Transient Occupancy Tax in San Diego – Airbnb Overcharging Visitors

Airbnb has collected and remitted Transient Occupancy Taxes (TOT) for hosts in the City of San Diego since July 2015, making collection of these taxes easier for both hosts and the City Treasurer.  Per the City TOT FAQs, TOT is charged for the following stays:

“If you are renting a room for less than one calendar month, the rental is subject to the TOT.”

The exact rules of the TOT can be found in the San Diego Municipal Code (SDMC) §35.0101.  Here the City states there is a TOT:

“It is the purpose and intent of the City Council that there shall be imposed a tax on Transients”
And to whom that tax applies in the definition for Transient:
“Transient” means any Person who exercises Occupancy, or is entitled to Occupancy, by reason of concession, permit, right of access, license, or other agreement for a period of less than one (1) month. A month is defined as the period of consecutive days from the first calendar day of Occupancy in any month to the same calendar day in the next month following, or the last day of  the next month following if no corresponding calendar day exists.”
This definition does not rely on a strict number of days to qualify as a month – it is dependent on the number of days in each month.  A stay of 28 days (or 29 or 30) in February (of a non Leap Year) are not subject to TOT  but a stay of those durations in July would have TOT since July has 31 days.

The City of San Diego TOT is 10.5% for small short-term rental operators, those with less than 70 rooms.  An additional TMD assessment used to apply to small operators but now applies to large operators only, effective September 1, 2016. Rates and additional information available on City website for TOT.

Airbnb has not correctly implemented the definition of a calendar month in collecting the TOT in San Diego and instead is applying the tax to any stays of 30 days or less.  Per an email from Airbnb this week the company is collecting “10.5% of the listing price including any cleaning fee for reservations 30 nights and shorter”.

The Airbnb site can be used to see how the TOT calculation is being applied by entering dates and then clicking a property to see the reservations details, where the TOT is listed as a separate line as “Occupancy taxes and fees”.  Below are a few sample results showing the TOT being charged when it should not be.  The erroneous TOT charges are for hundreds of dollars each. I also called the TOT help phone number at the City (619-615-1530) to confirm that TOT should not be applied to these specific date scenarios.

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I’m a big fan of Airbnb both as a host and as a guest.  Having the company collect and remit TOT for hosts is a nice convenience, as previously short-term rental hosts on the platform had to complete and file a monthly return to report TOT.  The incorrect application of the TOT rules and resulting overcharging of customers is not right and needs to be corrected.  I’ve reached out to the company a number of times requesting this and either due to a difference of understanding or other reasons a correction has not been made. I’m hopeful that this article may result in corrective action being taken.

15 Empty Cars or A Beautiful Public Plaza? Little Italy Opts for the Latter with Piazza della Famiglia

Little Italy continues to grow and become a better place to visit and live.  The most recent addition to the neighborhood is Piazza della Famiglia – a 10,000 square foot public plaza with apartments above and 16,000 feet of retail and restaurant space surrounding.  This plaza was formerly a short block of Date Street but per an agreement between the developer, H.G. Fenton, and the City of San Diego the street was vacated and a beautiful public space was created, paid for by private dollars.

The plaza isn’t fully open yet but a few of the businesses are and when I stopped by today on a sunny, gorgeous day around noon there were people chatting and having coffee, a family walking their baby in a stroller, and a number of passersby traversing the plaza on foot and bicycle.  There’s currently a small tent set up with leasing information for the two apartment buildings that H.G. Fenton built next to the plaza – Vici and Amo – which add 125 units to the area.

Here are a number of photos I took of the plaza.  The Little Italy Farmer’s Market (every Saturday and the best in the region if you ask me) will soon return to Date Street and the scene is going to be better than ever.

It’s awesome to see the neighborhood and the City choosing a public space over a handful of mostly free parking spaces (metered during part of the day) that previously occupied the plaza space.  For a comparison I checked out the two closest similr streets, which are similar size – Cedar and Fir.  When I stopped by Cedar had 10 total vehicles parked and Fir had 20, including one person moving from one meter to another and a parking enforcement vehicle looking for ticketing opportunities.  Needless to say, these streets that are devoted to cars and parking had zero persons enjoying the square footage occupied by the empty traffic lanes and parking spots.

