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.”
(2) comments
This council majority aided city atty. Laredo in crookedly losing the vested pension rights case(POAv City of Pacific Grove) a citizen's ordinance that reformed pensions. On March seventh another appellate case(Fry v. City of LA) showed the body of law that applies to charter cities like PG. Unfortunately, Judge Wills was not informed of that body of law(as an expert, Laredo and LCW knew it well). As a result of thowing the case, PG has an unfunded pension deficit, using market rates, of about $117M(Stanford Pension Tracker). Hence the need to commercialize by hook and by crook. PG, by its Charter is to retain a residential base, so that it creates an atmosphere conducive to families, but the council has become revenue crazy in a fruitless attempt to pay for the ill-gotten pensions. Short term rentals ruin family residential areas. We created zoning for a reason. Rudy Fischer is running for mayor and he supported Laredo's ruinous scheme.
The first short term rental ordinance was approved in 2010 very naively. The intent was to provide residents with an opportunity to get some short term income if they happened to be gone on a vacation. It was never intended to commercialize the residential zones by creating semi-permanent mini-hotels for real estate investors or people who do not permanently live in Pacific Grove, but who simply want to make a bundle of money at the expense of neighbors who do live here. And that is what is now happening. I have had real estate brokers tell me that there is now a business in selling PG real estate to outside investors for short term rentals.
There is nothing 'pioneering' about this. They are approving a bad ordinance that will do nothing but degrade the residential zones and decrease the number of properties available to long term residents.
Moreover, I believe the City is probably violating state law, because as proposed it provides a privilege to a few 'lucky' property owners in residential zones that is not equally available to every property owner in the same zone. If you investigate this issue, you will find that some cities, such as San Francisco, allow any property owner to get a license to have one short term rental over a limited time, such as during a single month of the year. That preserves the properties as permanent residential dwellings for the rest of the year. No one gets to have short term rentals during every month of the year, which in effect makes a business of short term rentals. This is what the original ordinance should have done. If you allow short term rentals at all, placing a cap on the number is inherently unfair to the person who simply wants to rent their property for a week or a weekend, at most once a year.
Alternatively many cities, that really cherish the role of their residential neighborhoods, simply prohibit short term rentals outright. That is what Carmel did. Apparently our City leaders do not have such foresight, or forgot that PG is supposed to be a City of Homes.
The real motives behind this move in Pacific Grove are based on the greed of a few property owners and the City's desperate need for revenue. Unfortunately this has led to the current proposal, which seeks to maximize profit for a few at the expense of the many, as well as line the City's pockets with new revenue, needed mostly for unsustainable salaries and pensions.
And this is what tends to happen when normal citizens do not remain vigilant and informed.
Welcome to the discussion.
Log In
Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
PLEASE TURN OFF YOUR CAPS LOCK.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.