Seaside wrestles with bringing short-term rental owners into compliance, and charging back taxes.

As the controversy surrounding short-term rentals was heating up in Pacific Grove, Carmel and Monterey in recent years, Seaside took a laissez-faire approach, and left them unregulated until last summer.

After a series of public meetings – and some spirited debate about the impact short-term rentals might have on affordable housing – Seaside City Council came to a compromise and approved a relatively lax short-term rental ordinance that took effect in August 2018.

But, evidently, many short-term rental owners – despite having had a large presence at the public meetings – didn’t get the memo. To date, just 17 licenses have been issued for 29 properties, another 21 are being processed for 28 properties and only $27,000 in transient-occupancy tax has been collected from the rentals.

The city’s estimate is that 120 short-term rentals are currently being advertised in Seaside.

On March 7, Seaside City Council will consider authorizing City Attorney Don Freeman to work out a payment plan for back taxes for those owners who got their licenses after the ordinance went into effect, and to bring enforcement action against those still operating without a license. (Under the ordinance, property owners are subject to fines of up to $2,500 a day.)

“The first thing would be to make sure everybody is aware of the ordinance,” Freeman says, adding that would mean a phone call, and then a formal letter.

“If that doesn’t work, we’d file an action against them and put them into compliance,” Freeman adds. “But the idea is to gain compliance, and not to beat people up.”

The trickier question is whether to forgive back taxes that are owed, because that would also likely mean having to refund taxes that licensed owners have already paid.

“That’s the question the City Council has to decide,” Freeman says. “To my way of thinking, most of the [short-term rental owners] had been at the public hearings, and those people realistically should have been collecting the tax.”