Campbell’s District 2 Office Is Not on Top of Short Term Rental Licensing
By Geoff Page
It seemed like a good time to check up on the short-term vacation rental, or STVR, picture in Ocean Beach. The Rag submitted a Public Records Request, or PRR, asking for the current list of permitted STVRs.
The following paragraphs provide an account of what it took to obtain the STVR information, an explanation of what STVR Tiers are and how many there are, how this is being administered by the city, and the budget. The information resulted in one surprise and one confirmation of expectations.
The surprise is that the city expects to make millions from the STVR business. The confirmed expectation is that the city is not spending any of that money on enforcement of the STVR ordinance.
Obtaining Information
When making a PRR, the requester has to pick a department to send the request to. It is not always clear what department should get the request. If the requester chooses an incorrect department, most of the time the city will correct the request and send it where it needs to go.
Not knowing who had the required STVR information, the logical place to send the request was the District 2 city council office since they are responsible for foisting this system on the city. The PRR was submitted on January 22. Here was the response on January 25:
Council District 2 has no responsive records.
Unsatisfied with this answer, The Rag responded the same day with:
Surely then, Council District 2 was able to advise to whom this request should go to. Correct?
On Sunday, January 28, the city sent an email stating that the request was published. The city provided a link to a website where a large spreadsheet with the information was located. There was no mention in the response about who provided the information.
Campbell’s office has broken another promise, a promise to monitor and stay on top of how their ordinance works. But, they have nothing. A second PRR was again submitted to the District 2 office for a list of all the STVR applications to date, including those not granted a license. Here was the second response from District 2 on January 29:
Council District 2 has no responsive records.
The Rag responded:
District 2 may not have the records but they surely know who would have those records. They need to be more helpful.
On February 2, the city sent an email asking, “Are you able to specify the data fields you are seeking in the list requested? For example, name of applicant, application number, address, approved/denied, etc..”
This was a frustration with the system that seemed intentional. The spreadsheet of the current licenses, that the city already provided, had 23 columns of information, but for some reason, the city wanted only to provide something specific this time. The Rag responded by specifying a specific need was for the addresses and whether or not the licenses were granted.
The city provided a spreadsheet on February 6, again with no help from District 2. But, the way it was provided was another frustration that also seemed intentional. Instead of separate columns for the addresses and the zip codes, like the spreadsheet of active licenses did, the city provided the address and zip code in one column. Anyone who has worked with and sorted spreadsheet information would see the difficulty.
With separate columns for addresses and zip codes, a spreadsheet can be sorted in a minute by zip code. All of 92107 or 92106 can be sorted into lists easily. While it was possible to sort this second spreadsheet, it was unnecessarily cumbersome. If this was not done intentionally, then it means the city is doing a bad job of keeping its information organized.
STVR License Tiers
The licenses are divided into four “tiers.” The variations are important.
Tier 1
Rented for an aggregate of 20 days or less per year. The owner or permanent resident does not need to reside onsite during the STRO.
The data shows that Tier 1 is not popular. Of the current 8,359 licenses granted, only 186, or 2%, are Tier 1. The 92107-zip code area currently has 815 STVR licenses. Of these, only nine are Tier 1 licenses, or 1% of the total.
Tier 2
Renting a room or rooms in the home for more than 20 days per year so long as the owner or permanent resident resides onsite. The owner or permanent resident may be absent from the permanent residence during the STRO for up to 90 days per calendar year.
Tier 2 is much more popular at 2,589 licenses of the total granted. In the 92107-zip code area, there are 198 Tier 2 licenses, or 24 percent of 815 total. It is easily apparent why these are more desirable. Tier 1 limits the total rental days to less than 20 and Tier 2 is unlimited. Tier 2 allows the owner to be absent for three months out of the year.
According to the city’s website, the number of available Tier 1 and Tier 2 licenses is “Unlimited.” Unlimited?
Tiers 3 and 4
Rentals for more than 20 days per year where the owner or permanent resident does not reside onsite. To determine your dwelling unit’s Community Planning Area (CPA), reference the City of San Diego Community Plans Map.
If your dwelling unit is within the Mission Beach CPA, you would fall into Tier 4 Mission Beach Whole Home. Any other CPA would fall into Tier 3 Whole Home (excluding Mission Beach).
Note that the ordinance requires STRO utilization for a minimum of 90 days each year in order to maintain a Tier 3 or Tier 4 license.
