A Ban on Short-Term Rentals Is Terrible for Homeowners, And Our City

Do you own a home in San Diego? The homeownership rate for the county is around 55% so there’s a good chance you do.  The proliferation of companies in recent years tailored to improve housing efficiency and financial opportunities for home owners has led to many ways in which property can be utilized that did not previously exist.  It is changing the entire idea of what homeownership means for many.  Instead of a 30-year liability that eats up 30 – 60% of take home pay, owners are increasingly able to reduce this liability and/or have more options and flexibility in their lives.

For some, these opportunities are to rent a spare bedroom in the home they occupy to earn money.  For others, it is the opportunity to rent their home while they are on vacation – in some cases paying for the entire trip while using what would be an empty house.  Instead of renting out their home while away, some use home-swapping to explore a new part of the world.  An older couple on my block uses home-swapping about once a year – last year for a month visit to family on the East Coast and this year for a month-long visit to Italy.  These are all great options for people that elect to utilize them, and that largely benefit individual homeowners.

All of these examples do not reduce housing stock for local residents.  They also are part of systems in which homeowners have a very significant stake in making sure guests are polite, quiet, and considerate.  No one wants their home trashed or to hurt the neighborhoods they live in.  I recognize that there are outliers in which homes have been destroyed by short-term tenants.  It’s worth noting that Airbnb alone books more than 100,000 rooms per night – the horror stories that make the news comprise a very small percentage, likely less then .01% of bookings.  In the rare instances in which such issues do occur, I have yet to see an example in which Airbnb does not fully remedy the situation for the homeowner.

Platforms like Airbnb, VRBO, HomeExchange, and others are becoming more mainstream but we are still in the very early days of these tools.  The Wall Street Journal this week highlighted how large extended families are utilizing short-term rentals to connect with far-flung relatives.  The article noted that “nearly 1 in 4 travelers has switched in the past two years to vacation-rental homes from hotels or condos”.  This growth is significant and increasing.  It represents an incredible opportunity for local economies, in particular home owners and local businesses.  Visitors now have the opportunity to stay in real, dynamic, attractive neighborhoods.

Here in San Diego locals can host visitors from all over the world to experience North Park, Little Italy, Ocean Beach, and other fantastic neighborhoods.  It gives a far superior experience for many than staying in Hotel Circle or Downtown.  The ripple effects from this for the reputation and long-term prospects for San Diego are enormous.  We used to be known for beaches, Tijuana, SeaWorld, and the Zoo.  Look at us now – world-wide recognition for the beer industry, industry leading research in science and telecommunications, and thriving neighborhoods with great restaurants and cafes opening daily.  The latter is what our guests can now experience in a realistic way and the reason so many people want to move here.  It shouts: “We’re a real city!”  Beaches and a laid-back attitude will (hopefully) always be part of the San Diego identity.  But we’re not a tourist attraction cultural backwater.  We’re a fully fledged modern American city with the full range of amenities that entails and full of passionate, intelligent, fit residents working to better our region and world – and have a great time doing it.

We can build on this momentum and put San Diego on the top of everyone’s list for places to live or visit.  It will be difficult if our approach is to bar visitors from having an authentic experience of our best neighborhoods.  That’s a good enough reason for me to think a ban on short-term rentals is a terrible idea.

On top of handicapping our ability to attract great people and showcase all the good things happening here we would also be directly harming every property owner in San Diego.  Economic winds change, personal illnesses occur, and people get older with big, empty houses.  The ability to benefit San Diegans all across the city by utilizing unused space in their own homes is an absolute win for everyone.  It can mean the difference between a foreclosure and staying in your home.  It can mean social connections for empty nesters on a fixed income.  It can mean new friendships established and a chance for proud residents to personally show guests what a great city we have.

The types of opportunities are as large as they are varied but are not assured to remain.  Carlsbad just passed a law to ban any sort of short-term rentals in much of the city.  That is a severe reduction in property rights of homeowners.  If you have four bedrooms and three are empty you are explicitly barred from hosting a guest for fewer than 30 days.  Yes, you can get a long-term roommate who will then enjoy tenant rights.  I’d guess that many that might be willing to host a couple for a weekend likely aren’t looking for a long-term housemate.  This rule also prevents homeowners for utilizing their home while on vacation, explicitly preferring to see properties sit empty rather than be used.  An empty house is an inefficient use of space, a reduction of dollars in the local economy, and can be a safety issue as empty homes are sometimes targeted for theft.  Santa Monica recently passed rules that also eliminate the ability of homeowners to rent their home while away.  Good-bye home-swapping or a paid-for vacation for property owners in that town.

Will San Diego follow the lead of Santa Monica and Carlsbad and take away from our economy and the pockets of individual home owners?  I hope not, and hope that if these sort of rules are passed here the elected officials responsible will be held accountable.  We are talking about reducing the utility and freedom that residents enjoy in their own abode.  The largest asset and most private place that we enjoy would be negatively impacted.  This is not a trivial matter, and certainly not one in which drastic action should be taken across the entire city hastily.

If you support short-term rentals in San Diego please share your voice here.  This support will be presented to the City Council.