Tomorrow, December 3, 2020, the San Diego Planning Commission will consider a proposal to greatly reduce and regulate the short-term rental industry in the city. This item will likely move to the City Council for consideration in 2021.
You can add a comment or sign up to give live testimony via the Planning Commission website. Below is my short comment, opposing the MOU and supporting the many thousands of hosts in the City of San Diego.
This amendment / action would reduce the number of short term rentals in San Diego by approx. 65% and harm thousands of property owners during a period of economic turmoil. I urge the Planning Commission to oppose this amendment / action.
I agree with requiring a license number for each unit rented on a short-term basis, and requiring the posting of this license number on any online platform. I also agree with enhanced enforcement of noise and other nuisance laws, including an escalating fine scale for repeat offenders.
Short-term rentals are immensely popular (and have proven to be more resilient than hotels and other accommodations in the current Covid climate). I hope the Planning Commission will embrace short-term rentals and support this long established opportunity for San Diegans for the years to come by opposing this item. Thank you.
Airbnb has collected and remitted Transient Occupancy Taxes (TOT) for hosts in the City of San Diego since July 2015, making collection of these taxes easier for both hosts and the City Treasurer. Per the City TOT FAQs, TOT is charged for the following stays:
“If you are renting a room for less than one calendar month, the rental is subject to the TOT.”
“It is the purpose and intent of the City Council that there shall be imposed a tax on Transients”
And to whom that tax applies in the definition for Transient:
“Transient” means any Person who exercises Occupancy, or is entitled to Occupancy, by reason of concession, permit, right of access, license, or other agreement for a period of less than one (1) month. A month is defined as the period of consecutive days from the first calendar day of Occupancy in any month to the same calendar day in the next month following, or the last day of the next month following if no corresponding calendar day exists.”
This definition does not rely on a strict number of days to qualify as a month – it is dependent on the number of days in each month. A stay of 28 days (or 29 or 30) in February (of a non Leap Year) are not subject to TOT but a stay of those durations in July would have TOT since July has 31 days.
The City of San Diego TOT is 10.5% for small short-term rental operators, those with less than 70 rooms. An additional TMD assessment used to apply to small operators but now applies to large operators only, effective September 1, 2016. Rates and additional information available on City website for TOT.
Airbnb has not correctly implemented the definition of a calendar month in collecting the TOT in San Diego and instead is applying the tax to any stays of 30 days or less. Per an email from Airbnb this week the company is collecting “10.5% of the listing price including any cleaning fee for reservations 30 nights and shorter”.
The Airbnb site can be used to see how the TOT calculation is being applied by entering dates and then clicking a property to see the reservations details, where the TOT is listed as a separate line as “Occupancy taxes and fees”. Below are a few sample results showing the TOT being charged when it should not be. The erroneous TOT charges are for hundreds of dollars each. I also called the TOT help phone number at the City (619-615-1530) to confirm that TOT should not be applied to these specific date scenarios.
I’m a big fan of Airbnb both as a host and as a guest. Having the company collect and remit TOT for hosts is a nice convenience, as previously short-term rental hosts on the platform had to complete and file a monthly return to report TOT. The incorrect application of the TOT rules and resulting overcharging of customers is not right and needs to be corrected. I’ve reached out to the company a number of times requesting this and either due to a difference of understanding or other reasons a correction has not been made. I’m hopeful that this article may result in corrective action being taken.
Mail-in ballots for primary races in San Diego were mailed out today, May 7, so if you live here you can expect to see them arriving soon. The election date is June 5. Vote next week, or the following, or on June 5 – just remember to vote.
Who to vote for? In the County Supervisor race for District 4 it’s clear:
** VOTE OMAR PASSONS **
I’ve known Omar for a few years and met him IRL (in real life) after starting to use Twitter as a newly established stay-at-home dad and fairly recent arrival to San Diego. He and others invited me to join them for pick-up basketball in Golden Hill. I love playing basketball and it was nice to connect with a bunch of people I hadn’t met before. Especially nice given that many of them were engaged in local issues and care about making this a better place to live.
If you’re engaged in San Diego issues you probably already know Omar (if not, find him on Twitter @omarpassons). He’s long been involved in city issues with hands-on experience or in policy discussions from graffiti to neighborhood parks to the many stadium debates in San Diego and so much more. The man is a dynamo of energy and gives frequently and deeply of his time and energy to support a broad range of causes that matter to him.
I’m not a Democrat or a Republican and broadly feel the strict two party system sets up a by-default “Us vs. Them” debate on nearly every issue, often unnecessarily. I’m a policy and issue voter and if you’re looking for an intelligent and thoughtful person to consider issues and guide the region you’ll find such a person in Mr. Passons.
