Last month a press conference was held to release a study done on the economic impact of short-term rentals in San Diego for HomeAway / Expedia by Xpera Group. The report follows a similar study commissioned by Airbnb and done by National University in October 2015. Both full reports are included on this post for anyone interested in this issue.
A few highlights from the new study:
Total of $500M of impact in City of San Diego ($300M direct spending, $200 induced and indirect spending)
3,00 jobs in City of San Diego
Transient Occupancy Tax (TOT or “hotel tax”) estimated to be $19M or more in 2017, a 200% increase over 2015 when the TOT from short-term rentals total $9.6M
In 2016, City of San Diego TOT was $202.8M of which $15.6M was from short-term rentals, a 7.7% share.
“Short term lodging guests tend to be much younger than hotel guests and have a higher percentage of females than hotels.”
Short-term guests typically stay longer than hotel guests, “roughly half of short term lodging room nights coming from trips of seven days or longer”
7,436 total short-term lodging listings in City of San Diego, estimated (as of June 2017). 11,530 estimated for San Diego County.
In 2016 San Diego County had 30.4 million visitors, 17.4 million overnight visitors. That would be an average of 47,671 overnight guests per night in the County.
The short-term rental issue continues to be a hot topic in San Diego and a good explainer for the current status can be found here on Voice of San Diego (from Nov 1, 2017). A full City Council hearing is expected to be held on December 12 although a recent hearing was cancelled on short notice in October so we’ll see how the December hearing plays out.
I’ve been thinking about vacant housing units in San Diego for some time and recently was reading about the issue in Vancouver, Canada. The data provided was much more thorough than anything I found locally so I wanted to use it to estimate what the numbers might be in San Diego. Following is my take and links to the underlying information from Vancouver. If you have information on this topic I’d love to connect or hear your input.
This article from the Vancouver Sun from February 2017 lays out some good information about vacant housing units in that city, which in recent years has been often in the news for quickly rising housing prices. Included is the following:
The figures from “2016 show there were 25,502 unoccupied or empty housing units in the City of Vancouver” (below graph from article shows the growth in this number from 1986 to 2016, a period during which Vancouver real estate prices skyrocketed)
This figure is for the City of Vancouver, not the region, and represents 8.2 per cent of total housing units
Per City of Vancouver, there were 309,418 total dwelling units in the municipality as of 2016. This total supports the above calculations (309,418 x 8.2% yields 25,372 or roughly the same amount as show in bullet one)
In response to the high housing prices in Vancouver, the city levied a 1% property tax surcharge on vacant units to push owners to add the units to the housing supply for renters or other owners.
I’ve been trying to find vacant number estimates or similar studies in San Diego and have asked various reporters, housing industry experts, random Twitter users, and other avenues to seek this information. The answers I have received have been all anecdotal but mostly consistent – there are a lot of Downtown condos and probably a fair share of other units that are mostly vacant but it’s hard to ballpark the percentage.
Vancouver is a relatively similar city to San Diego, located on the west coast of North America and with high housing prices and demand. Below are some basic demographic and economic factors – San Diego is larger but in the same ballpark, a large regional hub in a developed country.
Poplulation (metro) – Vancouver = 2.3M, San Diego = 3.3M
Poplation (city) – Vancouver = 647,520, San Diego = 1.4M
Housing units (city) – Vancouver = 309,418, San Diego = 526,663 (1/1/2015)
Since I can’t find a good local estimate for vacant units I thought Vancouver would be a reasonable estimate, or at least a starting point for conversation and hopefully the SD City Council, EDC, Chamber of Commerce, or other party could commission a study to quantify this aspect of housing stock in San Diego. (I would guess the amount would be higher in San Diego than Vancouver given the long history as a vacation destination, the warmer weather, and the presence of large population centers nearby – Los Angeles, Phoenix, Las Vegas, etc.)
The SANDAG numbers may best reflect the number of vacant units, but it’s worth looking at a portion of the above referenced Vancouver Sun article which notes that the private study produced a vacancy rate more than double existing city estimates.
“The census numbers of unoccupied units are more than double an estimate released by city hall last year because a completely different set of criteria and data were used.
Assessing the extent of empty or underused homes can differ depending on “your measurement tools,” said Yan.
