.Inn Decision

News-2-GT1544City and county look for balance on vacation rentals

An empty hammock hangs idly on the front porch of a modern home overlooking a garden. A block away, beach lovers pedal, jog and push strollers up and down West Cliff Drive.

The house would be big enough to house a decent-sized family or a group of UCSC students. This space, though, is a place for visitors to Santa Cruz, some of them tech entrepreneurs from all over the world.

“The goal was to be surrounded by like-minded people that value work/life balance and the outdoors,” Emmanuel says via email. Emmanuel, who asked us to withhold his last name, runs the establishment on the corner of Oxford Way and Almar Avenue. “I have had guests from all ages, backgrounds and nationalities. Some of them, like me, fell in love with Santa Cruz and decided to settle down here.”

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The vacation rental, which was once called Surf Office Santa Cruz, has four listings for both individual rooms and shared ones, with nightly rates ranging from $67 to $105 on Airbnb.com. There it boasts average reviews as high as five stars. Emmanuel has converted the garage into a co-working spot, according to a Santa Cruz Tech Beat article written by a former guest. Other amenities, according to the article, include speedy wireless Internet, full kitchen privileges, a flat-screen television, and a yoga room, as well as bikes and surfboards for guests to use.

The question, according to Santa Cruz city planning staff, is whether or not this property crosses the line between an acceptable surf haunt and an unpermitted business operating in a residential area.

“It appears more like a business operating in a residential zone than a family renting a room to someone visiting Santa Cruz,” says Santa Cruz Assistant Planning Director Alex Khoury. Khoury says staff may have to decide whether or not the Oxford Way house needs to follow the permitting avenues that traditional inns and co-working spots do.

Khoury says staff first got a few complaints from neighbors about this house several months ago, and code enforcement inspectors stopped by in February but they were mostly concerned about noise, lights and parking. Khoury says the managers agreed to cut back on the number of occupants.

Communities all over the country, including both the city and county of Santa Cruz, are grappling with the best way to deal with the rise of short-term rentals, due mostly to websites like Airbnb. Supporters say it helps homeowners with their mortgage payments and provides an affordable yet comfortable way for tourists to travel. Skeptics worry about the loss of housing and the impacts on neighborhoods. As this story went to press, San Francisco, where Airbnb is headquartered, was voting on a proposition to limit rentals to 75 nights per year and to beef up enforcement, too.

In Santa Cruz County, Noel Bock of the Davenport North Coast Association (DNCA) has been talking with fellow board members about what to do with Airbnb in the North County’s sleepy beach town. Bock is concerned about absentee landlords who might not know or care about issues in Davenport. “Beyond that, it changes the community from a family-centered community to more tourist-centered,” she says.

The DNCA has started a discussion about possibly limiting the number of vacation rentals as county leaders do in Live Oak and Aptos, where they are capped at 15 percent of each area and 20 percent of any given block.

Out Back

The Santa Cruz City Council has been moving toward a change of its own: preventing property owners from putting vacation rentals in their accessory dwelling units (ADUs)—the back houses and converted garages sometimes called “in-law units.”

Until one year ago, ADUs were front and center in a fight to create and legalize more housing that might keep rents from going sky-high. Now they’re ground zero for a clash over vacation rentals, where they may no longer be allowed.

The ADU-Airbnb debate comes down to a couple of core issues, as the council juggles the laws of supply and demand in a suffocating housing market on the one hand, and homeowner interests and freedoms in the other. Homeowners, for instance, may have already made decisions on whether or not to buy homes based on whether or not they have the added income of a vacation rental, which is a bigger income stream than a long-term unit.

At an Oct. 13 council meeting, Vice Mayor Cynthia Mathews proposed that the city restrict ADUs for only long-term tenants—people staying more than 30 days. The motion also grandfathered in anyone already renting out their ADU as long as they were up to date on paying their transient occupancy taxes, which all guests are required to pay.

The motion passed 4-3, with Mathews, Cynthia Chase, Micah Posner, and Mayor Don Lane supporting it. The change will come back to the council on Tuesday, Nov. 10 for another reading.

Dissenting councilmembers criticized the decision, saying that more study was needed. Councilmember Pamela Comstock called for a city task force to look at short-term rentals, as one has been doing in Pacific Grove.

After the vote, the council gave direction to planning staff for things to study for a possible overhaul of vacation rentals. Suggestions include a limit on the number of days per year that each vacation rental would be available, creating a time of the year (like summer, for example) when rentals would be allowed, and even taking a close look at couchsurfing.

The planning department is looking to add an employee and schedule some town hall meetings. Planners want to tackle the new plan before the next wave of tourism hits.

“Our goal is to come back with something definitely before summertime,” says Khoury.

NIPS AND TUCKS The city of Santa Cruz will be looking at new vacation rental rules, including limiting the amount of days per year that people can stay.


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