These are whole home rentals, not rooms in a house. The owner does not have to be there. Of the total licenses granted, 4,502 are Tier 3. In the 92107-zip code area, there are 608 Tier 3 licenses, or 75 percent of the 815 total. According to the city site there are still 917 of these licenses available citywide. That is a lot of whole homes taken off the rental market and turned into businesses, no longer homes.
The city’s website explained that the number of licenses issued will not exceed 1% of San Diego’s total housing units outside the Mission Beach Community Planning Area. In the Mission Beach Community Planning Area, the allowance is far greater at 30%. There is a waiting list of 166 applicants trying to get a Mission Beach license.
Both areas require a two-night minimum stay for guests.
City website contains information about STVRs.
There were, to date, 9,353 total applications. Of those, 640 were labeled “CANCELLED,” which is probably a catchall term for ones that were withdrawn or not granted by the city. In the 92107-zip code area, there were 907 applications and 62 of those were labeled as CANCELLED. The 92106-zip code area only had a total of 182 applications with eight CANCELLED.
STRO Administration
The city has set up a group called the STVRO Administration within the City Treasurer’s department. This group handles administration of the ordinance. Enforcement is the responsibility of another group called the Building and Land Use Enforcement, or BLUE, team. This is Code Enforcement.
The STVRO Administration group consists of a Program Manager, a Supervising Management Analyst, an Associate Management Analyst, and two Administrative Aides.
The salaries of these people, according to the current city Budget:
- Program Manager – The budget show 4.5 of these personnel totaling 665,072 or an average of $147, 746 each.
- Supervising Management Analyst – The budget show two of these people totaling $296,738 or $148,369 each.
- Associate Management Analyst – The budget shows five of these people totaling $372,130 or $74,000 each.
- Administrative Aides – The budget shows 16 of these people totaling $1,008,238 or $63,000 each.
This would total $496,115 in salaries for the budget year. This does not include a long list of benefits that adds approximately 61% total, or another $320,630. That would bring the SRVRO Administration personnel costs to about $798,745.
Because the ordinance drafters said income from the program would pay the administration costs, the next logical question for the city was, how much revenue has the city received from the STVRO business.
The city provided a link to the Fiscal Year 2024 – Mid-Year Budget Monitoring Report showing that the STVRO program has generated $821,000 in application and license fee revenue. The city also provided a link to its Fiscal Year 2025-2029 Five-Year Financial Outlook. The surprise was encountered in this document:
Licenses are valid for a two-year period.
Application and license fees are collected when applications are submitted or renewed. This results in a projected revenue of $6.0 million in FYs 2025, 2027, and 2029 and $1.7 million every other year.
If STVRO management is only costing about $800,000 a year, it looks like this is a money-making proposition for the city. The drafters never presented this as a money-making venture for the city. The explanations were that the revenues would pay for administration and enforcement. The revenues do easily cover the cost to administrate the program. Enforcement is another story.
The personnel assigned to STVRO Administration will have to do more than just collect fees. Here are a few of those tasks:
- Monitor each of the 186 Tier 1 licenses to ensure the units are not rented for any more than 20 days a year.
- Monitor the 2,589 Tier 2 licenses to ensure that the owner or permanent resident is onsite for 275 days of the year.
- Monitor the data to ensure that no more than 1% of the city’s housing stock will be used for STVRs.
The very complexity of achieving those tasks almost guarantees failure.
Enforcement
During development of this ordinance, there was a big concern about enforcement. That meant enforcement of the rules for those with licenses and enforcement at large to stop illegal STVRs from operating. Campbell’s office said enforcement would be funded by the fees from these licenses.
The city’s website contains a feature for reporting STVR violations of the STVR rules and of illegal operations. Unfortunately, the violations are reported to the city’s notoriously understaffed code enforcement department, now called the BLUE team.
A look at the current budget shows the Building and Land Use Enforcement group has had five people in it since the 2022 budget and it remains unchanged at only five people. This group is not dedicated to enforcing the STVR rules as it handles all code violations. The city has starved code enforcement for years, adding all this extra work with no added personnel is a recipe for lawlessness in the STVR world.
If Campbell’s office had followed through with their promise, there would be new personnel added to code enforcement ranks funded by the ordinance. The new personnel would handle STVR enforcement as their primary responsibility.
Unfortunately, the only money budgeted specifically for the STVR ordinance was for the City Treasurer’s STVRO administration, the money collectors. Money for additional code enforcement personnel to enforce the STVR ordinance was not included in the 2024 budget.
It seems that all Campbell’s office has done is take credit for crafting this ordinance and walked away. Is anyone surprised?
