comments.

I just want to say one last statement, and I know I've worked here, so I know you can let me have one sentence.

There's no that that urgency for everybody to leave.

All I want to say is I believe it should not be a rush decision, and it should be on the ballot.

And let the people decide and let them see both sides.

Thank you.

Thank you.

And giving these individuals another opportunity to speak as I had called their name earlier, Greg Smith, Katherine Alvarez, Stephanie Lloyd, Kyle Weinberg.

And we also received six slips in opposition for people that would like to register the register their position but do not wish to speak.

Barbara Ned, Debbie Barr, Christy Baker, Avalon Baker, Tammy Huang, and Dan Hush.

So that concludes public testimony here in chambers.

I will begin the five-minute timer for all those in the virtual queue to raise their hand if they wish to provide testimony for item number four.

Each speaker will have one minute, and we will begin with Catherine Douglas.

Please unmute and begin.

Today I'm speaking for Larry Webb.

I own two properties.

One has four units, two short-term rentals that we actively manage, and two long-term rentals.

I'm speaking today on behalf of many Mission Beach neighbors who are long-term residents.

We actively manage our units.

We rely on the income for our retirement.

This proposed unfair penalty penalizes us for our decision to host an STR that was made decades ago.

It's a retroactive penalty we could not plan for.

It would leave no other choice but to either raise rates or have our retirement income significantly reduced.

The real benefit is for our multi-generational family clients, the ability to spend quality time together under one roof.

No hotel can duplicate this very important benefit.

STRs become more expensive.

Families, many families will no longer come to San Diego as they plan to place a stay as they want to place a place to stay as a family that's not a hotel.

That means this does conclude your time.

Thank you for your comment.

Our next speaker is Suzanne Smith.

Please unmute and begin.

You will have one minute.

Suzanne Smith.

Yes, are you able to hear me?

We can hear you now.

Please begin.

Thank you.

Please put this item on the ballot.

You outline provisions that will protect many people who spoke earlier.

I am a lifelong San Diegan.

Two years ago, an investor who was already running at least five other whole home rentals purchased a house on my quiet family street in Claremont, not La Jolla or Point Loma.

It has been a disaster with loud parties and music and drunk people knocking on our doors.

We don't have a housing crisis.

We have an affordable housing crisis.

This is a complicated problem.

So we need to pull every lever we have.

And one of those levers is taxing and putting guardrails around whole home short-term rentals and investor owners that are exploiting the ghost host loophole to run multiple hotels.

These mini hotels used to be and should be homes again for people that live here.

History shows that Airbnb will have their lawyers and lobbyists ready to go on this.

Please put it on the ballot for San Diego voters to decide.

Thank you.

Our next speaker is Connor Robbins.

Please unmute and begin.

You will have one minute.

My name is Connor Robbins, uh, Chief Steward for Teamsters Local 986, representing San Diego Life Guards.

I'd like to thank you, uh, Councilmember Elo Rivera and the D9 office for bringing this item forward today.

Local 986 appreciates the efforts to generate funding for important city services without raising taxes on working families, and for ensuring that San Diegans have homes to live in.

I encourage the rules committee to take action to gather background information, provide a preliminary analysis of the proposal, and work with the city's attorney's office on this proposal.

Thank you all for considering this item.

Thank you for your testimony.

You can please give me one minute here.

All right, thank you for your patience.

Scott McCaskill, if you can please unmute and begin.

Uh good morning or afternoon now.

Uh Scott McCaskill, I'm the advocate advocacy director for the Ocean Beach Community Foundation.

Uh, we wholeheartedly support this tax.

In our community, we see time and time again.

Houses come up for sale, they get bought up, and they immediately become Airbnbs.

These short-term rentals are hoarding housing, and they're a blight on our ocean beach community.

Our residential neighborhoods should not be a substitute for hotels.

If this tax forces some of these homes to return to the long-term rental market where people who actually want to live here have a place to live, that is reason enough alone for this tax.

At the very least, this tax would help offset the harm these rentals are doing by leaching the lifeblood from our community.

Please ignore all these threats and doom and gloom from these people and matching shirts that Airbnb bought them and put this on the ballot.

Thank you.

Thank you.

Our next speaker is Hunter Rosenquist.

Hunter.

Hunter Rosenquist, I have given you permission to speak.

I cannot unmute you.

Okay.

One more opportunity.

Okay.

Our next speaker is Mohammed.

Mohammed, if you can please unmute and begin.

Good afternoon, Council members.

Uh, my name is Mohammed Omar.

Um, here on behalf of PAN and the Coalition for Equitable Development.

I'm in uh strong support of the city drafting a pellet mesh that will tax vacation homes within the city of San Diego.

Welcome families already carry the burden of San Diego failure to produce enough affordable homes.

This measure levels the playing field by expecting that investors who profit from keeping homes out of the long-term rental supply, contribute the fair share to maintaining city services and housing solutions.

Equally important, the revenue generated through this measure can and should help to fund more affordable homes for seniors on fixed incomes, people exiting homelessness and families struggling to find affordable homes.

Every dollar raised should move us closer to a city where everyone has a safe and affordable place to live.

We can solve the problem of two affordable uh too few affordable homes for our residents when our policies are.

Thank you.

This does conclude your time.

Thank you for your comment.

The five-minute timer has concluded.

We have seven hands remaining in the queue, and we'll take no other callers beyond these remaining seven individuals.

Phone number ending in 9009.

Please unmute and begin.

Phone number ending in Can you hear me?

Yes, we can hear you.

Please begin.

Thank you.

Awesome.

Good afternoon.

My name is Karina Pugh.

My pronouns are she her, and I'm speaking of support of this item on behalf of the San Diego LGBT community center.

Housing should be a human right and not a way to create profit.

This measure will ensure that the folks rich enough to own multiple properties in San Diego to contribute their fair share to our city.

At the center, we have thousands of folks who access our services each year.

Many of them in unstable housing or already experiencing costlessness because of the rising costs in the city.

Many of these folks are in San Diego in search of a more accepting environment, fleeing harmful policies and environments that prevent them from living their lives authentically.

By reinvesting in the programs and services that are clients access, like the housing instability prevention program and eviction prevention program, we are ensuring that our city works for all San Diegans, not just the few who profit from it.

The center urges you to support this item.

Thank you.

Thank you.

Our next speaker is Marcella Escobar.

Marcella, if you can please unmute and begin.

Hi, can you hear me?

We can hear you.

Please begin.

Great.

Thank you.

Um hello, Council President and members of the committee.

My name is Marcella Escobar, and I'm speaking in favor of this proposed tax.

Um, I think many of you will recall that the mayor had a um affordable middle-income housing working group that was convened.

And as a part of that report, one of the actions that was recommended was a vacant property tax.

This is in line with that recommendation.

