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Waterfront vacation Rental

Wrestling with Vacation Rentals

Seeking balance between housing needs, property rights

Jan 3, 2018
by David Abbott

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The fires that descended on Sonoma County last October destroyed thousands of homes and increased pressure on an already tight housing market, leading the board of supervisors to take a closer look at the role Vacation Rentals play in exacerbating those problems.

In order to have time to get a more complete picture of the state of housing, and to reduce the opportunity for housing speculation as the county maneuvers its way through an unprecedented crisis, at the end of October the supervisors adopted an interim 45-day moratorium on the issuance of new vacation rental permits.

As the initial emergency ordinance was set to expire, on Dec. 5 the moratorium was extended an additional 60 days, to give county staff an opportunity to study Transient Occupancy Tax (TOT) receipts that come in January to determine the extent to which vacation rentals are affecting the availability of housing for residents displaced by the fires.

“That will be the first objective data we’ll have on what vacation rentals are being used for,” County Planning Director, Tennis Wick, said at the Dec. 5 meeting.

Wick added that he would meet with Airbnb executives with the expectation they will share data with the county to further enhance the report he hopes to bring back to the supervisors before the Feb. 5 deadline to either let the moratorium expire or extend it once again for a maximum total of one year.

Airbnb is a San Francisco-based online marketplace that connects travelers with vacation rentals from apartments to castles throughout the world, and claims it is “the easiest way for people to monetize their extra space and showcase it to an audience of millions.” In Jan. 2017, Airbnb began collecting TOT on any unit rented in Sonoma County, through a Voluntary Collection Agreement (VCA) with the county.

Vacation Rentals growing problem in some areas

Potential problems with vacation rentals has been on the board’s radar for several years, as former First District Supervisor Valerie Brown sounded the alarm toward the end of her tenure on the board, according to Susan Gorin, who was elected to replace Brown in 2012.

“Valerie Brown alerted the board and started that process,” Gorin said in a mid-December interview. “Sonoma Valley (vacation rentals) exploded during the recession when investors came in and bought up housing stock.”

Workforce housing took a hit, as real estate prices escalated once the market bounced back. The First District—encompassing Sonoma Valley and east Santa Rosa—is heavily affected by vacation rentals and workers struggle to find affordable housing.

But the economic collapse was nothing like the damage left behind by the Sonoma Complex Fires.

Preexisting condition

Prior to the fires, Sonoma County was already in the grip of a housing crisis that only picked up steam in the past five years.

According to the 2017 Sonoma County Profile Report developed by the Economic Development Board, rental vacancy rates fell from 5.8 percent in 2011 to 1.8 percent in 2015. During that same period, homeowner vacancy rates fell from 2.2 percent to 1 percent. According to the report, a healthy rental market needs vacancy rates of at least 5 percent.

A report titled “The Impact of Vacation Rentals on Affordable and Workforce Housing in Sonoma County,” prepared by Economic and Planning Systems for the Sonoma County Community Development Commission in 2015, found that “There is a measurable shift in housing supply, otherwise available to the County’s working families, to vacation rentals and other nonresident serving uses.”

The fires wiped out 5,100 homes in Sonoma County, 2.5 percent of the total housing stock. Santa Rosa alone lost 5 percent of its homes. Thousands of people have been displaced for the foreseeable future and there is a possibility of an economy-crippling depopulation that will decimate the workforce needed for rebuilding efforts.

Housing shortage after the Sonoma Firestorm

Gorin’s district was particularly hard hit.

“The first district is a stopping point on the way to Napa and a big part of the economy of the Sonoma Valley is agro-tourism and the wine industry,” she said. “It’s the people with lower wage jobs having difficulty: vineyard workers, landscapers, and hospitality staff.”

Vacation Rental Exclusion Zones (VREZ)

This is not Gorin’s first attempt to limit vacation rentals in parts of the county most affected by them, as she picked up the mantel of a process that began in April, 2009 when a previous board considered the long-term effects of vacation rentals on communities.

The Second and Third districts, Petaluma and central Santa Rosa, for the most part, have very few vacation rentals—Third District Supervisor Shirlee Zane joked about having doubled to two at the Dec. 5 meeting and the Second has a mere handful—so the First, Fourth and Fifth were the main targets of subsequent studies.

After forming an ad hoc committee to study policy options, in November 2010 the board adopted a vacation rental ordinance that went through an amendment process in 2014 that included “a robust public outreach program.”

As a result of those efforts, in 2016 the board created a number of “exclusion zones,” where applications for vacation rental permits were not allowed.

