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Santa Cruz Vacation Rental Debate Doesn_t Cool Down at Planning Commission

Santa Cruz Legacy STR's Map.jpeg

 

Santa Cruz STR Map as of April 2017.jpeg

Appeal to SC City Council to preserve rental housing for local residents

Our community is losing much-needed rental housing units to the short term vacation rental industry.

Please join us in urging the Santa Cruz City Council to adopt rules that will preserve rental housing units for local residents and local workers.



The revolt against STR’s in Santa Cruz is particularly important because the Coastal Commission has been holding up Santa Cruz as an example of unfettered STR’s being accepted by a happy community.  Subsequent events show that the tide has shifted dramatically, and that the Coastal Commission was wrong in its assessment.

Quote from the June 23, 2016 letter from the Coastal Commission (Susan Craig) to the Monterey County Planning Commission:

Commission staff has experience in working with local governments to draft and implement such regulations, including recent LCP requirements associated with vacation rentals for both Santa Cruz and San Luis Obispo Counties.2 In place of prohibitions, which the Commission has historically not supported,3 these coastal communities instead were able to find a balanced middle ground that helps to ensure that vacation rentals are regulated, including for transient occupancy tax and rules and regulations purposes, and limited as necessary to avoid oversaturation of such rentals in any one neighborhood or locale. These programs have proven successful in Santa Cruz and San Luis Obispo Counties, and we would suggest that their approach can serve as a model for Monterey County moving forward.

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From Voices of Monterey Bay, by Joe Livernois 12/7/17

 

Santa Cruz, like Monterey, is a historic vacation destination. But Santa Cruz visitors tend to be day-trippers, and the city has far fewer visitor lodgings than Monterey.

And until recently, the presence of vacation rentals in Santa Cruz was uncontroversial and nearly unregulated.

Before 2016, Santa Cruz didn’t regulate vacation rentals except to demand payment of the city’s Transient Occupancy Tax (TOT), which currently amounts to 11 percent of the room rate. But the arrival of the sharing economy, combined with the soaring cost of coastal housing, quickly elevated the issue to a furious debate.

The key question was whether short-term rentals were displacing long- term rentals, in a city with a critical housing shortage. There were also concerns about parking and neighborhood disruption, already common irritants in a university town with numerous student rentals.

In October 2016, Santa Cruz placed a temporary moratorium on new vacation rentals while o!cials sought public comment and studied the impact of STRs on long-term rental housing. A year later the City Council approved a compromise designed to protect long-term rentals and allow a limited number of city residents to host visitors in their homes.

The ordinance is awaiting review by the state Coastal Commission, and city officials hope it will be approved before the moratorium expires on May 31, 2018. The Coastal Commission is charged with preserving access to California’s coastline, and tends to favor rules that result in affordable visitor lodging.

The Santa Cruz ordinance makes a key distinction between “hosted” STRs, where the homeowner is on site and offers space in the home, and “non-hosted” STRs where the owners live elsewhere, and guests occupy the entire unit.

Hosted STRs are favored by the ordinance, as they do not displace existing rental units, while non-hosted STRs are discouraged. The ordinance would grandfather in existing STRs but ban new non-hosted rentals, and eliminate most existing non-hosted rentals by attrition, over time.

The ordinance would allow up to 250 hosted STRs in Santa Cruz, with existing units having priority and the rest permitted on a first-come, first served basis.

Home-swap arrangements would be exempt from regulation, and STRs would not be allowed in legally-restricted a”ordable housing or accessory dwelling units, except for a handful with permits obtained before November 2015.

“It was a very polarized debate,” said Scott Harriman, special projects manager for the city of Santa Cruz. “People who do short term rentals love them, those who don’t, hate them.”

The city sought a middle ground that protected rental stock, and allowed law-abiding homeowners to host STRs and earn income on the side. Those STRs will also provide TOT revenue to a city that has long sought to build new hotels.

The city of Santa Cruz currently offers 2,090 visitor rooms, compared to 4,664 rooms in the city of Monterey. Countywide, the numbers are even more lop-sided. Santa Cruz County provides a total of 4,637 rooms, while Monterey County offers 11,976, according to statistics from both counties’ visitor agencies. These numbers include hotel rooms, bed and breakfast inns and vacation rentals managed by agencies. They do not yet include rentals listed solely on online platforms such as Airbnb.

 

Santa Cruz County also draws a distinction between “hosted” and “non-hosted” vacation rentals in homes outside the cities. It regulates all non-hosted rentals under longstanding whole-house vacation rental rules. Whole-house vacation rentals in desirable beachfront neighborhoods have long been blamed for reducing housing options and plaguing residents with parking conflicts, loud parties and other bad behavior. Existing county law limits the number of whole-house vacation rental permits and applies strict licensing rules.

The county is now drafting rules for hosted short-term-rentals, with a proposed ordinance going before the Board of Supervisors on Tuesday, Dec. 5. The rules would cover hosted STRs in the county’s unincorporated areas, including communities like Aptos and Soquel.

 

The proposed ordinance would limit the numbers of days that homeowners, and a handful of grandfathered-in renters, can rent spare rooms to visitors in a year. The total number of permits would not be limited. Hosts in most of the unincorporated area would be allowed no more than 110 rental days per year. Hosts in three specific neighborhoods –— Pleasure Point, Seascape and Davenport — would be limited to no more than 55 days per year.

 

STRs would also have to obtain permits, pay fees, and meet parking, occupancy, noise and other standards.

 

Supervisors will consider the proposal Tuesday, and any ordinance they move to adopt must eventually also pass muster at the Coastal Commission.