A proposal in Palo Alto to start regulating and taxing rooms rented out through sites such as Airbnb quietly fizzled on Monday night after the City Council agreed that it has other, more pressing, priorities.
The idea to better regulate short-term rentals in residential neighborhoods came from a December colleagues memo from four council members: Karen Holman, Liz Kniss, Larry Klein and Gail Price. The memo called for exploring ways to collect hotel taxes from these rentals and to consider new zoning rules that could apply to short-term rentals in residential areas. The memo also characterized the issue as one of “safety.”
“Without some form of registration, as a hotel would have, or some means of notification, residents have no way of knowing who is taking up residence, albeit on a short term basis, next door to them,” the memo stated.
But several council members remained unconvinced that this is indeed a problem. Greg Scharff pointed to the fact that the city received only seven complaints in the past year about this issue and that two of them were deemed invalid.
“This hardly strikes me as a hot-button issue on which we should spend a huge amount of resources on,” Scharff said.
He also said he supports “home-stays” of the sort enabled by Airbnb. The “shared-economy” model provides an attractive alternative to the traditional hotel, he said.
Many of his colleagues also graded the subject a low priority. It didn’t help the cause that none of the council members who had signed the December memo were present at the meeting. Klein and Price both concluded their council tenures last year, and Holman and Kniss were both absent Monday.
With all the memo authors absent, the seven council members struggled to muster any enthusiasm for action on this subject. Though some suggested minor rule tweaks and proposed ways to address the rare cases where short-term rentals affect the neighborhoods, most agreed that the issue just isn’t as urgent as other items on the Planning Department’s overflowing to-do list – an ever-growing document that includes a litany or traffic and parking initiatives, as well as the update of the city’s Comprehensive Plan.
Council members also didn’t feel too strongly about the need to collect hotel taxes from short-term rentals. Though local law technically requires these businesses to pay transient-occupancy taxes, the city does not have a mechanism in place for identifying the short-term rentals, much less taxing them. Several cities, including San Francisco and San Luis Obispo, have required homeowners who use Airbnb to get permits. Palo Alto does not have such a requirement.
The council also heard from a few speakers, though neither side had a clear majority. One homeowner said she’s had a great experience renting out her spare bedroom on Airbnb, while another said she plans to take advantage of the service now that her children have moved out and she has spare rooms.
“I’m considering making that bedroom available for people who want to come to Palo Alto and work for a month or two, come visit children in Stanford or coming to the hospital for cancer treatment,” Katherine Glassey said. “If it’s illegal that’s bad enough, but if you tax me for doing something illegal, that’s very odd.”
A few others called for better regulation and enforcement. Resident Marvin Weinstein described the “Airbnb nightmare” that occurred on his block when a homeowner who lives in Vietnam decided to put his house on Airbnb and to enlist a management company in San Francisco to oversee the rental. That company, Weinstein said, never came to the house to take a look at the conditions.
“We suddenly find ourselves in a situation where people are coming for three- or four-day weekends at a time – groups of 10 or more to live in a single house, parking up the entire street, partying to three or four in the morning.”
Complaints to the city didn’t accomplish anything, Weinstein added. Ultimately, after tracking down the homeowner in Vietnam and threatening enforcement, the homeowner agreed to keep the duration of rentals at a minimum of 30 days.
The council agreed that the most useful thing it can do on this topic is discouraging short-term rentals of the sort that plagued Weinstein’s block.
Councilman Pat Burt said he would support limiting the number of rentals a homeowner can make per month or encouraging long-term rentals.
Councilman Marc Berman suggested that a rule requiring the homeowner to be present during rentals might be helpful.
“If the owner is there, there’s at least limited oversight,” Berman said. “If no one is there, that’s not a situation I’d be comfortable with.”
After a broad-ranging discussion, the council ultimately agreed to a suggestion from City Manager James Keene to monitor the situation and revisit the subject in a year. In the mean time, Keene said the city will consider improvements to code-enforcement practices to address the rare situations in which Airbnb rentals cause a problem.
Thank goodness, a rare moment of sanity.
Good. I am mad so many other towns are up in arms about home sharing. I feel it is a net good as it helps people afford to visit and to live in palo alto. We have limited space, we might as well be more efficient using it.
A citywide parking permit program would be an indirect way to help control the worst offenders (e.g. parking up the whole block). As for partying all night, people need to be less afraid to call the police.
I am frequently critical of City Council for adopting solutions to non-problems so it is only right that I offer congratulations on a decision like this. Airbnb offers many homeowners a way to afford to stay in the community with increasing taxes and assessments. Sharing space should be encouraged, not discouraged. We do not see wide spread conversion of apartments into Airbnb as many big cities fear. It’s a non-problem and well handled with the appropriate non-solution. Thanks, City Council!
