Stumbling Blocks on the Way to Enact Vacation Rental Regs for San Diego; City Staff Ignored Council Directions on Lottery System, Airbnb Complaints

by on October 12, 2021 · 5 comments

in Ocean Beach, San Diego

Lori Weisberg in the U-T reported this morning:

As the city of San Diego prepares to implement in July its first-ever regulations for short-term vacation rentals, officials unveiled on Monday a lottery system that both longtime hosts and City Council members said failed to give priority to responsible operators, as promised earlier this year.

The council asked Mayor Todd Gloria’s office to go back to the drawing board and return within a month with a new proposal that will reward those who are “good actors,” a request that was made in February’ when elected leaders first approved new regulations governing the citywide operation of the increasingly popular home-sharing industry.

The city’s new ordinance specifically caps the number of whole-home rentals that operate more than 20 days in a year at 1 percent of San Diego’s more than 540,000 housing units, or about 5,400. A separate, more generous allocation was made for Mission Beach, a longtime mecca for Airbnb-style rentals. More active whole-home rentals there will be limited to 30 percent of the community’s total dwelling units, or about 1,100.

Council President Jennifer Campbell, whose office shepherded the new regulatory effort over the last year, told city staff Monday that she wants to see a lottery’ that gives preference to those operators who have no pending code enforcement actions in the last three years, have paid their transient occupancy’ tax on time, and who’ve hosted at least 90 nights of bookings in the last year. …

Members of the Council were not pleased with the proposals being made by city staff. Weisberg reported:

Several council members appeared irritated that their instructions, which were to implement a lottery system that would prioritize hosts who have been paying required taxes and have operated responsibly, were ignored.

“There’s a lot riding on getting this system right, and so it feels a little bit like deja vu to not have a system as we instructed,” said Councilmember Raul Campillo. “If our constituents hear us and the media prints the words we say and then we come back and don’t have a system as aligned per policy… it destroys the credibility and makes the public not believe we’re serious about doing this.”

Equally perturbed was Councilmember Stephen Whitburn, who said he went back and listened to the council motion from February to reaffirm his recollection.

“I want the permit process to prioritize responsible, existing operators who have demonstrated they follow the rules,” he said. “That’s what my constituents want, and I’m confident that is what most San Diegans want. When I learned the proposed lottery system coming before us today did not give preference to good actors, I was surprised.”

Eligibility’ under the process outlined Monday by the city’ treasurer’s office said only that to qualify for a license, hosts could not have any pending city’ enforcement actions for “violations of any provision of the San Diego Municipal Code (SDMC), unless the approval of a license is required to resolve the enforcement action.” They would also have to apply for a transient occupancy’ tax license, if they had not already’.

Here’s the Voice of San Diego‘s Tuesday report on the issue:

The city’s plan to regulate vacation rentals after years of disagreement about how to do so faces the prospect of being delayed once again.

The City Council on Monday got updates on what they can control for now — and how the California Coastal Commission could throw a wrench into their plans.

Councilmembers heard city officials’ proposals on an application process for vacation rental licenses, fees for licenses and the lottery process the city will use to decide which operators get licenses for whole-home rentals that host guests more than 20 nights a year. The City Council ultimately signed off on most of what staff proposed,but directed city staff and Mayor Todd Gloria’s office to pitch a way for longtime-responsible hosts to be prioritized rather than go with the largely random lottery process staff had proposed for whole-home operations. City officials said Monday they didn’t have data available to make that work and that city attorneys warned there could be legal pitfalls with that approach.

But city officials are now expected to provide a memo on plans they have decided are legally permissible to prioritize good actors within the next month.

City Councilman Raul Campillo, who in February pushed to give hosts who already pay hotel taxes and rent out their homes more than 20 days a year prioritization among other criteria, was one of multiple councilmembers calling for city officials to act on that direction.

“A lot of individuals have compromised a lot to get us to a point and to not have a lottery system that prioritizes good actors puts communities at risk and ultimately leaves us open to lawsuits,” Campillo said.

Councilmembers also heard about a major uncertainty facing the regulations the city hopes to implement next July: The city can’t implement long-elusive regulations until the state Coastal Commission gives its stamp of approval — and it’s unclear when that will happen.

The Coastal Commission in July deemed the initial package the city submitted on the policy incomplete and requested more details on multiple aspects of the proposal.

Now commission staff are reviewing the city’s latest response and will have additional information to assess after Monday’s City Council discussion.

If the commission proposes any changes or extends the timeline it has to certify the city rules, city officials will need to return to the City Council to make changes — and then, potentially, back to the Coastal Commission again for a final approval, Development Services Director Elyse Lowe said Monday.

Lowe warned that the Coastal Commission could wait until as long as April 2023 to certify the city’s vacation rental rules.

Officials are now counting on the Coastal Commission to take up the city’s vacation rental regulations at its meeting in San Diego next June, less than a month before the new regulations are set to go into effect. That’s also the next meeting the commission has planned in San Diego County.

{ 5 comments… read them below or add one }

Greg October 12, 2021 at 11:14 am

After the first year, will this create an effective monopoly on corporate AirBnB whole home permits? If part of the prioritization criteria is to give permits to those who already pay hotel taxes and rent out their homes more than 20 days a year then how would new entrants to the process get permits?

I could see there being a small number of new entrants allowed but then that would mean existing post-first year corporate entities would be able to maintain their AirBnB empires while new entrants into the market would be limited to tiny allocations?


Justine October 12, 2021 at 3:28 pm

Just to be clear, if someone has already been operating a business in an area zoned residential, they will be rewarded??? And anyone who is interested in possibly entering this game (please DON’T), their applications will be denied because they aren’t “good actors” for not already breaking the law?? So by definition, a “good actor “ is someone who buys any available real estate out from under residents of the state, driving the cost of sales and rental beyond any reasonable price. Didn’t Campbell run on the promise to close down vacation rentals?


Will October 12, 2021 at 10:55 pm

My preferred number is zero. I’ll be happy for a capped monopoly and I hope they are taxed heavily. OB loses serious housing stock to Airbnb- even the 65 unit apartment building across the street is in on the action while raising tenant’s rents.


kh October 14, 2021 at 12:31 am

So nice to see the councilmembers working so hard to keep the current illegal hosts happy. The residents though… screw you!

How long does one have to break the law for before they are considered a “good actor”? Asking for a friend. They are thinking of starting a meth lab in their basement.


CK October 14, 2021 at 10:19 am

So the way I read this is… We need to put up a at least one Code Enforcement complaint on every STVR in OB immediately.


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