Category: Airbnb

Home-Swapping – Now Banned in Carlsbad, San Diego Next?

Effective today, June 4, the City of Carlsbad has new regulations on vacation rentals / short-term rentals in the city.  They have a helpful FAQ sheet explaining where such activity is and isn’t allowed.  Essentially, the city has banned renting any portion of a home, or an entire home, for fewer than 30 days, unless it’s in the “coastal zone” – roughly west of Interstate 5.  This means if you have a second property, or a spare bedroom, you can not rent it for less than 30 days whether once a year, once a month, or every day of the year.  Per my conversation with the City of Carlsbad, it also prohibits home-swapping or a home exchange.

What is home-swapping?  It is trading time in one property for time in another.  A popular platform for enabling this type of trading is HomeExchange.  For many, it is an opportunity to travel and greatly reduce total travel costs by securing free lodging.  I haven’t used home-swapping before but it seems like a great idea.  A couple approaching retirement on my block recently used HomeExchange so I spoke with them to get more details.  (Names withheld to protect privacy.)

homeexchange example
A sample HomeExchange property in Indonesia

To use HomeExchange costs my neighbors $100 annually, which gives one access to the site and contact information for others on the site.  The details for a swap occur between the individual parties, not via the site.  My neighbor noted that some people include money as part of agreements to swap but they have not in their two uses in the past year.  Their first experience was to Brooklyn, New York, and their most recent trip to Florence, Italy.

My neighbor noted that when he originally read about HomeExchange his wife was adamantly opposed but after looking at overall finances and their joint desire to travel they thought it worth a try – this option would close the financial gap and allow for travel now, and during their retirement years soon approaching.

So far the experience has been a very good one for them and they plan to continue using this option in future.  However, the San Diego City Council may have other plans.  The city is currently researching new regulations on short-term rentals which may include a ban on uses like home-swapping as our neighbors to the north in Carlsbad have enacted.  This platform that allows homeowners to utilize their otherwise empty homes and enable world-wide travel for owners would be gone.

For more recent home purchasers in San Diego the financial incentives to supplement vacation funds is compelling.  The median single-family home price in San Diego currently stands at over half a million dollars – $520,000.  As opposed to long-time home owners with lower property taxes (and lower mortgage balances), new buyers are shelling out near-record prices for their homes.  The upside is that living in San Diego means that there is a lot of demand  for property here and home owners have an opportunity to utilize that by home-swapping to visit family or explore a new country.  Of course, banning home-swapping would be a double whammy – high purchase prices and limited ability to utilize homes.

The debate about short-term rentals and Airbnb continues in San Diego and new regulations of some sort are on the way.  Hopefully, these regulations won’t throw new opportunities in the trash can in the effort to address resident concerns.  We are at the start of many new opportunities like Airbnb and home-swapping which are beginning to become mainstream and many others that are yet to come.  Problems need to be addressed, but the opportunities presented also need to be preserved when possible.

[The Carlsbad prohibition of home-swapping also raises questions about the general ability of homeowners to have guests of any sort.  If no payment is being made but home-swapping is not allowed, are non-paying friends or family also prohibited?  It almost seems as if any overnight guest is technically barred from staying, though I don’t believe this was the intent of the new law.]

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.

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My most recent guest enjoyed playing with my kids and even gave them books she had illustrated.

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.

A Request for Airbnb Visitors to San Diego

The City of San Diego is currently considering new regulations on short-term vacation rentals like Airbnb.  These regulations could potentially ban this type of property use for the entire city.  Currently the city is pursuing a case against a retired school teacher for renting out rooms  in her home via Airbnb with potential fines of up to $250,000.  There are also groups organized to push for restrictions and a ban on short-term rentals.  Nearby cities like Carlsbad and Santa Monica have recently passed very restrictive rules regarding short-term rentals and there is a real possibility San Diego could be next.

If you have enjoyed visiting San Diego using Airbnb, VRBO, or other short-term accommodation please take a moment to share your story.  I am part of a group of San Diegans that are working to preserve this opportunity for visitors and residents alike, to benefit our city socially, culturally, and economically.  If you have friends or family that have visited San Diego using a short-term rental please pass along this request to them.

Please share your voice at: http://www.strasd.org/share-your-voice

We will present all of the support for short-term rentals to the City Council in our efforts to ensure this property use remains a possibility for homeowners in San Diego.  Thank you!

A sample Airbnb property in Pacific Beach.
A sample Airbnb property in Pacific Beach

Share Your Support for Airbnb and Short-Term Rentals in San Diego

If you value the existence of short-term rentals in San Diego and platforms like HomeAway, VRBO, and Airbnb please share your thoughts to ensure they remain available here.  The San Diego City Council is currently considering new rules and regulations for this type of property use which includes a potential ban, strasd-logo-w375among other possibilities.  The Short-Term Rental Alliance of San Diego (STRASD) is a grass-roots group of San Diegans that has organized to give a voice to responsible hosts here and the benefits that short-term rentals provide to the city.

