Still annoyed at AirBNB ban

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Submitted by gzz on July 25, 2018 - 8:23pm

Bad for tourism
Lots of lost hotel tax money
Bad for property values
Hurts our image among people who embrace tech
Lost jobs due to less residential investment

What exactly is going to happen to Mission Beach? The law literally says no short term vacation rentals other than a granny flat of your primary residence + the primary residence for only part of the year.

From what I can tell, 80% of MB is either year round short term rentals or summer short term + 9 month student rentals. Close to none qualify for single exception. Are we going to just dump all of them onto only the long-term rental market?

If this law ever is actually enforced, you could see mid-development projects there fail, short-sales and defaults all over the place. Because prices would really have to fall a lot there to make the area competitive as owner-occupied housing.

Meanwhile the businesses on Mission Blvd would lose most of their customers.

Submitted by FlyerInHi on July 25, 2018 - 9:35pm.

Well said.
It will go underground

Submitted by JPJones on July 26, 2018 - 1:56pm.

gzz wrote:
From what I can tell, 80% of MB is either year round short term rentals or summer short term + 9 month student rentals.

MB is 44% according to a UT article published when the vote went through on the 16th. I'm curious as to what percentage of those owners are local voters. It can't be high, or there's no way that many of our local politicians would have voted through even tighter restrictions than what the mayor proposed.

Submitted by EJ on July 26, 2018 - 2:26pm.

Do you live at the beach? If yes, you are ok with mini-hotels operating next door?

I am guessing the answer to both questions is no. I have seen you post about OB real estate, so I suspect you own some properties that are rented as STVR (illegally). The residential zoning laws are clear about transient occupancy, it is not allowed. For many years, due to the technology, the zoning laws have been skirted by "home sharing". The "home sharing" has been thoroughly abused to the point where houses and condos in residential zones are turning over occupants ever few days, year-round. If you took the risk of buying a home in a residential area and running it as a hotel because zoning laws were not enforced, that was your decision. Don't expect the laws to change now, and you should have foreseen some sort of regulation coming.

WRT MB, I suspect some consideration will be made for those that were paying the transient occupancy tax before the new AirBnB ban. For those that bought homes in MB (or other beaches) residential areas and planned to run them as hotels illegally, I do not feel bad. Believe it or not, a decade or so ago there was still a lot of residents in MB. Even a school!

WRT hurting property values, the beach area prices were getting inflated because people were making purchase price decision based on operating them as illegal STVR's which pencil out to much higher cap rates. I am ok with prices normalizing to what the local population will bear. I own in OB and have thought about going the STVR route, but I couldn't do it to our neighbors and was adverse to the risk of entering an unregulated STVR market. Now that the policy has been clarified, I hope it is enforced appropriately, I may consider a granny flat AirBnB with confidence that I am operating within the law.

I am sure you are right, people will still try to skirt the law, but that is not my thing. Probably the people that are most likely to operate their STVR underground in the future are the same ones that bought residences expecting to be able to operate them as hotels, when clearly the zoning did not allow it.

Just my $0.02 ...

Submitted by gzz on July 26, 2018 - 2:44pm.

I find that 44% figure very hard to believe.

Just checked craigslist, and only 5 of the 31 MB listings were 12-month leases. And of course full-time AirBNBs would not be on craigslist.

To put it another way, do you know a single person who is a long-term full-time MB resident, either as an owner or a renter? I have never met such a person in many years in San Diego, and I live nearby in OB and am social. You'd probably have to go back to the 70s or 80s to find many such people.

Submitted by gzz on July 26, 2018 - 2:51pm.

EJ, I am a long term resident of OB, moved not too long after college, and my rental properties there both have the same tenants for years. I tried to do a vacation rental right after purchasing one of them, this lasted like 3 months, and I definitely will not do so again.

There are a small number of AirBNBs on my street, and I have never had the slightest problem with them, not with noise, parking, or any other issue. If I did, I would address the owner of the property, not try to take away rights of every property owner in San Diego.

I also lived next to a vacation rental cottage in the mid 2000s. Again, never had the slightest problem, and had some lovely conversations with people visiting from all over Europe and Asia.

Submitted by FlyerInHi on July 26, 2018 - 3:55pm.

