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The San Ramon City Council has taken steps toward the potential regulation and taxation of short-term rental residential properties within city limits.
Council members instructed city staff to proceed with studying and forming a plan on how to deal with, currently unregulated, short-term rentals at their regular council meeting Tuesday night.
“This is a start. We know we have to do something and if people come out in droves and say ‘no’ then ok, but we have to take the next steps and ask is there an answer out there,” Councilman Dave Hudson said. “Let’s proceed, take a study or whatever, take another meeting and listen to the public.”
San Ramon may have taken a step toward regulation, but it will take the formation of an actual plan to be presented to the council at an as of yet unspecified future meeting, to decide if short-term rentals will be regulated, or even allowed within city limits.
Short-term rentals are typically defined as a direct rental agreement that lasts less than 30 consecutive days, often through services like Airbnb and VRBO. They offer visitors to the city the opportunity to rent a furnished home or apartment to stay in for a limited amount of time. This is done in a way that is similar to a visitor renting a hotel room, but usually the owner lives in the rented property when they are not renting it out.
“(Short-term rentals) are just an alternative to hotels but it’s not an even playing field,” planning division manager Lauren Barr said at the meeting.
A key discussion point is the implementing of a transient occupancy tax (TOT) on short-term rentals. Currently, the city has a TOT that charges hotels a tax based on how many rooms are occupied every night, however this tax does not yet extend to short-term rental properties
“Preliminary analysis shows approximately 50 short-term rental properties within city limits but that can change greatly from season to season … It is very difficult to quantify,” Barr said.
Due to the temporary nature of short-term rentals, it is difficult to obtain an accurate number on the total amount available in San Ramon, Barr said. Based solely off of the preliminary numbers collected by Barr in his staff report, a TOT on short-term rentals could bring in $57,000 in revenue per year. Barr stressed however that further research would be necessary in order create a more accurate number.
“It appears to me we have three choices: we can either ban them all just say you can’t do it, we could put together regulations and rules, or we can continue to do what we do now which is allow it to happen but we don’t have any rules in place and enforcement is based off of complaints,” Mayor Bill Clarkson said.
Neighboring Danville banned short-term rentals in town limits completely in 2016, deciding that they were essentially commercial rental operations occurring within residential only districts. This is one option the city will consider, but according to Barr some residents will still slip through the cracks and rent to customers in the short term.
San Francisco has a model for more active regulation, that includes a 14% TOT on short-term rentals, requires hosts to live in their home 75% of the year prior to renting, and mandates hosts have a minimum of $500,000 in liability insurance.
Or San Ramon can keep the status quo. Officially short-term rentals are viewed by the city in the same manner as bed-and-breakfast lodgings. In practice however short term rentals tend to not follow these city codes concerning B&Bs.
“A bed and breakfast land use, regardless if it is a private agreement via an internet website, requires approval of a land-use permit, which includes public notice to the neighbors,” Barr said in his staff report. “To date, no one has applied for a land-use permit for approval of Airbnb business, and those local residents who are offering (short-term rentals) are doing so in a discrete manner.”
Outside of their online presence, short-term rentals have only come to the cities attention as a result of complaints made by neighbors of the property. These complaints are most often related to “noise, parking, trash or strange people coming and going in a manner that is inconsistent with the typical neighborhood character,” according to Barr.
“The one hesitation I have is once we open the doors to this, if we officially decide to regulate it, then these uses will be allowed in residential neighborhoods so it is a commitment to this course of action,” Barr said explaining that regulation would essential legalize short -erm rental properties in residential neighborhoods.
Councilman Harry Sachs is one member who is pushing for an increased TOT among hotels as well.
“I am as anti-tax as the next person but not when it comes to the place where I am raising my family. Local control over local revenue leads to better city services and amenities for all of us,” Sachs said in a email updating voters on the council’s first quarter of 2018.
In the email Sachs further that if voters elect to increase the TOT on hotels it would raise $1.2 million in new revenue annually for the city, which would go towards protecting current levels of service in police, public works and parks programs. “Who pays it?” he asks. “People who stay in our hotels.”
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