Mission Viejo voters may be tasked with deciding if a local hotel and short-term rental tax should be increased.
The City Council will take a vote on Tuesday, June 25, on whether to let voters decide if that tax, called a transient occupancy tax, should be increased. Collected from hotels and other lodging facilities, including Airbnb and Vrbo, and put toward the city’s general revenue, the tax is 8% of the total room charge in Mission Viejo, the lowest in Orange County.
The proposal would increase the tax to 12%, above Orange County cities’ average of 10.4%. That would place Mission Viejo as the fourth-highest transient occupancy tax in the county.
The tax increase, city officials said, is expected to generate an additional $670,000 more in revenue each year.
“We are not saying, ‘Let’s jack up the price on people;’ we are saying, ‘Let’s meet the market where everyone else is at,’” Councilmember Brian Goodell said.
Mission Viejo residents who participated in a recent community survey said they’d like to see an increase in the rate to assist in areas they deem the city is lacking.
Specifically, residents said if this increase is passed in November, they would like to see the extra money go toward “police, crime prevention and 911 emergency response,” “repairing streets, sidewalks, storm drains and infrastructure,” and “keeping parks, trails and community facilities safe, clean and well-maintained.”
The city’s survey of 987 Mission Viejo residents found 70% would support the measure.
Placing the tax increase on the ballot could cost the city between $146,382 and $171,090, according to the agenda.
Proposed increase builds on earlier updates
While the city has had a transient occupancy tax in place since its incorporation in 1988, earlier this year, officials clarified the language to ensure tax was being collected on short-term rentals, including people who rent parts of their homes on sites like Airbnb or Vrbo.
Then, Cheryl Dyas, the director of administrative services, said anywhere between 120 to 180 houses in Mission Viejo were being used as short-term rentals, and the city collected $5,700 in transient occupancy taxes from them in 2023. However, the exact number of homes being used as short-term rental properties was not known, Dyas said.
Since then, the city has implemented an outreach program, sending letters to short-term rental property owners asking them to register their property with the city. Through this program, an additional 30 homes registered with the city as short-term rentals. Mission Viejo now estimates it has about 200 short-term rental properties in the city, she said.
Property owners who still need to register their short-term rentals can visit the city’s website for more information, Dyas said.
