Guests Welcome

City Shows Progress on Short-Stay Rentals

By R.E. Graswich
November 2018

People who stay in short-term rentals when they visit Sacramento don’t need to be next to the Capitol, convention center, Golden 1 Center or Old Sac. Short-term rental guests seem to prefer D Street.

Why D Street? It’s impossible to say how that humble byway became the boulevard of choice for the Airbnb crowd, but the numbers don’t lie.

Inside Publications filed a Public Records Act request with the city to examine short-term rental documents. The request produced insight on short-term rental permits—149 issued so far. And there it was: D Street had seen more licensed short-term rentals than any other—six.

To get into the short-term business, a homeowner pays $125 for the annual permit and agrees to follow the law. Rules prohibit more than six guests per night. And they block absentee landlords from renting more than 90 nights per year. Mini-hotels pay Transit Occupancy Tax, with $427,301 collected from July 2016 to this March.

The documents present a picture of a city trying to get a grip on the disruptive and controversial business of short-term rentals. Records show the city has worked hard to create a system that protects neighborhoods from absentee vultures who buy houses and wreck neighborhoods with relentless parking and noise problems.

Yet City Hall doesn’t want to chase away potential business. And the city wants to respect on-site homeowners who make extra money by renting out a room or two.

Inside Publications closely examined 103 permits for short-term rentals. The landlords all appeared to be private individuals. Corporate names were not present, suggesting the short-stay trade is a mom-and-pop hustle in Sacramento.

The corporate backbones of short-stay—tech platforms such as Airbnb and HomeAway—are eager to limit their responsibilities. Inside found a series of emails between the city’s business revenue team and an executive from HomeAway in Texas. Short-stay platforms insist they’re just apps.

At one point, the HomeAway manager asked, “Regarding the proposed changes to your ordinance, can you tell me if you will be holding the platforms liable for listings without a permit number? Currently, our subscribers/owners are able to put their license/permit number on their listing.”

The city’s point person on short-term rentals, Cynthia Smith, alerted her boss, revenue chief Brad Wasson, to the correspondence with HomeAway. Smith wrote, “He seems very open to discussing the compliance requests we have for the short-term rentals. However, he did state that they are just a marketing platform. The company’s purpose is just to give homeowners a place to advertise their property. They do provide links to specific city code webpages.”

Ultimately, operating a short-term rental is a tough business. One poignant email to the city says, “I did try to host but after a month of no booking, I have decided this is not worth the investment and time on my part. Please close out my account.”

R.E. Graswich can be reached at reg@graswich.com.