CC 2023-05-09_12b Supplemental 1
MEMORANDUM
TO: CITY COUNCIL
FROM: Jessica Matson, Legislative & Information Services Director/City Clerk
SUBJECT: Supplemental Information
Agenda Item 12.b – Study Session Regarding Short Term Rentals
(Vacation Rentals and Homestays) and Potential Revisions to the
City’s Short Term Rental Ordinance
DATE: May 9, 2023
Attached is correspondence received before 4 p.m. for the above referenced item.
cc: City Manager
Assistant City Manager/Public Works Director
Community Development Director
City Attorney
City Clerk
City Website (or public review binder)
From:tina haun
To:public comment
Subject:Letter of Support for Short Term Homestay Ordinance
Date:Thursday, May 4, 2023 4:09:25 PM
Hello,
I’m posting my support to change Ordinance #781. I vote to change the ordinance back to
the original distance from 500 feet to 300 feet between vacation homestays. I frequently
use Airbnb to travel to the central coast and enjoy the safety and amenities they offer. My
experience with homestay hosts is positive and professional, one that I’ve grown to depend
on. Having the hosts onsite gives me both personal peace of mind and a welcoming local
perspective that I value. When visiting, I contribute to the local economy by buying
groceries, attending events, eating at local restaurants, etc so I’d like my vote to count in
favor of short-term rental stays, especially homestays. Please allow this change in the
ordinance so that I can return to my preferred Airbnb short-term homestays.
Best regards,
Tina Haun
From:Janet Tacy
To:public comment
Subject:Letter of Support for Short Term Homestay Ordinance
Date:Monday, May 8, 2023 7:21:59 PM
Hello!
I’m writing regarding my support to change Ordinance #718. I vote to change the ordinance
back to the original distance from 500 feet to 300 feet between vacation homestays. I have
frequently use Airbnb to travel. My experience with homestay hosts is positive and
professional, one that I’ve grown to depend on. Having the hosts onsite gives me both
personal peace of mind and a welcoming local perspective that I value. When visiting, I
contribute to the local economy by buying groceries, attending events, eating at local
restaurants, etc so I’d like my vote to count in favor of short-term rental stays, especially
homestays. Please allow this change in the ordinance so that I can return to my preferred
Airbnb short-term homestays.
Best regards,
Janet Tacy
--
Janet Tacy
Owner and Lead Designer
Sandcastle Celebrations
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From:Glenn Pickett
To:public comment
Subject:Ordinance 781, Request to Have AirBnb Collect TOT During Booking Process
Date:Tuesday, May 9, 2023 4:51:02 AM
To the City Council:
Based on the information presented below, we kindly request that the City of Arroyo Grande
negotiate with AirBnb and other online short term rental platforms to collect TOT as 78 other
city and county governments in California do. We also request that the City refrain from its
request that “hosts” of AirBnb and other Short Term Rental online platforms pay back "TOT"
taxes that were not collected from transient clients on behalf of the City. For those who have
already paid, refunds should be issued.
Here’s why:
City Ordinance 3.24.030 states that:
“For the privilege of occupancy in any hotel, each transient shall be subject to and shall
pay a tax in the amount of ten (10) percent of the rent charged by the operator. Such
tax shall constitute a debt owed by the transient to the city, which debt shall be
extinguished only by payment to the operator or to the city. The transient shall pay
the tax to the operator of the hotel at the time the rent is paid.
It is the “transient guest” who owes the City these taxes, not the “hosts” who use the AirBnb
platform as a means of income. “Rent” is paid to AirBnb by their clients who are hosted as
guests in homes. AirBnb then takes its share of service fees and then sends “hosts” payment
after their fees had been received.
3.24.030 also defines who an “Operator” is, and because AirBnb collects rent as an
“Agent,” it should be considered to be an “Operator” by law:
"Operator" means the person who is the proprietor of the hotel, whether in the capacity
of owner, lessee, sublessee, mortgagee in possession, licensee, or any other capacity.
Where the operator performs his or her functions through a managing agent of any
type or character, other than an employee, the managing agent shall also be
deemed an operator for the purposes of this chapter and shall have the same duties
and liabilities as his or her principal.
Because AirBnb is the party that collects the “rent” from their clients, AirBnb should be
considered the “Operator” as defined in 3.24.030. “Hosts” like my wife and I do not make
any financial transactions with AirBnb’s clients. For us to collect TOT from AirBnb’s clients,
we would have to perform an additional, separate financial transaction between the
clients of AirBnb and us.
It has taken a while for our society to adapt to the “gig” economy. All of us have had to learn
new methods of procuring all kinds of services, including transportation (UBER), shopping,
and hosting others in our homes. Indeed, it took state governments several years to force
Amazon to collect sales taxes on their behalf. Although Amazon’s customers were technically
responsible for the sales tax and were asked to pay it through their annual income taxes,
Amazon eventually came around and began to pay state governments sales taxes on behalf of
its customers. AirBnb also does this in regards to collecting TOT from their clients on behalf
of local munincipalities.
