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’ve been using custom online guidebooks from Hostfully for about a year to share recommendations and property information with our guests in San Diego. I really like the platform and functionality, especially the ability to send a PDF, print, or link to the guidebook for easy guest use.
Hostfully recently started a regular series of articles featuring hosts using the platform – the “Hostfully Host Spotlight” and this week they decided to feature our property in North Park and some favorite recommendations in San Diego.
You can check out the profile article at the below link. Cheers!
(If you’re an Airbnb or VRBO host in San Diego and interested in Hostfully please feel free to drop me a line and we can chat.)
I was curious about the overall impact of the venue on the neighborhood in terms of patrons and dollars – how many people are attending concerts and bringing energy, liveliness, and money to North Park. I live a couple of blocks away and it seems to be quite popular but I hadn’t seen any numbers about the average attendance, etc. Here’s the response I got from an Observatory representative (received on 8/11/2017) on this topic:
“Our capacity is 550 seated or 1100 standing. We do between 12-25 shows per month with the average of most shows being about 80% sold.”
Let’s do a bit of math to get a monthly estimated total of attendees:
Average capacity: 825[(550 + 1100)/2] (assuming half seated shows and half not)
Average shows per month: 18.5 [(12 + 25)/2]
Average attendance per concert: 660 (825 x 80%)
Total attendance per month: 12,210 (660 *18.5) ———>> In a year that would be an estimated 146,520 attendees.
What does this mean for the larger North Park economy? As a rough estimate, this infographic from event organizer / platform Eventbrite is what a quick Google search yielded. It’s a bit dated, from January 2015, but as I don’t currently have a data analyst on staff I’m going to run with it.
Based on the above, the average non-ticket spending (snacks, drinks, transportation) would be $47 per person, in addition to the average $35 ticket. Multiplying the annual attendance by this $47 per person in spending would yield a direct economic impact to North Park of $6,886,440. A good portion of this, especially the drinks category, may occur inside the Observatory venue or attached West Coast Tavern. The wide variety of restaurants, cafes, and bars in North Park would also receive some of this money.
Prior to Observatory opening there wasn’t a major concert venue in North Park and I’m glad there is a place where music lovers can attend a wide variety of performances. (I’m not much of a concert goer myself and haven’t attended a performance at Observatory other than the Christmas program for Jefferson Elementary, for which the venue donated the space and support services.) I see Observatory as the type of place that most neighborhoods would pay lots of money or tax breaks to attract – a place bringing money, jobs, and attractions. Hopefully Observatory will continue to listen to neighborhood concerns as well as operating as a top-notch place to enjoy a night out in San Diego.
Mission Trails Regional Park is an amazing San Diego asset. It covers 7,220 acres and is located near Downtown and urban areas like North Park, Mission Valley, La Mesa, and others. There are a wide variety of activities available – running, rock climbing, bike riding, hiking, and more. To encourage more people to explore some of the less visited areas of the park the 5 Peak Challenge was officially launched on November 7, 2015 although it had been an unofficial challenge in the hiking community prior to that launch.
Cowles Mountain is the most popular hike in the park and has a constant flow of people. I had done Cowles a dozen or more times in the past 5 years and the Fortunas once or twice but had never been to Pyles or Kwaay Paay prior to attempting the 5 Peak Challenge. You don’t have to do all the peaks on one day and it’s probably not advised but a friend had told me about doing the challenge in under hours so I decided to make that my goal.
Using the park map (below, click for pdf copy) I decided the shortest total route from the Visitors Center would be: South Fortuna, North Fortuna, Kwaay Paay, Cowles Mountain, Pyles Peak. I hopped on my bike in North Park and about 35 minutes later was at the Visitors Center and ready to go.
I used the Strava app to record the time, elevation gain, distance, and route for my 5 Peak Challenge. Including a few breaks for lunch and to register the kids for swimming lessons it took a total elapsed time of 4 hours and 57 minutes. I was scrambling up Pyles Peak to get under the 5 hour mark but managed to do it. I hiked at a moderate pace for the most part but did jog some of the descents and a bit of the Junipero Serra Trail that is a flat, paved road from the Old Dam to the Visitors Center. I also rode my bike from the Visitors Center to the Cowles Mountain base after the first 3 peaks.
