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Vacation rentals attract county scrutiny

By Christian Kallen SPECIAL TO THE INDEX-TRIBUNE

The ads are all over the Internet: Charming, private cottages, perfect for a weekend getaway, minutes to restaurants, shopping, hiking and local wineries. They promise an idyllic taste of the wine country, a carefree Sonoma Valley weekend (or week, or longer). But while many of these vacation rentals deliver on what they promise, more than half of them are in violation of City of Sonoma or Sonoma County ordinances on vacation rentals, according to informed realtors and officials.

Tracking unpermitted vacation rentals is a task that 1st District Supervisor Susan Gorin has been focusing on of late, in response to rising complains from her constituents. “It should not be OK that we have renters coming in, renting a house for party purposes, and having wild parties in the backyard that disturbs the serenity and slumber of people in the surrounding neighborhood,” she said.

And according to Matt Sevenau, “Vacation rentals are very hard to track.” Sevenau, a realtor for Sonoma’s Pacific Union office, added, “My guess is no more than a third are permitted.” His colleague at the vacation rental agency he co-founded in 2009, Sonoma Valley Escapes, is Heather Hanlon. Using popular online services, such as Vacation Rentals By Owner (VRBO) and AirBnB, she calculated that there are as many as 3,000 such units available in Sonoma, Glen Ellen and Kenwood, though there is the possibility of overlapping listings.

But according to the county Permit & Resource Management Department (PRMD), there have been only 775 user permits for vacation rentals issued since 2011, when they began to be required. The City of Sonoma reports only 50 such permits on 35 properties. Not only are the other listed properties illegal, they are dodging payment of the required 9 percent Transient Occupancy Taxes (TOT) that other lodgings, such as hotels and resorts, must impose on their guests. “It would be nice to level the playing field and ensure that all vacation rentals are in compliance with rules and regulations that keep Sonoma safe and quaint,” said Hanlon.

Vacation rentals are defined as a dwelling unit or guesthouse rented for less than 30 days; a bed and breakfast is a single-family dwelling, with an owner in residence, with up to 10 guest rooms. Both are subject to regulation, but the evidence is strong that while most B and Bs go through the permitting process, many vacation rentals are still under the radar.

The issue is not a new one in Sonoma County, and it became newsworthy early in 2010 when a deck collapsed from the weight of a large crowd of young revelers at a house in Guerneville, sending at least one person to the hospital and crushing a Lincoln Town Car parked beneath it. At that time, there were estimated to be 1,000 vacation rentals in the county, a number that has surely increased in the nearly five years since.

Nor is the issue confined to Sonoma. The San Francisco Chronicle last year reported almost 5,000 rentals available through Airbnb, and the city attorney there has taken landlords to court for illegally converting residential buildings to pricey tourist hotels and evicting longtime tenants. Even in Europe, the freewheeling online vacation rental market has been curtailed by regulation in some cities, including Berlin and Paris.

Closer to home, Healdsburg has been cracking down on short-term vacation rentals, which are only allowed in its relatively small downtown historic district. Healdsburg also recently published an online form for residents to complain about vacation rentals, allowing the planning department to follow up and contact the homeowner. “We’ve experienced quite a spike in complaints in the last year,” said Healdsburg city planning director Barbara Nelson, though the city council there has balked at implementing further controls on vacation rentals.

Although most vacation renters are unaware if not unconcerned about regulation – “I have never had a guest inquire about the legality of a vacation rental,” said Hanlon – reputable vacation rental agencies take pains to explain the limits on noise, traffic and events to anyone who wants to rent one of their properties.

“We only work with homes that have a vacation rental permit,” said Liza Graves of Beautiful Places, a Sonoma luxury home rental firm. “We work with the owner to make sure it’s licensed, submit all the paperwork and attachments required, including neighbor notification. And we collect the TOT and submit it to the city.”

Neighbor notification is a key element in the reinforced county vacation rental policies, Gorin and others stressed. The owner must provide in writing a phone number to all neighbors that they can call to get a response in one hour, either from the owner or a designated property manager. The $295 user permit is issued on a one-time basis and is non-transferable to a new owner who, if he or she elects to continue in vacation rental, must reapply for the permit and update contact information with the neighbors.

If an effort to contact the owner or manager fails, neighbors are encouraged to contact the county’s Code Enforcement division directly. And if it’s an immediate situation, such as a noise violation, a call to the Sheriff’s Office may be in order.

It’s the impact of vacation rentals on local neighborhoods that most concerns realtors and officials alike, perhaps even more so than uncollected tax revenue. “I’m concerned that lower income workforce housing supply is being eroded by speculators who are purchasing the homes and then renting them out for vacation rentals,” said Gorin. That concern is shared by the Sonoma Valley Economic Development Partnership, which found the number-one concern among area businesses is lack of workforce housing.

Gorin pushed for a new PRMD staff position to track unregistered vacation rentals in the coming fiscal year’s budget, arguing that the position could easily be paid for from the revenue collected from user permits. Ironically, those fees also go partially to support regional tourism promotion.

“I don’t want to take steps that would send the message that we don’t want visitors to come to Sonoma County,” said Gorin, who was clearly animated and engaged by the issue during an hour-long interview with the Index-Tribune. “What I’m looking for is to make sure we have responsible property owners paying TOT, that they are registered and complying with requirements that the neighbors are protected, and that the property owners are being responsive to what the neighbors are experiencing.”

What the neighbors are experiencing, in some cases, are excessive vehicles parking on residential streets, litter, late night noise violations, large parties and even weddings, events that should require special-use permits. Even though there is a county-wide 10 p.m. noise curfew, Sevenau told of one property his company manages that had to impose a 9 p.m. curfew because noise carried so far in the hillside neighborhood. “If you want to use the hot tub after 9 o’clock, you literally cannot talk,” he tells his prospective renters. “They (the neighbors) will hear you, they will call us and they will complain.”