A good decision. Congratulations.
Re “more pressing priorities,” is is really a priority to increase dramatically the size of the Children’s Zoo and reduce parkland? And how much is this going to cost?
Like other neighbors, we got an “alert” postcard from the city about their plans to increase the zoo to 29,000 sq feet.
The current Municipal Code already indicates these units are subject to the tax. Maybe the City isn’t making it a priority because that part of the issue is already resolved. AirBnB seems to know this (and they reference it often on their site).
As for this being a Council “priority”, I agree, it’s probably not a “priority”. As for the taxation, I think it’s time the units were brought into compliance. Just like San Francisco just finished doing (didn’t AirBnB just pay San Francisco $25 Million in taxes??) I’d also love to see the units become legal but, that would take Council making it more of a priority I guess.
Good.
DeBlasio, take note of how to properly handle Airbnb.
An ESL” student of mine, an economics professor from Beijing on a scholarship to Stanford, decided to travel for 1 month throughout USA. She chose to stay at AIrBnB facilities wherever she could. Before she returned home to China, she told me that her AirBnB experiences were the highlights of her 1-year stay in USA. “I think I learned to respect and appreciate ordinary Americans and their values through my conversations with my hosts. In spite of the country’s regrettable politics, the United States is still a generous and welcoming country for foreigners like me.”
On a less flattering note, I take this opportunity to encourage and challenge P.A. housing officials to get after the numerous slumlords in this city. My guess, based on numerous accounts by my students and on personal inspection of some student rentals, is that hundreds of P.A. landlords rent small rooms at exorbitant costs — without kitchen access and with restricted bathroom usage. Unconscionable and repugnant landlord behavior, totally alien to the image and reputation of P.A. as wonderful university/college town!
I was at the council meeting last night, and it seemed clear to me that they did all agree to approach Air BnB to ask them to charge and remit the 14% hotel tax. I wonder if Palo Alto voters had known more about this issue before the election, they would’ve voted for the tax. Although the guest is being asked to pay it, it will price some of the home stays out of many guests’ budgets, resulting in them having to stay in towns other than Palo Alto and not spending their money in Palo Alto. I would like to know why hotels are even charged hotel tax? This just seems like a way to rake in money. Homeowners and Hotels are already paying property tax and Hotels are paying sales tax to the cities. Cities should be encouraging as many people as possible to stay in their towns and to spend their money there, not making it extra expensive to do so. I think I’m with the Tea Party and the Libertarians on hotel tax– it’s just customary so all the cities do it to bring in extra dollars.
Regarding OldBasse’s comments. Yeah. The Council and the commenters gave a lot of time to talking about the City ordinances and that they should just be enforced. I really wanted to jump up and ask about all the city ordinances pertaining to landlords. I lived in an apt. in South Palo Alto where the landlord broke every single city ordinance there was. There was nobody in Palo Alto helping to enforce those, but it seems they will for Air BnB. I had one truly horrible situation that I went to the police about, but nothing. It’s because it’s all civil. There was a lot of talk and wringing of hands last night about the lack of affordable housing in Palo Alto. Two Words Palo Alto City Council: RENT CONTROL
ChrisC
How well has rent control worked for tenants in San Francisco, do you think?
How are Buena Vista residents like airbnb hosts? How is Sandra D., Stanford employee forced out of Palo Alto because of doubling of her rent and forced to store her belongings as she moves to a distant room as opposed to a P.A. apt., like them? How are they different?
Alike – all have problems coming up with enough money to stay in this area. The airbnb hosts seem the most fortunate, and we seem to be in a phase right now of setting up systems that reward the most fortunate, so often older and whiter. Some Palo Alto airbnb hosts or potential hosts, so far from being willing to rent to struggling Stanford employees, don’t even want their own kids in their houses, consigning them to distant rooms (but maybe those kids don’t have to rent a storage locker).
But people like feeling good, and it felt good on Monday night to reward nice people doing nice things for other nice people. Nobody said that the law does not know the word nice. Open the door to these nice hosts and you are on a slippery slope. I think during the year of procrastinating people won’t even start to find out how slippery.
Meanwhile, the people like Sandra will probably fare the worst of all those who can’t afford to live here.
Does anyone else feel that we do nothing out of conviction but only because it makes us feel good, feel part of something nice?
