Illegal Vacation Homes Draw Complaints, Review from City Council

That house down the street, with the constant changing cars in the driveway and unfamiliar faces on the porch? Could be that homeowner is in violation of the City’s municipal code regarding vacation rentals.

As what was once a quite agricultural community becomes a Destination, with a capital D, the city has become increasingly concerned about unlicensed vacation rentals in residential neighborhoods. So at the July 1 City Council meeting, city staff asked the Council to give more direction on how aggressively to pursue violators of the municipal code regarding vacation rentals.

Complaints have come to the city from residents who, according to Planning and Building Director Barbara Nelson, “are often reluctant to file a request for investigation with the City due to concerns regarding potential retaliatory conduct by some property owners.”

Complaints of unpermitted vacation home rentals include excessive noise, limited parking, “degradation of residential neighborhood character” and more. But that’s not the only problem: the violators are unfairly escaping city business licensing fees and transient occupancy taxes (TOT), charges levied against licensed lodgings such as hotels and B&Bs, according to Nelson’s report to the City Council.

“A City business license is required to operate a residential visitor lodge operation and transient occupancy tax requirements apply,” said Nelson in her statement to the council.

The current situation is that the city’s municipal code only allows vacation rentals in the Commercial Downtown zoning district; residential areas are not permitted to have such. If a homeowner is found to be in violation of the ordinance, they are subject to a $500 per day fine.

A search of some of the popular online vacation rental sites, such as Vacation Rental by Owner (VRBO.com) and Air B&B shows dozens if not hundreds of Healdsburg-area vacation rentals, though how many of these are within city limits is unknown.  A recent search for Healdsburg in VRBO resulted in 194 returns, though some of them were clearly outside of city limits.

Currently the city only investigates these violations only in response to complaints; a chart of code violations over the past six years shows a low point in 2009 (the worst of the “Great Recession”) and a steady increase up to nearly 90 complains in 2012. The City decided in 2002 that land use violations of this nature would be a low priority.

The question before the council was whether to keep doing what they’re doing – responding to these situations on a low-priority, complaint-based basis, or to take more proactive action in enforcing the violations, issuing citations and leveling fines.

When the issue was opened to comment, public sentiment was roughly split between those who wanted more city oversight of vacation rental violation and those who thought they should just leave well enough alone.

“What I personally favor is either be more proactive and start enforcing the rules,” former council member and realtor Kent Mitchell told Patch, “or legalize it: Allow vacation rentals outside the commercial district, charge fees and collect the TOT.”

At the end of the discussion, the majority position of the City Council  remained opposed to vacation rentals and wanted staff to investigate other similar communities on how to strengthen enforcement. Mayor Susan Jones, however, expressed interest in allowing and regulating vacation rentals, saying it’s going on anyway, maybe the city should tax them.

“It’s not always about the money,” said Councilmember Gary Plass. “Granted, we hear that some people are getting $4000 a weekend for some of these big homes that are illegal [vacation homes] inside city limits, so the TOT could be substantial.

“But bottom line, it’s about the character and the quality of life in the community. Granted, we are a tourist attraction, we love that, we know that’s what supports the community. But we also have 12,000 people who sleep here every night. And they’re entitled to some peace and tranquility in their neighborhoods.”

The issue is scheduled to come before the City Council again in eight weeks, following investigations from the Planning Department.