I too would talk to a problem landlord directly and I have before at rentals I own.

I prefer to meet people from all over than the same old cranky neighbors.

Some people are just jealous the world is changing without them. I think STRs represent the entrepreneurial spirit at its finest. They should allow people to open coffee shops and restaurants out of their houses also.

Submitted by EJ on July 26, 2018 - 4:01pm.

As a long time resident, I would think you would want to keep your neighborhood zoned as residential. Enforcing existing zoning laws is not "trying to take away rights of every property owner in San Diego". I feel the opposite, people skirting laws by illegally running STVR are taking away my rights to a residential zoned property that I purchased.

gzz, what would your recommendation for STVR rentals be? Mine recommendation would have been to limit the number of STVR per neighborhood and make operators get licensed and pay fees. The limit would be set so that OB never gets to the point where 44% of homes are STVR's, like MB, but more like %5 or less. However, I am happy with the recent decision to keep our residential neighborhoods for the actual residents, and this solution probably requires less regulation than what I suggested.

PS: I despise regulation and big government in general, but I do believe zoning laws should be enforced and any changes to them taken seriously. The unregulated STVR market was getting out of hand.

Submitted by FlyerInHi on July 26, 2018 - 4:56pm.

Originalists would disagree. Zoning is not in the Constitution and didn't arise until the 20th century and didn't become common place until after WWII. With current zoning we would not have Manhattan today. Individual property rights were once stronger than community benefits under the police power of the state which is what zoning is derived from. Read up and you will see.

Submitted by Myriad on July 26, 2018 - 5:49pm.

I'm not sure that's really a valid argument. Lots of things are not explicitly identified in the Constitution - especially when you get to the local level detail of managing a city or town. There's nothing about delegating power to a city council or a county recording office.

https://en.wikipedia.org/wiki/Zoning_in_...
https://en.wikipedia.org/wiki/Village_of....
"In short the court ruled that zoning ordinances, regulations and laws must find their justification in some aspect of police power and asserted for the public welfare."
So derived local power from the 14th amendment.

My take is that outside of a few areas of the city, there is pretty minimal impact. It will be interesting to see Mission Beach in a few years.

I'm only surprised that the STVR that properly registered with the city were not grandfathered in. All the others that didn't follow the rules or didn't bother to find out, they were essentially illegally running a business.
By buying a property and registering at the county recorder's, a buyer is acquiescing to the right of the city's municipal code which includes the zoning rules. Otherwise, they should have taken a court case to argue before buying - though unlikely to succeed due to stare decisis.

Submitted by SoCalBakerman on July 26, 2018 - 6:12pm.

What are you talking about, zoning is a ancient practice, in the USA the earliest case by the supreme court that affirmed zoning was in the 20th century 1926 t be exact but cultures have zoned areas for centuries. In terms of Manhattan the city founders laid out streets and passed nuisance laws which had the same effect as zoning. I am fine with street planning and nuisance laws, because that would force every property owner to defend how its' STVR was not causing a nuisance.

Submitted by FlyerInHi on July 26, 2018 - 7:16pm.

Nuisance is not the same as government limiting how long you can enter into contract to lease your property.

ST renters may be more considerate that long term renters. Wait until there is a nuisance such as noise, then complain; but don't abridge property rights which are clearly protected, not dirived, in the Constitution

How does a one week lease on its own create a nuissance? So why outlaw it? You guys who are against don't stand on principle. You just want to social engineer your ideas of a neighborhood. It's all me, me, me.

What if the short term renters are quiet writers or academics? Are they a nuisance?

Submitted by Myriad on July 26, 2018 - 8:14pm.

Well for me, I don't care whether short term or long term lessors are a nuisance. I merely indicate that by purchasing a property in SD (after any zoning is in place), a buyer has given up rights by choice for the city to enforce it's municipal code. In this particular case, we are talking about short term rentals - but why limit the discussion there. By your line of thinking, anyone should be able to build anything anywhere. I could just build a 30 story apartment complex next to a cottage home. A buyer could have just bought in Houston where there is no zoning.

