San Diego Lottery for Short-Term Rental Licenses Should Prioritize “Good Players,” Council Insists


As the city of San Diego prepares to implement its first-ever regulation for short-term vacation rentals in July, officials on Monday unveiled a lottery scheme that longtime hosts and council members said municipal, did not give priority to responsible operators, as promised earlier. This year.

The council asked Mayor Todd Gloria’s office to go back to the drawing board and come back within a month with a new proposal that will reward those who are “good actors”, a request that was made in February. when elected leaders first approved new bylaws governing the city-wide operation of the increasingly popular colocation industry.

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The city’s new ordinance specifically limits the number of whole house rentals that operate more than 20 days a year to 1% of San Diego’s more than 540,000 housing units, or about 5,400. A separate and more generous allowance has was made for Mission Beach, a longtime mecca for Airbnb-style rentals. More active whole house rentals will be limited to 30% of the total housing units in the community, or about 1,100.

Council Chairman Jennifer Campbell, whose office led the new regulatory effort over the past year, told city staff on Monday that she wanted to see a lottery that gives preference to operators who have not of pending code enforcement actions over the past three years, have paid their transitional occupancy tax on time, and have accommodated at least 90 nights of reservations in the past year.

“I look forward to the positive impacts this will have in our city,” she said.

The board did not indicate whether it would reconsider the revised proposal at a formal board session.

Monday’s hearing was billed as an information hearing and therefore did not require a vote, but that did not stop Airbnb, as well as many vacation rental hosts, from voicing complaints about the matter. of the proposal, which they say would bring their long-standing operations to an abrupt end.

“We are urging the city to include at least 90 days of pre-booking history within a 12-month period for lottery eligibility,” said John Choi, senior public policy officer at Airbnb.. “… Without prioritizing good actor hosts, we think San Diego is squarely as an aberrant city. Other cities that have legalized vacation rentals and limited permits, such as San Diego, have generally granted grandfathering rights to previously operating hosts.

While the city’s treasurer’s office said home-sharing platforms typically do not share rental activity from their individual hosts, Campbell said companies have assured him they are willing to provide to the city the necessary verification.

Several board members appeared irritated that their instructions, which was to implement a lottery system that would prioritize hosts who paid the required taxes and operated responsibly, were ignored.

“There is a lot to be done for this system to work properly and it looks a bit like déjà vu not to have a system as we requested,” said city councilor Raul Campillo. “… If our constituents hear us and the media prints the words we speak, then we come back and don’t have a system that conforms to politics … it destroys credibility and makes the public believe that we are not. not serious about doing this.

Councilor Stephen Whitburn was also disturbed, who said he had returned and listened to the February council motion to reaffirm his memories.

“I want the authorization process to prioritize existing and responsible operators who have demonstrated that they are following the rules,” he said. “This is what my constituents want and I have no doubts that this is what most San Diego people want. When I learned that the lottery system proposed today did not favor the right players, I was surprised.

Eligibility under the process outlined by the city’s treasurer’s office on Monday only stated that to qualify for a license, hosts could not have city enforcement actions pending for “violations of any provision. of the San Diego Municipal Code (SDMC), unless approval of a license is required to resolve the enforcement action. They should also apply for a TOT license, if they had not already done so.

The new vacation rental regulations, which are expected to come into effect on July 1 of next year, allow only one two-year license per host.

Whatever lottery system the council ultimately adopts, it will only apply to the rental of entire homes for more than 20 days a year. An unlimited number of licenses will be allowed for vacation rentals of less than 20 days per year or colocation operations where a host rents a room or two.

In order to ensure that residents of all communities have the opportunity to obtain a license, the city-wide lottery – with the exception of Mission Beach – would link the allocations in each community planning area to the percentage of applications. received. So, for example, if 30% of the applications came from La Jolla, that same percentage of the licenses available for the city, outside of Mission Beach, would be allocated to applicants from La Jolla. The selection would be random for each community.

In order to fund the administration and enforcement of vacation rental regulations, license and application fees will be required. The council on Monday approved a fee schedule ranging from $ 100 for a two-year license for hosts who rent their properties less than 20 days a year to $ 1,000 for those who rent entire homes for more than 20 days out of the country. year. Application fees will vary from $ 25 to $ 70.

The revenues will cover the hiring of approximately 15 new positions, including nine in the area of ​​code enforcement.

An additional wrinkle at the expected start next summer of the new short-term rental regulations is the question of when the California Coastal Commission, which has jurisdiction over seaside communities, will sign. City officials have said they will not enforce any of the new city-wide rules until the commission weighs in.

If the coastal agency was able to officially certify the regulations by April, the effective date could remain July 1, but any delay by the commission would put that start date at risk, Elyse Lowe said, director of the city development services department.

A number of hosts have complained that starting the new program before the end of the busy summer season will be a challenge, as many are already accepting reservations for the summer months. City councilor Vivian Moreno, who urged council to consider a later start date, such as October 1, expressed the only non-vote on the new fee schedule.

“Rolling out a new regulatory system during one of the busiest weeks of the busiest seasons for vacation rentals, I think, is problematic,” she said, “especially since the tourism industry has been hit so hard by COVID-19 ”.

In a report to council, city staff said the lottery application process would begin no later than March 31, with the results of the draw being known no later than May 31. Those dates, however, could change, depending on what’s going on with the Coastal Commission.

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