Background
Short Term Rentals (STRs), defined as a home or a room in a home available to rent for a period of 30 days or less, are an outgrowth of the multi-billion dollar “sharing economy,” which includes services like Uber, Neighborgoods and Lending Club. STRs are generally divided into two types: hosted homestay, where one or two rooms are rented out and the owner resides in the house, and vacation rentals where all or most of the home is rented and the owner may or may not reside on site. In most jurisdictions, hosted homestays have fewer issues and are less regulated than vacation rentals. Both types can be found in just about any community, but are most prevalent in major metropolitan markets like New York and San Francisco, and other locations that attract tourism like coastal and mountain destinations.
The benefits associated with STRs include tax revenues resulting from payment of transient occupancy taxes and assessment of personal property in a commercial rather than private residential context, promoting tourism throughout the County with the associated benefits to local businesses and recreation areas, and providing alternative accommodation options for visitors, especially in areas under served by traditional commercial lodging.
In Unincorporated Shasta County, in 2016, there were an estimated 168 STRs registered with the Tax Collector and paying Transient Occupancy Tax (TOT). These rentals were distributed throughout the County with concentrations in Viola, Shingletown, Old Shasta, greater Redding and Lakehead. The taxes generated by registered STRs makes up about 15% of the total TOT collected in the County. Other contributors consist of the hotel/motel industry which accounts for about 64% and camping/RV parks at about 21%. Since records on STRs began in 2013, the overall amount of TOT collected has increased for both the STR and hotel sectors.
Currently the County zoning code does not permit STRs per se. Permitted transient short-term accommodations include hotels/motels in commercial districts, lodges and dude ranches in some agricultural zones with a conditional use permit, and bed and breakfast facilities with an administrative permit. All of these types of facilities are also regulated by other agencies and may be subject to standards beyond those applied to private residential properties to address the life/safety issues associated with public access and use.
Resource Management’s code enforcement section primarily responds to citizen complaints filed with the department. There have been an estimated nine cases in the past 15 years directly involving an STR. In most cases, the rental unit has been taken off the short-term rental market and is either occupied by the owner or made available for long-term rental (more than 30 consecutive days).
Regulatory Issues
There are five principle concerns to be considered in developing local regulations for Short Term Rentals: 1) effects on neighborhood character; 2) effects on long term rental housing stock; 3) effects on traditional commercial lodging; 4) health and safety; 5) enforcement.
1) Neighborhood Character. The impacts to neighborhood character are largely the result of visitors not knowing the informal rules and expectations of the neighborhood they are in, or people with a recreational agenda that does not include consideration of the neighbors, or a combination of both. They commonly include excessive noise, litter and trash, parking and traffic problems, trespass, and the loss of individuals invested in neighborhood well-being and the sense of community.
2) Long Term Rental Stock. In most locations STRs are capable of generating more income for the owner than a long term lease. As a result some residential rental properties are taken out of the long term rental market and advertised through VRBO, Airbnb and other vacation rental sites causing a shortage of rental housing stock and higher than normal rents. An informal survey of local property management firms indicates that the long term rental market in Shasta County is “tight,” with a 2 to 3 percent vacancy rate at any given time. The market is somewhat seasonal, but there is no evidence yet that suggests that STRs have had a direct impact on local rental stock.
3) Traditional Commercial Lodging. As indicated above, commercial lodging accounts for about 64 percent of the County’s current transient occupancy tax revenues. Despite the growth in TOT from STRs over the last three years, there does not yet appear to be a substantial direct impact on commercial lodging since the TOT generated by traditional hotels also shows an increase in the same period. If STRs become a permitted use in the County, growth in that sector could impact commercial lodging at some point in the future.
4) Health and Safety. The first purpose of any forthcoming STR regulation should be to promote the health and safety of the host, their guests, the neighborhood and the general public. In the rural areas of the County, safe emergency ingress/egress are of paramount concern, along with local fire controls, flood hazards, septic system function and capacity, wells and water supply, accessibility, off-street parking and many other concerns. Any future regulations should distinguish hosted homestays and other rentals where the owner resides on site, from vacation rentals where the owner does not live in the house or on site, and apply appropriate standards for each type.
5) Enforcement. Because STRs are generally individual private homes it is challenging to implement an effective enforcement program, but effective enforcement would be necessary to a successful program. For example, how and when does a typical noise complaint to the Sheriff become an STR zoning violation for Code Enforcement? The effort to monitor all the potential electronic platforms to identify and track STRs in the County would require significant additional resources in terms of both personnel and equipment.
Summary
There are community benefits to allowing STRs as a permitted land use in the County including tax revenues, promoting tourism and providing alternative accommodations to visitors. There are five main concerns that should be considered in a regulatory plan for STRs in order to balance the interests and safety of hosts, guests, neighbors, and the public. So far, it does not appear that existing STRs have had a significant adverse effect on the local long term rental housing stock or the traditional commercial lodging industry, but that could change if STRs become a permitted use. Potential adverse effects on neighborhoods and health and safety can be reasonably controlled through effective regulation including limits on the number of STRs in an area, education to sensitize hosts to neighborhood concerns, and a responsive enforcement program.