I didn’t include any scenery shots on this post, other than the background on the selfies at bottom, which are required to officially complete the challenge and submit for a certificate. If you haven’t been, Missions Trails Regional Park is basically Southern California natural scrub habitat – some trees in the low lying areas but primarily short bushes and shrubs. The peaks provide wonderful views in every direction, from Mexico to the Pacific to inland mountains to the east. The day I hiked was overcast so the view distances were greatly reduced but I was grateful for the less intense sun and heat.
I’d highly recommend doing the 5 Peak Challenge or simply visiting the park to have a picnic or go for a casual hike up one of the peaks. It’s a great asset to the region and one well loved by many.
New Airbnb Feature Likely To Be A Boon For The Platform
Airbnb has a feature currently only available in a number of cities around the world – Co-Hosting. The current list, below, includes 25 cities although additional cities are being rolled out per my conversation with an Airbnb representative this week.
So what is the Co-Host program about? Basically, it’s a way for a property owner (a “Host” in Airbnb parlance) to add another Host (the “Co-Host”) to a listing. You can tap a friend, relative, neighbor, or experienced Airbnb huser to manage your property for you. This is a huge growth opportunity for the platform and one I’m surprised is not getting more publicity. I’d guess this is because they’re currently in test mode and working out any bugs in the program. In addition to assigning management rights to an Airbnb listing, the Co-Host option allows users to set fees (management fees as a percentage of gross earnings or fixed fee, cleaning fees, etc.) and the platform will automatically split earnings and distribute to both the Host and Co-Host per the Co-Host settings.
There are a number of reasons why someone might want a co-host for their property. The hassle of managing a property isn’t for everyone and to be able to hand off some or all of that responsibility will be attractive to some. For others, travel schedules or work demands might necessitate a co-host for short periods of time or seasonally. I can see myself wanting to add one of my children as a co-host to our listings in the future and giving them limited management rights to gradually give them control and responsibility for their own business.
In addition to existing Airbnb Hosts it’s easy to see how the Co-Hosting option could enable landlords to allow long-term tenants to utilize Airbnb in a monitored and responsible way. Between landlords, existing hosts, and the growth in the number of hosts in general I see a lot of growth potential for co-hosting. It should also allow Airbnb to retain hosts as there’s an option to avoid the hassles of managing a listing but still have the earnings, flexibility of schedule, and other benefits the platform provides. Airbnb has built a huge user base complete with reviews and other data and strengthening that base and building on it will be a competitive edge for the platform against the many competitors in the field.
I recently became a Co-Host here in San Diego and am excited for the opportunity. As one of the most experienced SuperHosts in the area I’m comfortable with taking on another listing to manage and hopefully the Host will see a benefit from the reduced workload for the property. If you are considering a Co-Host in San Diego you can find my profile at the below link. I’d be happy to talk with you about co-hosting and my experience and expertise.
Wondering if Airbnb offers Co-Hosting in Your Area? You can find out by logging in, and checking at the bottom of the menu bar. If Co-Hosting is an option for you, there will be a section labeled “Management” with a sub-section “Co-hosts” on your menu bar. You can directly invite someone you already know as a Co-Host or use the “Find a co-host” option to search by location for experienced hosts.
On December 6, 2016 the California Coastal Commission issued the below letter regarding short-term rentals in California. The letter reaffirms the Commission’s previous comments regarding their stance that a ban on short-term rentals will not be supported. The letter also notes that some regulations and restrictions may be supported.
With much of the state population residing in or near the coastal zone the Commission will continue to play a prominent role in the discussion of short-term rentals in municipalities across the state, including San Diego.
Below is a Facebook post I shared in August but am updating and adding some links and additional text. Next Tuesday the San Diego City Council will have a special meeting to consider changes to the Municipal Code which would eliminate nearly all short-term rentals in the city. The changes will address whole unit rentals of less than 30 days, as home-sharing (a room in a home rather than a whole unit) is essentially already banned. For more in-depth detail and the legal mumbo jumbo I’d recommend reading this great post by Omar Passons from earlier this week.
The following are my thoughts on Airbnb / short-term rentals, why I support short-term rentals in our city, and where I see the industry going in the future.
