San Diego City Council to vote on short-term vacation rental plans

The San Diego City Council is meeting today to consider two different proposals to regulate short-term vacation rentals in the city. The vote comes after years of debate over the issue, which pits neighborhood activists opposing short-term rentals against homeowners who want the opportunity to supplement their income by renting out their properties.

The stricter plan, sponsored by La Jolla Councilwoman Barbara Bry, would restrict vacation rentals to owners’ primary residences. Those offering short-term vacation rentals would be required to get a permit and would only be allowed to rent out their property for a maximum of 90 days per year.

Bry and her plan’s supporters contend that the restrictions are necessary to prevent the loss of local housing stock to rentals, rising real-estate prices, and disruption to residential neighborhoods.

The other proposal, drafted by Councilmen David Alvarez, Mark Kersey, Scott Sherman, and Chris Ward, would also require short-term vacation rental operators to get a permit, with a maximum of three permits per holder. This plan would not limit rental days per year, but would require three-night minimum stays for guests in the coastal zone. For properties that are not their primary residence, owners would be required to own the property for a year before applying for a short-term rental permit.

With either proposal, the council will also consider notice requirements, processes for neighborhood complaints, and enforcement.

Short-term rental operators could be required to be registered with the city treasurer to collect San Diego’s 10.5 percent transient occupancy tax before they are issued a short-term rental permit. Currently, Airbnb collects the tax from guests for San Diego Airbnb listings, but hosts who have bookings through other platforms, such as VRBO or HomeAway, are responsible for collecting lodging taxes from guests and submitting them to the city on their own.

Along with groups supporting the two proposals, a third community faction supports a total ban on short-term vacation rentals. As it stands now, short-term vacation rentals are against the law, but this is not enforced. This spring, City Attorney Mara Elliott wrote a memo declaring short-term vacation rentals illegal in San Diego. However, Mayor Kevin Faulconer said no efforts to enforce the law would be made until regulations were clarified.

Nearly 9,000 homeowners in San Diego are renting out their properties to visitors, according to data company Host Compliance, with only 22 percent of whole homes being rented more than 90 days per year.

For short-term vacation rental operators in San Diego, Tuesday’s vote could have a huge impact. It’s important for operators to understand any changes and what it will take to comply with any new obligations.