Um, I find it sort of fantabulous that people who oppose accessory dwelling units every day are now disclosing that they are short-term vacation rental owners and are opposing this tax, which really seems to make a lot more sense now while they're opposing ADUs.

This is going to be something that is going to help all of San Diegans be able to afford property in the city of San Diego.

And I hope that you move this recommendation forward today.

Thank you.

Thank you for your comment.

Our next speaker is Susie Gherky.

Susie, if you can please unmute and begin.

You will have one minute.

We can hear you, please begin.

Oh.

Okay.

This is the Rachel Hayes.

Yeah.

With legal experienced advisors, and I fully support Ilo Shawnee's item because it would help solve a lot of problems out there.

The taxes could be used to help solve homelessness.

And go to programs that are what that are underfunded that we need, like detox centers and treatment centers and all those things that people need because everybody deserves to be somewhere, and everybody deserves to have a door to lock and to be safe and to feel safe and to have their own bathroom and a bed to sleep in at night.

Thank you.

Thank you.

Our next speaker is Susie Gurke.

Susie, if you can please unmute and begin.

Yes, hello.

Thank you for taking my call.

I graduated from San Diego State University and purchased my South Mission Beach home 26 years ago.

We purchased it as a vacation rental home.

We used to rent two students for nine months and then have summer vacations.

Rentals, even at 26 years ago.

The students used to cause problems.

I used to get calls from my neighbors, parties.

I've been capped.

About four years ago, I went to full-time STR, and my neighbors are very happy with my renters.

They enjoy sharing stories, hearing about where they come from.

And I've even had people on my Airbnb saying how nice my rent my neighbors are.

Guests have commented on how nice my neighbors are.

It's a reciprocal relationship.

Another benefit it gives families, especially middle class to lower class families, access to the beach and beach vacations.

The Coastal Commission backs short term rentals in South Mission Beach for this reason.

Recently, thank you.

This does conclude your time.

Thank you for your comments.

Our next speaker is Hunter Rosenquist.

Hello, my name's Hunter Rosenquist.

Um I am an Airbnb operator.

Um I manage Airbnb arbitrage units for hosts who can't afford to buy their own Airbnbs.

Um, so they rent an apartment unit and then Airbnb it.

Um I think that this uh proposal is completely misguided.

Um, and I think it completely protects the hotel industry who are owned by corporations and foreign investors versus the Airbnb industry, which is owned as you've seen today by mostly local mom and pop operators.

Um I also think that it's not a progressive tax, being a flat tax, it's gonna affect the poorest among operators.

Um, operators who are making a ton of revenue and profit on their Airbnbs will not be infected by this tax.

Um so they'll still be able to operate, whereas the the you know, uh mom and pop operators with one and two bedrooms um are not going to be able to continue their operations um due to this burden.

Um, and I think that if you really wanted to tax.

Thank you.

This does conclude your time.

Thank you for your comment.

We have three hands remaining in the queue.

Kevin Hastings, please unmute and begin.

My family lives in a tiny cottage in Ocean Beach.

I just got my property tax bill for 12,500.

And I get a tax break every year of 70 bucks.

We're also fortunate enough to have a second home, and we rented out long term.

Crazy, right?

On this home, I get tax breaks, tens of thousands of dollars, all of the mortgage interest, property taxes, maintenance, depreciation.

These tier three and four hosts get all those same tax benefits, and they can dodge the capital gains if they sell it.

But if I live there, 70 bucks.

I find that insane.

I'm tired of seeing investors prioritized above residence.

San Diego can do better.

This measure would not hurt tourism.

There will still be plenty of rooms available for visitors, just as many bed sheets and coffee makers to clean in the morning, just as many tourists paying TOT.

These Airbnbs sit empty most nights.

Meanwhile, we have residences, residents struggling to find housing, living in their car.

Do we have a housing crisis or do we not?

To these owners of two, three, ten or more homes.

I say thank you.

This does get a real job.

You are our next speaker is Chad.

Chad, please unmute and begin.

Chad giving you one more opportunity to unmute.

I have given you permission to speak.

Okay, we will go back to we will go back to you.

And phone number ending in 5703.

Phone number ending in 5073.

You can unmute by pressing star six.

Thank you very much.

Um my main point with regards to this is purely just to be able to have this place on the ballot.

Um, there have been many issues most recently with regards to the trash uh situation where it was not actually put fully before voters.

It was automatically said that or viewed as though anybody that had not voted was automatically a yes.

I feel like this needs to be put on a ballot for anybody and everybody that are San Diego residents to be able to vote without having it be just a city council's decision and automatically have it be where no response is an automatic yes.

Thank you.

Thank you.

And giving Chad one final opportunity to speak.

I have given you permission to speak.

Please unmute and begin.

Okay.

Chair with no other hands in the virtual queue.

This concludes public testimony for item number four.

All right.

Thank you to everybody that uh spoke uh this morning and now into the afternoon.

Thank you.

Sarah for managing a very long public comment period.

So I'll now turn it over to committee members for questions and comments, entertain a motion.

Uh and we will start uh with a proponent, Councilmember Gilo Rivero.

Thank you, Council President.

Let me start by thanking everyone who participated today, uh, Maya, Molly for your work on this, the work from the city attorney's office uh in helping us do some uh initial research, um, the treasurer's office as well for providing some important information as well.

Um tried to set this up on at the very beginning, but I'm gonna say it again.

We're here today because San Diego is facing a defining choice about the kind of city that we want to be.

Are we going to continue down a path where speculation and greed drive up costs, hollow out neighborhoods, and force working families to wonder how much longer they can afford to stay in the city that they love, or will we build a San Diego that works for the people who live here?

A city where everyone sees a future for themselves, a future for their families, and a future for their friends.

Across our city, thousands of homes are sitting empty or are used year-round as short-term vacation rentals, while families who teach in our schools, care for our elders, and build our city are struggling just to keep a roof over their heads.

That's obviously an economic problem, but it goes beyond that.

It's also a moral one.

The vacation home operation tax is about restoring fairness and balance in our housing market.

It's pretty simple.

If you live here, you're actually in the clear.

If you use your home as a business, it's only fair to contribute to the city services that make that business possible.

I do want to speak to speak directly to the handful of middle class San Diegans who may rent out a home or depend on that income to get by.

I hear what was said, I understand those realities.

The problem isn't you.

It's an economy that has made it harder and harder for ordinary people to stay afloat while the wealthy and well connected profit off the rest of us.

Just last the the last just last year.

This is a description of Airbnb's strong financial performance in 2024.

Airbnb has demonstrated robust growth in 2024, achieving record revenue of 11.1 billion dollars, representing a 12% increase from the previous year.

This performance reflects the company's continued dominance in the global accommodation sector.

I would imagine none of the people who spoke here achieved record revenue of a billion dollars or more last year.

You probably did not experience a 12% increase from the previous year.

You are being used as a pawn in this game.