The lion’s share of those VREZ parcels—6,204 in 10 zones—are located in the First District from Boyes Hot Springs to Kenwood, while the Fourth District held just three: Fitch Mountain, Palomino Lakes and The Vineyards.

In the end, the First was the only district that adopted the changes meant to “preserve existing housing stock, reduce fire danger, and improve neighborhood compatibility.”

 In James Gore’s Fourth District, two of the zones had homeowners’ associations with vacation rental policies in place and Fitch Mountain property owners were steadfastly against it, citing property rights.

“It’s (a) multi-faceted (issue) and a good example of something different in every district,” Gore said in an interview in 2017. “On Fitch, it came down to ownership rights.”

He said that about 19 percent of Fitch Mountain properties are vacation rentals, and many owners bought property there with the intention of using them as rentals. Some even incorporate it into business plans to get loans to purchase properties.

“Susan was interested in banning R1 (residential rentals) in all of Sonoma County,” Gore said. “I have not come to a final conclusion but I’m looking for a solution to satisfy (the community). Some issues are countywide, but this is something that is a district-specific issue.”

And while he was on favor of the VREZ on Fitch Mountain, he acceded to the desires of his constituents there.

Fifth District

But the Fifth District is a whole different animal, particularly in the Lower Russian River area. In fact, the recent moratorium excluded any discussion of the area at all, as it has traditionally been a vacation destination with a focus on transient housing and summer vacation rentals.

“(Former Fifth District Supervisor Efren) Carrillo was steadfast against it for the Lower River,” Gore recalls. “People showed up to stop it.”

The election of Lynda Hopkins to replace Carrillo in 2016 has done nothing to quell the ardor and independence of Russian River denizens, but Hopkins understands the impetus behind VREZ and the affect transient housing can have on neighborhoods.

“There are about a dozen towns and all have their own perspective,” she said. “It’s a neighborhood by neighborhood issue and the decision is hyper-local.”

At the Dec. 5 meeting, Hopkins noted with some surprise that, despite the terrible toll taken on residential properties in the aftermath of the fires, there are several rental properties in that part of her district.

She attributes that to the remoteness of a region nowhere near services, jobs or schools for Santa Rosa residents looking for a long-term temporary home while they go through what could be a multi-year rebuilding process.

“Someone who lived in Coffey Park doesn’t want to move to Cazadero and commute if they were working in Santa Rosa,” she said. “One of the challenges going forward is how we gather the data we need to gather. …How do we look at something that clearly has no ‘one size fits all’ solution?”

Moving forward

The extension on the moratorium adopted in December allows 21 vacation rental permit applications currently in the pipeline to move forward, halting any new applications while county staff analyzes data and creates a report to bring back to the board.

Additionally, it does not include hosted rentals, where the homeowner remains onsite, renting out extra space.

Gorin is adamant about finding a vacation rental balance in remaining housing stock, particularly if the county sees an exodus of people unable to deal with the long and arduous task of rebuilding. She is concerned that speculators will scoop up lots on the cheap to build investment properties instead of housing within the means of those left behind.

“My fear is the rebuilding process will take longer than people expect or hope,” Susan said. “A lot are not comfortable with the process and are putting their lots on the market. We need to rebuild the community for the workforce. I’m far less interested in vacation rentals or mansions on the hill. We’re looking to keep those communities intact.”

The Vacation Rental Ordinance can be found at sonomacounty.ca.gov/PRMD/.

Neighborhoods interested in becoming VREZ can contact the Sonoma County Permit and Resource Management Department at 707-565-1900.

Sonoma Valley’s VREZ Maps can be found on our online version of the report:vacation-rentals-combining-district-map-series.pdf



COMMENTS:

I just read David Abbott's article in the January 2018 Sonoma County Gazette about Vacation Rentals, and it needs a serious rebuttal.  He made several omissions and errors in his article - gosh, we hope he does not have a hidden agenda.
 
The list is long:
 
- No mention of some 1,000 AirBNB hosts offering up over 2,000 bedrooms for free to people fleeing the fire and/or first responders a day or two after the conflagration.  A community that is participating in the sharing economy is tremendously more resilient then one that is not.
 
- The study cited by Abbott - "The Impact of Vacation Rentals..." is tremendously flawed.  It is misleading throughout including the claim that Vacation Rentals displace workers.  As we see in Healdsburg (where there is a strict ban on unhosted AND hosted rentals, that people still buy vacation homes, but restricted from renting them out when not in use by family and friends means they just sit empty.   
 