While the census might count a greater number of folks who are, say, on extended vacation during the census period, the city’s estimate was criticized for likely missing the number of units used for only short, seasonal periods, perhaps one or two months in the summer, but then are left vacant for the rest of the year.”
So, based on SANDAG’s vacancy rate of 5.2% we would have 27,386 vacant units in San Diego. Using the Vancouver vacancy rate of 8.2% would estimate 43,186 vacant units here. And if we thought that the government estimates are off by half due to sampling methodology, as they were in Vancouver, we could use a rate of 10.4%, yielding 54,773 vacant units in San Diego.
Given the large impact that property tax rules in California can have on homes held for long periods (Prop 13 being most prominent) I would think the vacancy number in San Diego would be at the high end of the above numbers, probably 50,000 or higher, maybe much higher. Prop 13, over time, can result in incredibly low property tax burdens for long-time owners. Prop 13 allows properties like the amazing home below, currently for sale for $1.7M, to pay a total of $136.97 in total taxes a year – a rate of .008% rather than the approx 1.05%, $17,850 a year, if taxes were applied on market value at existing property tax rates. When holding costs are essentially nothing, there’s greatly decreased incentive to sell and little cost to holding an empty property. It’s probably a large part of the reason the house across the street from me in desirable North Park, which is worth around $750k, has sat completely empty for the 4 years I’ve been in the neighborhood.
I’m not advocating for an empty house tax as Vancouver did, but seeking to get an estimate of vacant units in San Diego to consider a similar or other action. Being involved in the short-term rental (aka Airbnb) debate here the impact of short-term rentals on housing availability and prices frequently comes up. It’s undeniable that increased demand has an upward effect on housing prices. However, short-term rentals produce economic activity for owners, businesses, and the city whereas empty units do none of those things. Upper estimates of short-term rental units in San Diego are around 15,000 (I would guess it’s around half that number) – likely far dwarfed by empty units in our city. We would be much better served putting vacant units on the market rather than reducing economic activity, entrepreneurial opportunity, and property rights by greatly restricting short-term rentals.
Lake Murray is a reservoir located at the confluence of the borders of La Mesa, San Diego, and Santee. It is part of Mission Trails Regional Park which includes great hiking opportunities and a set of five peaks to climb.
There is a path around Lake Murray but it does not create a full loop as the area around the dam is closed to the public – it’s about 3 miles start to finish, so 6 miles in total if you do an out and back. Lake Miramar was once similarly closed but reopened the full loop – hopefully Lake Murray will one day do the same. There are a wide assortment of ducks and other birds that you can find in the water, although a local rule prohibits feeding them. 🙁
I took my two children to Lake Murray this week and brought along my bike and our 2-seat Burley trailer to give them a ride on the out and back path around the lake. It’s mostly flat and has some nice trees lining the path in certain areas. Below are some photos of the scenery and the ride profile (elevation, distance, duration) from my Strava recording.
Lake Murray has a number of places to access the trail, I usually enter from Kiowa Street on the south side of the Lake, off of Lake Murray Boulevard, the address for GPS is 5540 Kiowa Drive, La Mesa, CA 91942.
This is a great place to have a picnic, walk, jog, or bike. Cowles Mountain is also very close so you could do a hike there in the morning and then relax at the lake afterwards. Fishing is also popular and there are kayaks for rent, but swimming is not allowed in the reservoir.
Path Enhancement – If you know who to contact or what needs to be done to open the full loop around the reservoir please let me know, I’d love to see this asset enhanced with a full loop option and access to a greater portion of the shoreline.
Burley bicycle trailer – We’ve had our Burley D’Lite trailer for more than 5 years. It is amazing and a huge help with grocery shopping, taking the kids to the park, etc. They’re pretty spendy new, about $700 but we bought ours for $150 on Craigslist and it’s great. Highly recommended if you have young kids, I also know people that use them for dogs and enjoy.
I use my bike mostly for function – getting to and from places, shopping, going to dinner, etc. One of the best purchases I’ve made was getting pannier bags, which make it easy to carry items and more comfortable than using a backpack or handheld bag. Pannier bags attach to a basic bike rack (front or rear) and are a convenient way to carry goods, or to carry camping supplies if going for a long recreational trip.
