Short-Term Vacation Rentals Are Heating Up in Ocean Beach

by on April 28, 2017 · 8 comments

in Ocean Beach

By Frank Gormlie

Nate Bazydlo – the vice-president of the OB Town Council – got up before the audience the other night at the monthly meeting of the Council and recounted a sad story. He had recently run into an old friend, a long-time resident of Ocean Beach, who had just been evicted out of her home of 20 years.

Seems some mystery man had approached her landlord and had offered him hundreds of dollars more a month than what Nate’s friend was paying. The landlord took the deal, kicked the friend out, and leased it to the mystery man.  And without moving in, the mystery man made the place into a short-term vacation rental.  He didn’t even have to buy it, he just leased it, and then turned around and now leases it out to high-paying vacationers.

There was a collective – and knowing – moan from the audience when Nate finished the story. It was a story of a type that many had heard before, as it seems everyone has a horror story about these rentals these days.

Short-term vacation rentals. The issue of these controversial vacation rentals is heating up once again in Ocean Beach.

The Town Council may hold a public forum on them at their May meeting.  The OB Planning Board has a working sub-committee on them. And community planners from throughout the beach area are networking and strategizing about how to combat them, including the OB planners.

Some of the other beach planning committees are ahead of Ocean Beach, I was told by Blake Herrschaft, the chair of the OB sub-committee on vacation rentals, but OB is catching up. His sub-committee is trying to collect data to quantify the effects of the rentals, such as the loss of housing stock in OB. He estimated that there are, at any time, about 400 vacation rentals in Ocean Beach. And there were, in effect, 720 displaced people in OB in 2016 due to short-term rentals. These numbers are significant.

The Ocean Beach Planning Board took the bull by the horns back in September of 2015 and sponsored a town hall meeting on short-term rentals, co-hosted by the Town Council. There was a general consensus of that there needs to be regulation, and Board members felt that STVRs are a threat to the community. Now home-shares are different- where the owner rents out a room, or when the owners goes on vacation and rent out their residence.

The issue centers on the mini-hotels set up throughout residential neighborhoods at the beach that rent out to vacationers who party, make lots of noise, leave trash, take up parking, and generally disturb the tranquility of the neighborhood. But noise, trash, traffic, parking are just the surface issues; the deeper ones are the loss of housing stock in a mainly-renting community like OB, the displacement of long-term residents – like Nate’s friend, and a more sweeping and threatening effect – literally, the loss of community – where on certain blocks, there are no more actual residents, only vacationers and time-sharers. And government services have been replaced by private security teams and trash collectors.

Naturally, there has been significant push-back against any opposition to STVRs by Airbnb and other commercial sites that promote vacation rentals. Now that they are paying some monies to the city, they advertise their “contributions” to the local economy with stunning reports of how much they have earned hosts and how much they have contributed in taxes.  Airbnb and other such businesses are beginning to finance the election campaigns of politicians who support them, further muddling up the waters.

Yet it has been determined that most of the people who lease out their units on places like Airbnb are not “mom and pops”, but rather realty and property management companies.

On the other side, groups such as Save San Diego Neighborhoods formed and have been able to focus the opposition and make everyone aware of Airbnb’s funding efforts.

In April of 2016, the San Diego Planning Commission grappled with an unsuccessful effort to craft an option to the chaotic mess of how there were being viewed by the City – an option where STVRs were allowed with a 20-minimum day stay.

Meanwhile, planning boards and town councils at the beach were being inundated with complaints from local residents about the noise and disturbances they experienced from short-term rentals in their neighborhoods.  The city council committee assigned to deal with the issue, floundered. Opposing armies faced off at committee hearings, and political leaders like Councilwoman Lorie Zafp of District 2 – which includes most of the beaches affected by STVRs – couldn’t find consensus and the city froze.

The OB Town Council sent an open letter to Mayor Kevin Faulconer and the City Council in August of 2016. In it they stated:

The City of San Diego has not yet adopted a new ordinance to resolve STVRs and resultant impacts to our communities. Until STVRs are formally addressed by the City Council and the Mayor with a new ordinance and/or revisions to San Diego’s municipal code, the OBTC is in full support of the position of Save San Diego Neighborhoods as stated:

Enforce the existing Municipal Code, which makes STVR unlawful in all San Diego residential zones, to rid our communities of absentee-owner commercial mini-hotels. Amend the Municipal Code to allow true “home-sharing” (room rentals with owners present) and home-swapping with some restrictions. Create and implement effective enforcement policies to support those positions.

Save San Diego Neighborhoods is requesting the City of San Diego to enforce its current municipal code as it relates to Visitor Accommodations which prohibits Short Term Vacation Rentals within residential neighborhoods. We call upon Mayor Faulconer to enforce the current Municipal Code until this matter is resolved legislatively by our City Council.

Then in November 2016, Barbara Bry was elected to the Council seat representing La Jolla. One of the central planks to her platform was her opposition to short-term rentals. From there, there was some momentum to develop a Council consensus in strictly enforcing them. Whether one will develop that favors huge restrictions is yet to be seen.

Plus, newly-elected City Attorney Mara Elliott in March of this year issued a legal opinion that determined that STVRs were illegal in all parts of the City. There was some momentary joy in the short-term opposition camp.

