Encinitas to clamp down on unlicensed Airbnb hosts

Resident Hugh Elliott rents out his property through the website Airbnb. He has a permit for that purpose, unlike many Airbnb hosts in Encinitas.

Elliott’s beach bungalow in a quiet Cardiff neighborhood is registered as a short-term vacation rental, defined as a private home rented for 30 consecutive days or less, usually to visitors who want to frequent the beach. The owners of these rentals are required to pay a 10 percent hotel tax to the city and obtain a permit that’s $150 annually.

Yet a high number of unlicensed short-term rentals in Encinitas has prompted a city crackdown. As a first step, city officials next month will send out letters to six Airbnb hosts demanding that they pay taxes and get a permit. More letters will follow.

“Our ultimate goal is to have all these properties registered,” said city Finance Director Tim Nash.

Currently, there are 169 registered short-term rentals in the city, but Airbnb alone lists more than 300 Encinitas vacation properties on a given day. Less popular websites advertise short-term rentals as well, and the city is also targeting them as part of its enforcement push, according to Nash.

Encinitas approved short-term vacation rules nearly a decade ago, before the Airbnb boom. Four Airbnb hosts contacted for this article had a range of opinions on the city’s regulations and clampdown.

Two Airbnb hosts, both who declined to go on the record for fear of being identified by the city, said they had no idea about the regulations. Of the two, one man said he should be able to rent his property without the government getting in the way.

However, Elliott and another Airbnb host reached for this article said they’re aware of the city rules and happy to comply. For his part, Elliott stated the Encinitas regulations strike a balance between keeping neighborhoods peaceful while maintaining property owners’ rights.

“The nice thing about Airbnb rentals is the flexibility,” Elliott said. “If I’m looking to rent out my property for a period, I can. If I have relatives coming into town and want space for them, it’s available.”

The detached bungalow he rents out is on the same lot as his home, so Elliott isn’t far if any visitor issues arise. Guests thus far have respected the mellow, tree-lined neighborhood in Cardiff.

Elliott went beyond city requirements by letting his neighbors know that out-of-towners occasionally stay at his bungalow. He also screens potential guests by making sure they have glowing reviews from prior Airbnb hosts.

“You want to be a good neighbor,” Elliott said.

Among other things, the city’s ordinance mandates that landlords post a sign outside the rental with the property owner’s telephone number, along with the maximum number of occupants and vehicles allowed. Plus, it spells out that trash can’t accumulate in front of homes and noise has to be kept within reason.

Previously, the city contacted unlicensed rental owners only after receiving a complaint. Nash, the city’s finance director, said city staff is shifting to proactive enforcement in light of the spike in unregistered homes.

City staff identified the first batch of unlicensed homes by matching Airbnb pictures to local homes, and then they confirmed those properties don’t have a permit. Nash acknowledged the method is imperfect, since not all listings have a clear picture with landmarks showing where the property is located.

Nash said there are other ways of tracking these homes, but the city’s ultimate goal is for Airbnb to collect city taxes when visitors book in Encinitas. The company has set up such a system in San Francisco and other places.

State legislators have also taken an interest in making it easier for cities with short-term rental regulations to collect revenue. California Senate Bill 593 would require operators of Airbnb rentals and other services to report addresses and the amount paid for rentals to local governments. The bill was shelved this summer but will be reintroduced in 2016.

Airbnb’s media relations department did not return a request to comment by press time for this newspaper.

Proactive enforcement will begin in January and ramp up from there, according to Nash.

The city’s letter that will go out to unlicensed Airbnb hosts next month was not finalized by press time. Past letters to unregistered short-term rentals warned property owners that they have 14 days to obtain a permit and that they must pay the 10 percent tax. Otherwise they could be hit with fines starting at $250.

Another matter is back taxes. Nash said if property owners don’t cooperate in the future, the city plans to bill for taxes going back to January 2016. By comparison, the city of San Diego in some cases has required that Airbnb hosts pay taxes owed for stays that happened a few years ago.

The city’s general fund in 2015 gained $25,350 from the 169 registered short-term rentals. It’s safe to say rental revenue will increase in the future with the enforcement push, though the city doesn’t have projections stating just how much.

Mayor Kristin Gaspar this week said she’s supportive of the city proactively sending out letters on the city’s existing policy. She stated Encinitas rules for short-term rentals have largely satisfied various interests, even though they passed before the rise of Airbnb.

“We were more proactive than some other communities that are just now tackling the issue,” Gaspar said.

Cities like Del Mar are exploring regulations for short-term vacation rentals. Some have called for restrictions or a ban on the properties to protect neighborhoods. Others have countered the rentals provide a necessary source of income for owners and benefit the greater economy.

The occasional Encinitas apartment pops up in Airbnb listings, even though that’s against city code. In Encinitas, short-term rentals are only allowed with a permit in single-family homes and duplexes in residential zones.

Leucadia resident Ron Chambers said he’d like to see an outright ban on short-term rentals. Chambers said his neighbor has hosted Airbnb visitors without a permit, adding renters there have thrown wild parties that kept the neighborhood up.

“It’s a nuisance and spoils the nice neighborhood we’re in,” Chambers said.

After receiving complaints, the city slapped the Airbnb host with a fine for repeatedly failing to comply with rental regulations, but an appeal is underway, Chambers said.

“If they’re going to allow the rentals, the city needs strict enforcement of its rules,” Chambers said.

Encinitas a decade ago tried to pass a ban on future short-term rentals, but the California Costal Commission denied the move, saying the units are a more affordable alternative to hotels and thus bolster coastal access.

The city adopted the permit requirement on short-term rentals in 2006, after hearing from residents who complained about renters’ loud parties and parking issues.

Encinitas voters two years later approved the 10 percent tax on rentals. Part of that money is earmarked for local beach replenishment projects.

Those with questions about short-term rentals in Encinitas can email the city at jgloger@encinitasca.gov.