Editor’s Note: The following is an interview with an fictitious Airbnb host.
by Chuck Thassing
I’m sitting down with an Airbnb host to discuss the dollars and sense of short term vacation rentals (STVRs). These have been a hotly debated issue in San Diego, and our 9 city councilmembers are gearing up for a vote on December 12th on how to regulate it. The stories run the gamut from displaced residents and frat parties in residential neighborhoods, to desperately needed supplemental income and other benefits of the “sharing economy”.
Q: So tell us about your rental unit.
A: Last year I converted a little 1 bedroom beach cottage in Ocean Beach into a short term rental and listed it on Airbnb. Before that I had a tenant in there paying $1100 a month. Anyways I repainted it, cleaned up the landscaping, put some Ikea decorations and furniture, you know make it look beachy. The tourists love that stuff.
Q: How much does it rent for now?
It depends on the season, but on average, tourists from all over are paying $4,000 a month now. It’s nuts. When I first listed it, it started booking within 15 minutes.
Q: That’s $48,000 a year, quite an increase. With numbers like that why would anyone bother renting to long term tenants?
A: Certainly they are leaving money on the table, there’s no money in renting long term. But not all of that goes in my pocket. Airbnb and the city took in a little over $10,000 of that last year. Everybody wants a piece.
Q: What’s to stop you from just buying and converting more properties?
A: Well I have a day job, this is just a side thing. It’s easy work though. Without a doubt I could do this full time and make a killing. The income covers a new mortgage right off the bat. I’d just buy more properties until it reaches saturation, if there is such a thing. Is Mission Beach saturated? Airbnb even asked me to host other people’s properties for them. The state of limbo at the city is probably the only thing really keeping more investors on the sidelines.
Q: Councilmember Chris Ward has proposed a compromise, limiting it to 3 STVRs per owner, wouldn’t that stop you?
A: Three for me, and 3 for my wife? Three for each of my parents and brother who live out of town? And I heard that Scott Sherman just tweaked that you don’t even have to be the owner. I could build a little empire. I just might if the neighborhood gets overrun and I have to move. And of course I can make a cut hosting other people’s properties that would rather just sit back and collect a check. There’s a few companies that do that already and offer turnkey service to absentee landlords, the owners next to me live in Riverside and use one. It doesn’t sound like much of a compromise to me.
Q: Some would say the only thing it compromises is our neighborhood character. What do you say to that?
A: Honestly I can’t disagree. I can’t imagine anyone would want to live next door to one unless they were profiting from it.
Q: How many bookings do you get? Airbnb has said it isn’t necessarily profitable over long term renting.
A: It’s booked nearly every single night. The only time it’s empty is when there’s a 1 night gap between bookings, because I have a 2 night minimum. Most guests are there 3 to 7 days at a time. Profitability I guess depends on where you are. If you can’t book out a little beach cottage then you’re doing something wrong. The smaller older units are the most profitable with very little investment. Now a large beach mansion I could see having more vacancies, you’re limited to the bigger groups and party events.
Q: Who are your typical vacation renters? Do you show these people around? Share the wealth with the local businesses? Play ambassador to your city?
A: Most are from Arizona, but they come from all over, and overseas. Usually couples or small families. I don’t really keep track. I rarely ever talk to them beyond the initial booking process. I just send them the door combo and house rules, then call the cleaning lady after. I mean I’m not a grouch, I leave the interaction part open-ended but it’s clear that they just want to get in, do their vacation itinerary and leave. My wife and I use Airbnb when we travel and it’s the same thing. We’ve run into the host before but yeah there’s no kumbaya going on.
Q: You don’t seem like a fan…
A: Well I guess I see both sides of it. I have them on 3 sides of my place now and another 2 doors up. The guy behind me is running one out of his garage, the one next door has one in his granny flat. I don’t even know if that’s legal. I mean it’s not a nuisance really, most of the guests are quiet. They’re terrible at parking. But mostly it’s just unsettling to play Mr. Rogers with a different neighbor every few days. I’ve had them come knocking on my door late at night because they can’t find the rental next door. The shear quantity of them is getting out of hand in my neighborhood and I don’t know where it ends. It will be interesting to see what happens with this vote.
Q: Chris Ward has said city depends on these tourist tax (TOT) dollars from Airbnb to fund police and other services….
A: And my cousin depends on selling drugs to fund his drug habit. The ends don’t always justify the means. I don’t know what the right answer is.
Q: What is your opinion on Councilmember Barbara Bry’s proposal? It would restrict vacation rentals to primary residences and 90 days per year when the primary resident isn’t home.
A: Well I’d have to shut mine down and find a long term renter. It wouldn’t be the end of the world for me but I think it would be a shock to hosts that are invested into these and have been operating legally. They’d have to at least give them a transition period for them to change their financial plans. If they are out-of-town owners I could care less. They could always just sell it to someone who wants to actually live in it.
