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Short-term vacation rentals do not remove affordable housing options from the market because most of these homes have never been “affordable.”
The mayor and City Council are preparing to once again debate short-term vacation rentals in San Diego. Those who support this industry hope our elected leaders have studied the matter carefully since their last meeting, rather than relying on the misnomers and reactive arguments that have clouded the discussion for the past several years.
Groups opposed to vacation rentals want to disregard personal property rights, as well as decades worth of successful vacation rental history, to blame all of San Diego’s woes on the short-rental industry. One of their most prolific attacks is that the proliferation of short-term vacation rentals has caused our affordable housing crisis.
But according to the market researchers at Xpera Group, only about 1 percent of all San Diego homes are used for this purpose — and most of those are in the beach community where rents aren’t exactly cheap. Plus, a 2015 study by Point Loma Nazarene University found that 47 percent of San Diego’s housing costs are due to building regulations. Adding more government oversight to restrict private property rights is not the answer.
Short-term vacation rentals do not remove affordable housing options from the market because most of these homes have never been “affordable.” The overwhelming majority of these rentals in San Diego are within two miles of the coastline and most are within 10 blocks of the beach. At an average cost of $800 per square foot and an average size of 2,000 square feet, we are looking at home prices of about $1.6 million.
The reality of the situation is that the houses being used as short-term vacation rentals are simply not now, nor will they ever be, considered affordable housing. The majority of short-term “whole home” rentals are owned by people who may not live in the home full time, but vacation there throughout the year — and in many cases retire to the property in the years to come. Why would they allow their own homes to be trashed or alienate their neighbors?
When these owners are not using their homes, they rent them out to help offset expenses. These people are not investors; they are part-time San Diego residents who are sharing their homes with tourist families during a time the homes would normally be sitting vacant. Short-term vacation rentals provide homeowners with a reasonable way to earn extra income in a manner that still provides them with the ability to use their second home when they want.
Short-term vacation rentals play a pivotal role in San Diego’s economy. In 2017 alone, the city says, vacation rentals and third-party online hosting platforms contributed $21.2 million to the general fund, which went toward paying for things such as road repair, emergency services and schools. Short-term vacation rentals also offer low-cost alternatives so that traveling families can avoid renting multiple hotel rooms, eating at expensive restaurants for breakfast, lunch and dinner, and the many other expenses that come with traditional travel. Instead, short-term vacation rentals represent an option that keeps families together, allows homeowners to earn extra income and has an economic impact of nearly half a billion dollars. That’s real money that stays within our community.
As we’ve seen in our beach areas, especially Mission Beach, where vacation rentals have existed for decades, short-term vacation rentals are an important economic driver and help keep our beaches accessible for families and tourists. Extreme policies such as outright bans might sound good to a few but have no chance of holding up at the California Coastal Commission level, which continues to strike down burdensome regulations — even as recently as May 10 during its review of Santa Barbara County’s restrictive ordinance.
Let’s face it — short-term vacation rentals are here to stay. Just like Amazon and Uber, which faced similar criticisms at first, the technology-driven world we live in is dynamic. The answer is not to fight progress or adopt superficial regulatory barriers or bans that cannot be enforced. Instead, we should support common sense solutions that generate revenue to appropriately enforce and eliminate “bad actors” that are not sensitive to our local communities.
Any ban on whole-home vacation rentals would severely damage San Diego’s thriving tourist economy, trample on personal property rights and most importantly, be ineffective and unenforceable.
Our Council and mayor have put countless hours into developing a resolution to this very important issue. I would suggest that before anyone decide on this matter, they take the time to research all sides and not simply use this as an opportunity to try to score political points.
Jonah Mechanic is a resident of La Jolla and president of Share San Diego, a collection of homeowners, property rights advocates and rental managers.