San Diego and countless other cities across the country have taken a whack-a-mole approach to vacation rental platforms like Airbnb.

San Diego officials are increasingly cracking down, telling hosts they need to abide by the rules. The problem: The rules that have long worked for hotels and bed and breakfasts don’t address exactly what Airbnb hosts are doing – renting out rooms or entire homes for less than 30 days.

City Councilmembers Chris Cate and Lorie Zapf are working to reform and clarify the city’s approach to vacation rentals.

“It should be very clear to (hosts) what they need to do to follow the rules and follow the law,” Cate told me last week when he shared his reform proposal.

NBC 7 San Diego’s Catherine Garcia and I explain the city’s recent vacation rental crackdown and what could be next in the latest San Diego Explained:


We Stand Up for You. Will You Stand Up for Us?

Since the rules remain confusing for now, I asked officials what hosts who want to follow the law need to do. Here’s what they said.

Pay those bed taxes.

Hoteliers and traditional bed and breakfast hosts add a roughly 11 percent bed tax charge to every hotel bill. The city says vacation rental hosts need to do the same.

This isn’t so simple for Airbnb hosts. The website doesn’t let them collect taxes directly, meaning hosts would need to raise their prices to cover the cost.

Pay business taxes.

City rules say hosts need to pay a business tax of at least $50 per property, plus $5 per room that’s rented out. Hosts can pay this annual bill online, in person or via snail mail.

Check the zoning rules.

This is where things get complicated.

Airbnb and other vacation rental options come in three general categories: full home or condo rentals, single or multiple room offerings and shared rooms.

Most San Diego Airbnb hosts are renting out entire homes, according to data from Airbnb service app Beyond Pricing.

 

Robert Vacchi, director of the city’s development services department, said the city doesn’t currently regulate full-home rentals.

That changes when a host remains at home while guests visit essentially, just renting out a room.

The city says hosts who rent out rooms in areas dominated by single-family homes should get a neighborhood use permit to operate a bed and breakfast, which can take months and cost thousands of dollars. They also need to have extra parking spaces – at least two if they’re renting out rooms.

The city acknowledges, though, that it hasn’t handed out a bed and breakfast permit in about a decade.

Yet the city recently threatened a Burlingame woman with up to $250,000 in fines for renting out two rooms. Her attorney says she’s since stopped using Airbnb.

The city doesn’t require residents in zones dominated by apartments and condos get a permit to operate a bed and breakfast, though their leases may bar them from hosting visitors.

There’s a whole other set of rules for longer stays and for areas reserved for apartments and condos. Vacation rentals for at least seven days in multi-family areas, for example, are technically allowed without a permit. In single-family areas, those stays need to be at least 30 days.

So, basically, it’s complicated. For that reason, city officials suggest would-be vacation rental hosts contact the city’s development service department if they want to start renting out rooms.

That’ll likely come with an upfront cost.

“If you want to do business in the city of San Diego, you have to follow the regulations. That means you get the permit,” Vacchi said. “That means you need to make the investment.”

    This article relates to: Economy, Tourism Economy

    Written by Lisa Halverstadt

    Lisa writes about San Diego city and county governments. She welcomes story tips and questions. Contact her directly at lisa@vosd.org or 619.325.0528.

    24 comments
    Richard Gardiol
    Richard Gardiol

    “If you want to do business in the city of San Diego, you have to follow the regulations. That means you get the permit,” Vacchi said. “That means you need to make the investment.”
    Todd Gloria appointee Robert Vacchi, current "Godfather" of the criminal organization known as the Department of Development Services has his hands firmly on the levers of power in determining what is a legal use and what is not in San Diego. Regulations are what Director Vacchi says they are so there is really no point in looking them up in the Municipal Code. Once you have satisfied Dirctor Vacchi's personal agenda you are good to go with whatever illegal use you may be contemplating. But first says the local king pin with a wink; "you need to make the investment".  Investment in what ? Could it be in Todd Gloria's next election campaign for higher office ? Or maybe Robert Vacchi's retirement fund ? One thing is certain; Voice of San Diego's complicity in covering up the abuse of power in San Diego's Department of Development Services. 

    physioteacher
    physioteacher subscriber

    Current municipal code states that certain commercial businesses are not allowed in RS 1-7 zones. Visitor accommodations fall under those commercial businesses prohibited in these zones. I'm not sure why the city is having such a difficult time interpreting their own zoning codes.