No other candidate in the race has put forward as detailed of positions and policy ideas as Omar and it’s no surprise – these aren’t “made-to-campaign” platforms put together for the 2018 elections. They’re policies honed over decades of experience and personal action, wrought from real and deep-seated caring about our region and residents.
Take a look at Omar’s website for more details – www.omarpassons.com. Or take my preferred route and check out his podcast series for an audio experience on a walk around town. You’ll get a good sense for Omar as a person and why you should vote for him on June 5.
The City of San Diego continues to discuss options for regulations and rules around short-term rentals on sites like Airbnb. Short-term rentals are rentals for less than a full calendar month and have been the topic of discussion at a number of City Council and committee hearings over the last few years.
I recently received an inquiry from a San Diego resident that would like to rent out one or two bedrooms in the home they live in – sharing a room or home with guests is often referred to as “home-sharing”. Home-sharing is frequently brought up in the short-term rental debate with both sides typically saying there is no issue with this type of activity. (However, home-sharing is the only type of short-term rental I’m aware of that the City of San Diego took to court, and ultimately the judge decided that this type of activity is not allowed under current rules and issued a fine to that host.)
The prospective host in this case was looking to do the right thing and get clarity from the City before hosting on Airbnb. They contacted several City departments regarding how to fill out the right information for the Transient Occupancy Registration Certificate( “TORC”), if a Business Tax Certificate is required, what taxes they need to pay, and if there are other regulations they need to follow for lawfully renting out rooms via platforms such as Airbnb.
On the response to the prospective host, the city was clear and straight-forward in providing the process to register for the TORC, what kind of taxes the host would need to pay, etc. The Transient Occupancy Tax (i.e. hotel tax) is not part of the debate and proposed short-term rental rules – it is already in place and collected (and in the case of Airbnb remitted for all hosts on the platform each month by the platform itself).
However, in regard to other requirements for operating an Airbnb, the prospective host was directed to consult the Development Services Department (in charge of Land Use and Development). Surprisingly, when the host reached out to Development Services they were told that since there are no official regulations or rules around short-term rentals, this kind of activity is currently not allowed in San Diego. That’s when the host reached out to me, as part of my efforts with the Short-Term Rental Alliance of San Diego (STRASD) – seeking clarity the city couldn’t provide and how they should proceed.
The contradiction between the responses from different City departments is confusing but accurate. Yes – you can register and pay the taxes for this sort of activity. No – you can not engage in this type of activity in the first place. This is the current status of short-term rentals in San Diego, at least for home-sharing situations. It still seems that whole-home short-term rentals may be on firmer ground, although the current City Attorney has declared all short-term rentals illegal. [Note: the previous two City Attorneys held a different position, that short-term rentals were not illegal.]
This sort of lack of clarity is harmful to potential hosts like the one highlighted in this post – a San Diego resident seeking to improve their economic position and do so in a straight-forward and compliant manner in the type of short-term rental that is roundly approved of and supported. We need clarity to support residents like this and should encourage this type of widespread entrepreneurial opportunity to give citizens more options and ability to chart their own desired course. Hopefully in the months ahead we will see clarity that gives certainty to current and potential hosts and guests and that supports the opportunity that platforms like Airbnb and others gives to many thousands of San Diegans.
Thanks to a request from the Mid-City Parking District a number of streets in North Park will likely soon be converted from parallel on-street free parking to head-in on-street free parking. The following list of requested changes will result in an increase of 254 parking spaces, using more of our public land to store empty automobiles. The proposed changes were discussed at the March meeting of the North Park Planning Public Facilities and Transportation Subcommittee – minutes including discussion can be found here. The proposed changes are on the agenda for the North Park Planning Committee consent agenda for Tuesday, April 17.
The proposed changes are spread across a large section of North Park, but the stretch of 29th Street is particularly interesting to me. 29th Street is the site of the North Park Parking Garage – a 100% taxpayer funded parking garage with low rates that rarely breaks even (and in the most recent year likely lost money due to popularity of biking, walking, and Uber / Lyft – financials aren’t yet out to verify performance). Here’s a map of the blocks of 29th Street and cross streets proposed to be converted to head-in parking (identified in red).
