A proposal in Palo Alto to start regulating and taxing rooms rented out through sites such as Airbnb quietly fizzled on Monday night after the City Council agreed that it has other, more pressing, priorities.
The idea to better regulate short-term rentals in residential neighborhoods came from a December colleagues memo from four council members: Karen Holman, Liz Kniss, Larry Klein and Gail Price. The memo called for exploring ways to collect hotel taxes from these rentals and to consider new zoning rules that could apply to short-term rentals in residential areas. The memo also characterized the issue as one of "safety."
"Without some form of registration, as a hotel would have, or some means of notification, residents have no way of knowing who is taking up residence, albeit on a short term basis, next door to them," the memo stated.
But several council members remained unconvinced that this is indeed a problem. Greg Scharff pointed to the fact that the city received only seven complaints in the past year about this issue and that two of them were deemed invalid.
"This hardly strikes me as a hot-button issue on which we should spend a huge amount of resources on," Scharff said.
He also said he supports "home-stays" of the sort enabled by Airbnb. The "shared-economy" model provides an attractive alternative to the traditional hotel, he said.
Many of his colleagues also graded the subject a low priority. It didn't help the cause that none of the council members who had signed the December memo were present at the meeting. Klein and Price both concluded their council tenures last year, and Holman and Kniss were both absent Monday.
With all the memo authors absent, the seven council members struggled to muster any enthusiasm for action on this subject. Though some suggested minor rule tweaks and proposed ways to address the rare cases where short-term rentals affect the neighborhoods, most agreed that the issue just isn't as urgent as other items on the Planning Department's overflowing to-do list an ever-growing document that includes a litany or traffic and parking initiatives, as well as the update of the city's Comprehensive Plan.
Council members also didn't feel too strongly about the need to collect hotel taxes from short-term rentals. Though local law technically requires these businesses to pay transient-occupancy taxes, the city does not have a mechanism in place for identifying the short-term rentals, much less taxing them. Several cities, including San Francisco and San Luis Obispo, have required homeowners who use Airbnb to get permits. Palo Alto does not have such a requirement.
The council also heard from a few speakers, though neither side had a clear majority. One homeowner said she's had a great experience renting out her spare bedroom on Airbnb, while another said she plans to take advantage of the service now that her children have moved out and she has spare rooms.
"I'm considering making that bedroom available for people who want to come to Palo Alto and work for a month or two, come visit children in Stanford or coming to the hospital for cancer treatment," Katherine Glassey said. "If it's illegal that's bad enough, but if you tax me for doing something illegal, that's very odd."
A few others called for better regulation and enforcement. Resident Marvin Weinstein described the "Airbnb nightmare" that occurred on his block when a homeowner who lives in Vietnam decided to put his house on Airbnb and to enlist a management company in San Francisco to oversee the rental. That company, Weinstein said, never came to the house to take a look at the conditions.
"We suddenly find ourselves in a situation where people are coming for three- or four-day weekends at a time groups of 10 or more to live in a single house, parking up the entire street, partying to three or four in the morning."
Complaints to the city didn't accomplish anything, Weinstein added. Ultimately, after tracking down the homeowner in Vietnam and threatening enforcement, the homeowner agreed to keep the duration of rentals at a minimum of 30 days.
The council agreed that the most useful thing it can do on this topic is discouraging short-term rentals of the sort that plagued Weinstein's block.
Councilman Pat Burt said he would support limiting the number of rentals a homeowner can make per month or encouraging long-term rentals.
Councilman Marc Berman suggested that a rule requiring the homeowner to be present during rentals might be helpful.
"If the owner is there, there's at least limited oversight," Berman said. "If no one is there, that's not a situation I'd be comfortable with."
After a broad-ranging discussion, the council ultimately agreed to a suggestion from City Manager James Keene to monitor the situation and revisit the subject in a year. In the mean time, Keene said the city will consider improvements to code-enforcement practices to address the rare situations in which Airbnb rentals cause a problem.