The Coast News Group
Old - DO NOT USE - The Coast NewsRancho Santa Fe

Increase in short-term vacation rentals upsets Cbad residents

CARLSBAD—When Tracy Teregis walked into her bedroom one morning, she was surprised to find a neighbor’s Wi-Fi account pop up saying “rental,” instead of the random number sequence it was named in the past.

After doing a quick search on, she realized her next door neighbor was renting out his house in La Costa Meadows as two separate short-term vacation rentals.

Another neighbor, Jessie Hinrichs, was upset by the addition of vacation rentals in their community.

“It was a shock to all of us,” Hinrichs said.

Teregis and Hinrichs are among a small number of residents who oppose vacation rentals.

In a report released in June, Gary Barberio, Carlsbad’s assistant city manager, estimated five formal complaints are made a year by residents upset with short-term vacation rentals.

“Key issues associated with complaints are loud noise, crowds, parking problems, excessive trash and concerns for the residential character of the neighborhood,” Barberio wrote in the report.

However, the trend towards turning homes into short-term vacation rentals is up in coastal towns, according to Sue Loftin, a real estate attorney at The Loftin Firm.

“The actual implementation of having a home turned into a vacation rental has significantly increased since the (economic) downturn,” said Loftin. “There’s more investors who bought to hold and in high tourist areas, it has much more significantly increased.”

Short-term vacation rentals aren’t addressed in the city’s Zoning Ordinance, which makes them illegal.

The Council has requested a report on whether or not short-term rentals should be approved and they’re expecting to receive the report in December.

In the preliminary report, Barberio classified short-term as anything under 30 days.

A 10 percent transient occupant tax is paid to the city by any structure rented out for less than 30 days.

The city received $233,000 in taxes on the short-term rentals during the 2012-13 fiscal year, according to the report.

More than 400 short-term vacation rentals are operating in Carlsbad.

Teregis said she and her husband thought about selling their home, but decided otherwise because of the effect short-term rentals have on property value.

“We don’t want to have to be forced out of our home,” said Teregis. “We also know that we’re not going to have an easy time selling it, knowing that we’ve got all this going on.”

Short-term vacation rentals have a negative effect on surrounding properties, according to Loftin.

“You make more money with a vacation rental than you do as a straight rental,” said Loftin. “It decreases the value for the people who own a home and are not renting.”

She said the extent of the effect depends on the frequency of turnover, the number of homes that are being rented on a summer rental basis, the length of the summer rental and the type of renters.

She also said the impact is greater where there is greater density, like condos or townhomes.

Loftin said that investors maximize on their profits by renting as a vacation rental compared to income raised from a traditional rental, so for their particular property, the property value increases.

The California Coastal Commission, a state agency with the goal of coastal preservation, approves of short-term rentals because they provide a less costly alternative to traditional vacation options and increase coastal access for the general public.

The commission’s approval of a Local Coastal Program amendment is necessary for any zoning change to the coastal zone.

Encinitas originally tried to amend residential zoning to make short-term vacation rentals illegal, but after opposition from the commission, the city moved towards regulation of rentals.

Like Solana Beach, Encinitas allows residents to list their homes as short-term rentals as long as they get permits through the city.

Solana Beach requires a minimum stay of seven days.

Hinrichs is not happy with the addition of short-term rentals in her neighborhood.

“Here, privacy and peace and quiet has been affected,” said Hinrichs, who lives in La Costa Meadows. “That could happen to all of us, your next door neighbor could have a vacation rental.”