Saturday, April 11, 2015

Short Term Rentals and the Sharing Economy

Single family housing that used for short-term vacation rentals through web services such as Airbnb or VRBO have gotten negative attention here in San Diego of late.  Even though the complainants point to specific behaviors they dislike, the underlying tone of the discussion is that they don't like the sort of people who come America's Finest City to vacation.  I am probably not going to persuade those folks, because their argument is rooted in emotionalism to which they will not admit.  For the rest of us who realize that sometimes real problems arise from short term rentals, I think we need to propose a light regulatory touch that purges the worst abuses.  Technology, primarily the internet, is lowering the cost of bringing underutilized assets to market, whether its vehicles, homes or spare CPU cycles on our computers; these assets can return rents to the owners.  Unfortunately, we have a tax and regulatory environment that doesn't address the mixed use of assets very well.

I have engaged with a number of people on this issue and the key complaints can be boiled down to bad behavior by the renters, to include late night loud parties, not cleaning up trash and boorish behavior.  The answer is to hold the owners accountable, who can the hold the guests accountable.  Just as owners are rated on airbnb, so are guests.  Guests whose behavior threatens owners with loss of income will give guests bad reviews which in turn create a disincentive for the bad behavior.  For serious violations one might have to call the police, but that is always true.  In the past three years, I have had the police in my neighborhood in force on two different occasions that had nothing to do with short term rentals; there aren't any guarantees in life.

Consider this scenario. Two sets of parents from Fresno have students attending San Diego State. They want to visit their kids over a long weekend, enjoying a bit of San Diego, and also bringing a bit of home to their kids. By sharing a home, they keep down expenses, it costs less than renting three hotel rooms. They can also make their stay cheaper by buying groceries instead of going to restaurants and cooking them in the furnished house. They can relax more freely in the home atmosphere provided by the short term rental.

A policy of restricting short term rentals denies them this opportunity. Do we think that only the well off should visit our city? Wouldn't we want to welcome these fine folks to our city? This is why I would like to see a light and even-handed regulation of short-term rentals. It can be a source of joy for so many guests in our city.

Consider this too, people are having a hard time making ends meet.  Renting out their home helps.  "Elise Howell, who lives off a small pension and about $11,000 a year from substitute teaching, says she depends heavily on the money she makes from renting out a room in her two-bedroom Hillcrest condo for up to $79 a night."

In a 2007 analysis of the issue, the City Attorney stated that current regulations do not prohibit short term rentals.  However, the San Diego Vacation Rentals Manager's Alliance notes that owners who rent out room short term must collect the Total Occupancy Tax of 10.5%.  This is the position of the City Treasurer's office as reported in the U-T.

If the city is going to regulate short term rentals, I look forward to minimal regulations that allow neighbors to identify abusers, but allow owners to use their property as they see fit.  We should set a level playing field and welcome the additional visitors to America's Finest City.

Council Member Lorie Zapf (CD-2) recently posted proposed regulations that looked reasonable to me.  The key points were:

 Define the term “Short-term Vacation Rental” in the Municipal Code.
 Require a renewable permit for the operation of any short-term vacation rental city-wide.
 Determine permit fees that are cost recoverable and will be used towards the management and enforcement of the permit.
 Require a posted 24/7 contact with a name and phone number on the property as part of the permit.
 Enforcement process that includes fines and revocation of permit for repeat violators.
 Identify additional funding for the Community-Assisted Party Program (CAPP) to respond to citizen complaints.
 Require TOT collection and payment from short-term vacation rental hosts per Municipal Code. 
While this might lead to possible abuse by disgruntled neighbors, these proposals seem reasonable to solving the supposed problems of short term rentals.

Saturday, March 21, 2015

Let's #racetogether for Racism

I am sure you have heard of Starbucks' ridiculous effort to show that they're contributing to moving America forward on the issue of race, with a hashtag #racetogether. Of course, this effort will be heavily lampooned, see Iowahawk's entry for starters. (By the way, how is the #BringBackOurGirls hashtag working out?)  However, I wanted to take on the issue head-on.

