Business & Real Estate

Sacramento seeks to accommodate, limit Airbnb rentals

In 2013 Megan Fidell was one of the early Sacramento homeowners renting their home on Airbnb.com.
In 2013 Megan Fidell was one of the early Sacramento homeowners renting their home on Airbnb.com. jvillegas@sacbee.com

Sacramento is joining a long list of cities in California and across the country grappling with how to regulate rooms offered for short-term rental under the home-sharing website Airbnb.

So far, it looks like the capital is taking a gentler approach to the burgeoning business, compared with some coastal cities. Santa Monica, for instance, adopted regulations earlier this month that essentially ban property owners from renting out units for less than 30 consecutive days. They’re still allowed to rent a couch or spare room, but only if they’re on site, and if they register and pay fees to the city.

Sacramento City Council members say they’re looking for a way to welcome the short-term rental business – and the visitors it brings – without letting apartments and houses become de facto hotels.

“This is a real balancing act,” Councilman Jay Schenirer said at the meeting.

“We have a new economy coming, and we do not want to kill it,” Schenirer said. “But we also want to protect our neighborhoods and residents who may have bought a house and all of a sudden have people coming and going next door.”

Earlier this month, the council’s Law and Legislation Committee heard a proposal from the planning staff to allow more flexibility for short-term rentals.

Under current regulations, which were crafted in the 1980s, a short-term vacation rental in Sacramento is considered a bed and breakfast inn, with stays limited to 14 days. The city’s planning division has recommended increasing the maximum stay to 29 days for short-term rental units and waiving the requirement that a manager be on site.

The proposed ordinance would allow property owners to rent out units for a maximum of 30 days in a calendar year without being considered a bed and breakfast. Owners who rented their units out for more than 30 days in a year would have to obtain a city permit, which would include an evaluation for traffic impacts and noise.

Airbnb opposes such time limits. At the Law and Legislation Committee meeting, Airbnb representative Jeff Dorso asked the city not to decide on a maximum number of days that units could be rented each year until later in the process, after the city staff conducts public outreach.

“We just don’t want to rush into anything and set an arbitrary parameter,” he said.

Schenirer agreed, recommending to staff members that they defer deciding on a number until they gather more information. “There’s no great data on it,” he said.

City Councilman Steve Hansen, who represents downtown, said he is eager for the city to adopt regulations that would be fair and allow for growth of shared economy businesses like Airbnb.

“We have this innovative new way for people to visit our city and for people to engage in the sharing economy,” said Hansen. “We should be cautious of overshooting the mark with any kind of regulation.”

The Law and Legislation Committee is the first stop for the proposed regulations, which will also go to the Planning and Design Commission and then to the City Council.

Some travelers, like Detroit resident Paul Hogle, say they prefer Airbnb rentals over a hotel stay in Sacramento.

Hogle visits the area frequently as executive vice president of the Detroit Symphony Orchestra. He is part of an eight-member team that has been consulting the Sacramento Philharmonic on executing a turnaround in the orchestra’s finances and image.

Since last October he has stayed a total of 24 nights in Airbnb homes in various neighborhoods that include Curtis Park, Old Sacramento and near Sacramento State.

“Why do I use Airbnb? It’s a combination of meeting people, convenience and price,” said Hogle.

It remains to be seen how the rise of Airbnb and similar services, such as VRBO and Flipkey, will affect the city’s existing hotels or bed and breakfasts.

The issue is so new that the Sacramento Convention and Visitors Bureau does not have an official stance on it, said Sonya Bradley, the organization’s chief marketing officer.

“We’ve not received any feedback pro or against from the smaller or the major properties,” said Bradley.

Bradley said she believes Airbnb users represent a small subset of the customer base for overnight lodging in Sacramento.

“A lot of Sacramento’s business travelers are here for lobbying or corporate business, and so you’re probably dealing with people who have higher expense accounts and who need access to the Capitol quickly,” Bradley said.

During the legislative session, Bradley said roughly 70 percent of the short-term stays in Sacramento are for this kind of business.

There are about 500 housing units used as short-term rentals in Sacramento, the city estimates. That compares with about 20,000 in San Francisco, a major tourist destination.

In pricier cities along the California coast, the proliferation of units being rented through Airbnb and other sites has stirred accusations that badly needed housing is being taken off the market to rent to tourists.

Santa Monica attracted headlines earlier this month when the City Council adopted its ordinance, which will be enforced with fines of up to $500 a day. The city website says Santa Monica may even pursue criminal charges against violators.

A committee of the San Francisco Board of Supervisors is considering two proposals that would impose limits on the use of Airbnb. One would cap short-term rentals at 60 days a year; the other at 120.

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