In a tourist economy that draws visitors from around the world, real estate agent Derek Timm says talk of further regulating, possibly even voiding, a few hundred vacation rentals around Santa Cruz makes for a bad look.
“I think it’s really ugly,” says Timm, a Scotts Valley planning commissioner. Timm built a vacation rental on Front Street near the Santa Cruz Municipal Wharf and has his Montalvo Homes and Estates office in the same building. “Rather than looking at those people as good actors and encouraging them to continue, they are being blamed for a problem that is not of their own creation.”
Anyone guessing the debate over short-term rentals might soon cool down would probably be wrong. Although heated subcommittee meetings wrapped up in April, the first planning commission meeting had the intensity of a pressure cooker. At a five-hour June 29 evening meeting, which adjourned after midnight, members of the subcommittee said they did not recognize the recommendations that city staffers had drafted—even suggesting that planners had ignored their hard work altogether.
Brion Sprinsock, a supporter of tighter vacation rental regulations, gave a presentation on the impact of sites like airbnb.com on housing stock. Sprinsock, who served on the Short-Term Vacation Rental Subcommittee, has created an informational site called unfairbnb.net and posted flyers in neighborhoods like Beach Hill that “Airbnb is destroying our city.” In the city council chambers people held up signs that read “our neighborhoods need your help” and “we need housing,” while proponents argued about a property owner’s right to rent their space.
There are currently 303 short-term rentals registered with the city, but opponents say the real number is much higher, citing a San Francisco Chronicle article published in April 2016, that found roughly 76 percent of short-terms in San Francisco operate illegally, with big impacts on neighborhoods and rents, they argue.
Sprinsock, a local homeowner and landlord, says that by compiling listings from the top five vacation sites and cross-referencing them, he has counted 572 active rentals in Santa Cruz, and suggests the number could keep growing. He cites a Morgan Stanley Research survey from November 2016 in which 18 percent of the roughly 4,000 people polled had recently used Airbnb, a 25-percent increase over the year before.
Sprinsock, who owns the Hinds House Extended Stay Hotel, also points out that, according to the Stanley survey, 98 percent of those questioned would’ve stayed in other lodgings if vacation rentals were not available.
Timm pins most of the town’s rising rents on UCSC, where enrollment has risen a little more than 3,000 students in the last 10 years, according to the school’s website. He says he’s done an informal survey, which found that the vast majority of vacation rental owners would not convert their spaces to long-term housing, even if the city banned online short-term rentals.
“The city is saying, ‘This is a solution to our housing problem,’ without any data or knowledge of what is out there,” he says.
By the end of the meeting, exhausted commissioners agreed to cap the number of short-term rentals at 400, with one short-term rental per owner. They also agreed to phase out non-hosted rentals over the next decade and allow nonconforming rentals—those not registered with the city—to start complying with city regulations over the next five years. They’ll keep working on the details at their next 7 p.m. meeting on Thursday, July 20, when the commission will keep working on recommendations they’re eventually sending to the Santa Cruz City Council.