Month: April 2026

Is Your San Diego Property Eligible for the Mills Act? Why Historic Property Owners Should Take a Closer Look

San Diego is one of the most active jurisdictions in California when it comes to historic preservation incentives. For owners of qualifying historic properties, the Mills Act can offer substantial property tax relief while preserving the architectural character that makes many San Diego neighborhoods unique. According to recent reporting by the San Diego UT, San Diego County owners of historic properties who qualify for the incentive are saving 71%[1] on their property taxes.

Despite its benefits, many property owners are unaware that their home or building could, (or may already) qualify with the right legal and preservation strategy. As interest in historic designation grows, San Diego has become an especially strong place to evaluate Mills Act eligibility.

What Is the Mills Act?

The Mills Act (California Government Code Sections 50280–50290) is a California state law enacted in 1972 that grants property tax relief to owners of qualified historic properties. In exchange, owners agree to maintain and preserve the historic character of their property through a binding contract with the city.

Unlike typical tax incentives, the Mills Act recalculates a property’s assessed value using a specialized methodology that often results in significantly lower annual property taxes. The savings are intended to support ongoing maintenance, restoration, and long-term preservation.

Why San Diego Stands Out

San Diego administers one of the largest Mills Act programs in the state, with a level of participation that exceeds many other major California cities. The city has made historic preservation a core part of its land use and development framework, particularly in areas with strong architectural identity and historic housing stock.

For property owners, this means:

• A well-established administrative process
• Clear preservation standards
• Demonstrated willingness by the city to approve Mills Act contracts
• Long-term program stability

From a legal perspective, San Diego offers a relatively predictable environment for navigating historic designation and Mills Act approval when the process is handled correctly.

The Financial Benefits Can Be Significant

For qualifying properties, Mills Act participation can result in meaningful annual property tax reductions. While the precise benefit depends on the property’s characteristics and existing assessment, tax savings can be substantial enough to materially offset the cost of ongoing maintenance and restoration obligations.

Importantly, these benefits are not limited to single-family homes. Commercial buildings, mixed-use properties, and adaptive reuse projects may also qualify, making the Mills Act a valuable tool for a wide range of property owners.

In addition to tax relief, Mills Act designation can enhance long-term property value by formalizing historic status and preserving neighborhood character that buyers often view as irreplaceable.

Historic Designation Is a Legal Process, Not Just a Label

Qualifying for the Mills Act requires more than age alone. Properties must meet historic designation criteria under local law, which often focus on architectural significance, integrity, and contribution to the surrounding area.

The application process involves legal, historical, and land use considerations, including:

• Evaluating eligibility for historic designation
• Preparing required documentation and supporting materials
• Negotiating the terms of a Mills Act contract
• Understanding long-term obligations that attach to the property

Mistakes or omissions at the application stage can delay approval or foreclose eligibility altogether. This is where legal guidance becomes critical.

Why Many Eligible Properties Never Apply

Even in a city with a robust program, many qualifying properties are never evaluated for Mills Act eligibility. Common reasons include:

• Lack of awareness that the program exists
• Assumptions that designation is limited to landmark properties
• Uncertainty about costs versus benefits
• Misunderstanding the application and approval process

In practice, many property owners are surprised to learn that their home or building may already meet eligibility criteria or could qualify with modest restoration planning.

How Hoffman Forde Helps Property Owners Navigate the Mills Act

Hoffman Forde works with property owners to assess Mills Act eligibility and guide them through the historic designation, application, and contract process. Our approach focuses on both the legal and practical implications of designation, helping owners make informed decisions before committing to long-term preservation obligations.

Our services include:

• Preliminary eligibility analysis
• Coordination with preservation consultants and architects
• Preparation and submission of application materials
• Review and negotiation of Mills Act contracts
• Strategic guidance on restoration and compliance obligations

Whether you are a homeowner, investor, or developer, early legal analysis can help determine whether the Mills Act aligns with your financial and long-term property goals.

