Short-term rentals of residential properties cause conflicts and problems.
Allowing short-term rentals – a commercial use – in single-family residential neighborhoods undermines the purpose and intent of single-family zoning, causes economic offsets and creates administration and enforcement problems for the city. The latest proposal to allow short-term rentals in San Diego by Councilman Chris Ward and others is fatally flawed and should be rejected.
Allowing commercial use, or businesses, to operate in residential zones violates the fundamental principle of zoning – a place for everything, and everything in its place. In urban planning, the single-family zone is the sacrosanct core; the most protected place reserved for families and children. In San Diego, there is a vast array of commercial zones, but they have always been separated from single-family neighborhoods as much as possible.
Efforts to fundamentally change zoning laws are usually accompanied by economic rewards and losses. In this case, the dollar rewards are evident, easily quantifiable, sizable and immediate for the landlords. Such rewards come also with the promise of transient occupancy taxes, to which vacation rentals contribute. The hotel tax is an enticement for elected leaders in their continual quest for public funds.
Those short-term gains are already being garnered illegally, due to failure of the mayor and the City Council to enforce existing zoning prohibitions.
Losses for allowing vacation rentals in our neighborhoods come in two categories; quality of life and long-term dollar losses in depreciation, which could run to thousands for individual property owners.
We Stand Up for You. Will You Stand Up for Us?
I must admit that the shorthand reference in the article to zoning as “a place for everything and everything in its place” needs some amplification.
At minimum, zoning establishes a basic order and reasonable expectations on not only what the owner can do with their property, but what neighbors can do with their property as well.Uses are separated to provide protection both ways.Residential uses will not be subjected to commercial or industrial uses and the noise and traffic that accompany those uses.And commercial and industrial uses also want protection from complaints and nuisance litigation.
Within the residential zone for example, the setbacks, coverage limitation, and height limits provide a reasonable expectation of development.A front yard setback provides for open space and assurance that all development in that zone will follow those regulations.
These regulations also protect a homeowner’s investment.They know the limitations of use and development on their property and on adjacent property.If they choose to sell they can offer those limitations as protection for the prospective owner’s investment.
In commercial and industrial properties, the expectation of development potential establishes the price.How much square footage is available and what are the permitted uses.
It can be stated that residential zoning provides for housing by setting aside land and protecting that use.The value is determined by residential use; a home not a business.On the other hand, if vacation rentals are allowed, the dollar return on vacation rentals determines the price of the property, and that prices homeowners out of the market.That house is no longer a home; it is a rental income property and a commercial use.
Other commenters have carefully pointed out the economics of residential versus vacation rental properties.The inflated price based on income keeps many hopeful home purchasers out of the market without distinction of class or color.
The statement, "Long-term losses will be realized in the reduced sale prices of single-family homes in proximity to short-term rentals." may have created confusion. I was trying to point out that a home next to vacation rentals would have less value as a residential use, but would have increased value as a vacation rental – income property.And as one commenter pointed out, this creates a domino effect tilted to vacation rentals.
Many of Joe Flynn's points are extremely well made. Clearly, Councilman Ward should withdraw his proposal. FYI, Ward attempted to justify his proposal last night before a packed audience at the University Heights Community Association. The crowd became increasingly frustrated with Ward's reasoning until it literally booed him to stop talking at one point. It was just another indication that Ward's plan is, as Flynn writes, fatally flawed and should be rejected.
Derek Hoffman (below), however, picks up on one point that does need to be clarified in Flynn's article. It is about housing prices.
To put a finer point on Flynn's argument, in general housing prices are rising. In fact, a report today indicates long-term rental rates have hit an all-time high in San Diego. Economists, such as USD's Alan Gin and many others, say this is due to a shortage of available housing units. There are many causes for this shortage, but Gin and others say a significant factor in our lack of housing inventory stems from thousands of units of housing stock being diverted from being homes to being short-term vacation rental hotels, Further, because investors may make upwards of $100,000 per year in vacation rental revenue, they are, naturally, willing to pay inflated prices for that opportunity. That makes it much more difficult for families across the city to buy homes.
