Editorial: Sonoma City Council’s preemptive swipe at Pacaso

Of the roughly 653 “vacant” homes listed in the City of Sonoma, nearly 70% are “for seasonal, recreational occasional use” — no matter what you call it, it’s a vacation home. Somewhere for people to be when they don’t want to be at their primary residence.

In a town with an established housing crisis, where listing prices and rental rates continue to climb, it’s hard to stomach the idea of 452 “partially used” homes. That means almost 9% of Sonoma’s 5,125 houses are underutilized, at a time when rental relief requests are skyrocketing.

The City Council sought to stem the flow of households to vacation homes in 2017, with a rule prohibiting new short-term rentals in most cases. Of course, that only applies to houses that are monetized and marketed for travelers, not those who can afford to buy a residence they rarely use.

So it was no surprise that hackles were raised when multi-million-dollar Pacaso came to the region, snapping up houses in Napa, Healdsburg and on Sonoma’s Old Winery Court. The company’s promise to “make second homeownership more affordable” came off as tone deaf in an area where many people struggle to pay the rent, let alone buy a home.

Using a “fractional ownership” model, up to eight families purchase and share one house, paying hefty fees to Pacaso for maintenance, cleaning and scheduling the property. Sure sounds like a time share, doesn’t it?

But this model has allowed Pacaso to avoid vacation rental rules, even as the properties sit behind an LLC. Regulations have been slow to follow. With pockets this deep, municipalities are rightly concerned about ending up locked in litigation with a Goliath to their David.

Which is why the Sonoma City Council, led by a staff recommendation, should be commended for taking a brave and preemptive strike by targeting fractional homeownership. With a unanimous vote, no less. Based on cursory research, Sonoma appears to be the first city in the country to block Pacaso’s model. In stories written about the real estate company in NPR, the Wall Street Journal and the New York Times, not one mentions such a ban.

It’s a move that hasn’t gone unnoticed. Elected officials in other cities with Pacaso properties have reached out with support and curiosity. As the current ban only applies to the Sonoma city limits, the Sonoma County Board of Supervisors should consider following suit, to ensure our unincorporated corners don’t become defacto hubs for fractional homeownership.

Councilmember Kelso Barnett said the neighbors of Old Winery Court, who have spent months fighting Pacaso’s model on their block, are the ones who deserve credit for this decision.

“They were the real inspiration,” he said.