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.
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’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.)
I was curious about the overall impact of the venue on the neighborhood in terms of patrons and dollars – how many people are attending concerts and bringing energy, liveliness, and money to North Park. I live a couple of blocks away and it seems to be quite popular but I hadn’t seen any numbers about the average attendance, etc. Here’s the response I got from an Observatory representative (received on 8/11/2017) on this topic:
“Our capacity is 550 seated or 1100 standing. We do between 12-25 shows per month with the average of most shows being about 80% sold.”
Let’s do a bit of math to get a monthly estimated total of attendees:
Average capacity: 825[(550 + 1100)/2] (assuming half seated shows and half not)
Average shows per month: 18.5 [(12 + 25)/2]
Average attendance per concert: 660 (825 x 80%)
Total attendance per month: 12,210 (660 *18.5) ———>> In a year that would be an estimated 146,520 attendees.
What does this mean for the larger North Park economy? As a rough estimate, this infographic from event organizer / platform Eventbrite is what a quick Google search yielded. It’s a bit dated, from January 2015, but as I don’t currently have a data analyst on staff I’m going to run with it.
Based on the above, the average non-ticket spending (snacks, drinks, transportation) would be $47 per person, in addition to the average $35 ticket. Multiplying the annual attendance by this $47 per person in spending would yield a direct economic impact to North Park of $6,886,440. A good portion of this, especially the drinks category, may occur inside the Observatory venue or attached West Coast Tavern. The wide variety of restaurants, cafes, and bars in North Park would also receive some of this money.
Prior to Observatory opening there wasn’t a major concert venue in North Park and I’m glad there is a place where music lovers can attend a wide variety of performances. (I’m not much of a concert goer myself and haven’t attended a performance at Observatory other than the Christmas program for Jefferson Elementary, for which the venue donated the space and support services.) I see Observatory as the type of place that most neighborhoods would pay lots of money or tax breaks to attract – a place bringing money, jobs, and attractions. Hopefully Observatory will continue to listen to neighborhood concerns as well as operating as a top-notch place to enjoy a night out in San Diego.
We’ve had a couple of wood planter boxes in our sideyard that I made a few years ago for herbs and vegetables but have never had good luck with growing edibles. Yesterday, we decided to repurpose one as a butterfly garden, which is more in keeping with our lot flora in general and hopefully will be more successful than the tomatoes and basil were.
We went to a nursery in the Midway District of San Diego, Walter Andersen’s, which has quite a large selection and is on to the way to our favorite beach neighborhood, Ocean Beach. Our total purchase for the day was $77.49 for the following plants and one bag of bedding soil. I sprang for a couple of extra large choices rather than smaller pots, so the total cost could easily be closer to $50 for the same selections at a slightly smaller planting size.
Achillea Millefolium (Siren song angie)
Acelpias fascicularis (Mexican whorled milkweed)
Asclepias mix mojonnier (Milkweed)
Asclepias physocarpa (Hairy Balls / Family Jewels) – commonly named for the seed pods resemblance to the human testicle. Seriously.
All of these are butterfly friendly and pretty well suited to the San Diego climate. Some, like the cuphea and galvezia are also great for hummingbirds. Only the galvezia is a “true” California native plant but the asclepias mix is probably the most common milkweed you’ll see in yards around town and a great monarch butterfly attractor.
Wanted to share this project and plant selections in case others would like to easily add some habitat for butterflies at their own home. Cheers!
Mission Trails Regional Park is an amazing San Diego asset. It covers 7,220 acres and is located near Downtown and urban areas like North Park, Mission Valley, La Mesa, and others. There are a wide variety of activities available – running, rock climbing, bike riding, hiking, and more. To encourage more people to explore some of the less visited areas of the park the 5 Peak Challenge was officially launched on November 7, 2015 although it had been an unofficial challenge in the hiking community prior to that launch.
Cowles Mountain is the most popular hike in the park and has a constant flow of people. I had done Cowles a dozen or more times in the past 5 years and the Fortunas once or twice but had never been to Pyles or Kwaay Paay prior to attempting the 5 Peak Challenge. You don’t have to do all the peaks on one day and it’s probably not advised but a friend had told me about doing the challenge in under hours so I decided to make that my goal.
