Paso Robles is abandoning its laissez-faire stance on vacation rentals.
With the city missing out on an estimated $300,000 in transient occupancy taxes (TOT) and hearing from a growing number of residents who are frustrated by the impacts of rentals on neighborhoods, Paso is crafting an ordinance that will regulate vacation rentals, or houses rented for fewer than 30 days at a time.
The number of vacation rentals operating in Paso is up to an estimated 200 to 300 houses, according to the city, thanks to booming tourism and the ease of advertising rentals through websites like VRBO and Airbnb. But the surge hasn’t been smooth sailing for all.
“We were getting a number of comments both from neighborhoods as well as operators about the lack of any consistent requirements for vacation rentals,” said Warren Frace, Paso Robles’ community development director. “It’s gotten to the point where it’s a significant land-use pattern in town, and we do need to have some sort of rules to deal with it.”
On March 15, the Paso Robles City Council voted in favor of forming of a task force to work alongside city staff for three to four months and develop the outline for vacation rental policy. Five to seven local residents will be selected to the task force team (via applications) and ideally represent the diverse set of views on vacation rentals in the community.
The committee will convene weekly and cover a variety of topics for an ordinance, including “good neighbor” standards for renters, licensing processes, TOT collection requirements, rental density limits, limits on frequency of rentals, advertising requirements, limits on occupants, parking requirements, complaint response procedures, and violation penalties.
“One of the things we heard quite a bit was the need to protect the residential character of neighborhoods,” Frace said. “I think one side is to allow them to operate and collect the TOT, and at the same time, doing it in a way that respects the character and quality of residential neighborhoods.”
Working cooperatively with rental operators will likely be the method used to achieve that balance, Frace said. He hinted that the city could introduce a hotline for residents to call and report disturbances, in addition to instituting penalties if problems persist.
“[Enforcement] is likely going to be the last-resort approach,” Frace said. “The approach will likely be more cooperative and expecting the operators to take the lead on managing them correctly.”
Longtime Paso resident Kathy Bonelli has witnessed first-hand the growth of the Paso region as a tourist destination. Since 2005, she’s assisted Paso homeowners with operating vacation rentals through her company, Paso Robles Vacation Rentals LLC.
Her client base started out very small, grew rapidly during the 2008 housing crisis, and today she manages 85 houses (not all of which are within city limits), representing a significant chunk of the total vacation rentals in town.
“I think, by bedroom count, we are bigger than any hotel in town,” Bonelli said.
Bonelli said her business has operated “pretty harmoniously” in the community for 11 years, but she does see the need for an ordinance now, given vacation rentals’ increased presence.
“I think because of the notoriety, there needs to be some regulations [added] and some processes changed to address it,” she said.
One goal that both the city and licensed rental operators share is to get all operators paying their taxes. Only 70 vacation rentals in Paso are paying the TOT, the city estimates.
Not every property owner running a vacation rental tax-free is purposely evading them, though, Bonelli said.
“There are people who just don’t know. When I started, I went to the city to get a business license for vacation rentals, and they didn’t know what to do with me. I had to come back three times because such a thing didn’t exist around here,” she said.
Bonelli emphasized the importance of setting high behavioral standards for renters and spelling those standards out in contracts and guidelines. Given the current atmosphere, she is working even harder now to communicate those expectations.
“We are focusing on educating the guests on the rules and the [appropriate] environment,” she said. “Everybody in Paso Robles can do the exact same thing.”
Bonelli and other rental operators who have spoken at public meetings observe that problematic rental situations commonly arise when an operator lives out of the county and doesn’t do enough to oversee their property.
“The house has to have somebody in charge of it, otherwise you’re leaving the teenagers without a parent home,” Bonelli said.
Bonelli hopes that Paso’s eventual ordinance will be fair and enforceable, and will strike a balance between “what is good for the hospitality of Paso and keeping our unique character.”
So far, she’s encouraged by the way in which the city is going about it. Bonelli was also pleased at the civility shown by residents on both sides of the issue at a town hall meeting in November.
“I’m hopeful in the city of Paso Robles,” she concluded. “I do think if logical heads stay together long enough [the task force will find a good solution]. I don’t think it’s rocket science.”
Staff Writer Peter Johnson can be reached at firstname.lastname@example.org or on Twitter at @pljohnson9.