Is Your Property a Candidate?

If you own an older property in San Diego, particularly in a neighborhood with historic character, it may be worth exploring whether Mills Act designation is an option. Even properties that have been altered over time may still qualify with the right strategy.

The Mills Act remains one of California’s most powerful tools for aligning preservation with financial incentives. San Diego’s commitment to the program makes it an ideal place for property owners to take advantage of that opportunity.

Interested in exploring Mills Act eligibility for your property?
Hoffman Forde can help you evaluate whether historic designation and Mills Act participation make sense for your property and guide you through each step of the process.

[1] Union Tribune Article 3/22/26

Disclaimer

The information in this post is considered attorney advertising under applicable California law. The contents of this post are for informational purposes only and do not constitute legal advice. The information may be incomplete or out of date. No representations, testimonials, or endorsements on this website constitute a guarantee, warranty, or prediction regarding the outcome of any legal matter.

A Legal Perspective on San Diego’s New Waterfront Lease and It’s Impact on Property Owners, by Adam Reifman

Hoffman Forde was recently fortunate enough to represent an ambitious local business that will be expanding their popular roller rink experience to a second location at Seaport Village this summer.

The newly announced lease for this unique and dynamic property is more than a tourism update. It is a clear indicator of how waterfront property in San Diego is being repositioned and how public agency leasing is integral in shaping that transformation.

From a legal and developmental standpoint, this project underscores a fundamental reality. Securing and structuring leases with the San Diego Unified Port District requires a deliberate strategy that contemplates a great deal more than traditional commercial terms. As a public entity governed by California’s Tidelands Trust, the Port prioritizes public access, economic performance, and long-term land use consistency. These priorities directly influence how leases are negotiated, approved, and enforced.

In negotiating this lease, the key issues were not limited to rent or duration. The process required alignment with public use mandates, operational flexibility, and the ability to deliver a concept that activates a high-profile waterfront location in a meaningful and sustained way while accommodating an overarching municipal development timeline. These are not unique challenges. They reflect the current standard for waterfront development across San Diego and throughout California.

For property owners, developers, investors, and HOA stakeholders, the implications are immediate. Public agencies are actively favoring experiential, high-traffic uses that extend activity beyond traditional retail models. This shift directly affects surrounding property values, leasing strategies, and redevelopment potential. Projects that fail to align with these priorities will face increasing difficulty securing approvals and long-term viability.

The timing is not incidental. San Diego’s waterfront continues to evolve under long-range redevelopment plans, and smaller lease transactions like this are often leading indicators of broader policy direction. Stakeholders who are not paying attention to how these deals are structured risk falling behind in a market that is becoming more competitive and more regulated at the same time.

The takeaway is straightforward. Waterfront leasing in California is no longer a passive process. It requires a clear understanding of public agency objectives, regulatory constraints, and market expectations. This project demonstrates that when those elements are addressed strategically, these leases can unlock significant value for both individual stakeholders and the broader San Diego real estate market.

Disclaimer

The information in this post is considered attorney advertising under applicable California law. The contents of this post are for informational purposes only and do not constitute legal advice. The information may be incomplete or out of date. No representations, testimonials, or endorsements on this website constitute a guarantee, warranty, or prediction regarding the outcome of any legal matter.

In early March 2026, the San Diego City Council voted 8–1 to place an “Empty Homes Tax” measure on the June 2, 2026 ballot. The proposal would impose an annual tax on vacant second homes that are empty for 183 days or more in a calendar year, starting at $8,000 and rising to $10,000 in subsequent years. The version that advanced to the ballot also includes an additional surcharge for “corporate-owned” vacant homes, with higher amounts in the first and second years.

But if you only read the March coverage, you’d miss a large part of the conversation: this proposal is the endpoint of a longer, politically charged effort that started as a much broader tax and was narrowed only after significant opposition, legal concerns, and enforcement questions surfaced.

