With the spread of online short-term rental services like Airbnb, travelers have more options for lodging than ever before. But the rapid rise of short-term rentals has resulted in problems in many communities, as regulation struggles to keep pace with new rental practices.
“There’s about 2 million short-term rentals in the country, and in California, there’s about 330,000,” said Ulrich Binzer, the founder and CEO of Host Compliance, a company that helps local governments identify and regulate short-term rentals.
“The reason why a lot of counties in California and other places care about (regulation of short-term rentals) is obviously that they want to make sure that everybody pays their fair share of taxes,” Binzer said. “The second thing that a lot of California cities are concerned about is how short-term rentals are impacting the neighborhood character of these communities.”
According to Calaveras County Planning Director Peter Maurer, short-term rentals have increased in the county in recent years. While Maurer pointed out that short-term rentals can benefit the local economy by allowing more accomodations for tourists in areas that may not have enough hotel rooms, and by providing revenue for the county through the collection of the Transient Occupancy Tax (TOT), they can also cause problems in residential neighborhoods.
“They definitely can (cause negative impacts), especially in tourist areas such as Murphys,” Maurer said in an email. “In many communities, and we are beginning to see it in Murphys, many residential units that could be available for families and workforce housing are converted to STVRs (short-term vacation rentals), leaving them vacant during the week and occupied by tourists on the weekend. This drives up housing costs and, in extreme areas, completely converts a community.”
A recent study by the Economic Policy Institute, “a nonprofit, nonpartisan think tank created in 1986 to include the needs of low- and middle-income workers in economic policy discussions,” according to its website, the costs of short-term rentals, specifically those operated by Airbnb, generally outweigh their benefits in the communities in which they operate.
The study found that while Airbnb increases competition in the rental market and likely lowers prices, there is significant evidence that it also drives up the cost of housing, as former long-term rentals are placed in the more lucrative short-term rental market, which caters to tourists rather than residents.
Although proponents of short-term rentals often argue that services like Airbnb increase tourism and are a boon to local economies, the study found that there was little evidence that Airbnbs substantially increased tourism, and significant evidence that they tend to compete with more traditional forms of lodging, like hotels.
While property owners and travelers can benefit from Airbnb, according to the study, other residents are affected by negative externalities like increasing noise and stress on infrastructure.
The study also found that the shift from traditional hotels to Airbnbs has led to difficulties in collecting taxes for local governments.
In recent years, local governments have passed ordinances to further regulate short-term rentals. These ordinances have sometimes been met by litigation by the short-term rental industry and other interested parties.
On Nov. 16, 2018, voters in South Lake Tahoe narrowly approved Measure T, which banned short-term rentals outside of the tourist core and commercial areas of the city by the end of 2021, with some exceptions for local residents.
In mid-December of last year, the South Lake Tahoe Property Owner’s Group filed a lawsuit against the city, claiming that the citizen-driven initiative was unconstitutional.
On Sept. 3, with the case still awaiting judicial review, the South Lake Tahoe City Council voted unanimously to defend Measure T in court.
In Calaveras County, there is currently a shortage of affordable housing. According to the 2019-2027 Calaveras County Housing Element, approved by the Board of Supervisors on Tuesday, 36.6% of the county’s housing was unoccupied in 2018. This compares unfavorably with the state’s 7.4% vacancy rate, and is largely due to the high numbers of second homes and vacation rentals in the county.
The Department of Housing and Urban Development defines a household as “cost burdened,” meaning it may have trouble affording basic necessities if more than 30% of household income is dedicated to housing. In Calaveras County, 30% of the Area Median Income equals $542 per month in housing costs, according to information cited in the Calaveras County Strategic Plan to Address Homelessness.
Because the average rental price of a two-bedroom home in the county is $930 per month, minimum wage earners would have to work 63 hours per week to not be considered “cost burdened.” Someone subsisting on Supplemental Security Income, which is currently $906 per month, can only afford to pay $272 per month to avoid being considered “cost burdened,” according to the Homeless Plan.
While the county requires the operators of short-term rentals to register, pay the TOT and obtain a business license, enforcing these policies can be difficult. Companies like Airbnb are generally not required to hand over detailed information about their clients to local governments, so locating and regulating short-term rentals is often difficult.
“The websites actually don’t provide the true location. They don’t put the address on the listings … They do that because they don’t want the renters and the hosts to connect outside of the online platform,” Binzer said.
The high turnover rate in the industry – 60% in a given year, according to Binzer – compounds these problems.
Calaveras County currently has an ordinance regulating short-term rentals in the Lake Tulloch area, and also requires conditional use permits in order for homeowners to rent two to five rooms in residential zones. However, renting an entire house or a single room outside of the Lake Tulloch area does not currently require a permit.
According to Binzer, in June of 2019, there were about 900 individual short-term rentals listed online in Calaveras County, excluding the city of Angels Camp. There are currently 375 short-term rental accounts registered in the county, according to an email response from the Calaveras County Tax Collector’s Office.
During the drafting of the latest Housing Element for the General Plan earlier this year, the county held three community workshops in order to provide opportunities for public participation.
One comment from the public asserted, “Vacation homes in Murphys and Arnold are taking up all the workforce rental housing options.” Another comment received stated, “The county should take on a market analysis to identify the impact of vacation rentals throughout the county.”
In response, the Housing Element commits the county to undertaking a vacation home rental study by 2021 “to assess how vacation home rentals impact local workforce housing and the housing market and propose ideas to mitigate the impact.”
The county is also in the process of joining with Host Compliance to enforce short-term rental registration and compliance, according to an email response from the Calaveras County Tax Collector’s Office.