On July 10, California State Assemblymember Tasha Boerner Horvath announced that she pulled her bill AB 1731 from further consideration in the State Senate. The bill was met with strong opposition from a number of groups, including the Greater San Diego Association of REALTORS® (SDAR) and California Association of REALTORS® (C.A.R.). AB 1731, which targeted only San Diego area short term vacation rentals for new regulations, is now a two-year bill. Meaning, it's likely to receive further consideration next year.
About AB 1731
AB 1731 would restrict short term rental platforms (VRBO, Airbnb, HomeAway, etc.) from making a home available as a short-term rental for more than 30 days per year, unless the primary resident lives onsite full-time. These regulations would only apply to properties in San Diego County’s coastal zone.
Additional information can be found here.
C.A.R. opposes AB 1731 (Boerner Horvath) because the bill “would undermine the Coastal Act by severely limiting the availability of lower cost short-term rental housing located within the coastal zone in San Diego County by, among other things, prohibiting a hosting platform from making a property available as a short-term rental for more than 30 days per year. Cities located within the coastal zone in San Diego County that are interested in enacting regulations related to short-term rental housing should be encouraged to continue working with the California Coastal Commission on these matters.”
The Greater San Diego Association of REALTORS® (SDAR) opposes AB 1731 and maintains that a majority of the issues created by short term rentals are due to a lack of enforcement by the city. Instead of this bill, we should be working to allocate taxes and fees collected from short term rentals – of which amount to millions of dollars annually to our region - to hire additional code enforcement officers and/or police dedicated to enforcing noise, parking, trash and other codes meant to protect the character of our communities and safety of our families. This approach will allow us to effectively target bad actors while protecting the private property rights of homeowners who choose to participate in the short-term rental market in an appropriate and lawful manner.
Additional Concerns with AB 1731
AB 1731 would do nothing to reduce concerns over public safety and community character. Often cited as the primary source of frustration with short-term vacation rentals is the lack of enforcement over existing codes, such as noise violations. AB 1731 fails to allocate any resources toward enforcement that could address these concerns.
AB 1731 risks making effective regulation more difficult. One of the glaring issues with AB 1731 is that it doesn’t actually prevent non-resident property owners from participating year-round in the short-term vacation rental market. Instead, the bill only limits the amount of days per platform. In fact, according to an analysis by the California State Senate Judiciary Committee:
As some opponents of the bill have also pointed out, there is another possible method by which non-resident property owners could still engage in year-round, short-term rentals, in spite of the bill’s restrictions: they can platform hop. In other words, a nonresident owner can book 30 days of short-term rental on Airbnb, 30 days on VRBO, 30 days on FlipKey, 30 days on Homeaway,7 and so on, thereby circumventing the intent behind the bill. In addition, of course, non-resident property owners could resort to other mechanisms for renting out their properties on a short-term basis, such as an individual website for the property, or a website that does not seem to meet the definition of a hosting platform, such as Craigslist.
(California State Senate Judiciary Committee, 2019, p. 8)
The likely result of this “platform hopping” option is that countless new platforms will enter the market as property owners are forced to look for alternative sites. This will only make regulating the industry more difficult and increase the likelihood of underground participants who refuse to comply with regulations, such as collecting and remitting TOT taxes and related fees.
AB 1731 Conflicts with existing local regulations. Several of San Diego County’s coastal cities have already adopted regulations that meet the unique needs of their coastal communities. According to an analysis by the California State Senate Committee on Natural Resources and Water:
In San Diego County, the cities of Solana Beach, Oceanside, Del Mar, Carlsbad, Encinitas, Coronado, and Imperial Beach have vacation rental ordinances. Of these, Del Mar is in litigation, Oceanside is opposed to this bill, and Imperial Beach is in support. There is general agreement that this bill conflicts with those ordinances, although the author’s view is that the bill regulates platforms, not local governments. That said, the limitations on platforms in the bill are more restrictive than some aspects of some of these local ordinances. Solana Beach’s staff report noted a potential loss of $520,000 in TOT revenue, although the city has no position on the bill.
(California State Senate Committee on Natural Resources and Water, 2019, p. 5)
Additional updates will be provided should this proposal receive further consideration by the California State Legislature.