I am an Airbnb host and have been for a few years. When our family travels it’s basically exclusively what we use. We’ve had a great experience on both sides of the equation and I’ve never tried to hide that. I’m a supporter, user, money maker, etc. Next month we’ll be taking our family to Mexico City for a week and look forward to staying in an Airbnb property there. Here’s a photo of the property we’ll be staying at.
Locally and globally Airbnb has experienced massive growth since being launched in August 2008, this wouldn’t be possible unless it was affording an opportunity for the millions of hosts on the platform. (Potentially this could be due to hotel rooms being artificially capped by zoning / permits / etc but I think it’s mostly because these platforms are accessing non-standard rooms and properties in authentic neighborhoods that provide superior value.) Pair the desire for non-standard rooms / neighborhoods and value with the growth in travel globally and you have a massive opportunity.
However, the growth to date is likely to be dwarfed by the growth to come. PriceWaterhouseCoopers (PWC) issued a report in 2015 on the “sharing economy” including a variety of sites across industries including Uber, onefinestay, Airbnb, Feastly, and many more. As of the report date, only 7% of the U.S. population had participated in the sharing economy as a provider. PWC predicted that five major sharing economy sectors – travel, car sharing, finance, staffing, and music / video streaming – would grow from $15 billion in 2015 to $335 billion in 2025, a growth rate of approx. 36.4% annually.
What does the current opportunity and projected growth mean for hosts? Money. I know of few people that open their homes to strangers for free – even CouchSurfing is predicated on the give & get premise so there’s a benefit or exchange of value derived. There’s an economic opportunity for people to utilize and they are taking it – great. They’re doing so on a widespread, individual basis and connecting one-to-one with guests – even better.
I think a lot of the blowback is about “punk” millenials like me that are just saying “screw the rules” and “i do what i want, the system is the one with a problem”. Based on my interactions with other hosts I think this far from the truth. It’s widely covered that millenials don’t have much money, have major debts, live with their parents at historically unprecedented levels, and mostly don’t own property.
Who does own property? Boomers. And older members of Gen X and the Greatest Generation. (And Millenials that inherited from those groups or have had above average successes.) Additionally, for many years the average house size has been growing while the average household size has been shrinking. Per the American Enterprise Institute, from 1973 to 2014 the average number of persons per home declined from 3.01 persons to an all time low of 2.54 persons. Over the same period the median home size increased from 1,525 square feet to a record high of 2,506 square feet.
So today home sizes in the US have never been higher and family size has never been lower. Meaning? There are tons and tons of empty rooms – completely unused, spider web covered. I live across from an entirely empty house (next to a surface level parking lot in a residential neighborhood) in the heart of San Diego’s hippest neighborhood of North Park. Empty rooms are the real opportunity of the short-term rental industry – for both host and community.
Many articles focus on flip young people (me and my brethren punk millenials) boasting about having 10 units and how the money is so easy putting properties on VRBO, Flipkey, or Airbnb. It’s probably true, to some extent. This is a new opportunity with a ton of excess demand not currently being met. This excess demand will be met due to the incentives created – there is real money on the table.
The idea and model of web-based room renting is fairly new – even a few years ago it was unknown or fringe. (Though boarding houses and room letting has existed for centuries.) Today people from all age groups use it widely, though as the PWC report points out there is much room to grow. Think of the evolution of users of Facebook – young first adopters, then a broader segment of the populace, and today with a huge amount of older frequent users. That’s where this model is going – both on the user and host sides. The same with uptake of private room vs. whole home. When I started hosting our guests were 70-80% foreign, today that’s about 15%. The idea of staying in someone’s home was odd to Americans but more familiar to foreigners. This trend will continue and even now I hear a lot of commentary about preference for private room vs. whole home. The personal connection is much greater – part of the “live like a local” push that is the current Airbnb media slogan.
