Growth in SD Hotel Taxes Eyed for Homeless Causes

The idea of out-of-towners helping with San Diego's homelessness crisis is starting to make its way through city hall.

The problem just keeps growing.

But so do San Diego's hotel tax proceeds.

Council members David Alvarez and Lori Zapf see a funding source for homelessness which comes courtesy of the city's hotel guests -- growth in the proceeds of San Diego's "transient occupancy tax", TOT or room tax.

The current rate is 10 and a half percent, plus a 2 percent assessment charged at hotels with more than 70 rooms.

The taxes generate about $230 million a year for the city.

And the projected annual growth right now is about $13 million.

Alvarez and Zapf propose allocating the growth proceeds to sheltering, treating, training and tending to the homeless for 20 years.

Not raising the tax rate itself, which would take a two-thirds voter majority.

But getting a simple majority of voters to approve a Charter amendment.

It's increases in hotel room rates, and the revenues those generate, that create growth in the TOT -- assuming visitor counts remain strong.

Widespread homelessness and “hep A” can't be helpful to the industry’s cause.

"If that kind of PR, negative PR, gets out there, it could really damage our tourist economy -- which is important to San Diego,” Alvarez said in an interview. “ So therefore, solving the homeless crisis and any effect that that causes -- which is hepatitis A or anything else -- should be most important to the industry, the hotel industry and the visitor industry."

The hotel tax proposal is expected to undergo review by the City Council sometime in January.

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