XII. POPULATION AND HOUSING –– Would the project:
a) Induce substantial population growth in an area, either directly (for example, by proposing new homes and businesses) or indirectly (for example, through extension of roads or other infrastructure)?
b) Displace substantial numbers of existing housing, necessitating the construction of replacement housing elsewhere?
c) Displace substantial numbers of people, necessitating the construction of replacement housing elsewhere?
There are currently more than 1,500 Rooms illegally for Rent from STRs/Home Stays than are allowed by the Carmel Valley Master Plan, Big Sur Land Use Plan , and the Carmel Area Land Use Plan. Most, if not all, were long-term rentals taken off the market. There is now a housing shortage for workers, whoi are being forced in to longer commutes and higher prices for the homes or apartments they rent.
- There are currently 20 legal and more than 1,500 Rooms illegally for Rent from STRs/Home Stays than are allowed by the Carmel Valley Master Plan, Big Sur Land Use Plan, and the Carmel Area Land Use Plan
- The number of STR/Home Stays have been increasing by more than 30% per year.[i] [i]https://preservemontereyneighborhoods.files.wordpress.com/2018/08/airdna-report-complete-all-cities-and-regions.pdf
Working families who cannot afford the rents face the most daunting problems. Very long commutes, and in some cases homelessness. And then when they try to obtain housing for their familiees after being on the streets, landlords are demanding fees to consider thneir applications, and higher up-front payments – often citing Air BnB as their reason, their alternative. (Community meeting, Alisal, August 11, 2018.)
STRs squeeze the paychecks of working families which violates the LUP’s that require provision for workforce and low income housing.
- Increasing rents and longer commutes for workers in Monterey County cost working families more than $78 million per year. Paychecks have not kept pace with this increase, leaving working families to foot the bill for STR/Home Stay owners profits.
- Between July 2011 and July 2018 rent on 2 bedroom apartments increased 85% from $1,195 per month to $2,216 per month.[i]
- There are 70,000 rental units in Monterey County.
- Some portion of this is attributable to STR/Home Stays taking affordable housing off the market.In other cities, studies attribute between 9.2% and 33% of the rent increases to STR/Home Stays.[ii]
- Using the lower figure, 9.2%, the total cost to workers is $78,902,880.
[i]https://www.rentjungle.com/average-rent-in-monterey-ca-rent-trends/
[ii]“Between 2009 and 2016, approximately 9.2 percent of the citywide increase in rental rates can be attributed to Airbnb. . . . Airbnb listings were heavily concentrated in parts of Manhattan and Brooklyn and had a greater impact on these neighborhoods. Approximately 20% of the increase in rental rates was due to Airbnb listings in midtown and lower Manhattan . . . “
The Impact of Airbnb on NYC Rents; May 3, 2018; Scott M. Stringer, New York City Comptroller; https://comptroller.nyc.gov/reports/the-impact-of-airbnb-on-nyc-rents/ – –
And also see “Airbnb listings are concentrated in just seven of the city’s densest, most expensive neighborhoods: Venice, Downtown, Miracle Mile, Hollywood, Hollywood Hills, Echo Park, and Silver Lake. These tourist destinations account for nearly half of Airbnb listings, and 69% of all Airbnb-generated revenue in Los Angeles. In 2014, rents in these neighborhoods were 20% higher, and increased 33% faster, than rents citywide. . . . Airbnb indirectly reduces the affordable housing supply by reducing the overall housing supply. As a result, the pressure that STRs place on rent prices pushes units out of the margins of affordability for low- and middle-income residents, an effect that cascades throughout the city. In 2014, Airbnb removed 1% of the units from Los Angeles’s rental market— and substantially more in some neighborhoods—while monthly rents in- creased by 7.3%. And by reducing the overall housing supply, Airbnb is partially responsible for the citywide rent increases that further reduce the supply of affordable housing.” How Airbnb Short-Term Rentals Exacerbate Los Angeles’s Affordable Housing Crisis: Analysis and Policy Recommendations; Dayne Lee; Harvard Law & Policy Review; Vol. 10; 2016
There is now massive amounts of evidence that STR’s and Home Stays take lomg-term housing off the market, and drive up the cost of what remains. Below are numerous articles supporting this statement, and many more have been written. Serious governmental and academic articles have been appearing starting a year or so ago.
ARTICLES
2015-2013_Housing_Element City of Monterey
Raising the Roof – Voices of Monterey Bay
The Impact of Airbnb on NYC Rents : Office of the New York City Comptroller Scott M. Stringer
Airbnb gentrification: How the sharing economy drives up housing prices.
Rental housing shortage on Monterey Peninsula prompts call for referrals, finder_s fee of $500
Least Affordable Housing Market
Airbnb Drives Up Rent Costs in Manhattan and Brooklyn, Report Says – The New York Times
Hotels, STRs going at a premium during Classic Car Week
Here Comes the 2nd Wave of Big Money in the “Buy-to-Rent” Scheme | Wolf Street
The Long and Winding Road Leads to a Job In a Place You’ll Never Be Able to Afford
The local hospitality industry is reaching a critical point. The high cost of living is driving employees out of the Central Coast. Those help-wanted signs on restaurant windows are starting to yellow. HR departments are desperate to fill housekeeping positions. Nowhere is the problem more acute than in Big Sur, where affordable housing is nonexistent. According to hospitality leaders that Voices writer Laith Agha talked to, there are no immediate solutions, which means that the employees they do manage to hire must be willing to endure one long (if not beautiful) commute.
Monterey Peninsula cities grapple with boom of short-term rentals,
Monterey Herald, by JAMES HERRERA
“It’s purely financial,” one Monterey property owner said of her motivation to rent out short term. “To stay in my home, I need this income.” She asked that her name not be used for fear of repercussions from the city. Monterey prohibits rentals for fewer than 30 days.