What the measure would do, as written today

The City’s Independent Budget Analyst (IBA) describes the proposed ordinance as a new tax on owners of “empty homes,” defined as residential dwelling units left vacant for more than half the year. If approved, the tax would become effective January 1, 2027, and the first tax bills would be mailed in the first quarter of 2028 for homes presumed vacant during 2027.

The IBA also lists a set of exemptions, including (among others) primary residences, bona fide leases, military relocation, certain disaster-related uninhabitability periods, owner death, and owner medical care. Importantly, the IBA notes that the City’s working estimate of impacted homes comes from a proxy dataset tied to the City Treasurer’s Rental Unit Business Tax, and that this approach introduces uncertainty and likely “data clean-up” challenges.

For developers and real estate professionals, the immediate takeaway is not just the nominal tax rate. The takeaway is that implementation depends on definitions, verification methods, exemption administration, and an enforcement mechanism that must stand up to both practical strain and legal scrutiny.

The original proposal was broader, sharper, and aimed directly at short-term rentals

The “Empty Homes Tax” voters will see is not the same policy package originally proposed. In October 2025, Councilmember Sean Elo-Rivera advanced a framework described as the “Vacation Home Operation Tax to Preserve Housing,” which targeted both vacant second homes and whole-home short-term rentals, including properties rented out on platforms like Airbnb. That earlier proposal contemplated much larger reach and significantly higher revenue expectations, with public reporting describing a structure that could apply to thousands more properties and generate far more than the later IBA ranges.

That version sparked organized pushback from short-term rental hosts and industry groups, and it became a flashpoint for accusations about paid turnout and political influence at City Hall. In late January 2026, the City Council’s Rules Committee killed the broader proposal, and the March 2026 ballot measure is the “narrowed” successor that removed short-term rentals entirely.

This history is important because it explains why third-party interests took early positions and why some of those positions shifted once short-term rentals were excluded.

Third-party interests did not disappear, they recalculated

When the earlier proposal targeted short-term rentals, Airbnb and related interests treated it as an existential threat and prepared accordingly. One widely circulated report referencing Union-Tribune coverage noted Airbnb had raised substantial funds in anticipation of fighting the proposal and later indicated it would take a “neutral” stance once the revised measure removed short-term rentals.

That shift is not an endorsement of the new measure. It is a strategic recalibration after a key business category was removed from the tax base. For San Diego property owners, this matters because political resources tend to follow the most directly impacted stakeholders. When one stakeholder group is carved out, opposition can fragment, even when underlying legal and administrative issues remain unresolved.

Revenue projections are wide, and the City’s own analyst flags uncertainty

The IBA estimates a net positive fiscal impact ranging from $12.1 million to $23.8 million in the first year of implementation, with a second-year range of $15.3 million to $30.0 million. Those ranges are not a technicality. They reflect real uncertainty about how many homes will actually be taxable once exemptions are claimed, occupancy patterns change, or owners restructure usage to avoid the tax.

The IBA also benchmarks other jurisdictions and highlights a recurring pattern: early unit counts and revenue estimates are frequently overstated, with higher-than-expected exemption activity and administrative challenges once the law is operational. For a city already facing fiscal strain, this should concern every voter, including those who support housing policy reform, because uncertain revenue paired with new administrative burden is a recipe for downstream pressure on enforcement practices.

Legal vulnerability is not hypothetical, it was raised inside the Council chambers

Councilmember Raul Campillo was the sole “no” vote and cited concern about moving forward without a legal review memo demonstrating the measure can withstand litigation. External critics have echoed legality concerns. The San Diego County Taxpayers Association publicly opposed the proposal, citing concerns about legality and taxpayer protections.

A vacancy tax that depends on contested definitions, proof burdens, and enforcement discretion creates several obvious litigation pathways. The point here is not to predict outcome. The point is that the City chose to advance a measure that its own elected members and outside watchdogs describe as legally exposed.

