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San Diego’s short-term vacation rentals are in a bit of a legal gray area. But they might not be for long.
The primary group fighting the rentals is upping the ante by threatening to sue if the city doesn’t ban them.
Save San Diego Neighborhoods has retained attorney John Thickstun to make the case that vacation rentals are illegal in neighborhoods per San Diego’s municipal code.
There’s an important distinction between “vacation rentals” and other short-term rentals — vacation rentals imply an entire home or property is rented, as opposed to other short-term rentals where only a room or section of a home is rented. Save San Diego Neighborhoods seeks to ban vacation rentals, not roomshares.
In single-family neighborhoods, the group claims, the municipal code explicitly prohibits vacation rentals, and the city should be enforcing that rule.
The city’s position, on the other hand, is that the municipal code makes no mention of vacation rentals — so city staff are developing a new ordinance to address them.
There’s no word yet on the draft of that ordinance, though, which was scheduled for release by the end of June. It could be delayed even longer if it’s not complete by August, when Council committees don’t meet.
Here’s where the Save San Diego Neighborhoods and the city disagree: The municipal code for single-family neighborhoods does prohibit “visitor accommodations,” which “provide lodging, or a combination of lodging, food, and entertainment, primarily to visitors and tourists.”
But a memo written in 2007 by then-City Attorney Mike Aguirre declares that vacation rentals, which aren’t the same as hotels and motels, don’t count as visitor accommodations.
The memo explained there’s no definition in the code that clarifies how long a “visitor” must stay before he or she is considered a renter.
“If the prohibition of short-term rentals is desired, amendments to the Land Development Code should define what length of stay is prohibited,” the memo reads.
Thickstun said the memo is “frankly just erroneous.”
He said vacation rentals act very much like hotels, making them commercial properties, which don’t belong in residential zones. That’s evidenced by the fact that the city charges bed taxes to vacation rental hosts, the same taxes hotels pay, he said.
Gerry Braun, a spokesman for the city attorney’s office, said Thickstun’s view is one of many ways to interpret what city codes say about short-term rentals — which is precisely the problem.“The ordinances on this are vague and unclear and can be interpreted different ways,” Braun said. “The intent of the mayor and City Council appears to be to resolve any arguable ambiguities by adopting a clear ordinance covering short-term rentals.”
Braun said Save San Diego Neighborhoods will have a tough time arguing that the city was wrong not to ban vacation rentals because the city’s interpretation of its own codes has allowed the rentals to stick around for such a long time now.
“A longstanding interpretation of an ordinance by a city will be given great weight by the courts,” he said.
Regardless of whether a lawsuit would hold up in court, San Diego lags behind San Francisco and Los Angeles in clearly stating its position on vacation rentals.
The City Council’s Smart Growth and Land Use committee held two public forums about vacation rentals in April and May and researched how coastal cities nationwide have approached them.
Councilwoman Lorie Zapf, who chairs the committee, proposed allowing vacation rentals in single-family neighborhoods for guests staying at least 21 days and increasing enforcement of noise violations.
Members of Save San Diego Neighborhoods say that won’t cut it.
“Just enforcing noise complaints doesn’t deal with the steady drip-drip-drip of minor annoyances,” said Sue Hopkins, a UCSD professor and a member of the group. “It’s that constant undermining of your peace and quiet.”
Anti-vacation rental advocates say they won’t be satisfied until the city bans them altogether.
In considering its options for the ordinance, the Smart Growth and Land Use Committee has looked to Palm Springs, where Cindy Gosselin, CEO of Palm Springs’ Vacation Rental Compliance agency, says her city and has found a sweet spot.
Vacation rental hosts in Palm Springs pay an annual registration fee of $200. That fee covers a multilayered enforcement program, including a hotline residents can call when a short-term rental is causing a disturbance, a security company that shows up at rental properties when the hotline is called, and Gosselin’s company, which ensures rental owners are registered and paying their taxes.
Hosts can have their registration revoked if they cause too many problems.
Gosselin said tax revenue for vacation rentals alone — that’s not including other types of short-term rentals, like roomshares — is about $1 million annually for Palm Springs, four times what it was just five years ago when the program began.
Bed taxes from short-term rentals in San Diego earned the city $6.8 million in 2015.
Gosselin said there’s truth to the claim from supporters of vacation rentals that only a small percentage of rentals cause problems.
In April — the month of mammoth music festival Coachella and the busiest for Palm Springs vacation rentals — 102 rental properties provoked calls to the city’s hotline out of more than 1,600 total in the area.
“The main thing you want to do is to control the bad homes,” Gosselin said. “The only way to do that is to have an ordinance and require registration — that’s the only way you can get rid of bad apples.”