The passage of Ordinance 718 needs to be enforced in a manner that recognizes the reality of
AirBnb and other Short Term Rental Platforms acting as “Operators” that collect “Rent” from
Transient Occupants.
The County of San Luis Obispo, of which the City of Arroyo Grande is part of, recognized
that AirBnb acts as a traditional “operator” early on in the history of online short-term rentals.
Thus, they negotiated with AirBnb to have the County’s TOT charged by AirBnb directly
from the clients of AirBnb. AirBnb pays the county the TOT without any involvement from
the “hosts.” Both AirBnb and the County of San Luis obispo recognize that in this new world
of the gig economy, AirBnb is more of the traditional “operator” than the “host” is. Please see
this link for 78 other cities and counties in California, including the City of San Luis Obispo
which recognize AirBnb as the Operator and thus they collect their TOT from AirBnb as
AirBnb collects the rent from their clients. Why can’t the City of Arroyo Grande do the same?
Because the relationship between AirBnb, the hosts and the City is confused, even with the
passage of Ordinance 718, we believe that that the City should collect TOT taxes through
AirBnb and drop its demand of back taxes owed to it by transients from “hosts” of
AirBnb. Perhaps a better approach would be to demand the back TOT from AirBnb since it
is the party that as an Operator, collects the rent and handles all of the financial
transactions. Also, AirBnb is the party that possesses all of the contact information for
their transient clents, we as “hosts" have none. The City could make collection of TOT a
condition of AirBnb doing business within the City.
The City’s demand of back TOTs now places a huge financial burden upon us. This tax
burden would have been easy had we been contacted earlier by the City as we recently were
because of the passage of Ordinance 718. Indeed, this is why the Federal Government uses the
payroll tax system. It’s easier for all parties.
Finally, there is no directive given in Ordinance 718 to collect back TOTs from AirBnb hosts.
Indeed, there is no directive in its language to collect back TOTs at all. This seems to us to be
contrary to the general idea of “from now on…"
Indeed, it would be of great benefit to all parties concerned if the City would deal
directly with AirBnb (and other online short-term websites) in regards to collecting the
TOT as the 78 other cities and counties in California do It would alleviate the City of
hundreds of man hours spent at taxpayer’s expense as they correspond with each individual
host in the City and provide the City with a highly consistent revenue stream that would
cost it little if any time to enforce. It would would also release the City from placing a huge
and unfair financial burden on the “hosts” of AirBnb, and in turn, create good-will for all
involved.
We deeply appreciate you thoughtfully considering this request.
Sincerely,
Glenn and Julie Pickett
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From:noah brehio
To:public comment
Subject:Letter of support for home stay ordinance
Date:Tuesday, May 9, 2023 10:23:02 AM
Hello,
I’m posting my support to change Ordinance #718. I vote to change the ordinance back to the original distance from
500 feet to 300 feet between vacation homestays. I frequently use Airbnb to travel to the central coast and enjoy the
safety and amenities they offer. My experience with homestay hosts is positive and professional, one that I’ve grown
to depend on. Having the hosts onsite gives me both personal peace of mind and a welcoming local perspective that
I value. When visiting, I contribute to the local economy by buying groceries, attending events, eating at local
restaurants, etc so I’d like my vote to count in favor of short-term rental stays, especially homestays. Please allow
this change in the ordinance so that I can return to my preferred Airbnb
short-term homestays.
Best regards,
Sent from my iPhone
From:Vanessa
To:public comment
Subject:Ordinance # 718
Date:Tuesday, May 9, 2023 10:12:06 AM
City Council Members,
I've enjoyed calling Arroyo Grande my hometown for 45 years. Growing up here and raising
my family in this community has been a privilege, one that I don't take for granted. I've seen
many changes over the years and I've seen Arroyo Grande make its mark on the central coast
as truly dynamic and progressive, while still retaining its small-town vibe. As part of the
community, I've also seen and participated in small business opportunities, one of which is the
Airbnb platform for home-sharing. A recent change in the distances between host-occupied
homestays has profoundly affected my ability to operate my business as a short-term rental.
The other host in the neighborhood and I have worked alongside one another as co-hosts for
several years. Speaking for myself, having another host in the neighborhood has strengthened
our small business model. Historically, my neighbors both on Aspen and Sage Street are fully
supportive of having a short-term rental. We are present and proactive to deal with any issues
and we clearly state our good neighbor expectations. We've never encountered unruly guests
and they abide by quiet hours and parking place assignments. Guests have enjoyed our small
studio and we've enjoyed hosting them. They return and tell others and this contributes to the
thriving travel industry of Arroyo Grande. Some neighbors and recent guests have written
letters of support for changing the ordinance. I hope you will consider changing the ordinance
back to the original buffer distance between host-occupied homestays. I am currently up to
date with all city taxes and application fees, and I've applied for a permit to operate a
homestay with the hopes that this ordinance will be amended to allow me to return to hosting
short-term stays.
Best regards,
Vanessa Brehio