“All politics are local,” but housing law is increasingly state-driven

California has spent the past several years limiting local discretion in housing approvals and downzoning. SB 330, among other statutes, requires written findings and evidence-based standards before denying or reducing qualifying housing development projects. State agencies also frame SB 330 as a tool to “remove barriers and impediments” and improve certainty through vesting mechanisms such as preliminary applications.

This is where City Hall’s posture becomes difficult to defend as consistent. San Diego’s leadership frequently speaks about housing urgency and the need for housing production. Yet, at the same time, the City has engaged in highly visible local pullbacks and restructurings of housing-related policy tools. In June 2025, the City Council voted to cap the number of ADUs permitted on single-family lots, reversing an earlier incentive program that allowed substantially more units in transit priority areas. In February 2026, the City Council approved reforms that shift historic designation appeal power toward elected officials, explicitly to balance preservation rules against housing production.

When cities tighten one set of incentives while imposing new taxes and compliance burdens elsewhere, the result is not coherent housing policy. It is regulatory volatility, and volatility is the enemy of investment, permitting strategy, and predictable project delivery.

Why Hoffman & Forde opposes this measure

Hoffman & Forde is steadfastly opposed to arbitrary and capricious legislation that burdens property owners without clear legal durability, reliable administration, or a demonstrated connection between the burden imposed and the stated housing outcome. This is especially true when the City’s own fiscal analysis underscores uncertainty about taxable unit counts, enforcement infrastructure, and ultimate impacts on affordability.

The City may argue this is “targeted” because it affects fewer than 1% of properties. That framing misses the land use point. The measure is not a zoning reform. It is a high-dollar annual tax instrument that depends on ongoing classification decisions and recurring compliance processes. Processes that cost taxpayer dollars.

If San Diego wants housing production, there are proven pathways: objective standards, predictable entitlements, lawful streamlining, and consistent use of state housing tools that already constrain local discretion. A vacancy tax might be debated as a policy preference, but it should not be advanced as a substitute for legal clarity and consistent pro-housing governance.

Practical guidance for owners, investors, and developers

If you own a second home in San Diego, or you are evaluating acquisition, disposition, or conversion strategies, you should focus on four practical issues:

1. Classification risk: whether the property could be deemed vacant under the ordinance’s definition and how exemptions would be documented.
2. Entity ownership implications: the ordinance contemplates additional tax treatment for homes not owned by a natural person, which is relevant to LLC and trust structures used for legitimate planning purposes.
3. Lease strategy and documentation: the IBA’s summary treats a bona fide lease as a key exemption category, meaning documentation quality will matter.
4. Market effects and timing: implementation is described as beginning in 2027 with billing in 2028, which affects how owners model carrying costs and evaluate near-term sales or long-term rental conversion.

Hoffman Forde advises clients to evaluate these questions early, not after a ballot passes, because structural decisions are hardest to unwind once enforcement procedures are in place.

Disclaimer

The information in this post is considered attorney advertising under applicable California law. The contents of this post are for informational purposes only and do not constitute legal advice. The information may be incomplete or out of date. No representations, testimonials, or endorsements on this website constitute a guarantee, warranty, or prediction regarding the outcome of any legal matter.

In California, unlawful detainer cases move fast. That speed comes with a tradeoff: courts expect absolute technical precision. Even small mistakes can derail an eviction before it ever reaches the merits.

A recent decision, Heffesse v. Guevara, 330 Cal.Rptr.3d 139 (Cal. App. Div. Super. Ct. 2025.), is a reminder that when it comes to three‑day notices to pay rent or quit, “close enough” is not good enough.

What happened in Heffesse v. Guevara

The landlord served a residential tenant with a three‑day notice demanding unpaid rent. The notice listed a monthly rent amount that was $4.44 higher than the rent stated in the lease. The additional charge came from a local municipal fee the landlord believed could be passed through to the tenant.

