Petaluma outlines plan for short-term vacation rentals

Petaluma has taken a step forward in the effort to regulate short-term vacation rentals in residential neighborhoods with a plan to permit them, but to collect bed taxes and to keep neighbors involved with a complaint process.

Many cities are facing similar issue as the Internet makes such heretofore-underground businesses more common with online booking sites including AirBnB, VRBO and others.

Owners, who call themselves hosts not business owners, say their enterprises are more like sharing their homes with friends than hotels. But some residents say the noise, late-night activity and carelessness of tourists in a neighborhood are incompatible with residential zoning.

Planning commissioners heard from nearly two dozen residents in a hearing last week, which touched on issues of taxation, privacy, respect, affordable housing, the definition of neighborhood and the “sharing economy.”

The commission unanimously recommended that the City Council adopt an ordinance that would legalize the approximately 50 short-term rentals operating in Petaluma currently. The ordinance would require owners to seek permits and pay the same bed taxes that hotels, motels and bed-and-breakfasts do.

The rules would also alert immediate neighbors when a homeowner applies for a permit, require management to respond to complaints quickly and consider mediation when there are disputes.

The issue surfaced in Sonoma County a few years ago when a house party at an unofficial rental along the Russian River got out of hand and a deck collapsed under the weight of partygoers, injuring one person.

Since then, cities that benefit from tourism have sought to get a handle on the underground economy and determined what regulations were necessary.

Homeowners in Healdsburg and Sonoma have complained about loud alcohol-fueled parties or large numbers of people taking over private homes for landmark events such as weddings, disrupting their usual calm streets.

Petaluma, trying to capitalize on potential tourism dollars, has tried to find a middle ground.

The city’s economic development manager said the city explored what other municipalities are doing.

Portland and San Francisco, for example, are limiting the number of days a whole home could be rented out in a calendar year.

“That would essentially eliminate the concern about speculators buying properties that they could turn into 365-day-a-year hotels,” she said. “That would still allow people who own homes to take advantage of the opportunity to share their homes as vacation rentals.”

Some residents remain opposed to having businesses in their neighborhoods, saying the city wants to allow them in a misguided effort to grab tourist dollars.

It’s unclear how much Petaluma is missing out on with unpaid taxes.

Sonoma County auditors are tracking how many people are renting out rooms in unincorporated areas and estimate the unrealized revenue to be as much as $1.3 million a year.

Petaluma resident Susan Thompson said the city unfairly wants to expand its tourism efforts “on the backs of residents.”

“If we allow mini hotel corridors in our town, how does that contribute to community?” she asked. “Tourists are strangers, pure and simple. They belong in places meant for them, not in our residential neighborhoods.”

Planning commissioners’ recommendations will be reviewed by the City Council, likely early next year.

You can reach Lori A. Carter at 762-7297 or lori.carter@pressdemocrat.com.