Q: Actually Mara Elliott, the city attorney says short term vacation rentals are illegal, but the law isn’t enforced. Anything else?
A: The city needs to collectively grow a pair and do the right thing. They work for us.
We shall see what happens December 12th at the Golden Hall downtown. Thank you for your time.
Anyone interested in this matter should contact the city councilmembers below to share their experience and express their support or opposition. Ask to speak to their policy staff. They can’t represent us properly without our input.
Bry and Zapf have proposed restricting whole-home STVRs to primary residences for less than 90 days per year.
Ward, Kersey, Sherman, and Alvarez have proposed allowing them full-time but with a limitation of 3 STVRs per person. Cate has also shown support for whole-home STVRs. (All councilmembers have shown support for home sharing, where the host rents out rooms in their home.)
D1 – Barbara Bry (619) 236-6611 barbarabry@sandiego.gov
D2 – Lorie Zapf (619) 236-6622 loriezapf@sandiego.gov
D3 – Chris Ward (619) 236-6633 christopherward@sandiego.gov
D4 – Myrtle Cole (619) 236-6644 myrtlecole@sandiego.gov
D5 – Mark Kersey (619) 236-6655 markkersey@sandiego.gov
D6 – Chris Cate (619) 236-6616 ChrisCate@sandiego.gov
D7 – Scott Sherman (619) 236-6677 scottsherman@sandiego.gov
D8 – David Alvarez (619) 236-6688 davidalvarez@sandiego.gov
D9 – Georgette Gómez (619) 236-6699 georgettegomez@sandiego.gov
{ 21 comments… read them below or add one }
Mr. Editor, there is nothing fictitious about this article. Sorry if that wasn’t made clear. Please correct this mistake asap, or contact me if necessary.
Interesting interview. OB is one of the last middle class neighborhoods intact in Southern Calif. – short term rentals = short term thinking. We could use some S.R.O.’s on Newport Ave. for the lower middle class.
My wife and I just got back from a trip and stayed at an AIRBNB. It was a tiny two bedroom apartment. The host was not the owner of the building but rather the actual occupant of the apartment, and she was there with us when we stayed. Honestly it was a very positive experience and was much cheaper than staying in a hotel. I’d be willing to bet that many of the very active protesters have stayed in one themselves at some point.
AIRBNB is a double edged sword but I think there can a reasonable compromise rather than an outright ban. What if the host is an actual resident of the space?
I feel that if the host is a resident and sharing the space that is totally acceptable. Or if the host lives in the residence and rents it out for short periods while they are away, that’s cool, too.
Agree.
There is almost no opposition to the homeowner who wants to rent their primary residence out while on vacation.
What’s prohibited by zoning is using a residential property for commercial purposes, including transient lodging. The difference between tourist accommodations and semi-permanent tenants is easily seen in the difference in advertising. Long-term rentals are only advertised when vacancies occur. Vacation rentals usually have continuous international advertising, online booking calendars, and automated payments, all geared towards back-to-back guests.
That’s called a homeshare and isn’t the issue, nobody is opposed to it.
Home shares generally don’t displace residents or disturb neighbors.
This was an interesting piece, and certainly provided a balanced view from both sides; that is, both user and provider. But what it leaves out (and, not intentionally, disregards) is an important segment of society that lives in every community. Those who don’t have the income to travel, to take vacations and use Airbnb elsewhere, or to upgrade their living spaces with Ikea and then rent them out, long or short term. All communities have this echelon, and I’m not talking about the homeless.
And before someone whines that “its not their problem”, or that they “worked hard to earn that vacation” or other justifications, that isn’t the point… no one’s asking for a hand-out here. What is being asked is a recognition and reflection that the very definition of a real community is a diverse stratification of socioeconomics, otherwise its just an “enclave” or one sort or another, whether its a wealthy one or a poor one. What is being lost in this formula is that faction of the community.
So I guess what I would ask, gently, is “How does this contribute to the community in which you live? To the greater good? To the community that provided you with the living space that is now ‘enriched and enhanced” to the benefit of one, but not really to the benefit of the community? By abrogating the ‘labor’ to a non-owner host, with the idea that they, then, also get a piece of the action? By beautifying the block so the unit can be habited by strangers with no vested interest? I’m not poking a specific finger at either user or provider, just trying to ask the larger question that, ultimately, will determine whether either entity will want to visit or live in the community. Because once its not a community anymore, one might as well be anywhere.
We are in the midst of a housing crisis, not a tourist accommodation crisis. Yet, we still allow tourism dollars to pollute our family neighborhoods.
Airbnb and supporters like using that buzzword: sharing economy
but really there’s no sharing, no community. It’s just a business.
