Town council president Matt Gardner says the new state law governing short term rentals is an unwanted interference in local decision making.
At her dining room table in South Mission Beach, Stevie Wheeler is wondering aloud about how reducing the number of already existing short term rentals in Mission Beach could possibly work. “How would you choose those to be eliminated?” she asks, jabbing her index finger in the air to her left, then to her right, as though pointing to the unlucky ones.
“A lot of people have made a lot of money here on short term rentals,” says Mission Beach resident Mary Swenson. “But the residental community should have something too.”
Two years ago, Wheeler and her friend Mary Swenson served on a Mission Beach Town Council committee (a second committee is now at work) devoted to achieving consensus in the community on what to do about the growing short term rental crisis. An hour after leaving Wheeler’s home, I am enjoying the sun with Swenson in her narrow front yard on one of the ocean-side courts in North Mission Beach. Swenson is proposing a different solution to too many short term rentals. “It could happen by allowing attrition,” she says, “whether by owners selling their places or the city removing them for violating the rental regulations. But it would probably take an awful long time.”
The growing percentage of all residential dwellings in Mission Beach that are short term rentals has been worrying the community. That percentage now stands, according to most estimates, somewhat north of 40 percent. Swenson believes it should come down to 25 percent, “otherwise, given the trending, it might rise to 50 percent and higher,” she says.
Stevie Wheeler rents out two units on her MB property.
Dueling websites in Mission Beach are proposing even more divergent viewpoints on the community’s future. SAVE MISSION BEACH, while acknowledging the need for change, defends the right of investors to continue earning income from short term rentals. SAVE MB from STRs, a newer website, announces that its main purpose is to counter those arguments. The website’s creators want to see short term rentals dramatically reduced and argues that the only way to do it is by lowering the number of days per year that units can be rented out.
Focusing on the number of days coincides with the approach of a new bill now working its way through the state legislature. Assembly Bill 1731 would allow hosting platforms, such as Airbnb and HomeAway, to offer short term rentals of residential properties in the San Diego County urban coastal zone throughout an entire year only if its “primary resident” lives on the property during the same calendar year (defined as 270 days).
Seventy-sixth district Assemblywoman Tasha Boerner Horvath, formerly an Encinitas councilmember, introduced the bill into the state legislative process on February 22 of this year. It passed through the Assembly Judiciary Committee with a few amendments on April 9. The bill’s more consequential feature reads in the Assembly’s description as follows: “If the primary resident of the residential property does not live onsite of the residential property full-time, the hosting platform may make the residential property available as a short-term rental for up to 30 days per year.”
Further down: “Only those who hold property primarily for investment purposes or as rarely-used second homes would be subject to AB 1731’s restrictions. The 30-day restriction applies to each hosting platform separately. There is nothing to stop a property owner from listing their residential property for 30 days on Airbnb, 30 days on HomeAway, 30 days on VRBO, and so on.
“The rationale for AB 1731 is the depletion in housing stock caused by properties being taken off of the housing market for short-term rental purposes.”
“I don’t see how the bill could relieve the housing shortage,” Stevie Wheeler tells me. “The properties in the beach areas are way too expensive, especially for low income people.”
Wheeler says originally she thought “Mayor Faulconer’s plan, the ‘carve out’ of Mission Beach, was the fairest. But when the city council said you can’t carve out one community and have a different set of rules for it, then the mayor’s plan was voted down. So my question with this Assembly bill 1731 is how can they carve out San Diego County and allow all these other communities in California to opt out. It would seem to me that if there are legal ramifications present in Faulconer’s plan, AB 1731 would have similar issues.”
Besides her residence, Wheeler owns two dwellings on her property, one she rents on a permanent basis and a tiny apartment (250 square feet) that is already booked two to three weeks at a time through this coming October. AB 1731 would have no effect on either of these situations.