For the salaries paid for those in the STVRO Administration Group, you would think they could/would provide an easily accessible data base. Oceanside can do it so maybe these fine folks and the mayor should follow suit https://oceanside.munirevs.com/business-list/?cityid=80 it evens has a search function – duh!
“even” – Here is the main link for Oceanside’s STR https://www.ci.oceanside.ca.us/government/financial-services/short-term-rentals
First the City needs to review all the Permits applied for, in the past 5-6 yrs., looking for all the adjectives that don’t say WHAT they’re actually being used as. There are ADU’s, JADU’s, granny flats, home extension, garage conversation, artists loft, nanny quarters, STRO’s, and other words, that all do the same, and the owners are just trying to disguise short term rentals, so they don’t get inspected, and work with the City Permits, taxes, etc.. Hopefully there’s a new Mayor in town that will take a look at all the shenanigans being pulled, and recalculate exactly what’s going on.
Interesting financial news:
“California Public Employees Retirement System Raises Stock Position in Airbnb, Inc (NASDAQARBND)” Marketbeat, January 21, 2023.
You can read about some of CalPERS history on Wiki.
From Vern
Please Vern and other commenters – don’t leave just a link – add some text first. Otherwise the link goes wonky on our site.
Understood, Frank.
FYI I own a tier 4 license in MB and I have been audited 2 times since the program started last May. We also submit qrtly reports to the City.
There are two types of problems with STRs: 1. Global and 2. Local. As a STR operator, you only see local issues, positive or negative, but when you take STRs in the aggregate, any positives are outweighed by the large collection of negatives as mentioned by Cathy. One STR raises the rent 20 percent and no big issue, but 1200 STRs raise their rates by 20 percent and you have another 1,000 homeless. From our perspective, STRs should be banned.
We knew that the city would not be able to keep their part of the bargain. Not only does it take 4 months to the city to respond to the complaint and when they report it is resolved, it is not. In another example we have 4 known Tier 2 listings (unlimited) that are actually Tier 4 and nothing is done about them in just 1 block in Mission Beach. We have 10 known STR’s with no license at all (1 block) (no response on reporting) We have numerous no signage on the front (all reported) We have seen duplicate STR signage, meaning they photocopied one sign to put on another place. You cannot see 90% of the signs as they are so small, in a side door, on the 3rd floor, in a condo building. Almost every court in Mission Beach has a violation of some sort.
The important thing is Jennifer Campbell got paid by Expedia.
Geoff, did you also find information on the Transient Occupancy Tax being collected? A Los Angeles study by Dr. David Wachsmuth from McGill found a net negative in a cost benefit analysis of STRs when the cost to the City paid to help homeless caused by the STRs was considered.
But, focusing on your topic, Campbell’s office turned the whole of STR administration over to Development Services (Elyse Lowe). Elyse Lowe’s family were into STRs in Mission Beach and I imagine does not put a lot of effort into their enforcement. Councilmember Campbell stood in front of cameras in Mission Beach and proclaimed that 16 code enforcement officers were being hired for enforcement, but then she has no control over these hires once they are in DS.
There are a few, a very small few, who make substantial monies from STRs, which does not help the disparate distribution of annual incomes in San Diego, pushing those at the lower end of the socio-economic group into homelessness, which we the taxpayers must cover. AirBnB also makes a lot of money.
In Mission Beach 2500 to 3,000 residents have been displaced since 2,000. Local businesses are struggling because housing has even been priced out of range of many USD students, which is more than a little difficult to do. It is a sham.
Gary, I did not come across anything about the TOT but that may explain the $6 million every other year. I did not have time to follow up on that question but it is next. I plan to get an explanation from the city. The $1.7 every other year seemed like it made sense since the city said it had collected $821,000 in its half-year report. When I find out, I’ll post a comment here.
Every time I do a piece like this, it keeps generating more questions for the city and obtaining each answer takes time. Just have to keep at it.
Campbell actually said 16 extra people? I’d love to find that on video.
It is a shame what has happened to Mission Beach. And it is shame what this vacation rental crap is doing to the housing problem. I read that the little town of Joshua Tree has so many of these that local workers have to live elsewhere and commute to the town to work. Nuts.
Awh Gary
C ome on, your sticking to your story that multi million beach $4000’a week beach rentals in are causing the homeless problem !! Laughable!
Local business are thriving because of tourism, a concept you should embrace in our vacation town. 2000-3000 “displaced” yet you don’t mention that 80% of the time our community has 10,000 “replaced” who moved in and spending big $$$. (Yes 80% has been my experience)
JW
Michael Mills owns 240 apartment units in OB and in one shot he obtained Tier 3 licenses for half of them. These were cheap, old, tiny, low rent housing units. Now they’re motels and those long term tenants are now out on their ass.