This is the most educated and comprehensive argument that I have heard. Kudos retired botanist, kudos. You asked exactly the right questions. You need to ask them at a city council meeting.
Funny…I always found comfortable places to stay before the AirBnB craze began. The rhetoric is all the same from the profiteers involved. You all talk about regulations and rules and enforcement. They don’t work. You could care less about the neighborhoods you’re infecting with your businesses.
Speaking of property rights, what about mine? What about my rights not to live next to a hotel? Have you heard of zoning laws? They exist for this purpose.
Beat it spammer.
I like how the author cherry picks one profitable story and doesn’t look for one from an Airbnb’er that wasn’t as profitable, because many are out there. This guy is a rarity and not the norm for airbnb’s in general or any rental in general. He must be located at a great location because some of the unit’s I’ve seen only make $800-$2,200 a month, which doesn’t cut the rent/mortgage payment sometimes.
Also no mention that airbnb’s are only about 10,000 units of the total 1.3 million housing units in SD as well as SD has issued record low new housing permits since 2010, vastly being the greatest contributor to the housing shortage…. the numbers put the issue into context and were omitted.
“…some of the unit’s I’ve seen only make $800-$2,200 a month, which doesn’t cut the rent/mortgage payment sometimes.”
Does society have an obligation to make sure that everyone’s real estate investments are profitable?
“Also no mention that airbnb’s are only about 10,000 units of the total 1.3 million housing units in SD as well as SD has issued record low new housing permits since 2010, vastly being the greatest contributor to the housing shortage…. the numbers put the issue into context and were omitted.”
This is factually incorrect and misleading. The City of San Diego has an estimated 501,757 housing units. (source SANDAG: http://datasurfer.sandag.org) 1/2 of what you say.
Yes Airbnb is a tiny fraction of the total housing units but the key is what fraction they are of housing that is available for people to rent. The vacancy rate is 2.73% according to Phil Molnar (UT http://www.sandiegouniontribune.com/business/real-estate/sd-fi-rent-all-time-high-20171005-story.html) so there are 13,698 vacant units.
Phillip Molnar (Union Tribune) reported on June 5, 2017 that there were roughly 3100 units currently being built in San Diego in 2017. The report is here: http://www.sandiegouniontribune.com/business/real-estate/sd-fi-san-diego-construction-report-20170605-story.html
AirBNB alone had 5900 active listings in October 2017 (source AirDNA), and the number of Airbnb whole house units is roughly doubling every year, growing from 1462 housing units in October 2014 to its current level of 5900 in October 2017. 2049 of these are full time (source Airdna). These numbers do not include other rental platforms which list whole property rentals.
So in a year (2017) in which only 3100 new housing units are being constructed, there were 2049 residential properties lost to FULL TIME whole house short-term Airbnb rentals. In other words, 66% of new housing units built in San Diego did not help the housing crisis in San Diego because an equal number were taken out of the housing market by FULL TIME short-term Airbnb rentals. Again, this underestimates the impact because Airbnb is only one of a multitude of short term rental platforms.
If Airbnb continues to grow in 2018 at the same rate as it has over the last 5 years and there is no reason to think that it won’t, early in 2018 the number of full time whole house short-term Airbnb rentals will surpass the average annual number of new housing units constructed in San Diego. The following year, the number of NEW Airbnb listings will exceed the number of new houses built. Again, this underestimates the impact because Airbnb is only one of the short-term rental platforms.
If they are inland then that would make sense. Tourists want to stay at the beach.
If you have a less profitable unit that you’d like to share then I’d be interested in getting your side of the story.
Housing CRISIS NOW in San Diego!
Even if all Vacation Rentals were eliminated tomorrow; there would still be a housing shortage: there is a Housing Crisis.
Residents are the people who make neighborhood livable!
Residents make the City run; which makes SD a great place to live.
Also residents vote.
Stop this VR plague!
Do any elected officials live next to a VacationRental?
The housing crisis exists because the housing market is controlled by investors and financiers. Add vacation rentals to the mix and we have a housing crisis on steroids.
Coastal California is one of, if not the, most desirable places to live and vacation in the USA. Gentrification, vacation rentals, loss of character, etc. and all of the changes that come with it are all inevitable. Sad, but true.
You can try to fight it, and it is a commendable effort… though you’d probable be better off spending your time making money to buy a home in OB and use it the way you see fit.
Sadly, I’m in the same boat as many others. Born and raised here, but no place to go.
John, if your dismal fatalistic prediction were true there wouldn’t be any nice places left, anywhere in the world.
Coastal California is worth saving, and it’s not too late.
So the government restricts the supply and development of housing, increase the cost of housing with high fee and property taxes, and increasing the demand for housing with open borders, and we can’t figure out why their is a housing crisis in California????
This is a government created crisis.