Introduction
AirBnB, the online short-term rental platform, has been controversial in Sacramento. Some people love it and want more of it, while others hate it and want less. The debate is about whether short-term rentals (STRs), which are homes that are rented for as little as one night at a time through Airbnb or other platforms like VRBO, should be allowed in residential neighborhoods. Recently, Sacramento City Council voted on a new policy that will allow residents to rent up to two rooms for thirty days at a time with no more than four occupants present. But what exactly is the long-term rental debate all about? And how did we get here? Let's take a closer look:
The Long-Term Rental Debate.
As you may know, Sacramento has an acute housing shortage. We are a city with a population of about half-a-million people and only enough homes to house about 446,000 people. The average cost of renting an apartment in Sacramento is $1,246 per month, making it more expensive than New York City or San Francisco.
For many years now, the city has struggled to find solutions for this crisis—but one solution that has been repeatedly proposed is: evicting residents who have been living in their homes for years or decades (sometimes even as long as 30 or 40 years) so that they can be replaced by richer tenants who will pay higher rents.
The other side of this debate is that long-term rentals are a dwindling resource in Sacramento.
The other side of this debate is that long-term rentals are a dwindling resource in Sacramento. As the city grows, so do the number of people who want to live here. According to county planners, there are currently only about 6,000 units available for year-round renting in Sacramento County—a far cry from the tens of thousands needed to accommodate workers and students who want to stay in town after graduating from local universities.
Short-term rentals can be good sources of income for property owners, but they’re not a substitute for long-term rents. The city will continue seeing its population increase over time (notwithstanding the possibility of mass exodus). If it wants to keep up with demand for housing options and avoid losing residents who can’t find places within reasonable commuting distance from their workplaces or schools, then it needs more supply on which short-term renters will inevitably compete.
What Sacramento's Doing About It.
In a move that stands to benefit everyone, the City Council has drafted a policy and will vote on it next month. According to the Sacramento Bee, the policy will allow people to rent up to two rooms for thirty days at a time, with no more than four occupants.
The hope is that this legislation will clear some of the hurdles preventing AirBnB from entering the city and make travel better for everyone in Sacramento—not just tourists!
City Council voted to draft a policy that would allow residents to rent up to two rooms for thirty days at a time, with no more than four occupants.
If you’re looking to rent out your spare room or two, stay on the right side of the law by following these guidelines:
Rentals are limited to 30 days in length.
The maximum number of occupants allowed per rental unit is four people. This includes tenants and guests.
Vacation rentals under 30 days are only legal if the property is owner-occupied, meaning that you live at least nine months out of the year in Sacramento, California. If you don't meet this requirement and want to rent out an entire home through Airbnb, it's best that you consider listing it as a long-term rental instead.
Timing is Everything.
While STRs are a good way to make some extra cash, it's important to be aware that the City Council is still working on an official policy. As such, it's best to understand that there may be some legal risk involved with renting out your property.
In the meantime, people who rushed to rent out their properties before the new regulations were in place are now stuck with two conflicting sets of laws: one saying they can't do it and another saying they can. If you've never been through this kind of situation before (and if not—you should read up on California real estate law), then you might wonder why this should be a concern at all.
The answer lies in timing: if you're too early or too late by even just a few days, then your actions could result in fines or even jail time!
Some owners of short-term rentals rushed to turn their investment properties into STRs before the City Council team started drafting up new legislation.
Some owners of short-term rentals rushed to turn their investment properties into STRs before the City Council team started drafting up new legislation. They weren't just trying to get ahead of the curve; they didn't want to risk losing money on their investments, either.
The Case for and Against Short-Term Rentals.
If you are considering making the move to STRs, there are some things you should know. The first is that, while STRs are a growing industry, they don't offer the same legal protections as hotel rooms or other types of rental agreements. This means that if your guests cause damage or otherwise disturb people in the neighborhood, there's not much recourse for action on your part.
The second thing is that STRs can be good ways for hosts to make money off their homes when they're not using them; however, this can come with downsides as well—if your neighbors don't like having strangers around who might cause disturbances (or even worse), it may negatively affect their quality of life and drive down property values in general.
Finally and most importantly: You should consider how much time you'll have available for hosting guests before deciding to get into short-term rentals full time!
Many fear that STRs can drive neighborhoods apart (much like having an HOA), as well as cause an increase in crime, noise and parking issues.
Many fear that STRs can drive neighborhoods apart (much like having an HOA), as well as cause an increase in crime, noise and parking issues.
Additionally, some people believe that the Airbnb industry drives up property taxes because of the increased demand for housing in already expensive areas. However, this may be offset by the fact that Airbnb hosts typically invest their revenue into making their homes more competitive and attractive to potential guests.
Others also worry that STRs lead to an increase in property taxes because their presence will "spur interest" in buying real estate, which will make property values rise.
Others also worry that STRs lead to an increase in property taxes because their presence will "spur interest" in buying real estate, which will make property values rise. If this happens, it is feared that homeowners will see their property taxes go up.
This would be a burden for homeowners who are already struggling to pay off their mortgages and afford their home payments. The fear of higher property values is also why some people oppose the idea: they don't want to see their homes become more expensive so that it becomes harder for them to afford one.
STRs may not be the best solution to the housing problem in Sacramento or anywhere else in California.
People who support STRs say they are a way to increase tourism while generating revenue for area business owners, who benefit from tourists spending money at local restaurants and shops.
People who support STRs say they are a way to increase tourism while generating revenue for area business owners, who benefit from tourists spending money at local restaurants and shops.
AirBnB is currently illegal in many parts of California unless you use it as your residence or if you rent out a room in your house (or even just the bed). In other words, the city of Sacramento doesn't want people renting out their entire homes unless they're living there at the same time, with some notable exceptions. You can usually get at least 90 days out of the year permitted for STR, and often times you can apply for an extension on this permit. Also, if your property is in a commercial zone, you may have fewer restrictions. Some areas around Sacramento, such as West Sacramento, have even weaker or nonexistent language as of 2022.
They say an increase in tourism would also help Sacramento's homeless community by creating more jobs (since it would need more people to work at hotels and restaurants).
They say an increase in tourism would also help Sacramento's homeless community by creating more jobs (since it would need more people to work at hotels and restaurants). This is important because there are many people in the homeless community who would be able to find work, but don't have the proper training or experience. The tourism industry would provide jobs for the unemployed, as well as people who have been laid off or didn't finish school.
Conclusion
The debate over STRs is one that will likely never end, but hopefully we can come to an agreement on how best to regulate them. The City Council has taken the first step by drafting legislation that would allow short-term rentals to operate in Sacramento with some restrictions, but there are still many unanswered questions about how this law might work in practice. If you have any questions about TOT (Transient Occupancy Tax) or short term rental permits in and around the city of Sacramento, CA, please contact your local experts at WISH STR.