• Short term rentals on the agenda

    In March 2009 members of the public identified the possibility changing the city’s Transient Use License ordinance as a way to generate much-needed income for the city. In April 2009, the City Council directed staff to develop an ordinance to amend the Municipal Code to not only allow for short-term vacation rentals but to find a way to tax and to regulate them.

    At the time, staff estimated that if 100 properties rented for 10 weeks per year at $1,800 per week, Transient Occupancy Tax revenue to the City could generate $180,000 based on ta TOT tax of 10 percent. An annual licensing fee of $200 on each such property would help cover the costs of enforcing such an ordinance.

    In the recent budget report, the city states that short-term rentals have generated $453,048 in fiscal year 2013-14; the estimate for 2014-15 is $595,000. Projections for the next five years include a 3 percent increase in that figure every year. That’s a lot of money. It would pay many salaries, fix a lot of roads, retire some debt, buy a lot of streetlights at Candy Cane Lane.

    And those are the legal rentals. Who knows how many illegal ones are out there, not paying TOT but still generating sales tax as they patronize our stores while not using a lot of city services.

    But it comes at a price. The biggest complaint coming from neighbors is about the loss of the flavor of a neighborhood. No one knows anyone anymore. There are complaints that short-term renters don’t respect the neighbors’ privacy, and there’s the dearth of parking – particularly in the Retreat area. While rowdy parties have not been big problems, there have been complaints about late-night parties.

    Part of the short-term rental ordinance requires that either the owner or their agent be quickly reachable in the event of problems with the tenants, which hasn’t always been the case. Owners live hours away and do not have an attachment to the property, though they may hire caretakers, housekeepers and gardeners.

    Another, more hidden problem is that of property values: Prices go up and up as properties are purchased and turned into lucrative short-term rentals. Soon they are priced out of the reach of young, local families and retirees seeking to spend 365 days a year here.

    On the other hand, the properties are being cared for while year-round residences might have less manicured lawns and worse. The short-term renters eat out more often than year-round residents and they patronize our businesses while visiting.

    What is your take on this? City Council will discuss a moratorium on new permits at the Wednesday City Council meeting. Is the price worth the benefit? Should we limit the number of permits issued in certain areas? Should we stop issuing permit altogether, and risk lawsuits? Let us know what you think.


    Commercial TOT (hotels and B&Bs) generated $3,278,458 in 2013-14 and is on target to reach $3,137,000 in the current fiscal year. Only 24 rentals are still available in Pacific Grove during Concours week on AirBNB, ranging from a crash sofa to an entire estate. Average cost: $323 per night.

    posted to Cedar Street Times on August 3, 2015

    Topics: Front PG News


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