Infuriated over San Diego’s strict new short-term rental regulations, Airbnb and HomeAway have launched a referendum effort in hopes of overturning legislation it has characterized as a ban.
Signature gatherers have already started circulating petitions, which ask that the San Diego City Council either repeal the new regulations, which do not go into effect until next July, or place the matter before the voters. The referendum effort is being funded by the Committee to Expand the Middle Class, supported by Airbnb, which so far has contributed $100,000 to the campaign group.
The referendum is a joint effort by the online home sharing platforms Airbnb, HomeAway, and Share San Diego, a coalition of short-term rental hosts and vacation rental management companies. In a call Tuesday with members of the press, the coalition discussed its plan to fight back against the council’s action last Wednesday to significantly rein in the proliferation of short-term rentals citywide.
That fight could also include legal challenges, although representatives said their current focus is on the referendum effort.
“We’re standing up for the thousands of middle class San Diegans who welcome tens of thousands of visitors each year,” said Laura Spanjian, Airbnb’s Public Policy Director for San Diego. “Together, we must find a better way to regulate short term rentals other than a ban.”
The referendum petition’s “statement of reasons,” though, is signed by Councilman Scott Sherman, who voted against the new regulations last week and has been especially vocal in his opposition, going so far as to call on Mission Beach rental hosts to sue the city.
“The main reason I wanted to sign this is I feel the city is in a terrible legal bind with the decision we made,” Sherman said. “The city has been allowing short-term rentals for quite a long time and collecting transient occupancy fees, and with a stroke of the pen we’re saying that they’re now no longer allowed. If this were to go to court, we could end up having to come up with a whole bunch of money for taking people’s property, so it’s a property rights issue.”
The council-enacted rules, which govern short-term stays of less than 30 days, will limit such rentals to one’s primary residence only for up to six months out of the year. The effect of the action, which came following three years of failed efforts by the city to regulate such rentals, is to outlaw short-term stays in second homes and investor properties throughout the city, including Mission Beach, long a magnet for vacation rentals.
If supporters of the referendum effort can succeed in collecting 35,823 valid signatures (5 percent of San Diego’s registered voters) within the next 30 days, the City Council would be required to either withdraw its action or put the short-term rental legislation to a vote of the electorate.
Even if the backers are successful in collecting signatures, there would not be enough time to place anything on this November’s ballot because the deadline for doing so is this Friday. The next regular citywide election would not take place until 2020.
Still, the effect of a successful effort to certify a referendum would be to put the council’s action on hold until the issue is decided by the voters.
Councilwoman Barbara Bry, who led the council effort to put in place restrictive regulations, said Tuesday that the referendum does nothing to alter her position.
“I will continue to stand up for San Diego residents and neighborhoods and fight for preserving our housing stock,” she said. “Our residents expect their elected officials to create policies that protect our sharing economy and residential zoning, while increasing our housing stock, not depleting it.”
Sherman said he hopes that if the referendum is ultimately certified the council will rescind its action and eventually consider legislation that is not as restrictive.
“But at the end of the day, this will need to go to the voters in some form and let them decide because the politicians keep messing it up,” he said.
The short-term rental coalition points out that it had been supportive of a more permissive plan advanced by Mayor Kevin Faulconer that would have allowed San Diego residents to rent out up to two homes on a short-term basis, including their primary residents. Out-of-towners would have been able to apply for one vacation rental license, and the majority of existing rentals in Mission Beach would have been exempted.
Instead, say referendum backers, “through backroom deals, hastily-crafted amendments, failure to follow the law, and blatant disregard of constituents, a law passed that will cost San Diego tens of millions of dollars in economic activity and tax revenue.”
The council’s crackdown on rentals popularized by home-sharing sites like Airbnb has the potential to affect as many as 80 percent of the city’s more than 11,000 vacation rentals, according to San Diego Mayor Kevin Faulconer’s office.
The council had been facing enormous pressure over the last several years to take some regulatory action in the face of growing complaints from residents that rotating cycles of vacationers are disrupting their quiet neighborhoods and depleting the supply of long-term housing.
While it’s hard to know whether San Diego voters would favor strict limitations on short-term rentals, the coalition backing the referendum says it is buoyed by Palm Springs voters’ rejection in June of a measure that would have banned vacation rentals in residential neighborhoods.
The group is also banking on the California Coastal Commission to relax the restrictions for properties in the coastal zone. The commission has long supported short-term rentals as an affordable alternative to hotel stays. The city’s new ordinance cannot go into effect in the coastal communities until the commission has a chance to weigh in.
Opponents are also still weighing potential litigation based on legal concerns an attorney representing Airbnb and HomeAway raised this month in letters sent to the City Council.