This is not an economy that's in crisis, it's a system that's working exactly as it's designed to let billion-dollar corporations thrive while working families like the ones in this room fight over the scraps of a shrinking housing market.

This proposal is about restoring balance, making sure the people who profit most from our city contribute to making it a livable city for the rest of us.

I want to speak specifically to some of the folks who spoke here today.

To the woman who spoke of renting rooms in your home.

This tax will not apply to you.

To those who shared stories of being multi-generational property owners, this tax will not apply to you either.

We will have common sense exemptions to ensure this proposal that is premised on fairness does not have truly unfair effects.

This proposal is not about punishing San Diegans who are making ends meet.

It's about accountability from for those who are profiting while others can't find a place to live.

That folks with powerful stories spoke today.

By simply renting your home long term to a San Diegan who needs housing.

This is not about punishment, it's about priorities.

Using homes as homes.

A single home being used as a short-term rental may not seem rental or a vacation home.

May not seem or even be a problem on its own.

But we don't make policy based on single uh incidents.

And this policy proposal isn't about a single home.

It's about cumulative impact.

The impact when an entire condo building to Mission Beach gets converted from the most affordable housing in the neighborhood into a de facto hotel.

The impact when a neighbor looks around their street and realizes they don't have any neighbors anymore.

The impact when homes are removed from an already too compressed housing market.

So, yes, of course it's true that a low income family may not move into the exact home being converted from a vacation home or a short-term rental.

But they absolutely will benefit from having one more home back on the housing market.

Now let's talk about tourism, because it does matter deeply to our city.

Tourism supports jobs, showcases everything that makes San Diego special.

But when are we going to start to make that work for San Diegans?

Big business and their lobbyists have spent years convincing us that we have to sell out our people and our neighborhoods to stay a world class destination.

That is false.

San Diego is one of the premier tourist destinations long before a single night was ever booked on an online platform.

We're a great tourist destination because we're a great city with great people with great beaches, with great culture, and what I hope we will maintain as great neighborhoods, not because of any corporation that profits so much from them and from us.

Unfortunately, big boot business is doing what it always does when we stand up for working families, co-opting the stories of ordinary people to protect extraordinary profits, telling the rest of us that we won't be better off by making them pay their fair share.

They want San Diegans to believe that fairness is bad for them, that asking out of state investors and global corporations to pay their fair share somehow makes life harder for everyone else.

San Diegans are too smart for that.

We know who's been benefiting from the current system, and it's not the families working two jobs to make ends meet.

This policy, as currently structured, won't affect 99% of San Diegans.

It won't touch primary homeowners, renters, or long-term landlords.

It simply ensures that vacant second homes and full-time short-term vacation rentals, often owned by out of state investors, help fund the city services that San Diegans need and deserve.

Housing, infrastructure, public safety, parks, libraries.

So with that, Council President, I move approval and uh very much welcome feedback from uh you and the rest of our committee colleagues.

All right, thank you, Councilmember Ila Rivera, moving the uh recommendation.

Um I'm gonna jump in here before I kind of go into my talking points.

Wanted to recognize some of the comments that I heard.

One I appreciate John Brady's pretty simple comment about what we're here to do today.

We're not here to pass a tax.

We're not even here to put a ballot measure in front of the voters.

We're here to discuss a proposal to see if it have merits and is worth additional conversation.

There'll be a second committee if this moves forward today.

There'll be a second committee meeting where the idea and the proposal will be flushed out, and that will be the opportunity for the committee to weigh in and whether to forward it to the full council.

And then it will be the full council's decision about whether to put it on the ballot, and then if so, for the voters to decide.

I also was a little bit concerned by the number of comments from the public from those folks that have been in the industry, whether it's a host or a property manager for quite a few years.

Short-term vacation rentals have only been legal in this city for about three years.

You do the math.

Um I'm also concerned about those folks who imply that they have more than one, either tier three or tier four, short-term vacation rental.

That was not the intent of the ordinance that was passed three years ago, for which I voted no, but yep, they have exploited loopholes, and we have the elephant in the room that would prevent us from fixing those loopholes and ensuring that the original intent of that ordinance would only grant one license in the city of San Diego for a tier three, or only one license for a tier four.

However, we're not here to litigate that conversation.

Oh, one more point.

Um I realize the challenge in becoming an elected official in the city of San Diego, and I heard a lot of people talk about the increasing cost of being in San Diego.

And those folks are quick to come down to City Hall and say, cut your expenses, City, don't raise taxes.

I understand that.

I get that.

But I wonder how many of those people call up their insurance company and say, cut your expenses, don't raise my rates.

Or go to a small business and say, cut your expenses, don't raise your prices.

Or go to Washington and say, stop with your trade policies and your tariffs.

Cut your expenses.

That doesn't happen.

We provide the forum for the people who come and uh criticize the city.

And I understand I get I understand that.

People say, why don't you run your city like a business?

A business would look at its expenses, look at the services we're trying to provide to our customers, our constituents, and price accordingly.

It's a challenge for all of us.

So I want to thank Councilmember Ila Rivera and your team for proposing or putting forth this proposal.

I'm second, I'm happy to second your motion to keep the conversation going.

Why?

Our city's budget situation is clear.

We need more revenue to provide the services our communities are asking for.

In June, the city made significant cuts, and we are continuing to be challenged to continue to identify ways to reduce costs and deliver city services.

The bottom line, we cannot continue to under-resource this city.

The voters of San Diego rejected a sales tax measure less than a year ago.

And after that vote, we heard that voters did not know how dire the city's fiscal situation was when they voted.

And yet, with the cuts that this mayor and this council adopted in June for the FY 2026 budget, many constituents agree more resources are necessary so that we continue to provide the city services they need and want.

We should not curtail any conversation on any new revenue opportunity.

I believe the voters of San Diego deserve the opportunity, if we move this forward to weigh in on this revenue measure.

Or and frankly, any revenue measure.

As Mr.

Brady reminded us, this is not the only conversation we will have on this proposal.

Now I will add that there have been important points brought up in public comment that should be considered in fleshing out this proposal.

And I appreciate Councilmember Ulla Rivera's recognition of those issues.

Whether it is changing the fee structure, whether it is carve-outs, whether it is considering the potential impact to TNT revenue.

So I do ask the proponents to seriously consider these concerns as this proposal is fleshed out and refined.

I also encourage the office of the IBA to look into the questions that we heard.

How much TOT are we receiving from vacation rentals annually?

How much TOT could drop off from this tax if units leave the market?

How likely would second homes be sold rather than pay the proposed tax?

How would additional carve outs affect revenue projections?

And what are the projections that this would indeed result in a significant revenue gain for the city?

Now I ask these questions, which are near impossible to answer.

We can only speculate, not knowing how the marketplace would react.

But I think it's an important consideration if we're going to go through this, if we're going to make a lot of people angry, that in fact it does result in a significant revenue gain for the city that we very desperately need.

