By Frank Gormlie
The San Diego Union-Tribune had veteran reporter Lori Weisberg write an extended piece on short term vacation rentals in Sunday’s “SD In Depth” entitled “Opportunity or Nuisance” (June 12, 2016). Weisberg looked at the impact of short term rentals on San Diego’s housing market and wrote – based on her research – who exactly was profiting “from the rise of the home sharing.”
Two of the immediate take-aways from her article are that more and more commercial rental agencies are dominating the short term market and that the available housing stock in San Diego is being negatively affected – even if only “gradually”.
Yet, despite all the articles that Weisberg has written on this issue and the debate that has been raging within San Diego for nearly two years – while the City Council has still not made a decision on laws regulating short term rentals – , she still has not focused on one of the key long-term effects of the short term vacation rental industry: the loss of community.
Poster boy for “mega-operators” of the short-term rental market.
Weisberg’s piece showcases some of the individuals who are raking it in by owning or managing residential units that have been turned into short-term rentals.
One such agent is Ryan Scott, who – as Weisberg explained – owns or sublets a dozen STVR dwellings and manages another 10 – many in the beach area – including Ocean Beach. “Scott confesses that he has become addicted to the intoxicating short-term rental revenues he says his properties have been generating over the last few years,” she wrote.
“The reality is,” he told Weisberg, “you’re leaving money on the table if you’re renting to a long-term tenant.”
As Weisberg has been covering this issue, she recounted the complaints made by neighbors of dwellings or apartments rented out to short-termers, and where “tensions have erupted in urban neighborhoods, most notably in the beach areas”; all the noisy and raucous parties interrupting neighborhood lifestyles and sleep, the invasion of strangers onto quiet streets, the trash, the taking of limited parking, and the eating into an already tight rental market.
“In San Diego County,” Weisberg reports, “listings on Airbnb have grown at least 60 percent annually over the last several years …” based on data supplied by a company that tracks listings on home-sharing sites. “In just the last year, some 3,900 Airbnb hosts in the City of San Diego welcomed 185,000 guests ….”
One criticism of the STVR market in San Diego – which Airbnb executives deny – is that it “is increasingly being dominated by commercial landlords who are upending San Diego’s rental market and altering the character of residential communities.”
The Ryan Scott that Weisberg interviewed is a poster-boy for the “mega-operators” of the STVR scene. Mega-operators are those who rent out 3 or more units, and while they represent only 7% of the hosts – which was determined by a 12 city study – they account for 25% of the revenue generated by the short term rentals. The report, cited by Weisberg, concluded that Airbnb is now a platform for commercial operators – operators who are affecting neighborhoods and not abiding by the safety and security standards of the hotels.
Ronan Gray, a PB resident and founder of Save SD Neighborhoods.
Weisberg did interview at least one member of the group, Save San Diego Neighborhoods, Ronan Gray, who has been fighting the short-termers for years. Gray lives in PB and ever since his neighbor sold out to an out-of-state buyer, he’s been fighting the 2 a.m. hot tub parties, the raunchy language of vacationers, the threats and every other negative aspect of living next door to a hotel.
The article, over-all, however works to cast the spotlight on those profiting off the home-sharing.
People like Paul and Cecilia Abraham recounted how they liked the money coming in from one short term rental, they booted another long-term tenant so they could rent out that place as well for vacationers.
Or like Tim Riley, who after renting his 4-bedroom old Craftsman to long-term tenants for a decade, raised the rents – which forced the current tenants out, and then turned the building into a vacation rental, charging $240 a night. He likes the money so much, Riley is “sticking with his short-term experiment.”
This trend, as Weisberg, gently suggests, represents the types of changes that have “fueled the argument that long term rental stock is gradually being diminished as the home sharing economy matures.”
The Sunday article did disclose that by far most of the vacation rentals are homes (3,062) or apartments (1,959), not lofts (83) or B&Bs (86).
Just how much San Diego’s long-term rental and housing stock is negatively affected by Airbnb and the other platforms is still too confusing to figure out, Weisberg says. A supplemental article reports that a labor-backed group up in Los Angeles estimated that in March of 2015, more than 7,000 houses and apartments had been taken off the market in metro LA for use as short term rentals.
Meanwhile, here in San Diego, while campaigning for District 1 Council seat, candidate Barbara Bry claimed that 6,000 units have been lost from San Diego’s housing stock due to STVRs. She was taken to task as incorrect by the Voice of San Diego in one of their “fact-checking” episodes. Bry’s numbers have since been defended by Save San Diego Neighborhoods, in an article by Tom Coat in VOSD, a member of the group. The group strongly disagreed with VOSD’s determination that the candidate’s figures were off and has asked VOSD staff for a retraction.
Here is more of what Coat wrote:
So here is the overarching point: the number of entire-home short-term rental listings that Save San Diego Neighborhoods estimated to be operating in the city of San Diego – over 6,000 – is actually very conservative. …
In addition, the 6,000 number does not include rooms once used for long-term rentals that have now been converted to short-term vacation rental rooms. … Data shows over 3,000 short-term rental rooms – just for Airbnb – in San Diego. Clearly, a loss of long-term room rentals has a negative impact on housing stock. By reducing long-term rental supply, they add to San Diego’s dramatically rising long-term rental rates.