The City Council Smart Growth and Land Use Committee held a hearing on April 22nd attended by hundreds of San Diegans on this issue and will have another hearing on May 29th.  For many, it is not possible or difficult to attend in person and voice an opinion.  STRASD has created an online submission option you can use to add your thoughts and why you support short-term rentals here.  Whether you are a property owner, a visitor to San Diego, a local business, or anyone else that supports platforms like Airbnb your voice is important and needs to be heard!  STRASD will compile the submissions and present them to the City Council.  Please take two minutes (or more) and add your perspective.  It really makes a difference.

You can make your submission via the “Share Your Voice” link at the top right of the STRASD website, or via this direct link.  Thank you for speaking up.

The following is my submission, as an example.  Yours can be shorter or longer – the important thing is that you make a submission.  If you’re not familiar with this issue or would like to discuss I’d be happy to talk with you, just drop me an email or phone call.

I am an Airbnb host in North Park and love the platform and the opportunities our family has due to it. We bought our home two years ago, and the presence of a second legal and permitted unit on the property was the primary consideration outside of neighborhood for us. We exclusively use Airbnb when we travel and wanted the opportunity to be a host in San Diego. We are a one-income family and planned on the income from the second property to allow us to spend quality time with our young children. A ban on renting our property on a short-term basis would be a major issue for us and may cause us to sell our home and potentially leave the region as well.

It’s not all about the money though. For us and for many hosts there are many factors at play in being hosts on Airbnb. We are able to accommodate friends and family in town (no return on investment) due to the flexibility provided. We are able to help move San Diego away from solely being a car-focused place by encouraging bike use (provided), bus, etc. Many guests do not bring a car, they walk around the neighborhood and improve the conditions around parking and traffic for all. We can show off our great neighborhood of North Park and the many businesses located here. I give all of our guests great San Diego beer to help promote one of our most recognized industries. We’re also able to host parents of friends that otherwise would be miles away instead of a short walk.

During the time we’ve owned this property we’ve made many improvements to the cottage we rent out, hiring local electricians, plumbers, construction workers, and other service providers. We also pay a neighbor to clean the cottage at an hourly rate that is more than double the existing minimum wage. The positive economic impact for San Diego provided by platforms like Airbnb and VRBO is significant and on top of indirect effects like restaurant purchases and zoo tickets the dollars paid for the lodging itself benefit our local community by staying with owners that live and spend here, not hotels that take the money out of our city.

Please keep ordinary San Diegans like us that are good hosts and care about and are involved in our community in mind when contemplating any regulations or rules on short-term rentals. This is a great opportunity for many people in the city that should not be eliminated due to a very few problem locations. Thank you.

Common Ground on Airbnb in San Diego

The debate about short-term rentals, including sites like Airbnb, Flipkey, VRBO, and Craigslist continues in San Diego.  The San Diego City Council Smart Growth & Land Use Committee held a public hearing on April 22nd that was attended by hundreds and will be continued in a hearing to be held on May 29th.  To date, four council members have issued memos on the issue (click links for full memos):

San Diegans waiting to attend the April 22nd hearing
San Diegans waiting to attend the April 22nd hearing

While there are a broad number of issues that have been raised, there are also some very major points that nearly everyone agrees on.  These basic points should be the baseline for any proposed rules or regulations.  They include:

  • Everyone should pay the hotel taxes due
    • Anyone renting out a property or a part of a property is responsible for timely and full payment of the San Diego hotel taxes – for most, that is a transient occupancy tax of 10.5% and a tourism marketing district assessment of .55%. (For more details on the taxes click here.) These taxes are not being debated although the City Treasurer could do more to improve the payment system including acceptance of credit card payments, a payment profile system to save account information and history, and acceptance of zero due filings.  Additional staff for the Treasurer’s office to collect back taxes would likely pay for itself many times over in addressing current non-compliant properties.
  • Owner-occupied properties should be allowed to host guests
    • The horror stories of late-night parties, loud noise, and heaps of trash no doubt reflect reality in some instances.  These types of issues are far more likely to occur in a non-owner occupied property.  I have heard very few people that want to prevent a widower from renting a room in their house, or a young couple trying to pay bills renting a spare bedroom.  Home owners should not be curtailed in their ability to rent space on their own property.  There do not seem to be many San Diegans that would agree with the City Attorney prosecuting a retiree in Burlingame for renting rooms in her own home. (Other than perhaps her private investigator neighbors.)
  • Enforcement of existing nuisance laws and fines for bad actors
    • Late-night noise, property damage, trespassing, and other issues have existing laws on the books.  These should be enforced and property owners held responsible for the behavior taking place on their property.  Additionally, most parties support fines for bad actors on an escalating scale.

Hopefully the city council will take these common ground, and common sense, items as a starting point for any proposals put forward.  Other issues remain and will likely be contentious but with very strong support across the board for the above items there is no need to muddy the conversation with issues that are not being debated.