No big deal or a “bloodbath”? Mission Beach Responds to City Council Limits on Airbnb Rentals

Maurice Maio is the owner of San Diego Beach King, a vacation rental business in Mission Beach. But he didn’t look like royalty on Tuesday, a day after San Diego City Council passed an ordinance restricting short-term rentals and eliminated a mayor’s proposal to make an exception for the popular beach and beach community. bay.

“Eighty percent of homes (using short-term rental housing) will be affected,” Maio said. “I think we’re probably going to see a ghost town effect in Mission Beach.”

With around 44% of its estimated building stock being short-term rentals, Mission Beach is seen as the starting point for the great debate on how San Diego should regulate colocation platforms like Airbnb.

Supporters of the new rule viewed the city council’s 6-3 vote as a great victory, but others see it as a serious economic threat.

While new regulations passed by city council on Monday will affect the entire city, they promise to dramatically disrupt the long-standing vacation rental market in Mission Beach, where some estimates put the number of such rentals at over 1,000.

In a decision that will dramatically change the home-sharing landscape in San Diego, city council on Monday voted to ban vacation rentals in second homes, limiting short stays to her primary residence only.

Under the action of the council, short-term rentals of entire homes will be limited to his primary residence only for up to six months per year. While there was movement to consider exempting Mission Beach rentals that paid the required transitional occupancy taxes to the city, the majority of council was unwilling to legislate on exemptions.

“If we can’t rent the property on a short-term basis and it’s not about renting it on a monthly basis, then it’s a bloodbath for us,” Maio said. “We should consider selling.

Maio was shy about how many properties his company rents – “less than five,” he said.

In Mission Beach, the vast majority of short-term rentals are second homes or, in some cases, investor properties, according to vacation home management companies.

(John Gibbins / UT)

The new rules are expected to come into effect in July next year.

RELATED: San Diego Council Votes To Limit Airbnb Rentals To Primary Residences Only

In perspective, about 1,500 of San Diego’s more than 11,000 short-term rentals are in Mission Beach, according to a report prepared last year by Host Compliance, a company that works with cities to monitor and enforce regulations. short term rental.

In Mission Beach, the vast majority of these rentals are second homes or, in some cases, investor properties, according to vacation home management companies. The net effect of the new regulations, they say, will be to eliminate these rentals.

“We are not responding well. Mission Beach owners are panicking because we all interpret this as a ban, ”said Blaine Smith, owner of 710 Beach Rentals, which manages 140 rental units, 85% of which are in Mission Beach. A Crown Point resident, Smith himself owns a vacation rental in Mission Beach, as do his parents, who live in Temecula.

“Some of these owners have owned properties for three or four decades,” he said. “Some owners say, should I sell because they can’t live there six months a year. Some called to say it was wrong and that we were going to sue the city. I was on the phone with my dad, and he’s extremely nervous and upset about it.

Share San Diego, a coalition of some of the largest vacation rental companies as well as individual guests, said on Tuesday it planned to take legal action, alleging a violation of equal rights and rights. of property under the US Constitution.

However, other cities across the country, from New York to San Francisco, have also legislated vacation rental rules that limit them to their primary residence.

“Without a doubt, Share San Diego and our members who participate in the sharing economy believe that property rights and constitutional rights were violated yesterday by San Diego City Council,” said Jonah Mechanic, owner of SeaBreeze Vacation Rentals, which operates rentals on the San Diego Coast. He estimates that of the 350 vacation rentals run by coalition companies, 90% are not primary residences.

“We plan to take legal action to ensure that all San Diego property owners, regardless of their classification, are also protected.”

Airnb, which hired former San Diego City Attorney Jan Goldsmith to represent the company at Monday’s hearing, said Tuesday it had no further comment.

Council members, voting for tighter restrictions, argued their first obligation was to residents, who have complained for years that holidaymaker rotation cycles are disrupting their quiet neighborhoods, depleting the housing supply in the city. long term and transform houses into mini-hotels.

“The community that I represent, they came out in force and they said, we have no more neighbors – it’s just a big party all the time,” said Lorie Zapf, board member, who worked on sides of the board. member Barbara Bry to write the prescription.

In cracking down on short-term rentals, the council also approved a registration program that would require payment of an annual license fee of $ 949, which would help generate revenue to help hire staff to enforce the news. laws. But since there will be considerably fewer hosts paying the fees, it’s unclear how robust the law enforcement program will be. Charges were calculated on the basis of the primary residence rental authorization plus an additional short term rental.

Those who fail to register their properties could face daily fines starting at $ 2,500 per violation. Hosting platforms would face even tougher penalties if they don’t ensure their hosts have the proper licenses.

Some critics say the demand for short-term rentals is so strong and the ordinance so strict that it will encourage fraud.

“Look, you can’t stop the bad actors from trying to play with the system,” Zapf said. “But I can assure you the neighbors will keep an eye on them. It’s very clear when something is for rent – there are people coming and going… The fines are incredibly high to prevent the metro (economy), but if people want to try it, it’s theirs.

Meanwhile, the new regulations will still have to be approved by the California Coastal Commission, which has long favored short-term rentals as an affordable option for overnight accommodation along the coast. While other coastal cities, including San Francisco, have passed regulations that limit vacation rentals to primary residences only, the commission has not taken a consistent approach with every city, said Deborah Lee, district manager of the commission for the San Diego area.

In a letter she sent to council members last week, Lee said staff liked the idea originally proposed by Mayor Kevin Faulconer not to limit vacation rentals in Mission Beach given the “decades-long popularity” of house-sharing there.

Although commission staff have yet to see the exact language of what the council has approved, Lee said he was concerned that “it will reduce the inventory” of more housing. affordable in the community.

“So far, the city has not put this in any context.” Lee said. “They haven’t shown how many units (for the night) they have or the range of affordability for hotels and what’s in the vacation rental market. We also recommended that they do not adopt a maximum stay and the board opted for six months, so we are concerned about those items.

“But in fairness to the city, we haven’t seen the final ordinance. Hopefully they will move the analysis forward.

Gary Wonacott, president of the Mission Beach City Council, fought for tighter regulations and predicted the impact wouldn’t be huge for most Mission Beach residents who rent out their properties.

“They can convert to long term rentals and they’re going to do really well, I think,” Wonacott said. “My wife and I have three long term rentals and everything is fine. You don’t need to have short term rentals in Mission Beach to survive.

However, Aaron Steele is concerned that the new rule will affect him significantly.

Steele, his wife and two children have outgrown the two-bedroom, 1,000-square-foot home they own in Mission Beach and are using the money they make from short-term rentals to pay for the part of the lion of the largest house they are currently renting nearby.

The new regulations would not allow them to continue to do so.

“We may have to move from where we live just to adapt,” Steele said. “It does not mean anything.”

Not all Mission Beach vacation rental owners are wringing their hands on the board’s decision.

Pacific Beach resident Ed Nodland, who has been renting his two-bedroom cottage in Mission Beach for short stays since about 2008, said he and his wife would likely switch to long-term tenants once the new regulations come in. in force.

“The income changes a bit, but we’re just going to rent it out for longer periods, 30 days or more or maybe for a two-year period,” he said. “We are not the type to fight the changing times.

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