    When a vacant house is being used strictly as a vacation rental, this is a commercial business operating in a RS 1-7 zone, and therefore, is not permitted under current code. This vacant house is a MINI HOTEL (I.e. A business) operating in a non-commercial zone.

    For anyone who is interested, I've referenced SDMC Table 131-04B in §131.0422. Seems cut and dry to me!

    (http://docs.sandiego.gov/municode/MuniCodeChapter13/Ch13Art01Division04.pdf)

    Chris Brewster
    Chris Brewster subscribermember

    Agree. However, absent an opinion from Mr. Goldsmith to the contrary, this is the official opinion of the City Attorney. I subscribe to your point of view. It will come down to the political power of neighborhoods versus entrepreneurs who would like to use neighborhoods for commerce.

    physioteacher
    physioteacher subscriber

    @Chris Brewster I've seen this document before. It appears that the former City Attorney did not want to define what a "visitor" or a "resident" is to our city. This seems pretty obvious. A "visitor" is someone who doesn't live in San Diego and is paying to stay in lodging that isn't their permanent home. A "resident" is someone who lives in San Diego for a permanent amount of time. Visiting a city and staying for 2-3 days does not make one a resident. This entire document is all an avoidance of definitions that could be easily looked up in a great book that I know as a DICTIONARY. 


    Also, according to this document, "A dwelling that is rented out in its entirety as a short-term rental is not a hotel or motel". This seems entirely asinine to me. "A dwelling that is rented out in its entirety as a short-term rental is not a hotel or motel" is most definitely a type of HOTEL. 


    This entire issue is just frustrating to those of us to take pride in our neighborhoods. 

    Chris Brewster
    Chris Brewster subscribermember

    The municipal code addresses room rentals in a manner not quite consistent with the reporting here. In my view the clear purpose of this regulation is to prevent residential areas from turning into boarding houses where people rent short term. In fact, that’s exactly what the Municipal Code refers to them as – boarding houses. Most people don’t buy homes in residential areas expecting to live beside quasi-hotels. Hotels must be in commercial districts, for a reason.

    The Municipal Code protects residents by requiring that in residential multi-unit zones boarders and lodgers must occupy the premises for at least 7 days. That helps prevent the Airbnb short term rentals in those zones that include both houses and condos. The same code protects residents in residential single unit zones (houses) by requiring that boarders and lodgers must occupy the premises for at least 30 days. (The code is below.)

    Much attention seems to be focused here on the so-called “rights” of the distinct minority of people who want to take advantage of the Wild West market created by Airbnb to monetize their spare rooms. The fact is though that the vast majority of San Diego residents don’t want to rent out part or all of their homes. They want to live there, enjoy their neighborhoods, have long-term and positive relations with their neighbors, and basically live in peace. They want their neighborhoods maintained in the manner the existing codes dictate.

    Mr. Cate, in his zeal to take a libertarian view of all this seems to care little for homeowners who don’t want to rent or to live beside rentals and to care much for the few who do. This is the sort of approach that destroys neighborhoods and communities. The existing rules exist for good reason.

