Commentary: Pacaso update — one year later on Old Winery Court
A year ago, the Index-Tribune ran a story about Pacaso, a company that sells fractionalized ownerships in vacation homes. The article reported that the house they owned on Old Winery Court in Sonoma had been taken off the market. Pacaso purchased the house in May 2021. Since then, there has been no indication any shares have sold. (The purported first share buyer has not returned since June of 2021.)
Since February there have been at least 44 “turnovers” with a steady stream of strangers staying in the house. We believe these to be employees or friends of Pacaso. At times there are only two “guests” and at other time multiple visitors. Some stay two days and some stay a week or more. Afterwards, the housekeepers, yard crew, pool maintenance and service trucks show up. It is like having a busy hotel on our formerly quiet little cul de sac. These visitors are not our neighbors and don’t know or care about us.
Even though we are in a vacation rental overlay zone, the county says unless there is proof of payment being made, there is nothing they can do. Last May the Board of Supervisors approved contracting with a consultant firm to study the issue of fractionalized ownership and current regulations. The contract was awarded to Rincon in December of 2022. Despite several attempts by Stop Pacaso Now members to contact the firm and provide assistance, no response has been received.
There have been several attempts by Pacaso to list other Sonoma homes, including several in wildfire danger zones that burned in 2017: one at the top of Trinity Road and one on Wood Valley Road. A home at the top of Gehricke Road was briefly listed on their website, as was one on Hale Road. In each case, Stop Pacaso has rallied support and provided free signage. In short order, these properties disappeared from the company website.
In May 2021, Permit Sonoma received a complaint from “someone on Old Winery Court” about the Stop Pacaso signs. Neighbors were told to remove the signs and issued a courtesy warning. Following that, an official citation and fine was issued with threats of more to come. After reaching out to Supervisor Susan Gorin, and a reminder that the Supreme Court had ruled that owners have a right to post yard signs as an expression of free speech (Reed vs Gilbert 2018), Sonoma County Permit backed off. No further action was taken. Needless to say, the signs remain.
There are indications that Pacaso may be hanging on by their fingernails in this economic climate. In July they laid off a third of their workforce, and another 100 lay-offs occurred in January 2023. The founders stated the reason was the expectation of a global recession and a report by Proptech Startup citing a 28% drop in vacation home mortgages.
About the same time, Pacaso offered new terms to potential buyers who could now purchase a share for only 5% down. They have also begun to accept cryptocurrency as down payment “partnered through Bitcom.” Softbank, the last investor to provide money to Pacaso, reported a $23 billion quarterly loss of revenue last July. Pacaso has not gotten any new funding since September 2021. That same month, there were only 70 homes on the Pacaso website that they actually owned.
Is the house on Old Winery Court really no longer on the market? Refer to the website Unique Homes and it pops up as for sale to eight owners by Pacaso. This same strategy on an ocean front home was previously employed by another company, LA Luxuries. Perhaps this may be a way around the negative publicity when someone searches for Pacaso?
Our hope is that Pacaso sells the home to a single family so that our residential neighborhood is free from a commercial operation. Should that not come to fruition, Sonoma County must pass an ordinance banning fractionalized ownership by unrelated parties, or issue a cease and desist order prohibiting Pacaso from invading residential areas. Dozens of other communities nationwide have done so.
Neighborhoods are for neighbors! For more information go to stoppacasonow.com.
Nancy Gardner and Carl Sherrill are residents of Old Winery Court.
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