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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 Links contained in this email have been replaced. If you click on a link in the email above, the link will be analyzed for known threats. If a known threat is found, you will not be able to proceed to the destination. If suspicious content is detected, you will see a warning. 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 Links contained in this email have been replaced. If you click on a link in the email above, the link will be analyzed for known threats. If a known threat is found, you will not be able to proceed to the destination. If suspicious content is detected, you will see a warning. 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