After about two-and-a-half hours of speakers at the May 17 Pacific Grove Council meeting—42 to be exact—council members pushed off making a decision on the city’s short-term rental ordinance until possibly late June.
And despite pleas from some residents to rescind the ordinance altogether, it became very clear by the time the council adjourned at 10pm that the ordinance will change, but it’s not going away.
Money was clearly on the minds of many, including STR owners, local businesses that benefit from visiting guests—and possibly in a more urgent way—Mayor Bill Kampe and some council members with their eyes on the city’s budget.
After the long list of speakers filed through, Kampe said besides it being too late in the evening to make policy decisions, he wanted to wait to hear the city’s financial forecast scheduled for a May 31 special meeting.
“Several speakers have dismissed the financial aspect and the impact to the city, and finances have a really big impact on the quality of life in this city,” he said.
A staff report estimated that Pacific Grove pulls in more than $1.1 million a year in transient occupancy taxes and fees directly related to its STR program. That amount could rise to $1.4 million next budget year. Currently there are 272 active STR licenses.
Of the 42 speakers, 26 spoke in favor of short-term rentals. One STR owner said she was contacted by industry giant Airbnb about the meeting.
Several STR owners who spoke said they were from a long line of Pagrovians, just trying to keep the homes they inherited from parents and grandparents. Others said they want to eventually retire in P.G., but the only way they could afford it was by buying homes now and using them as STRs until retirement comes.
One man, who said he manages a STR for a friend who lives elsewhere, said the people who stay at the home spend money in town, providing jobs. He urged residents to share the town with visitors. “Let’s be nice to each other, let’s share our space, let’s be family.”
Other speakers understood P.G. is a tourist town, but were not thrilled about sharing residential neighborhoods, suggesting that’s what hotels are for.
Several said they would be willing to accept the ordinance with changes to prevent some of the nuisance issues troubling residents. Only about 10 speakers said they wanted the council to abolish the ordinance all together.
Michael Matthews said his main concern was affordable housing and the availability of rentals. He noted a difficulty in recruiting and retaining employees to come live on the Peninsula.
Calling the city’s ordinance a “Faustian bargain,” he said that if the city needs $1.5 million to service the pension debt, the community should shoulder paying it. He estimated his share would be less than $1,000.
“And if you’re asking me if I’d like to pay a thousand dollars to prevent a hotel opening up across the street from me, then that’s a bargain,” Matthews said.
The city currently caps the number of Type A licenses—where entire homes are rented out year round with the owner living elsewhere—to 250, with no limits on other forms of licenses, like homes that are rented out less than 90 days per year, or home-sharing situations.
A staff proposal would cap all licenses at 300 total, regardless of the type of license. That would amount to 3.6 percent of the city’s housing stock.
Kampe called the argument that STRs are the cause of a lack of affordable housing “nonsense.” He said the real problem is vacant second homes, something the city has no control over.
“So to me the dilemma of this is, we have to deal with the reality that is new to us, and how do we do that in the most constructive way,” he said.
Kampe and three other council members said they would favor keeping the STR license program, but with limitations like capping the total number of licenses, the number of nights, and other aspects. One council member, Rudy Fischer, was absent.
Only one council member, Robert Huitt, said he believes STRs violate residential zoning ordinances and should be phased out.
Pointing out that home-based businesses face restrictions in order to protect the residential character of neighborhoods, he said that STRs “obliterate the distinction between commercial and residential, and it does it under the radar,” changing neighborhoods without going through a formal zoning change process.