But later in the month, on March 24th the Smart Growth and Land Use council committee met and could not come to consensus of which of the three major proposals from staff to favor. Here’s the La Jolla Light report:

The staff report proposes two approaches to the problem with three options each — one for whole-home rentals, which committee members could not agree upon, and one for house-sharing, which obtained the required votes to pass as a recommendation to the full Council. The committee voted to allow home-sharing (renting out parts of one’s home while the owner is on the premises) of up to two bedrooms in all single- and multi-family zones without any limitations of use. …

Home-sharing, with three to five bedrooms for rent, would need compliance with the “limited use” regulations, which include the requirement of an annual permit for homeowners, the existence of an occupancy agreement and a designated-local contact available during the use of the property as a home-share.

The whole-house rental proposal consists of three options, the strictest one requiring a 21-day minimum stay for most residential zones, and the most permissive one allowing whole-house rentals in many multi-family and commercial zones with compliance of the “limited use” regulations.

City staff will likely formalize these options – and the one decision – and present them to the full City Council this Fall.

And this Fall Council meeting is a target date for people like Blake Herrschaft, chair of the OB Planning Board sub-committee on STRVs. He wants his committee and the full Board to come up with draft language they could present as another option on short-term rentals. Herrschaft and his diligent committee members want to collect their data by this summer so they could use it as a basis for their option.

This showdown on short term vacation rentals will affect all of us, and especially the large body of permanent renters in Ocean Beach who find less and less units available as more and more units are turned into vacation rentals. Renters in OB are the soul of the village. So, it turns out it’s a battle for the soul of the community.

{ 8 comments… read them below or add one }

David Klaft April 29, 2017 at 11:55 am

Can someone please explain to me what a “Voluntary Tax Agreement” is?

I’ve spoken with at least a dozen Tax Attorneys from Harvard to Yale, who have never heard of such a thing…

But what do they know is, somehow Brian Chesky, CEO of Airbnb must have learned of this secret “Tax Loohole” while attending Art School in Pasadena, a loophole that Harvard and Yale never taught to their Tax Attorneys…

Furthermore, 300 cities across the United States have entered into a “Voluntary Tax Agreement” with Airbnb, yet No one can find any Tax Codes/Laws that allow an American Corporation to process $Millions of Dollars in room rental sales on their Merchant Credit Card Account, without being required to Collect & Remit any Room Taxes (TOT) to the local Tax Authority where the revenue was generated.

All I can say is, “It sure is nice, and “Christian like” of Airbnb to “Volunteer” some of their hard-earned Revenue to some of the cities they’ve collected Tens-Of-Millions of Dollars from over the PAST 10-YEARS!!!” Such Humanitarians!!!

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Jane Donley April 29, 2017 at 2:35 pm

I continue to be appalled by the displacement of residents, the crisis of homelessness, and the loss of community brought about by short-term rentals in beach communities. It’s obvious there is a lack of will among money-grubbing politicians to regulate or eliminate these “rentals.” If they must exist, I prefer limiting them to no more than 3% of housing units per census tract throughout San Diego. This would include those who would be “grandfathered” in by reason of oldest payments of TOT taxes to the City.

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Mercy Baron OB Mercy April 30, 2017 at 3:38 pm

Everyone who truly cares about the proliferation of STVR in our beach community, needs to show up to the next OB Planning Board meeting this Wed, May 3 and voice your opinion about this issue. We will be discussing the STVR on Saratoga and Cable that has displaced a family and been turned into one of these places.

Now, the owner wants to build a garage in the back and add another 900 sq ft unit on TOP of the garage and rent to short term vacationers in addition to the front house. The front house will hold up to 10 PEOPLE says their ad on the VRBO (Vacation Rentals By Owners) web site and so will the back place!!! This MUST be stopped!!

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GJW April 30, 2017 at 7:51 pm

Our neighborhood experiened vacation rental units used as event venues for wedding receptions and other parties. These rentals resulted in loud music, parking issues, and garbage dumped on neighbot’s lawns. Vacation rentals are businesses and as such not appropriate in a residential neighborhood. I wonder how Kevin Faulkner and the city council would feel about having vacation rentals in their neighborhood?

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John O. May 1, 2017 at 4:42 pm

I’d like to propose that when owner occupancy falls below a designated (studied) percentage that limits are placed on investor owned real estate and vacation rental ownership alike.
Such a strategy might help strengthen the communities and help mitigate the problems.

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nostalgic May 1, 2017 at 5:37 pm

In Asheville, North Carolina, the law is: “If you don’t stay there, they don’t stay there.” Everyone seems to understand this. There is a strong B & B tradition there, with resident business owners.

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triggerfinger May 2, 2017 at 5:31 pm

That’s quite selfish of you….. how about some consideration for the poor investors stuck with 4 beach properties – they need to pay their mortgages too.

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doug blackwood May 2, 2017 at 7:49 pm

“Greed is good”! Gordon G.
Most people don’t take a stand until it affects them. Now we see the result of displacement of working, retired & others who don’t make the big money. 2% or less available housing.
Are there any politico’s who have the guts to stop this obscene travesty?
Get up stand up!

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