Loss of Community Is Greatest Threat From Short-Term Vacation Rentals

Red circles designate a vacation rental. Most in OB are in north OB. Save San Diego Neighborhoods.

Originally posted on Sept. 1, 2015

Short-term vacation rentals are on the minds of a lot of people these days, especially with those who live at the coast in San Diego.

The issue bubbles up at community meetings. An OB resident brought it up at a recent Ocean Beach Planning Board meeting. And it was the subject of a panel discussion organized recently by the Point Loma Democratic Club. Also, back in February of this year, residents of Pacific Beach made their complaints about them heard publicly.

Then it came up at the most recent OB Town Council meeting last week, during the non-agenda comment period, where folks on both sides on the issue contended for audience sympathy.  And it’s certainly a hot topic among callers to District 2 Councilwoman Zapf’s office.

A page from Airbnb on OB.

Zapf’s office is in the middle of the controversy as she heads up a City Council committee on Smart Growth and Land Use, which last Spring held 2 public hearings on the issue, where both sides squared off. The upshot was that city staff have drafted language for a new San Diego Municipal ordinance updating how the City deals with the issue of short term vacation rentals. (See below for explanation.)

The first of several public meetings on the issue is being scheduled for September 22nd. By time the full Council votes on a new ordinance, it may be well into the Fall.

Part of the problem has been the lack of clarity in current regulations, where there are various references in the Municipal Code that could cover vacation rentals, such as “boarder and lodger” and rules on bed-and-breakfasts. Plus with more than 4,000 listings on Airbnb just for the City of San Diego, government simply has not been able to respond to the explosion of popularity of the home sharing trend.

Without a government resolution on the issue and the numerous gray areas not covered by the current City Municipal Code – as, for example, a neat definition of short-term vacation rentals (STVR) – the issue will continue to simmer.

Organizations have formed to represent the different sides in the discussion. An organization called  Save San Diego Neighborhoods organized to fight any loosening up of restrictions on short-term rentals, and on the other side, the Short Term Rental Alliance of San Diego came together to advocate against restrictions on renting out units. (See below for some of what both groups declare on their respective websites.)

The two sides are in contention, for example, over how many of the Airbnb listings in San Diego include the entire residence. The Alliance claims:

AirBNB has over 3,490 listings in San Diego alone. The majority of these listings are individuals sharing a portion of their home and go largely unnoticed to neighbors.

In response, the Neighborhoods says:

Data obtained by Inside Airbnb on June 22, 2015 shows that the majority, 65% (2,283 out of 3,530), of Airbnb listings in San Diego are “Entire Homes or Apartments” being rented out in their entirety.

We’d have to say, according to our research, by far most vacation rentals are advertised as an “entire place”, as for example, recently for Mission Beach, Airbnb has 349 rental units where 330 – or 95% are for the entire unit.

It is a smoldering issue, as staff at Zapf’s office know, with many of the complaints about the new wave of rentals having to do with noise, trash, more congestion, more traffic, the unruliness of vacationers living it up in quiet, residential neighborhoods. Locals are outraged and frustrated with the threats to their quiet blocks and the slowness of government to respond.

Vacation rental on Santa Monica Ave.

Defenders of the rentals say it’s just a small minority of their customers who are making the problems, and that they’ve tighten-up their vetting process, that property managers are ensuring compliance with community codes, and that Airbnb is now paying taxes to the City of San Diego.

The small property owners who utilize sites like Airbnb are not in the majority. The Voice of San Diego found:

Most of San Diego’s short-term rentals are run by property managers who don’t live on-site — not by homeowners renting out a room or two. …

Twenty of the city’s top short-term rental management companies operate about 40 percent of those units, with each operating between 20 and 109 rental units. Another 22 percent of the registered short-term rentals are run by small companies and individuals who list at least three units.

That leaves a little more than a third of short-term rentals registered with the city run by individuals who list just one or two units.

Yet, no matter the back and forth, the arguments for and against, there is something that is not being specified clearly enough, that is being left out of the common complaints and discussion of the positives and negatives of short term rentals. The Save Neighborhoods group comes closest to enunciating it:

These mini-hotels are changing the character of residential neighborhoods across San Diego, as long-term renters and families are being priced out of the housing market. We are quickly losing our neighborhoods.

This ‘change of neighborhood character’ and loss of long-term rentals is very significant. But we would go further, and say that one of the greatest threats to neighborhoods along the coast like Ocean Beach from Airbnb and short-term vacation rentals is something of great consequence – literally – the loss of community.

