Once again, Pacific Grove is a pioneer.
In 2010, the city passed an ordinance to allow short-term rentals, a move that anticipated the rise of visitor-serving websites like Airbnb. Six years later, they remain the only Peninsula city to do so.
But there have been growing pains: Just two years ago, the city had 173 licensed short term rentals, earning the city about $350,000 annually in transient occupancy tax. Now the number of licensed homes has reached 215, which brings the city about $700,000 annually.
“At no time did anybody see this coming,” says Thom Akeman, who lives on a block near downtown. “It’s made us pretty miserable for the last 16 months or so.”
The primary issues stem from the density of the rentals in certain neighborhoods, and the frequency with which they’re being rented: On one block, 62 percent of homes are rented out short-term. Three homes in the city are rented out more than 270 nights per year.
Akeman approached City Council with his concerns just over a year ago, and many others followed suit. The council responded last summer by passing a temporary moratorium on new licenses, and to find a long-term solution, the city formed a stakeholder task force last fall.
The product of that task force is an amended ordinance approved by the Planning Commission March 3, and which comes before City Council March 24. Broadly speaking, it would impose a cap of 250 licenses in the city and limit the density of rentals to no more than 15-percent on a block.
“We’ve found middle ground,” says Mark Brodeur, the city’s community and economic development director. “The ordinance now protects both sides of the issue equally.”
City officials across the nation have been calling about the ordinance, Brodeur adds. “They’re saying, ‘Once you pass the ordinance, send it to us.’”
Jan Leasure, managing broker for Monterey Bay Property Management, was on the task force, and agrees with Brodeur. “On the whole, the revision was well-received,” she says.
If the proposed amendments pass, change might still take awhile: All existing licenses will be grandfathered in, so blocks above the 15-percent density threshold will remain that way until some homeowners don’t renew their licenses. Brodeur says the annual dropout rate is between 10 and 15 percent.
Akeman, who was also on the task force, wishes all short-term rentals would just go away. But he knows that’s not realistic: “If we have to have them, [the amendments] would lessen the impact.”