California Bill Restricting Coastal Short-Term Vacation Rentals Faces Key Test
AB 1731 Would Prohibit Listings of Some Investment, Second Homes on Sites Like Airbnb in San Diego First
BY LOU HIRSH (via CoStar Group)
If a California Assembly bill becomes law, certain types of beach-adjacent residential properties could become tougher to find on vacation-rental sites like Airbnb. Photo: Josh Sorenson, Pexels.
A California bill that would significantly limit short-term rentals, such as those on Airbnb, in coastal zones of San Diego County faces its next test before the full Assembly, and its reach could expand statewide on whether such rentals could be a viable alternative to hotels in otherwise pricey waterfront areas.
Put forward by state Assemblywoman Tasha Boerner Horvath, an Encinitas Democrat, Assembly Bill 1731 was approved by that chamber’s Natural Resources Committee by a 6-3 vote. It now will be scrutinized by the full chamber, and if successful it would eventually also need to pass in the California Senate.
Originally intended to apply statewide when it was proposed earlier this year, AB 1731 is currently shaped as a five-year pilot program that would initially apply only in San Diego County. But it could be extended later by legislators to other coastal zones in California, a move that is watched by the hotel industry in the nation’s most-populous state.
AB 1731 would essentially prohibit second homes and investment properties – where the primary owner is not present most of the time – from being listed on home-share listing sites like Airbnb, VRBO and HomeAway. Other types of residential properties could be listed on such sites for no more than 30 days a year unless the full-time resident of the home is present.
The time limit is aimed primarily at the listing of full residential properties and would not apply to home-sharing situations where a full-time resident, for example, rents out a spare bedroom. That type of listing would be allowed year-round.
The latest assembly bill is among several that have arisen nationwide in the realm of home-sharing, amid clashing interests of parties including homeowners looking to make extra income, neighbors dealing with noise and other nuisances created by vacationers, and cities seeking to collect their fair share of lodging taxes while struggling to enforce standards for home-sharing practices.
“This is something that cities across the country are dealing with in some form,” said Robert Rauch, chief executive of hotel consulting firm RAR Hospitality Inc. in San Diego. More political, financial and other issues could arise as service lines blur and competition increases between home-share sites and traditional hotel operators.
For instance, Airbnb recently acquired booking site HotelTonight, and Marriott International announced a new division that will offer home-share-like vacation listings at some of its luxury-oriented properties.
“In a way, Marriott is making a statement,” Rauch said. “If you’re going to invade our turf, we’re going to invade yours.”
Boerner Horvath has said her measure is designed mainly to address the state’s housing shortage and affordability crisis, by ensuring that full properties like coastal investment homes are kept in the full-time, year-round rental pool rather than offered occasionally to vacationers.
The bill is opposed by the home-sharing service providers and could encounter objections from the powerful California Coastal Commission. That agency oversees coastal development and related policies and has made a priority of maintaining the supply of affordable lodging alternatives in coastal zones, including units made available through home-sharing sites.
“AB 1731 will ban vacation homes in San Diego County, infringe on homeowners rights, result in millions of dollars in lost revenue and deny access to the California coast,” said Airbnb spokesman Charlie Urbancic, in an emailed statement after the assembly committee vote. “We look forward to continuing discussions around this bill and educating the public about the consequences if AB 1731 were to pass,” he said.
Coastal Commission spokeswoman Noaki Schwartz said the agency has not taken a formal position on AB 1731. However, she forwarded to CoStar News a copy of a December 2016 letter sent to community development officials throughout the state, in which the commission outlines its position on short-term rentals including its willingness to work with local jurisdictions on policy changes.
That letter also states that vacation rental regulations in coastal zones must be authorized based on coastal development permits, which are issued by the Coastal Commission.
Coastal Commission policy on this issue has been reflected in moves now being made by other regional agencies to ensure more affordable waterfront lodging options. For example, the Unified Port of San Diego is considering several developer proposals to build affordable accommodations on a waterfront parcel controlled by the port district, which could take the form of mini hotel rooms or other alternatives like sleep pod configurations.