On the other hand, IF you are trying to sell your house to a family who will actually use it as a home, you may have to settle for a lower price because of the potential nuisance of a vacation rental nearby that must be disclosed. Unfortunately, this disclosure will virtually force many people to sell to an investor. That, of course, causes a ripple effect that will only accelerate the destruction of a neighborhood as a viable community because tourists will continue to replace residents.
One other point, online real estate website Redfin released a recent study. It found that only 5% of the listings in San Diego last year were affordable for middle-class African-American and Hispanic families. Five percent. That is morally repugnant to me. If we continue to remove housing stock intended by zoning to be used for homes, and divert them to business uses, the situation will only get more dire for these groups and our population in general. The intent of our zoning laws is crystal clear. Our Municipal Code states that residential neighborhoods are intended to be for residents. The mayor should do his job and enforce our laws.
@Tom Coat "If we continue to remove housing stock intended by zoning to be used for homes, and divert them to business uses, the situation will only get more dire"
I agree 100%!
Additionally, no one here has brought up the fact that AirBnB hosts have been known to discriminate along racial lines. There have been documented cases where people who are black or Asian got the door slammed in their face when they showed up to their AirBnB reservation. There's a reason we have laws against discrimination when it comes to providing room and board as a business, and people making AirBnB listings get to ignore those laws.
If there's money to be made from short-term rentals (or anything else) in San Diego, the Gods of Cold Hard Cash will win, neighbors and neighborhoods be damned. For the past year, I've watched - and listened to -the construction of a new apartment/condo building on a narrow strip of hillside property near my home which, now nearing completion, has completely blocked the views of the existing building just feet from the property line behind it. Money, money, money..."Legal" doesn't make decisions in SD right...Our fair city is increasingly a lot like New York in one big way - a nice place to visit, but ...
"Allowing short-term rentals...in single-family residential neighborhoods undermines the purpose and intent of single-family zoning"
Which is to keep poor people and people of color out of white middle-class neighborhoods.
"Long-term losses will be realized in the reduced sale prices of single-family homes in proximity to short-term rentals."
Another Voice of San Diego article claims the opposite, that short-term rentals are making housing less affordable. Who are we supposed to believe?
Meanwhile, suburban areas are heavily subsidized by downtowns. Ironically, even coastal neighborhoods may benefit from this kind of welfare. If every neighborhood had to become financially self-sufficient in tax revenue versus city spending, I think people would be much more accepting of commercial activities within their neighborhoods because it would lower their property taxes.
Mr. Hofmann. Please. The article to which you link refers to zoning ordinances aimed at racial minorities. For example, the article refers to, ".Richmond, where a 1911 zoning ordinance made it illegal to sell a house on a majority-white block to a black person, or a house on a majority-black block to a white person." If you can identify a racial zoning law at present in San Diego, please do, but the issue here isn't about race. It's about buying a home in a single family zoned area (whatever race or ethnicity you may be) and then having to put up with a de facto hotel next door. Hotels are not permitted in single family zoned areas; but vacation rentals of three days or less would be allowed under Mr. Ward's ill-considered proposal. That's the same as a hotel.
Mr. Brewster, please keep reading that article. Start at the following paragraph and continue to the end: "Another study, in 2009, found “a strong and significant … relationship” between low-density zoning policies and racial segregation."
Mr. Hofmann: Thank you. I had read that part. There is no question that discriminatory policies, both explicit and subtle have occurred over the years. Consider the history of anti semitism in La Jolla real estate sales. But the referenced article lacks eviidence of its assertions, as well as application to San Diego. The 2009 study is not referenced, so its quality cannot be evaluated and the circumstances in Houston are not necessarily relevant to San Diego. More importantly though, the issue before us has to do with existing single family homeowners. If people with means are allowed to buy and rent out three homes each (I suppose a couple could own six) as short term vacation rentals then that is three to six homes taken off the local housing market for each affluent property owner That will presumably reduce housing stock and thereby drive up housing costs city-wide. How in the world does that help the population to which you refer?
The zoning code which restricts commercial activity in residential areas also establishes minimum setbacks, maximum floor area ratios, height limits, and minimum parking requirements. These all limit housing stock and drive up housing costs, so let's scale them back a little.
@Derek Hofmann The zoning code limitations that you cite can the allowable floor area of a residential structure but do not remove houses from the market in the way that whole-house short term rentals do.