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Vacation Rentals - Compromise is Key

By Vesta Copestakes

The morning I go to press with this issue of the Gazette, our Board of Supervisors will be discussing potential changes to the Vacation Rental Rules and Regulations.

Some communities have established Vacation Rentals by Owner (VRBO) Exclusion Zones to keep housing and their neighborhoods protected from commercial use of residential homes, while others have tried and failed to to establish Exclusion Zones. It’s a complicated process, requires entire neighborhood agreement, and costs fees many cannot afford.

In Sonoma and Marin Counties, some residential neighborhoods have more VRBOs than residents, causing not only a shortage of housing, but also a shortage of people who contribute to their hometowns, especially in unincorporated areas where there are few local services and volunteers maintain home.

What people see as a conflict depends upon perspective.

If you make a living renting out your home, you’ve been hit really hard by COVID-19 restrictions on travel. Inviting healthcare workers to stay in your home while they work in Sonoma County (allowed) is your only option heading into tourist season when you make enough money to get through the rest of the year. But if you LIVE in the house, it’s a risk you may not be willing to take. That’s called a “Hosted Rental” where the property owner, or property manager, lives on-site.

For a neighborhood, the advantage of Hosted Rentals is that someone is present to take care of the property and be home while guests are renting. This helps to eliminate the risks of parties, loud noise, inviting more guests than the reservation implied, etc. The biggest problem for neighborhoods is the presence of strangers over whom they have no influence or control.

Many communities have rules that require Hosted Rentals, and establish that as part of their ordinance. Sonoma County is considering this option since it has worked well to solve problems and reduce conflict elsewhere. Some require the owner to be present only when guests are renting. Others require the owner to live on the property or have a property manager live there full time. The latter provides opportunities for people to take care of a rental and therefore live in a nice home for reduced rent. This adds to the Affordable Housing inventory for communities.

VRBOs also function the way Junior Dwelling units function for people who have outgrown their large home after the kids move out, but they want to stay where they have established a home over decades. If they rent out rooms year-round, they are living with roommates, in essence. If they rent rooms or a section of their home as a VRBO, they choose when they are willing to share the house and when they want it all to themselves. This option works well with an ordinance requiring someone present while guests are renting.

There’s a compromise ordinance as well.

This one is a 90-100 day cap on how long guests can stay when the owners are permanent residents but they want to trade with other travelers. I’ll stay in your home while you stay in mine kind of arrangement. Or they become part of a group that works out the details so people travel but stay in homes of people in the group where they can settle in during their vacation.

It can be very cost-effective and homeowners feel they “know” who will be staying in their home. This also puts the neighborhood in a better position to not stress because the homeowner is someone they know, and who cares about the property and community since it’s their primary residence.

Another advantage to this is that homeowners who are renting out their homes tend to keep them well-maintained. The house is on the market, in essence, so has to look good in order for people to rent it.

VRBOs Gone bad.

There are two basic reasons for being totally opposed to homes being rented to out-of-area guests. One is the behavior of the guests. If there is only a distant property manager and no responsible person on the property, guests can have parties, invite too many people so septic systems get overloaded, parking too many cars is a nuisance, noise levels are hard to control, or impossible without law enforcement intervention, and weekends during vacation season become opportunities for higher levels of stress instead of relaxation on days off from work. The other is the impact of available housing and neighborhoods devoid of neighbors.

After the fires Sonoma County lost 5,000 homes and right now the building boom is replacing those with brand new homes. It will take time, but the void will be filled. In the mean time, people who live and work here need places to call home and there is less to choose from.

In resort areas like the Russian River communities, where floods have damaged riverfront buildings, property investors come in to purchase the distressed homes, remodel them, then rent them as vacation rentals rather than year-round residences. This takes an affordable home out-of-reach since as a vacation rental, the property owner can charge many times the price of a year-round rental without landlord/tenant issues. If a guest is annoying, they won’t be able to come back. If a tenant is annoying or destructive, there are tenant protections that require a landlord to evict the tenant and that usually doesn’t go well.

Income from TOT Taxes.

Tourism accounts for massive amounts of money pouring into Sonoma County paying for wages and tax-dependent services. Between the losses fires to floods, Sonoma County was hurting long before COVID-19 came right as we are entering vacation season. Our county coffers are hurting worse than they have ever hurt before.

Can TOT (Transit Occupancy Taxes) make up for some of those losses? Yes, and no. Right now, the answer is no. People are coming here in spite of the COVID-19 protections, and who knows where they are staying, but we’ve already lost huge sums just telling them to stay away.

Some look at these restrictions as an economic issue, while others look at it in terms of human suffering and long-term impacts. Open the county too soon and the chances of inviting illness into our home could take a toll that is both economic as well as tragic. Keep the county closed into vacation season and every business that depends upon tourism dollars will suffer and that means less wages earned, less spending, less taxes collected, etc. It all dominoes no matter which path we take.

So what’s a county to do?

As we tell our children, compromise allows both sides of an issue to get at least some of what they want. Right now following the examples of other counties that require physically present owners or managers seems to be the best comprise. That way homeowners can earn extra income with their unused space, people who need an affordable place to live can find one, and a light job in the process, the county gets to collect TOT taxes, neighborhoods feel there is a responsible person on-property, and visitors have a place to stay that is more enticing than a hotel room.

Is it perfect?

Is anything perfect where everyone gets what they want?

We’ll find out shortly what our Board of Supervisors decides, or if they decide that now is not the time to push this issue with so many other issues pressing them from all sides. Time has a way of answering most questions.

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