Proposed hosted rental regulations worry Santa Cruz County residents

Posted on December 2, 2017

County planners want rooms to go to year-round renters, but homeowners reluctant.

http://www.santacruzsentinel.com/article/NE/20171201/NEWS/171209956
By Jondi Gumz, Santa Cruz Sentinel

December 1, 2017, Santa Cruz, CA – APTOS >> When Delia Gilligan’s son attended UC Santa Cruz, the cost of that degree

meant taking on a lot of debt. An empty nester since her son moved out, she’s been renting his room for three years on Airbnb.

Cayley Lanctot, 38, a nurse, and her husband Alex, a teacher, have a toddler and hope to have another child. To pay for $20,000 in infertility treatments, they rent out a room in their Aptos home on Airbnb.

Jeanell Martin, 60, emptied her retirement account to replace a unpermitted retaining wall, which she said cost her $340,000. She’s had knee surgery and pays $1,400 a month in health insurance premiums, so renting rooms in her four-bedroom Seacliff home has helped her stay afloat financially.

In March, Santa Cruz County planners proposed a limit of 60 to 75 nights for these “hosted rentals,” overnight accommodations in a private home — less expensive than a typical $245 summer hotel room and made possible by software platforms such as AirBnb. Hosts are pushing back, creating the Hosted Rental Alliance of Santa Cruz County to lobby county supervisors.

ARBITRARY?
The new proposal, emerging after an online survey of 242 hosts and 856 neighbors, calls for a limit of 55 nights in coastal Live Oak, Aptos-Seacliff and Davenport, popular beach areas, and 110 nights in the rest of the unincorporated county — restrictions veteran local land-use planner Kim Tschantz contends are “arbitrary and not based on facts.”
County supervisors have scheduled a public hearing for 1:30 p.m. Tuesday at 701 Ocean St. It’s no. 58 on the agenda.
The scrutiny comes in the wake of concerns that vacation rentals — renting entire homes for up to 30 days — are a factor in the housing crisis along with the growth of UCSC enrollment to more than 18,000.
With hosted rentals, one county concern is fewer bedrooms available to year-round renters. Another is rental income boosting home prices and rents. Another is hosted rentals bringing noise, trash and traffic to residential neighborhoods. Yet another involves room taxes — transient occupancy tax funding government services. An agreement with Airbnb in April 2016 brought the county room tax revenue of $1.5 million. Justin Acton, 33, of Boulder Creek, said he’s paid nearly $10,000 in taxes since 2011, but not all hosts pay.

The county’s housing advisory commission, which heard hosts say the income is crucial, declined to make a recommendation. The Planning Commission heard from two dozen people, most objecting on grounds of financial hardship, and voted 3-2 to send the proposal to the supervisors, with a grandfather clause allowing tenant hosts to continue. That would help Evan Lohr, 33, of Santa Cruz, a baker who rents out a room in the house he rents to save up to become a homeowner.

DATA SCRUB

With the “sharing economy” a relatively new development — Airbnb was founded in 2008 — and turnover among hosts depending on personal circumstances, accurate data on hosted rentals has been scarce. Host Compliance, a San Francisco startup, offers monitoring and tax compliance services to regulatory agencies based on the number of hosted rentals.

Hired by the county, Host Compliance found 169 properties in June on Airbnb with private rooms for short-term rent in the unincorporated areas of Santa Cruz County, down from 180 found in October 2015 by InsideAirBnB.com.
Lohr was frustrated by outdated listings on Airbnb. When hosts become inactive — empty nesters want to keep the room free for their children to visit — the listings are not removed. Concerned about decisions being based on faulty numbers, he spent 20 hours on a “data scrub” of Airbnb listings, looking for errors and outdated listings. He found 177 hosted rooms in unincorporated Santa Cruz County, with 57 inactive, leaving 118 available. He counted 96 hosts — with 16 hosts renting multiple rooms, stretching the definition of hosted rentals. He found the most hosts, 36 in the Second District, which includes Aptos and Seacliff, 31 in Live Oak and Soquel, and 26 in San Lorenzo Valley and Scotts Valley. He found five homes, cabins and accessory dwellings mistakenly listed as rooms.
The county survey asked if respondents had lost housing due to hosted rentals, and 95 percent said no. Only 15 hosts said the hosted room was previously occupied by a roommate.

EX-INSIDER VIEW

Tschantz, who has spent 38 years in land use planning, managed environmental review for the county before forming his own consulting business in Aptos in 2002. He said he does not have a client on this issue.
In a letter he sent to the supervisors, he contends the regulations proposed for hosted rentals are based on seven faulty assumptions and would hurt property owners rather than provide a social benefit. The idea that property owners would converted a hosted rental to a long-term renter is faulty, he said, citing the county’s survey that found 81 percent of hosts would not convert their guest room to a long-term tenant. “That’s something I did when I was 19,” said Lohr, the number-scrubbing host.

Jeanell Martin, the host in the four-bedroom Seacliff home, said, “Month to month, there’s lots of problems, it’s easy to make mistakes.” She said if she had long-term tenants, there would be parking problems that don’t exist with the irregular schedule of hosted rentals.

Delia Gilligan, the empty nester, pointed out Airbnb has reviews of guests. “You can check if they are a problem guest, you can say, ‘No, not a good fit,’” she said.

COMPARING CODES

Tschantz, the local land-use planner, pointed out the proposed regulations were not driven by citizen complaints and that potential problems were greater with vacation rentals, where an entire home is rented to a large group with the owner absent. He noted county regulations allow small-scale commercial enterprises such as child care, adult residential care, foster homes and home occupations such as yoga studios, music instruction and counseling offices, which he said would generate more activity than a hosted rental.

The county proposed one-year renewal for permits, adding expense when vacation home permits run for five years, he said. As for the maximum on hosted rental nights, Tschantz noted, “No other use including vacation rentals, have this type of limitation … Singling out hosted rentals for this type of treatment is discriminatory.” He contended prohibiting renters from hosting rentals would also be discriminatory.

COMPLAINTS

Elisabeth Henri-Ellsworth, a property owner on Tindall Ranch Road, a private road in Corralitos, wrote county supervisor Zach Friend in May, complaining about outside music, noise and partying at an Airbnb rental where homeowners are not present. She invited Friend to visit to see for himself. Pam Wood and Shaun Keller, also on Tindall Ranch Road, wrote Friend to say code enforcement staff has not been seen. By definition, hosted rentals are supposed to have a host on the premises.

ALTERNATIVES

Lohr, the data-crunching host, said he’s never had complaints, which he attributes to the Airbnb review system for guests and hosts. “It weeds out bad actors,” he said. He contends the county’s own data show hosted rentals are not “exploding,” as was feared by county supervisors in March. He favors regulations matching those for whole home vacation rentals, eliminating the limit on hosting nights, allowing renters as well as property owners to host, allowing two rooms maximum per property to be rented, and “a simple, inexpensive permit process” with permits renewed every five years.

SURVEY RESULTS

Santa Cruz County’s online survey got 1,098 responses, allowing multiple answers.
Not a host: 856
Have hosted: 221
Rent rooms in more than one home: 21
WHY HOST?
173 responded
Income: 149
Sociability: 73
IMPACTS?
698 responded
No impacts: 398
Parking: 209
Noise: 160
Source: Dyett & Bhatia, Sarah Neuse

View original article: http://www.santacruzsentinel.com/article/NE/20171201/NEWS/171209956