Expedia, San Diego union reach pact on short-term rentals

Expedia Group, which owns Vrbo and HomeAway, has signed an agreement with a San Diego hospitality labor union on a plan to regulate short-term rentals in the city.

The City Attorney’s office has agreed to draft an ordinance based on the agreement’s framework. If the plan is adopted by the City Council, San Diego could have an unambiguous regulatory framework for the industry after years of battles between pro- and anti-vacation rental groups.

“We think it will provide certainty for our partners who have been operating responsibly for generations. It will establish responsible limits that will address community concerns,” said Amanda Pedigo, Expedia vice president of government and corporate affairs.

Airbnb is not party to the agreement, but Expedia said it is in talks with Airbnb about joining.

Short-term rental regulation has a rocky history in San Diego. In fall of 2018, the City Council repealed the new short-term rental law it had just passed a few months before.

A referendum seeking to repeal the law received enough signatures to qualify for the ballot, so the council had to choose whether to either rescind the law or allow the question to go to a vote. The council voted 8-1 to rescind the new rules. The vote took San Diego back to a lack of enforced regulation on short-term rentals after years of debate.

The memorandum of understanding between Expedia and Unite Here Local 30, which represents 6,000 hotel, airport, and restaurant workers, outlines a plan for keeping some short-term rentals legal, but reducing their number. It would also legalize home sharing, where hosts are present during guests’ stays.

Under the plan, only 0.7% of the city’s total housing units — around 3,750 properties — would be allowed to operate as whole-home short-term rentals. That would be a reduction by approximately 75% from the estimated 16,000 short-term rentals currently in business. In Mission Beach, however, the plan would allow an additional 1,086 vacation rentals.

According to the agreement, LLCs and individuals would only be allowed to hold one short-term rental permit at a time. Permit holders would be required to designate a local contact that could respond to complaints within an hour.

The framework would also require any listings on short-term rental platforms to include a permit number. Platforms would be required to check permit numbers against a city database and take down any listings without valid numbers.

The agreement outlines four tiers of short-term rentals:

• Properties rented for short terms for less than 30 days a year
• Properties rented with the host remaining on site
• Whole-home rentals rented for short terms more than 30 days a year (two-night minimum stay required)
• Mission Beach whole-home rentals (two-night minimum stay required)

For all tiers, hosts would be responsible for collecting Transient Occupancy Tax (TOT) from guests and remitting to the City Treasurer, unless collected and remitted by a short-term rental platform on behalf of the host. Both Airbnb and Vrbo collect TOT on behalf of their hosts.

MyLodgeTax can help short-term rental hosts in San Diego comply with all their TOT obligations. For more on lodging taxes in California, see our state Vacation Rental Tax Guide. If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.