So if the committee concurs today, and I hope they will, the IBA, City Attorney, and City Staff will look into this proposal and flesh out this measure for further consideration by this committee.

And I'm prepared to dock it when it is ready.

And then again, the council will have the final determination whether to put it on the voted, and if it is on the ballot for the voters to decide.

In closing with a brutal budget adoption last June, with all number of cuts that made a lot of people angry, and recognizing that we have another budget season of difficult decisions.

I'm committed to consider any new revenue opportunities put before me.

There's been talk about those other revenues, but I actually have not seen any of those come forward.

I am going to continue to support this revenue measure going forward to the next step.

So again, we have a motion by Councilmember Ilo Rivera, second by myself to move the recommendation.

And I'll turn it over next to Councilmember Campio.

Thank you, Council President.

Sarah, I have my talking points and some pointers I'd like to have the audience follow as I speak aloud about my analysis of what's going on here.

First of all, uh thank you to the District 9 office for your um work on this, and uh thank you to the members of the public who've come to express your views both in support and in opposition.

Uh I want to dig into where this starts.

The stated goals of the staff report.

It's clear that raising revenue for the city is one of the possible uh benefits and increasing and preserving housing stock, and we have an early assessment uh of what the estimated outcomes will be 135 million in the general fund, hundreds, if not thousands of rental or purchase opportunities, and these are worthy, and these are desirable goals that we should craft policy to try to achieve.

Next, please.

So let's like with all measures, figure out if this is gonna achieve the goal.

The presentation and what has been described uh by staff to other council offices and docket briefings is that essentially this will add $13 to each room per night.

The overall mathematics of this show that there seems to be an assumption that every single short-term vacation rental will stay a short-term vacation rental and 100% occupancy throughout the year.

But I think we've heard already that this is an unlikely outcome.

So the discussion today in the media already already has implicitly acknowledged that this figure will not be achieved, and that it may even be a goal designed to be sacrificed for the purpose of creating more housing opportunities.

Next.

So we have to talk about what the most important, more important question that's not asked.

And in my contention, it doesn't seem to get asked about taxes or fees or surcharges.

What will be the overall economic impact to our city's quality of life because of this new policy?

We can talk about one component at a time, but if we don't talk about the entire ecosystem, we aren't asking the right question.

So we have to look at who is being taxed and how that cost is transferred to others, because without considering that accurately, we will skew the market, it'll disrupt long-standing equilibriums, it'll lead to negative effects that tend towards one outcome.

As each short-term vacation rental is essentially a small business, it will lead to the closing of businesses and the loss of jobs.

Next, please.

So let's talk about this from some basic economic terms.

The theory tells us, and real life experience shows that when costs go up, the demand for that product will go down.

And should short-term vacation rental hosts choose to remain in a disrupted market if the tax is implemented, they will necessarily have to pass on the cost of the tax to the potential guests in the form of a higher price to maintain their return on their investment.

Because there will be lower demand at those higher prices, which means there will be fewer guests at those higher prices.

This means there's more risk, and that risk is on the short-term vacation rental hosts, which will necessarily be higher.

And given this increased risk, that rational host will be highly disincentivized from keeping their short-term vacation rental on the market.

This leads prices to go up.

Next, please.

Reducing the supply of short-term rentals drives up the price of both short-term vacation rental rooms and hotel rooms, which are similar products in the market for short-term visitors.

The guests renting a short-term vacation rental does not have more money to rent, so fewer guests will come to San Diego because fewer guests can afford it.

And fewer San Diegans who use short-term vacation rentals for whatever purpose it is in their own city, they also don't have more money to rent because they can't afford it.

This negative supply shock will be a double gut punch to the short-term vacation rental hosts and lead to herd behavior with a major sell-off of short-term vacation rental homes and a resulting drop in the tax revenue collected by the city.

That will be lost to TOT.

And that results in a supply-side inflation.

Next.

So the consequence of this will be lower revenue than projected with higher prices.

As those short-term vacation rentals are naturally removed from the market, it significantly undermines the first stated goal of this policy, which is to raise revenue for the city.

If the resulting shock to that market is the natural consequence of the policy, it's dubious to state that revenue collection is a main goal of this because we are inherently undermining our own revenue mechanism.

So let's talk about the ecosystem that relies on short-term vacation rentals.

When you drive up the nightly rental rates means fewer bookings, it means fewer visitors, means less money flowing into local businesses.

And we know that nearby businesses, restaurants, bars, storefronts, and contractors who provide things like towels and soap and toilet paper and cleaning services to short-term vacation rentals, they're going to see a reduction in their revenue.

The natural consequence of this will be a loss of job for those businesses, unless they also raise their price to other customers to cover their costs.

You're starting to see the inflationary effect here.

The city relies on this ecosystem.

We currently collect TOT from short-term vacation rentals, and we get a share of sales tax and other fees like parking from short-term vacation rental customers who are here.

So a reduction in TOT and sales tax revenue and other fees means that the likely result will be that the net revenue after the tax is collected is significantly lower, a reduction in jobs for our city workers, and a reduction in delivery of services if that net is negative.

Next.

So let's talk about this goal.

Sorry, what?

Oh, next, please.

So we've talked about wanting to see an economic analysis.

Hasn't been done yet to see if the net revenue will be collected, or what the correct pricing model could be.

Five thousand dollars a room doesn't seem to be based in any sort of math.

Percentages based on how much the person is paying.

Would that be more fair?

What about tiers based on rooms?

If you have one bedroom, pay a little less.

You're only taking one room out of the market as opposed to two or three or more, or seventeen with the sand castle.

Which one of these is going to maximize revenue for the city without the negative consequence of outweighing the benefit to the economy?

So without a thorough and comprehensive analysis before putting this to the voters that includes impacts on sales tax revenue, the TOT revenue, the job losses, property tax impacts, the voters will not have enough information to know if they're choosing between something that will undermine the local economy and our city revenues or bolstering it.

I have been working over the last four or five months to figure out what council policy we could do to try to make sure voters have that information.

And I've been working closely with the city attorney's office to draft something that would require us to have a deep dive economic analysis.

And it's my hope that it will be docketed at rules committee, and I know it's under consideration, so that the voters do have that information.

So let's focus on who's being taxed.

The paying of the fair share.

Sandy Eagans who own that second home and use it as a short-term vacation rental, outnumber the outside investor host four to one.

These are the same residents that the city council says is our people, and that we're trying to give discounts to park at Bobo Park or charge less for other fees in the city.

And based on a survey of Airbnb hosts from 2023, 54% said they use the income for hosting to stay in their home, their primary home.

12% said it helped them avoid eviction or foreclosure.

65% they said they use that income to cover the rising costs of living.

That's their source of their income.

Next.

The vast majority of people who will be taxed by this are San Diego-based small businesses.

Next.

So San Diegans are going to pay one way or the other.

Data shows that the San Diegans themselves are the largest proportion of guests in San Diego's SEVR market.

