Council asks staff to study vacancy tax and ongoing funding options for local housing trust fund

The Santa Barbara City Council on June 23 directed staff to perform two analyses intended to expand the city's options for housing finance and rental-market interventions: (1) study a vacancy tax that would be presented to voters for behavior change (not primarily revenue generation), and (2) analyze sustainable, ongoing funding sources for the local housing trust fund.

Council members emphasized the complexity and administrative burden of a vacancy tax; staff noted only a handful of California cities have implemented variants and that adoption would require careful design, likely significant administrative resources and voter approval if structured as a general-tax measure. Staff advised the council the earliest practical ballot for a city-sponsored vacancy tax would be November 2028 and recommended pairing the analysis with the strategic-plan calendar to account for staff workload and policy tradeoffs.

Separately, the council gave direction to study permanent funding options for the local housing trust fund rather than rely on ad hoc or one-off transfers. Council members discussed Measure C and Measure I as potential sources, and asked finance staff to model multi-year scenarios and a target annual funding goal so the city can better plan allocations.

What happens next: staff will return with analysis on vacancy-tax structure, administrative cost estimates, comparisons with peer jurisdictions, and a menu of sustainable funding options for the local housing trust fund to inform a future council decision and potential ballot measure timing.