A couple of years ago I bought a used set of Avenir pannier bags for $10 a piece. They have some nice features like:
Reflective trim to increase visibility
Two bottle holders
One large pouch for large items (I’m usually carrying a laptop or papers) with clip straps to secure and expand or shrink height
Small zippered pouch for easy access to wallet, keys, etc.
Clips to secure bag to bike rack and reduce chances of falling off
Waterproof with drawstring tie on opening
I went to the grocery store the other day and took some photos to show what a shopping trip by bike looks like. I sometimes see newspaper articles or comments online about how non-functional it is to buy food items on a bicycle. I strongly disagree – the parking is usually much easier, it’s cheaper than driving, and with a couple of good bags carrying your items home is a breeze.
Here’s my bike with two pannier bags full of groceries – I didn’t put the chips in the pannier bags for fear of crushing them although there was room in the expanded upper portion if I wanted to use it.
On returning home, I unpacked the bags on our table and took this photo to show the amount of food that can easily fit in a pair of bags. We were cooking for a get-together so some of the items are in bigger quantities than usual but overall a pretty good idea of an average grocery shopping trip for me by bicycle.
We’re fortunate to live in an area with a number of grocery stores within a mile. I often walk instead of biking, but often pick up a couple of items in other areas when I’m coming home from work or other activities. Pannier bags are a great addition to any bike and I highly recommend getting a pair.
Banker’s Hill is a hilly, pretty neighborhood just North of Downtown San Diego and to the West of Balboa Park. It has a wide variety of old mansions, new condos, restaurants, churches, and everything in between. It has a quiet vibe but I would guess this will shift in the next couple of years as there are quite a few new housing units being built and one would expect supporting businesses – more coffee shops and restaurants, gyms, professional offices, etc. – to open to cater to the new residents.
I’m often in Banker’s Hill and have established a route I like to walk or run that has a good mix of nature trails in canyons, park space, and residential areas. I typically put a podcast on my phone and then go out for a break from work and listen to something interesting. I wanted to share my route with others that might be interested in exploring Banker’s Hill a bit more.
Here’s a map of the route I generally take although I frequently shift portions of the route. Start just East of the intersection of 6th & Laurel at the statue of Kate Sessions. Head north on one of the sidewalks (or walk on the grass) through the western portion of Balboa Park to Spruce Street and head West. This will bring you to the Spruce Street Bridge which you can cross and then take the meandering Curlew Street down to the bottom of Maple Canyon, which you can use to complete the loop and then cross the Quince Street Bridge to finish up. I finished this route today at the new James Coffee location at 2870 Fourth Ave, Suite 107, San Diego, CA 92103.
Following are a few photos from today, there are also a number of wonderful buildings (new and old) to look at. Hope you enjoy the area and this route!
2017 marks the 6th Annual Ride for the River Park, benefiting the San Diego River Park Foundation (SDRPF). This 2 day, 1 night tour begins at the Pacific Ocean in the neighborhood of Ocean Beach, and follows the path of the San Diego River from the ocean to the headwaters in the mountains near Julian. This is a challenging ride of 70 miles each direction, with about a mile of elevation climb on the first day. At the end of the first day we’ll enjoy camping at Lake Cuyamaca and a beautiful night’s sleep. The return trip on Sunday, October 22 is all downhill – a well deserved easier return trip.
All participants are strongly encouraged to make a donation to the SDRPF at http://sandiegoriver.org/give.html. Please also send an email to organizer John Anderson at john.patrick.anderson.com. The event organizer and volunteers will provide snacks and water along the way and a support vehicle for carrying small overnight bags and gear. Food and drink are the responsibility of each participant as is accommodation in Julian on Saturday night. Julian is a popular tourist destination so reservations are recommended as soon as possible. There are a variety of hotels and other accommodations and many options on VRBO or Airbnb. There are also nice campgrounds nearby like Heise County Park and Lake Cuyamaca**. Please note that the campgrounds are a few miles from Nickel Beer Company where we will end the first day’s ride.
This ride is challenging and is on open roads, some with fast-moving automobile traffic. We welcome participants of all skill levels but please be aware that this will be a difficult ride for those not used to elevation gains or long-distance riding (more than 50 miles). Please note that the average group pace for the first day is 10 mph and 15 mph for the second day. If you’re not comfortable with this pace for a long day’s ride please bring a friend to ride along – we don’t want to leave anyone riding alone.
