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.
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.
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.
Thanks to a request from the Mid-City Parking District a number of streets in North Park will likely soon be converted from parallel on-street free parking to head-in on-street free parking. The following list of requested changes will result in an increase of 254 parking spaces, using more of our public land to store empty automobiles. The proposed changes were discussed at the March meeting of the North Park Planning Public Facilities and Transportation Subcommittee – minutes including discussion can be found here. The proposed changes are on the agenda for the North Park Planning Committee consent agenda for Tuesday, April 17.
The proposed changes are spread across a large section of North Park, but the stretch of 29th Street is particularly interesting to me. 29th Street is the site of the North Park Parking Garage – a 100% taxpayer funded parking garage with low rates that rarely breaks even (and in the most recent year likely lost money due to popularity of biking, walking, and Uber / Lyft – financials aren’t yet out to verify performance). Here’s a map of the blocks of 29th Street and cross streets proposed to be converted to head-in parking (identified in red).
There are a number of reasons to oppose these conversions:
Climate change and health – Increasing automobile parking runs counter to the city’s Climate Action Plan goals to move mode share away from automobiles. Bringing (and parking) more cars in North Park brings more air and noise pollution to the neighborhood, in addition to the potential fatalities and injuries that are common from automobile use. Giving away even more of our public realm to parking is a bad idea. Increasing and encouraging more automobiles in North Park also runs counter to the promotion of the area as a walkable neighborhood. At a time when bike-share, scooter-share, and ride-share options are plentiful and increasing we shouldn’t be increasing the amount of parking for private vehicles.
Aesthetics and safety – This stretch of 29th Street is full of beautiful Craftsman homes. The average age of the homes on the block is around 90 years old. Parallel parking creates a standard car edge so visibility down the street for pedestrians, drivers, and residents is clear. Head-in parking creates large variances (think of an extended cab pick-up, which are for some reason incredibly popular in San Diego despite the urban environment lacking steers and I-beams to carry around, parked next to a small sedan). Pulling in and out becomes more dangerous for those traversing the street. Additionally, the headlights from the vehicles at night are aimed directly into homes which are mostly at street level. I can’t imagine most residents would enjoy the additional lighting from the street.
Unneeded and counter-productive– Most of the houses on these streets already have off-street parking, many have full length driveways and garages. The housing density (number of residents per unit) is almost certainly less than it was 50 years ago, as the average American household size has fallen almost by half. If the housing is nearly a century old and the households are smaller than they have been in the past it seems unlikely that residents are clamoring for more parking on the street to bring in more traffic and noise.
Here’s a photo gallery of each block of 29th Street to get a sense of the housing and parking. The street is very wide but as you can see, there is hardly a lack of parking although this may vary according to time of day.
Perhaps the worst bit of all is residents have basically no say in this process. The parking changes were requested by a parking agency and I don’t believe any residents of any of these streets were part of the application – apparently the mission of parking agencies are to maximize the amount of parking for vehicles. Residents will have a chance to respond negatively to the proposals, a written notice will be sent out. Who does the notice go to – property owners or residents? (Not sure.) Are the mailings certified delivery to ensure receipt by intended recipients? (Guessing no.) Even if the letters are addressed properly, and received what are the odds they are read or understood? (Not likely.) The standard to oppose is that a majority, more than 50%, of the notices sent out must be returned in opposition. If you’ve ever done a survey or mail response campaign you probably understand there is essentially zero chance of ever seeing a 50% response rate to any issue.
If there is demand from the residents on the impacted streets then an Opt-In approach would pass with flying colors. I suspect that there is not support from the residents given the above many reasons this is a bad idea. In either case, I believe the North Park Planning Committee has discretion on this matter to evaluate as they deem most appropriate. I hope they’ll opt to consider the impacts of yet more automobile-focused use of our land in this urban environment and reject this proposal to bring yet more traffic and parking and associated ills to the area. For reference, here’s the evaluation policy for this sort of proposal.
In addition to this conversion being a bad idea there are better options for the excess roadway that does exist. Some of those better options are:
Reduce the road width and increase the size of the housing parcels (increase the public right-of-way usable by property owner) – this would increase home values and the tax base, bringing in funds via property taxes, and allow for planting of trees or other use.
Install a bike lane to enable more residents to bike to work or school.