5% of those guests.

The other five percent are made of other people.

But 5%, the highest proportion from anywhere, are our own people.

That makes San Diego the top origin city for short-term vacation rentals in San Diego.

Shouldn't be a surprise that Los Angeles is the second highest origin city for people visiting San Diego.

Middle class San Diegans use short-term vacation rentals in San Diego for many, many reasons to get to the beach or host friends because hotels are expensive option, while short-term vacation rentals are the cheaper option with living rooms, kitchens, any other amenity you're looking for.

This tax passed on to the consumer hurts San Diegans on both sides of the equation, whether you're a host or a guest in one way or another.

And the belief that this falls on tourists is flawed, and it prices out the middle-class San Diegan and middle class tourist who wants to come here.

The underlying philosophical premise here.

Why would we want to take a certain segment and negatively impact them?

The philosophy here is that a person with a second property has the money to pay a tax or at least enough wealth for us to target them for a higher tax, even though the data shows that that is largely untrue.

About three hours ago, I maybe this was 50 minutes ago, but I think it was closer to two hours ago.

This will apply to those who can afford it based on their zip code.

That was specifically stated.

Stated another way, if you don't use your private property the way the city council wants you to, and you live in a particular neighborhood, then we're gonna tax you for it.

The tax is therefore a tool designed to disincentivize and change your behavior.

This actually has a term in behavioral economics.

Next.

It's called punishment.

That's not me saying this.

This is economists saying this.

The tax is not a figurative punishment.

It's a specific term in academic literature.

Next.

So more housing, but to whom is that housing gonna go?

Let's focus on that.

Let's assume that it's not gonna bring in any revenue, but the goal of more housing, still a good goal.

Most of the short-term vacation rentals in second homes, a significant percentage of which are in the coastal zone, and which I think would have to wait for coastal commission approval of any regulation that adapts that regulation, would be far more expensive than the average home in our region.

And currently the housing market is currently cooled off.

In a scenario where we would see a high value housing market experiencing a sudden influx of homes for sale due to a shock like a new tax increase, the likely economic result is that you have a temporary decline in home prices, while outside cash investors would be would likely be in the best position to capitalize on the downturn, not Sandy Agans.

Next.

The outflow of ownership from San Diegans is an important part of this.

As a result of this, anyone who wanted to sell their home now in these areas will see a drop in their home value, a drop in their equity, with the most likely purchaser of that housing being some out-of-town investor with significant cash reserves.

Local purchasers would be in a far less competitive position than out-of-town investors who have cash or credit to expend.

The tax would cause homes currently owned by San Diegans to no longer be owned by San Diegans, leading to one thing if they are used for long-term rentals, a certain outflow of the profit rather than keeping it in one of the four out of five San Diegans who own that home right now.

So we would have neighborhoods that are not neighborhoods because speculators and investors would see every home in them with dollar signs and have detached themselves from the impact of what they're doing.

A policy that wants to help San Diegans, I legitimately believe they're trying to help San Diegans will have the opposite impact.

Next.

So let's talk about this in the ecosystem of our current hospitality environment.

We just raised our TOT earlier this year.

We don't know how that's going to impact San Diego's hotels and SEVR markets long term, particularly when it comes to foreign tourist ecosystem.

We know that's significantly down because of federal actions that's that's disincentivizing people from visiting here from out of the country.

Mathematically, we know that this is gonna impact the bottom line, we just don't know how much yet.

So removing short-term rentals, which is decreasing the supply, drives up the cost of other short-term vacation rooms and hotel rooms alike, that diminishes our short-term and long-term economic prospects relative to competitors for tourism.

We deliberately kept the TOT rate at a competitive level.

We did not match the highest levels that we see, like Anaheim and Las Vegas and other places, which have 15 or higher percent.

We kept it at a tiered rate to maintain advantages over our national market competitors, because we want people to still come here.

But this tax undoes that advantage by putting the room rate higher and higher, including part home rentals.

Next.

Because of the drop in stock, every short-term rental, not just the whole home rental, will see an increase.

Because when you take the number of rooms out, people are looking at what the other options are.

So to think that this will only impact whole home rentals doesn't meet muster because each room is its own component in that economic equation.

It's inaccurate to say that if you live in your house and you rent out one room, you won't be affected.

You won't pay the $5,000 a night uh year tax, but because of the drop in supply, the price will go up and there will be fewer people who afford it at that higher level.

Next.

Now, Airbnb short-term vacation rentals alone.

I don't have data for Verbo, I don't have data for Expedia, I don't have data for that.

But we know that short-term vacation rentals alone provided the city of San Diego with 34.7 million dollars in local TOT revenue in 2023.

Interestingly, this amount covers exactly what it costs to run the entire lifeguard system in the city of San Diego.

Next.

So-called tourists are paying for their impact and everyone else's for our lifeguards to save us when there's a problem on the beach.

Let's recognize that fact.

Now, let's talk about other solutions.

Things where we might be able to find an agreement.

Next.

So focusing on the people who keep something completely vacant.

That second home that simply sits there as an inactive piece of an investment portfolio without creating business or jobs or cash flow, even if the person uses it to come here regularly for whatever reason.

I could see how that is less economic productivity.

So a narrowly tailored vacancy tax might meet the stated goal of this proposal.

What about cutting a break for verified San Diego hosts?

Perhaps only 19% of short-term vacation rentals should pay something extra, since that would appear to be local dollars, quote unquote, flowing out of the city.

Notwithstanding the TOT and sales tax revenue that those still predicts for us, directly or indirectly.

But it's important to note that that something extra should be determined by an extensive and comprehensive comprehensive economic analysis.

And when I say comprehensive economic analysis, the IBA's office does great job trying to predict where things will go, where policies will go.

But to do the type of analysis that will be a holistic, completely forthcoming and communicable set of information to provide the public, that usually costs hundreds of thousands of dollars to get done.

It takes months and months to get done because it takes a long time to collect the data, to put the numbers in, to have it checked against a third party to make sure it works.

I don't think we have $300,000 to spend right now.

Certainly not contemplated to get this done for a vote by March to put it on the June ballot.

Next.

Let's talk about the real drawbacks of short-term vacation rentals that a lot of people brought up, and I agree are there.

True and consistent enforcement is something the city could focus more on.

We should fund better monitoring, punish the bad actors, that would reduce community harm.

We don't do a good enough job implementing our own laws.

That could be said about dozens and dozens and dozens of our own laws.

The city is letting you down by not enforcing that more accurately, and that's something we should get on board and try to do better.

There's a lot of loopholes.

Council President brought up a really good point.

There's people who've admitted essentially that they have multiple licenses, and that's not what we wanted out of this mechanism.

That's something we could do more to stop.

Reassessing the licensing fee is are we really recovering the cost of implementing our laws that we have?

It's my understanding that the study is underway to figure out what that actual cost would be that we can then pass on to the licensees.

