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'Airbnbs' debated

Published: Thursday, September 26, 2013 at 12:12 p.m.
Last Modified: Thursday, September 26, 2013 at 12:12 p.m.

Short-term room and home rentals are quickly becoming the frugal traveler's preferred choice of accommodations. Harkening back to the days of boarding houses, where travelers could rent single rooms with local families, popular websites like Airbnb that offer such digs are becoming increasingly popular.

But the growing presence of such rentals in Petaluma caused city officials to question the largely unregulated sector and its ability to skirt the city's transient occupancy tax laws at a special City Council meeting held Monday.

Petaluma officials have recognized short-term rentals as a tourist draw for the city. Travelers can avoid the high costs of hotel rooms, stay in neighborhoods where there aren't hotels and often connect with hosts that expose the visitor to the local life in town, rather than just the tourist version.

Such is the case for Thomas Holsboer, a citizen of the Netherlands who is renting a room in a Petaluma home that he found on Airbnb.

“This is my second stay in Petaluma and it has been wonderful,” Holsboer told the council on Monday. “I'm not just renting a room. I'm staying with friends. At least, that's how it feels to me.”

With short-term rentals, travelers receive affordable accommodations in friendly neighborhoods, while hosts are able to vet their guests and refuse service to anyone they are not comfortable having stay in their homes.

But some neighbors are concerned that the rentals are bringing a commercial feel into their residential neighborhoods.

“Hosts are responsible for vetting the people staying with them, but it's largely unregulated,” said Petaluma resident Nancy Sasser, who lives near one such short-term rental facility on Keokuk Street and echoed the sentiments of several Petaluma residents at Monday's meeting. “This provides access to criminals and sexual predators. It's unlikely, but it's a reality. You don't want to ask people why they're standing in front of your house, looking at it, but you have to wonder.”

For the Petaluma City Council, it's an issue of losing out on the transient occupancy tax, also known as TOT, revenue. Guests staying at standard hotels, motels, bed and breakfasts and campgrounds currently pay a 9 percent TOT charge on top of their hotel bill, which goes straight into the city's general fund. Informal, short-term rental businesses currently are completely unregulated by the city and their guests are not subject to the same fees.

While several local homeowners wanted the city to completely ban short-term rentals in residential neighborhoods, the City Council expressed more of an interest in taxing these establishments.

“I get the sense that Airbnb is here to stay,” said Councilmember Mike Harris. “So the question is how do we regulate this going forward?”

Councilmember Gabe Kearney said that he has used Airbnb services on more than one occasion.

“We have a lot of information to look at,” said Kearney. “But I'm looking forward to the discussion and thankful that other cities are going through the same thing.”

Much like the debate online retailer Amazon.com faced over paying sales tax to local jurisdictions, Airbnb is facing similar issues across the globe. Currently, payment for accommodations is collected through the website and distributed to the host. The website keeps a portion of the guest's payment for itself. No revenue is directed to cities or counties. And council members acknowledged that it would be an ongoing and difficult battle to try to collect tax revenue from such websites.

“It's the internet moving into another business model and turning it on its head,” said Councilmember Teresa Barrett. “Anyone who knows me knows I'm all about TOT tax. The city has to move forward with trying to collect that revenue.”

The one thing most council members agreed they wanted to ban is people renting out their entire homes to guests as vacation rentals, while they themselves are gone. In 2010, a Guerneville vacation home's deck collapsed when a large group of people was having a party on it, seriously injuring one person. Not long after, the county began regulating such rentals.

“All of us are familiar with the Guerneville house,” said Councilmember Mike Healy. “We don't want situations like that, that would be more problematic than just renting out your child's old room.”

As for added criminal elements and overall neighborhood noise, parking and nuisance complaints, Petaluma Police Code Enforcement Officer Joe Garcia said that he doesn't see the new rental trend as a problem.

“I think we've only had two complaints in the last three years,” he said. “We've been able to identify about 12 people operating these short-term room rentals in the past six months but we really haven't had issues with most of them.”

Garcia said that if the city were to ban such rentals in town, it could put a strain on city services because of the added enforcement requirements. “We would need to do quite a bit more to deal with the issue than if we simply were to regulate them,” he said.

Monday's meeting was a starting point for the council and city staff. Garcia said that he would be working with Senior City Planner Heather Hines to draft regulations for such establishments going forward. The matter will come back to the City Council in the near future, though staff could not estimate when.

(Contact Janelle Wetzstein at janelle.wetzstein@arguscourier.com)

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