Entire-home short-term vacation rentals have become a very real and serious problem in San Diego and elsewhere. Short-term vacation rentals are affecting affordable housing here and in other cities. … It is indisputable that short-term vacation rentals adversely affect affordable housing. …
SSDN urges all San Diego officials who care about affordable housing to read the staff reports of those California communities that have reiterated the ban on short-term vacation rentals in residential zones. All of these cities recognized and expressed their beliefs and concerns that short-term vacation rentals have a significant impact on affordable housing….
Okay, back to Weisberg’s article – it was illuminating and did confirm a couple of things: that commercial rental companies are grabbing more and more of the short term market, and that San Diego’s housing stock is being negatively affected.
Still, we find the illumination by Weisberg limited. She still has not addressed the much larger issue of the loss of community, although it was hinted at with the realization that the short term market is affecting neighborhood character.
We go further. In a post from last September, we stated :
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. …
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.
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.
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.
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.
If there’s no one left to care about the community or that section of it, then there is no community.
Our perspective, still today. And the threat remains.
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.
{ 7 comments… read them below or add one }
This article seems to be leaving a lot of information out. First, I have stayed in Airbnb rentals all over the world, from Tuscany to Tahiti, and many times in the US. Airbnb has your credit card info. If you trash a property, violate the rules regarding occupancy, noise, or parties, you will loose your security deposit. In addition, hosts can post a review about you on the website. If you engage in these undesirable behaviors, it is unlikely you will rent in the future. Also, we own a vacation home ourselves. Do not let those nightly rates fool you. Twenty percent right off the top goes to the management company to cover the cost of advertising maintenance and cleaning. If the rental comes thru Airbnb, add another 5%. Our vacation home is in Texas and we are required by law to pay fifteen percent hotel tax. So the owner is only left with about 65 % to pay the mortgage, property tax, insurance and utilities. At best you can hope to recover about a third of your cost of home ownership. It is not the get rich scheme Mr . Scott would have you believe.
I agree vacation rentals pose a threat of loss of community and neighborhood. My husband and I bought a few years back and had to do the owner-occupy landlord thing. We are so grateful for our wonderful tenants and try to keep the rent reasonable and provide good service. The opportunity exists to make it a mini hotel and make extra $$, but we will not. I love OB too much!
Thank you, Frank. You are correct. The key long-term effect of the short term vacation rental industry is loss of community. It’s as if we can’t see the forest for the trees.
Below is one of the comments I posted to Tom Coat’s article in the VOSD. It’s in response to a comment from Omar Passons claiming the connection between the proliferation of STVR and affordable housing is “hard to defend” and “an extreme view”. As you can see, neither of these statements is true. The connection has been made by cities, not just in California, but across the country and around the world. And, regarding the long-term effect of loss of community, note the preamble to Santa Monica’s ordinance which reiterates the prohibition of STVR in residential zones.
My comment begins here:
I suggest you read the City of Santa Barbara, June 23, 2015 Council Agenda Report. The stated purpose of this staff report was to provide basic information to the Council’s discussion of short-term vacation rentals. It states, “Further, the commercialization of rental housing contributes to an increase in rents by reducing the amount of housing stock available to longer term tenants. the City’s Housing Element has a long-standing policy to protect and preserve the City’s rental housing stock.”
And the City of Santa Monica’s April 28, 2015 City Council Report and it’s attached ordinance reiterating that STVR are not permitted in residential zones which states,
“WHEREAS, Santa Monica’s primary housing goals include preserving its housing stock and preserving the quality and character of its existing single and multi-family residential neighborhoods. Santa Monica’s prosperity has always been fueled by the area’s many attractive features including its cohesive and active residential neighborhoods and the diverse population which resides there. In order to continue to flourish, the City must preserve its available housing stock and the character and charm which result, in part, from cultural, ethnic, and economic diversity of its resident population; and
WHEREAS, the City must also preserve its unique sense of community which derives, in large part, from residents’ active participation in civic affairs, including local government, cultural events, and educational endeavors:”
Or the City of Los Angeles, Department of City Planning, Home Sharing Ordinance Quick Guide dated April 15,2016 which states, “The City is experiencing a severe housing crisis, exacerbated in 2016 by an extremely low vacancy rate and the most unaffordable housing stock in the country. the loss of housing units to short-term rentals has further tightened housing supply, particularly in certain neighborhoods, which leads to increased housing costs. In addition, vacant properties being rented out by those not living on site are more likely to see nuisances and be unreceptive to community concerns. the concentration of short term rentals in neighborhoods, particularly when they are not a primary residence , amplifies concerns about the loss of neighborhood character and cohesion.”
I would also suggest you read the article published in the February, 2016 Harvard Law and Policy Review, titled “How Airbnb Short Term Rentals Exacerbate Los Angeles’s Affordable Housing Crisis: Analysis and Policy Recommendations”.
