Sonoma County Board of Supervisors to hear residents’ concern over vacation home startup Pacaso

Sonoma County residents will have the chance to voice their concerns over Pacaso — a “fractional homeownership” startup that has riled some local neighborhoods — during a public hearing before the Board of Supervisors on Tuesday.

Founded in October 2020, the rapidly expanding San Francisco-based company purchases single-family homes and allows up to eight buyers to take part ownership in the properties to use as shared vacation homes.

Over the past year, Pacaso, has made national news for buying homes in the Napa County. That’s sparked fears among residents in Sonoma Valley and other parts of the North Bay with significant concentrations of vacation homes that the company’s presence will ruin the character of their communities and result in fewer houses available for local families, a growing countywide concern as home prices have soared during the pandemic.

In all of Sonoma County, the company currently manages just two homes and has one more on the market, according to Pacaso spokeswoman Amy Musser.

Sonoma County Supervisor Susan Gorin, whose district includes Sonoma Valley, said the purpose of Tuesday’s hearing is to help inform potential actions the board could take to regulate the company’s business model.

“Many constituents in the county have wanted an opportunity to comment on this,” Gorin said. “We will be listening carefully to their comments and documenting impacts of Pacaso homes on their neighborhoods.”

In a statement, the company responded to residents’ concerns by arguing vacation properties with multiple owners have long been commonplace in Sonoma County.

“The families that Pacaso serves are no different. They are second home owners, not renters, who own 100% of their home, and employ Pacaso as a property manager,” said Ellen Haberle, director of government and community relations, in a statement.

In an attempt to ease worries about its impact on the local housing market, Pacaso in June made a commitment to only acquire homes in Napa and Sonoma counties valued at more than $2 million. And for each Pacaso home sold in the region, the company said it will donate $20,000 to local housing nonprofits through 2022.

Still, county officials appear to be giving closer scrutiny to Pacaso properties.

After receiving complaints from residents, Permit Sonoma notified the company about potential violations for three properties in parts of unincorporated Sonoma and Healdsburg, where commercial lodging is not allowed. Pacaso responded that the properties are used as owner-occupied single-family homes, and therefore are in compliance with local zoning laws, according to the county.

“We’ve sent courtesy notices for potential zoning code violations because we view these properties as lodging,” said Bradley Dunn, policy manager with Permit Sonoma.

Dunn said the county is considering legal options and other actions for how to handle the possible violations, but declined to elaborate.

He was not able to confirm whether the complaints correspond to the three properties Pacaso says it has sold or put up for sale.

Late last year, citing concerns about loud parties and public safety, the Board of Supervisors extended a temporary cap on short-term vacation rentals such as those listed through Airbnb in Sonoma Valley and along parts of the Russian River.

Permit Sonoma does not regulate Pacaso homes as short-term rentals.

The Santa Rosa City Council last month imposed its own emergency regulations on vacation rentals. The city is in the process of creating a permanent short-term rental ordinance.

On Tuesday, county staff will also update the Board on the Pacaso’s ongoing lawsuit against the city of St. Helena, which has banned its fractional homeownership model, citing an ordinance prohibiting timeshares. The company disputes that its properties are timeshares.

In a staff report, the county acknowledged the startup — carrying a $1.5 billion valuation and with plans to expand across the country and overseas — has “displayed aggressive litigation tactics” in its case against St. Helena.

Gorin said it was “too early to say” what potential steps the county could take to regulate Pacaso.

“This an opportunity for the full board to hear from members of the community,” she said.

You can reach Staff Writer Ethan Varian at ethan.varian@pressdemocrat.com or 707-521-5412. On Twitter @ethanvarian