Observations of the City Council Hearing on Short Term Rentals

OBceans who traveled on the chartered bus congregate prior to the council hearing with Lorie Zapf.

By noon, the anointed hour of the City Council hearing on short term vacation rentals, the Council Chambers was packed with only a few seats open here and there. The Green Shirts – those who supported Airbnb – had arrived early and had captured many of the first rows of the cavernous chamber. A second room had to be opened a few steps away on the 12 floor of City Hall for the spill-over.

Because the Blue Shirts – those from Ocean Beach – arrived close to noon, we were left with scattered small sections with which to stake out. The Red Shirts were also scattered about; the Red Shirts were divided into 2 crowds: those who were members and supporters of Save San Diego Neighborhoods – the one group that has persisted for years in opposing short term rentals, and the other group who were members of the union, Unite Here (more on them later).

Marcus Turner at the podium.

Councilwoman Mrtyle Cole gaveled the room to order; she’s the Council President and represents District 4. It would be up to Cole to maintain order and more than once did she raise her voice to firmly let a speaker know they were over their time limits (most got 1 minute).

To start off, Mayor Kevin Faulconer introduced his proposed ordinance – but he trashed his own idea of a Mission Beach carve-out – and took the issue off the table by amending his own plan. Apparently his office had received beaucoup complaints from the Mission Beach crowd; it was such a bad idea not even he could defend it. He did mention that Mission Beach has14% of all the city’s short term rentals, and now he wanted Mission Beach short term vacation operators to have the same restrictions as the rest of the city and coast.

Also, we should note that a number of speakers called Faulconer out for trying to change the language of the discussion; up until the time he brought his “compromise” plan out of the shadows into daylight, everyone called them STVRs, short-term vacation rentals; but when Faulconer rolled out his plan, he called them STRO, “short term residential occupancy”. This was a bald attempt at labeling something that was not residential, residential. The critics decried this language, claiming he was trying to sugar coat something negative.

Once Faulconer was finished – to very light applause – , Elysee Lowe took over the presentation of the Mayor’s plan; she’s the new director of the city’s Development Services Department – not a popular job these days in San Diego – and has already weathered numerous confrontations at community meetings in recent weeks and months. Several red-shirt speakers claimed she had left many questions unanswered during her parade through the neighborhoods.

STVR expert Kevin Hastings.

A couple other presenters assisted Lowe as she marched through the introduction. [I’m not going into detail about Faulconer’s plan, as it was defeated.] Suffice to say, it was horrible and allowed any investor to step in and grab up condos and homes turning them into STVRs; they needn’t have been even San Diego residents.

One of those assisting Lowe was from Host Compliance Data; Mr Binzer recounted how his firm does its research on STVRs; since 2016 his firm has been scanning 50 hosts platforms every week. With some graphs, he showed there had been “significant growth in San Diego” of the vacation rentals. They’re in every neighborhood, he said, and there’s 14,592 listings in San Diego – but there are duplicates. Once these are removed, he said, there’s 11,350 STVRs in the city.

Forty-five per cent are in only 4 areas: Mission Beach, PB, La Jolla and downtown. The top 10 community planning areas account for 75%. And these are:

Mission Beach (2305), Pacific Beach (1832), downtown San Diego (1588), La Jolla (1448), Uptown (1070), North Park (738), Ocean Beach (683), Point Loma (584), Clairemont (557), and Golden Hill (451).

80 per cent of short term rentals include the entire home where the host is not present and no one is on site. Two-thirds of them are studios and 1 and 2-bedrooms. 60%, he continued, are rented “very infrequently”, leaving about  2,000 that are rented for more than 3 months of the year.

Keith Fink speaking to the council.

A “host” Lowe explained, under Faulconer’s plan, is any natural person or “authorized” person; it’s not necessary for them to be the owner.

Once Lowe was finished, Council President Cole opened up for public comment, giving each side 30 minutes at a time – and this was the process for the next 4 or so hours.

The “anti-STVR” crowd was first. One gentleman from Bird Rock said the Wall Street Journal reports the STVR industry is growing by 10% a year, and he described how his neighborhood has been “decimated” by the rentals. He predicted there would be no enforcement and no monitoring by the city of the STVRs.

Another speaker stated STVRs bring in only $20 million to the city – as they’re not that important to the overall budget – and in fact, the speaker said parking tickets bring in more money.

The Airbnb contingent

Dr. Jen Campbell spoke against Faulcouner’s plan; she’s running against Lorie Zapf for District 2 in November, and claimed there’s 4,000 short term rentals in District 2 – probably the hardest hit community in the city.

Another speaker called it, “the Faulconer Eviction Machine”, as if implemented, it would result in many, many current residents being evicted to  make room for short term rentals.

Supporters of Faulconer’s plan were up next.