Hmmm…if the wealthy people who have multiple homes can rent out one of their homes through AirBnB and not pay taxes to the city, then I am wondering why as a less wealthy person I should support Measure A. It may seem unrelated, but is it really? Also, I do not have children and pay higher taxes than these same neighbors who have children who attend public schools, but who inherited their homes and therefore pay less property tax. Why are the less wealthy subsidizing the wealthy? Make it stop!
Some people are putting in tool sheds in their back yards, and renting them out for the night (no air-conditioning or heat).
Is this legal?
How can these be up to city code?
I feel that these rentals take away the feeling of “residential community” within our neighborhood.
Am I the only grouchy citizen around?
According to the SJ Merc, one guy is renting out a tent in his back yard for $45/night! BYO sleeping bag and Coleman lamp.
According to the Chronicle, another guy put a plastic shed in his back yard, with an actual bed and nightstand, and rents it out for $900/month. The renter must go through the owners’ bedroom to use the bathroom or kitchen. No heat, no cooling, but rainproof.
Have any of you ever lived next door to a serial Airbnb apartment, one that is being let out not by the homeowner, but by the tenants, no less? Because I can tell you that it is absolutely no fun to be sharing a partitioning wall with a different set of strangers every couple of days while your unscrupulous neighbors profit. And this is happening in a beautiful part of Old Palo Alto. Once they move, they’ll just start doing it again in the next location. The lure of the cash is just too strong.
>Because I can tell you that it is absolutely no fun to be sharing a partitioning wall with a different set of strangers every couple of days
This was and is entirely predictable. If this model is not restricted, it will spread all over the place in PA…maybe I will give it a try (got a couple of rooms, and a backyard with room for 3-4 tents)… pretty good cash flow!
My neighbor is being very dishonest to the renters and potential renters of his house. He illegally enclosed his patio and made that a family room, which he is marketing as a fourth bedroom. Then he sealed his one-car garage and called it a fifth bedroom. He markets his three Bedroom, 1-1/2 bath, 1200 SF house as a FIVE bedroom, two bath house. The two fake bedrooms have no flier covering or closet. The garage has no heat or windows. There are five- eight Stanford kids living there in any given year, and they are paying a combined rent of $7000/mo for the privilege!
I have given them a heater and a portable wardrobe for the garage, because I feel so bad for these kids!
This community and area is no longer family friendly nor retirement friendly!
I agree with the other poster from Old Palo Alto.
These rentals take away from our community.
There is no longer a sense of security here for a number of reasons.
There are people who are renting out tool sheds in their backyards – no heating or anything else. These places are not up to any code! They are violating a lot of codes!
Also, having travelers / strangers coming in and out of residential homes on a regular basis is just plain weird.
Add to this the number of empty residential homes, and home flipping itself. The city is bizarre.
Prop F (limiting short-term rentals) has a good shot at passing in SF, despite the millions being spent by Airbnb to defeat it. Should Palo Alto join suit?
http://ballotpedia.org/City_of_San_Francisco_Initiative_to_Restrict_Short-Term_Rentals,_Proposition_F_%28November_2015%29
@ Sad Neighbor: If you’re upset about the patio and garage conversions – you can anonymously report the code violations to the city planning department. They will handle it from there…
@Crescent Park Dad – is there any way to report people who don’t own the property but who are sub-letting it over and over again? (Apart from to a landlord.)
Our neighbor gutted and remodeled her duplex (no permits), and put a hot tub right next to our shared fence. She’s pitched it for 6 people (it’s Small!) So we have long term renters in the front half (they are nice people) and who knows who in the back half. Owner lives in SF and never visits. Manager lives in Marin, I’ve seen him twice. Today there were a bunch of short-term AirBnB renters in the hot tub yucking it up, I saw a young man walking in with a shopping bag filled with beers. To say I’m not excited about the prospect of my quiet neighborhood being turned into a party house, all to line her pockets, is an understatement. I will be calling the police whenever they make a lot of noise. I’m not happy about this.
Does the IRS and Franchise Tax Board know about all this? Or are these airBnB “landlords” pocketing this income under the table?
I think they should be required to collect hotel tax and remit to the City, at a minimum.
It’s AWFUL to be near Air BnBs, anywhere.
Typical government process—don’t address it until it’s a complete mess. There is a Airbnb on the north side of Greer Rd. off of OrEx, which was a tear-down. There are constantly cars surrounding it and just recently, there has been a huge camper parked in the driveway. I would be furious if I lived near the house! What right do people have to turn our quiet family neighborhoods into apartment town?! Those who cannot afford to live in Palo Alto must live elsewhere. Those who want extra cash in their pockets can move elsewhere and rent their house instead of disturbing our neighborhoods. If we could not afford our mortgage, we would move elsewhere!