San Diego council votes to limit Airbnb rentals to primary residences only

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.

The effect of the action will be to restrict investor activity in the short-term rental market while prohibiting residents and outsiders from accommodating short-term stays at multiple properties other than the ones. where they reside.

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.

While council had to weigh a special exemption for long-standing vacation rentals in Mission Beach that had already paid the required transitional occupancy taxes, a majority of council was unwilling to agree to it. It is estimated that about 44% of the real estate inventory in Mission Beach, long a popular destination for vacationers, is for short-term rentals.

The board vote was 6 to 3, with board members Scott Sherman, David Alvarez and Chris Cate dissenting.

An exception has been made for San Diego’s who have additional units on the same property as their residence, such as in a duplex. In these cases only, a resident could obtain a permit for a second vacation rental. While not part of Monday’s action, council members said they would like to reconsider the issue of grandma’s apartments, which under current rules cannot be used for rentals. vacation.

RELATED: No big deal or a ‘bloodbath’? Mission Beach Responds to City Council Limits on Airbnb Rentals

The crackdown on Airbnb-style rentals could affect up to 80% of the city’s more than 11,000 vacation rentals, said Elyse Lowe, the mayor’s director of land use planning and economic development.

Speaking to San Diego City Council during public comments on the STRO issue, Melanie Menders, a PB resident showed her frustration when she counted how many STROs are in a half block of her neighborhood.

(Nelvin C. Cepeda / San Diego Union-Tribune)

“Today’s vote by San Diego City Council is an affront to thousands of San Diego officials and workers and will result in millions of dollars in lost tax revenue for the city,” Airbnb said in a statement to UT. “San Diego has been a vacation rental destination for almost 100 years and today’s vote almost guarantees that business will be forced underground and customers will choose alternative destinations.”

The action, following an at times moving hearing lasting over six hours, marks a stark departure from the centerpiece of a compromise proposal crafted by Mayor Kevin Faulconer’s office over the past few months in response the multiple unsuccessful efforts of board members over the past three years to legalize rentals popularized by Airbnb.

His plan would have allowed vacation rental hosts to rent out their primary residence while they are not present for up to six months per year – plus an additional house with no limit on the number of days per year. The plan approved by the council, led by Coucilwomen women Barbara Bry and Lorie Zapf, would still limit short-term rentals of its main house to six months.

While Faulconer’s effort for compromise was more restrictive than a proposal launched late last year by four board members, pressure has increased in recent weeks from hard-hit seaside communities, as well as unions and the California Hotel Accommodation Industry Association, which had lobbied the city to curb vacation rentals.

The new regulations, which will govern the rental of rooms while the host is present, as well as entire accommodation when the resident is not present, will come into effect by July 2019.

“I was not elected to serve the interests of out-of-town investors, but our constituents in District 2 who have spoken for years of abuse of short-term rentals in their neighborhoods,” Zapf said. , which represents many seaside communities. “Our neighborhoods should not be treated like a game of Monopoly… while our longtime residents are suffering. This is by no means the ideal solution, but it is as close as we were able to get some relief. “

In another dramatic change, council decided not to exempt Mission Beach, long a vacation rental haven, from city-wide regulations, as Faulconer had originally proposed. Earlier today, the mayor issued a memo saying he was no longer in favor of allowing unlimited rentals in the community, but supported vested interests in existing rentals that had paid the tax. transitional occupation required in the city.

According to Lowe, there are approximately 1,100 short-term rentals in Mission Beach that have registered to pay city resort tax. It is not known how many of them are primary residences.

Gary Wonacott, chairman of Mission Beach City Council, was happy with the council vote, having fought for years for tighter regulations.

“It’s pretty touching, really,” Wonacott said, his voice cracking for a moment. “We’re getting our community back… I think it gives us a chance to bring back some young families. “

While a number of changes were made to Faulconer’s multi-pronged approach to regulating the proliferation of vacation rentals, he said he was happy that this ultimately resulted in concrete action on the part. advice.

“I presented my compromise proposal to help city council find sufficient common ground to pass comprehensive short-term rental laws, and with the additional changes made today, we have finally achieved that goal, ”Faulconer said in a statement. “As I have said many times, the most important thing is that we have a set of rules established that protects the quality of life in the neighborhood through increased monitoring and enforcement,” Faulconer said in a statement.

Despite the change in who will be allowed to host vacation rentals, several other parts of Faulconer’s regulatory framework have remained, including imposing minimum stays of three nights in the most saturated coastal areas and downtown San Diego. . In addition, all short-term rentals of entire homes will be subject to a steep licensing fee of $ 949 per year, which would be the highest in the country.. The revenue will be used to fund new code enforcement positions in several departments, although with fewer short-term rentals that would pay the fee the calculation may need to be readjusted.

Hosts on short-term rentals will also be charged an affordable housing fee of $ 3.96 for whole-house rentals and $ 2.73 for those renting a room in their home while they are present.

In an effort to crack down even more on short-term rentals, council has added a provision that will require a more onerous approval process for homes with four or more bedrooms.

The new regulations are also designed to require compliance from the online platforms themselves, which would face heavy penalties for failing to ensure their hosts are registered.

City Councilor Chris Cate, who has long favored a more permissive approach, said after the hearing he was concerned whether she could withstand a legal challenge.

“I am deeply disappointed with the proposal adopted by the Council on short-term rentals,” he said on Twitter. “After nearly four years of debate and discussion, a reasonable compromise was before us that would balance neighborhood protections with our thriving tourist economy. Instead, the Council chose a path that is not only unenforceable and subject to legal challenge, but would drive the activity underground, resulting in the loss of millions of dollars in revenue that fund public security officers and the public. repair of city streets.

The California Coastal Commission, which has long supported vacation rentals as an affordable alternative to more expensive hotel stays along the coast, will also need to weigh in. Last week, the commission sent a letter to council members reminding them of the importance of the role of such rentals. play to ensure affordable access to the coast.

Former San Diego City Attorney Jan Goldsmith, who appeared at the hearing on behalf of Airbnb and HomeAway, warned that legal challenges could follow. The same goes for Jonah Mechanic, who runs a vacation rental business and is president of Share San Diego, a group supporting more permissive rules governing vacation rentals.

He said the vote was “carried out on feelings, propaganda and fear and not on facts” and predicted that the new rules would be challenged in court.

In the decade since Airbnb popularized the home-sharing industry, the estimated inventory of vacation rentals in San Diego has grown to over 11,000, the majority of which are entire homes rented for stays. short-lived, according to data analytics company Host. Compliance

In taking the steps it took on Monday, the council is following the lead of other major cities, such as San Francisco, New York and Paris, which have also limited short-term rentals to residents’ primary residences.

For several years now, pressure has been mounting to take action amid complaints from residents that rotation cycles of vacationers are disrupting their quiet neighborhoods and draining the supply of long-term housing. Vacation rental hosts counter that their tenants have been a boon to the economy and that platforms like Airbnb and HomeAway are providing them with additional income to help them meet their financial obligations.

City Councilor Bry predicted the new rules would be defensible in court and still provide an opportunity for additional income for residents.

“It’s a big day for San Diego as we passed an ordinance that will protect our precious housing stock and still allow people to share their homes to make ends meet,” she said minutes after the end. of the council session. “It’s not a ban. This allows for the sharing of the house and it allows someone to rent out their entire house on a short term basis for up to six months a year. This is the original spirit of Airbnb.

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