Campbell’s District 2 Office Is Not on Top of Short Term Rental Licensing
By Geoff Page
It seemed like a good time to check up on the short-term vacation rental, or STVR, picture in Ocean Beach. The Rag submitted a Public Records Request, or PRR, asking for the current list of permitted STVRs.
The following paragraphs provide an account of what it took to obtain the STVR information, an explanation of what STVR Tiers are and how many there are, how this is being administered by the city, and the budget. The information resulted in one surprise and one confirmation of expectations.
The surprise is that the city expects to make millions from the STVR business. The confirmed expectation is that the city is not spending any of that money on enforcement of the STVR ordinance.
Obtaining Information
When making a PRR, the requester has to pick a department to send the request to. It is not always clear what department should get the request. If the requester chooses an incorrect department, most of the time the city will correct the request and send it where it needs to go.
Not knowing who had the required STVR information, the logical place to send the request was the District 2 city council office since they are responsible for foisting this system on the city. The PRR was submitted on January 22. Here was the response on January 25:
Council District 2 has no responsive records.
Unsatisfied with this answer, The Rag responded the same day with:
Surely then, Council District 2 was able to advise to whom this request should go to. Correct?
On Sunday, January 28, the city sent an email stating that the request was published. The city provided a link to a website where a large spreadsheet with the information was located. There was no mention in the response about who provided the information.
Campbell’s office has broken another promise, a promise to monitor and stay on top of how their ordinance works. But, they have nothing. A second PRR was again submitted to the District 2 office for a list of all the STVR applications to date, including those not granted a license. Here was the second response from District 2 on January 29:
Council District 2 has no responsive records.
The Rag responded:
District 2 may not have the records but they surely know who would have those records. They need to be more helpful.
On February 2, the city sent an email asking, “Are you able to specify the data fields you are seeking in the list requested? For example, name of applicant, application number, address, approved/denied, etc..”
This was a frustration with the system that seemed intentional. The spreadsheet of the current licenses, that the city already provided, had 23 columns of information, but for some reason, the city wanted only to provide something specific this time. The Rag responded by specifying a specific need was for the addresses and whether or not the licenses were granted.
The city provided a spreadsheet on February 6, again with no help from District 2. But, the way it was provided was another frustration that also seemed intentional. Instead of separate columns for the addresses and the zip codes, like the spreadsheet of active licenses did, the city provided the address and zip code in one column. Anyone who has worked with and sorted spreadsheet information would see the difficulty.
With separate columns for addresses and zip codes, a spreadsheet can be sorted in a minute by zip code. All of 92107 or 92106 can be sorted into lists easily. While it was possible to sort this second spreadsheet, it was unnecessarily cumbersome. If this was not done intentionally, then it means the city is doing a bad job of keeping its information organized.
STVR License Tiers
The licenses are divided into four “tiers.” The variations are important.
Tier 1
Rented for an aggregate of 20 days or less per year. The owner or permanent resident does not need to reside onsite during the STRO.
The data shows that Tier 1 is not popular. Of the current 8,359 licenses granted, only 186, or 2%, are Tier 1. The 92107-zip code area currently has 815 STVR licenses. Of these, only nine are Tier 1 licenses, or 1% of the total.
Tier 2
Renting a room or rooms in the home for more than 20 days per year so long as the owner or permanent resident resides onsite. The owner or permanent resident may be absent from the permanent residence during the STRO for up to 90 days per calendar year.
Tier 2 is much more popular at 2,589 licenses of the total granted. In the 92107-zip code area, there are 198 Tier 2 licenses, or 24 percent of 815 total. It is easily apparent why these are more desirable. Tier 1 limits the total rental days to less than 20 and Tier 2 is unlimited. Tier 2 allows the owner to be absent for three months out of the year.
According to the city’s website, the number of available Tier 1 and Tier 2 licenses is “Unlimited.” Unlimited?
Tiers 3 and 4
Rentals for more than 20 days per year where the owner or permanent resident does not reside onsite. To determine your dwelling unit’s Community Planning Area (CPA), reference the City of San Diego Community Plans Map.
If your dwelling unit is within the Mission Beach CPA, you would fall into Tier 4 Mission Beach Whole Home. Any other CPA would fall into Tier 3 Whole Home (excluding Mission Beach).
Note that the ordinance requires STRO utilization for a minimum of 90 days each year in order to maintain a Tier 3 or Tier 4 license.