I know it's more for them to pay, but that is supposed to address the negative externality of the wild party or the trash on the street or the noise complaint.

That's what that's designed to do.

Next.

And I want to point out a couple things that I thought were not fair.

The quote that we have neighborhoods that are not neighborhoods because speculators and investors see every home in them with dollar signs and have detached themselves from the impacts of what they're seeing is really unfair.

These are small business owners.

These four out of five San Diegans, and even that one out of five San Diegans who or a person who doesn't live here.

Small business owners that create economic growth and have secondary and tertiary positive impacts should not be called detached greedy speculators that destroy neighborhoods.

Now, on most nights, these homes sit empty while thousands of San Diegans sleep on the streets.

That statement implicitly blames homelessness on people who have a second home who are running a small business.

The economic positivity created by this market that came about naturally over the course of literally a hundred years in San Diego.

We know that we have close to 18,000 jobs created by this.

They might be full-time, part-time, seasonal.

More were created through other platforms as well.

453 million dollars in tax revenue associated from all this activity.

Given those figures, and together with the number of Airbnb hosts who rely on the income, many of them said, I rely on that income to stay in my own home.

It's just as equal on the same opposite side of the coin.

You could equally describe short-term vacation rental economy as keeping people in their homes, as it could be used to describe as causing homelessness.

You just have to look at the math.

Next.

I think it's not just theoretical.

I think it's predictable.

We're gonna see significant economic harms and an elimination of jobs.

Livelihoods are at stake because of this.

Driving up the rate of renting a room in San Diego drives away tourism because then there's fewer people who can afford to come here.

Sellers are just as likely to get rid of it to the highest bidder who are more likely to be from out of town.

Next.

I go back to what I said earlier is the most important question, not asked about taxes and fees and surcharges.

What will be the overall economic impact to our city's quality of life?

Next.

So I think the overall results are that San Diegans are already overburdened.

They have high utility rates that are set by the CPUC at the state, numerous new fees that the city council has put in place, an economic outlook that does not look positive for 2026 and beyond.

Inflation remains above average.

The impact of federal cuts and the shutdown will loom large from the next six to twelve months, especially in a city that relies so much on military and federal contractors.

And the federal governments, what I think is an illegal pressure to drive down interest rates.

We've all seen the president try to pressure the Fed to drop rates, means inflation could get worse.

When inflation's gonna get worse, and then we have a supply shock because of a tax, the price is gonna go up.

So this is one more tax that will impact short-term vacation rental hosts and guests directly and drive up others' costs indirectly.

While the likely outcome of net negative tax revenue and an increased share of out-of-city homeowners, I think it's more likely to drive down the quality of our life than improve it.

Next.

This is an issue that was not brought up, I don't think by anybody, but it's underlying a big part of what we're talking about today.

Getting this measure on the 2026 ballot, which will require the council, I thought it was February, Council President pointed out it was March, would limit the analysis that we're able to do and would withhold important information for the voters.

We should not put forward any ballot measure that could potentially come up way short on revenue projection, thereby under delivering on overpromised services, which would be overpromising and underdelivering for our city workers, or presenting a painful and higher cost for unsuspecting homeowners.

Let's talk about Measure L.

Next.

So, Measure L, it was passed in 2016.

It was designed to require citizens' initiatives and referenda to be placed on the ballot in November when more voters vote.

Measure L was supported by nearly two-thirds of San Diego voters.

And I'm glad it was.

At that time, citizens' initiatives and referenda were the two items.

I'm not entirely sure why it wasn't also city council items that have significant impacts, because when we read the reasons for it, we're gonna realize that anything that might have a significant, significant impact should be in November.

Next.

If you go through the ballot pamphlet, Measure L was about ensuring major important decisions are made by a majority of voters.

We realized that in June primaries, you could see as few as 20% of people casting ballots.

But Measure L was in trying to, and indeed did, make it so that we could get closer to 80% of the people having a say in this.

Next.

Measure L was consistent with state process for ballot measures.

It gives voters and what was said by the proponents at the time, not special interest, power decide big issues.

More influence in June primaries when it's cheaper to run a campaign because there's fewer people who are identified as high propensity voters, so it costs less money to send it to likely voters.

That's what's going on.

Next.

Measure L was protecting the taxpayers and insured when the decisions will be made by when most people vote.

And I think that last point is pretty much the most important point that could be made in this day and age.

Democracy functions best when the most people vote, and that's November.

Next.

In a 2017 op-ed, a local leader said the following that voter participation in San Diego doubles between June and November.

For voters of color, it triples.

For young voters, fivefold.

If we're serious about creating an inclusive democracy, we have to measure implement the full intent of Measure L, which limits local ballot measures to November general elections.

Doesn't say citizens' initiatives or referenda, it said local ballot measures.

It aligns with state elections, avoids confusion, maximizes participation, keeps special interests from exerting undue influence in elections with relatively low turnout.

Additionally, it keeps elected officials accountable to the greatest number of constituents.

Democracy is the cornerstone of our society, so we must do everything we can to nurture and strengthen it, and voters did just that when they overwhelmingly pass Measure L.

At that time, there was gonna be a special election on a on, I believe it was a convention center tax.

The last sentence says now it's up to the city council to do the same and limit local measures to November general election because democracy functions best when most voters participate.

Not gonna say who said that, but that person was in the room earlier today to advocate in favor of this.

Next.

So this begs the question: why would we put the count the why would the council not hold itself to the same standard that special interest groups are held to by the voters?

If we truly believe democracies function best when most voters are involved, why would we want to put the ballot in June when fewer voters are involved?

Next.

We cannot have one set of rules for others and a different set of rules for ourselves when it's convenient to fit our own purpose.

That is bottom line, unfair.

Next, please.

So in conclusion, this proposal will punish San Diegans.

It's gonna weaken the local economy, it's gonna undermine small businesses, it's gonna hamper our ability to deliver services.

My prediction that it's a net negative is true.

Well, all while suggesting that tourists are gonna bear the price.

That can't possibly be true when four out of five of short-term vacation rental owners in San Diego are San Diegans themselves.

A vast majority of them rely on this income to pay their rent, pay their bills, and I have no problem with a person who invested in something to try to create wealth to pay for the kids' college, to cover their bills, especially when the city could do a better job to make sure bad actors aren't doing it.

The city ought to do the first step before we then look to the public to pay to fix the problem.

100% of San Diegans will feel this impact because of the overall cost increase and the drop in economic activity.

And so I would contend that if we care about fairness and local jobs and about targeting the real problem, we can't move this proposal forward.

If we truly value the voter input and democratic norms, we certainly must not put such an impactful ballot on the June ballot.

And last but not least, the trust of the city is critical for us to restore.

But if we're not seeking stronger job creation, and if we're not looking at predictable negative overall economic impacts, we would therefore just be telling the voters again that we're not putting the right thing forward.