There are a number of reasons to oppose these conversions:
Climate change and health – Increasing automobile parking runs counter to the city’s Climate Action Plan goals to move mode share away from automobiles. Bringing (and parking) more cars in North Park brings more air and noise pollution to the neighborhood, in addition to the potential fatalities and injuries that are common from automobile use. Giving away even more of our public realm to parking is a bad idea. Increasing and encouraging more automobiles in North Park also runs counter to the promotion of the area as a walkable neighborhood. At a time when bike-share, scooter-share, and ride-share options are plentiful and increasing we shouldn’t be increasing the amount of parking for private vehicles.
Aesthetics and safety – This stretch of 29th Street is full of beautiful Craftsman homes. The average age of the homes on the block is around 90 years old. Parallel parking creates a standard car edge so visibility down the street for pedestrians, drivers, and residents is clear. Head-in parking creates large variances (think of an extended cab pick-up, which are for some reason incredibly popular in San Diego despite the urban environment lacking steers and I-beams to carry around, parked next to a small sedan). Pulling in and out becomes more dangerous for those traversing the street. Additionally, the headlights from the vehicles at night are aimed directly into homes which are mostly at street level. I can’t imagine most residents would enjoy the additional lighting from the street.
Unneeded and counter-productive– Most of the houses on these streets already have off-street parking, many have full length driveways and garages. The housing density (number of residents per unit) is almost certainly less than it was 50 years ago, as the average American household size has fallen almost by half. If the housing is nearly a century old and the households are smaller than they have been in the past it seems unlikely that residents are clamoring for more parking on the street to bring in more traffic and noise.
Here’s a photo gallery of each block of 29th Street to get a sense of the housing and parking. The street is very wide but as you can see, there is hardly a lack of parking although this may vary according to time of day.
Perhaps the worst bit of all is residents have basically no say in this process. The parking changes were requested by a parking agency and I don’t believe any residents of any of these streets were part of the application – apparently the mission of parking agencies are to maximize the amount of parking for vehicles. Residents will have a chance to respond negatively to the proposals, a written notice will be sent out. Who does the notice go to – property owners or residents? (Not sure.) Are the mailings certified delivery to ensure receipt by intended recipients? (Guessing no.) Even if the letters are addressed properly, and received what are the odds they are read or understood? (Not likely.) The standard to oppose is that a majority, more than 50%, of the notices sent out must be returned in opposition. If you’ve ever done a survey or mail response campaign you probably understand there is essentially zero chance of ever seeing a 50% response rate to any issue.
If there is demand from the residents on the impacted streets then an Opt-In approach would pass with flying colors. I suspect that there is not support from the residents given the above many reasons this is a bad idea. In either case, I believe the North Park Planning Committee has discretion on this matter to evaluate as they deem most appropriate. I hope they’ll opt to consider the impacts of yet more automobile-focused use of our land in this urban environment and reject this proposal to bring yet more traffic and parking and associated ills to the area. For reference, here’s the evaluation policy for this sort of proposal.
In addition to this conversion being a bad idea there are better options for the excess roadway that does exist. Some of those better options are:
Reduce the road width and increase the size of the housing parcels (increase the public right-of-way usable by property owner) – this would increase home values and the tax base, bringing in funds via property taxes, and allow for planting of trees or other use.
Install a bike lane to enable more residents to bike to work or school.
Do nothing. The status quo, although mostly a vista of asphalt, has real potential and we shouldn’t discard it for more unneeded free parking. Not to mention that once granted it is very difficult to repurpose parking area to other uses, as recent debates in Hillcrest and elsewhere have underscored.
My favorite – Dreaming big I’d love to see Balboa Park connected to the new North Park Mini-Park, located at 29th Street and North Park Way via a beautiful greenscape. My proposal would greatly reduce the street size of both 29th Street and Granada Avenue to something like below – going from 54 feet of street space to 16 feet (paired one-way streets, one North-bound and one South-bound with one side of parking) and adding 19 feet of green space to either side of the two streets. That’s a lot of additional greenery, quieter roads, and an increase in parking on each lot of one space per driveway. (Although I would guess many residents would do as they currently do and opt for more productive uses of their land than parking vehicles and utilize for gardens, play areas, chicken coops, hop scotch, and other options.)
If you have an opinion on this proposal you can attend the North Park Planning Committee Hearing on 4/17 or contact the group via email at email@example.com. Additionally, on my street – Granada Avenue – I’ll be working with the other residents to proactively state our opposition to this sort of conversion. You can consider doing the same as it seems likely the many over-sized roadways in San Diego will likely follow 29th Street in becoming a parker’s paradise.
I was recently included on two podcast I regularly listen to, both on the topic of short-term rentals. I have been using platforms like Airbnb for about 8 years to welcome people to San Diego and have had a great experience. As with many other cities around the globe, San Diego has been debating the proper place for short-term rentals (rentals of less than 30 days or a calendar month) in recent years. I’ve become involved in that political debate locally and follow the issue broadly as well.
