As short-term rentals continue to multiply throughout Orange County, millions of dollars are pouring in to influence the battle over the “sharing economy” in the state Legislature and city councils.
The fight pits the legacy hotel industry – the Marriotts and Hiltons – against lodging websites like Airbnb and HomeAway, digital upstarts that governments large and small are trying to regulate.
The websites allow homeowners and renters to list their homes online, creating overnight entrepreneurs – and, some opponents contend, a surge in noise and trash complaints.
For the first time, Airbnb and HomeAway registered lobbyists in Sacramento earlier this year to address proposed legislation. Airbnb reported spending more than $67,000 on lobbying through the first half of this year.
That’s easily eclipsed by its more established competition.
California’s hotel and restaurant industry pumped 61percent more money into lobbying lawmakers on various issues last year than it did in 2012 – $3.4 million compared with $2.1 million – according to state records.
Local hospitality groups have shied away from making public comments on the short-term rental explosion, or have downplayed its impact. But on a national level, corporate hotel executives have been more vocal.
“I’m not trying to be a Pollyanna and say we don’t think about it, we don’t care, we dismiss it,” Hilton president and chief executive Chris Nassetta said in a July earnings call with financial analysts. “We think about it a lot. We talk about it a lot.”
Big hotels, traditional travel companies and resorts also have poured hundreds of thousands of dollars into the campaign coffers of California candidates over the last several years. Most of the spending targets those running for state Senate or Assembly.
A bill, SB593, that aimed to regulate short-term rentals was shelved in June. The proposed legislation would have required hosting platforms such as Airbnb to report quarterly on the addresses of each residential unit offered, total nights rented, total rent paid and then collect local hotel taxes and forward them to local governments.
SB761, however, passed and was signed by the governor this month. The new law requires websites like Airbnb and HomeAway to notify hosts that they may be violating their leases and could face eviction by subletting their homes.
At the local level, Anaheim recently imposed a moratorium on new short-term rental applications. Santa Ana has temporarily banned them. A moratorium on new short-term lodging permit applications in Laguna Beach has been extended until next fall, and the issue will come before city councils in Newport Beach, Huntington Beach and other cities over the next few months.
Orange County candidates have collected $37,150 from the hotel industry’s major donors since 2011, with most of it – $20,600 – going to Assemblyman and former Anaheim Mayor Tom Daly.
Thousands of dollars have also trickled down to city-level candidates, especially in tourism-heavy Anaheim and Newport Beach.
Major campaign donors include:
• Expedia and the American Resort Development Association Resort Owners Coalition PAC, which have spent a combined $265,050 targeting state legislative races since 2011.
• Marriott, which has spent $232,750 on races, including $7,650 for local city council candidates in Anaheim and Newport Beach.
• The California Hotel & Lodging Association PAC, which spent $171,950, including $2,400 for candidates in Anaheim.
Traditional hoteliers are also trying to harness public outrage. They’ve created Neighbors for Overnight Oversight, a grass roots-sounding group that furnishes an action template to help unhappy residents demand crackdowns against short-term rentals from their local officials. It includes sample letters to newspapers and elected officials stressing everything from guest safety to cost.
The group, created by the American Hotel & Lodging Association, is among the interest groups that supported the tabled state bill to regulate short-term rentals.
So far, local Airbnb opponents say materials from Neighbors for Overnight Oversight or similar groups haven’t figured prominently in their advocacy. They say their outrage is fueled by quality-of-life considerations.
Irene Bowie is one of those who beseeched the Laguna Beach City Council to crack down last month. Her neighbors told “horror stories about unruly guests disrupting quiet enjoyment in residential zones, and the capper was the young man and his wife who have bought three properties in the area, renting two out as short-term lodging and living in the third,” Bowie said by email. “A valid and growing concern is the lack of affordable rentals for residents.”
Likewise, officials in Newport Beach, Anaheim and other cities say pressure isn’t coming from traditional hoteliers, but from residents like Bowie.
“Fundamentally, there is a different attitude and perspective regarding residents and people on vacation,” Anaheim resident Cecile Eveland told the Anaheim City Council.
“Residents have to get up and go to work. We do not appreciate the noise disturbances, trash, strangers, illegal parking and loss of privacy, etc., that is generated as a direct result of this short-term rental, with turnovers sometimes up to three times a week. The renters are there to enjoy themselves and garner the most for their money; unfortunately, that comes at a cost to our neighborhood.”
Ryan McIntosh, who operates short-term rentals with his wife in Anaheim, sympathizes with homeowners. Last year, he supported Anaheim’s move to regulate short-term rentals. His message: not all hosts are irresponsible.
“My wife and I’s success would not have been possible without reaching out to our neighbors, building relationships with community members, listening to their input and constructive criticisms, and adjusting our models to ensure that we do our best to consider their needs,” McIntosh said at a May 2014 council meeting.
The number of rentals available in Anaheim has doubled over the past year. Mayor Tom Tait says he’s “a big property rights guy – do what you want with your property, so long as it doesn’t become a nuisance to your neighbor.
“But when you have people buying properties and renovating them with extra bedrooms and bathrooms so they can rent them out seven days a week, 365 days a year – that fundamentally changes the nature of the neighborhood,” Tait said. “It’s not fair.”
The short-term rental debate is far from over in Anaheim and other Orange County cities.
“The city is trying to come up with an acceptable balance,” Tait said.