The VRBO screeenshot above is of a Coronado home advertised by its owner on the website VRBO. According to the website it is available for rent the week of July 24-31 for $5,600, based on an advertised minimum stay of 7 nights, plus a refundable damage deposit of $2,500. In the advertisement its owner states, ” I have lived in Coronado the past 19 years and have rented out this home for the past 6 years on another website.”
Opportunities abound on the internet for short-term rentals in Coronado. The vacation rental sites contain dozens of properties for rent in Coronado. There is something for virtually every pocket book. Many of the properties can be rented for as little as one night while others set minimum stays of from four nights to a week.
One of the most popular sites, airbnb, lists a studio apartment in the Coronado Bay Club with a one night minimum and a daily rate of $250. Another property, with a one night minimum, is a “fully furnished 450 square foot 1BD/1BR guest house with a kitchenette available for rent in charming and quiet neighborhood close to ferry landing.” At the other end of spectrum is a house on the bay that can be rented by the week for $14,000. Its advertisement states, “live in the Coronado dream location spectacular panoramic San Diego Bay and Downtown views This private home is designed for gracious and spacious enjoyment shopping, restaurants, bay walk and ferry are all in very close proximity.” Another well-known site, VRBO states the residence on Sixth Street is available for rent by the week. The site quoted a price of $6,000 for the week of July 24-31 plus a refundable damage deposit of $3,000.
Other sites including tripping.com and HomeAway.com listed an “apartment in Coronado village” and a condominium in the Coronado Shores, respectively, both of which are advertised as being available for the week of July 24.
The only trouble is that all of these offers are illegal. Coronado’s Municipal Code Section 86.78 states that no dwelling or habitable unit in any residential zone, with some very specific exceptions, shall be used as a transient rental. It goes on to define “transient rental” to mean the renting, billeting, subletting, leasing, or subleasing of a dwelling unit or habitable unit for “transient occupancy,” which is defined as the right to use, occupy or possess, or the use, occupancy, or possession of a dwelling unit or habitable unit for a period of 25 consecutive days or less. The bottom line is that you cannot rent your house, condominium, apartment, or guest house for a period of less than 26 consecutive days. Further, Assistant City Manager Tom Ritter has indicated that a room or portion of a residence is considered a “habitable unit” and therefore cannot be rented for less than 26 consecutive days.
The rationale for the city ordinance, which has been on the books for well over two decades and was reaffirmed by the City Council in 2010, is twofold. Reminders routinely published by the city to educate residents about the prohibition against short-term rentals state, “The purpose of the City’s prohibition of short-term rentals in a residential zone is to preserve the quality of life for full time residents and to maintain the residential character of local neighborhoods. Short term rentals often create intensified use that brings excessive vehicles, noise, and turnover of people in a residential home or condo that disrupts the livability of the neighborhood.” City notices also explain the other reason for the ordinance as follows, “The City of Coronado has 14 hotels with approximately 1,900 rooms, where vacationers are encouraged to rent for as few or as many days as they wish. Hotels and motels in town are required to pay a hotel tax and meet licensing, safety and liability requirements when renting rooms. Homeowners do not pay a hotel tax, nor do they meet licensing, safety and liability requirements, which gives them an advantage over those who are in a properly zoned area and are legally allowed to rent on a short-term basis.” The hotel tax in Coronado, known as the Transient Occupancy Tax (TOT), is 10 percent of the room rate.
The City Council strongly supports the ban on short-term rentals. In the words of Mayor Casey Tanaka, “I support the current ordinance because it helps to protect our residents from having impromptu hotels popping up in their neighborhoods. People deserve as much peace and quiet as we can reasonably provide My only chagrin is that this is one more thing that requires enforcement vigilance.” Councilman Mike Woiwode echoed Mayor Tanaka’s sentiment when he stated, “I have been supportive of our city’s policy on rentals; and of any and all the steps necessary to enforce those. I believe that short term vacation rentals change the quality of residential neighborhoods for the worse. In fact, [I have] spoken to a San Diego homeowners’ meeting to explain to them what our city’s policy is. I’ve also had conversations with several San Diego City Councilmembers about the topic. As I’m sure you’ve read, San Diego is struggling with the creation of policy on short term vacation rentals. In fact it’s really a worldwide issue, a manifestation of the emerging sharing economy, made viable by websites. I’m glad our city had a policy in place before such sites became ubiquitous. My desire would be to do all we can to shut down short term vacation rentals in Coronado.”