The tenant challenged the notice, arguing that the amount demanded did not match the lease and improperly included charges that were not defined as “rent.”

The court agreed. The unlawful detainer action was dismissed.

Not because the tenant didn’t owe money.
Not because the landlord acted in bad faith.
But because the notice was technically incorrect.

Why the court invalidated the notice

California unlawful detainer law is unforgiving by design. Because eviction is a summary proceeding that limits a tenant’s defenses, courts strictly enforce the statutory notice requirements.

The court focused on two issues:

1. Rent must mean rent.
   Only amounts that qualify as “rent” under the lease or applicable law can be included in a three‑day notice. Fees, surcharges, or pass‑throughs that are not clearly defined as rent cannot be added.
2. Consistency matters.
   The notice listed a different rent amount than the lease and the complaint. That discrepancy created ambiguity, which the unlawful detainer statutes are designed to prevent.

Even though the difference was small, the error was enough to render the notice invalid.

Why this matters for landlords and property managers

This case highlights a common and costly mistake: treating notices as routine paperwork rather than legal documents.

Including the wrong amount, even by a few dollars, can result in:

• dismissal of the eviction,
• delay of possession,
• additional rent loss, and
• restarting the process from the beginning.

In some cases, repeated notice defects can also weaken a landlord’s credibility if the dispute escalates.

Best practices to avoid notice problems

Before serving a three‑day notice, landlords and property managers should:

• Confirm the lease definition of rent.
  Do not assume that all recurring charges qualify as rent.
• Separate fees from rent unless clearly authorized.
  Registration fees, administrative charges, or municipal pass‑throughs require careful analysis.
• Match the lease, notice, and complaint exactly.
  Any inconsistency invites dismissal.
• Review notices before service.
  A quick legal review can prevent weeks or months of delay.

The takeaway

Unlawful detainer cases are not decided on fairness alone. They are decided on compliance.

Heffesse v. Guevara is a reminder that precision is the price of speed in California eviction law. When notices are drafted carefully, they move cases forward. When they are not, even a $4 mistake can bring everything to a halt.

If you have questions about eviction notices, rent demands, or compliance with local ordinances, it is worth addressing them early, before a minor error turns into a major setback.

Disclaimer

The information in this post is considered attorney advertising under applicable California law. The contents of this post are for informational purposes only and do not constitute legal advice. The information may be incomplete or out of date. No representations, testimonials, or endorsements on this website constitute a guarantee, warranty, or prediction regarding the outcome of any legal matter.

San Diego, CA | April 1, 2026

Hoffman Forde recently achieved a significant victory for its clients in a contract dispute arising from a failed real estate transaction. Following a buyer’s breach of the purchase agreement, the firm successfully moved for summary judgment, securing a decisive ruling in favor of the sellers. The court’s decision resulted in more than $100,000 in escrow funds being released to our clients, along with an award of prejudgment interest, treble damages, and attorneys’ fees and costs.

The Power of Summary Judgment

The ruling demonstrates the power of summary judgment in civil litigation. When material facts are undisputed, this mechanism allows the court to deliver justice without the significant delay and expense of a full trial. Courts can, and will, hold parties accountable for contractual obligations, particularly where key provisions are designed to protect against exactly this type of risk.

While every dispute is unique, this result underscores the value of a decisive litigation strategy and careful contract enforcement when transactions do not go as planned.

Market Implications

Outcomes like this also help reinforce confidence in the transactional process. They signal that courts will uphold negotiated agreements and impose real consequences when those agreements are breached. That stability is essential for residential and commercial real estate transactions to function effectively and predictably.

The team at Hoffman Forde remains dedicated to protecting the interests of both buyers and sellers in both transactional matters and real estate litigation. Our attorneys bring deep experience and a decisive approach to contract disputes, ensuring our clients’ rights are vigorously enforced.