That is my contention.

I'm sorry, I can't support this, and I appreciate that council district nine is working hard to solve major issues, but I think this is the wrong way.

Thank you.

So for folks who watch City Council regularly, the reason we have committees is we don't put time limits on council members so that we can dig deep on it.

Uh and so, which is why I love committees, because we get to have that opportunity to keep maybe not that deep, but uh uh well done, sir.

Thank you.

Uh we will uh then turn it now turn it over to Council President Pro Tam Lee.

Thank you, Council President.

Uh thank you to Councilmember and Maya for your presentation.

Um I want to acknowledge why we're here today, um, and and just so that we're clear with the public as well.

Uh, we're here today because our financial needs as a city, in order to provide the critical services to our residents continues to outpace the revenues that allow us to meet those needs.

Um we saw that conversation play out this year uh in a very challenging budget with a 258 million dollar deficit, where in our final budget votes, including overriding the mayor's vetoes, this council made a conscious choice when it came to restoring city services.

Um that choice comes with a cost, and our budgetary challenges as a city are projected to continue, and that's why we do need to figure out how the city can best protect the services and needs of our residents.

So I do want to thank Councilmember Ila Rivera for kickstarting this conversation, which I hope will spark a much needed and broader regional discussion about how we address needs at the city, um, even at the county, recognizing that in this region, in light of the federal uncertainty that it's exacerbating all the problems that we face, that action is needed.

Um, I I think there are great parts of this proposal that should be explored, and that is why I'm supporting moving it forward today.

I understand that there are also many questions to be answered as it's explored further, and so I'll add to what the council president shared and note some of the ones that I have in mind uh today.

Um, to start, I I think it would be helpful to get some clarity on where the potential revenue from this measure is intended to be directed.

Um, as many folks might be aware, my office is a particular interest in addressing our city's affordable housing needs, and I did get a sense from the slides that there might be an opportunity to direct funding towards that purpose, but I also understand that directing funds towards something specific like that would take away from our ability to address clear general fund needs that the city has streets, stormwater, parks and libraries, um, all the things that we saw on the chopping block during this year's budget discussion.

Um, so I think that is one of the questions that when we have the next discussion, I I would hope that we can really discuss where revenues can be directed.

Um, as I understand it, this proposed measure has two types of properties that are considered.

Um, the first is vacation homes, and I just want to distinguish the the simple fact that the way we label vacation homes from the um treasurer's office is is specific, and so I I I don't want to conflate that with the other piece of the um proposed measure as well.

The first is vacation homes, and I just want to distinguish the simple fact that the way we label vacation homes from the treasurer's office is specific, and so I I don't want to conflate that with the other piece of the proposed measure as well.

But since our city treasurer is here, can you can you help us clarify how homes are currently registered with your office as a quote unquote second home or vacation home since that is an official listing that you have?

Good afternoon.

I'm Ricardo Ramos from the City Treasurer's Office.

So annually through our rental unit business tax uh billings, if you don't have an owner-occupied exemption with the county, uh you can apply for a separate exemption, one of those exemptions being a vacation second home exemption.

So it's the property owner applying for that exemption.

So just to clarify for folks so they know how this uh list exists.

We have the county registering folks who are owner occupied because they get the homeowner's exemption from that.

And then on the city side, they if they don't have that exemption, then we collect a rental uh business unit exemption if they have one.

Correct.

We have uh 10 different 10 additional exemptions that are unique strictly to the city of San Diego.

And if you're approved for one of those exemptions, you're not the rental unit business tax does not apply.

Understood.

So this is individuals, and thank you for answering that question.

These are individuals who have stated themselves that they are not this is not their primary residence, uh self-attested, um, and which are not utilized for other purposes, such as being rented out for either long-term housing or even the short-term agomodations that are being discussed today.

Um and so I'm I'm very much interested in in this piece of the policy because I think I mean there's a clear and simple, I think nexus here to folks who can afford to have a second home that they don't use for other purposes, being able to pay the revenue and generate the revenue that the city uh might be asking for in this purpose.

Um it comes to enforcement and how uh the intended revenues collected, I know one of the examples that has been brought up is Berkeley's empty homes measure that was passed in 2022.

Um, and I know it's only been a couple years since then.

I I do understand it has lower levels in terms of where it starts, um, but I do think any data from other relevant measures would be helpful just to understand how those impact again, how we track enforce um meet the needs uh of enforcing policy relating to second homes.

Um next is a section of the policy that specifically addresses tier three and four short-term rentals, which are considered whole homes.

Um, and I do want to be transparent with everyone here in the interest of addressing our our simple belief that short-term rentals do have an impact on local housing.

My office has already been collaborating with the San Diego Housing Commission on a study for a prospective housing impact fee that would be levied on tourists for nightly rates.

And this effort was something that was discussed um early on this year.

It was supported by the council, and the funding for the study that is currently underway was included in our veto override of the budget.

Um and so I I want to again thank my colleagues for supporting that effort uh because that is something that we have declared that we are putting on the table, and I understand is separate and different from uh what is proposed in this measure.

Um I don't want to echo all of the points that the council president had, but I do think that um this portion of the policy is where I think a lot of questions would be helpful to answer.

And the IBA certainly mentioned a number of data points that um would I think help us in analyzing this if uh if we're considering it in the next meeting, and that's things like who's gonna be impacted, how we get a sense of what the potential conversion rate of STRs ROs to other uses would be, and how we better have an assumption of the revenues.

Because I I will acknowledge that I I presume that the revenues presented in the slides are um a little overly optimistic, maybe a lot overly optimistic.

I mean, we should have a real discussion about what those numbers look like if we're intending to put something on the ballot uh or even considering that.

Um I I know it's very difficult to get a sense of the behavior of the folks who would be impacted, but I will note that in the 2018 Nexus study that was completed, um, the impact on housing by STROs uh appeared to differ significantly by geography and location.

Um, and I I think same thing when we're looking at the details of how we think a policy could impact um the end user.

I think those nuances will be important because I think coastal vacation home renters, I mean vacation rentals will look very different than inland ones and and the impacts will be relevant there as well.

Um and finally, I know the IBA mentioned the potential losses to TOT revenue, and I do imagine that a degree of that might be captured through other types of stays.

Um but again, if there's a way to get a better understanding, especially if there have been others who have um policies that have data that would give us a sense, um, I think that would be helpful.

Um, I do want to take a moment to thank city staff for helping us obtain data on short-term rentals as they exist today.

Um, and we're still reviewing that information uh and certainly will continue to do so since we're gonna be continuing this discussion.

Um, ultimately, I want to acknowledge the need for collaboration at the end of the day when it comes to a broad regional strategy to address the significant fiscal needs that we have, whether it's at the city or the county.

And I just want to be very upfront about that because we are in an era facing the challenges that we are seeing both locally but also federally.

