12/22/2023
Short term rentals are perhaps the most controversial issue that San Diego communities have faced in their history, may be second to the viability of Lindbergh Field. In the year 2,000, there were very few short term rentals in San Diego, with the vast majority near the coast in La Jolla, Pacific Beach, Mission Beach and Ocean Beach. Most of these were summer winter rentals, weekly rentals in the three summer months and nine month leases the rest of the year. This resulted in near one-hundred percent occupancy year-round.
And then there was AirBnB, which changed everything. Summer only short term became year-round. While there is high occupancy in the summer months, there were many vacancies in the winter months. Worst of all, more than 2,000 residents of Mission Beach were evicted to make room for short term rentals, which peaked in San Diego in 2017. The short-term rental regulations went into effect in 2021, although last summer was the first true test for City of San Diego Development Services STR Enforcement to be evaluated. And, the consensus is that they failed colossally. Perhaps the biggest flaw was simply a loophole in the regulations that allowed one owner in Ocean Beach to have 115 short term rentals, using 115 surrogate hosts.
Back in 2021 when the STR regulations were passed by the City Council, they were also reviewed and with minor changes passed by the California Coastal Commission (CCC). At that time and to this day, the formal policy of the CCC has been to support low cost accommodations, i.e., STRs, in the coastal zone. But, this may now be on the verge of changing.
At the most recent meeting of the CCC, there were presentations by experts from academic institutions declaring the negative impact of STRs on affordable housing and homelessness. The bottom line is a remarkable potential change in the CCC on STRs in the coastal zone. After the presentations, one after another, the commissioners commented how they wished they had the data presented on that day two years ago. The all seemed on board with the main conclusions and recommendations from the presenters:
1. The data presented at the meeting supports the need to eliminate whole home STRs, which contribute significantly to housing price increases.
a. STRs enable a step-up/ladder down effect; that is step up indicates the wealthy become more wealthy, and ladder down is a growing gap with the middle and lower socioeconomic classes.
2. Reversing the effects of decades of inflationary impact on housing prices would itself take decades, except for eliminating whole home STRs, which the data shows contribute 20 percent of the housing price increases.
3. Eliminating whole home, but retaining home sharing (owner occupied) STRs, would continue to allow some lower cost accommodations at the coast.
4. The CCC will likely revise its policy to no longer support low-cost accommodations in the coastal zone through STRs.
5. A collaborative scaler approach involving the State, County, and City is necessary to effectively address the issue of STRs.
6. Home sharing (owner-occupied) STRs should be allowed to continue to provide some lower-cost accommodations.
7. The CCC commissioners expressed regret for not having this data two years ago and seemed to be in agreement with the presented conclusions and recommendations.
Overall, the meeting indicated a potential shift in the CCC's stance on STRs in the coastal zone, with a focus on addressing their negative impact on affordable housing and homelessness. The need to eliminate whole home STRs was emphasized, while retaining home sharing options. The meeting highlighted the importance of collaboration between different levels of government to tackle this issue effectively.
You are strongly encouraged to watch the video recording of the CCC meeting that can be found at:
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