Fir Street – 20 empty cars
Cedar Street – 10 empty cars

Which would you prefer for your neighborhood? 15 empty cars on a block, or a beautiful public plaza with shops, fountains, tables, and a place to sit and enjoy life? This sort of opportunity is available in spaces across San Diego, if we choose to embrace it.  More likely we’ll see massive amounts of additional free street parking across the city, as soon to come to North Park, due to the City making it easier than ever to quickly give over more public land to parking.  I’d prefer more plazas, trees, and life – hopefully you’ll join me in working for the same.  And don’t forget to check out the Little Italy Farmer’s Market – a great start to the weekend for locals and visitors alike.  I’d recommend taking a bike-share bike, hopefully by the time you visit the local business association will have stopped sabotaging those programs in Little Italy.

Want To Be An Airbnb Host in San Diego? Good Luck – You’re On Your Own

The City of San Diego continues to discuss options for regulations and rules around short-term rentals on sites like Airbnb.  Short-term rentals are rentals for less than a full calendar month and have been the topic of discussion at a number of City Council and committee hearings over the last few years.

I recently received an inquiry from a San Diego resident that would like to rent out one or two bedrooms in the home they live in – sharing a room or home with guests is often referred to as “home-sharing”.  Home-sharing is frequently brought up in the short-term rental debate with both sides typically saying there is no issue with this type of activity.  (However, home-sharing is the only type of short-term rental I’m aware of that the City of San Diego took to court, and ultimately the judge decided that this type of activity is not allowed under current rules and issued a fine to that host.)

The prospective host in this case was looking to do the right thing and get clarity from the City before hosting on Airbnb.  They contacted several City departments regarding how to fill out the right information for the Transient Occupancy Registration Certificate( “TORC”), if a Business Tax Certificate is required, what taxes they need to pay, and if there are other regulations they need to follow for lawfully renting out rooms via platforms such as Airbnb. 

 

On the response to the prospective host, the city was clear and straight-forward in providing the process to register for the TORC, what kind of taxes the host would need to pay, etc.  The Transient Occupancy Tax (i.e. hotel tax) is not part of the debate and proposed short-term rental rules – it is already in place and collected (and in the case of Airbnb remitted for all hosts on the platform each month by the platform itself).

However, in regard to other requirements for operating an Airbnb, the prospective host was directed to consult the Development Services Department (in charge of Land Use and Development). Surprisingly, when the host reached out to Development Services they were told  that since there are no official regulations or rules around short-term rentals, this kind of activity is currently not allowed in San Diego.  That’s when the host reached out to me, as part of my efforts with the Short-Term Rental Alliance of San Diego (STRASD) – seeking clarity the city couldn’t provide and how they should proceed.

The contradiction between the responses from different City departments is confusing but accurate.  Yes – you can register and pay the taxes for this sort of activity.  No – you can not engage in this type of activity in the first place.  This is the current status of short-term rentals in San Diego, at least for home-sharing situations.  It still seems that whole-home short-term rentals may be on firmer ground, although the current City Attorney has declared all short-term rentals illegal. [Note: the previous two City Attorneys held a different position, that short-term rentals were not illegal.]

This sort of lack of clarity is harmful to potential hosts like the one highlighted in this post – a San Diego resident seeking to improve their economic position and do so in a straight-forward and compliant manner in the type of short-term rental that is roundly approved of and supported.  We need clarity to support residents like this and should encourage this type of widespread entrepreneurial opportunity to give citizens more options and ability to chart their own desired course.  Hopefully in the months ahead we will see clarity that gives certainty to current and potential hosts and guests and that supports the opportunity that platforms like Airbnb and others gives to many thousands of San Diegans.

A screen shot of some home-sharing options currently available on Airbnb (taken 4-19-2018)

Out and About – Recent Podcast Interviews on Short-Term Rentals

I was recently included on two podcast I regularly listen to, both on the topic of short-term rentals.  I have been using platforms like Airbnb for about 8 years to welcome people to San Diego and have had a great experience.  As with many other cities around the globe, San Diego has been debating the proper place for short-term rentals (rentals of less than 30 days or a calendar month) in recent years.  I’ve become involved in that political debate locally and follow the issue broadly as well.

