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In a 2019 article about San Diego’s housing shortage, Voice of San Diego reporter Andrew Keatts emphasized that the crisis did not occur overnight. And while Mayor Todd Gloria wants to increase construction of affordable housing, that takes time and there are ways to provide more housing now. Our housing shortage has been negatively affected by the proliferation of short-term vacation rentals in San Diego, which has been caused by a combination of San Diego’s longstanding failure to enforce existing regulations and the “acting first and apologize later” strategy common to many gig economy companies.
Council President Jen Campbell has proposed a new ordinance laying out short-term vacation rental regulations to reclaim a portion of the current 16,000 listings for use as long-term housing. This is an admirable goal. But there are two serious loopholes in the proposed ordinance that would allow the short-term rentals to continue to run amok in residential neighborhoods.
The proposed ordinance is based on licensing short-term rental “hosts” and a neighborhood complaint-driven process for control. There is no effective provision for eliminating unlicensed vacation rental hosts. The only way to ensure compliance with the proposed ordinance is to include a comprehensive reporting system with penalties for platforms. This has been successfully implemented in San Francisco and other cities.
San Francisco found out the importance of platform accountability the hard way. It was not included in its original 2014 short-term rental ordinance, and as a result, 9,600 short-term rentals were listed on the platform, according to AirBnB’s own account in court documents submitted in 2016 as part of a case against the city. At that time, according to the San Francisco Short Term Rental Office, there were only 1,600 legal short-term rental registrants. The illegal short-term rental problem was, to a large degree, rectified with the introduction of platform accountability provisions – including penalties.
Santa Monica adopted a similar platform accountability approach after a federal court ruling. Boston, Los Angeles, Washington D.C., Portland, Hawaii and, just recently, Denver, have all used similar approaches.
The loopholes in Campbell’s proposed ordinance can be closed with amendments that benefit from the experience and successes of these jurisdictions. One amendment should add language providing for platform accountability; stipulating that the platforms can be fined for listing properties without the proper licensing and may lose their right to do business in the city if they do not comply. The other amendment should delete the section of the current proposal that would provide a way for the platforms to make unacceptable backroom deals and special operational arrangements with the city without public scrutiny.
The propensity for AirBnB and other rental platforms to behave badly has been demonstrated across both the United States and Europe. One recent report, for example, lays out the many ways short-term rental companies fail to cooperate with cities, and fail to self-regulate. Without the two suggested amendments, Campbell’s proposal to regulate short-term rentals in San Diego does not have an enforcement mechanism that will keep platforms from engaging in bad behavior.
Closing the loopholes and making the platforms accountable to the city for their business practices will be far easier and more cost-effective than the Herculean task of checking each licensed host, one by one, and relying on complaint-driven enforcement. The biggest question is: Will the platforms agree or will they sue the city and, if so, will the city fight back?
Gary Wonacott is past president of the Mission Beach Town Council.