Arroyo Grande OKs short-term rentals to start this summer

A sign welcomes visitors to Arroyo Grande.
A sign welcomes visitors to Arroyo Grande. dmiddlecamp@thetribunenews.com

Will numerous Arroyo Grande residents decide to rent out rooms in their homes and bring traffic, noise and other problems to quiet neighborhoods, as some critics of “home stays” predict will occur?

Arroyo Grande City Council members — who approved new rules allowing such short-term rentals this week — don’t think so.

“I’m not at all concerned that if we approve it, we’re going to have an avalanche of people coming forward and wanting to host,” Councilman Joe Costello said. “It’s a lot of work.”

Instead, with new regulations in place, the city will for the first time be able to track, permit and collect tax revenue from vacation rentals and home stays. The ordinance approved Tuesday will come back to the council June 10 for final approval, and would go into effect 30 days later.

For a one-time fee of about $420 and an annual $31 business license, Arroyo Grande homeowners will be able to apply for a permit to rent up to two rooms for a short time in an owner-occupied home (a home stay).

Those wanting to operate a vacation rental (homes rented for a period of 30 days or less but are not owner occupied) will pay a little more.

Besides the permit fee and annual business license, the city will require an additional $100 to $150 to notify neighboring property owners that a vacation rental was permitted in their area.

Vacation rentals and home stays have been operating in Arroyo Grande for some time. But the increasing popularity of websites such as Airbnb, VRBO and HomeAway brought the issue to the forefront — and prompted a crowd of people to attend Tuesday’s council meeting to share their concerns or support.

Opponents were particularly critical of home stays, which they said would increase problems related to neighborhood safety, parking, traffic, noise and trash; and might negatively affect their property values.

“Most of all, safety and security would decrease with the comings and goings of endless strangers,” resident Audrey Howard said. “I predict that if this ordinance passes, it will eventually change the character of each and every neighborhood in our very desirable city.”

Supporters, meanwhile, said such rentals bring more tourism revenue to the city, encourage owners to maintain their properties and make living on the Central Coast more affordable. They said five short-term rentals are operating in the city.

Guests are also carefully screened, supporters said, and they couldn’t imagine large numbers of residents wanting to spend time and money sprucing up their homes for guests.

“Renting the house for one to two weeks per month has allowed me to make significant improvements on the property,” resident Aaron Thompson said. “It’s been a positive experience.”

The council decided to allow the rentals and then revisit the issue in a year to see how the process is working, unless there are problems that need to be addressed sooner.

In addition, the council decided to limit the number of permits issued to vacation rentals and home stays by prohibiting a permit from being issued to a short-term rental if another such operation exists within 300 feet on the same street.

Arroyo Grande assistant planner Matt Downing said the city has already received five applications from existing operators — one vacation rental and four home stays — but staff won’t process them until the ordinance takes effect.