Using the park map (below, click for pdf copy) I decided the shortest total route from the Visitors Center would be: South Fortuna, North Fortuna, Kwaay Paay, Cowles Mountain, Pyles Peak. I hopped on my bike in North Park and about 35 minutes later was at the Visitors Center and ready to go.
I used the Strava app to record the time, elevation gain, distance, and route for my 5 Peak Challenge. Including a few breaks for lunch and to register the kids for swimming lessons it took a total elapsed time of 4 hours and 57 minutes. I was scrambling up Pyles Peak to get under the 5 hour mark but managed to do it. I hiked at a moderate pace for the most part but did jog some of the descents and a bit of the Junipero Serra Trail that is a flat, paved road from the Old Dam to the Visitors Center. I also rode my bike from the Visitors Center to the Cowles Mountain base after the first 3 peaks.
I didn’t include any scenery shots on this post, other than the background on the selfies at bottom, which are required to officially complete the challenge and submit for a certificate. If you haven’t been, Missions Trails Regional Park is basically Southern California natural scrub habitat – some trees in the low lying areas but primarily short bushes and shrubs. The peaks provide wonderful views in every direction, from Mexico to the Pacific to inland mountains to the east. The day I hiked was overcast so the view distances were greatly reduced but I was grateful for the less intense sun and heat.
I’d highly recommend doing the 5 Peak Challenge or simply visiting the park to have a picnic or go for a casual hike up one of the peaks. It’s a great asset to the region and one well loved by many.
New Airbnb Feature Likely To Be A Boon For The Platform
Airbnb has a feature currently only available in a number of cities around the world – Co-Hosting. The current list, below, includes 25 cities although additional cities are being rolled out per my conversation with an Airbnb representative this week.
So what is the Co-Host program about? Basically, it’s a way for a property owner (a “Host” in Airbnb parlance) to add another Host (the “Co-Host”) to a listing. You can tap a friend, relative, neighbor, or experienced Airbnb huser to manage your property for you. This is a huge growth opportunity for the platform and one I’m surprised is not getting more publicity. I’d guess this is because they’re currently in test mode and working out any bugs in the program. In addition to assigning management rights to an Airbnb listing, the Co-Host option allows users to set fees (management fees as a percentage of gross earnings or fixed fee, cleaning fees, etc.) and the platform will automatically split earnings and distribute to both the Host and Co-Host per the Co-Host settings.
There are a number of reasons why someone might want a co-host for their property. The hassle of managing a property isn’t for everyone and to be able to hand off some or all of that responsibility will be attractive to some. For others, travel schedules or work demands might necessitate a co-host for short periods of time or seasonally. I can see myself wanting to add one of my children as a co-host to our listings in the future and giving them limited management rights to gradually give them control and responsibility for their own business.
In addition to existing Airbnb Hosts it’s easy to see how the Co-Hosting option could enable landlords to allow long-term tenants to utilize Airbnb in a monitored and responsible way. Between landlords, existing hosts, and the growth in the number of hosts in general I see a lot of growth potential for co-hosting. It should also allow Airbnb to retain hosts as there’s an option to avoid the hassles of managing a listing but still have the earnings, flexibility of schedule, and other benefits the platform provides. Airbnb has built a huge user base complete with reviews and other data and strengthening that base and building on it will be a competitive edge for the platform against the many competitors in the field.
I recently became a Co-Host here in San Diego and am excited for the opportunity. As one of the most experienced SuperHosts in the area I’m comfortable with taking on another listing to manage and hopefully the Host will see a benefit from the reduced workload for the property. If you are considering a Co-Host in San Diego you can find my profile at the below link. I’d be happy to talk with you about co-hosting and my experience and expertise.
Wondering if Airbnb offers Co-Hosting in Your Area? You can find out by logging in, and checking at the bottom of the menu bar. If Co-Hosting is an option for you, there will be a section labeled “Management” with a sub-section “Co-hosts” on your menu bar. You can directly invite someone you already know as a Co-Host or use the “Find a co-host” option to search by location for experienced hosts.