As all of these trends come together the biggest opportunity – empty rooms – will take over. This will be driven by the biggest owners of property in the US, Boomers. Those multiple property “owners” (quotes because the multiple property hosts are often lessors that use Airbnb as a sublet opportunity) will be crushed by home-owning Boomers. Especially in California the advantage is huge – no mortgage, property taxes fixed at a very low level thanks to Proposition 13, and more empty rooms than a younger family with kids at home. Someone paying $700K for a 2 bedroom today can not possibly compete with someone offering a room in the same 2 bedroom bought for $70K in 1975. In a similar vein will be people with changing situations and spare rooms – couples about to have their first child and build a family, older couples that recently sent their children to college, etc.
What else is the economic opportunity doing? It’s spurring people to add units – increasing supply of total housing. That’s a good thing. Attic and garage conversions, adding separate entrances to bedrooms, building grandma flats, even building new units with purpose built areas for use as short-term rentals – when there is opportunity people respond. It’s the same reason you see cranes everywhere in San Diego today and none in 2010 – if there’s no opportunity no one is going to commit capital and take risk. Today many (maybe most?) of these sorts of new units may be going to short-term rentals. That won’t always hold true and when total supply goes up there is more flexibility in the market and potentially a decrease in average cost. (Potentially because demand also fluctuates.)
This post doesn’t even touch on non-economic factors – the personal connection is enormous and underplayed. Many of our guests are moving to SD, want to move here, are interviewing for jobs or academic opportunities – they instantly have a local perspective on the region, a connection for the future, and a guide. This is a huge deal. San Diego is the best place to live in America and I love sharing why with others. I know many other San Diegans feel the same. Our residents can connect and relate to guests from around the globe 100x better through short-term rentals than the biggest ad campaign, Comic-Con, or other paid marketing can accomplish. Opponents of STRs use the term “Short Term Vacation Rentals”, I prefer short-term rentals as many guests are not here to party and play at the beach, there are a host of reasons people visit San Diego and top of my priority list is attracting talent to our city.
I have a feeling that short-term rentals are likely to be banned soon in San Diego. Many other California cities have taken this path and it’s hard to blame them. We’re looking at all-time highs for rents, property prices, etc. Our population continues to boom. The economy grows, but mostly at the top. It is not a pretty picture for those looking to buy or rent and short-term rentals are undoubtedly a part of that growth in prices (although based on number of units I would say a very small part). But giving people an economic opportunity is a good thing and taking it away by dictat is a bad one.
I’m proud of the hosts / property owners I’ve met. We are committed to addressing real issues. We have proposed a number of specific, meaningful regulations to avoid negative impacts for San Diegans – an increasing fine scale including prohibition of use, dedication of TOT funds from short-term rentals for enforcement, an annual registration fee with funds for enforcement, posting of contact information and a required response time (or additional fine). These are meaningful suggestions and address complaints from opponents. We are happy to come to the table and discuss other aspects of the debate.
I didn’t come from money, we didn’t inherit our house. The opportunity from short term rentals enabled us to purchase our home in North Park as well as have a parent at home during the early years for our children. That was huge, huge, huge for us. If others don’t want to have a stranger in their home or yard – that’s absolutely their choice. But to take away that opportunity from future home buyers and others we should not do. Good times come and go – not long ago many in SD were underwater on their homes. More opportunity and more flexibility is great and should be embraced. I hope that short-term rentals will continue to provide an opportunity for San Diegans of all backgrounds, means and neighborhoods.
I hope you agree and will let your City Council Member know.
2016 marks the 5th Annual Ride for the River Park, benefiting the San Diego River Park Foundation (SDRPF). This 2 day, 1 night tour begins at the Pacific Ocean in the neighborhood of Ocean Beach, and follows the path of the San Diego River from the ocean to the headwaters in the mountains near Julian. This is a challenging ride of 70 miles each direction, with about a mile of elevation climb on the first day. At the summit in Julian we’ll enjoy dinner and craft beers at Nickel Beer Company. The return trip on Sunday, October 2 is all downhill – a well deserved easier return trip.
Registration cost is a $30 donation to the River Park Foundation but please feel free to make a larger donation if you’d like! The event organizer and volunteers will provide snacks and water along the way and a support vehicle for carrying small overnight bags and gear. Food and drink are the responsibility of each participant as is accommodation in Julian on Saturday night. Julian is a popular tourist destination so reservations are recommended as soon as possible. There are a variety of hotels and other accommodations and many options on VRBO or Airbnb. There are also nice campgrounds nearby like Heise County Park and Lake Cuyamaca. Please note that the campgrounds are a few miles from Nickel Beer Company where we will end the first day’s ride.