    San Diego Municipal Code 141.0301 Boarder and Lodger Accommodations
    Boarder and lodger accommodations are permitted as a limited use in the zones indicated with an “L” in the Use Regulations Tables in Chapter 13, Article 1 (Base Zones) subject to the following regulations.
    (a) Boarder and lodger accommodations are permitted only as an accessory use to a primary dwelling unit.
    (b) No more than two boarders or lodgers are permitted per primary dwelling unit.
    (c) In the RM [residential multi-unit] zones and all commercial zones, boarders and lodgers must occupy the premises for a minimum of 7 consecutive calendar days. In all other zones, boarders and lodgers must occupy the premises for a minimum of 30 consecutive calendar days.
    (d) Off-street parking shall be provided at a rate of 1 space for each 2 boarders or lodgers. Within the beach impact area of the Parking Impact Overlay Zone, off-street

    Chris Brewster
    Chris Brewster subscribermember

    Mr. Hofmann: The difficulty I'm having here is that I don't consider different zoning areas and different tax requirements in those areas to represent a subsidy from one to another. Regardless, if there is no zoning, there is no differentiation of property tax income from a given parcel (absent the distortions of Proposition 13).

    Derek Hofmann
    Derek Hofmann subscribermember

    @Chris Brewster "it would seem that the only clear resolution to your concern would be to have no zoning rules and to allow any use of any property."

    Would that eliminate the subsidy?

    Chris Brewster
    Chris Brewster subscribermember

    Mr. Hofmann: I'm not clear on your question, but it would seem that the only clear resolution to your concern would be to have no zoning rules and to allow any use of any property. In that case my neighbor can sell and someone can put in a bar, for example, or a used car lot. I think that sort of approach destroys community.

    Derek Hofmann
    Derek Hofmann subscribermember

    @Chris Brewster "In my view the clear purpose of this regulation is to prevent residential areas from turning into boarding houses..."

    And that's one reason why housing is so expensive in San Diego.

    "Most people don’t buy homes in residential areas expecting to live beside quasi-hotels."

    Most if not all areas zoned exclusively residential are heavily subsidized by downtown areas[1][2], and that makes them "welfare" neighborhoods (the opposite being "donor" neighborhoods). Can you name even one financially self-sufficient residential neighborhood in San Diego? If not, how much choice should people on welfare be given about who their neighbors are?

    [1] http://www.downtownsandiego.org/imaginedowntown/a-regional-asset/

    [2] http://dc.streetsblog.org/2013/05/08/nashville-study-walkable-infill-development-provides-the-most-revenue/

    Chris Brewster
    Chris Brewster subscribermember

    Mr. Hofmann: In a democracy we collectively decide things like zoning laws. They ensure quality of life and allow people to know, in advance of a purchase, what they can expect. This is why zoning rule changes are often hard fought, as they directly impact quality of life and property value. The relative income from commercial areas versus residential areas does not represent a subsidy. It represents a conscious decision as to where certain uses of land within the constituent city's boundaries will be permitted or not. Some will be higher income from others, but that is, again, a collective decision. The greatest problem at hand is not what should or should not be permitted. That is determined in statute. The greatest problem is that Airbnb hosts are, in many cases, ignoring the existing rules that were established to ensure their neighbors' quality of life in an effort to make money in a sort of underground economy.

    Derek Hofmann
    Derek Hofmann subscribermember

    @Chris Brewster "The relative income from commercial areas versus residential areas does not represent a subsidy. It represents a conscious decision as to where certain uses of land within the constituent city's boundaries will be permitted or not."

    Where is the conflict between these two sentences? In other words, how does it being a conscious decision make it not a subsidy?

    Omar Passons
    Omar Passons subscribermember

    Here's the odd thing about the current interpretation being offered, it differentiates not on how the property is being used but on who the users are.  The current scheme implicates people's privacy rights and potentially their freedom of association - these are fundamental rights that require a higher standard than regular old ordinances.  But even if you don't agree with my analysis, it is very hard to see how this framework of telling people they can rent out their whole home to people who know eachother but not to people who don't on a short term basis is rationally related to a legitimate government purpose.  Here's a fun one to have a quick look at: http://law.justia.com/cases/california/court-of-appeal/4th/43/677.html


    Also, remind me again how "visitor accommodation where breakfast is typically provided for guests" conveys that the number of people in your home dictates that you are a bed and breakfast.