The Voice of San Diego podcast is a great resource if you’re interested in local issues and longer interviews with people that make an impact here. I was part of a four person panel discussing potential new rules for short-term rentals in San Diego. The podcast was held shortly before a full City Council hearing on the topic which was expected to result in new rules for the city. Instead, the all day hearing resulted in nothing new and the issue remains up in the air.
Check out the Voice of San Diego podcast on short-term rentals here:
I was also recently on Get Paid for Your Pad – a podcast focused on short-term rentals with news and interviews of hosts from around the world. This show is a great resource if you are a current host, considering hosting, or just interested in the topic. Host Jasper Ribbens, from The Netherlands, does a great job of including perspectives from hosts from different cities and nations and covering a wide variety of news items from technology to new rules that impact the short-term rental industry.
Last month a press conference was held to release a study done on the economic impact of short-term rentals in San Diego for HomeAway / Expedia by Xpera Group. The report follows a similar study commissioned by Airbnb and done by National University in October 2015. Both full reports are included on this post for anyone interested in this issue.
A few highlights from the new study:
Total of $500M of impact in City of San Diego ($300M direct spending, $200 induced and indirect spending)
3,00 jobs in City of San Diego
Transient Occupancy Tax (TOT or “hotel tax”) estimated to be $19M or more in 2017, a 200% increase over 2015 when the TOT from short-term rentals total $9.6M
In 2016, City of San Diego TOT was $202.8M of which $15.6M was from short-term rentals, a 7.7% share.
“Short term lodging guests tend to be much younger than hotel guests and have a higher percentage of females than hotels.”
Short-term guests typically stay longer than hotel guests, “roughly half of short term lodging room nights coming from trips of seven days or longer”
7,436 total short-term lodging listings in City of San Diego, estimated (as of June 2017). 11,530 estimated for San Diego County.
In 2016 San Diego County had 30.4 million visitors, 17.4 million overnight visitors. That would be an average of 47,671 overnight guests per night in the County.
The short-term rental issue continues to be a hot topic in San Diego and a good explainer for the current status can be found here on Voice of San Diego (from Nov 1, 2017). A full City Council hearing is expected to be held on December 12 although a recent hearing was cancelled on short notice in October so we’ll see how the December hearing plays out.
I’ve been thinking about vacant housing units in San Diego for some time and recently was reading about the issue in Vancouver, Canada. The data provided was much more thorough than anything I found locally so I wanted to use it to estimate what the numbers might be in San Diego. Following is my take and links to the underlying information from Vancouver. If you have information on this topic I’d love to connect or hear your input.
This article from the Vancouver Sun from February 2017 lays out some good information about vacant housing units in that city, which in recent years has been often in the news for quickly rising housing prices. Included is the following:
The figures from “2016 show there were 25,502 unoccupied or empty housing units in the City of Vancouver” (below graph from article shows the growth in this number from 1986 to 2016, a period during which Vancouver real estate prices skyrocketed)
This figure is for the City of Vancouver, not the region, and represents 8.2 per cent of total housing units
Per City of Vancouver, there were 309,418 total dwelling units in the municipality as of 2016. This total supports the above calculations (309,418 x 8.2% yields 25,372 or roughly the same amount as show in bullet one)
In response to the high housing prices in Vancouver, the city levied a 1% property tax surcharge on vacant units to push owners to add the units to the housing supply for renters or other owners.
I’ve been trying to find vacant number estimates or similar studies in San Diego and have asked various reporters, housing industry experts, random Twitter users, and other avenues to seek this information. The answers I have received have been all anecdotal but mostly consistent – there are a lot of Downtown condos and probably a fair share of other units that are mostly vacant but it’s hard to ballpark the percentage.
Vancouver is a relatively similar city to San Diego, located on the west coast of North America and with high housing prices and demand. Below are some basic demographic and economic factors – San Diego is larger but in the same ballpark, a large regional hub in a developed country.
Poplulation (metro) – Vancouver = 2.3M, San Diego = 3.3M
Poplation (city) – Vancouver = 647,520, San Diego = 1.4M
Housing units (city) – Vancouver = 309,418, San Diego = 526,663 (1/1/2015)
Since I can’t find a good local estimate for vacant units I thought Vancouver would be a reasonable estimate, or at least a starting point for conversation and hopefully the SD City Council, EDC, Chamber of Commerce, or other party could commission a study to quantify this aspect of housing stock in San Diego. (I would guess the amount would be higher in San Diego than Vancouver given the long history as a vacation destination, the warmer weather, and the presence of large population centers nearby – Los Angeles, Phoenix, Las Vegas, etc.)
