Don Mosier | Rimini Road
Pro & Con: Visitor Taxes
Proposition J, TOT, & VRBO | Don't Make Our Homes Hotels
This photo, mistakenly used by the Sandpiper, shows rental properties which the owner, Hershell Price, says are already covered by TOT. The Sandpiper regrets the error. Photo Art Olson
Hotels aren’t faring well, but only partly because the recession has driven down rates. More travelers are branching out, turning to vacation rentals...as options.” (LA Times, April 2nd , 2010).
Internet booking of vacation rental properties is a booming business. One of the leading rental services is “Vacation Rental by Owners”, VRBO for short. You may be surprised to find that VRBO lists 106 rental properties in Del Mar with weekly rental fees ranging from $725 for a studio to $18,000 (yes, eighteen thousand dollars!) for a 6 bedroom beachfront house. If all these rental properties were fully occupied, they would add over 700 visitors to our village.
These vacation rentals compete directly with local hotels for guests, but unlike neighboring beach cities, Del Mar collects no transient occupancy tax (TOT) on short term (less than 30 days) rentals. Hotel and motel guests pay for the extra services that the City of Del Mar provides to visitors, but vacation rental occupants do not. The City Council recognized this disparity, and has drafted Proposition J to correct it.
Proposition J will authorize the city to collect TOT (currently at 11.5%) from the vacation renters, not the owners. This will transfer the considerable expense of providing beaches, parks, fire safety, and law enforcement services to these visitors from the residents of the Del Mar to the visitors. Why should you or I subsidize someone else’s vacation?
TOT is a local tax that stays in Del Mar, unlike many other revenue sources that get stuck in Sacramento. Some have argued that this difficult economy makes it the wrong time to impose new taxes on visitors, but the same difficult economy has made it imperative that Del Mar identify new sources of revenue that we can control. Proposition J accomplishes that goal.
Don Mosier is Deputy Mayor of Del Mar. This article reflects his personal reasons for putting Proposition J on the ballot.)