    Derek Hofmann
    Derek Hofmann subscribermember

    "The city says hosts who rent out rooms in areas dominated by single-family homes...need to have extra parking spaces – at least two if they’re renting out rooms."

    Even where there's no shortage of parking? No wonder people don't follow the rules. The rules don't make sense!

    Chris Brewster
    Chris Brewster subscribermember

    Mr. Hofmann: I don't see how. The street and available street parking won't increase by dint of the paying of required taxes.

    Derek Hofmann
    Derek Hofmann subscribermember

    @Chris Brewster "The logical entity to be required to [offset the burden] is the entity which is generating income from the use."

    Would paying business taxes help offset that burden?

    Chris Brewster
    Chris Brewster subscribermember

    Mr. Hofmann: The existing parking availability in residential neighborhoods is based on city planning for the intended use (of residents). There is a cost to all infrastructure, of course, but that is part of the foreseen cost of a residential neighborhood. Adding additional unintended use creates a burden that must be offset. The logical entity to be required to provide the offset is the entity which is generating income from the use. You'll see that just about any proposal for a new home or homes requires X amount of off-street parking. Those calculations do not take into account boarding house uses.

    Derek Hofmann
    Derek Hofmann subscribermember

    @Geoff Page Is that a "yes" or a "no" answer to my question of whether businesses help pay for street parking where the business is located?

    Derek Hofmann
    Derek Hofmann subscribermember

    @Chris Brewster "The two spaces would probably not be enough in some cases and overkill in others, but the alternative is an audit of each location, which would be enormously costly."

    With the high cost of land in San Diego, isn't it already enormously costly to provide abundant, free parking?

    Derek Hofmann
    Derek Hofmann subscribermember

    @Geoff Page "street parking, that is there for PUBLIC use, not to benefit a business"

    Don't businesses help pay for that street parking?

    Geoff Page
    Geoff Page subscribermember

    @Derek Hofmann What do you mean by "Even where there's no shortage of parking?"  If you are referring to street parking, that is there for PUBLIC use, not to benefit a business and the priority use should be for the people who live on that street.  Street parking is not allowed to be considered when approving a new project so why should it be considered here? 

    Geoff Page
    Geoff Page subscribermember

    @Derek Hofmann @Geoff Page Street parking in residential zoned areas is intended for residential uses.  Street parking in commercial zones is intended for businesses.  Whatever is allowed in a zoned area can take advantage of any public facilities available including streets and parking.  Since it appears that these businesses are not yet allowed in residential zoned areas, they have no equal right to use the available parking.  And, I will repeat, street parking is not figured into the calculations of required parking for a business.


    Look at what Mr. Anderson wrote earlier. He said he did not provide parking for his guests for security reasons, even though he did have the room, and he said that from 63 to 83 of his yearly guests had cars and he said he had a neighbor also renting out a cottage or a room.  None of this traffic was figured into an RS1-7 zone. 

    Chris Brewster
    Chris Brewster subscribermember

    Mr. Hofmann: To my understanding zoning codes for residential homes (and businesses) include requirements for parking impacts based on citywide averages. This includes off-street parking. This calculation is not made based on an assumption of short term renters being added to the mix, because residential neighborhoods were not zoned for that purpose. Thus, presumably, there is a requirement for additional parking if you rent rooms because otherwise it will have an impact on neighbors' parking availability. The two spaces would probably not be enough in some cases and overkill in others, but the alternative is an audit of each location, which would be enormously costly.

    Geoff Page
    Geoff Page subscribermember

    @Derek Hofmann @Geoff Page Everyone pays for all of the streets in the city, the money does not come specifically from residences in residential areas or specifically from businesses in commercial areas. Additionally, these are existing streets, so what are you asking about anyone paying for?  We're talking usage here.  There are limitations on what can be operated in a residential zoned area and those restrictions are based on the intended use of those streets.