- His story lacks any perspective on what a vacation rental is.  That the average total days rented for a typical rental is under 90 days a year.  That hosted rentals become important housing for visiting or rotating workers (like found in health care, education, and other fields).
 
- That property owners have rights to determine what to do with their property.
 
- Whether the exclusion zones he is a cheerleader for ban all types from of the sharing economy whether hosted or not.
 
- As is common with people not taking time to understand the nuances, definitions that carry specific legal weight (although that changes by jurisdiction) are used freely: "Vacation Rental" is used generically, when in Sonoma County they picked the same term to describe just "unhosted" full house rentals.  Abbott does not take the time to describe hosted and small Bed and Breakfast Inns.
 
- There are many more issues to clarify.
 
May we have space to publish a rebuttal?
 
Looking forward to being of service,
 
Eric Fraser, Santa Rosa

Yes, of course you can continue this conversation. I welcome the open format. 

There’s no hidden agenda. I’m not that kind of girl. I assigned David the topic, so please don't put any blame on David. I want people to PARTICIPATE in community life…not leave important decisions to our government or to other people who may not have their interests in mind. People have to be their own advocate. Offering them information so they make informed decisions about what impacts their lives is my only agenda. So yes, make sure your perspective is known so people have more information. As Lynda Hopkins said in the article - “there is no one-size-fits-all solution”.
 
In response to your comment about how AirBnB helped people during the fire - I had assigned this article to David before the fires, so addressing VRBOs in terms of the fire was not in the picture at the time, although he does mention the fire’s impact on page 7. 
 
My intent for having David research and write this topic is around the impact on neighborhoods and communities with absent land-owners. I want people to know that they can choose what they want for their own neighborhoods. Most people feel powerless, but in some cases, they are not. Like Fitch Mountain (see page 8) people voted to encourage Vacation Rentals. It’s their right to do so. It’s their home and their neighborhood. You can see the subhead isSeeking balance between housing needs, property rights. David covered a lot of territory in an article we can fit in our pages.
 
The topic keeps coming up in meetings where unincorporated communities are losing rental housing for local employees, teachers, emergency personnel, etc. who cannot afford to live where they work because a landlord can make so much more money renting a house as a vacation rental than as housing. 
 
A friend of mine recently bought a house specifically to make it a vacation rental and he had people begging him to make it a year-round rental. He ended up splitting it as upstairs for Vacation Rental and downstairs for housing rental. 
 
Communities like Bodega Bay are importing workers from Lake County because there is so little housing that workers can afford. It’s impacting the schools, volunteers who maintain unincorporated communities, businesses who rely upon year-round support from locals, and more. Individual communities have to decide for themselves whether they welcome the income or suffer from lack of neighbors. 
 
David did cover property rights (see page 8)  and he did bring up the Economic Development Board’s report on Workforce Housing (see page 7). And he mentionedhosted rentals that the county needs to assess as part of their moratorium on vacation rentals while we recover from the fire (see page 10). 
 
This is not a simple subject, so please continue the conversation and bring your concerns into the discussion. 
 
THANK YOU! ~ Vesta
 

Being surrounded by (good) vacation rentals and weekenders makes for a very quiet, but disjointed neighborhood. ~ Karen Lockert, Guerneville

The County would do itself a favor if it would offer Limited Vacation Rental Permits - 60 or 90 days. People (including myself) who want to rent out second homes just enough to cover some expenses would have this need met AND the County could collect BID and TOT taxes. As it is now, I can (and do) legally rent out our second home for 30 days at a time; the county collects NO taxes on this and I'm unhappy with this arrangement. Makes no sense. Give me a part time permit, collect the taxes, and we'll all be happy. ~ Mary McClure Jackson 


Comments:

Jan 12, 2018
I'd like to offer another perspective on Airbnb or VRBOs. Why not offer limited (60-90 days) vacation rental permits? There are many, many people - including myself - who have second homes that we'd like to rent out on a very limited basis; enough to help pay the expenses and taxes. I have no interest in ever renting our home on a 24/7 basis because my family spends a fair amount of time there, but a 90 day permit would allow me to legally rent the house and cover some of our expenses. As it is now, I follow the rules and rent the house for 30 days at a time (two or three times per year) to cover expenses and the County earns zero for this. Clearly, this isn't a win-win for me or the County. A limited vacation rental permit would allow the County to collect TOT and BID taxes, while I also meet my objective of home maintenance. Isn't this worth considering??
- Mary Jackson

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