On Monday, Councilwoman Jen Campbell announced that she had coordinated a new proposal for short term vacation rentals along with UNITE HERE Local 30 – a hospitality union – and Expedia Group – the parent company for travel platforms Vrbo and Homeaway.
Campbell claims the new regulatory framework could potentially cut the number of whole-home vacation rentals within the city limits by 70 percent. Based on the City Auditor’s estimation that 16,000 STRs exist today in San Diego, 70 percent equates to 3,750 permits, which would reduce the overall number of whole-home STRs.
The proposal also establishes a two-night minimum stays for most whole-home rentals. And it allows residents a maximum of one permit per person. Plus, in response to some of the main complaints of residents about STVRs, the proposal creates a detailed “Good Neighbor Policy” with “strict enforcement guidelines, a fine structure for violations, and a permit revocation standard for repeated violations.”
Campbell’s announcement said the new framework is important for UNITE HERE, as it represents more than 6,000 local hotel, gaming and hospitality workers in San Diego. The union wants “to establish well-defined rules for the STR industry that balances protecting existing hospitality jobs but preserves the right of homeowners to use their property to help make ends meet.”
In the press announcement, Brigette Browning, UNITE HERE Local 30 President, states:
“The City has debated this issue time and time again without resolution. This proposal is a fair compromise that protects hotel and hospitality workers and establishes real enforcement mechanisms to remove bad actors. We look forward to the City Council considering this proposal in the near future.”
The San Diego Union-Tribune also quoted Browning:
“I have been working on this for what feels like my entire life now. It is certainly not perfect. I feel both sides gave things up that they didn’t want to. But I do think having something in place is going to be better than having this wild west mentality that we have had in San Diego, and this proliferation of bad actors.”
The proposal, as outlined in a Memorandum of Understanding between UNITE HERE Local 30 and Expedia Group, brought the travel platform to the bargaining table. The announcement stated:
Expedia Group is the world’s travel platform, with travel sites connecting millions of travelers with destinations in over 70 counties. Expedia’s vacation rental brands Vrbo and HomeAway have been responsibly serving San Diego homeowners and managers for 25 years. Expedia Group has been working with the City Council, its customers, and community stakeholders for over four years to find a fair path forward.
Amanda Pedigo, Vice President Government and Corporate Affairs, North America, Expedia Inc. states in the release:
“Short-term rentals are a vital part of San Diego’s economy, contributing nearly $32 million annually to the City’s general fund through local taxes alone. Yet, for far too long local vacation rental homeowners and managers have been kept in regulatory limbo. This compromise provides our partners with the long-term certainty they need to legally operate in the City. We are hopeful this proposal will be adopted by Council soon.”
Through Expedia, VRBO/HomeAway have agreed to the regulatory framework. However, market leader Airbnb has not and is not a party to the deal. It’s estimated that Airbnb has more than 60 per cent of the STRV market in San Diego and in the past has been opposed to regulatory efforts. Many at the beach have a vivid memory of how Airbnb led a referendum petition drive in 2018 that moved the City Council to quash stricter STVR rules they had passed.
There is a special provision in the MOU for Mission Beach. That community has been in a special category because vacation rentals have supposedly existed for nearly a century. So the proposal follows Coastal Commission standards as well as those advocated by the Mission Beach Town Council, to permit up to 30% of the housing units in the community to be used as whole-home STRs (1,086), which will be in addition to the city-wide cap.
Matt Gardner, Mission Beach Town Council President, has in effect signed on; he said:
“We appreciate that Expedia Group and UNITE HERE worked together to develop and recommend a fair compromise that reflects what Mission Beach believes is right for our community. We are encouraged by their collaborative efforts and will urge the City Council to adopt this proposal.”
The City Attorney’s office has agreed to draft a STR ordinance that can be implemented city-wide based upon input from the parties and community stakeholders. Followers of the controversy know that City Attorney Elliot has called STVRs in residential neighborhoods “illegal.”
Campbell stated:
“San Diegans deserve STR regulations that protect our neighborhoods, preserve valuable housing and will stand the test of time. I promised my constituents I would work for them to tackle the tough issues and that is exactly what happened here. I appreciate the willingness of UNITE HERE and Expedia Group to work with me in the spirt of collaboration. I look forward to discussing their proposal with my colleagues when this issue comes back to council.”
“This will release many thousands of apartments, condos and homes back on the market for long-term rental, or if the owners wish to sell them, they can sell them on the market,” said Campbell.
The proposal would make home sharing legal, where the permanent resident rents a room or a granny flat for a short period. Previous city regulations sought to limit home sharing. And the framework allows residents to get permits at lower cost to rent their homes during popular events such as Comic-Con.
According to Campbell’s office, the agreement would establish four tiers of STRs in the City of San Diego, ranging from home-sharing to whole-home rentals. Highlights of the compromise include:
- Capping whole-home STRs at 0.7 percent of the City’s housing stock (based on SANDAG’s annual Demographic and Socioeconomic Housing estimates), which would equate to 3,750 permits today – reducing whole-home STRs by 70 percent or more based on the City Auditor’s estimation that 16,000 STRs exist today
- Establishing two-night minimum stays for most whole-home rentals
- Allowing residents a maximum of one permit, per person
- Adopting the Mission Beach Town Council’s recommendation to permit up to 30% of the housing units in the community to be used as whole-home STRs (1,086), which will be in addition to the city-wide cap
- Allowing all residents to home-share
- Allowing part-time STR operators to obtain a permit at lower annual fees to accommodate high visitor events such as Comic-Con, Pride or December Nights
- Creating a detailed Good Neighbor Policy with strict enforcement guidelines, a fine structure for violations, and a permit revocation standard for repeated violations
The City Council still has to agree to take up the proposal, which likely needs to be reviewed by the Office of Independent Budget Analyst for financial impacts. The travel platform and the union would like to see the legislation go into effect in 2021.
It’s admitted that the exact number of entire home vacation rentals listed in the city currently is unclear. Again, the City Auditor has estimated total short-term rentals — both whole home and home share units — at 16,000. “We have heard from an organization that watches over short-term rentals throughout the state that 80 percent to 90 percent are whole home rentals in San Diego,” said Campbell, “so home sharing is not a big part of it.”
So, at least Jen Campbell is trying – after half a decade of city council machinations – of bringing this contentious issue to the fore. But with a legislative agenda already being criticized as ‘too much, too fast’ during the pandemic where the public cannot genuinely participate, the city council is challenged to deal with it. There’s other contentious issues before them – such as Jen Campbell’s highly controversial proposal to deny the Midway District the benefits of the 30 foot height limit.
Yet, there are other stakeholders in the overall equation, like the communities themselves, the residents. Residents have been on the front lines during this past half-decade of the wild-west. They – we also need a say.
We’re waiting on Barbara Bry’s response – who has made regulating STVRs a hallmark of her stint on the council as well as part of her mayoral campaign. Plus we’re waiting to see what the primary organization that has been fighting STVRs for the past half decade, Save San Diego Neighborhoods, has to say. And let’s also see what local OB experts on vacation rentals have in reaction.
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