The real purpose behind efforts such as Starbucks' #racetogether is to delegitimize white people's voices, by continuously hectoring them over their supposed ongoing racism. Well, besides being an effort in colossal corporate ass-covering, just in case someone notices that all those baristas are persons of pallor, if you will.  Because this "conversation" is targeted at a specific racial group, in this case, whites, it is fundamentally racist. There is never any legitimate reason for racism. This is true whether the racism is practiced on behalf of the perceived victims or the perceived oppressors.  

Ultimately, the thought process behind the Starbucks campaign is illegitimate. It assumes a viewpoint on the part of the white customers. It doesn't treat them as individuals. In our society, we descend from a tradition where our rights accrue to us as individuals, we expect to be treated as individuals and we expect to be held accountable for our actions as individuals, not as members of a race. So when you are all given your Starbucks coffee cup emblazoned with #racetogether, if you haven't boycotted them already, you should ask:
"What makes you think I'm racist?"


Friday, March 6, 2015

The Chargers Must Leave San Diego

Qualcomm Stadium By Intersofia at en.wikipedia [CC BY-SA 2.0], from Wikimedia Commons

As long as the voters of San Diego are willing to punish politicians for subsidizing a new Chargers stadium, or as long as the law is interpreted that such subsidies require a public vote, there is no way that the Chargers can remain in San Diego for much longer. Numerous studies have shown that the value of a football stadium to a city is never more than the amount of money plowed into subsidies, so there will never be a viable economic argument for a new stadium, and I think San Diegans understand that. See Pacific-Standard for a great summary of the issue in general in America.
. . . from 2001 to 2010, 50 new sports facilities were opened, receiving $130 million more, on average, than those opened in the preceding decade. (All figures from Long’s book adjusted for 2010 dollars.) In the 1990s, the average public cost for a new facility was estimated at $142 million, but by the end of the 2000s, that figure jumped to $241 million: an increase of 70 percent.
. . .
Due to these oversights, Long calculates that economists have been underestimating public subsidies for sports facilities by 25 percent, raising the figure to $259 million per facility in operation during the 2010 season.
This only leaves emotional arguments about the value to the city of being in the "big leagues."  However,  even with the Chargers threatening to leave, the latest polls indicate that the public is unwilling to subsidize the team to stay in San Diego, with 54% disapproving of using tax dollars to keep the Chargers.

However, the situation is also unfair from the Spanos family's viewpoint. Other cities are willing to subsidize their football teams with money for stadiums, so San Diegans attitude puts the Spanos' Charger team at a competitive disadvantage. They have to compete against teams in larger markets who are playing on subsidized ballfields. The interest on loans to build a stadium is money not available to pay players salaries.  If the Chargers are a business, then they would be crazy not to look to move to a location where subsidies drive down their costs.  Ultimately, the business with the higher cost goes bust.  In the NFL, this would mean never being in contention and slowly losing your fan base.  Also, if the Chargers aren't going to receive subsidies, then moving to a larger market and sharing the costs of a stadium with the Raiders in Carson is still better than footing the bill alone in San Diego.

The real problem is that politicians in most other states and cities are willing to ignore public opinion and provide tax payer funding to professional sports franchises.  They do so, even when the public votes against ballot measures, like in Pittsburgh.  In such an environment, the only way to win is not to play the game.  But it means the Chargers have to go.

Thursday, February 12, 2015

Water Conservation Hypocrisy

This lake near San Luis Obispo, California barely contains any water following a several year drought.  Photo courtesy U.S. Dept. of Agriculture.


The ever helpful nanny state types have invaded my neighborhood app, called Next Door, with tips about saving water.  Of course, there was no discussion about why we don't have any water and why agriculture is dying in California.  Since the hypocritical nanny-staters didn't allow me to comment on their post, I am responding here.


I muted the discussion topic "Waste No Water" because they closed any discussion of their post. The fact is that California is suffering more from this drought because of the stupidity of past kowtowing to the environmental movement that killed reservoir projects. Victor Davis Hanson has a great  summary on the The City Journal web site.

Just as California’s freeways were designed to grow to meet increased traffic, the state’s vast water projects were engineered to expand with the population. Many assumed that the state would finish planned additions to the California State Water Project and its ancillaries. But in the 1960s and early 1970s, no one anticipated that the then-nascent environmental movement would one day go to court to stop most new dam construction, including the 14,000-acre Sites Reservoir on the Sacramento River near Maxwell; the Los Banos Grandes facility, along a section of the California Aqueduct in Merced County; and the Temperance Flat Reservoir, above Millerton Lake north of Fresno. Had the gigantic Klamath River diversion project not likewise been canceled in the 1970s, the resulting Aw Paw reservoir would have been the state’s largest man-made reservoir. At two-thirds the size of Lake Mead, it might have stored 15 million acre-feet of water, enough to supply San Francisco for 30 years. California’s water-storage capacity would be nearly double what it is today had these plans come to fruition.