This ride is challenging and is on open roads, some with fast-moving automobile traffic. We welcome participants of all skill levels but please be aware that this will be a difficult ride for those not used to elevation gains or long-distance riding (more than 50 miles). Please note that the average group pace for the first day is 10 mph and 15 mph for the second day. If you’re not comfortable with this pace for a long day’s ride please bring a friend to ride along – we don’t want to leave anyone riding alone.
Notes and Itinerary:
Show up early so we can depart on time – we roll out at 7 AM on Saturday, 10/1/2016
Bring needed gear – sunscreen, helmet (if you want), lights, spare tire tubes, WATER, bicycle, human body, snacks, cash, phone. If you have clothes, camping gear, etc. you can put in support van to take for you.
Book your accommodations in Julian in advance of the event or secure a camping site at Cuyamaca
Great attitude, smiles, be ready for a great time!
Route Map – Click image for dynamic Google Maps version.
Day 1 Stops – Saturday, 10/1/2016
Starbucks Coffee – 10406 Friars Rd, San Diego, CA 92120 (Grantville)
7-11 – 10195 Riverford Rd, Lakeside, CA 92040 (Just before Highway 67)
Thai Time (Lunch Stop) – 2330 Main St, Ramona, CA 92065
Dudley’s Bakery / Santa Ysabel Grocery – 30218 California 78, Santa Ysabel, CA 92070
Nickel Beer Company (Finish Line!) – 1485 Hollow Glen Rd, Julian, CA 92036. All are welcome (non-riders included) to enjoy a pint at Nickel Beer Company from 6-8 PM with a portion of each sale going to the River Park Foundation.
Day 2 Stops – Sunday, 10/2/2015
Breakfast – Location TBD – Alpine, CA 91901
7-11 – 10195 Riverford Rd, Lakeside, CA 92040 (Just before Highway 67)
Mission Trails Visitors Center – 1 Father Junipero Serra Trail, San Diego, CA 92119
Finish Line – Mike Hess Brewing (Ocean Beach Tasting Room) – 4893 Suite A Voltaire St, San Diego, CA 92107. All are welcome (non-riders included) to enjoy a pint at Mike Hess Brewing at end of ride, estimated arrival time is 3:30 PM on Sunday, Oct 2.
Hope you can join us for this great event and even if you can’t enjoy the ride you can support the work of the SDRPF by learning more and making a tax-deductible donation at: http://sandiegoriver.org/give.html.
What this debate is about is what rules should apply to the rental of a portion of a property or a whole property for a period of less than 30 days. Changes to the hotel taxes on short-term rentals are not being debated. Monthly rentals are not being debated either.
Much of the debate on short-term rentals has come to be synonymous with the largest platform for short-term rentals today – San Francisco tech wundercompany Airbnb. The debate is more about the proper place for Airbnb and less about the wide variety of short-term rentals that exist outside of this relatively young company (founded in 2008).
Some examples of short-term rentals that may not be directly discussed or considered as part of the short-term rental debate but will likely be impacted by any rules, fees, or regulations include the following (and many more):
Foreign exchange students – Hosting a student for less than 30 days is common and a great cultural experience for many. This type of use has a long history in San Diego.
Evergreen Club – A website ($75 annual membership fee) for those 50 and older to stay with other members for $20 per night.
HomeExchange – A site connecting people from all over the world that would like to “swap” houses for a period of time. Per website, HomeExchange currently has more than 65,000 listings in 150 countries. Many swaps do not include exchange of money.
Couchsurfing – A site to connect with others and share space in your home. Website states 400,000 hosts per year and 4 million users. Website name comes from sharing a spare couch, but includes more than couches, Couchsurfing invites hosts to share a – “couch, spare room or air mattress available to travelers”.
VRBO – Vacation Rental by Owner – An early entrant into the online world of vacation rentals. Founded in 1995 and sold to Homeaway in 2006 (which was subsequently purchased by Expedia in 2015). This site continues to thrive in traditional vacation locations.
onefinestay – A short-term rental site focuses on luxury / upmarket offerings.