Do nothing. The status quo, although mostly a vista of asphalt, has real potential and we shouldn’t discard it for more unneeded free parking. Not to mention that once granted it is very difficult to repurpose parking area to other uses, as recent debates in Hillcrest and elsewhere have underscored.
My favorite – Dreaming big I’d love to see Balboa Park connected to the new North Park Mini-Park, located at 29th Street and North Park Way via a beautiful greenscape. My proposal would greatly reduce the street size of both 29th Street and Granada Avenue to something like below – going from 54 feet of street space to 16 feet (paired one-way streets, one North-bound and one South-bound with one side of parking) and adding 19 feet of green space to either side of the two streets. That’s a lot of additional greenery, quieter roads, and an increase in parking on each lot of one space per driveway. (Although I would guess many residents would do as they currently do and opt for more productive uses of their land than parking vehicles and utilize for gardens, play areas, chicken coops, hop scotch, and other options.)
If you have an opinion on this proposal you can attend the North Park Planning Committee Hearing on 4/17 or contact the group via email at email@example.com. Additionally, on my street – Granada Avenue – I’ll be working with the other residents to proactively state our opposition to this sort of conversion. You can consider doing the same as it seems likely the many over-sized roadways in San Diego will likely follow 29th Street in becoming a parker’s paradise.
The press release at bottom is from the U.S. Attorney office in San Diego – apparently the Department of Justice took up a complaint that the mobile ticket purchasing option for MTS, Compass Cloud, did not allow for users to purchase senior, disabled, or Medicare tickets on the platform. MTS has agreed to allow for these options.
It’s not surprising after MTS trailed other cities / regions in allowing for mobile or electronic tickets and still does not have a transfer system (effectively doubling the price for any trip that requires more than one bus line). Hopefully this step will spur further moment on making it easy and convenient to use the public transport system in San Diego.
OFFICE OF THE UNITED STATES ATTORNEY
SOUTHERN DISTRICT OF CALIFORNIA
San Diego, California
United States Attorney
Adam L. Braverman
For Further Information, Contact:
Assistant U. S. Attorney Dylan M. Aste (619) 546-7621
For Immediate Release
San Diego Metropolitan Transit System Agrees to Improve Accessibility
NEWS RELEASE SUMMARY – April 16, 2018
SAN DIEGO – The San Diego Metropolitan Transit System (MTS) and the North County Transit District (NCTD) have agreed with the Department of Justice to address accessibility issues regarding the purchase of public transportation tickets on their mobile app named Compass Cloud. Completion of these steps will provide equal accessibility to public transportation riders and bring MTS and NCTD into compliance with the Americans with Disabilities Act (ADA).
MTS and NCTD offer Senior/Disabled/Medicare (S/D/M) tickets at a variety of locations (e.g., ticket vending machines) to qualified riders at a reduced rate. The Compass Cloud app allows users to purchase trolley, bus, and other transportation tickets. The Department of Justice received a complaint alleging that Compass Cloud did not include the option to purchase S/D/M tickets.
The United States Attorney’s Office for the Southern District of California opened an investigation into whether Compass Cloud met the ADA accessibility requirements. The United States Attorney’s Office determined that Compass Cloud provided an option to purchase standard tickets, but it did not provide an option to purchase corresponding S/D/M tickets that were otherwise offered. MTS and NCTD fully cooperated during the investigation and agreed to update Compass Cloud by April 30, 2018, to provide equal accessibility to all passengers.
“All public transportation riders must be provided with equal opportunity and accessibility,” said U.S. Attorney Adam L. Braverman. “We are pleased that the San Diego Metropolitan Transit System and the North County Transit District fully cooperated and agreed to quickly update Compass Cloud to accommodate all riders.”
This matter was handled by Assistant U.S. Attorney Dylan M. Aste of the Affirmative Civil Enforcement Unit, U.S. Attorney’s Office for the Southern District of California.
Additional information about the ADA can be found at www.ada.gov, or by calling the Department of Justice’s toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY).
Formally known as the Shift “Next Level Apartments” this recently erected building in the East Village portion of Downtown San Diego looks like it was designed for a video game. The colors and the odd angles and shapes throughout feel so strongly like they stepped out of an early Halo game or something similar.