If these groups so concerned about the drought's effects would work to increase the state's reservoir capacity I might not ignore them for their hypocrisy. I have cut back my water usage by over 40%, but the state is killing jobs by not reserving water for farms and industry. I don't think the state can thrive without agriculture.

Tuesday, February 10, 2015

San Diego Planning Follies

From the U-T:

The City Council voted 6-3 on Monday to reject plans to build three homes on the Jessop estate in Point Loma, adding to the single one built in 1926.
. . .
"When you have properties this big, you shouldn't be putting the houses 12 feet apart," said Council President Sherri Lightner, adding that the design would make firefighting difficult. "I have grave concerns about public safety."
Councilwoman Lorie Zapf, whose district includes Point Loma, said she could support adding­ development to the site, but not this particular proposal for La Crescentia Drive because of the locations of the new homes.
Monday's council vote was actually in favor of a res­ident's appeal of the Planning Commission’s approval of the proposed subdivision last June.
. . .
The owner of the property, Carolyn Kutzke, has been trying for several years to develop it.

The OBRag has more background on the story.  Apparently, there were 700 signatures on a petition to overturn the planning commission vote.  I think that Carolyn Kutzke should sue under the takings clause of the U.S. Constitution if she is not given a way ahead to develop her 1.5 acre property.

I hope that the city council is as fearful of resident's dismay when they vote on jamming dense development into the Morena district.  I am sure there will be far more than 700 people willing to sign a petition.  In the meantime, the council approved the path ahead to change the Bay Park community plan bypassing an update of the entire community plan.  This is a process foul that didn't go unnoticed by RaiseTheBalloon:
While we appreciate that the city threw out the original timeline to complete the Morena Blvd Area Specific Plan and replaced it with a more reasonable one, Raise the Balloon and residents of our community have made a formal protestation of the City’s attempt to change/amend our community plan through the Morena Blvd Station Area Specific Plan instead of updating our ENTIRE plan through the process of a comprehensive community plan update (CPU).
Meanwhile, all that money that the city collects from developers to make your neighborhood better?  It's not getting spent.  Apparently $78 million isn't enough cash to start a real project.  From the U-T watchdog:

Developers have paid more than $157 million in impact fees since San Diego approved the charges on new construction in the 1980s, and despite a litany of needs the city has spent only half the money, budget records show.
The money was collected from builders in some of San Diego’s oldest neighborhoods, with the idea that they should contribute to community needs such as parks and fire stations. Much of the money has remained in the bank for years while city planners save up for projects or figure out how it should be spent.
In the downtown district alone, the city has assembled $25 million. The city has not completed an impact fee-funded project in that area in more than 10 years, although officials have spent more than $400,000 of the funds on administration.
Citywide, $78 million of the money collected so far has not been spent, as of June 2014, the most recent accounting available.
Creative way to waste tax dollars? Don't spend it.