She explained that renting out her extra rooms long term might bring in $600 to $1,000 each per month. But in the last five months she has rented them short term, bringing in $3,400 to $3,800 each per month.
From To Be or Air BnB; From Voices of Monterey Bay,
by Joe Livernois, 12/7/17
BUT AIRBNB, TRUE TO ITS DISRUPTOR REPUTATION, CHANGED EVERYTHING IN CITIES AND NEIGHBORHOODS. THE BUSINESS MODEL BECAME FASHIONABLE IN A HURRY. LONG-TERM TENANTS WERE TURNED OUT OF HOMES TO MAKE ROOM FOR SHORT- TERM VISITORS WHO WERE WILLING TO PAY THE EQUIVALENT OF A MONTH’S RENT FOR A WEEK IN MONTEREY.
THE LOCAL CONCERNS ARE THREE-FOLD. FIRST, AFFORDABLE RENTALS FOR RESIDENTS WHO WORK ON THE CENTRAL COAST ARE HARD ENOUGH TO FIND, HARDER STILL NOW THAT SO MANY OF THEM ARE BEING RENTED TO OUT-OF-TOWNERS FOR SHORT PERIODS OF TIME. . . .
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Monterey Bay employers say lack of affordable housing a concern
POSTED:
Monterey >> A lack of affordable housing for workers emerged as the biggest concern of employers Thursday at a regional economic meeting.
About 70 people attended the Monterey Bay Regional Critical Conversation at Casa Munras Hotel, which focuses on a variety of issues of concern to businesses in Monterey, Santa Cruz and San Benito counties. Similar themes emerged among executives at Scotts Valley-based Fox Shox, Hyatt Regency Monterey Hotel & Spa and Spreckels-based Tanimura & Antle, who together represent about 4,300 workers.
“It is a challenge for the entry-level worker, who often has two jobs, to afford the housing in this area,” said Paula Calvetti, human resource director for Hyatt. “In all honesty, it’s more of a sticker shock.”
Affordability levels in all three counties have hit record lows, driving up the cost of rentals and hampering recruitment efforts. Tanimura & Antle’s human resources director, Larry Silva, said a need for housing is what led it to propose a $10 million, 800-person farmworker housing project in Spreckels.
Michael Cowen, human resource director for Fox Shox, said affordability levels in Santa Cruz County needed a special solution, like a light rail. When working for San Jose-based Cisco Systems, young engineers lived in townhouses in more affordable areas and would then take the train to work.
“Some sort of development like that would be really nice to see … so that people could (ride the train) and not have to have multiple jobs,” he said, adding that housing costs are affecting Fox’s ability to recruit high-level engineers.
Calvetti said employees are moving farther away than usual for housing, especially in Salinas. Housing costs are also part of the reason why Hyatt and Tanimura & Antle are having a hard time filling entry-level jobs.
“It’s an honorable profession. There’s nothing wrong with being a field worker,” Silva said.
In April, just 22 percent of homes in Santa Cruz County and 29 percent in Monterey County were considered affordable. In Monterey, a minimum qualifying income of $92,170 is needed to afford a home.
Rising home prices have also led to an increase in rents.
In March, Salinas made the top 10 in rent growth for California cities, according to the Apartment List Rentonomics blog.
California Association of Realtors chief economist Leslie Appleton-Young said at Thursday’s event that the state has gone through home affordability issues before but she can’t recall it being this bad.
“There are people all over California that probably want to see their grandchildren once in a while and don’t want their kids to move out of state because there’s no affordable housing,” she said.
She said local buyers are also competing with Chinese buyers who are paying more than asking price with cash. Chinese buyers bought 16 percent of all homes purchased by foreign citizens in 2014, according to the National Association of Realtors. About half of those homes purchased were in California.
“I don’t really think they have effective budget constraints, which is a fantasy for many of us,” she said.
The convention was also a chance for the Monterey Bay Economic Partnership to promote its website, which has data and help for businesses in all three counties, and Monterey County Business Council to show off its ACT WorkKeys program.
The WorkKeys Assessment is a national test used to rank potential employees and already used by Monterey-Salinas Transit, Hyatt, Encore Recycling and others.
“All those extra visitors must be staying somewhere, and that somewhere is private residences. Bonham estimates there were 14,000 rooms on the vacation-rental market in 2016 (that’s assuming full-time use, so the actual number is probably much higher), and every one of those is another unit that’s not available for residents looking to buy.”
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STR’s Cause Sky-High Home and Long-Term Rental Prices; Washington Post
“All those extra visitors must be staying somewhere, and that somewhere is private residences. Bonham estimates there were 14,000 rooms on the vacation-rental market in 2016 (that’s assuming full-time use, so the actual number is probably much higher), and every one of those is another unit that’s not available for residents looking to buy.”
One answer trumps all others: home prices. Hawaii has the most expensive housing in the nation, according to the home value index from housing website Zillow. Rent costs trail only D.C. and (in some months) California. Overall, Hawaii had the highest cost of living of any state in 2017 (D.C. was higher), the Center for Regional Economic Competitiveness found, and housing was the main driver.
That second part is the key.
All those extra visitors must be staying somewhere, and that somewhere is private residences. Bonham estimates there were 14,000 rooms on the vacation-rental market in 2016 (that’s assuming full-time use, so the actual number is probably much higher), and every one of those is another unit that’s not available for residents looking to buy.
Average hourly earnings for private-sector employees in Hawaii ranked 15th in the nation over the past year, and they consistently grow more slowly than home prices.
“There’s a connection there between that booming number of arrivals and that vacation-rental market and … some of the exits of people from the state because of rising costs,” Bonham said.