Written by Michael Palomba
UNITE HERE Local 30, the regional hotel union, has been at odds with companies like HomeAway, Airbnb, and Vrbo for a while now. That’s because short-term rentals pose a big threat to the hotel industry.
Well, San Diego City Councilwoman Jennifer Campbell has negotiated a “compromise” between Local 30 and Expedia, the parent company of HomeAway and Vrbo. The compromise would require short-term rental owners to acquire a permit from the city, and those permits won’t be free. There will be tiered prices for permits depending on how many days a property will be used as a rental.
The proposal also includes a cap on how many permits may be issued, meaning that many property owners would not be able to obtain one. Only 0.7%, or about 3,750 homes, would be granted permits. The city auditor estimates that there are currently 16,000 whole home rentals today, which means that over 12,000 properties that are currently used as rentals will lose that eligibility.
Currently, owners are free to rent out their property as much or as little as they please, with no permit required. This proposal would eliminate that freedom. So this “compromise” may make some businesses happy, but it appears property owners were left out of the discussion.
San Diego Mayoral candidate and current City Councilwoman Barbara Bry has made heavily regulating the short-term rental market one of her biggest campaign promises. She is determined to take rights away from property owners, almost acting as a lobbyist for hotels.
When asked about the proposal, Bry’s spokeswoman said “it’s the first we heard about it. All I can relay is that we will be listening in and reviewing what is said today.”
The battle between hotels and short-term rentals very much resembles the rivalry between Uber/Lyft and taxi unions. When Uber and Lyft were first introduced, taxi unions were furious, but ultimately they had to adjust to the new competition. This situation is no different, rather than regulating short-term rentals out of existence, hotels need to compete. Competition benefits consumers, but Councilwoman Campbell’s proposal does the opposite.