Craftsman house being rehabbed on Muir Street for a short term vacation rental.

When a significant number of residential units in a neighborhood are taken off the long-term (30 days or more) rental market, and turned into short-term vacation rentals, there are multiple results or consequences that impact that neighborhood, positive and negative.

For one, when a good number of rental units are utilized as vacation bits of heaven, there are fewer rental units available for people looking to actually reside in the neighborhood. Fewer rentals drives up the rents.

According to Save San Diego Neighborhoods:

STVR diminish housing supply for citizens who hold jobs and create businesses that generate more jobs, sales tax revenue and property tax revenue for the City. STVR have rapidly proliferated in residential zones, from a few hundred in 2007 to several thousand in 2015. Currently, there are thousands of STVR in residential zones in all parts of the City – these are thousands of homes that are NOT available for people who want to work and live in San Diego.

Housing shortages in any area ripple out to affect all other areas of the City, making it harder for everyone to find and afford a home. STVR also make housing harder to obtain because STVR investors can offer cash or better payment options than a working family wanting to buy a house.

Airbnb and other short-term sites have worsening the housing shortage in Los Angeles, according to the LA Times.

However, on top of housing shortages, the even more drastic consequence of loss of community occurs when there are so many residential units within a neighborhood that have been turned into short-term units, that a goodly-sized chunk of the area has morphed into a resort candyland of beach, surf and sand. There are no longer any actual residents in the immediate neighborhood, and every unit is utilized as a vacation rental – every condo, every McMansion, every apartment, every little cottage – no longer are the houses of residents – the human make-up of a community – but of visitors.

Without actual residents then, that portion of the neighborhood as “a community” collapses into a mishmash of rental and property managers, online rentals, private trash and private security details.

Parts of Mission Beach come to mind –  specially South Mission – where the 3-story mansions line the Boardwalk are vacation rentals, time-shares and where no one really lives there, and where every unit is now a vacation unit.  And this is not to disrespect those in Mission Beach and Mission Bay trying to hang onto whatever remains of a once vibrant community.

But along the streets and alleys in Mission Beach and Mission Bay, vacation rentals line up next to each other, taking over block after block of prime seaside land, gloriously sandwiched between the ocean and the bay, dominating entire sections of the neighborhood.  And this has occurred in conjunction with the obvious gentrification of Mission Beach and Bay.

If it was only a rental here and there, there wouldn’t be any problems, but at the beach, that’s a dream. And of course, only the neighborhoods where visitors want to spend time suffer the most impact.

Mission Beach is not a large community. In a recent search on Airbnb for Mission Beach, nearly 350 vacation rentals turned up. A search of Mission Bay came up with 619 total rentals where 524 or 85% were the entire place.

The problem occurs when for residents and local small property and home owners develop the motivation to turn their condo, cottage, second unit, apartment or house over to short-termers who will pay big bucks instead of keeping the interests of the community over that of the immediacy of cashing-in.

Mission Beach map of flipkey vacation rentals.

If there’s no one left to care about the community or that section of it, then there is no community.

This could be obvious. But take a walk or bike ride along the boardwalks that run along Mission Beach and Mission Bay. Try to count the buildings where actual residents live. It’s depressing.

This is the same threat, now, aimed at Ocean Beach. If enough little cottages, homes, apartments are turned into vacation rentals, then this is a larger threat to the culture of Ocean Beach than gentrification.

Never happen in OB, you say?

Let’s look at some numbers. A July study of Airbnb and the units they have available for OB showed that on July 8, 2015, they advertised 212 rental spaces, of which 157 were the “entire place” (74%), 51 were private rooms and 4 were a shared room. The average rental rate was $189 a night.

Map of flipkey rentals.

The next day, July 9th, we looked at VRBO, a similar online rental company. It advertised between 178 to 184 rentals in Ocean Beach. Most – 74 – were 2-bedrooms, 48 were 1-bedrooms, and 14 were 3-bedrooms

Another review of Airbnb in August showed that the company for OB had  198 rentals, of which 141 were for the entire place – 71%, for an average of $178 a day, 53 private rooms and 4 shared rooms.

Gee, you might say, these are really reasonable rates to stay at the beach – and they are – if they were staying at a resort hotel – but they’re not! They’re staying in a community where real people have to make real rents and real mortgages.

Look at the context. According to the demographics of Ocean Beach from the OB Planning Board website, there are 7914 residential units in the OB Planning Area (a smaller area than “92107”). If six out of every 7 OBceans rents, then it would be safe to say that there are roughly 6350 rental units in OB.

