San Diego Becomes the Latest City to Crack Down on Home-Sharing

by Christina Sandefur
July 18, 2018

Bad news for San Diego homeowners and tourists alike: The City Council just imposed strict regulations on home-sharing, limiting the properties a homeowner can rent short-term to that person’s primary residence and one additional unit on the same property as the primary residence. In other words, if an individual or business owns more than one property in San Diego, or if they live outside of the city, they will be prohibited from using those homes for short-term rentals.

These regulations are similar to—but even stricter than—those imposed by the city of Seattle, which voted to limit the number of homes a person can rent short-term to their primary residence plus two additional properties. If an individual or business owns more than three properties, they will be prohibited from using them for short-term rentals. Last month, we filed a legal challenge against the anti-home-sharing law in Seattle, and against Miami Beach and Pacific Grove, California. In each case, we’re standing up for homeowners who had been renting their homes responsibly but fell victim to the misguided war on home-sharing that city officials are waging coast to coast.

Like Seattle, San Diego officials claim these restrictions are necessary to increase the supply of affordable housing in the city. But the blame for unaffordable housing belongs with city officials, not with homeowners who decide what to do with their property. California’s cities are making it prohibitively difficult to construct new housing by imposing burdensome regulations, delays, and costs whenever a developer seeks permission to build. For example, Federal Judge Charles Breyer ruled in 2014 that in San Francisco, “the limited supply—and correspondingly high price—of rental units” was the result of “structural decisions made by the City long ago in the management of its housing stock.” A 2016 report from the National Association of Home Builders showed a 30 percent increase in the cost of complying with regulations over the course of just five years.

In fact, rather than exacerbating the cost of housing, home-sharing often helps California homeowners cover their mortgages in the face of soaring housing costs. For example, Airbnb reports that 13 percent of its Los Angeles hosts would have lost their homes through foreclosure without the extra income they earned from home-sharing.

If officials can use the excuse of lack of affordable housing to prohibit homeowners from deciding when and whether to allow guests in their homes, how far does this logic extend? Essentially, officials in San Diego and Seattle are arguing that the government should be allowed take away someone’s property rights—to prevent homeowners from using their property as they see fit—in order to artificially decrease the price of homes. Presumably, officials could make property virtually free if they impose rules to make it unattractive and unusable.

Home-sharing doesn’t just help homeowners earn money to keep their homes or pay their bills. It benefits the whole neighborhood, especially in cities like San Diego, where tourism drives the local economy and breeds new business opportunities for local residents. Home-sharing also helps alleviate cost and provide additional lodging options when visitors flock the city for major events like ComicCon and Pride Festival. And home-sharing properties pay the taxes that fund schools, emergency and community services, and infrastructure improvements. San Diego Councilmember Chris Cate voted against the anti-home-sharing measure because he worried the new regulations will “result in the loss in millions of dollars in revenue that funds public safety officers and the repairing of city streets.”

Perhaps that’s why California voters from Palm Springs to San Francisco have rejected similar anti-home-sharing proposals in their cities.

Rather than focusing on alleviating actual nuisances, blanket bans or regulations that target home-sharing are unfair and unconstitutional, punishing people who responsibly rent their homes or have made home-sharing their livelihood. The Goldwater Institute will continue to fight these discriminatory and overreaching regulations that limit choices, hinder tourism, and deprive homeowners of the right to use their property as they see fit.

Christina Sandefur is the Executive Vice President at the Goldwater Institute.