In a stunning move Wednesday, a state bill that would have sharply curtailed the short-term rental of homes in San Diego County’s coastal communities was held for a year by its author, even as the legislation had cleared the California Assembly and multiple Senate committees.
The decision by Assemblywoman Tasha Boerner Horvath, D-Encinitas, came amid heavy lobbying in Sacramento by short-term rental heavyweights Airbnb, HomeAway and VRBO, who asserted that the legislation would have had a devastating impact on the region’s tourism economy and unfairly barred the owners of second homes from renting out their properties for short-term stays.
The bill had just received approval from the Senate’s Natural Resources and Water committee on Tuesday and was on Wednesday’s agenda for the Government and Finance committee when it was abruptly pulled by Boerner Horvath.
“I made the decision to take time to work on this throughout next year,” Boerner Horvath said Wednesday. “It’s not the end of the process but the beginning. We were getting very near to the end of the session and still were making changes to the bill, so do you rush those changes or is it better to take more time? This isn’t about a quick win but having solid policy.”
Boerner Horvath, who had started to get push-back from some legislators in recent days, already had agreed to reduce her bill’s duration from five years to three, after which a study would be undertaken to determine whether the tighter controls had any real impact on stemming the loss of coastal housing.
While the proliferation of short-term rentals has drawn sharp criticism for years from homeowners in single-family neighborhoods, Boerner Horvath said her main motivation for authoring the bill was to preserve long-term housing, which she said was being eroded as increasing numbers of homes are converted to short-term rentals.
By converting Assembly Bill 1731 to what is known as a two-year bill, Boerner Horvath is able to revive it next year with possible changes without having to entirely restart the process.
Airbnb, which has fought the bill and encouraged its hosts and others to speak out against AB 1731, cheered the bill’s deferral this year.
“It’s clear that the bill doesn’t have the votes because this is an issue that should be dealt with on the local level and impacts San Diegans, their ability to earn income, the city’s economy and access to the coast for guests,” Airbnb said in a statement Wednesday. “If the bill resurfaces again, we’ll address it at that time.”
The bill specifically targeted the short-term rental platforms by not allowing them to book residential properties for more than 30 days a year each unless the full-time resident is present. Year-round rentals would have been permitted for traditional home-sharing in which residents rent out a spare bedroom or a granny flat on their property. The effect of the legislation was to prohibit the short-term rental of second homes and investor properties listed on the home-sharing platforms, a provision that would have had a far-reaching impact on coastal communities like Mission Beach, which has long been a magnet for vacation rentals.
The bill, had it been successful, would have had the biggest impact in the city of San Diego, where there are no regulations in place specifically governing the rental of homes for stays less then 30 days at a time.
“It is disappointing news, and I don’t see this coming back next year for the same reasons it didn’t make it this year,” said long-time Mission Beach resident Gary Wonacott, who has pushed for stronger regulation and enforcement in the beach areas, where the greatest number of rentals are concentrated. “I believe Airbnb lobbied it off the table. I think this bill was a win-win for the residents of San Diego because it would have restored housing — although we don’t know how much — and I think it would have had a chilling effect on investors.”
The San Diego City Council came close last year to regulating vacation rentals when it agreed to limit short-term stays to one’s primary residence only and for no more than six months out of the year. The council, though, had to rescind its action following a successful Airbnb-led effort to place a referendum on the ballot.
While AB 1731 was originally conceived to apply to all of California’s coastal areas, Boerner Horvath later changed the legislation to cover just San Diego County’s coastal zone, where cities from Coronado to Carlsbad have widely varying regulations, from outright bans to more permissive rules. The bill would have allowed cities to enact or retain regulations that are more restrictive than her bill.
Opponents of the legislation had hoped to enlist the California Coastal Commission in fighting the bill given the agency’s strong support of vacation rentals as a vehicle for providing affordable access to the coast. The commission has in fact repeatedly warned local jurisdictions against being too restrictive when it comes to regulating such rentals. But faced with pleas from the public to take a stance against AB 1731, the commission made it clear it was going to stay neutral.
“Cities and counties up and down the state of California are grappling with the phenomenon of short term rentals in various ways and it is not a one size fits all solution,” Coastal Commissioner Aaron Peskin, a member of the San Francisco Board of Supervisors, said last month at a hearing where dozens of vacation rental hosts showed up to protest the bill. “I am aware that Airbnb has encouraged people to come here asking us to vote against this bill. We don’t get to do that because we’re not in the state Assembly. This should be playing out in the halls of the Capitol building in Sacramento and not at Coastal Commission meetings.”
State Sen. Bob Hertzberg, D-Van Nuys, during the Tuesday Natural Resources committee hearing, raised questions about the bill’s potential conflicts with the Coastal Commission’s policy favoring short-term rentals. He also wondered whether the legislation would really make a meaningful difference in the supply of long-term housing.
“Are you really solving a problem?” he asked Boerner Horvath. “Would these (rentals) be available to people if they weren’t short term rentals? We all talk about housing but what are you really affecting, how many lives are being affected in the county? It seems to me you need to make that compelling case that your policy results in better polices on housing.”
In San Diego County’s coastal cities, there have been as many as 14,000 housing units listed as short-term rentals on the Airbnb, HomeAway and VRBO platforms.
Boerner Horvath’s bill had included what she called an “opt-out” mechanism that would have allowed cities to escape the tougher short-term rental regulations by creating a “residential tourist” zone where such rentals would be permitted. Critics of the legislation, though, complained that having to create a new zone would have been a burdensome, time-consuming process.
Boerner Horvath said Wednesday that one potential amendment to her bill would be to better clarify the special tourism zone.
Meanwhile, this fall the San Diego City Council will be trying yet again to get some rules on the books to bring some order to the local home sharing market. Council members Barbara Bry and Jennifer Campbell, whose districts include many of the coastal communities, will likely be leading the effort.
“We need a solution that fits San Diego when it comes to short term vacation rentals,” said Campbell, whose district includes Mission and Pacific Beach. “We’re continuing our conversations with stakeholders on this issue and I hope we can finally come to a true resolution this fall.”