If hundreds of these units are being turned into STVRs, that is significant. Without dealing with any overlap, let’s say we combine the numbers from Airbnb and VRBO for OB. We then are looking at 335 units as vacation units. That’s five per cent of the total number of rental units. That’s a huge number and percentage for a long-term rental market in Ocean Beach that is already tight.

The loss of community for Ocean Beach is one of the chief threats from this so-called “sharing economy”. If significant sections of OB are no longer available for residents, then there are no longer residents available for OB.

As a woman who was complaining about short-term rentals said at the recent OB Town Council meeting, said:

“Rather than a good vacationer next to me, I’d rather have a neighbor.”

OBceans need to be vigilante on this issue. It isn’t over yet. Along with gentrification, short-term vacation rentals have the ability to undermine parts of the community, change the character of the neighborhood for the worse and turn a vibrant village into a beach resort for vacationers.

____________________

Here’s some of what the Short-Term Rental Alliance states on their website:

About The Short Term Rental Alliance of San Diego

The Short Term Rental Alliance of San Diego is comprised of individuals who share a portion of, or their entire home(s) on online websites/services such as AirBNB, VRBO, Homeaway, Tripping, Roomorama, and countless others. The majority of us live on the property we invite others to stay in/on, and started utilizing these services as a means to pay bills, mortgage, other debt, etc. …

Our Mission

The Short Term Rental Alliance of San Diego will lobby and collaborate with city and other local politicians to develop, outline, and implement meaningful regulations regarding short-term rentals within the City of San Diego.

Our Story

… Hosts list a portion (or in some cases all) of their home(s) on a home sharing website, such as AirBNB. In the case of AirBNB, if someone is interested in booking a host’s listing, they submit and inquiry through the website. Once the host approves the guest for their stay, AirBNB collects the money (plus a service fee) and holds that money until the guest’s stay has begun. Once a guest “checks in,” AirBNB sends the money (minus a service fee) to the host for the guest’s visit.

San Diego, like many other cities, has regulations for transient (short-term) guests that were created many years ago to prevent commercial lodging operations from taking place in residential parts of the city. These regulations also place taxation requirements on transient guests, who are to be taxed based on the total price of their stay – again regulations meant for commercial operations such as hotels, motels, commercial bed & breakfasts, etc.

 … Fast forward to 2015. AirBNB has over 3,490 listings in San Diego alone. The majority of these listings are individuals sharing a portion of their home and go largely unnoticed to neighbors. Guests come and go without incident, and get to experience life in San Diego without being stuck in a hotel room. There are also some individuals who have made a business out of home sharing, and have multiple properties listed on home sharing websites.

98% of home sharing hosts never have an issue with their guests. That doesn’t mean the likelihood of that happening is gone 100%. Just like there’s a chance at having a neighbor move in next door who causes problems in the neighborhood – so is the possibility with home sharing. The hosts/listing that have come “onto the radar” usually are due to disruptions to neighbors in the form of loud/unruly guests, parking issues, or other complaints.

In any case, here’s what has happened to some of our member hosts:

• Unhappy neighbors (either due to problems with guests, or lack of support for home sharing) have complained to police, code enforcement, and other city departments, causing these departments to scrutinize the home sharing industry.
• Code enforcement has cited hosts/listings for code enforcement violations, “unlawful” living spaces, or cited structures for not being up to building code (even though the structure was purchased as-is with no code enforcement issues previously).
• The city treasurer has begun to track down home sharing hosts, and issue Transient Occupancy Tax and Tourism Marketing District tax bills to hosts for past years (with no proof of money charged/earned) and attached the maximum 25% late penalty. This has resulted in tax bills in the amount of $8000-$40,000+ for some hosts. …

…  In January of 2015, we first met to discuss our respective home sharing stories, issues with the city, and decided that time for change is long overdue.  Thus, we formed the Short Term Rental Alliance of San Diego, and hope to see positive change in how the city recognizes and governs the home sharing industry in America’s Finest City.

And here is some of what Save San Diego Neighborhoods says on their website:

We need your support  – Help us preserve our neighborhoods by stopping mini-hotels in single-family zones

Slip-sliding away, slip-sliding away …

Data obtained by Inside Airbnb on June 22, 2015 shows that the majority, 65% (2,283 out of 3,530), of Airbnb listings in San Diego are “Entire Homes or Apartments” being rented out in their entirety.

