As you may have heard, Sonoma County is the latest community tightening its regulation of vacation rental properties. The Sonoma County Board of Supervisors approved an ordinance in early November requiring vacation rental owners to obtain a permit starting January 2011. The ordinance requires existing vacation rentals with 6 or fewer rooms to obtain a $150 permit, and also to submit documentation that their septic system is at least class 3. Properties with more than 6 rooms (or new properties with more than 5 rooms) will need a use permit, which can cost as much as $3,800.
“Existing” and “new” designations are based on whether the property has paid the county lodging tax for the past 2 years.
The permit application is not yet available but should be online starting January 1, 2011. An announcement will appear on the county’s website (sonoma-county.org/prmd) when the application is ready. In the meantime, vacation rentals that are not registered with the tax collector should do that. For more information about taxes, call 707-565-2869.
Sonoma is not the only region paying increasing attention to vacation rentals. Recently, New York City stirred up controversy with a new law cracking down on short-term rentals. The law is targeted at residential motels and landlords who covert multiple units en mass into short-term rentals. The city says their focus is not the small-time owner who rents out an apartment while on vacation.
San Francisco and Paris are two other major cities with short-term rental bans on the books–but in both cases, the laws are infrequently enforced, and the focus was never on individual owners. Still, the topic draws much ire from homeowners who believe their property rights should cover their ability to rent out their home. Tourists are also irked, since vacation rentals are often the only affordable lodging option in big cities, and banning them limits a city’s tourism revenue.
For the time being, most travel experts agree that vacation rental owners and budget travelers have little to worry about.
In the words of a staffer from New York Senator Liz Kreuger’s office: “Certainly what we’re concerned about are the major operators who are renting out dozens and hundreds of rooms at a time, not Mrs. Jones who might be renting out her apartment for three weeks.”
Some of Inhabit’s Sonoma vacation rentals will be impacted. Our advice–and of course, we’re not lawyers, so we suggest contacting one if you’re concerned–is to do your level best to run an open, honest business. Collect your local lodging tax, be a good neighbor, and follow any and all new regulations. The whole issue is a gray area in most communities, but given the growth of the vacation rental industry there’s little doubt that it will be under increased scrutiny in coming years. The more we show the world that vacation rentals and short-term lodging enhances rather than hurts local communities, the better off we’ll all be.
If any of you own or manage vacation rentals, we’d love to hear about your experience with local regulation. Do you have any recommendations or tips to share?
Here’s what the code says about vacation rentals:
Section 41A.5 “(a) Unlawful Actions. It shall be unlawful for any owner to offer an apartment unit for rent for tourist or transient use.”
BUT! The definition of “apartment unit” is important:
Section 41A.4 “(a) Apartment Unit. Room or rooms in any building, or portion thereof, which is designed, built, rented, leased, let or hired out to be occupied, or which is occupied as the home or residence of four or more households living independently of each other in dwelling units as defined in the San Francisco Housing Code….”
Section 41A.4 “(c) Tourist or Transient Use. Use of an apartment unit for occupancy on less than a 30-day term of tenancy.”
What this adds up to is that vacation rentals are fine, as long as the apartment is in a building of fewer than four units. If the building has four or more units, the minimum rental period is 30 days. Lodging taxes (14% in SF, plus 1-1.5% TID depending on the area) are due for rentals of 29 days or less.
What’s still unclear is how the city treats large condo buildings, but usually these buildings’ homeowners associations have their own set of rules which would incorporate city requirements.