On May 1, San Diego’s short term rental occupancy ordinance took effect. The goal was to regulate an industry that’s accused of reducing the number of places people can live and decrease quality-of-life issues that can arise between vacationers and locals. But it appears at least one property owner in Ocean Beach has discovered a loophole that bypasses the spirit of the ordinance.
Each short-term rental license requires a “host.” That person must have the legal right to occupy the unit. A host isn’t allowed to hold more than one license at a time.
But a host isn’t the same thing as the property owner, and NBC 7 Investigates found a single property owner named Michael Mills is connected to 114 short-term rental licenses in Ocean Beach.
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NBC 7 Investigates spoke with three of Mills’ tenants at 5188 West Point Loma Blvd, who recently found a letter on their doors giving them 60 days' notice that their month-to-month leases would not be renewed.
“This is the first time I ever felt at home, or at peace, so I never planned on leaving,” Damin Dixon told us.
“We matter,” Edwin Aguirre said. “We deserve to have a place that we live, that we can call our own, that we can rest and then go back to work and be part of the community.”
“I have pretty much spent every Friday, Saturday and Sunday just crying,” Ali Bradford told us. “Looking online desperately to try to find a place to live that will take me and my pets, and I have not had any luck, and I don’t know what I’m going to do. But mostly just crying because I’m losing my home.”
NBC 7 Investigates also spoke with Kevin Hastings, who owns a home in Ocean Beach and serves as Vice Chair of the Ocean Beach Planning Board. He’s worried about what his beloved close-knit beach town will become.
“It’s hard to stomach right?” Hastings said. “Because it’s all focused right here. At least if the pain was spread out across the city, maybe we wouldn’t be here talking right now. But it’s just a gut punch really.”
Joe LaCava is the only San Diego city councilmember who voted against the ordinance to regulate short-term rental occupancy, or STRO, last year.
“I felt very strongly they were not allowed under the municipal code and did not see the value in trying to legalize it,” LaCava said. “I also thought that the language put forward was too liberal, left too many loopholes and really wouldn’t meet the needs of a city as a whole.”
NBC 7 Investigates sat down with Michael Mills, who goes by Mickey, who explained how he found hosts to apply for licenses.
“I asked friends in Ocean Beach, family, my staff who live in and around Ocean Beach,” Mills said. “I asked anyone who cared to listen to me if they would contact their friends or relatives with the idea of becoming a host where they wouldn’t be obligated to anything giving them our assurances that my family would manage the properties for them and they wouldn’t be obligated to do anything."
Mills told us none of these hosts were paid or compensated in any way and are connected to these properties in name only.
“They have no intention of personally managing the property,” Mills told us. “They simply allowed me to qualify for the city’s ordinance restrictions, probably aimed at trying to cut down on the number of short-term rentals in all the beach cities."
Councilmember Jennifer Campbell authored the ordinance. Her Chief of Staff, Venus Moline, acknowledged that Mills did not violate the law, but said the ordinance wasn’t supposed to be used in this manner and that suggested changes need to take place. Campbell’s office provided NBC 7 with a written statement Wednesday morning:
“I authored the Short-Term Rental Ordinance with the intent that Short-Term Rental hosts follow the City’s Requirements. Now that many of the STRO licenses have been issued, my staff and I are working closely with the City Treasurer to review and correct any issues that may come up in the STRO process," Campbell's statement read.
Even Mills calls the ordinance confusing, despite how he’s using it to his advantage.
“I don’t know if we could call it a loophole,” Mills said. “But obviously the ordinance makes no sense to any of us who have short-term rentals."
“Let’s be practical,” Mills said. “Why shouldn’t the owner be responsible? Why shouldn’t the owner have the right to do with this property and rent it – whether he wants to rent it for a week or a month or 10 years or 20 years?”
As for the tenants being displaced right now, Mills said he had other reasons to end some tenants’ leases but said he’s had a change of heart about how he’ll operate properties with STRO licenses moving forward.
“Anyone that’s worried about being evicted for Airbnb rental versus their current monthly rental, I’d like them not to worry, but these licenses will only be used as places become naturally vacant,” Mills said.
Ocean Beach Planning Board Asks for Changes
On June 7, the Ocean Beach Town Council’s Planning Board voted to send a letter to San Diego Mayor Todd Gloria and the City Council demanding changes to close the “host loophole.”
NBC 7 Investigates called more than a dozen of the hosts listed on Mills' short-term rental licenses. Most of the people we spoke with acknowledged they were hosts but did not want to answer any questions about the licenses.
However, one of the hosts said she was unaware her name and phone number had been published as a “host” for a short-term rental unit owned by the Mills. NBC 7 Investigates isn’t revealing her identity.
“I’d really like to know what’s happening,” she told us.
During that call, we discovered together that her daughter and mother’s names were also on the host list.
“Something’s happening and I don’t like that our names are being out here,” the woman told us.
“I think that this could have happened between relatives with not explaining the hosting obligation or opportunity,” Mills said.
Update: After our story aired, the woman we spoke with reached back out to us to say she was mistaken. She says she did grant her mother permission to use her name and phone number to become a host.
The City Treasurer’s Office is responsible for issuing short-term rental licenses to property owners. NBC 7 Investigates asked a spokesperson how it was verifying a host’s legal right to occupy a unit. It told us that only happens after the city’s Building and Land Use Division receives a complaint about a short-term rental license.
We also asked what steps it’s taken to prevent an STRO license applicant from using another person’s identity as a host without their knowledge. It told us:
“The host name of each active STRO license is available in the STRO Active Licenses OpenData portal for all citizens to view. If a host suspects a license has been issued under their name without their knowledge, they can contact the STRO Administration at stro@sandiego.gov or call (619) 615-6120. Additionally, the applicant submitting the application signs under penalty of perjury that all the information in the application that all information provided in the application and supporting documentation is true and factual to the best of the applicant’s knowledge. If any information provided is found to be incomplete or inaccurate, the application may be denied, or the license may be revoked.”