Councilman Sandke has a unique perspective on the subject because he and his family have rented out their home for the month of July since 2008. He noted, “We carefully screen our tenants and expect them to respect our home, our neighbors and our neighborhood. We check in with our neighbors during the rental term and ask to be notified of any issues. On the other end of the spectrum, across the street from my parents’ home in the Country Club area an owner has many times rented on a short term basis to noisy and disruptive tenants who litter the street, are loud late into the night and have necessitated police visits.” In response to the question of whether the city could do more to encourage compliance, he said, “I suggested yes during the campaign a[nd] was soundly berated by an owner who cited the financial security of he and his family depended upon such rentals and I should stay focused on more important issues.” Councilman Sandke went on to say, “On the contrary, a fundamental duty of city government is rightfully the preservation of our unique neighborhoods and quality of life. Where rentals, illegal or otherwise, create issues of noise or other disturbances that undermine our neighborhoods there should be action.” He also noted, “Additionally, competition with legitimate operating lodging establishments and the resulting avoidance of TOT payment also plays into this issue. Our city enjoys a great deal of additional resources that make our town the great place it is through the approximately 13 million in TOT paid annually. Add to that the over 3 million in sales tax, predominantly food establishments large and small, and you begin to see how city services are impacted by tourism.”
Councilwoman Carrie Downey expressed her support for the city’s ordinance stating that renting for “shorter than 26 days creates a hotel feel in a residential area.” She believes that the consequences of violating the ordinance are adequate, but would be willing to revisit them if necessary, adding that she is “happy with the balance that the ordinance [has] created.” She noted that the hotels in Coronado are sensitive to the issue, monitor the websites, and report violations to the city.
Councilman Richard Bailey did not respond to questions about his views on the city’s prohibition on short-term rentals.
Historically the city has been reactive in addressing the issue of short-term rentals, responding when it received a complaint from a resident. Starting last year the city began to proactively enforce the prohibition on short-term rentals. It has begun to contact property owners who advertise short-term rentals. If a property owner does not modify its advertisement to comply with the city’s ordinance, the case is turned over to the City Attorney for further investigation and potential prosecution. Mayor Casey Tanaka stated that the city “will be assigning someone the task of monitoring and contacting people using VRBO, airbnb, and such. The proactive enforcement envisioned will include contacting people who are renting out on a short term basis in violation of an ordinance, and potentially hauling people into court if they refuse to comply with our rules.”
The consequences of violating the city ordinance banning short-term rentals can be costly. In the words of the Assistant City Manager, “It can result in significant civil penalties, court costs and attorney fees, and possible IRS penalties repeat offenders can be held in contempt of court which can result in additional fines or penalties at the discretion of the court.” He added that the City has successfully prosecuted three property owners who failed to comply with the ordinance. In response to whether he considered the penalties to be adequate, Mayor Tanaka said, “I think the penalties are adequate, but I am no opposed to reviewing them if the City Council so desires.”
Residents can report suspected violators of the ban on short-term rentals to the city at [email protected]. Also, residents can simply call the City Manager’s office at 619-522-7335 and indicate that they would like to make a complaint. Helpful information to report is the move-in and move-out dates of the short-term renters and other potential information such as excessive noise, vehicles, and occupants as a result of the short term rental. It is the city’s policy not to reveal the names of complaining parties.
This is the first of two articles on this subject. The second will address the impact of websites like airbnb on short-term rentals and how cities across the country are responding. It will also describe the restrictions on short-term rentals in other beach communities and how these jurisdictions are dealing with the issue. In his responses to questions about Coronado’s ordinance Councilman Sandke noted, “The city of San Diego is entering an agreement to collect and remit TOT from the airbnb website. Perhaps VRBO, another popular site, will be next and this presents an interesting proposition for our city to explore.”
John Tato
Staff Writer