About a dozen of the Unite Here union people got up to give support to their speakers, one who claimed he represented the San Diego – Imperial County Labor Council; he stated he supported the Faulconer plan “with amendments”, with one being reducing the plan to the “principle residence only” – which is not the Faulconer plan. “We don’t support out of town investors”, one labor leader said.

This was a confusing presentation by the only union group in the room. They came up to speak during the pro-Faulconer period, but didn’t really support his plan.

Not confusing was the support for the Mayor’s proposal by the San Diego Taxpayers Association.

Many of the green shirt speakers shared their personal tragedies and how short term rentals saved them. Several of the more articulate advocates of Airbnb made fairly outrageous misrepresentations, accusing, for example, Barbara Bry and Lorie Zapf of not dealing with facts, of how opponents were being funded by the hotel industry.

A number of OBceans spoke, including this reporter, Kevin Klein and Andrea Schlageter from the OB Planning Board, as well as Kevin Hastings and Keith Fink.

As the afternoon wore on, the green shirts began dissipating from the room – leaving those who cared about their communities to make up the vast majority of those who remained for the entire 6 and a half hours.

It should be noted that former San Diego City Attorney Jan Goldsmith appeared before the Council to raise questions about this or that legalities of anything other than the Mayor’s ideas. He had breezed by the fact that he had been hired by a host of hosting platform companies. But because of his status, everyone on the Council leaned in to listen closely to his comments.

The turn-over came again and a group got up before the Council; it was the Community Working Group, made up of town councils and planning committees along the coast, which formed in November 2017 as a direct response to the short term rental crisis. It included Tom Coate – a leader of an anti-STVR group, Gary Wannocott, chair of the Mission Beach Town Council, as well as OB’s own Marcus Turner, prez of the OB Town Council, among others.

When it was Turner’s turn to speak, he turned to the crowd and asked everyone who was negatively affected by short term rentals to stand up – and two-thirds of the Chamber stood.

Finally, between 5 and 5:30, public comment ended – and the Council itself took up the issue of what to do with Faulconer’s plan.

Councilman Chris Cate moved to adopt Kevin’s ordinance with Scott Sherman quickly seconding it. When it was Sherman’s turn to speak in support, he claimed opponents are people who want to ban property rights, that it’s only “bad actors” who are driving the discussion, and Mission Beach “needs to be carved out.”

Sherman – who has some legal issues of his own to deal with (he ought to have recused himself from any decisions having to do with rental properties as he and his family have dozens) – kept asking Goldsmith questions, bringing him into the discussions with unlimited time restraints (the rest of us were very limited and nobody asked us questions).

The vote was taken: 6 against the Faulconer plan and only 3 in support (Cate, Kersey and Sherman)

Finally, Barbara Bry very pointedly asked Goldsmith who he represented: it was Airbnb and other host platforms. He was a paid lobbyist for the very industry under discussion, but some of the council members kept handing him more rope with which to pontificate on how wonderful these rentals are. Actually, she asked, “Who is your client, Mr Goldsmith?” This question elicited a hearty round of applause.

Then the Council considered the Bry proposal. Her posture has been steady: only allow the primary residence to be a vacation rental; now she compromised to allow any granny flat on the property to also be rented out on a short term basis. Lorie Zapf agreed and stated, “I was not elected to serve outside investor interests,” and then asked to remove the Mission Beach carve-out, and the primary residence rule to be applied everywhere.

Ward started speaking. But it was near 6pm at this point and the OB chartered bus was picking us up. So most of us left –  but followed the proceedings on our phones. We were at Culture celebrating our partial win, at least, when Gio excitedly told the group, “We won! The Bry proposal passed!” It had passed 6 to 3.

Wow, we couldn’t believe it; we were stunned at first and gradually the realization swept over us. We happily parted ways with hugs all around.

But what the heck happened to Councilman David Alvarez, the progressive Democrat whose big issue is affordable housing and who was the crucial swing vote during the debates on the issue last December? On Monday, he voted to oppose the Faulconer plan – but then he also voted against the Bry plan. Lameduckitis?

At any rate, Barbara Bry’s stock has gone up; her unwavering leadership on this issue will long be remembered – and her prospects only seem upward-bound as the only San Diego woman councilmember in stable territory. (Both Zapf and Cole have election challenges this November and Gomez is very green.)

And Faulconer’s stock has plummeted; he has failed once again to lead the city on an important issue. The strong mayor was not very strong in the leadership category.

Yet, with the dust settling, the crisis of the impending short term rental has been averted. Details have to be worked out – but at long last San Diego has joined a growing list of California cities who have taken Airbnb on without blinking. And for those who live in OB and at the coast can breath a little easier now.

Guess what! Those short term rentals all around OB? They’re now really illegal (or maybe there’s a time gap to allow them to switch back). Yet, it may be up to neighbors to monitor the situation for awhile until the city figures out how to actually do the regulation.

But hey! We won!