These are whole home rentals, not rooms in a house. The owner does not have to be there. Of the total licenses granted, 4,502 are Tier 3. In the 92107-zip code area, there are 608 Tier 3 licenses, or 75 percent of the 815 total. According to the city site there are still 917 of these licenses available citywide. That is a lot of whole homes taken off the rental market and turned into businesses, no longer homes.
The city’s website explained that the number of licenses issued will not exceed 1% of San Diego’s total housing units outside the Mission Beach Community Planning Area. In the Mission Beach Community Planning Area, the allowance is far greater at 30%. There is a waiting list of 166 applicants trying to get a Mission Beach license.
Both areas require a two-night minimum stay for guests.
City website contains information about STVRs.
There were, to date, 9,353 total applications. Of those, 640 were labeled “CANCELLED,” which is probably a catchall term for ones that were withdrawn or not granted by the city. In the 92107-zip code area, there were 907 applications and 62 of those were labeled as CANCELLED. The 92106-zip code area only had a total of 182 applications with eight CANCELLED.
STRO Administration
The city has set up a group called the STVRO Administration within the City Treasurer’s department. This group handles administration of the ordinance. Enforcement is the responsibility of another group called the Building and Land Use Enforcement, or BLUE, team. This is Code Enforcement.
The STVRO Administration group consists of a Program Manager, a Supervising Management Analyst, an Associate Management Analyst, and two Administrative Aides.
The salaries of these people, according to the current city Budget:
- Program Manager – The budget show 4.5 of these personnel totaling 665,072 or an average of $147, 746 each.
- Supervising Management Analyst – The budget show two of these people totaling $296,738 or $148,369 each.
- Associate Management Analyst – The budget shows five of these people totaling $372,130 or $74,000 each.
- Administrative Aides – The budget shows 16 of these people totaling $1,008,238 or $63,000 each.
This would total $496,115 in salaries for the budget year. This does not include a long list of benefits that adds approximately 61% total, or another $320,630. That would bring the SRVRO Administration personnel costs to about $798,745.
Because the ordinance drafters said income from the program would pay the administration costs, the next logical question for the city was, how much revenue has the city received from the STVRO business.
The city provided a link to the Fiscal Year 2024 – Mid-Year Budget Monitoring Report showing that the STVRO program has generated $821,000 in application and license fee revenue. The city also provided a link to its Fiscal Year 2025-2029 Five-Year Financial Outlook. The surprise was encountered in this document:
Licenses are valid for a two-year period.
Application and license fees are collected when applications are submitted or renewed. This results in a projected revenue of $6.0 million in FYs 2025, 2027, and 2029 and $1.7 million every other year.
If STVRO management is only costing about $800,000 a year, it looks like this is a money-making proposition for the city. The drafters never presented this as a money-making venture for the city. The explanations were that the revenues would pay for administration and enforcement. The revenues do easily cover the cost to administrate the program. Enforcement is another story.
The personnel assigned to STVRO Administration will have to do more than just collect fees. Here are a few of those tasks:
- Monitor each of the 186 Tier 1 licenses to ensure the units are not rented for any more than 20 days a year.
- Monitor the 2,589 Tier 2 licenses to ensure that the owner or permanent resident is onsite for 275 days of the year.
- Monitor the data to ensure that no more than 1% of the city’s housing stock will be used for STVRs.
The very complexity of achieving those tasks almost guarantees failure.
Enforcement
During development of this ordinance, there was a big concern about enforcement. That meant enforcement of the rules for those with licenses and enforcement at large to stop illegal STVRs from operating. Campbell’s office said enforcement would be funded by the fees from these licenses.
The city’s website contains a feature for reporting STVR violations of the STVR rules and of illegal operations. Unfortunately, the violations are reported to the city’s notoriously understaffed code enforcement department, now called the BLUE team.
A look at the current budget shows the Building and Land Use Enforcement group has had five people in it since the 2022 budget and it remains unchanged at only five people. This group is not dedicated to enforcing the STVR rules as it handles all code violations. The city has starved code enforcement for years, adding all this extra work with no added personnel is a recipe for lawlessness in the STVR world.
If Campbell’s office had followed through with their promise, there would be new personnel added to code enforcement ranks funded by the ordinance. The new personnel would handle STVR enforcement as their primary responsibility.
Unfortunately, the only money budgeted specifically for the STVR ordinance was for the City Treasurer’s STVRO administration, the money collectors. Money for additional code enforcement personnel to enforce the STVR ordinance was not included in the 2024 budget.
It seems that all Campbell’s office has done is take credit for crafting this ordinance and walked away. Is anyone surprised?