San Diego planning commissioners say proposal for short-term rental regulations has ‘a lot to be worked out’

Councilwoman Jennifer Campbell brokered an agreement that led to a proposed ordinance aimed at regulating short-term rentals.
San Diego City Councilwoman Jennifer Campbell brokered an agreement that led to a proposed ordinance aimed at regulating short-term vacation rentals.

After criticism over a perceived lack of public outreach — both ahead of the San Diego Planning Commission’s Oct. 8 meeting and during — a new proposal aimed at regulating short-term vacation rentals will return to the office of District 2 City Councilwoman Jennifer Campbell for refinement.

It is slated to return to the Planning Commission for a vote Thursday, Dec. 3.

The ordinance aims to amend the municipal code to include short-term rental occupancy licensing and operating regulations, as well as repeal bed and breakfast and boarder and lodger uses and regulations.

The proposal stems from an agreement that Campbell brokered 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.

According to a city report, the ordinance proposes to define short-term rental occupancy as a stay of less than a month. The regulations would require a license to operate a short-term rental unit, put limits on the number of licenses a host may obtain, create caps on the total number of whole-house short-term rental units and create a process to track, manage and enforce such rentals.

The regulations also would establish a mechanism to cite hosts or suspend or revoke the licenses of those who don’t follow the rules.

The ordinance groups short-term vacation rentals into a four-tier licensing system:

• Tier 1: Home-share or whole-home short-term residential occupancy for an aggregate total of 20 days or less per calendar year

• Tier 2: Home-share short-term residential occupancy for more than 20 days per calendar year

• Tier 3: Whole-home short-term residential occupancy for more than 20 days per calendar year

• Tier 4: Special tier for Mission Beach, which allows for whole-home short-term rental in a manner consistent with recommendations from the Mission Beach Town Council

Under the plan, the number of homes that could be fully rented out for short-term stays while the owner or
resident is not present would be capped at about 5,130 citywide, including a carve-out for close to 1,100 such rentals in Mission Beach.

The number of allowed licenses in the city, exclusive of Mission Beach, would be limited to 0.75 percent of the city’s more than 500,000 housing units. For Mission Beach, long a magnet for vacation rentals, the proportionate allowance would be much larger, representing 30 percent of the community’s total dwelling units.

The effect of the proposed restrictions would be to slash the number of whole-home short-term rentals, which the city believes totaled close to 13,000 as of last summer, by 60 percent.

In a presentation to the Planning Commission, Campbell’s chief of staff, Venus Molina, said this is a “complex” issue and recapped past regulation attempts. She said Campbell has received “hundreds of emails, phone calls and photos of bad operators.”

“We needed enforcement and ... something on the books that could be regulated,” she said.

Almost 500 letters from the public were received ahead of the online meeting, and hundreds of people waited to give comments by phone during the meeting.

Those on both sides of the issue asked that the ordinance not be advanced to the City Council as presented due to a lack of public input from renters and community groups outside City Council District 2, which includes Clairemont, Linda Vista, Pacific Beach, Midway, Mission Beach, Ocean Beach and Point Loma.

Before the meeting, La Jolla Community Planning Association President Diane Kane said her group was not given enough time to formally weigh in and told the La Jolla Light: “Community planning groups have been once again omitted from the political process and are being presented with last-minute fait accomplis. I see room for improvement in the city’s public involvement efforts.”

Commissioner Matthew Boomhower ultimately asked that the ordinance be sent back to Campbell’s office for refinement.

Among his concerns, he said, is that the proposal puts the onus on neighbors to be the first arm of enforcement should renters violate local rules. He also had questions about the enforcement mechanism, the impact on related city departments (such as code enforcement and the city treasurer’s office as it handles an increase in transient occupancy tax collections), how accessory dwelling units would factor in, the nature of the lottery system through which licenses would be allocated and more.

“It’s a great idea; there is just a lot to be worked out,” he said.

Molina responded that, with a planned implementation date of Jan. 1, 2022, “a lot of these logistics” would be worked out in the coming year with the appropriate city entities.

“I think it’s important we have something on the books that creates some sort of structure and framework,” she said. “We feel strongly that the small details will be fleshed out with the administrative regulations … and that city staff will bring about good processes to make these work.”

San Diego Development Services Department Director Elyse Lowe echoed that the proposal before commissioners was a “policy framework” that “gives guidance” and that “it doesn’t do us any good to figure out every little detail, have enforcement lined up … prior to a controversial policy decision being made. We are prepared to come up with administrative guidance [in the coming year].”

However, Boomhower said “we are getting public comment emails because there is a fear of the unknown. When city bodies say ‘Don’t worry, trust us, we are going to work it out,’ people get nervous. And this is too important. I think it would be easier to support this if some of the regulations were fleshed out and in the supporting documents.”

Commissioner Vicki Granowitz said this iteration of short-term vacation rental regulation has “gotten further than anyone else has” and commended the District 2 team.

“But residential zoning is residential zoning, and whole-house rentals is inconsistent use of a residential zone,” she said. “What those that are [listing their houses for short-term rentals] have done is enter into a business rather than just have a home where they are going to raise their children. When you enter into a business, you take a risk … people who have decided to become short-term renters of this nature need to understand they are inviting risk. You are not entitled to always make money. …

“Having said that, I am willing to find compromise. But I need to see the beginnings of administrative guidelines before I consider approving a council policy.”

A motion to have the ordinance return to the commission passed 4-3. It was then approved for a hearing Dec. 3.

Unite Here Local 30 and Expedia Group said in a statement Oct. 8 that they “appreciate input from the Planning Commission today about how to solve the short-term rental issue in the city of San Diego. ... We look forward to returning to the Planning Commission and ultimately the San Diego City Council soon so new regulations can be adopted that will protect local neighborhoods and preserve private property rights.”

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San Diego Union-Tribune staff writer Lori Weisberg contributed to this report.