WHAT IS OUR BEST STRATEGY FOR STR REGULATIONS MOVING FORWARD!

Updated: Dec 16, 2019

I see four options:

1) Enforce the San Diego Municipal Code

2) Implementation of primary only or something similar

3) Incorporate limits in the beach communities based on 2010 estimates 4) Put our head between our legs and kiss our ass good-bye OK, option four is not really an option. This leaves enforcement of the code, implementation of regulations similar to what the City Council passed more than a year ago, and then rescinded when the STR industry supporters fraudulently secured petition signatures to force a decision by the City Council, or implement 2010 estimated limits.


The third option is one that might force the platforms to negotiate. As shown below, the vast majority of STR listings in the City are located in Districts 1-3. The fastest growing area for STR listings is East Village downtown. This option undermines the platforms strategy to push a city wide referendum through consistent with their goals. Presumably, the platform strategy recognizes that the beach communities would oppose the referendum, but others in Districts 4-9, with a larger vote count, would support it. The assumption is that the voters in Districts 4-9 want the opportunity to use their property as they wish.


Therefore, the STR regulations would limit the number of STR permits in Districts 1-3, but allow an unlimited number of permits in Districts 4-9. In this case, the majority of the voters in Districts 4-9 would no longer be motivated to support the referendum. In fact, the District 4-9 voters may very well be more inclined to oppose the referendum, since the proposed STR regulations would limit the number of permits in Districts 1-3, therefore making locations in other parts of the City more attractive.



At this point, the platforms have consistently stated that they want a number of STR listings equivalent to two percent of the total number of dwelling units in San Diego, plus 100 percent of Mission Beach. They do not want any community based allocation for the allowed listings and or permits. So, we know that a vast majority of these will be in the high tourist areas, which will further accelerate tourism gentrification in San Diego. Right now the platforms and their sycophants are falsely promoting strong "enforcement" to address nuisance issues (in lieu of limits), but I am guessing this is more of a bait and switch than a commitment to be on board with this idea. I think it is fair to say that we are in a war with the platforms in San Diego, and at this point we have no reason to trust or believe anything they say that might very well only be a temporary negotiating position. We tried in Mission Beach to promote a community based solution in 2018 and more recently 2019, but there have been no takers. In both cases, we developed limits for Mission Beach, and then proposed a process for La Jolla, Pacific Beach, Ocean Beach and Clairemont to use to develop their own limits. Neither side is ready to acknowledge a middle of the road positIon. But then, we currently have 16,000 dwelling units that are being used as STRs in the City that could be used for much needed long term renters. Let’s say the communities in the City agree to some STR regulations that limits the number of STRs to a number substantially below what the platforms want. There is a high probability that the platforms will either litigate or push a referendum. Actually, AirBnB has not been very successful in the courts, so more likely, its management will promote a referendum. If there is no sign that the platforms will consider negotiating a more reasonable position, then the City should move forward with enforcement of the municipal code and be prepared to take on the challengers. But, there also needs to be a backup position that is a set of STR regulations that substantially protects the public. Primary only was actually beyond what the City should have offered, particularly since the ordinance included a very weak set of permit and enforcement requirements. It is most likely that the primary only was more opposed by the vacation rental management companies than the platforms, since the vacation rental companies would have been crushed, while the platforms would have survived. The key stakeholders involved in this decision are too many to enumerate, but the ones that obviously come to mind are: 1. The residents of each of the communities, their town councils and planning groups. 2. Save San Diego Neighborhoods 3. The platforms, AirBnB and Home Away 4. The coalition of town councils STR working group 5. The vacation rental management companies including Share San Diego’s Jonah Mechanic/Sea Breeze and Save Mission Beach’s Blaine Smith/710 Beach Rentals 6. The City Council 7. The mayor’s office 8. The mayoral candidates, Councilmember Bry and State Assemblymember Gloria, and now Councilmember Scott Sherman 9. The hoteliers and the hotel workers labor unions

I think our first option should be enforce the municipal code, as is. Every effort in the short term should focus on this objective. The best way to make this happen is by electing a Mayor and City Attorney who will aggressively take on the platforms and the California Coastal Commission and implement the code.


Under political pressure, our current City Attorney, Mara Elliott, wrote a memo clarifying that less than 30 day rentals are an illegal use in all residential zones in the City, only to have the Mayor state that he did not intend to comply. At this point, Mara Elliott backed off claiming that she did not have the authority without the mayor to enforce the code. As it turns out, she probably has plenty of authority from State law. According to State law, illegal businesses can be shut down, and STRs are illegal businesses. Also, according to both both State and City policy, short term rentals are publics accommodations and must comply with Americans for Disability Act (ADA). So, again, the City has failed to carry out its obligations.


Finally, arguments have been made that the fact that the City has collected TOT makes the STRs legal. But, this is not the case. The City must collect taxes on all revenues earned whether they are legal or not. And, businesses must acknowledge and pay their taxes whether the business is legal or not.


I think there are multiple backup positions:


1. Primary only with a 90 day annual limit in combination with relatively strong permit and enforcement requirements.

2. A limit on permits that would be a best estimate of the number of STR listings in 2010. The table below shows the number of STR listings as of August 2019, the number of single family units in the communities (SANDAG), the number of multifamily units in the communities, and a proposed number of STR permits by commyunity.


The number of STR listings was estimated to be about 0.35 in 2010 that is currently listed. This estimate came from a comparison and ratio of the number of TOT certificates in 2019 and 2010. The 2010 list is the oldest one available from the City of San Diego.

Clearly there would be more applications for STR permits than the proposed limits. Therefore, a priority system would be used to determine who does and who does not get a permit. The priority would be:

1. Multifamily owner occupied units with proof of TOT payments history

2. Multifamily owner occupied units with no prior history of TOT payments

3. Single family units with proof of TOT payments history

4. Single family units with no proof of TOT payment history


In summary, first priority is for the City to enforce the municipal code. Second, would be a modest variation of the primary only regulations, using a 90 day maximum. And third would be as community based set of limits based on estimated number of STR listings in 2010.


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