But Wheeler knows a number of people who stand to lose large amounts of income if the bill should pass. “One lady owns 12 short term rentals,” she tells me. “She can only live in one of those places at a time. She is going to lose the income from the others. The smaller short term rental management companies that have been in Mission Beach for years, long before Airbnb came and ratcheted up the problem, they will be forced out of business. There will be a lot of money lost in Mission Beach.”
On the other hand, says Mary Swenson, “a lot of people have made a lot of money here on short term rentals. It’s a business, of course, but the residential community should have something, too.”
An amendment to AB 1731 proposed by the bill’s author, Assemblywoman Horvath, seems to address the potential loss of many owners’ income by limiting the bill’s application to five years. “The sunset date [January 1, 2025] …,” it states, “will allow the Legislature to see if the housing crisis eases….” But it adds that the limitation might render “further restrictions on short-term rentals less necessary, or if [the crisis] worsens, perhaps arguing for a broader expansion of the bill’s restrictions.”
Continuing, the author “posits that California’s staggering shortage of long-term housing is worsened by investors who purchase residential properties for short-term rental rather than for long-term rental or residence. It may be that this bill decreases the value of such investments, which were made under the assumption that unlimited listing on hosting platforms would be an available option. This bill may also reduce tourism. But it remains a policy decision for the Legislature as a whole as to whether this tradeoff … is worthwhile.” The sunset period “will give the Legislature an opportunity to determine what the real-world impacts of [the restrictions on short term rentals] are, and to judge their costs and benefits, before attempting broader application.”
Blaine Smith, co-owner of 710 Beach Rentals and founder of the website SAVE MISSION BEACH, writes me by email: “We strongly oppose AB 1731.” In a reference to the bill’s author Horvath first being an Encinitas city council member, he argues that “if Encinitas wants to implement restrictions similar to AB 1731, it should be done locally. Our lawmakers should not apply a bill desired by one area of San Diego to all coastal communities. One size does not fit all on this sensitive issue.”
In the Olive Bakery on Santa Clara Place in Mission Beach, Town Council president Matt Gardner tells me that AB 1731 is an unwanted interference in a local decision-making process. “The new committee we have for finding consensus, with representations from both sides, is working well,” he tells me. He points to photos on the wall showing the tent cities that initiated vacation rentals in the early 1920s.
But the recent explosion of short term rentals after the entrance into the market by Airbnb, according to SAVE MB from STRs, is a far cry from the long tradition of summer vacation rentals.
“When Stevie and I served on the first Town Council committee,” says Mary Swenson, “she thought that some people were trying to ban short term rentals entirely and that I was totally against them. I am not against them. That would be unrealistic. And, as far as I’m concerned, the 30-day restriction in AB 1731 would be excessive.”
Swenson thinks the “nuisance” problems that accompany the rentals are the result of the city’s lack of enforcement. “The city doesn’t enforce anything,” she says. “You can’t expect the police to come out to a large party in the middle of the night. They won’t come. Why should they? They’ve got plenty else to do.”
“Investors from faraway places, such as the Midwest, are another part of the problem,” according to Swenson. “They don’t understand what it’s like at the beach. The regulations need to be impressed upon them so they don’t just sign a bunch of renters up and turn them loose. Permit numbers and phone contacts need to be posted on rentals to help alert owners who aren’t witnessing what’s going on. Be stricter on rules, too.
“One thing that might be done is to require short term renters to enter into leases longer than three days. At least five days would help. Now, large groups of college kids, usually guys, get a place for three days, cram as many people into it as possible and everybody stays drunk. And their cars often take up two parking spaces, making it impossible for residents to find places. There are times, too, when you have 50 kids partying on a rooftop deck and carrying on until late into the night. A minimum stay of five days would help alleviate that.”
Steevie Wheeler acknowledges that it’s hard to get some visitors to follow rules. Take a simple condition. “For the tiny unit we have on our property, I ask that only two adults occupy it at a time. A woman came with two children in tow. When I confronted her about my rule, she said, ‘I thought two kids equal one adult.”