By Linda Durham
A few months ago, I attended an Encinitas City Council meeting to hear about the city’s Short-Term Vacation Rental (STVR) policy update. During the meeting, I learned the city had identified 159 unpermitted units for which no corrective action had been taken to bring them into compliance and collect the 10% TOT (transit occupancy tax) paid by law-abiding unit owners.
Only four of the five council members voted on the policy update, as Councilmember Kellie Hinze recused herself because her “mother” owns a rental unit.
“I am recused from this item because my mother operates a short-term, owner-occupied vacation rental at her home and I have an ownership interest in the property on Melrose Avenue,” Hinze said during the meeting.
But a closer look reveals that at the time she recused herself, Kellie Hinze was actually the property owner, not her mother. In addition, Kellie was among those operating a vacation rental without a permit (it expired on April 7, 2021). As of this letter’s publication, the councilwoman’s unit remains likewise not permitted, according to the city’s interactive permit viewer updated on March 11, 2022.
The same likely goes for the other 150-plus violators.
Wondering why Kellie claimed her mother owned a property that was in fact hers, it turns out that all three Hinze family properties were deeded over to Kellie in early 2021. Deeded over just days before Proposition 19, a new property inheritance law, was due to take effect on February 21, 2021.
Prop 19, passed by voters in 2020, changed property inheritance law to impose current-value taxation on properties that the heirs inherit. The deed transfers into Kellie Hinze’s name alone, less than two weeks prior to the law going into effect, suggesting an intent to avoid a huge property tax revaluation and higher taxes in future years.
Kellie Hinze’s annual property tax savings from prematurely “inheriting” the property as a result of these moves is a total of $85,000 per year in today’s money, worth potential millions to her in lower taxes over ensuing decades.
It’s the same with Blakespear and her family’s properties, a move that will save Blakespear more than $80,000 in property taxes annually in today’s money.
These property transfers are legal and Hinze, Blakespear and their families engaged in nothing more than shrewd financial planning. However, the actions they took to avoid paying their “fair share” are certainly at odds with their stated values. They espouse equity, paying one’s fair share and supporting the less fortunate among us.
How do these Encinitas officials pay their fair share when they take action to avoid doing just that? How can they support programs to increase public transportation, affordable housing, the homeless, all of which depend on our taxes, when they are shorting the state’s coffers?
Linda Durham is a former longtime Encinitas resident.