You’re spreading the myth that Airbnb is just bunch of beach mcmansions that nobody would live in otherwise. In OB, 230 of the 461 full time STRs are in studio or 1 bedroom units. This is from airdna.co data scraped in 2020. Citywide, its 41%.
Thats because these formerly affordable housing units are the easiest to book and profit on Airbnb, bringing in 3-4x long term rents. I know this because I used to host one. But now a family calls it home. A cramped, aging home, but a home nonetheless, that they can afford.
First of all, laughable is not an analysis term. You have access to the McGill University Los Angeles shot term rental analysis. The difference between the cost benefit analysis that Venus Molina performed which showed a plus to STRs and the one Dr. Wachsmuth did is the addition of the cost of homelessness caused by the STRs. Second, our businesses in SMB are not thriving. To the contrary; they are struggling. Why, there are far fewer USD students living in MB this winter; priced out by the STRs. STRs are only at about 55 percent occupancy on average this winter. And, lastly, the 2,500 to 3,000 residents no longer living in MB. Let’s see 10,000 STR visitors. Perhaps you can explain that to me.
In the city’s analysis, they assumed if whole-home airbnbs were reduced by 23%, the city would lose an equal amount in TOT income. Because of course, those tourists would decide to just vacation in Bakersfield instead.
This is in the 2/19/21 IBA report presented to city council.
There are both Local and Global issues associated with Short-Term Rentals (STRs). A short-term rental operator’s perspective is focused on the local impact of his or her rental on the surrounding properties. The STR owner witnesses the immediate effects—both positive and negative—within his specific area. However, when we step back and consider STRs on a global scale, the picture becomes more complex.
Breaking it down:
1. Local Issues:
o Positives: STRs can provide substantial additional income (4-6 times the daily rate) for property owners and offer flexible accommodation options for travelers.
o Negatives: They may lead to increased noise, disrupt neighborhood dynamics, and potentially strain local infrastructure.
2. Global Considerations:
o Aggregation: When we aggregate the impact of numerous STRs, the negatives often outweigh the positives. The concentration of such a large number of STRs in Mission Beach (Tier 4) has created an enforcement nightmare that can never be resolved.
o Affordability: A single STR raising rent by 20 percent may not seem like a big issue. However, when hundreds or thousands of STRs do the same, it can contribute to homelessness and housing instability.
o Community Economics and Seasonality:
1. Having displaced long-term renters from the community, they have negatively impacted the local economics; seasonality strongly effects occupancy (summer at 95 percent versus other nine months at 50-55 percent on average), so by its nature negatively impacts local businesses.
2. STRs operate at 3-6 times the equivalent daily rate of long term rentals; if long term rents are one (3,620 total housing units in MB), then during the summer months, the combination of short and long-term rentals yields an equivalent rent of 9,301. The income amplification is 9,301/3,620 —> 2.6.
3. While this community income amplification benefits the STR owners, it creates a market stimulus affecting property sales and long-term rents in an upward trajectory. While this stimulus effect benefits local owners and is supported by the real estate industry, it sends a ripple effect across the City ultimately impacting those with high ratios of rent to income.
4. This ultimately leads to increased homelessness and the associated costs to re-house the homeless.
In conclusion, any short-term rental compromise should be dictated by a global economics criterion. The question is whether there is any seasonality and distribution combination that does not ultimately, negatively affect the City Treasury. Attempting to license and operate STRs during the winter months in areas primarily driven by seasonality, such as the beach communities, makes little economic sense. And certainly, concentrating STRs such that they impact long term sales and rents should not be allowed purely from a City cost benefit analysis.
Issues associated with distant and large, corporate ownership create problems everywhere, not just in San Diego. In North Carolina, half of the houses near where I grew up are now owned by various MDs in Florida who have never been there. They are used as vacation rentals. How much of San Diego real estate now has “distant” ownership, whatever that means. Los Angeles does not see as a problem the number of cars for the 2 BR 1 BA that sleeps 6 (maybe 8) adults.
This is alarming https://www.10news.com/news/local-news/san-diego-news/san-diego-police-investigating-homicide-at-point-loma-vacation-rental
sadly this is all predictable. remember campbell running on a promise to stop STVRs – then quickly reversing course and ignoring her campaign promise as soon as she was elected? then proclaiming herself to be a hero be legalizing the lawbreakers? this city has always been corrupt. remember roger hedgecock and that crew? nothing changes.
correction: “hero by legalizing”
request: add an ‘edit’ function!