Is Ocean Beach Number 3 in Vacation Rentals for San Diego? Boasts Meet City’s Strict Law

by on June 30, 2015 · 2 comments

in California, Culture, Economy, Environment, History, Media, Ocean Beach, San Diego

Vacation Rentals Pillow graphicThere’s a new vacation rental property management company out there that’s boasting that with 12,000 short term vacation rentals, “San Diego is rapidly becoming the fastest growing market in the country.”

And it also claims that of the top 5 key regions in the San Diego area, Ocean Beach is number 3 in terms of potential earnings from property owners turning their units into short term rentals.

The company Pillow just announced that it is officially launching in San Diego, and it has a nifty graphic that shows that short term rental fees from OB make the community the third top community in the San Diego region. OB’s short term average rent is $3407, compared with only $1831 for long term rents.

The breakdown: La Jolla, Pacific Beach, then OB, then San Diego generally, and fifth is Coronado.

The company is all about enticing homeowners to rent out their digs and has held several workshops around town. It’s already established itself in several other cities. Pillow

Wow! OB is number 3!

The whole issue of short term vacation rentals has gotten the beach communities upset with assertions that vacation rental guests disrupt their quiet residential neighborhoods, increase traffic, noise and trash – and with claims that affordable rental units are being taken off the long term markets, squeezing an already tight rental scene in the beaches.

I wrote about it extensively earlier this month, outlining the main points of each side. Mainly my piece was a comparison of what different cities – both within San Diego County – and up and down the state are doing about their vacation rentals. One city at least has outright banned them.

Boasts by such companies as Pillow, and claims by Airbnb and other rental companies, however, are flying directing into conflict with the CURRENT San Diego city law on vacation rentals. And it’s down right strict – and that’s why city staff are busy right now coming up with new draft language to be presented to city council members probably in the Fall.  San Diegans  had jammed 2 city council committee hearings in May and councilmembers heard hours of complaints and claims from both sides.

But the boasts by Pillow got to me. So, I called them up, dialing into their system as if I wanted to rent a unit in Ocean Beach. I was told by a polite guy up in San Francisco that actually Pillow only has one property to rent in all San Diego. He even asked me if I wanted to rent out my property.

Maybe the polite guy wasn’t up on the latest in the far-flung property management company, yet I was quiet taken aback. I told him I wanted to rent a vacation unit in OB and he told me they only have 1 place in the entire city. So much for the official launch of the company.

Yet their boasts and their enticements of San Diego property owners goes against the law. No where on their website do they explain the current law in San Diego. Of course, they don’t as that would certainly put a kabash on the discussion.

So what is San Diego’s current law?

Briefly, in the City of San Diego, a rental unit must be registered for and obtain a certificate of TOT – the Transiency Occupation Tax – this is outlined in San Diego’s Municipal Code in Chapter 3, Article 5 – and pay the rate that applies to it. The TOT rate is calculated at 10.5% of taxable rent collect from a transient occupant- staying less than 30 days.

In addition, San Diego levied a Tourism Marketing District (TMD), based on the number of units/rooms, where lodging businesses with thirty (30) or more units/rooms pay 2% of Assessable Rent. Lodging businesses with twenty-nine (29) or less units/rooms pay TMD Category B only or .55% of taxable Rent.

Plus, according to Chapter 13, Article 1, Division 4 of the San Diego Municipal Code, Multiple Dwelling Units located in Residential- Multiple Unit Zones (MAP), must enforce a 7 night minimum – as all non-owner occupants must occupy the dwelling for a minimum of 7 consecutive days.

What this means, is that all those grandmas and retired Sixties gens and those large-scale rental companies who rent out their units and properties are breaking San Diego law.

Fox5 spoke with Pillow CEO and San Diego native Sean Conway who is full of assurances that his company vets the guests and wants to standardize “the host and guest experience”, and says they provide 24/7 support. Yet, the TV station failed to ask Conway if his company was violating San Diego law.



{ 2 comments… read them below or add one }

Omar Passons July 1, 2015 at 7:20 am

Thank you. Seriously. I spend a great deal of time on this issue professionally and personally. And this is the first San Diego news source to adequately and directly report the plain truth based on current City of San Diego interpretation of its law regarding the requirements for minimum stays. Taken a step further, you could also have been explicit that everyone in an RS zone renting out a room in their home or their whole primary home for less than 30 days – according to Development Services – is required to obtain a $5-10,000 Neighborhood or Conditional Use Permit because that rental is a commercial bed and breakfast. At least according to the City’s interpretation.

As a lawyer, I think the City’s interpretation of its single family zone laws is awful and violates the law. But since it IS the current interpretation they ought to be honest with their citizens and say so. Publicly. And in a way that is calculated to actually reach regular people. I have had my share of disagreements with some of what I’ve read on this site. But good on you, OB Rag, for being candid with your readers.


Frank Gormlie July 1, 2015 at 9:33 am

Thank you, Omar for highlighting the lack of local San Diego media coverage of the actual vacation rental law in the city.


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