Vacation Rentals and Second Homes

The Question:

You state that you want to review the city policy on vacation rentals and second homes.  What would you change in the policy that would result in limiting them? How would you ensure it is enacted?

My Answers:

The overall goal of focusing on the question of vacation rentals and second homes is to increase the supply of properties that can be used as primary residences.

The specific goals would be to

  • Encourage property owners to rent their properties to long-term residents
  • Discourage the practice of renting to more lucrative short-term vacationers
  • Limit the conversion of primary residences to 2nd or even 3rd homes.   

Regarding vacation rentals...

One of the easiest actions is to more actively enforce the existing "30 day" minimum rental policy - perhaps as one of the duties of my "Affordable Housing Czar" (the idea for a role that would be funded by the TOT tax).  

I also want to review the rule itself.  As it stands one could technically rent a property for 30 days even though the tenant technically does not have to occupy it during those 30 days.  One could potentially play with the rules and “officially” rent a property for 30 days at an artificially low daily price - with the same income as renting it for a week.  Therefore the 30 day rule does not necessarily prevent vacation rentals.  I would like to pursue other ways to determine residence status - perhaps by evaluating water or electricity usage patterns against expected patterns.

Regarding second or third homes…  

Many feel that the sharp increase in the number of homes that are being purchased as second or third homes - and the resulting decrease in the number of actual residents - is one of the biggest threats to our sense of community.  

However the problem is very tricky to address, for several reasons.  

First is the reality of the capitalist system.  One of the bedrocks of that system is the freedom of private property owners to use their property as they see fit.  Moreover, many "second homes" are actually rental properties - and we don't want to discourage investors who could help to increase the supply of these rentals.  Finally, while some folks might keep 2nd homes, it is also true that these same folks may eventually move here in the future and become very important members of the community.

All that being said, I do believe this issue has a significant impact on the fabric of our community and it demands attention.  

I’d like to explore the possibility of a title transfer tax on non-primary residences, proceeds from which would be invested in a fund that would subsidize below-market-rate rentals, either for existing residents that have been evicted for no cause or for employees of local businesses.

I would also like to consider the feasibility of zoning rules that limit the number of "empty houses" in the same way that we limit the number of winery tasting rooms - some kind of rule that attempts to prevent an "overabundance" of homes that are not being used for primary residences.

I understand it's a difficult question and I should emphasize that I am sympathetic to the concerns of property owners, but I also feel that this is a big issue that should not simply be shrugged away.

 


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