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Fact Check: Are Vacation Rentals Making the Housing Shortage Worse?

The debate over how to regulate vacation rentals is especially hot in coastal communities, which have long been rental hotspots. It’s become a central issue in the race to represent City Council District 1, which includes vacation rental hub La Jolla.

FalseStatement: “The nonprofit Save San Diego Neighborhoods has estimated that over 6,000 properties in San Diego have been converted into permanent mini-hotels, which is disruptive to communities and needs to stop. Just ask anyone who lives next to one. Viewed in terms of affordable housing, these 6,000 homes are essentially removed from the rental or home purchasing market, directly contributing to the housing shortage,” Barbara Bry, a candidate for San Diego City Council District 1, wrote in a VOSD op-ed April 13.

Determination: False

Analysis: The advent of Airbnb and other home-sharing sites increased tourist access to once out-of-reach communities across San Diego. But not all local residents like their new, temporary neighbors.

Save San Diego Neighborhoods is a grassroots group that thinks the city should be doing more to enforce current zoning rules in residential areas to restrict short-term vacation rentals.

Another group, dubbed the Short Term Rental Alliance of San Diego, is seeking a better city process to allow homeowners to legally share their property without all the confusion and red tape that exists now.

City staff drafted an ordinance last year that would have created new rules, but failed to reach a consensus. Little progress has been made since, but a City Council committee is expected to take up the issue again this summer.

In the meantime, both tensions and listings are growing. The number of San Diego Airbnb rentals has risen 39 percent since February 2015, according to data from San Francisco-based Beyond Pricing.

The debate is especially hot in coastal communities, which have long been rental hotspots.

It’s become a central issue in the race to represent City Council District 1, which includes vacation rental hub La Jolla.

Barbara Bry, the Democratic candidate in the race, wrote in a recent Voice of San Diego op-ed that Save San Diego Neighborhoods found more than 6,000 homes had been converted to mini-hotels citywide. Bry, who’s endorsed by the group, said those rentals were “directly contributing to the housing shortage” by removing them from the long-term renter or buyer market.

Bry’s claim provoked an op-ed response from San Diego City Councilman Chris Cate, who wrote, “As far as I can tell, this is nothing more than a myth.” Cate pointed to a 2015 National University study that found there are 6,100 short-term vacation rental properties in San Diego total, including entire homes, as well as shared rooms and guesthouses where the homeowner stays on the property.

Bry says she supports short-term rentals if they’re permitted and the homeowner stays on the property. Bry’s primary opponent for District 1, Republican Ray Ellis, just wants to see short-term rentals permitted.

We asked Bry for data to support her claim that vacation rentals are contributing to the housing shortage. Her camp referred us to Save San Diego Neighborhoods board member Tom Coat.

“The impact of vacation rentals on affordable housing clearly is not a myth,” Coat said. He said his group is “working to stop the blatantly commercial use by owners, corporations, out-of-town investors and LLCs from Nevada, Texas and other states from destroying our residential neighborhoods with unsupervised hotels in the middle of our communities.”

Coat said his group purchased a year’s worth of data from the Airbnb analytics company Airdna showing 4,749 entire home Airbnb listings in the city from November 2014 to November 2015, not including La Jolla. With La Jolla data added in from Airdna, he said the grand total rose to 5,403.

Then, in order to account for listings on the “90 other websites,” like VRBO and FlipKey, without double-counting homes listed on more than one site, “You have to make a best estimated guess, and that’s what we did,” said Coat.

“We made a real honest effort,” and added 600 homes, or 11.1 percent, to arrive at 6,003 entire-home Airbnb listings citywide, Coat said, calling the addition, “unrealistically low” and conservative.

That’s the number Bry referred to.

There are problems with that number, though.

For starters, it includes any home that appeared on the site, even if it was rented for a one-time event like Comic-Con or brief homeowner vacations. But for those stays, the homeowner still lives in the house most of the year, so the listings aren’t contributing to a housing shortage.

While not perfect, a better measurement may be a point-in-time snapshot – or several – to see how many short-term rental properties are on the market at any given time. Homes that are operating as mini-hotels will, by definition, be listed on Airbnb all or most of the time. That means a simple point-in-time count should let us know how many homes are always available for short-term rentals.

Airdna’s public data shows 2,109 entire home Airbnb properties are presently listed in the city of San Diego and La Jolla combined. (Though La Jolla is part of the city of San Diego, Airdna separates the two.) That total is 3,900 listings less than the number quoted by Bry.

Fresh data from Beyond Pricing, another company that analyzes Airbnb, also puts entire-home Airbnb listings for San Diego this month on the lower end at 2,948 – half the number quoted by Bry.

To try to get an even better sense of the homes rented out most of the year, we can eliminate rentals with less than 17 reviews, said Beyond Pricing President Ian McHenry.

McHenry said about two-thirds of renters write reviews of their stays, and the average length of stay in San Diego is four days. So for every 100 days, you’d expect 25 guests and 17 reviews on average. If a rental has fewer than 17 reviews, it indicates they’ve likely rented the home for less than 100 days total during the life of the listing.

Out of the 2,948 entire home Airbnb listings in San Diego in May 2016 counted by Beyond Pricing, 79.2 percent have 17 reviews or less – making them very unlikely to be the mini-hotels that are perpetually filled with tourists described by Bry.

Conversely, just 613 current San Diego entire home listings have more 17 reviews and could possibly be frequent rentals. That’s a fraction of the 6,003 cited by Bry.

Bry’s statistic is also problematic because there is no agreed-on standard rate that could account for non-Airbnb listings, so the 11.1 percent added by Coat is truly a guess.

Coat did refer us to a 2014 article in Fortune where the CEO of home-rental site HomeAway/VRBO said just 6 percent of all their listings overlap with Airbnb – meaning 94 percent do not.

If true, Coat could have added a much larger percentage to try to capture the city’s non-Airbnb rental market, but the market is changing and people may be cross-listing more today than a couple years ago.

While there are many ways to try to quantify the short-term vacation rentals issue, none of the methods are an exact science and all use some degree of averaging or guesswork.

“We weren’t involved in the research, but we can tell you from comments we get from residents that the scope of the problem of permanent mini hotels is significant,” Bry’s campaign manager Hilary Nemchik wrote in an email. “Rather than housing San Diegans, these homes now accommodate a revolving door of tourists, which affects the character and safety of our residential neighborhoods.”

Residents are entitled to think a change in their neighborhood has hurt their quality of life, and hope the city passes regulations to make it better. It’s a point in a debate about property rights and the role of government in the city.

But that isn’t what Bry’s claim argued. She said short-term vacation rentals were contributing to a housing shortage that was making housing unaffordable in San Diego.

There are significant problems with the number she cited to make that claim.

All things considered, we’ve determined Bry’s claim was false.

We consider a statement false if it is not accurate and there is no element of truth to it. While some homes have been converted to mini-hotels, it is just not true that there are 6,000 such short-term rentals in San Diego. No data offered by Bry or gathered from other sources supports that claim. Multiple data points instead suggest the truth is closer to a fraction of the number she cited.

If you disagree with our determination or analysis, please express your thoughts in the comments section of this blog post. Explain your reasoning. You can also e-mail new Fact Check suggestions to factcheck@voiceofsandiego.org. What claim should we explore next?

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