By Steven Greenhut.
A common spectacle takes place at the state Capitol at the end of every session. Legislative leaders who have been unsuccessful advancing their bills through the usual system move them ahead instead through thegut-and-amend process. Language from an innocuous bill is “gutted,” and it is “amended” with something entirely different. The new, sometimes controversial, language gets pushed through quietly, often without the public being aware the switch was made.
It’s such a widely used strategy that there’s a Nov. 8 statewide initiative (Proposition 54) which attempts to stop it. But while the state’s voters may quash this type of end-run around the hearing process in Sacramento, San Diego residents are watching something slightly different but equally controversial unfold Tuesday.
In her term as City Council president, Sherri Lightner has been unable to strictly limit short-term rental services like Airbnb and HomeAway, which have caused controversy in a number of beachfront San Diego neighborhoods. City officials and residents have been debating the issue for three years and a consensus is emerging to pass a set of rules that regulate STRs, but allow this emerging industry to continue to grow.
With only one month left in her term, Lightner scheduled a last-minute meeting this morning dealing solely with this issue. Instead of letting the compromise get vetted in the normal manner, she’s trying to quickly push through what the San Diego Union-Tribune calls a “simple definition change in the city municipal code.” But as the article’s headline points out, the modest re-wording is “sweeping” and would result in a “ban” on Airbnb and other similar services.
By reclassifying tourists and visitors as transients, the article explains, the new rule would forbid homeowners from renting out their properties for fewer than 30 days in single-family neighborhoods and require a seven-day minimum stay in multifamily zones. If five council members approve this change, then without much public debate, Lightner will have quickly achieved the goal she was unable to achieve in her years on council. That’s what’s reminiscent of the Capitol end-of-session process.
There are a variety of opinions about this new short-term rental industry, which uses web-based applications to connect tourists with homeowners who want to rent out empty rooms or their entire homes for vacation use. Officials in tourist cities across California have been fighting over the proper regulations for it. Because it’s such a new business model, aged municipal codes don’t clearly address STRs, which means they’ve largely been operating in gray areas.
Advocates for the industry say companies like Airbnb and HomeAway boost the tourist industry and help small business owners. They can also help homeowners, struggling to pay the bills in highly priced coastal real-estate markets, bring in income. It’s a property rights issue, according to some observers. Homeowners, they say, should be free to rent out their own properties, provided they follow some basic rules. And tourists enjoy this affordable alternative to the big hotel chains, which sometimes try to use their political clout to stamp out the competition.
Critics complain that these property owners in many cases (especially those who rent out their entire property) are essentially operating hotel businesses in residential neighborhoods and that those neighborhoods often are plagued by late-night partying and loud music. They say STRs harm the character of neighborhoods and reduce rental stock. As Lightner said at a community planning meeting recently, “Given that STR are a visitor accommodation, there clearly are areas where they are permitted and where they are not permitted. The Municipal Code already regulates that. Where STRs are permitted is determined by the zoning of your property. We are going to protect the sanctity of single-family neighborhoods where STRs are not allowed.”
According to published reports, Lightner said she isn’t trying to ban home-sharing (when people rent out a room or two while they are at home), but short-term rental advocates argue the change she is pushing could easily be interpreted by the city to do just that.
Defenders of these rental arrangements say their status is allowed and that critics are trying to ban them without proper legislative deliberation. Furthermore, they say the city should punish “externalities” – e.g., loud music or bad behavior – not largely ban a type of business. San Diego and other cities already deal with long-term renters and homeowners who misbehave on their properties. Proponents of STRs claim it’s wrong to single out property use, rather than, say, loud music or public drunkenness.
Some public-opinion surveys suggest that most San Diego voters want to regulate rather than shut down this innovative new business. The STR industry notes that California’s big coastal cities are on the cutting edge of technological innovation, which would make it out of character to shut down this business model in its infancy, rather than find creative solutions to legitimate problems.
Such bans can also simply drive short-term rentals underground. As long as San Diego neighborhoods are close to the ocean, there will be property owners who find a way to rent their homes to tourists for short stays, they add. Opponents say the answer to scofflaws is more enforcement and fines. If Lightner’s rule change goes into effect, property owners would face $2,500 fines for single infractions and with a maximum of $250,000 in fines per property.
Lightner’s Tuesday morning special council session may bring a new criticism to the process, with some observers arguing that such an important and contentious battle ought to be debated through the normal process, not fast-tracked in a way that short-circuits unfolding efforts to compromise. And they believe a hastily drafted effort to rewrite city code so dramatically is more reminiscent of the controversial dealings in Sacramento than the type of transparent government Lightner promoted throughout her City Hall career. Stay tuned for a contentious council meeting, one way or the other.
Steven Greenhut is Western region director for the R Street Institute. He is based in Sacramento. Write to him at email@example.com.