An estimated 999 homes are being rented out for more than 60 nights out of the year – in fact for an average 155 nights of the year at $196/night. These mini-hotels are changing the character of residential neighborhoods across San Diego, as long-term renters and families are being priced out of the housing market. … We are quickly losing our neighborhoods.

WHAT is the issue? 

Commercial businesses in the form of mini-hotels, sometimes called Short Term Vacation Rentals, are proliferating in neighborhoods that are zoned for non-commercial, single-family dwelling use only.

WHY should I care?

You may think that this is confined to the beach and coastal areas but this problem is spreading across the city. With STVR comes noise, overflowing trash cans, strangers coming and going from the neighborhood, drunken parties late at night during the week as well as weekends and numerous other nuisances.

WHO are we?

Save San Diego Neighborhoods is a non-profit, grassroots organization of San Diego homeowners who believe that STVRs are a threat to the fabric of our communities and that the city is not enforcing the Municipal Code regarding these STVRs in our neighborhoods. Some of us have been fighting this battle for almost a decade.

HOW do we propose to fix this problem?

With a huge push from citizens such as us, the city is finally drafting regulations to control STVR. We continue to work with the city. We also intend to follow a legal strategy that may include asking the courts to tell the city to enforce the Municipal Code as we seek to rid our communities of these destructive commercial entities. It may sound extreme, but we are moderate people who have exhausted all our other options.  …

Proposal for Regulation of Short-term Vacation Rentals (STVR) in San Diego

SaveSanDiegoNeighborhoods.org supports:

1. We are NOT against a homeowner living onsite and renting out a room on a short-term basis, provided the owner obtains necessary permits and pays appropriate taxes.
2. We ARE AGAINST entire homes being used as short-term vacation rentals with no owner living onsite.
3. We want San Diego’s ordinance enforced as written, with no changes (see Legal).
4. Where permitted, we support short-term vacation rental permits with adequate conditions and fees, and for effective and timely noise complaint response using Police Investigate Service Officers (PISO) funded by a cost-recovery fee included with permit fees.

Here is how the San Diego U-T described the new draft rules for short term rentals:

Under the proposed ordinance offered up by city planners, there would be a new category for short term vacation rentals of an entire dwelling unit that includes strict guidelines for addressing growing neighborhood concerns about noise, overcrowding and disorderly conduct. Additionally, the municipal code’s existing boarder and lodger regulations have been expanded to permit short term stays by families or a maximum of two adults in a home where the owner is present.

While current rules for renting out a room in one’s home for under 30 days can vary by residential zones and communities, the applicable regulations generally fall under the city’s bed-and-breakfast category, which in most instances requires a special permit that can take as long as a year to secure.

What remains unanswered, though, is the question of how frequently homes and rooms can be rented to visitors. City Council members have offered suggestions ranging from minimum 21-day stays when an entire home is being rented to no restrictions at all.

Regulating short-term vacation rentals in San Diego

Short term rental of an entire single family home

Current rules: There is no specific language in the municipal code defining “short term vacation rentals.” Rentals under 30 days for a whole dwelling unit are currently allowed, with no restrictions on duration of stay.

Proposed regulations: For the first time, there would be a new municipal code section specifically defining short term vacation rentals. Rental agreements that address the allowable number of occupants and city noise limit rules and remedies would be required. Owners would also have to provide a local contact person responsible for responding to noise and disorderly conduct issues. Rules on how many guests are permitted and how frequently homes could be rented for stays under 30 days are left to City Council to decide.

Short-term rental of an entire multi-family unit

Current rules: Short term stays are permitted, but may be limited to a minimum of 7 days.

Proposed regulations: Same as those for single-family homes; council would decide occupancy and frequency limits. In multi-family complexes, no more than 25 percent of the units could be rented out for short-term stays.

Shared lodging: renting a room within a home

Current rules: Home sharing for short-term stays is now generally governed by bed and breakfast regulations. Such rentals are allowed as long as the owner of a single-family home is present. A special use permit is needed that requires notification to neighbors and can take months to obtain. A separate “boarder and lodger” category allows short term stays of at least 7 days in multi-family dwellings, and no permit is required.

Proposed regulations: Existing board and lodging regulations would be expanded to allow home sharing, provided that the property owner is present. A maximum of two adult guests would be permitted under one rental agreement. In cases where an owner wants to rent to more than one set of guests at the same time, a special use permit would be required. City Council will need to decide how often rooms could be rented within a home. A minimum of one parking space per two boarders would be required.