The city of Del Mar is an Airbnb owner’s dream.
The coastal beach town draws in millions of visitors each year from all over the country, flocking to its beaches, charming local businesses and popular attractions like the horse races.
But it’s about to get harder for new Airbnb and vacation rental owners to get in on the action. In September, the Del Mar City Council passed new rules for any home or apartment rented for 30 days or less. Del Mar placed a limit on the number of short-term rentals that can operate at any given time and a controversial new rule that will require new short-term rental owners to live in the home for at least half of the year.
The rules still need the California Coastal Commission’s approval. (That’s the state agency that regulates all things development in California’s coastal zone).
City officials believe they are taking a necessary step to protect the city from becoming overrun by vacation rentals. Plus, there’s added pressure from the state to make housing available for full-time residents.
But many vacation rental owners aren’t happy about the new rules. They say it could slowly phase out short-term rentals altogether and leave more homes vacant.
Let’s get into it.
The Shift
When setting out to learn about Del Mar’s new vacation rental rules, I wanted to understand why a highly-desirable tourist hot spot of a city would want to make it, seemingly, more difficult for people to visit.
Amanda Lee, Del Mar’s principal planner, said the main concern is that too many short-term rentals could significantly shrink the city’s housing supply.
When homes go up for sale, and people or companies buy them with the intention of turning them into vacation rentals, that ends up pushing full-time residents out, she said.
And with the arrival of online platforms like Airbnb and VRBO, even state officials are recognizing that the short-term rental landscape has completely changed.
“The position of the Coastal Commissioners has significantly changed over time, and it has to do with this kind of change in housing that’s happened in the state of California,” Lee said. “Coastal Commissioners for a long time were very much protectors of short-term rentals, saying to cities, ‘You have to accommodate all of these.’ Well, now they’ve kind of back peddled.”
She mentioned Mission Beach in San Diego and the city of Eureka near San Francisco as examples. In both areas single-family homes have been replaced with vacation rentals over the years, resulting in full-time residents having limited options for housing and affordable housing.
What Will Change
The new rules will set a cap on the number of short-term rentals allowed in the city at 129 homes, which is 5 percent of the city’s housing supply. That number is based on 2020 census data.
However, the city is allowing all existing vacation rentals to continue operating, even if that number is above 129.
Lee told me there are currently 136 registered short-term rentals. And any owners of existing Airbnbs and vacation rentals have until Dec. 31 to register their short-term rentals with the city before the new regulations kick in. That’s in 27 days.
Because there are already more than 129 short-term rentals, once the new year starts, the city cannot accept any more. That’s unless the number of vacation rentals eventually dips below 129 again.
Existing vacation rental owners also have the perk of being exempt from some of the rules that new owners will eventually face, including a limit of one vacation rental per owner and the contentious primary-residence requirement.
This will require new short-term rental owners to be primary residents of the homes they are renting out. That means owners must live in the vacation rentals for at least six months out of the year.
Lee said it stems from potential new rules the state’s housing department is considering regarding short-term rentals. California may start requiring cities to create one new housing unit for every new short-term rental in the next housing cycle.
In other words, each new vacation rental would have to be replaced with a brand-new housing unit. And that’s on top of the new housing that Del Mar is already required by the state to make way for.
“That would be detrimental because Del Mar is already a small and built out city,” Lee said.
But by making sure new short-term rentals are primary residences, Del Mar likely wouldn’t have to do that.
Lee added that city leaders will continue to monitor the new regulations moving forward and can make changes to the rules if they need to.
A Short-Term Rental Owner’s Take
Kimberly Jackson, owner of Vacation Rentals by Kimberly, owns and manages vacation rentals throughout North County, including Del Mar.
She’s been critical of Del Mar’s new regulations because she thinks the primary residence requirement will discourage new short-term rentals once new registration spots open.
Eventually, Jackson said, older vacation rentals will get sold and go away for any number of reasons. But prospective short-term rental owners won’t be inclined to choose Del Mar to run their business because of the primary residence rule. It could also cause more homes to sit vacant, not being used as a primary residence or a vacation rental.
“That’s not how vacation rentals are used. Vacation rentals are usually second homes that families visit. They don’t live in them, they visit them,” Jackson said. “To me it seems this requirement of it being a primary residence for any future vacation rentals is essentially a ban.”
And as the number of vacation rentals eventually starts to dwindle, she said, tourism in Del Mar could decrease because people will choose to stay in other cities.
Jackson has also taken issue with the 129-unit cap.
“We have so much tourism in the city of Del Mar between the racetrack, the fair, all the horse shows – so many people visit our community,” Jackson said. “It’s way too small.”
Jackson said she and other residents are planning to plead their case at the Coastal Commission meeting. A meeting date hasn’t yet been set, and a decision by the commission could take more than a year.
“All of a sudden, nobody can buy a house in hopes of short-term renting it anymore,” she said. “This is not what the public wanted.”
Around Town: Escondido Could Be Next
The city of Escondido is also considering adopting its own short-term rental ordinance, but this one would be a pilot program.
By the time this hits your inbox, the City Council will be discussing ways to officially allow and regulate short-term rentals in Escondido.
The city currently has 193 short-term rentals that are unpermitted, according to the city staff report. Collecting transient occupancy tax from these rentals could bring in an estimated $280,000 in annual revenue.
In Other News
- Oceanside Mayor Esther Sanchez has officially been re-elected for another term, narrowly defeating her challenger Councilmember Ryan Keim, according to final results released Tuesday. (Union-Tribune)
- Carlsbad Assistant City Manager Geoff Patnoe will be Carlsbad’s new city manager, succeeding Scott Chadwick, who announced Nov. 21 he is leaving to become the president and CEO of the Port of San Diego. (Union-Tribune)
- Oceanside has chosen a location to start its sand retention pilot program. Tyson Street Park will be the first area to get some much-needed sand work. (KPBS)
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