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In a dramatic shift, the San Diego City Council voted 6-3 Monday to allow only residents who live in homes in San Diego to rent them out to visitors up to six months every year. Councilmen David Alvarez, Chris Cate and Scott Sherman voted no.
It was a huge win for Councilwoman Barbara Bry, who first proposed a framework like this last year but got very little support from colleagues, besides Councilwoman Lorie Zapf. The tide changed with Councilman Chris Ward’s decision last week to switch his long-held more liberal position on the matter. Ward recommended that residents with accessory dwelling units, aka granny flats, should also be able to rent those out.
That will have to come up later.
The Council rejected a carve-out for Mission Beach. And existing Mission Beach vacation rentals were not grandfathered in.
The Council decisively rejected Mayor Kevin Faulconer’s proposal that people be allowed to rent out their own place plus one other. Faulconer had also proposed the Mission Beach carve-out. The policy vastly changes what someone has to go through to rent out a home they own to visitors. Unless they find a loophole, it will eliminate all vacation rentals owned as second homes or investment properties.
City Attorney Mara Elliott cheered the move in a tweet. “Congratulations to the mayor and City Council for stepping up to regulate short term vacation rentals, an issue that dragged on 11 years.”
Councilman Chris Cate said, in a written statement, a compromise would have provided resources to regulate the industry.
“Instead, the Council chose a path that is not only unenforceable and subject to legal challenge, but would drive the activity underground, resulting in the loss in millions of dollars in revenue that funds public safety officers and the repairing of city streets,” he wrote.
The mayor was optimistic: “As I’ve said repeatedly, the most important thing is that we have an established set of rules that protects neighborhood quality of life through increased oversight and enforcement.”
The losers: HomeAway, one of the platforms people use to rent out to visitors, said in a written statement it was “extremely disappointed” and hinted it may consider legal action.
Former City Attorney Jan Goldsmith, who was hired by vacation rental advocates to review the proposed regulations, argued Monday the city could face a fight in court over its decision to treat people with second homes in San Diego differently than those who spend more of the year here. The Constitution requires that all people be treated the same. Elliott had previously raised similar concerns and recently reiterated some of them.
Deputy City Attorney Shannon Thomas has said the City Council can apply different regulations to people but it must describe a legitimate purpose for doing so.
Last hurdle: The new vacation rental rules could face another major roadblock too. The California Coastal Commission, which has rejected multiple cities’ regulations, could take issue with a measure that significantly curtails rentals along the coast.