New proposal for short-term vacation rental regulation draws fire in La Jolla

A recent compromise bid in the long debate over regulation of short-term vacation rentals is making its way through city representatives, and residents of La Jolla and nearby communities are concerned about its possible effects.

The agreement between two private organizations — Expedia, which owns VRBO and HomeAway, two online platforms for renting STVRs, and Unite Here Local 30, a union that represents hospitality workers, was brokered by San Diego City Council member Jennifer Campbell, whose District 2 includes Pacific Beach, Mission Beach and Ocean Beach.

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Another bid percolating to regulate San Diego’s short-term vacation rentals

Agreement between VRBO/Homeaway and San Diego’s hospitality union, brokered by City Councilwoman Jennifer Campbell, sets a possible framework for short-term rental regulation

The agreement groups STVRs into a “four-tier system,” with the lowest tier being a homeowner who remains on the property while “home sharing,” legalizing that rental method for the first time, according to Joe LaCava, a Bird Rock resident and community planner who gave a presentation about the agreement at the July 8 meeting of the La Jolla Shores Association.

The “most aggressive tier,” LaCava said, “is whole-house rentals, available as a mini-hotel. That’s clearly where most of the problems are.”

The city auditor estimates there are 16,000 STVRs in San Diego, LaCava said, and “the group behind this memorandum did a deep data analysis of that 16,000. They believe that between 6,000 and 9,000 are these whole-house rentals … waiting to be rented. The agreement states the group will cap that at 3,750 units,” or 0.7 percent of the city’s housing stock.

LaCava noted that the deal would apply to the whole city except Mission Beach, which has a much higher percentage of STVRs, as approved by its town council.

However, LaCava said, “they ignore the fact that those [rentals] are illegal today, and the city has no clue how to do enforcement about that. So if you’re not willing to shut down those illegal operations, why do we think that you’re going to successfully shut down these whole-house rentals when this ordinance goes into effect?”

Though the agreement purports to find common ground between the hospitality union and Expedia, LaCava said the proposal “is no proposal at all.”

For nearly five years, the vacation rental debate has pitted the rights of property owners to rent their homes against residents who have seen their once-quiet neighborhoods disrupted by tourists, leading to complaints about noise, trash and parking problems.

Other critics of vacation rentals say platforms such as Airbnb and HomeAway create financial incentives for renting out properties for short-term stays instead of long-term residential use, thus reducing the housing supply and driving up prices.

“This will release many thousands of apartments, condos and homes back on the market for long-term rental, or if the owners wish to sell them, they can sell them on the market,” Campbell said.

Airbnb, the STVR market leader, is not a party to the deal, which concerns LaCava.

“Anybody who has been involved in the debates was caught by complete surprise” by the agreement, he said. “[The proponents] haven’t reached out to the stakeholders — the groups and those of us who have been in this battle for several years.

“Unite Here was a major funder of the fight against STVRs over the years.”

A statement last week by the Pacific Beach Town Council also said the framework came as a surprise and that the group strongly opposes it.

“STVRs are visitor accommodations and these commercial uses are illegal under the city’s zoning code and have no place in our residential zones,” according to the statement.

“I have been working on this for what feels like my entire life now,” said Unite Here President Brigette Browning. “It is certainly not perfect. I feel both sides gave things up that they didn’t want to. But I do think having something in place is going to be better than having this Wild West mentality that we have had in San Diego, and this proliferation of bad actors.”

Expedia estimates short-term rentals contribute $32 million annually to the city’s general fund through local taxes. It decided to support the new framework partly to end “regulatory limbo,” according to Amanda Pedigo, Expedia’s vice president of government and corporate affairs.

“We think it will provide certainty for our partners who have been operating responsibly for generations,” she said. “It will establish responsible limits that will address community concerns.”

Campbell said “San Diegans deserve short-term rental regulations that protect our neighborhoods, preserve valuable housing and will stand the test of time.”

The City Council would have to agree to take up an ordinance based on the proposal, which likely would be reviewed by the Office of Independent Budget Analyst for financial effects.

Expedia and Unite Here said they hope the council will pass legislation that could go into effect in 2021.

La Jolla Shores Association board member John Shannon asked LaCava during last week’s meeting, “What does it look like if this is implemented?”

LaCava said the “city attorney would take the first cut at drafting the ordinance, [creating] an amazingly complex permit system.”

Shannon expressed concern about the proposal, saying: “What this does to the value of real estate, it puts everything in turmoil. If people are going to have a quasi-legal STVR, it makes everything very difficult.”

LJSA President Janie Emerson said “this is a tough issue” and asked LaCava whether LJSA should vote to oppose the agreement.

LaCava said the group should wait “to see if an ordinance develops.”

“Let’s wait until August to take a position on this,” Emerson said. ◆