New figures shed light on potential impact of vacation rental proposal

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Artwork by Ashley Lewis and Adriana Heldiz, source data via Granicus

As City Council President Jen Campbell and stakeholders on both sides of the vacation rental saga prepare to debate yet another settlement proposal, they grapple with an inconvenient truth: No one knows. exactly how many vacation rentals there are in the city.

Campbell predicted his plan could reduce the number of whole-home rentals in the city by at least two-thirds. But new data obtained separately by Voice of San Diego and the city’s Office of the Independent Budget Analyst suggests Campbell’s proposal may not reduce the number of whole-home vacation rentals as much as it predicts. . The new numbers also offer a window into an industry hit by a pandemic that has decimated San Diego’s tourism industry.

On Tuesday, Campbell will urge city council members to approve a compromise she brokered with labor groups and a vacation rental platform that caps whole-home rentals at 1% of the city’s housing stock, and creates a stronger licensing process and enforcement system that allows the city to issue fines and revoke licenses. The proposal includes an exclusion for Mission Beach, a longtime vacation rental mecca, allowing whole-home rental licenses for the equivalent of 30% of neighborhood housing.

Campbell’s office, based on an old city audit report, estimates that the city has about 16,000 vacation rentals. In comparison, the city reports that only 6,829 vacation rentals have been registered to pay hotel taxes to the city since last week, a number that does not include many renters whose tax bills are managed by rental platforms.

Venus Molina, Campbell’s chief of staff, argues that data discrepancies are another reason the city should pass regulations.

“The importance of establishing this prescription is to create this baseline to really gather the data that we need to know how many there are,” Molina said.

Republican Chris Cate, who himself has pushed beyond his own regulatory proposals, agreed.

“Until we have a permit system, numbers are going to be everywhere,” Cate said. “Everyone is going to have assumptions or estimates.”

Campbell’s team didn’t attempt to guess how many whole-home rentals there might be in the city, but the Council Speaker’s political speech would allow the city to hand out about 5,400 whole-home rental licenses, a figure based on the 540,022 accommodation units in the city, to operators wishing to accommodate travelers for more than 20 days a year. It would also provide unlimited licenses for home-sharing operations, where the owner stays on-site, and for whole-house and home-sharing hosts who host guests less than 20 days a year. Permit costs are still to be determined and the amounts set could also influence the decision of hosts to continue renting their spaces.

The first set of data obtained by VOSD comes from Granicus, formerly known as Host Compliance, which the city once paid to help it track down renters who weren’t paying hotel taxes.

Granicus scoured about 50 websites where vacation rentals are advertised and found 16,361 listings in the city as of mid-January. Of these, 81% were for whole-home rentals. After considering listings on multiple sites, Granicus found 13,919 unique rentals, a number that includes both whole homes and home sharing. Here’s a breakdown of the city’s top neighborhoods for rentals compared to the number of rentals for those same neighborhoods in 2017, when the company last provided data to VOSD.

In 2017, Host Compliance provided a tally of vacation rentals across the city. The company provided the same data in 2021 showing an overall increase in rentals since then. (Click to enlarge)

The latest data from Granicus shows that the number of vacation rentals listed has increased since 2017 – from around 11,347 unique rentals in December 2017 to more than 13,900 last month – but the dataset the company provided VOSD did not report how often those listed rentals have been rented recently, or how many entire homes were counted after listings were removed on multiple sites.

If around 80% of vacation rentals captured by Granicus analysis were whole-home rentals – roughly the same proportion of whole-home rentals as a percentage of the industry as in 2017 and total listings in 2021 – that could mean there are over 11,100 whole-home rentals in the city.

This would suggest Campbell’s proposal would roughly halve the number of whole-home rentals in the city. But the proposal would not limit the number of whole-home rentals that host visitors for fewer than 20 nights a year – and a certain percentage of hosts only occasionally host guests.

The Office of the Independent Budget Analyst sought to control the number of hosts who rent their homes less often to assess the impact Campbell’s proposal would have on the rental industry and on the city’s hotel taxes.

Budget analysts analyzed 2019 data from Inside Airbnb, a website that tracks Airbnb listings, and spoke with the city treasurer’s office about hotel tax collection.

In 2019, budget analysts estimated there were 11,302 whole-home listings.

Analysts Baku Patel and Jeff Kawar noted in their report released Friday that vacation rental platforms and other sources have not shared data showing how often rentals are booked and the percentage of rentals booked more or less than 20 days per year, a key trigger for the Campbell’s prescription. Patel said budget analysts had run models estimating that 15-25% of rentals were rented less than 20 days per year and had spoken with industry experts who confirmed that this range held true.

Based on their assumptions about rentals booked less than 20 days per year and the number of permits available under Campbell’s proposal, Patel and Kawar estimated that the city could lose 1,651 to 2,781 rental listings from whole-house vacancies, numbers that would represent the equivalent of a 15 percent to 25 percent drop in whole-house listings. That’s less than the two-thirds drop Campbell claimed to follow if his proposal goes through.

Budget analysts also estimated that the cut would lead to a 14-23% drop in hotel tax revenue.

In 2019, the city earned $31.5 million in hotel tax revenue from vacation rentals. Patel and Kawar estimated a $4.4 million to $7.3 million drop in hotel tax revenue if Campbell’s order were in effect, but noted that the pandemic could mitigate the immediate budget loss given the drag. continued tourism.

Data provided to VOSD by AirDNAan analytics firm specializing in short-term rentals, reveals the impact of the pandemic on the industry in San Diego – and how bookings changed month-to-month even before the health crisis.

AirDNA data shows vacation rental listings on the Airbnb and VRBO platforms fell 28% in January compared to January 2020. The number of listings with at least one reservation in January also fell 39% , from 9,360 in January 2020 to 5,718 last month.

Here’s a look at how the number of active vacation rentals has fluctuated since 2019 and during the pandemic.

In December and January, the number of whole-home rentals with at least one reservation fell below the roughly 5,400 permits the city would grant each year to guests who rent their homes more than 20 days a year. The number of Airbnb and VRBO whole-home listings topped 6,500 both months.

The difference is that the properties listed are not necessarily active short-term rentals.

AirDNA spokeswoman Kristina Sprindyte and Jonah Mechanic, whose San Diego company manages vacation rentals and has been defending rental operators for years, said a certain percentage of rentals have been temporarily taken off the market. as some hosts choose to use them in different ways during the pandemic.

For example, Mechanic said some hosts who live outside of San Diego most of the year have opted to stay in their second homes during the pandemic as work and school move online, or have rented for weeks or months rather than for the shorter trips that were far more common in the past. Some of these homes remain listed on rental sites.

Mechanic said it hopes Campbell’s proposal will pass and provide more certainty for the vacation rental industry as the economy rebuilds.

He thinks the ordinance is also needed to help the city accurately assess the number and types of vacation rentals it has. Absent this information, Mechanic said, the impact of the regulations won’t be fully clear until after they’re implemented.

“I don’t think anyone will be able to give hard numbers until the dust finally settles on this,” Mechanic said.

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