La Jolla Town Council hears perspectives on why a 2023 ordinance needs refinement.

The 2023 city of San Diego ordinance on short-term rentals has reached “the limits of enforcement,” the La Jolla Town Council heard at its Aug. 8 meeting.

City Council passed the ordinance to limit STR licenses to one per person, aiming to increase the number of rentals for residents and reduce the number of STRs to a city-wide cap of 1 percent of properties and owners.

However, the ordinance has led to exploitation of certain loopholes, said Jay Goldberg, a Hillcrest resident who established NiceNeighbors San Diego to help with STR ordinance enforcement.

Evictions

One such loophole, called the “Mills Loophole” for San Diegan Michael Mills, who acquired more than 100 STR licenses last year, exists because the ordinance limits licenses to hosts, but not for property owners, Goldberg said in his LJTC presentation, which he previously shared at a recent City Council meeting.

And because owners are allowed multiple licenses, some have been converting apartment buildings with long-term residents into STRs, listing units under placeholder host names with the same phone number or repeating last names that have no real connection to the properties. 

“They’re actually kicking out paying tenants now and converting those into hotels,” Goldberg said, adding NiceNeighbors has data on more than 200 buildings in San Diego where nearly 1,000 one- and two-bedroom affordable homes were completely converted. 

“These buildings account for 15 to 20 percent of STRs in San Diego,” he said.

In La Jolla, it’s happening at several addresses, including a nine-unit complex at 242-258 Rosemont St., purchased in 2023. 

“Evictions are currently underway,” Goldberg said, with the STRs for most of the units slated to be operated by one of the largest STR operators in San Diego.

“I am the face of actual human beings who live inside of all those apartments that have been evicted,” said Rosemont resident Christie Ryan.

Saying the evictions include a professor at retirement and a family with two young children, Ryan called the apartment-to-STR conversion “an inhumane humane thing. … This is a brutal way of making extra money.”

“Is that what La Jolla really wants?” Ryan asked.

At 616 Prospect St., many STR hosts within the 9-unit complex have the same last name, Goldberg said. In the 11-unit building at 1241 Prospect St., seven are licensed as full-time short term rentals; the owner has eight properties in San Diego.

And at 338-354 Gravilla St., purchased in 2021, all seven units are licensed STRs; the owner has 16 licenses across San Diego. 

Oversaturation

Despite a one-percent cap on STRs in the city, STRs in certain areas often exceed that number, Goldberg said.

“The most desirable areas of San Diego for residents are also the most desirable areas for tourists.”

In La Jolla, 4.2 percent of all housing is currently operated as full-time, unhosted STRs, meaning the owner does not live onsite, he said.

There are 200 STRs within a 2-by-10-block area in the Windansea and Beach Barber neighborhoods.

“It’s quite pronounced,” Goldberg said, noting there are six one-bedroom units for rent currently in this area and 39 comparable STRs of that type.

San Diego is “reaching the limits of enforcement of the current ordinance,” he said.

Action? 

NiceNeighbors is asking the city to have hosts prove an association with a licensed property, Goldberg said.

The organization is also asking for fines and a 25 percent limit on units within a parcel for conversion, among other actions.

“We’re happy that the ordinance created some framework and transparency to STRs,” Goldberg said, “[but] it has however spurred corporate interests to buy property to convert specifically to hotels.”

Emphasizing that  “what these hosts are doing is only against the spirit of the law, not the law as written,” Goldberg said “we should do better and are asking the city to address those issues.”

The La Jolla Town Council will take up the matter for a vote at a future meeting, LJTC Vice President Peter Wulff indicated.

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