San Diego repeals strict new short-term rental law

The San Diego City Council has repealed the new short-term rental law it had just passed in August. Because a referendum seeking to repeal the law received enough signatures to qualify for a ballot, the council had the choice to either rescind the law or allow the question to go to a vote. The council voted 8-1 to rescind the new rules.

The vote takes San Diego back to where it was before the law was passed in August, with no enforced regulation on short-term rentals after years of debate. Short-term rental operators want to be allowed to earn income from renting out their properties, while activists complain about the disruption unchecked short-term rentals can introduce to neighborhoods as well as concern about investor-owned properties displacing scarce affordable housing.

The council has the option to create a new short-term law within a year, but it must be substantially different from the one that was repealed.

The rescinded law would have allowed short-term rentals only in operators’ primary residences, and only for six months of each year. The law also required three-night minimum stays for popular coastal areas and downtown.

The regulations also required all short-term rental hosts to obtain a San Diego transient occupancy tax (TOT) certificate, collect the tax from guests, and remit it to the city. If hosts used an online platform such as Airbnb, HomeAway, or VRBO, the platform would be required to collect the taxes on hosts’ behalf.

Currently, Airbnb is the only platform that collects TOT for hosts, and short-term rental operators are responsible for all lodging taxes aren’t collected for them. MyLodgeTax can help short-term rental hosts in San Diego comply with all their TOT obligations.

The referendum that forced the council’s decision was backed by online short-term rental platforms Airbnb and HomeAway, as well as by short-term rental owners’ groups, and was signed by more than 62,000 supporters.

In 2017, City Attorney Mara Elliott issued a memo stating short-term rentals aren’t permitted in any zone in the city, but the office of San Diego Mayor Kevin Faulconer has so far chosen not to enforce that opinion. In the wake of the new law’s repeal, those who want more regulation have called on the mayor to enforce city code and ban short-term rentals, at least temporarily.

The mayor’s office, however, said it’s working on a new plan.

“Today’s action may take us back to the drawing board, but the good news is that we are not back at square one,” Faulconer spokeswoman Christina Di Leva Chadwick said. “Mayor Faulconer will continue to advocate for a system that protects neighborhoods through increased oversight and enforcement, and in the meantime staff will continue to enforce existing laws against noise and other quality-of-life crimes.”

Airbnb and HomeAway want to work with the city on new regulations.

“This rescission passed because voters want regulations that protect private property rights, encourage tourism, weed out bad actors and create an enforceable regulatory structure,” the online short-term rental platforms said in a statement.