If they want to change it, then get a campaign to change the municipal code or sue the city and have the Supreme Court determine if the 5th Amendment or 14th Amendment is more important.
Technically the Constitution 5th Amendment doesn't rule on acceptable use of the property, just that government cant take property without compensation.

Personally I'm not for/against because I see arguments both ways - haven't done the tradeoff analysis.
But, I think the city is unfairly punishing owners that followed the city regulations to operate a short term rental.

Submitted by FlyerInHi on July 26, 2018 - 10:41pm.

The ban is new law. Not enforcement of existing laws. Why not enforce existing nuisance laws?

Remenber, short term leases don’t cause problems. People cause problems.

I’m confident things with change with technology and acceptance by the younger generations. It could however take a long, long time.

Like I said before, if you want to close your neighborhood to ST renters, others will do the same to you. What if you want to spend some time at a nice home in Santa Barbara or the French wine country to relax for 3 weeks? That option could be closed off — net loss for humanity.

Submitted by JPJones on July 26, 2018 - 10:50pm.

gzz wrote:
I find that 44% figure very hard to believe.

Just checked craigslist, and only 5 of the 31 MB listings were 12-month leases. And of course full-time AirBNBs would not be on craigslist.

To put it another way, do you know a single person who is a long-term full-time MB resident, either as an owner or a renter? I have never met such a person in many years in San Diego, and I live nearby in OB and am social. You'd probably have to go back to the 70s or 80s to find many such people.

I wasn't asking you to believe it. You're presenting anecdotal data. 44% is a number that was at least vetted by a high profile local publication (UT). Which sounds more reliable to you: that or a number posted as a guess in the comments section of a blog? Have you forgotten the mantra of this site?

"In God We Trust,
Everyone Else Bring Data."

Edit: To be clear, I haven't presented an opinion one way or another on this topic. I was simply questioning your estimate.

Submitted by JPJones on July 26, 2018 - 10:58pm.

FlyerInHi wrote:
Originalists would disagree. Zoning is not in the Constitution and didn't arise until the 20th century and didn't become common place until after WWII. With current zoning we would not have Manhattan today. Individual property rights were once stronger than community benefits under the police power of the state which is what zoning is derived from. Read up and you will see.

"Go look it up" is a terribly weak way to make a point. If you aren't willing to present supporting information, then why bother?

Submitted by JPJones on July 26, 2018 - 11:15pm.

FlyerInHi wrote:
The ban is new law. Not enforcement of existing laws. Why not enforce existing nuisance laws?

Remenber, short term leases don’t cause problems. People cause problems.

I’m confident things with change with technology and acceptance by the younger generations. It could however take a long, long time.

Like I said before, if you want to close your neighborhood to ST renters, others will do the same to you. What if you want to spend some time at a nice home in Santa Barbara or the French wine country to relax for 3 weeks? That option could be closed off — net loss for humanity.

It will take a long, long time. The younger generations are renters now, so this decision should in theory directly benefit them. And seriously, could you afford regular 3 week vacations in your 20s? What do you consider to be young?

Submitted by FlyerInHi on July 27, 2018 - 12:01am.

Myriad wrote:
By your line of thinking, anyone should be able to build anything anywhere. I could just build a 30 story apartment complex next to a cottage home.

That would be wonderful. And the owner of the cottage home would enjoy an economic windfall. He might sell and retire.

And they did just that in Manhattan to get the best economic use of the land. And we are all the better for it.

Submitted by JPJones on July 27, 2018 - 12:09am.

FlyerInHi wrote:
Myriad wrote:
By your line of thinking, anyone should be able to build anything anywhere. I could just build a 30 story apartment complex next to a cottage home.

That would be wonderful. And the owner of the cottage home would enjoy an economic windfall. He might sell and retire.

And they did just that in Manhattan to get the best economic use of the land. And we are all the better for it.


Speak for yourself. Manhattan is a terrible place to live unless you're filthy rich.

Submitted by FlyerInHi on July 27, 2018 - 8:24am.

JPJones wrote:

Speak for yourself. Manhattan is a terrible place to live unless you're filthy rich.

Lifestyle is all relative. I'm talking about maximizing the economic value of land. You can always sell and move.

And neighborhoods should be organic and change based on economic conditions. Don't resist change. Embrace it.

