Council at odds over short-term rental rules: Memo issued countering La Jolla Council member Bry’s draft ordinance

Four San Diego City Council members issued a memorandum Sept. 18 addressing proposed short-term rentals (STR) policies and strategies, offering alternative regulations to the ordinance recently drafted by District 1 Council member Barbara Bry.

Bry’s ordinance defines “short-term occupancy” as “any rented or leased residence for any time period of less than 30 days”; imposes a 90-day annual maximum on short-term rentals (which some have equated to 45 weekends in a 52-week year); requires renters to apply for a permit; pay a fee; and inform their neighbors that their property is available for short-term rentals.

She held a town hall forum on the topic to gather feedback on her ordinance Aug. 30 at the La Jolla Community Center. Several of the hundreds in attendance noted that code violation enforcement needed to be improved, questioned the enforceability of some of Bry’s recommendations and suggested a three-strike policy.

The memorandum was authored by City Council members David Alvarez (District 8), Christopher Ward (District 3), Scott Sherman (District 7) and Council president pro tem Mark Kersey (District 5) and sent to Council President Myrtle Cole, City Attorney Mara Elliott, Mayor Kevin Faulconer and Independent Budget Analyst Andrea Tevlin.

It lists a series of strategies and suggested changes to City zoning regulations that would “provide the framework for the necessary elements of an ordinance that ensures San Diego’s neighborhoods are protected, local jobs are preserved and the STR industry can lawfully operate.”

Among the recommendations: define STRs as any stays of 29 days or fewer; require a three-night minimum stay within the coastal and historical districts; provide occupancy standards for STRs consistent with California’s “two-by-two” standard of two adult occupants per bedroom, plus two in the home; require renters provide each tenant with a “good neighborhood code of conduct” that defines the parameters of the stay, and subsequent fines and penalties for non-compliance.

The ordinance also addresses some of the concerns raised at Bry’s STR town hall.

For example, the memorandum calls on the City to create a “comprehensive online permitting and enforcement process for whole-house STRs and require a permit for all STR” and suggests a fee (of an unannounced amount) to obtain a STR permit. “A portion of these fees should be dedicated to paying Code Enforcement officers to work nights and weekends,” it reads.

It also recommends citations and fees for homeowners and renters over noise and other verified nuisances — and a de facto three-strike policy. After the first verified offense, both the renter and the property owner would be fined $1,000, escalating to $2,500 to the renter for a second offense and $5,000 for a third offense. After the third verified offense in a one-year period, the rental permit would be revoked.

It also states that no STR permit shall be issued to an applicant with outstanding Code violations.

The memorandum seems to have the support of online rental platform, which issued the following statement: “We are reviewing this proposal and are glad to see that Council members Ward, Alvarez, Sherman and Kersey are working toward comprehensive regulations that better define short term rentals in San Diego. Vacation rentals and home-sharing are a time-honored tradition in San Diego and we agree that strong policies need to be enacted.

“We believe that regulations should define short-term rentals, establish good neighbor standards, provide funding for real enforcement and create a registration and permitting process. We look forward to continued work with the San Diego City Council in the coming weeks to find the best solution for San Diego.”

Bry’s response

After reading the memo, Bry said she was “encouraged” that she and her Council colleagues were looking into regulation and enforcement, but said the regulations proposed in the memorandum are “not enforceable” and “a sell out to AirBnB.”

“It is not possible to advocate for the creation of more housing for San Diegans while at the same time allowing existing units to be taken off the market and used as short-term rental properties,” she said in a statement. “While my proposal to regulate short-term rentals protects the rights of those who wish to rent out their entire primary residence on a short-term basis for up to 90 days per year, it is the only proposal that prohibits investors from converting homes in our residential neighborhoods into permanent mini-hotels.”

Speaking with La Jolla Light, Bry critiqued the proposed limitation on permits issued for whole house rentals, which the memorandum states “shall be capped at three per homeowner,” arguing that it is not enforceable. “I could buy three properties, then my husband could buy three properties, and then we could buy three properties as a LLC (and rent them short-term), you cannot monitor how many units someone owns,” she said. “This memo is open season for investors.”

She also expressed concern that the public perception is that the “fallback” would be to just enforce City Code or ban whole-hour rentals entirely. “Over a year ago, the City Council heard a proposal for a total ban on whole-house rentals and it got two votes in support,” she said.

Bry’s communication director Hilary Nemchik added: “The outcome of the Oct. 23 Council meeting is not going to be one ordinance or ‘just enforce the Code’ because the City is waiting for regulatory guidance. What comes from that meeting is going to be the City Code. People think (Bry’s) ordinance isn’t strict enough, but it is a compromise.”

Bry’s ordinance would need five votes at City Council to pass, and is scheduled to be heard Oct. 23 in Council chambers. With four Council members in support of an alternative, Bry told La Jolla Light, “A month is an eternity in politics, and a lot can happen before the Council votes. I’m always optimistic that you can present people with the facts, and in the next month, we will be having a number of people who are respected in the community coming forward to speak to support my proposal.”