CARLSBAD — During its Dec. 10 meeting, the Carlsbad City Council had a spirited debate about short-term vacation rentals (STVRs).
The discussion centered around whether to conduct a study of other coastal cities’ policies comparing those municipalities with what Carlsbad has in place. Some confusion among the City Council arose over the goal of the study.
The council accepted a staff report briefing the body on the current state of its STVRs.
“This has been a highly contentious topic, not only in our city, but in the state,” Councilwoman Priya-Bhat Patel said, lobbying for a staff study of other entities. “So, if I’m going to say yes to a change or no to a change without knowing if we should make that change, doesn’t make sense. I don’t know if we are going to be amending it or not.”
Mayor Matt Hall and Councilman Keith Blackburn said they are not concerned with other cities and their policies. Both said they are strongly against STVRs in any neighborhood. The vote was 2-2, thus killing the motion.
The council adopted its STVR policy on May 5, 2015, which defines STVRs as the rental of, all or any part of a residential unit, for fewer than 30 days. STVRs are only allowed in the coastal zone, which was created by the California Coastal Commission decades ago.
Most of the zone is west of Interstate 5, while some pockets east, including the Omni Resort and Spa in La Costa, are included. STVRs can only operate with a business license, said Kerry Kezisek, a senior program manager with the city.
According to the staff report, there were 637 new registered STVRs in the city. Of those, just 289 units are licensed with 348 unlicensed.
The city saw an increase of 32 licensed operators from Fiscal Year 2017-18, along with an increase of 52 illegal units inside the coastal zone. However, the number of illegal units outside the coastal zone dropped by 27 residences to just 13.
In total, the city has 2,094 STVRs and 184 units are non-compliant.
“Our No. 1 priority is to make sure that the properties are licensed and that taxes are collected appropriately,” Kezisek said, noting other goals include enforcing resident complaints, hosts inside and outside the coastal zone and operational issues. “We do have enforcement challenges. Roughly 30% of the short-term rental market is unidentified.”
She said those include no listed owner or address, along with pop-up units for those homeowners who take a vacation and rent out those units for a short time, but not on a regular basis.
The city has a three-strikes policy where with three confirmed citations in a two-year span, an operator can lose their license for up to five years, Kezisek said.
The largest concentration of STVRs are between the Buena Vista and Agua Hedionda lagoons, with Airbnb, an online home rental platform, constituting 45% of the market. The nightly rent, according to the staff report, is $189 per night, while peak-season rentals run for $297.
As for the transient occupancy tax, which also covers hotels, the city collected $1.5 million in Fiscal Year 2018-19, a 78% increase over the previous year. More than $500,000 was collected after the city and Airbnb reach a deal for passthrough tax collection.
The city is also currently in discussions with VRBO and HomeAway for similar agreements.
“If successful, that will provide tax passthrough agreements for up to 81% of the total advertised listings,” Kezisek said.
Those tax collections are automated through those companies, thus reliving the responsibility of the city, according to the staff report.
There is also a two-year bill in the state legislature regarding STVRs, which will be introduced in January.