Short Term Vacation Rentals: the Discussion Continues on San Diego Mayor’s Flawed Plan

These units at Voltaire and Abbott are the poster children of short term rentals. Not only are they STVRs, the owner even lied to the OB Planning Board the night they approved the project by saying he and his family would be moving in, and that they would not be short term rentals.

In Sunday, July 8th’s Op-Ed page in the San Diego Union-Tribune, discussion on short term vacation rentals fairly monopolized the opinion section as representatives of the hotel industry, Councilwoman Barbara Bry and the head of the Mission Beach Town Council all hashed it out.

The op-ed pieces were responding to Mayor Faulconer’s recent “compromise” proposal to resolve one of the most contentious issues currently roiling San Diego – what to do about the short term rentals.

In their piece entitled, “Neighborhoods, Jobs Must Be Protected“, Katherine Lugar and Lynn Mohrfeld – both CEOs of hotel industry associations – at first came out swinging against STVRs and appeared to be right-on:

” … with the rise of online hosting platforms like Airbnb and HomeAway, the proliferation of ‘illegal hotels’ operating in our neighborhoods has skyrocketed in recent years, threatening to tear apart our communities.

“We have watched as neighborhoods across the country, including those in San Diego, have been harmed by an influx of unregulated short-term rentals where commercial investors buy up residential homes to convert them into what often amounts to illegal hotels. As a result, these neighborhoods become commercialized, putting children and families at risk and depleting affordable housing options for hotel employees and San Diego residents at large.”

The industry CEOs highlight their weight – they represent 50,000 local jobs and more than $3 billion in wages and salaries – and mention other cities, such as San Francisco, Boston and New York who have “have passed strong regulations to take back their neighborhoods from commercial operators.” But then Lugar and Mohrfeld swing into Faulconer’s corner and say his compromise is needed to break the stalemate.

With much praise, they believe it’s a meaningful step forward. Yet, they either didn’t read his proposal or they are intentionally misleading us, when they say, Faulconer’s plan ” would put an end to outside investors buying multiple properties and renting them out to complete strangers with no system of accountability.” This is simply not true. Faulconer’s plan allows for outside investors to lease out STVRs.

They say this even while declaring, “… we would hope for a policy limiting short-term rentals to primary residences only,…”

Councilwoman Bry’s commentary is called, “Restrict Rentals to Primary Residences“, and seeks to explain her position on STVRs that she has held since at least last December, that she supports short term rentals out of the primary residence – and for up to 90 days. She says:

“… the proposal that I presented in December would have allowed unlimited home sharing in your primary residence and whole home rental of your primary residence on a short-term basis up to 90 days a year. (A short-term rental is considered to be anything less than 30 days.)”

Bry recounts what some other California cities have done to fight against the de facto hotels. Santa Monica, Pasadena and San Francisco have all passed ordinances that only allow STVRs if the homeowner is present during the stay, so-called “home sharing”. Santa Monica’s ordinance was upheld by a Federal judge, as the city’s attorney believes cities are allowed to take measures to preserve valuable housing stock in the face of threats by Airbnb and HomeAway.

She explained Pasadena enacted its ordinance that allows an individual to own one STVR which has to be their primary residence for 9 months of the year – which means they can rent it out for 3 months a year. And San Francisco maintains the requirement the short term rental must be the primary residence of the person, who is allowed also to rent it out to 90 days a year.

Bry supports some aspects of the mayor’s proposal, such as:

• the 3-night minimum stay in the Coastal Overlay Zone and the Downtown Community Plan,
• platform accountability which will require Airbnb and other hosting platforms to provide San Diego the records for each STVR transaction, and
• the focus on the enforcement component and a permitting process.

But then she outlines the problems with Faulconer’s plan:

• It does not include rules to limit short-term rentals to primary residences, as it allows for vacation rental hosts to rent out their entire primary residence for up to six months a year,
• plus it allows a 2nd additional home with no limitations on the number of days annually.

Bry nails it:

Under this scenario, an investor could purchase several rental properties and simply have the titles put in others’ names. Without the crucial primary residence piece, absentee investors will continue to commercialize single-family homes and turn them into mini-hotels in our residential neighborhood

She concludes her piece:

Our residents expect their elected officials to create policies that protect our sharing economy and residential zoning, while increasing our housing stock, not depleting it.

The third op-ed is by Gary Wonacott, who is the president of the Mission Beach Town Council. And understandably Wonacott focuses on the “Mission Beach Exception” or carve-out in Faulconer’s plan, which the MBTC opposes. He cites the lack of strong restrictions on STVRs, “will lead to further saturation (already near 50 percent) in Mission Beach, the permit application is lax, and the enforcement approach grossly underestimates the challenges.”

Wonacott takes on the mayor’s rationale for the Mission Beach carve-out – Faulconer’s claim of an utter lack of sufficient hotel rooms in Mission Beach. Wonacott instructs:

“… when compared with the downtown commercial district, the number one tourist area in San Diego, Mission Beach has more than twice the number of rooms available (STR bedrooms plus hotel rooms) per community dwelling unit.

“Perhaps the mayor has forgotten the Hyatt, the Dana Inn, the Bahia (about to add 400 rooms) and the Catamaran less than a mile from the beach. The city could reduce the number of STRs in Mission Beach from the current 1,560 to 433 and we would still have roughly the same ratio of available rooms to total dwelling units as downtown San Diego.”

Wonacott, agreeing with Bry, explains the major flaw in Faulconer’s plan:

Contrary to the mayor’s insinuation, primary plus one means anyone in the world can invest anywhere in San Diego and use the property as a STR [short term rental].

He points out,

An investor in Phoenix, for example, could purchase a duplex in Ocean Beach. Then both he and his wife could apply for permits to operate both units in the duplex as STRs. Even more likely is an increase in whole home STRs in La Jolla, Point Loma and Pacific Beach that require only a single permit, with a better return on investment.

The discussion on short term rentals will reach a crescendo on July 16 when the full city council sits down and holds another hearing.

The Ocean Beach Town Council is chartering a bus for OBceans to attend the hearing.