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I believe one of our nation’s greatest strengths is our boundless ingenuity. The growth of the sharing economy in recent years has been transformational in cities across our country. It also has introduced questions never contemplated when our current municipal regulations were drafted.
When ride-sharing programs such as Uber and Lyft entered the heavily regulated airport scene, it raised security questions and other concerns. The San Diego Regional Airport Authority recognized many travelers preferred ride-share companies over taxis, and, to its credit, developed a pilot program that addressed the unique circumstances of airport pickups.
My office has been advocating to do the same for another popular segment of the sharing economy: home-sharing and short-term vacation rentals. Platforms like Airbnb allow residents to rent out a single room or their entire home on a short-term basis, offer visitors a unique traveling experience and provide San Diegans supplemental income.
Home-sharing has benefited San Diego’s economy. A comprehensive economic study conducted by the National University System Institute for Policy Research found short-term vacation rentals infuse hundreds of millions of dollars into San Diego’s economy each year – benefiting all of us.
San Diegans who rent out all or a portion of their homes earn about $110 million in rental income annually, supplementing their household incomes and enhancing our local economy. Their guests spend more than $86 million per year supporting the shops, restaurants and other businesses that make our neighborhoods vibrant.
These visitors also contribute to the city’s ability to provide services to residents; between Transient Occupancy Tax and sales tax from vacationers in short-term rentals and home-shares, some $12 million a year is collected by the city and pays for road repairs, parks, libraries and fire and police services.
As someone who’s immensely proud of the city beyond our world-famous attractions, I love the idea of giving visitors looking for an authentic San Diego experience a chance to interact with natives and try our recommendations for the best tacos or craft beer.
As with all major shifts brought on by new technology, we have some wrinkles to iron out. Part of ensuring we have effective oversight of short-term vacation rentals is identifying concerns that need to be addressed. But it also means being honest about the true source of problems in our communities.
That’s why I was disappointed to see Barbara Bry, a candidate for City Council, heap blame for San Diego’s longstanding housing shortage onto short-term vacation rentals, with no data to back up her claim. According to Bry, more than 6,000 properties in San Diego have been converted into “permanent mini-hotels,” removing them from the rental or purchase market completely, thereby contributing to San Diego’s longstanding housing shortage.
As far as I can tell, this is nothing more than a myth. According to the National University study, which pulled its data from online rental platforms, there are only 6,100 properties total being rented out on a short-term basis in the entire city of San Diego. That number includes not only part-time and permanent vacation rentals, but also renting out a room or guesthouse while the owner is present during the stay.
The study addressed the notion that investors are snapping up units to use as permanent short-term vacation rentals and found that this is not a wildly profitable enterprise. In fact, operating short-term vacation rentals on a full-time basis is not profitable in most cases, according to the study.
If banning short-term vacation rentals, as Bry is suggesting, were to have any appreciable impact on median home prices, one would think the ban in effect in Coronado would have lowered their median home prices. But that’s not the case.
While I appreciate Bry’s statement that our housing crisis cannot be addressed by “any single approach,” let’s not fool ourselves into believing home-sharing platforms are a significant driver of our problems and deserving of the attention she suggests. Thankfully, the work being done by the mayor and City Council, including adoption of the Climate Action Plan, funding of community plan updates (including the recent announcement of the University City community plan in District 1), streamlining our local development processes and funding for low-income subsidized housing, were acknowledged in the piece as steps in the right direction.
It’s no secret we have a long way to go to address our housing crisis. But what we cannot do is halt the wave of innovation under the false pretense it will solve this problem. As a city that prides itself on its innovative and collaborative spirit, we can work together to move forward to find an honest and effective solution that ensures we continue to grow our economy and foster innovation.
Chris Cate is a San Diego city councilmember representing San Diego’s 6th District. Cate’s commentary has been edited for style and clarity. See anything in there we should fact check? Tell us what to check out here.