Thursday, January 29, 2015

Short Term Rental Issue in San Diego

There is a petition on change.org asking the mayor and the city Council to ban short-term rentals in the city of San Diego. I'm not going to link to the petition because I don't want you to sign it. A total ban would be ridiculous and an invitation for people to just flaunt the law. However, there are some issues that ought to be dealt with regarding short-term rentals.  Some negative comments about short term rentals from my neighbors on Next Door.
  • The vacation rental on our street is basically a hotel. New people, often for only two or three days. Lots of parties lots of noise. Sometimes they book it for a wedding.if it was the neighbor getting married, nobody would object to them having a wedding at their house.
  • It makes me upset and ruins my quality of life by having a "hotel" on my street in my quiet residential neighborhood. It is not safe for my child and threatens my well being. Especially when I am verbally assaulted by a transient occupant who thinks it's ok to party until 2:30 in the morning.
  • I know that some vacation rental owners do NOT pay TOT [10% tax levied only on short-term rentals], which one must remit voluntarily. Most of these owners do tend to rent for longer terms [& thus do not have to pay TOT], but 2- & 3-week rentals are common, as in the beach areas, so those who do not pay TOT on their short-term rentals are cheating the city.
  • As long as the city is receiving TOT from a vacation rental, there is no reason for them to care if it is a full time mini hotel or not. Houses in residential neighborhoods should not be turned into full time mini hotels, that is why we have hotels in the first place.
Other cities have taken some steps to regulate short-term rentals.  Portland's approach, however, seems a little heavy handed.
Portland will start issuing permits for its first legal short-term rental operations in private homes as soon as September.
The Portland City Council on Wednesday gave its OK for Portlanders to rent out one or two bedrooms in their home over-the-counter, $180 permit after an inspection and notifying neighbors.
$180 permit? Why?  This will only encourage people to evade the system and reduce the extra tax revenue that Portland could receive.  Further, there is no need for an inspection. This market is very much self regulating, with renters providing feedback on the quality of their stay.

A better approach for San Diego would be very light touch regulation. Owners who want to do a short-term rental, should pay a very low fee, maybe $10, so that the city is aware of their activity. They should also pay the same transient occupancy tax (TOT) that hotels do. If owners don't control their rental properties their permits could be revoked.

Exit question: If I rent out my home on airbnb.com do I get to vote on the use of the TMD tax? Would I have standing to sue that it violates Prop 26?



Sunday, January 25, 2015

Leftism, corruption, and its causes

You can always count on the left to favor solutions that both increase government size and lead to cronyism and corruption. Holman Jenkins makes this connection in the weekend edition of the Wall Street Journal.
But Europe, Japan and the U.S. have been desperate to stir private-sector growth and yet refuse to consider how they treat their private sector. Europe gave itself austerity in which the private sector shrank and the government didn’t. Big-name economists keep insisting monetary policy can conjure growth without anyone having to question any ideological, political or policy embraces of the past three decades. 
Nobody asks: How can we make our societies ones in which people find opportunity? They worry about the distribution of income but not the absence of income-creating opportunities for individuals.
When the left's solutions never actually solve the problems they report to solve, then it is fair to question their motives. Indeed I have come to believe that the motives of the leaders of the left are merely to aggrandize their own power. They have no interest in solutions, just as Al Sharpton has no interest in better race relations in the United States, because continued trouble gives him the continuation of his platform.

Another area of leftist hypocrisy, but I repeat myself, is in the area of global warming. It seems clear to me that man is having some effect on the climate, even if not catastrophic. But you might argue that it would still be good for the environment to impose a tax on carbon since the burning of carbon is associated with other forms of pollution.  Such a tax would need to be offset by other tax reductions to not distort the economy further. Of course, the left does not propose this. Instead, they opt for cap and trade, which does very little to reduce carbon omissions, is prone to fraud, and lines the pockets of politicians seeking donations from groups to get exemptions from the caps for their favored industries.  It becomes nothing but a graft machine wall destroying the wealth that we need to come up with a real solutions to the problem.

Rather than argue policy with the left, it is much easier and more effective to point out their massive hypocrisy. When they propose cap and trade, for instance, just ask them why they intend to increase corruption.  When they propose raising the minimum wage, ask them why they hate the unemployed. When they propose even more regulation of Wall Street, ask them why their legislation includes bailouts for Wall Street's biggest firms.  Ask them why they always favor the solution that increases corruption.

What You Should Be Reading

  • Left Coast Rebel provides an excellent review of American Sniper, without plot spoilers.
  • Dalrock continues to expose the ugliness of feminism through the subject of hot farts. (It is really worth the read.  Also, defeating feminism is necessary to maintaining liberty in this country.)  Fortunately, feminists have made themselves so darn easy to ridicule.
  • Duck Enlightenment (@jokeocracy on Twitter) guest blogs at Heartiste and puts the shiv to SJW feminism by asking "Who Bitch This Is?" Reasonable debate has failed and the feminist establishment refuses to listen to rational concerns about where they are leading our civilization. Direct words need to be spoken, and this man Shinblade has gifted us with these four powerful direct words to show us the way forward.  (Backstory, the woman pictured in the video had plotted ahead of time to provoke a reaction that would prove her SJWs theories.  When she is caught on video, the result is epic fail.)