Arroyo Grande planners move to allow "home-stays" and vacation rentals

clambert@thetribunenews.comMarch 5, 2014 

Several Arroyo Grande residents this week urged the city’s Planning Commission to allow them to rent out a room or two in their homes to short-term visitors, noting the city could benefit from increased tourism and additional tax revenue.

Arroyo Grande currently doesn’t have rules in place regulating vacation rentals or “home stays,” short-term room rentals in owner-occupied homes.

After some discussion, the commission decided Tuesday to craft rules to regulate such rentals. An ordinance will come back to the commission for consideration March 18. It would require City Council approval.

With the proliferation of temporary housing and vacation rental websites like Airbnb, HomeAway and VRBO, a number of cities are trying to determine how best to track, regulate and collect tax revenue from them.

A similar conversation took place in San Luis Obispo late last year, when a group of property owners prevailed in their fight for permission to have home stays. The San Luis Obispo City Council also voted to not enforce a ban on vacation rentals and is now writing a new ordinance that allows them.

In Arroyo Grande, the Planning Commission discussed new rules that would require property owners of vacation rentals – homes that are rented for 30 days or less but are not owner occupied – to obtain a minor use permit and a business license, and to pay the same transient occupancy tax to the city that hotels pay.

The same terms would apply to home stays, but planning commissioners discussed limiting the number of rooms available to rent to two.

Assistant planner Matthew Downing said the city currently doesn’t track how many vacation rentals or home stays are operating in Arroyo Grande, but receives several complaints a year about noise, traffic and other issues.

The city does regulate bed-and-breakfast inns. Two are currently operating.

A group of property owners attended Tuesday’s meeting to urge the commission allow them to rent out rooms in their homes.

“I have one room; there’s one car in my driveway,” resident Gay Groomes said. “There’s no way my neighbors would know if it was my personal friends or a paying guest.”

She compiled information showing the city could bring in about $9,100 a year in transient occupancy tax from her and four other home stay operations. That amount doesn’t include any money property owners spend sprucing up their homes, nor does it include money visitors spend in the city.

Another home stay proponent suggested that if home stays weren’t allowed in Arroyo Grande, visitors searching for that type of rental might stay in San Luis Obispo instead.

While most of the comments were in support of the new rules, one resident urged commissioners to reject home stays, worrying that they could negatively impact local hotels; prompt some property owners to turn out long-term renters in favor of more lucrative, short-term stays; or cause an increase in crime.

“Can a registered sex offender now rent a room without anyone knowing better?” Michael Howard said. “We should all consider the ramifications of allowing a Pandora’s Box of unintended consequences.”

But planning commissioners decided they wanted to move ahead with rules to track and regulate such rentals.

“I think we want to track these and provide some kind of oversight and if the process becomes too onerous I’m not sure that people will do that,” Commissioner Lisa Sperow said. “They’ll just go under the radar.”

She added: “I’ve stayed in all these types of situations and it is a different feel depending on what you’re looking for and I would like our city to be welcoming to that type of arraignment.”


Reach Cynthia Lambert at 781-7929. Stay updated by following @SouthCountyBeat on Twitter.

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