Finally, I’d suggest you look at cities all over the globe that are struggling with affordable housing; New York, Berlin, Dublin, and others. All of these cities are severely restricting or outright prohibiting STVR in residential zones – primarily because STVR have a significant adverse impact on housing stock.
And the law and it’s purpose are perfectly clear. To maintain and preserve community and neighborhood character, short-term vacation rentals – like hotels and motels and any other visitor accommodations – are not permitted in residential zones. STVR are commercial businesses.
First, section 131.0401 of the San Diego Municipal Code (SDMC) titled, Purpose of Residential Zones states, “The residential zones are intended to accommodate a variety of housing types and to encourage the provision of housing for all citizens of San Diego.”
There is no dispute that STVR are for visitors and tourists. Short term vacation renters are not citizens of San Diego.
Second, SDMC section 131.0112(a)(6)(K) defines Visitor Accommodations as “Uses that provide lodging, or a combination of lodging, food, and entertainment, primarily to visitors and tourists.” Visitor Accommodations are specifically not permitted in any of San Diego’s residential zones.
To confirm this, locate the Use Regulations Table for Residential Zones, SDMC Section 131.0422. Now find the “Visitor Accommodations” category in the Use Regulations Table. It’s on page 13 of the May, 2016 version of the SDMC.
Note the hyphen in each box to the right of the use, “Visitor Accommodations”. These hyphens indicate this use, “Visitor Accommodations”, is not permitted in the zone at the top of the page. There is a hyphen in each and every column which means “Visitor Accommodation”s are not permitted in any residential zone.
So, the use of residential housing to lodge people who are not citizens of San Diego is directly counter to the stated purpose of residential zones in the SDMC.
Additionally, there is no dispute that STVR fall within the definition of Visitor Accommodations. STVRs are a commercial use which, like hotels, motels and B&Bs, provide lodging to visitors and tourists.
And if by chance one were to conclude, for any reason, that short term vacation rentals don’t fall within this definition, for example if the definition is too vague, then this use is NOT permitted in any zone in San Diego.
Here’s the reason: San Diego uses a “categorical use” or “permissive” zoning scheme. Which means, if a use is NOT listed in the Use Regulations Table it is NOT permitted.
San Diego’s permissive zoning scheme is codified in SDMC section 131.0420(b) which states: “Within the residential zones, no structure or improvement, or portion thereof,
shall be constructed, established, or altered, nor shall any premises be used or
maintained except for one or more of the purposes or activities listed in Table
131-04B. It is unlawful to establish, maintain, or use any premises for any
purpose or activity not listed in this section or Section 131.0422.”
Short term vacation rentals are – like marijuana dispensaries before the new ordinance allowing a limited number in only certain zones – not an enumerated use in the SDMC and are therefore NOT permitted in any zone.
So you see, the law is perfectly clear. And the City of San Diego’s failure to police and enforce the law is a fundamental failure of city government and elected officials.
No one can make a rational legal argument – that STVR are a residential use. Operating STVR in residential zones is simply evading the law – many laws. In addition to not being defined in the SDMC and therefore not an enumerated use, the fact that there are no health and safety regulations of these STVR mini-motels – parking, refuse disposal, parking, etc. – is simply additional evidence that this use is not listed and not permitted.
For San Diego, like so many other California cities, the presence and proliferation of short term vacation rentals in residential zones is an enforcement and policing issue, not a question of whether a law the exists or needs to be clarified.
Sigh. I know there are many sides to this controversy, but each time I read the negative comments about visitors, I feel so sad. OB has been my ‘heart home’ for a long time. But for me, it is also a home away from home. I have always treasured the feeling of openness and acceptance I experience in OB. Coming in late Fall or during the Winter, I have enjoyed not feeling like a ‘tourist’ but a part of OB for my time there. Now I wonder if during my next visit, I will get responses to being a short-term renter that will make me feel like an interloper or outsider. I truly hope that will not be so. I have no answer to the balanc-ing needed in this issue but again, just feel sad about the whole thing.
Equally are the negative comments you see (especially in the UT article) about how bad long-term renters are and the overwhelming greed perpetuated by the AirBnb crowd. “It’s my house, I can do as I please”, “Call the cops if it’s too noisy” and my personal favorite “Tourists that are using AirBnb are contributing to the bars and restaurants in the community”.
1. Just because you own property in an area doesn’t give you carte blanche to do as you please. There’s a lil thing called zoning. And if you’re so interested in running a hotel, go thru the necessary licensing and inspection process. Oh wait, you’re just in it for the money
2. Calling the cops on noisy tourists is a waste of time. We all know the police of this city could care less. The cops don’t even come out when some transient is hunkered down on private property.
3. What do you think the actual tax-paying residents of an area do, especially in OB. We patronize the same establishments and not just for a week. We do it 52 weeks out of the year. We even contribute to our community by watching over it and volunteering to keep it the way we love.
Our homeless brothers and sisters can’t catch a break. They even get nicked on a comment concerning STRs!?!