Big Companies Run Biggest Share of Short-Term Rentals

Economy UNVEILING THE UNSEEN

Big Companies, Not Homeowners, Run Biggest Share of Short-Term Rentals

Data shows that a large chunk of short-term rentals in San Diego are run by big companies, not individual owners. Proponents of a ban on non-owner-occupied short-term rentals say that’s a formula for disaster. Those companies say it’s just the opposite: Unlike individual operators, they have the resources to police problem tenants.

Most of San Diego’s short-term rentals are run by property managers who don’t live on-site — not by homeowners renting out a room or two.

But the biggest short-term rental companies say that, contrary to popular belief, they are better equipped to be courteous neighbors than regular homeowners trying to make a buck renting out their home.

There are 2,797 short-term rental units in San Diego whose operators registered with the city for tax purposes, according to data obtained by Voice of San Diego through a Public Records Act request.

Twenty of the city’s top short-term rental management companies operate about 40 percent of those units, with each operating between 20 and 109 rental units.

Another 22 percent of the registered short-term rentals are run by small companies and individuals who list at least three units.

That leaves a little more than a third of short-term rentals registered with the city run by individuals who list just one or two units.

Who's hosting short-term rentals in San Diego

The city’s list does not account for all short-term rentals, however. For instance, VRBO, a short-term rental platform like Airbnb, listed 3,875 rentals as of July 29, more than 1,000 more units than had registered with the city. Properties do not have to be active year-round to be listed on sites like VRBO.

Though the city’s list is incomplete, it nonetheless demonstrates a big chunk of short-term rentals in San Diego are run by big companies.

Proponents of a ban on non-owner-occupied short-term rentals say that’s a formula for disaster.

“When a property is that big, and when it’s managed by people that don’t live there, it gets a lot of people in, and the only people that suffer are the neighbors,” said Sue Hopkins, who owns a home in Clairemont.

Those companies say it’s just the opposite: Unlike individual operators, they have the resources to police problem tenants.

Paul Becker manages Bluewater, one of San Diego’s largest short-term rental management companies, which has been around since 2009 and manages more than 60 rentals. He said over-occupancy and noise issues are bad for business.

“When I first started with short-term rentals, I learned the hard way — I had to drive down to the house at 12 a.m., knock on the door and say, ‘Knock it off,’” he said. “I get it — if I had a badly run home next to me where they were allowing young people, parties, disturbances, I would be on the other side in a minute.”

Bluewater prohibits tenants under the age of 25 and requires a security deposit. A bolded, underlined message at the top of its tenant contract says violations to its rules against noise, over-occupancy and parties result in fines from $500 to three times the rental amount, plus a surrendered security deposit and immediate, non-refundable eviction.

“We will turn away revenue all day long,” Becker said. “There are so many people who want to have weddings and events, but it’s just not appropriate in these high-density communities.”

Other major short-term rental companies have similar policies. Nancy Kramer of Nancy’s Vacation Rentals, which began operating in 2002 and manages more than 50 rentals, said the clients whose homes she manages depend on her policy of evicting any tenant who hosts a party or event.

“These homes are gorgeous, and the owner is trusting me with their expensive furniture and their artwork,” she said. “If something would get damaged, the noose would be around my neck.”

Ryan Jantz, who’s been running Mission Bay Vacation Rentals since 2002, said tenants lose half their security deposit the first time a neighbor calls the company to complain. He evicts after the second complaint.

He said short-term rental companies, and not aggrieved neighbors, should be responsible for keeping noise down.

“Calling the police is a worthless adventure — they have way bigger fish to fry than responding to a noise complaint on a Friday or Saturday night,” he said. “If anything, there should be a way that everyone knows who manages what properties — some kind of public database where they could go online, type in the address and call the owner or management company directly.”

San Diego does not have a database of short-term rental operators and doesn’t require a permit to run a rental, only that owners register to pay bed taxes like a hotel would. City officials are developing a new ordinance to regulate short-term rentals that was scheduled for a June release.

Becker said accountability is necessary to get problem rentals shut down.

“There are some people who are scumbags — they’re greedy, they’re disenfranchised from the community, they live out of town, and they don’t care,” he said. “Those are the guys that need to be put out of business.”

But Jantz said it’s a misconception that there are tons of out-of-town investors buying up properties in beach communities for short-term rentals.

After all, most beachfront properties cost millions.

“We’ve looked into buying vacation rentals ourselves — unless it’s a really depressed price on the property, to us it never really pencils,” he said.

Short-term rental managers say they work with homeowners, not investors. Some of their clients bought retirement homes, others have been managed their homes as rentals and want someone else to take the reins and others have inherited or bought property they don’t use year-round.

Laurie Miller and her husband own a home near Mission Beach and a remodeled condo downtown. The two have been in the short-term rental business for a decade, advertising their properties when they travel.

A new short-term rental just cropped up down the street from her Mission Beach property.

“They don’t check anybody in and out, they allow 18 people to stay there — the neighbors are losing their minds, which has caused a lot of negativity toward me,” Miller said. “Do I think the city needs to make restrictions? Yes! I’ve been saying this for years.”

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