What impact do short-term rentals and home sharing websites have on the city and the communities where they are located? According to a recent study by the National University System Institute for Policy Research, from July 1, 2014, through June 30, 2015, tourists spent approximately $110 million on rented rooms and houses in San Diego; that figure nearly doubles after factoring in dining and retail spending.
So what, says former SD planner
Joe Flynn, a former deputy planning director for the City of San Diego and 38-year employee of the city's planning department, says the impacts are not all positive.
Flynn says short-term rentals threaten the fundamental tenet of zoning practices, to protect single-family-residential zones. Flynn considers single-family zones "sacrosanct" and is calling on city officials and municipal planners to reject any ordinance that allows commercial and industrial uses to begin their slow and potentially disastrous creep into neighborhoods.
"The core of zoning, in terms of protection, is the single-family residential zone," writes Flynn in an email. "It is designed to be a safe place for families and especially children....
"Quality of life suffers when strangers occupy neighborhood homes for a few days at a time," continues Flynn. "Uneasy questions abound: How will these strangers conduct themselves? Will they maintain and respect the tranquility of our neighborhoods or are they just here for a good time for a few carefree days? Their only stake in the neighborhood is a short term rental fee and a cleaning deposit payable to the landlord. Loss of quiet enjoyment will be borne by neighbors without compensation."
Decreased property values, more tax dollars...
"Long term losses will be realized in the reduced sale prices of single family homes in proximity to short-term rentals," says Flynn. "If sellers are now required to disclose to buyers barking dogs and antagonistic neighbors, surely they will have to disclose the existence of commercial rental activity in the neighborhood."
"[Previous] illegal short term rental usage in single family zones included vacation usage, visiting family parties, weddings and special events," says Flynn. "The money to be made by these uses made city enforcement time consuming and costly. The citation authority of Code Enforcement Officers is used more as an incentive for compliance rather than punishment or revenue generation. But, when cases were referred to the City Attorney for further action, costs of course escalated. Making such uses legal does not ensure that the conduct of short term renters will change."
The pivotal Rachel Smith case
As reported in the Reader, San Diego and other cities have depended on an aging municipal code to define and enforce up-and-coming trends. In the case of Rachel Smith, who listed one of her five-bedrooms on AirBnB, she was forced to pay more than $18,000 after an administrative law judge ruled that she was running a bed-and-breakfast establishment without a proper permit.
The story made national headlines. City officials began discussing ways to update the code to address short-term rentals. This past August, planners released a proposed short-term rental ordinance. The ordinance provided a definition, which is currently missing from the code.
Property owners would be forced to draw up rental agreements that place restrictions on the number of occupants and inform guests of the city's noise ordinance. Owners would also be required to respond to noise complaints, or, in the case of out-of-town investors, they must have someone local to do the same. Homeowners such as Smith, who stayed in the house while renting out a room on a nightly basis, would need to obtain a permit to rent for less than seven nights per stay.
City shouldn't overregulate home-based businesses
Smith's attorney, Omar Passons, says the ordinance is a step in the right direction. Passons has urged the city to catch up to the times in regard to home sharing and short-term rentals. He says that planners should continue to view single-family residences a core principle of urban planning, but at the same time, the rights of a property owner should not be overshadowed.
"The problem with the view that every use of one's home that involves some exchange of value is that it fundamentally misunderstands the flexibility these new technologies have created. It is simply not a business to rent out your home a few days a month or a couple times a year while you travel. The notion that [there is] some magic number at which renting a room in my house goes from a residential use to a commercial one is just not a good way to look at this," writes Passons.
"The City Attorney's statement that there are currently no regulations nor prohibitions for short term vacation rentals in single family zones is exactly why the city council should take this up. That it gives our city a chance to step out of the type of thinking this former planning director espouses is, in my view, a good thing. In truth, I don't think it's a good idea to be over-regulating home-based businesses, even though generally these are not that. And I think the existence of game-changing companies like Hewlett Packard and Apple and countless other start-ups bear out my point."
As to the complaints from neighbors, Passons continues, "People often say to me 'you'd think differently if you lived next to an Airbnb or a VRBO.' I do live next to several and I don't feel differently. My neighbors who do this are respectful and decent and communicative. And they are exactly why the city shouldn't be banning something across the entire city because a small sub-set of people are having difficulty.
"The city should tax these things at the [transit occupancy tax] rate and then use that tax to hire 24-hour code enforcement staff — and then train that staff on appropriate exercise of their authority. Dealing with negative externalities like noise and trash is a much wiser and more defensible position than trying to regulate how people feel about what their neighbors should be allowed to do."
Users and proponents of a short-term rental ordinance say that websites offer some level of enforcement. In regards to AirBnB, ratings on guests and homeowners are meant to give a clearer picture of the parties involved. Also, problem guests have been banned from using the website.
Planner Flynn: That’s not good enough
"If there is a late noisy party, where is the landlord? Can neighbors reach them? Will or can they do anything? Does it go beyond neighbors’ normal tolerance level to a point they are willing to call the police? Or, do you contact AirBnB and have them send the offenders a nasty email? Right. How many people in the group? They each have a name. The problem like the users of the commercial service are transient. Those causing the problem are long gone before action can be taken. Neighbors’ only recourse is to talk to the owner — if they are resident owners."