The SANDAG numbers may best reflect the number of vacant units, but it’s worth looking at a portion of the above referenced Vancouver Sun article which notes that the private study produced a vacancy rate more than double existing city estimates.
“The census numbers of unoccupied units are more than double an estimate released by city hall last year because a completely different set of criteria and data were used.
Assessing the extent of empty or underused homes can differ depending on “your measurement tools,” said Yan.
While the census might count a greater number of folks who are, say, on extended vacation during the census period, the city’s estimate was criticized for likely missing the number of units used for only short, seasonal periods, perhaps one or two months in the summer, but then are left vacant for the rest of the year.”
So, based on SANDAG’s vacancy rate of 5.2% we would have 27,386 vacant units in San Diego. Using the Vancouver vacancy rate of 8.2% would estimate 43,186 vacant units here. And if we thought that the government estimates are off by half due to sampling methodology, as they were in Vancouver, we could use a rate of 10.4%, yielding 54,773 vacant units in San Diego.
Given the large impact that property tax rules in California can have on homes held for long periods (Prop 13 being most prominent) I would think the vacancy number in San Diego would be at the high end of the above numbers, probably 50,000 or higher, maybe much higher. Prop 13, over time, can result in incredibly low property tax burdens for long-time owners. Prop 13 allows properties like the amazing home below, currently for sale for $1.7M, to pay a total of $136.97 in total taxes a year – a rate of .008% rather than the approx 1.05%, $17,850 a year, if taxes were applied on market value at existing property tax rates. When holding costs are essentially nothing, there’s greatly decreased incentive to sell and little cost to holding an empty property. It’s probably a large part of the reason the house across the street from me in desirable North Park, which is worth around $750k, has sat completely empty for the 4 years I’ve been in the neighborhood.
I’m not advocating for an empty house tax as Vancouver did, but seeking to get an estimate of vacant units in San Diego to consider a similar or other action. Being involved in the short-term rental (aka Airbnb) debate here the impact of short-term rentals on housing availability and prices frequently comes up. It’s undeniable that increased demand has an upward effect on housing prices. However, short-term rentals produce economic activity for owners, businesses, and the city whereas empty units do none of those things. Upper estimates of short-term rental units in San Diego are around 15,000 (I would guess it’s around half that number) – likely far dwarfed by empty units in our city. We would be much better served putting vacant units on the market rather than reducing economic activity, entrepreneurial opportunity, and property rights by greatly restricting short-term rentals.
This morning a number of media outlets are reporting on a new proposal by four San Diego City Councilmembers regarding short-term rentals. Below is a copy of the memo released that was included in the Voice of San Diego Morning Report today. I wanted to share as I received a few messages about this today – I haven’t had time to read through yet but with the City Council likely to have a hearing on this issue in October or November it sounds like another option that will be on the table for discussion.
I’ll try to do a summary post in the next day or two but wanted to put up the full document for the meantime.
I recently read Dream Hoarders – How the American Upper Middle Class Is Leaving Everyone Else In The Dust, Why That Is A Problem, And What To Do About It by Richard Reeves of the Brookings Institution. Despite having a very long and unwieldy title it was a very good read about the “Top 20%” in the United States. The book calls out unfair advantages that the upper class has carved out for itself and how these advantages have created “mobility stickiness” at the top – if you’re born in the top 20% you’re likely to remain there, more so than your chances of remaining in the bottom 20% if you are born there.
Reeves criticizes practices like legacy admissions at elite universities, college savings plans, nepotistic internship placing practices, the interplay of zoning and access to public goods like schools, and more. The book is a quick read and very informative.
Below is an example of the sort of information presented in the book. I really enjoyed the graphic presentation of data throughout, as well as the casual and plainspoken writing style. It makes the subject matter easier to grasp and relate to. I also enjoyed Reeves’ perspective as a non-native American – he was born in Britain and frequently refers to that land of dukes, dames, and queens and how his perception of America as a more meritocratic place has been challenged through his research on wealth and social mobility.
If you have a chance to pick up this book at your local library or purchase online I’d highly recommend it. It’s important for those of us in the Top 20% to recognize unfair practices and work to create a more fair playing field for our children and future generations.
I’m sending out these books as part of my “Sharebook” campaign – my personal project to send out books I’ve enjoyed and start a number of book chains to continue them being passed after I first ship them.