“If they’re responsible renters and managers, then it’s not a problem and it blends in seamlessly to the neighborhood,” said Supervisor Gorin. “If they think this is just a business and they don’t have to be respectful to the neighborhood, that’s when we have problems. “

It’s a problem that will not be solved overnight, not only because of the popularity of wine country destination travel – and the accelerating real estate market. When asked if he had potential buyers asking about purchasing a house as a vacation rental property, Sevenau confirmed, “All the time.”

Then he added, “It’s really not a great business model. People think they’re going to buy these vacation houses and make a bunch of money. I basically paint them a picture of what it’s like to own a vacation rental, the regulations that go into it, what their lives are going to be like.?“I always ask if they’re doing it to make money or offset expenses. If they’re doing it to make money, my answer is, I’d probably put my money elsewhere.”

But not everyone views vacation rentals as a business. Some of the area’s homeowners who rent out rooms, cottages or even their own houses are only trying to make ends meet. “It was the best idea I could come up with,” said one Eldridge woman who moves into her converted garage on weekends and rents out her two-bedroom home. “I can make more than I could if I get a full time, minimum-wage job.”

  • Kirsten Lindquist

    The proliferation of vacation rentals raises a serious question about the definition of residential vs. commercial zoning. With so many single family properties—in what have historically been quiet residential neighborhoods—now operating as income-producing (or commercial) enterprises what has happened to “residential zoning?”

  • Fred Allebach

    There has to be some way to cool the jets on tourism as there are simply too many people coming to Sonoma too much and this impacts the quality of life for the residents. Business friendly can be taken too far, to the point of being resident unfriendly. The events are blow by blow by blow; locals can’t find a place to park or get a table. Getting rid of 2000 illegal vacation rentals would be a start. A comprehensive look at some of the negative effects of no holes barred tourism would be an intelligent move by local politicians, i.e. goods and services affordability, low income housing, enfranchisement and decent wages for the servant class.

  • Me

    Well Fred I have some bad news for you… If it wasn’t for those 2000+ troublesome vacation rentals you wouldn’t have a table to get. Those vacation rentals pump MILLIONS into the local economy. I have yet to hear ONE complaint from a business owner. The astronomical commercial real estate prices make it extremely difficult for business owners to be successful in this town. These vacation rentals are helping local businesses!

    • Fred Allebach

      Well, whoever you are, that’s why the greed of Plaza landlords is as known part of the overall tourist/ gentrification problem. I think it’s great that gov’t is keyed into at least one negative aspect of tourism. If some folks’ plan is to let the market sort things out, there are baseline rules that need to be played by.

      • Me

        WOW!!!! Let the greedy landlords and gentrification problem go without
        any government oversight. Instead, go after the smallest of smallest
        business start ups “Home owners”. Well Fred, when the Andersons build
        their massive Hotel next to the Square. You definitely wont be able to
        blame vacation rentals for not getting a table or parking spot.

        • Fred Allebach

          I can see why you have an anonymous tag.

  • Larry Barnett

    Unpermitted vacation rentals in the city of Sonoma are illegal. All of them owe back TOT to the city, plus penalties. Moreover, operating a business without a business license also subjects them all to penalties and fees. Homes converted to illegal vacation rentals hollow out the character of neighborhoods as a steady stream of transient visitors replace stable neighbors. The solution is simple: enforce the existing laws.

  • Phineas Worthington

    As a general rule, when the tax and regulatory burdens become significant cost barriers to a free exchange people will create alternatives to circumvent them. These genius internet innovations are like water flowing through the iron hand of regulators trying to grasp and control them. Freedom is a funny thing that way and it is always interesting to see who supports it and who doesn’t.

  • Dee Test

    “The rules are changing under our feet.” The rules are ignored and enforcement is nil. It’s the “Wild West”. Anything goes. The “underground economy” in most of northern California is estimated to be responsible for up to 1/3 of our “middle class” incomes. (Pot grows, run by the cartels or run by US locals.) Illegal immigration (and labor) is supplying the largest part of corporate agribusiness profit in this state and elsewhere….so we certainly need to ignore that issue or even embrace it. Off-shore banks and off-shore corporate establishments allow the big guys to escape taxes, just in case there is any pretense of tax laws being followed.

    So, if the business owners in town are all focused upon their individual profits…..more than willing to ignore any aspects of illegal/immoral activities associated with local real estate….as long as their personal profits are enhanced, its accepted. Too bad for families who may be disenfranchised from their own town. All that’s important is what/who is making individual profit.

    Instant “globalization” was shoved down all our throats….for the benefit of “special interests”. The result has been the disbanding of our laws and our stability, and the disruption of our economy. Instead of allowing a step-by-step approach to globalization, and instead of enacting new laws to address unfair import/export commerce, our government abdicated its responsibility to us. The result is chaos. And its getting worse. Without laws – and enforcement of those laws – we degenerate, from a civilized society, into “Lord of the Flies”. This will not translate into “freedom from masters”. I do not share your enthusiasm for “hastening our own demise as a species”.

  • Alex

    It is very unfortunate that so many people rent their homes without permits and don’t pay TOT.
    To say that you can only rent your house for 30 days or more in the city limit is a little suspect.
    Are they implying that there are no neighborhoods outside the city limit? Or could it have something to do with (at least one) person on the board owning a B&B in Sonoma. Hmm interesting.

    Paying TOT and getting permits is a must. The 30 day rule is archaic and should be adjusted.