Vacation rental divides Petaluma neighbors

Mary and Jerry Moynihan used to enjoy relaxing in their west Petaluma back yard, but the peace the five-decade residents once relished has long been interrupted by what the family describes as bustling short term rentals next door.

The family alleges that Marie Saint Clair, who also owns and operates the Metro Hotel near downtown Petaluma, has been running a “satellite hotel” on the 20 block of Park Avenue in various capacities since 2012, renting out structures on the property without city approval or regard for neighbors. Saint Clair, meanwhile, said she is following the rules.

The neighbor dispute highlights the deep rifts created by the growing short term vacation rental industry. Sites like Airbnb allow residents to profit from renting a spare room or vacant house, while neighbors say the practice introduces tourists, and related problems, into neighborhoods that were never intended for a transient population. Local governments have scrambled to develop regulations to deal with the evolving industry.

Mary Moynihan said she’s often kept awake late into the night when renters return in taxis and engage in drunken brawls. The units are booked at least five nights a week, and renters wander onto the Moynihan’s property while the sound of suitcase wheels breaks the serenity of the neighborhood and tenants leer into their backyard, Moynihan said.

“It never, ever ends,” Moynihan said.

The family said attempts at communications have been fruitless and hostile, though Saint Clair said her neighbors have not attempted to contact her.

Kathleen Molavi, Moynihan’s daughter, said she’s been imploring the city to shut down the rentals for five years, and the family expressed frustration at what they described as a lack of responsiveness from city officials.

“I couldn’t help but think maybe the city didn’t know what to do, so they did nothing,” she said.

Saint Clair said any complaints are unfounded and the rentals have been operating inside of the city’s rules

“We don’t need this, we’re not doing anything ... this is crazy,” she said. “It’s like people are trying to stop us from making money and getting ahead in life.”

Petaluma officials in 2015 voted to adopt rules to regulate short-term rentals, establishing guidelines for hosts and creating a permitting structure that also includes the remittance of a 10 percent transient occupancy tax for overnight stays. Those rules went into effect in January 2016, and Saint Clair was granted a permit to rent two rooms in the main home on the property that April, according to city records.

That has since expired, and planners have received an incomplete application for a new permit, Deputy Planning Manager Kevin Colin said.

Joe Garcia, the city’s code enforcement officer, was alerted about an unpermitted structure on the property in 2012. He didn’t receive other complaints until June, when he issued a notice of violation and set a July 4 date for the owners to get proper permits for three rooms that had been offered for rent through the hotel’s website, he said. Now, Mary Moynihan said that short-term renters are still causing a ruckus, but Saint Clair said the units are inactive.

“At this point we can’t prove that they are conducting business out of there,” Garcia said.

Molavi is lobbying the city to deny Saint Clair a permit based on the ongoing complaints.

“With regard to our evaluation of the new application and comments from the public, we will consider all comments in so far as they relate to the standards of review,” Colin said in an email.

Vice Mayor Teresa Barrett, who’s been helping Molavi reach city officials, said the city is working to address the issue and ensure neighborhood cohesion.

“It’s been a little slower than one would hope in terms of getting a solution to this, but I think we’re actually on the course of getting there,” she said.

Though the Park Avenue feud has nearly reached a boiling point, officials say they’re not fielding many other gripes about short term rentals. Garcia said he’s only received one such complaint in 2016 and three in the past two months.

“It’s becoming more and more popular now and people are more aware of it,” he said. “The more aware of it people are, the more likely they are to be disputed. We are getting more complaints for properties, but it’s just been recently.”

The discussion comes as the city continues to struggle to bring hosts who are shirking city rules into compliance. The city is also working with vacation rental sites to get a response to subpoenas issued last year seeking information to identify and contact Petaluma hosts, which have been ignored, City Attorney Eric Danly said.

“We need to get direction from the council as to if we’re going to litigate the subpoenas, which I’m perfectly prepared to do, or if there’s a non-litigation approach that actually will fully protect the city and fully achieves compliance,” he said.

A search of Airbnb shows nearly 200 listings for short term rentals in Petaluma, though Colin said the city has 23 permits on file, meaning the cash strapped city is losing out on valuable revenue.

Since Jan. 1, 2016, the city has collected $50,213 in transient occupancy tax from short-term rentals, while $10,970 has been collected for business license and short term rental permit fees, according to Principal Financial Analyst Corey Garberolio.

If 100 hosts offered rooms for the average nightly rate of $150 for 90 nights, the city would receive an estimated $162,000 in bed taxes annually, according to city calculations. If 100 permits were issued, the city could net $38,063 in permit and business license fees.

In December, Airbnb announced that it would collect transient occupancy tax on behalf of Sonoma County. Petaluma doesn’t currently benefit from that, but the city could explore a similar arrangement, Danly said.

The short-term rental program will end Dec. 31, 2018 unless the council chooses to extend it, and a discussion will be held closer to that date, City Manager John Brown said.

“I’m so glad we’re on a trial basis just to make sure there are not issues and also be alert to identify when there are issues and take care of them … this is just a learning curve,” Barrett said.

(Contact Hannah Beausang at hannah.beausang@arguscourier.com.)