by Bob Pinzler
This is not a screed against short-term rentals (STRs), although having one embedded in what is a normally quiet community can be disruptive. It is, however, an expression of concern about the long-range effects of the non-enforcement of the laws of each of the beach cities regarding STRs.
The story that triggered this thought was about Cape Town, South Africa. In that country, Cape Town has proven to be an outlier relative to other major cities, such as Johannesburg, regarding issues that comprise what is generally referred to as “quality of life.” As a result, there has been an influx of two competing groups of people wishing to invest in housing.
One is South Africans, particularly younger people, who wish to establish households in that city. The others are investors, from that country and abroad, seeking to purchase properties to create rental businesses. This competition has driven up the cost of housing, mostly to the detriment of younger potential buyers, causing them to reconsider moving to the city where the most attractive jobs are located. This leaves growing businesses in Cape Town with a smaller pool of potential employees, thereby driving up wages.
The investors in rental property don’t necessarily face the same issue. Property ownership is an income issue, and they can offset the higher cost of property by charging more rent, which they can easily charge in a city that is as attractive to their customers, such as tourists, as Cape Town.
I mention this because STRs in our cities may have the same effect on housing prices here. The competition for properties between those seeking rental income and those seeking family housing drives up costs. And when long-established family homes, sometimes repurposed for rentals after the original owners are no longer resident, hinder the housing market by never being sold because trusts are designed to protect the next generation from Prop 13 tax increases, the problem gets exacerbated.
The issue of STRs is not just about noisy neighbors. It may very well be a key element in why our cities have become so unaffordable. The laws regarding STRs need to be either enforced or changed. However, their existence is part of a larger issue we must deal with so that those seeking to establish long-term residence in our cities can be accommodated.
I live in Torrance and just found out that one of our neighbor’s houses is being used as a STR. We found out because of the loud motorcycle noise of the group that rented it. I’m not absolutely sure, but for Torrance I think the owner has to be on site, which this neighbor isn’t. This rental doesn’t fit in with our neighborhood especially with the limitation of weekday street parking due to an Elementary school across the street.
Take it from someone who lived next to 10 STRs one door away for five years.
Yes, UNREGULATED STRs will be an issue.
It would be similar to removing all regulations on bars and restaurants.
A free for all unregulated STRs in a touristy city would be a nightmare for everyone living there.
The solution, put a cap on how many STRs are allowed.
Limit where STRs can go, such as near tourist areas, beaches, Disneyland.
Ban them in strictly residential areas such as cul-de-sacs where kids play.
Have them agree to a good neighbor policy, screening guests, no parties, disruptions.
Require language that they can put directly in the rental agreement.
Require a hefty permit fee that can be revoked if the owner causes too many problems.
Have Owners remit Transit Occupancy Tax (TOT) (Manhattan now earns over $1mil in TOT a year after lifting their ban)
Owners would be incentivized to pay tax and follow rules or lose their permit. Just like a bar protecting it’s liquor license.
Try ordering a drink in a bar in CA at 1:50am. They won’t serve one to you in fear that it won’t be collected before the 2am cutoff.
Investors are buying up properties and raising rents even in areas where no STRs allowed.
Cities could mandate: In order to obtain a STR permit, the owner by name must live there for three years first.
This would prevent investors and/or corporations to buy up properties and convert them into de facto hotels.
Problem solved.
For the person who posted complaining their potential STR neighbor is making loud motorcycle noise.
I feel for you. That would annoy me more than anything.
Keep in mind that person could be a long term renter. Then you are stuck.
If the landlord wanted that person out because the renter was inconsiderate to neighbors, then it is an eviction process that could take many months.
And it is worse if the person making the noise is the owner of the home.
I am sure Torrance has noise regulations, file a complaint with the code department.
A landlord, can’t put restrictions on the renter as a STR landlord can.
A STR landlord can evict a renter immediately if they break the rules as long their stay is under 30 days.
Otherwise they would have to evict the same way as above.
By the way, when I found out in 2005 I lived in a sea of STRs just outside of my door, I believed my life was ruined for the same reason most people are against STRs now.
But in a few weeks, it became a complete non-issue and forgotten. I lived there for five more years afterwards.
The outrageous tax bite for selling is a big reason for both rentals and STRs. I agree that STRs can discriminate much more than rentals, so it’s easy to see why STRs happen. First – I don’t want to lose 1/3 of my equity to taxes and second – I can’t stand the current rental laws. Owners have no rights.