Starbucks Coffee – 10406 Friars Rd, San Diego, CA 92120 (Grantville)
7-11 – 10195 Riverford Rd, Lakeside, CA 92040 (Just before Highway 67)
Iron Mountain Trailhead / Parking Lot – Intersection of Highway 67 and Poway Road
Thai Time (Lunch Stop) – 2330 Main St, Ramona, CA 92065
Dudley’s Bakery / Santa Ysabel Grocery – 30218 California 78, Santa Ysabel, CA 92070
Lake Cuyamaca Campground (Finish Line!) – 15027 Highway 79, Julian, CA 92036. We’ll grill out for dinner, have some drinks at the lake and enjoy some star-gazing and conversation. I’ve reserved Campground 26 and 27 at the Chambers Park area, which has showers and nice restrooms. Capacity is 8 per site but there are additional spots that we can get the day of event if needed.
Day 2 Stops – Sunday, 10/22/2017
Breakfast – We’ll cook up some coffee and eggs and bacon at the campsite before heading off in the cool morning mist.
7-11 – 10195 Riverford Rd, Lakeside, CA 92040 (Just before Highway 67)
Mission Trails Visitors Center – 1 Father Junipero Serra Trail, San Diego, CA 92119
Finish Line – Pizza Port Ocean Beach – 1956 Bacon St, San Diego, CA 92107. All are welcome (non-riders included) to enjoy some pizza and conversation at Pizza Port at end of ride, estimated arrival time is 3:30 PM on Sunday, Oct 22.
Hope you can join us for this great event and even if you can’t enjoy the ride you can support the work of the SDRPF by learning more and making a tax-deductible donation at: http://sandiegoriver.org/give.html.
This morning a number of media outlets are reporting on a new proposal by four San Diego City Councilmembers regarding short-term rentals. Below is a copy of the memo released that was included in the Voice of San Diego Morning Report today. I wanted to share as I received a few messages about this today – I haven’t had time to read through yet but with the City Council likely to have a hearing on this issue in October or November it sounds like another option that will be on the table for discussion.
I’ll try to do a summary post in the next day or two but wanted to put up the full document for the meantime.
I recently read Dream Hoarders – How the American Upper Middle Class Is Leaving Everyone Else In The Dust, Why That Is A Problem, And What To Do About It by Richard Reeves of the Brookings Institution. Despite having a very long and unwieldy title it was a very good read about the “Top 20%” in the United States. The book calls out unfair advantages that the upper class has carved out for itself and how these advantages have created “mobility stickiness” at the top – if you’re born in the top 20% you’re likely to remain there, more so than your chances of remaining in the bottom 20% if you are born there.
Reeves criticizes practices like legacy admissions at elite universities, college savings plans, nepotistic internship placing practices, the interplay of zoning and access to public goods like schools, and more. The book is a quick read and very informative.
Below is an example of the sort of information presented in the book. I really enjoyed the graphic presentation of data throughout, as well as the casual and plainspoken writing style. It makes the subject matter easier to grasp and relate to. I also enjoyed Reeves’ perspective as a non-native American – he was born in Britain and frequently refers to that land of dukes, dames, and queens and how his perception of America as a more meritocratic place has been challenged through his research on wealth and social mobility.
If you have a chance to pick up this book at your local library or purchase online I’d highly recommend it. It’s important for those of us in the Top 20% to recognize unfair practices and work to create a more fair playing field for our children and future generations.
I’m sending out these books as part of my “Sharebook” campaign – my personal project to send out books I’ve enjoyed and start a number of book chains to continue them being passed after I first ship them.
I’ve been using custom online guidebooks from Hostfully for about a year to share recommendations and property information with our guests in San Diego. I really like the platform and functionality, especially the ability to send a PDF, print, or link to the guidebook for easy guest use.
Hostfully recently started a regular series of articles featuring hosts using the platform – the “Hostfully Host Spotlight” and this week they decided to feature our property in North Park and some favorite recommendations in San Diego.
You can check out the profile article at the below link. Cheers!
(If you’re an Airbnb or VRBO host in San Diego and interested in Hostfully please feel free to drop me a line and we can chat.)