Short-Term Rentals Could Worsen San Diego Housing Crisis
Monday, October 9, 2017
Photo by Associated Press
A University of San Diego economist said San Diego needs to put restrictions on vacation-rental housing, lest it make the supply of local housing scarcer than it already is.
Alan Gin, known for his monthly index of economic indicators, said the shortage of housing in San Diego is one of the biggest drags on the local economy, preventing employees from affording a decent place to live and preventing employers from having an adequate workforce. By his reckoning, the region is 68,000 housing units short of what it needs.
He is concerned that if the city does not restrict short-term rentals — the kind advertised through sites like Airbnb — it will take even more housing away from those who live here.
“I'm not against people renting out a single room in their place,” he said. “But when people start renting out whole units for extended periods of time, that takes housing off of the market that could otherwise go to renters and add then to our supply."
San Diego County's average rent just hit a record of $1,875 a month, according to Marketpointe Realty Advisors.
Gin said the San Diego housing dilemma is simple economics.
“When supply is low and demand is high, that drives up the price of housing. And again, the short-term vacation rentals adds to the lack of supply,” Gin said.
The San Diego City Council will take up the issue of short-term vacation rentals at a meeting next week, and there is more than one idea on the table.
One proposal already has the support of four of the nine council members. It would allow San Diego homeowners to rent up to three housing units they own as short-term vacation rentals, and it would make the owners subject to a fee to create new housing.
"Our proposal respects property rights while also reining in large commercial enterprises, cracking down on flipping and providing desperately needed funding for affordable housing," said councilman Chris Ward, one of the proposal's backer.
But Gin said that allowing three homes to be taken off the long-term market for every permit applicant is a bad idea, and he doesn't believe the fee charged to permit holders would make a dent in the housing shortage.
“The recent proposal released by council members Ward, Kersey, Sherman and Alvarez does not deal adequately with the problem because it does not do much to restrict the diversion of whole units out of the housing stock and into the short-term vacation rental market,” Gin said.
Another proposal by City Councilwoman Barbara Bry would allow San Diego homeowners to lease the home they live in for up to 90 days a year for short-term vacation rentals. The proposal would permit unlimited home sharing as long as the owner is on site to supervise.
“(Mine) is the only proposal that prohibits investors from converting homes in our residential neighborhood into permanent mini-hotels,” Bry said in a press release.
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