The Voice of San Diego podcast is a great resource if you’re interested in local issues and longer interviews with people that make an impact here.  I was part of a four person panel discussing potential new rules for short-term rentals in San Diego.  The podcast was held shortly before a full City Council hearing on the topic which was expected to result in new rules for the city.  Instead, the all day hearing resulted in nothing new and the issue remains up in the air.

Check out the Voice of San Diego podcast on short-term rentals here:

https://www.voiceofsandiego.org/topics/news/vosd-podcast-great-vacation-rental-debate/

I was also recently on Get Paid for Your Pad – a podcast focused on short-term rentals with news and interviews of hosts from around the world.  This show is a great resource if you are a current host, considering hosting, or just interested in the topic.  Host Jasper Ribbens, from The Netherlands, does a great job of including perspectives from hosts from different cities and nations and covering a wide variety of news items from technology to new rules that impact the short-term rental industry.

You can find my interview with Jasper here:

EP212: The Power of Under-Promising and Over-Delivering

Hope you enjoy the podcasts and if you’d like to connect about short-term rentals in San Diego or elsewhere please reach out anytime.  Cheers!

A photo from a recent bike ride along Sunset Cliffs. #SDlove

Short-Term Rentals in San Diego – Economic Impact Analysis Report (Oct 2017)

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.

a photo of my Airbnb listing in North Park
Short-term rentals in SD – Economic Impact Analysis – Xpera Group – October 2017
Short-term rentals in SD – Economic Impact Analysis – National University – Oct 2015

A Lovely Stroll Through Banker’s Hill

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.

Overhead map and elevation chart

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!

Kate Sessions – mother of Balboa Park
Spruce Street Bridge
A photo from the Western portion of Maple Canyon
This house is mostly hidden and located in Maple Canyon. It has a great assortment of plants and a rustic look.
Quince Street Bridge crossing Maple Canyon. New construction underway in background.

Ride For The River Park – 6th Annual – October 21-22, 2017

REGISTRATION NOW OPEN – REGISTER HERE!


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.

2017 ride map

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.

** Lake Cuyamaca will be the location for a number of participants to camp.  There are showers located at the Chambers Park location at Cuyamaca.

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.

Day 1 Stops – Saturday, 10/21/2017

EVENT START – 6:30 AM (leave at 7 AM) – Dog Beach Parking lot in Ocean Beach at W Point Loma Blvd and Voltaire St. San Diego, CA 92107.

  1. Starbucks Coffee – 10406 Friars Rd, San Diego, CA 92120 (Grantville)
  2. 7-11 – 10195 Riverford Rd, Lakeside, CA 92040 (Just before Highway 67)
  3. Iron Mountain Trailhead / Parking Lot – Intersection of Highway 67 and Poway Road
  4. Thai Time (Lunch Stop) – 2330 Main St, Ramona, CA 92065
  5. Dudley’s Bakery / Santa Ysabel Grocery – 30218 California 78, Santa Ysabel, CA 92070
  6. 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. 

New Proposal for Short-Term Rentals in San Diego

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.

STR Memo – 9-18-2017

Hostfully Host Spotlight – Our Place in San Diego

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.)

https://travel.hostfully.com/airbnb-advocacy-and-backyard-cottages-with-john-anderson-ad59937dfff9

Hostfully website top banner image

Observatory North Park – Estimated Attendance + Economic Impact

There’s been quite a bit of neighborhood angst in North Park about Observatory North Park – a historic theater in the heart of the neighborhood converted to a concert venue a few years ago.  Recently the City Councilmember for the area hosted a Festivus-style Airing of Grievances about the venue.  I live a couple of blocks from the venue and other than an occasional bit of noise haven’t had any complaints about the venue or patrons.  My thoughts generally align with this piece by Jeff Terich of CityBeat.

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.

Eventbrite Infographic from January 8, 2015 – https://www.eventbrite.com/blog/infographic-how-much-do-people-spend-on-a-night-out-in-san-francisco-ds00/

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.

Observatory North Park with throngs of attendees waiting to enter, taken 7/19/2017.