Proposed Airbnb regulations could legitimize Sacramento’s home-sharing economy

Specifics regarding number of guests, length of stays and neighbor-notification policy approved by council

Sacramento city officials want their cut of the home-sharing economy.

After more than a year of committee and staff discussions, the Sacramento City Council unanimously approved a package of regulations covering online rental platforms such as Airbnb and VRBO, which let people rent out spare rooms or residences to traveling strangers.

Like hotel- or bed-and-breakfast operators, the people behind these short-term rentals are required to pay 12 percent of their monthly take to the city in the form of transient-occupancy taxes, or TOT, but there’s no system in place to reliably collect this money, a city staff report says.

Besides establishing such a system, the regulations adopted Tuesday require home-sharing operators to purchase a business-operation-tax permit for about $50, and establish a few ground rules by which they’d have to abide.

As principal planner Joy Patterson explained to the Planning and Design Commission last month, the regulations would set an occupancy limit of six guests at a time, including children. Additionally, if the operator doesn’t reside on the property for the majority of the year, it can’t be rented out more than 90 days per calendar year, unless the operator wants to pony up $4,000 for a conditional-use permit. The city would also notify neighbors within 200 feet any time a new home-sharing permit is obtained.

Tuesday’s council meeting occurred after print deadline. At the December 10, 2015, planning-commission meeting, both sides appeared close to a compromise. That isn’t to say there weren’t differences to resolve.

Steve Walker said he struggled to rent out a Curtis Park apartment he owns until he began offering it for temporary stays through Airbnb. “It’s not very attractive. But as a suite for a night or two, people love it,” he told commissioners. “And, I’ll admit, I’ve already rented it for more than 90 days this year.

“If you do this, you’ll shut me down.”

Two local Airbnb hosts also feared their neighbors might react negatively if informed of their business.

“My neighbors really don’t need to be notified about what I’m doing. If they have a problem with me, they’ll tell me or they’ll call the sheriff or the cops,” said Vivien Terry, an Airbnb host who rents out a spare room. She said she would be OK with a general notification going out to the entire city that rental platforms are being allowed. But, she added, “Naming names is just going to give the naysayers fodder.”

But River Park resident Kate Riley, who said she lives next to an Airbnb operator, saw a definite need for notification. “There are more neighbors than there are hosts, and I think neighbors have a right to know there are businesses moving next door,” she said. She also wanted the city to drop the occupancy limit back down to four guests, and potentially link the number of guests to the size of the units. “You could have a studio [apartment] with six guests in it, and I think that’s excessive.”

Commissioner Cornelius Burke expressed concerns about the potential cost of civil penalties, which are set to range between $250 per day and $25,000 per day depending on the violation. “When I don’t turn in my library books on time, I freak out, but it’s not going to make me bankrupt,” he said.

Revenue manager Brad Wasson said it was unlikely that the city would ever charge that much. “Rarely do we get to the higher amounts,” he said. “I don’t think my office has issued one more than $500.”

Burke and Wasson did agree on that counting home-sharing rentals toward Sacramento’s somewhat static hotel-bed inventory could help the city better compete for large-scale events, possibly even the Olympics, Burke said. “This is kind of the way of the future,” he added. “We definitely want people to participate in these if they want to.”