Business & Real Estate

The 'hotel' next door: Airbnb rentals face backlash in some Sacramento neighborhoods

'There was the bachelorette party at 2 o' clock in the morning.' Neighbors upset at Airbnb rental

Sacramento residents are upset with homes being turned into Airbnb and other short-term rental properties.
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Sacramento residents are upset with homes being turned into Airbnb and other short-term rental properties.

The little East Sacramento bungalow with the bright red door and trim camellias looks like any other family home on its street.

It's not. For the past year, neighbors complain, they have dealt with noise at times from pool parties, the comings and goings of groups of strangers at night and extra cars parked on the street.

The house on La Purissima Way is one of several hundred houses in neighborhoods around the city that have been turned into short-term rentals by their owners. It's part of the "sharing economy" phenomenon, fueled by Airbnb and other online companies, in Sacramento.

Several La Purissima residents have gotten noisy themselves: They put up yard signs with the word "Airbnb" slashed by a red line and have gone to City Hall to push for tighter controls on how many people can stay there and for how long.

"It doesn’t feel like an appropriate use to have a non-owner-occupied Airbnb that is constantly turning over in a neighborhood full of kids," said Sharon Huntsman, who lives with her family next door.

Most renters are fine, she said. But not all. "You never know what to expect. Every week there is something else."

For their part, city officials say they are scrambling to get a handle on how many homes have been turned into short-term rentals. So far, 143 property owners have obtained city permits to use their homes as short-term rentals, said Brad Wasson, the city's revenue chief.

But that is only a slice of the reality. Wasson said the number of nonpermitted home rentals could be 450 or more, based on an internet search of rental ads city officials did last year.

Some of those owners may be willfully avoiding the city permit process, essentially running underground businesses. But many may simply be unaware they need to register and pay fees, officials said.

The city plans to hire a company this summer to scour internet ads and get more rental homeowners to sign up. A permit costs $125 with $90 annual renewals and a $50 annual city business operations tax.

City code officers say that will help them keep better watch and potentially shut down nuisance properties. It also should allow the city to enforce a key aspect of its rules: Homeowners who don't live on site cannot rent their property more than 90 days a year. Someone who lives at a house more than half a year, however, can rent it out the rest of the year.

The city set that rule so investors won't buy houses in large numbers and turn them into businesses. "That would deplete our housing stock," Wasson said. "The city already has affordable housing issues for our residents."

At this point, the city doesn't know how many days any particular house is being rented out. Officials say they hope the consultant they hire this summer will help them keep tabs.

Airbnb spokeswoman Jasmine Mora said her company has been working with the city to get more hosts to sign up for permits and that the "overwhelming majority" are responsible hosts.

Sacramento County is dealing with similar issues of nonpermited rentals, as well as some confusion about county rules.

Currently, the county issues vacation rental permits that allow homeowners or renters to rent out their primary residences or accessory units, with a 30-day maximum per rental. An owner does not have to be on site when renting it out.

But the county ordinance fails to cap how many total rental days per year can occur and still be considered an owner-occupied home, planner Jessica Brandt said.

The county has approved 22 short-term rentals since it began requiring rental permits in 2015, but officials say they suspect many more are being run as rentals without permits.

County officials say they will draw up new guidelines this summer to clarify how many days a home can be rented out, as well as to encourage more people to register and to help the county track unregistered properties.

"What we are interested in is getting to a program that's a lot more clear to implement and clear for property owners to follow," said Chris Pahule of the county's office of planning and environmental review.

The short-term-rental phenomenon has ignited fights in many communities, notably in tourist draws like San Francisco, Santa Monica and the wine country, where people gather for bachelor parties, weddings and other big events.

“City after city after city is moving to establish regulations on short-term rentals," said David Wachsmuth, a professor at McGill University who studies the relationship between short-term rentals and the housing market. It's a "recognition that this is a growing and increasingly large feature in economic activity and housing activity in cities.”

Sacramento code enforcement officers say they have gotten only a few dozen complaints in the two years since the city enacted an ordinance. Those complaints are typically about noise, late-night activity, cars parked on the street and strangers in the neighborhood.

"It's not a lot of complaints," said Wasson, "but the (neighbors) who are upset are really upset."

Short-term rental permits

So far, 143 property owners have obtained city permits to use their homes as short-term rentals in Sacramento.
Map of short-term rentals
Source: City of Sacramento
The Sacramento Bee

One complaint is that an out-of-town host can't keep good tabs on renters' behavior.

Michael Baiocchi, the owner of that rental house on La Purissima, lives mainly in the Seattle area but said he spends time in the Sacramento house. He has family members in Sacramento who can check on the house, he said. But they do not live in the neighborhood.

He said he makes a point of telling his guests to be respectful, noting in his Airbnb ad: "Out of respect to our entire community, please keep neighbors in mind when you are in our home."

"I have (outdoor) cameras on the property," he said. "If I see a keg go into the house, you are going to leave." He said he's also thinking about getting a noise meter.

Councilman Jeff Harris has fielded complaints about more than the allowed number of people staying at rental properties. He is leading the push for better city oversight.

A big question, he says, is how many homeowners do not pay the required 12 percent transient-occupancy tax, also known as the hotel tax, for renting out their properties.

The city relies on Airbnb to collect the tax and remit it to the city. Airbnb handles an estimated 80 percent of the online-based, short-term-rental market in Sacramento, Wasson said. The city does not have a similar deal with other online rental companies, such as VRBO, HomeToGo and Craigslist, that cover most of the remaining estimated 20 percent.

Displaying an anti-Airbnb lawn sign, homeowner Zac Rivera works in his yard in East Sacramento on Friday, June 15, 2018. Some neighbors object to the presence of Airbnb homes in their neighborhoods, particularly homes that belong to out-of-town owners who cannot police their tenants. Randall Benton

"We have no way to verify who their operators are and where, unless we get complaints," Harris said. "I think the city is probably losing out on revenue.”

Harris wants the city to persuade Airbnb to publish each host's city permit number on its website. That way only homeowners who have city permits can advertise on the site. The city will meet with Airbnb later this month to discuss that, Wasson said.

Harris said he will watch to see how things work out in the coming months but that he would be willing to propose that no homes be used as short-term rentals unless the owner lives at the property, similar to the county policy.

One such homeowner is Romer Cristobal, who has been renting rooms in his North Natomas house through Airbnb for 10 years. He loves it, he said, because it brings in extra money, and he gets to meet people from around the world, many of whom stay a night in Sacramento and visit the Capitol on their way to and from San Francisco, Napa, Lake Tahoe and Yosemite.

But he says he wouldn't dream of renting his house if he weren't living in it. "For my own comfort level, I want to be there," he said. "I don’t want them to have parties, destroying property."

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