DEL MAR — Heavy restrictions on new short-term vacation rentals in Del Mar have not stopped dozens of local homeowners from making a few extra bucks by offering their homes for touristic overnight stays, data presented to the City Council on Monday show.
City leaders reviewed the data collected by scraping online listings on Airbnb, Vrbo and other websites from January to April of this year as part of an ongoing effort to establish new regulations for short-term rentals, or STRs, in the city.
Del Mar is one of the last coastal cities in San Diego County without clear regulations for STRs. Instead, city leaders have repeatedly extended a forbearance forbidding any new rentals in the city, allowing only STRs that operated before April 2016 to continue without restrictions.
After delays by litigation and then the COVID-19 pandemic, city officials and residents alike say it’s high time to establish clear regulations for the local industry and start collecting transient occupancy tax, or TOT, from operators of these rentals.
“STRs are happening right now, but we’re not collecting the revenue, and we don’t really have good monitoring and compliance, so that will only get better as we formalize the regulations,” said Councilmember Dan Quirk.
Within four months, the city found 116 STRs advertised online within Del Mar’s boundaries. City staff were able to match 18 of these to rentals registered with the city that qualify for the forbearance.
However, the other 21 rentals registered with the city were not captured in the collected data, indicating that many more vacation rentals are likely operating than the city is aware of.
The most common locations for STRs in Del Mar are, unsurprisingly, close to the shoreline in the north beach and south bluff areas. The average nightly rate is around $630, data indicates, and the occupancy rate appears to be around 62%.
Considering all this, city officials estimated Del Mar could generate over $1 million in TOT annually to go toward city services.
Relying on the collected data, city officials also determined that STRs make up at least 4.5% of all housing units in the city. This is important to know, they said, as the city ultimately decides what number or percentage of permits to allow in an eventual ordinance.
“Eventually, we’re going to have to decide on the number of permits,” said Councilmember Terry Gaasterland.
The city of Encinitas has established a 2.5% citywide cap and a 4% cap for some qualifying regions, while the city of San Diego has set a 1% limit citywide.
Regarding the next steps, the council directed city staff to bring back additional data from June to see whether the number of STRs changes in the summer months.
They also agreed to hold a community meeting on July 24 that will focus on the guiding principles and objectives that will shape the ordinance, followed by another discussion in September, looking at STR regulations in other cities and the California Coastal Commission’s role in the process.
From there, said Councilmember Dave Druker, the council should be able to provide recommendations to staff to create a draft ordinance.
“Because this is a very sticky, difficult issue, I think we need to give the staff some specific guiding principles so we can give them objectives for solving this problem,” Druker said.
What makes this issue particularly difficult in Del Mar is the bad taste left in some residents’ mouths by the city’s last attempt at an STR ordinance. In 2017, the City Council approved a set of regulations known as the 7/28 ordinance that many residents opposed for being too restrictive, a characterization that the Coastal Commission would later echo.
The ordinance, which never went into effect, would have required rentals in nearly all residential zones to operate at least seven days at a time and no more than 28 days per year.
Debbie Church, an STR operator living in Del Mar for the past 40 years, said this process could go much more smoothly if the city listens to residents and follows standards successfully adopted in other areas.
“The process we went through before was extremely contentious, not because citizens couldn’t agree on fair regulations, but because the City Council did not listen to the community,” Church said. “It would be very simple to model off of what the other cities have done. We don’t need to reinvent the wheel.”
Ken Assi, who rents out his Del Mar home around 30 days per year, reminded the council that many residents rely on the extra income provided by operating an STR.
“It’s what we worked our whole lives for, to buy this property, and we should be able to use it,” Assi said.
The city has set a roughly two-year timeline to adopt an ordinance and receive approval from the Coastal Commission, taking action in January to extend the current forbearance through 2025.
However, Mayor Tracy Martinez emphasized that the city will take however much time is needed to ensure a solid, thorough process that residents can trust.
“We’re gonna be under scrutiny, and we wanna do it well, and we wanna do it right, and we want to have time so everyone can weigh in,” Martinez said.