Yes, Short-Term Vacation Rentals Are Hurting San Diego
Entire-home short-term vacation rentals have become a very real and serious problem in San Diego and elsewhere. Short-term vacation rentals are affecting affordable housing here and in other cities.
Let’s start with something on which virtually everyone agrees: San Diego has a prolonged – and worsening – affordable housing crisis. This summer, the San Diego City Council will undoubtedly be forced to extend once again the state of emergency due to the severe shortage of affordable housing it first declared on Aug. 6, 2002. It will mark well over a decade of crisis.
While this crisis certainly has many causes, the use and conversion of thousands of homes to short-term vacation rental hotels clearly is not helping the city grapple with its admitted state of emergency.
In particular, long-term renters, young families looking to buy first homes, middle-class families and even businesses looking for nearby housing for their workers are literally paying a steep price for San Diego’s failures. It all makes the city’s bewildering refusal to enforce its own municipal code regarding prohibited commercial uses in residential zones all the more confusing.
This is the context to keep in mind when considering why citizens group Save San Diego Neighborhoods (SSDN) – a citizens group I helped found and serve as a board member – joined an international movement in studying the negative impacts of short-term rentals on affordable housing. Voice of San Diego recently fact-checked our assertion – stated by District 1 City Council candidate Barbara Bry – that an estimated 6,000 homes used or converted to whole-home rentals negatively impacts affordable housing in San Diego and claimed it to be false.
The entire board of SSDN – working on behalf of hundreds of citizens who have joined us and thousands of their extended family members – strongly disagrees.
In fact, the numbers in SSDN’s study represent the most accurate picture to date of what VOSD itself calls the “booming” vacation rental market in San Diego. Further, SSDN believes VOSD’s own short-term vacation rental analysis and subsequent fact-check are at best questionable.
To understand why, you need to understand that accurate, unbiased data on vacation rentals is difficult to get. Like Big Tobacco decades ago, the vacation-rental industry guards its data so zealously that the New York attorney general was forced to subpoena Airbnb’s records.
The vacation-rental industry has created a situation in which independent studies about its rentals are required to make at least some estimates, albeit based on empirical data. Voice of San Diego did this in its analysis and so did Save San Diego Neighborhoods. But there are big differences in the methodology of the two analyses.
Save San Diego Neighborhoods purchased data in January from airdna.co, a short-term vacation rental industry marketing firm that provides analytical data for owners and operators of short-term rentals. Airdna.co has analyzed more than 2 million listings and 30 million transactions on Airbnb. In an effort to obtain pure and unbiased data, SSDN did not tell airdna.co how the data was going to be used, letting airdna.co assume it was purchased by a short-term rental operator. As a result, SSDN is confident it received unbiased, accurate data.
Airdna.co’s data came in the form of an Excel file that had 7,784 individual rows. It is important to bear in mind that airdna.co only analyzes Airbnb vacation rental listings and no information from any other hosting website. The data that we received was for ZIP codes in San Diego for 92101 and above, and as a result, La Jolla, whose ZIP code is 92037, was not included. The period covered was November 2014 through November 2015. The data from airdna.co showed 4,749 listings on Airbnb for entire home – that is, whole house, condo and apartments – short-term rentals.
This is where City Councilman Chris Cate, who penned an op-ed for Voice of San Diego arguing that short-term vacation rentals’ impact on San Diego’s housing shortage is a myth, and Voice of San Diego’s fact check, find fault with Save San Diego Neighborhoods’ study. VOSD objected that not all of the entire-home short-term rentals listed in airdna.co’s data impacted affordable housing. Cate and VOSD asserted that the airdna.co data included one-time rentals in which a home is rented out for Comic-Con or other special events when there is a high demand, but otherwise lived in by the owner. SSDN agrees and accounted for this in its study.
What VOSD apparently did not understand about our methodology in developing the estimate of more than 6,000 entire home short-term rentals is that SSDN looked at the income from each of the 4,749 entire home listings. With this information, SSDN was able to determine that revenues from 12 percent of the entire home listings were so small as to have no impact on the affordable housing stock.
Put another way, the data showed that 88 percent of the listings do affect affordable housing options in that the vast majority of short-term vacation rentals clearly removed homes from San Diego’s housing stock. Bear in mind, the number of entire home listings from airdna.co were only from Airbnb listings. Our estimates did not include data from the other 90 online vacation rental websites available in San Diego.
SSDN later purchased the data from airdna.co for La Jolla and that data resulted in an increase of 654 additional Airbnb entire-home listings. SSDN then estimated the total number of entire-home short-term rentals listed on the other home-sharing websites. It is important to note that Airbnb’s closest competitor, VRBO, maintains that it has more than 80 percent of the number of worldwide vacation rental listings as Airbnb. Even accounting for duplicate listings, we conservatively estimated only 600 listings across San Diego for all the other 90 or so online sites such as VRBO/HomeAway, Tripping and Flipkey.
So here is the overarching point: the number of entire-home short-term rental listings that Save San Diego Neighborhoods estimated to be operating in the city of San Diego – over 6,000 – is actually very conservative.
The study attributed a mere 14 percent of the entire home short-term vacation rental market in San Diego to the other estimated 90 web hosts (when, in reality, there’s probably a lot more on those sites). In addition, the 6,000 number does not include rooms once used for long-term rentals that have now been converted to short-term vacation rental rooms. Airdna.co data shows over 3,000 short-term rental rooms – just for Airbnb – in San Diego. Clearly, a loss of long-term room rentals has a negative impact on housing stock. By reducing long-term rental supply, they add to San Diego’s dramatically rising long-term rental rates.
The bottom line is that SSDN’s estimate of over 6,000, which is based on empirical data, is accurate. SSDN has asked Voice of San Diego to publicly acknowledge that its fact-check is erroneous and that Bry’s statement is, in fact, correct.
Entire-home short-term vacation rentals have become a very real and serious problem in San Diego and elsewhere. Short-term vacation rentals are affecting affordable housing here and in other cities. Santa Barbara, Santa Monica, Hermosa Beach, Huntington Beach and many, many other California cities already have voted to enforce laws that prohibit commercial uses in residential areas. Each of the cities that has reiterated that ban on entire-home, short-term vacation rentals in its residential zones based that decision in large part on the adverse impact short-term vacation rentals had on housing stock. It is indisputable that short-term vacation rentals adversely affect affordable housing. Affordable housing concerns also recently prompted Los Angeles to propose an ordinance that would permit only home-sharing of a primary residence.
SSDN urges all San Diego officials who care about affordable housing to read the staff reports of those California communities that have reiterated the ban on short-term vacation rentals in residential zones. All of these cities recognized and expressed their beliefs and concerns that short-term vacation rentals have a significant impact on affordable housing, particularly Los Angeles.
Nearly every day, Save San Diego Neighborhoods receives inquiries from San Diego residents who are directly and profoundly impacted by the exponential growth of entire home short-term vacation rentals.
SSDN invites Cate to meet with the growing group of people adversely affected by short-term vacation rentals in San Diego. SSDN would appreciate the opportunity to talk about the problem and the solution.
Tom Coat is a career journalist/publisher who has served in positions from reporter to managing editor on daily newspapers. He was an award-winning journalist for 11 years for the San Diego Tribune and for 26 years ran his own publishing company in Pacific Beach. See anything in there we should fact check? Tell us what to check out here.