Warm Showers – “A free worldwide hospitality exchange for touring cyclists” – similar to couchsurfing but for travellers exploring by bicycle.
Informal – Whether by personal connections, Craigslist, or other means there are short-term stays arranged directly by property owners and visitors to provide lodging for visitors, friends of friends, or strangers.
There are many, many other sites and services that offer short-term rentals (and the above also offer non short-term rentals – stays longer than 30 days). As the debate over short-term rentals continues it shouldn’t be lost that we aren’t talking about just one website or one multi-billion dollar company. The rules we put in place will affect a wide variety of uses that San Diegans have for their property.
Also worth noting is that many of the above noted sites and platforms are relatively young and new offerings and ideas are being created as the market for short-term rentals changes and grows. When I started traveling and hosting via Airbnb a few years ago my parents thought it was quite odd, likely unsafe, and a generally weird idea. Today they have used the site a number of times and it has become a mainstream tool that people from all over the world use. I expect this trend to continue and hope that San Diego will embrace new tools that benefit both local residents and visitors in ways financial, social, and cultural. Increased flexibility and opportunity is a good thing.
Plaza de Panama is the central plaza in Balboa Park and for many years was devoted to automobile parking. In June 2013 reviled former Mayor Bob Filner led a push that removed the parking spots from the Plaza de Panama and created a public space for strolling, sitting, and enjoying the surrounding museums and sunshine.
Here’s a photo of what the plaza looked like as a parking lot.
Below is what the plaza looks like now, less than three years later. Today our family had a small picnic lunch on the plaza and there were people everywhere – a newlywed couple taking photos on the steps of the Museum of Art, small children riding bikes and scooters, people of all ages sitting or taking photos. In short, it felt like an authentic plaza: “a public square, marketplace, or similar open space in a built-up area“.
While a lack of parking at Balboa Park continues to be a prominent point of public discussion and debate the Plaza de Panama proves that empty parking spaces do not a great space make – no one was hanging out at the parking lot it formerly was, other than the valets for The Prado restaurant. People enjoying life and each other are what make a plaza great and if you visit Balboa Park today you’ll find such a place at its heart.
The removal of the parking lot was the start of this new public life, but there have been many other elements that have contributed to the engaging place it is today. Below are a few and it’s encouraging to see a range of different players contributing – I look forward to see what other improvements lie ahead.
The Balboa Park Explorer Pass – This pass grants access to the museums and cultural institutions in the museum campus area of Balboa Park. Our family has had the annual pass ($229) since the inception of this program. It is fantastic and has us visiting the park more frequently and a wider variety of museums than we previously had. A great idea to increase the amount of visitors coming to the museum campus.
Trees and tables – After the parking was first removed the plaza felt empty – it’s a big expanse and needed to be populated to make it more inviting. The addition of a variety of chairs, tables, umbrellas, planter boxes, and other items have made it a pleasant and comfortable place to sit and people watch.
Panama 66 Restaurant – The owners of local favorites Blind Lady Ale House and Tiger!Tiger! Tavern now operate a full service restaurant adjacent to the Plaza de Panama (and technically part of the Museum of Art). This is a photo from March 13, 2016 at 11 AM – the line out the door says all that is needed about the popularity of the venue. The restaurant includes a sculpture garden area and sitting on the grass in the evening while the California Tower is aglow is a newly classic San Diego experience. [Caution: check schedules for sometimes irregular hours.]
Art of the Open Air – The newest addition to the Plaza de Panama is a series of sculptures set up around the plaza. In the central seating area there are information cards about the works including pieces by Rodin and Miro. A great addition and fitting complement to the Museum of Art which stands on the Plaza de Panama.
Improvements for walking and biking – Improved crosswalk markings and Balboa Park themed bicycle racks in prominent locations have made it more convenient to visit the park without a car. Hopefully in future we will see the Laurel Street bridge closed to automobile traffic and made into a full-time pedestrian promenade.
Thank you to the many people that are working to enhance Balboa Park and the experience of visiting for locals and tourists alike. The Plaza de Panama shows that even on a short time frame big changes can be made through thoughtful, low-cost projects that put people first. Cheers!