Business & Real Estate

Sacramento approves restrictions on short-term rentals such as Airbnb

In 2013 Megan Fidell was one of the early Sacramento homeowners renting their home on
In 2013 Megan Fidell was one of the early Sacramento homeowners renting their home on

The Sacramento City Council unanimously approved two ordinances Tuesday allowing short-term rental services such as Airbnb.

The ordinances require Sacramento operators of short-term rentals to obtain a permit and pay associated taxes and fees.The changes respond to a quickly evolving part of the sharing economy in which residents advertise a room or entire house for rent online, typically on a nightly basis as an alternative to a hotel.

Council members spoke of the importance of creating a balanced system where homeowners can share their homes and make some extra money without causing problems for their neighbors.

Councilman Steve Hansen said he has neighbors who are Airbnb hosts and has no problems. If there’s an issue with a guest, he talks to the homeowner.

Several neighborhood residents expressed concerns about allowing six guests a night, noise problems and how well the ordinances would be enforced.

Airbnb hosts told the council members the income they receive from home-sharing allows them to maintain their homes and praised the hosting experience. Airbnb representative Jeff Dorso said the company approves of the ordinances.

City officials and staff have been reviewing and proposing changes to the short-term rental and bed and breakfast inn sections of the city’s code for more than a year. In December, the ordinance passed its final hurdle of the Planning and Design Commission.

At each step, requirements on short-term rental hosts have been relaxed.

Previously, renting out a spare room or an entire house fell under the category of a bed and breakfast inn section of city regulation. Under those rules, someone operating a bed and breakfast inn is required to obtain a conditional use permit, among other things.

Conditional use permits for bed and breakfast inns can cost around $5,000, said Joy Patterson, principal planner for the Community Development Department.

Under the new category of short-term rental, detailed in the first ordinance approved Tuesday, short-term rental owners would still have to obtain a business operations tax certificate and pay the city a transient occupancy tax, which is 12 percent of the room charge. But they are exempt from the conditional use permit process.

The new ordinance also requires the city to notify all neighbors within 200 feet that a permit has been issued. It sets a six-guest limit.

Each owner is required to keep a register of guests and to ensure all postings on Airbnb and similar sites are permitted residences.

Some people raised concerns at a September public meeting that an investor could buy an apartment complex and turn it into a short-term rental business. To address this, each owner cannot rent for more than 90 days annually if the space is not a primary residence.

Bed and breakfast inns in certain zoning areas are allowed to host weddings, fundraisers and other events with the appropriate conditional use permit; short-term rentals are not.

The second ordinance amends the city’s definition of a bed and breakfast inn to include short-term rentals as a subsection that do not require conditional use permits.

Angela Mia said she views being an Airbnb host as being an ambassador for Sacramento. She has been sharing her home near downtown for more than a year to supplement her income, as one of more than 300 advertised on Airbnb.

She said she’s glad the city eliminated the conditional use permit requirement. She would have paid it because she knows she could recoup the investment, but first-time hosts would find it cost-prohibitive.

“I think the planning department has been great,” Mia said. “The different committees have been great. They made it less restrictive than what they were proposing.”

Other cities have cracked down on short-term renting, like Santa Monica’s recent ban of most home rentals for less than 30 consecutive days. San Francisco voters defeated a ballot measure in November that would have limited vacation rentals to 75 days a year and increased enforcement penalties for violators.

Councilman Jay Schenirer said he thinks these ordinances could become a model for cities figuring out how to handle home-sharing.

Ellen Garrison: (916) 321-1920, @EllenGarrison

Related stories from Sacramento Bee