And there has been discussion of the need for revenue, the shortfalls that everyday citizens are going to be facing in services and more.

And the reality is that even as we're looking for revenue that might support the city's budget behind that is a simple reality that we have what feels like at times insurmountable challenges when it comes to our infrastructure backlog.

Um, the shortfalls from government funding that are going to impact uh the most needy of San Diegans, um, our affordable housing shortage and much, much more.

And those, in order to be addressed, are going to need even far further discussions than this revenue that's being discussed.

Um, and I look forward to the regional discussions that I think really do need to take place to ensure that um we are able to achieve what we need to meet San Diegans' needs moving forward.

Um, so this is still early in the process, and again, I I am supporting the continued exploration so that we can help to answer these questions and have the relevant discussions.

Uh again, I want to thank Councilmember Ilo Rivera and his team for the work that's been done today and to the feedback and uh input that we've heard from the public.

We do take all of that in and recognize that.

And my hope is that we can continue to have fruitful discussions as we move forward.

Thank you, Council President.

All right, thank you, Council President Pro Tem Lee.

Uh, not seeing anybody else in the lights.

Uh we have a motion by Councilmember Ilo Rivera to move the recommendation, a second by myself.

Uh Sarah, please call the vote.

And that passes 311 with Councilmember Campia voting no and Councilmember Moreno absent.

Again, thank you to everybody that uh spoke today, and especially those of you who stuck around for the entirety of the meeting, although we're not done.

I hope at least two of my colleagues will stick around.

We are at the end of today's agenda, but as mentioned at the onset that we uh delayed remote, non-agenda comment until the end of our session.

So, Sarah, um, if there's any non-agenda remote comment.

Thank you, Chair.

And as a reminder, per rule 2.7 non-agenda public comment is an opportunity for members of the public to comment on items that are not on the agenda but are within the subject matter jurisdiction of this committee.

And each speaker will have two minutes if he wanted to participate.

You may dial 1669-2545252.

Inputting webinar ID 161-232-7007 pound.

We have two hands up in the virtual queue.

I'll begin the five-minute timer if there's any other hands that go up within that time.

We'll start with Becky Rapp.

Please unmute and begin.

Good afternoon, Chair and Committee members.

My name is Becky Rapp, and I'm here to speak about the importance of keeping and enforcing our city's sign rules.

Rules exist for a reason to protect the public, promote safety, and ensure fairness.

When rules are ignored and when loopholes are created to benefit a few, communities pay the price.

And that's what we're seeing today with billboards and the idea of digital advertising displays possibly spreading across our city.

Billboards are not harmless.

They distract drivers and increase crass crash risks, especially the bright, flashing digital ones.

They shine into neighborhoods, block our views, and contribute to light pollution and visual clutter.

And when signs go unchecked, they chip away at the safety and beauty of our city.

It's also an issue of equity.

Many billboards are placed in lower income areas, targeting families and youth with ads for alcohol, marijuana, and tobacco.

These are addictive and harmful products.

And they should not dominate the spaces where our children's walk to school or play outside.

San Diego's original sign ordinance from 1972 was clear.

Too many signs create confusion, hazards, and degrade the quality of life.

That principle still matters today.

I urge this committee to stand firm in keeping and enforcing strong sign rules, hold businesses accountable, prevent the new digital conversions, and make sure our city standards protect people, not adverse advertising profits.

Strong rules keep our communities safe and our streets focused and our neighborhoods beautiful.

Please uphold that standard for the people of San Diego.

Thank you.

Thank you.

John, please unmute and begin.

John, I see you have unmuted, but we cannot hear you.

Hear me now.

We can hear you.

Please begin.

Oh, sorry about that.

Thank you.

John Brady lived experienced advisors.

Thank you for your time, Council members, and glad to see you move that last bit forward.

Mr.

Campio, I truly do understand your concerns and uh and I hopefully the analysis delivered will uh assuage some of those.

Um the uh reason I'm reaching out is because I want to focus the council on uh longitudinal uh concerns that we have, uh, which is the impact of AI on our job market and therefore our economy.

We forwarded to each of you uh a number of weeks ago and our analysis uh which indicates somewhere between 40 and 80,000 jobs will be lost over the next 36 months due to the impact of AI.

These are not low-level jobs, they are mid-level programming, mid-level management jobs, analyst jobs, biotech jobs and research.

Uh while there are going to be a huge numerous positive uh benefits, one of the things that we're not planning for, uh clearly at a federal level is what's going to happen when we don't have jobs for people anymore as we move into an AI world.

And interestingly, it's not the jobs that we thought were going to disappear that are disappearing.

It's the mid-level jobs uh that that have required college degrees and the jobs that are in the most demand, we're not providing enough education for, which is car repair, HVAC, uh, electrical technicians, all that type of work that really we need to be refocusing our economy on if this is where we're headed.

My point is the economic impact at the top end is around 10 billion dollars uh over the next uh 36 to 48 months, and that's only just the beginning.

And we need to be thinking about that as we're looking at how to fund uh the work of the city, uh the impact that it could have on city employees as well as county employees, and how we became maintain competitiveness with other cities that implement AI perhaps faster than we do.

Thank you very much for your time.

Thank you for your testimony.

Francine Maxwell, please unmute and begin.

You will have two minutes.

Thank you.

Francine Maxwell, Southeastern San Diego resident.

I'm hoping that the rules committee will consider holding a civic engagement one-on-one to teach the communities across all districts how to look at how one council district can have maybe three ordinances written in one legislative year calendar versus some districts that haven't written any and maybe teach the community how we can propose, you know, our legislators, they have it where they meet with the community and we can offer suggestions for legislation.

Why not have uh teach us how we can all come together and suggest different ordinance to the uh rules committee that can make the ballot one day?

So just trying to uh shop it around the community all across the city needs to be educated, and it's gonna take a city council person to offer that to get to our COO, then to get to our strong former mayor to direct staff to come out to the communities and teach the community how you can participate in governance.

So thank you for your consideration.

Thank you for your testimony.

The five-minute timer has concluded.

We have one hand remaining in the queue, and we will take no of the callers beyond this remaining individual iPhone.

If you can please unmute and begin.

Yes, thank you.

This is actually Lori Soldania checking in.

I had to leave for another meeting and missed the outcome of the vote, but um, I just want to circle back to comments I was making about the impacts of surveillance on our community that I made at the start of the meeting.

Um, I'm gonna I'm gonna pause you.

I have you registered as an in-public uh in-person public speaker from earlier in the meeting.

And so, Chair, without any other callers in the queue, this concludes on agenda public comment.

All right, thank you, Sarah, and apologies for cutting the speaker off, but uh you the public only gets one opportunity to speak on an agenda, whether you speak in person or remotely.

So with that, I will now adjourn this meeting of the rules committee until the next regularly scheduled meeting to be held Wednesday, November 19th, 2025 at 9 a.m.

We are adjourned.

Thank you to my committee.