Paso Robles evaluates future of vacation rental ordinance

After two years, the city of Paso Robles is deciding how it should proceed with its vacation rental ordinance — whether to make it permanent as is or continue with temporary rules that allow for some changes.

The short-term rental ordinance, which issues permits for properties to be listed as short-term rentals on websites like Airbnb, VRBO and Homeshare, was adopted by the council in August 2019 and is set to expire on Aug. 16, 2022, according to a report presented to City Council Tuesday night.

The rule sets a cap on the number of permits that can be issued to property owners looking to list their home or apartment as a non-hosted short-term rental, meaning the property is rented by a guest for fewer than 27 days and the property owner is not staying at the property while it is rented, according to the report.

After more than 30 meetings and input from the public, the council opted to write the 2019 ordinance to allow a maximum of 325 permits, a cap that was met in June 2021, community development director Warren Frace said during his presentation to the council.

With the permits for non-hosted short-term rentals all taken up, the only way a new one can be issued is if a permitted property comes off the rental market or turns over in some way, Frace said.

Currently, the city has two waitlists for homeowners interested in using their property as a vacation rental, Frace said, one with 16 requests for rentals in areas zoned for residential, single-family homes and another with seven requests for rentals in non-residential zones.

The 325-unit cap was established to balance the need for housing and maintaining residential communities with the desire to offer lodging options for tourists, Mayor Steve Martin said at the meeting.

“Tourism doesn’t get the whole loaf, and residents don’t get the whole loaf either,” Martin said of the cap.

During Tuesday’s meeting, the council directed the community development team to prepare two options for the council to review at a future date.

The first option the council will consider is a permanent extension to the short-term rental ordinance, while the second is a temporary extension that would also terminate short-term rentals operating without a permit from the city.

Not included in either plan is any increase in the total number of permits the city will issue, Frace said.

“If we set a cap of 325 short-term rentals, then our job has been to enforce that cap,” Martin said.

Council members Steve Gregory and John Hamon recused themselves from the discussion about short-term rental properties due a conflict of interest.

What the short-term rental landscape looks like in Paso Robles today

Nearly 41% of the vacation rentals are located in residential, single-family districts, according to a short-term rental dashboard that’s managed by the company Host Compliance and updated monthly.

The bulk of these vacation rentals are located on the west side of Paso Robles, so much so that roughly 6% of the properties in western Paso Robles are now short-term rentals, according to the report.

The tension between Paso Robles’ short-term rental owners and neighbors’ frustrated by tourists was on display in the public comments submitted via email ahead of the council discussion.

“… Each and every STR (short-term rental) brings in new groups of strangers to neighborhoods every week, and each STR can include from one to four or more vehicles driving through an otherwise stable and peaceful neighborhood,” said Jeff Carr of Paso Robles via email. “STRs can splinter neighborhood blocks and disrupt community trust and peace.”

The majority of complaints about short-term rentals that are called into a hotline managed by Host Compliance are about the noise that comes from using an outdoor pool, Frace said.

Most of the time, these noise complaints are not actual noise violations, he said.

Carr also wrote that, because the majority of STRs are located on the west side of Paso Robles, the housing market in that part of the city has been negatively impacted.

“I’d like to extend (the ordinance), but I’m nervous about how long,” said City Council member Maria Garcia. “I keep getting comments from community that we’re lacking housing, and I want to make sure that we’re doing everything we can for our R1 (residential, single-family home) zoning.”

Short-term rentals bring in revenue, benefit tourism

The short-term rental program has generate $217,500 from permit application fees to date, according to the report.

Though COVID-19 tamped down tourism in 2019-20 — and tax revenue generated from short-term rental properties by extension — the city saw a boost in 2020-21.

Paso Robles reported a 76% increase in the monthly tax revenue generated by short-term rentals in the first half of 2021 — $911,543 — compared to the same period last year — $517,801.

Leaders in the Paso Robles business community have come out in favor of the ordinance.

Gina Fitzpatrick, president and CEO of the Paso Robles Chamber of Commerce, wrote in support of extending the ordinance beyond Aug. 16, 2022.

Stacie Jacobs, executive director of Travel Paso, said that she was in favor of the ordinance because of its benefits to tourism.

“It keeps that unique mix of lodging properties, which we believe is very important to the overall ecosystem of Paso Robles,” Jacobs said, urging the council to “continue letting the ordinance work.”

One common misconception about the short-term rental market in Paso Robles is that the property owners are all out-of-towners, when in reality, the majority are locals, Jacobs said.

“That’s a different version of neighbors,” she said.

Council member Fred Strong recommended that the community development team update the report to contain figures about how the availability of short-term rentals compares with the availability of hotel rooms, noting that some travelers prefer to stay in a short-term rental as opposed to a hotel.

“If we want tourism, what do the tourists want?” Strong asked. “We want them to be here and be comfortable, and what do we do if they will only come here under certain circumstances?”