Submitted by Myriad on July 27, 2018 - 10:11am.

It's an interesting thesis. I might be supportive of this if changes were planned properly - for safety, transport, infrastructure, etc. Basically simcity - the heck of out it.

It's a better plan than the current High Speed Rail plan.
If you could just build the HSR without worrying about EIR or eminent domain, the entire SF-SD segment could be done in about 10 years.

Housing and transport would be a lot better in CA if you could build high density housing high rises near mass transit.

Submitted by FlyerInHi on July 27, 2018 - 10:23am.

China built, not one line, but their whole HSR network in 10 years. It's safer than Amtrak that had many accidents recently.

Remember, back when China started, people predicted abject failure, poo-pooed their creativity, engineering, future safety, etc... Now they are managing networks around the world and exporting technology. They created an industry larger than Boeing! Thousands of jobs and incredible wealth!

Submitted by FlyerInHi on July 27, 2018 - 10:29am.

Remember that the Constitution also a contract clause. States shall not impair contracts.

Well, the airbnb ban outlaws leases under 30 days.

Just saying for originalists out there that the Constitution specifically protects private property rights and contracts, but says nothing about zoning which is all about restricting uses.

Submitted by EJ on July 27, 2018 - 12:10pm.

I would be interested to hear other peoples ideas for how to regulate the vacation rentals.

Sounds like we have some people that feel they should not be regulated at all, which is one idea.

I provided an idea above.

We had Faulkner's proposal to limit to 2 STVR properties per owner (with some nuances), no restrictions on amount of time per year that could be rented or if it needs to be owner occupied. This would still allow out of town folks to buy STVR's in SD.

We have Bry’s proposal, which limits to STVR to primary residence and only part of the year. A granny flat on same property as primary residence can be ST rented year round. This effectively prevents out of town investors from buying properties and turning them into STVR. This proposal was recently passed by city council vote.

Any other ideas?

Submitted by Myriad on July 27, 2018 - 12:41pm.

Allow each neighborhood to determine what's an acceptable rate of STVR. Then allow owners to participate in a lottery system to obtain a license with a new lottery every year.

Or allow a neighborhood the option to designate certain areas as available for STVR without restriction.

Submitted by FlyerInHi on July 27, 2018 - 12:42pm.

Under Faulkner’s plan, can each member of a family have 2 properties? Is an LLC a separate entity?

Submitted by FlyerInHi on July 27, 2018 - 12:45pm.

Myriad wrote:
Allow each neighborhood to determine what's an acceptable rate of STVR. Then allow owners to participate in a lottery system to obtain a license with a new lottery every year.

Or allow a neighborhood the option to designate certain areas as available for STVR without restriction.

That’s a horrible idea. That last thing you want to do is enable busybody neighbors.

Submitted by Myriad on July 27, 2018 - 1:00pm.

It's better than the existing plan and more feasible than getting rid of zoning.

Submitted by Myriad on July 27, 2018 - 1:00pm.

It's better than the existing plan and more feasible than getting rid of zoning.

Submitted by FlyerInHi on July 27, 2018 - 1:05pm.

The primary residence requirement is so economically asinine.
Second homes should be made available when not in use. Why keep the inventory off the market and iddle?

Submitted by gzz on July 27, 2018 - 1:06pm.

I do not see any need to pass additional laws to regulate STVRs. As Flyer said, if there are noise problems, enforce noise laws.

STVR are already subject to a huge hotel tax.

Think of the numbers here for a basic 1/1 condo in OB:

Annual rent on long-term lease: $20,000
City revenue from that rent: 0
Average sales tax per day from resident living there: $30*7%= about $2 or about $700/year.
Total city taxes collected: $700/year

AirBNB: Annual rent $90/day off seasons $150/day on season = $40,000
Hotel tax = $5,000
Sales tax on $80 a day in visitor spending = $2000

Total city revenue from AirBNB $7000/year

I may be off a little on some of these estimates, but I doubt it is that much. The city collects about 10 times more in taxes from an AirBNB then a rented condo, and this is only the direct economic effect.

This AirBNB is going to have to be made up one way or another. How much in extra taxes or cut city services are you willing to deal with to ban AirBNB?

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