The building is bounded by 15th Street and 16th Street as well as J Street and K Street, a full city block. Will be interesting to see it fully tenanted and up and running – the street scene in East Village continues to ramp up in a major way. The units are priced from $1700 – $4500 although the available units ranged from $2795 for a 1 bedroom, 1 bathroom to $3920 for a 2 bedroom, 2 bathroom.
One of my favorite websites is the fantastic Mr. Money Moustache (MMM). This website and the book Early Retirement Extreme (ERE) by Jacob Lund Fisker caught my attention a few years ago and the concept of financial independence has been stuck in my head ever since. There are a number of great podcasts, books, and articles, on the topic and the “FIRE” movement (financial independence / early retirement) has grown into a semi-mainstream concept.
The biggest lesson I took from MMM and ERE is the impact that a person’s savings rate has on the ability to grow wealth. The flip side to the savings rate is the consumption rate – together they equal 100% of earnings. The money you earn is either spent and disbursed to another party via consumption – the pizza place, daycare, car payments, etc. – or it is kept and accrued in your accounts – savings, investment account, real estate, etc.
The impact of the consumption / savings rate is laid out most excellently in this post from MMM:
I decided to take a stab at making a simple calculation along the same lines – using a few basic inputs to see the time required to create a “Passive Income Symbiote”. The goal is to create a passive stream of income equivalent to gross earnings – to entirely replace wage earnings with passive income. If you can live on what you currently earn then it’s easy to imagine living on that same amount, but with all of your time free to use as desired. I chose the word symbiote with the idea that the goal is to have the Passive Income Symbiote be the “host” and the person becomes the “parasite”, living on the efforts of the host.
The basic elements for the calculation (spreadsheet attached, feel free to use and share if you like) are:
Income / earnings – how much you make
Consumption rate – how much of your earnings you spend
Return on investments – what you earn on your savings
Earnings increase – if you expect an annual raise, how much it is
Earnings increase spent – how much of any earnings increase you spend (also known as lifestyle inflation)
Many of these factors are hard to change or controlled by outside forces – bosses, annual evaluations, how the stock market performs – the spending / saving ratio is the factor easiest to quickly adjust. It’s also the factor that has the most impact on the time required to fully fund a PI Symbiote. I’ve included some suggested ranges for items like return on investments and annual earnings increase. There’s a relative limit on some items and I’ve tried to based the suggested ranges on my perception of those general limits. (You might get a 100% raise at your job but it’s more likely to be a moderate increase of 3-5%, for example.)
Good luck on your journey and creating your own pet Symbiote. Cheers!
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:
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.
Property taxes are typically described as a wealth tax – they are taxes levied on assets held rather than transactional taxes like income taxes (applied to wages as earned) or sales taxes (applied to goods when purchased). Property taxes are applied to the same property each year.
Back in 1978 Proposition 13 was passed in California to place a limit on property tax increases. Per Wikipedia, Section 1. (a) of Proposition 13: “The maximum amount of any ad valorem tax on real property shall not exceed one percent (1%) of the full cash value of such property. The one percent (1%) tax to be collected by the counties and apportioned according to law to the districts within the counties.”
Proposition 13 also placed some rules on how the value of a property is assessed or re-assessed. Again, per Wikipedia: “Proposition 13 declared property taxes were to be assessed their 1975 value and restricted annual increases of the tax to an inflation factor, not to exceed 2% per year. A reassessment of the property tax can only be made a) when the property ownership changes or b) there is construction done.”
I was curious about the impact of Prop 13 on property taxes in San Diego after seeing some listings on Redfin and Zillow that had astoundingly low property taxes. For example, the Banker’s Hill property shown below, currently for sale for $1,697,955, carries an annual property tax levy of $136.97. That effective tax rate of .008% is far below the 1% established under Proposition 13.
I decided to take a look at the property values and property taxes on my block in North Park. The houses are all pretty similar (outside of one empty lot that was purchased by a local church and razed for a small and scarcely used parking lot). Below are the property values (per Zillow Zestimate) and property taxes paid (per San Diego County Treasurer website). I’ve listed all the properties on both sides of the street but removed the addresses for privacy reasons.
Despite the homes on the block having pretty similar property values the amount of taxes paid and effective tax rate vary quite a bit. I found it interesting to see the differences in a very small area of town summarized together.
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.