A Palo Alto property owner's idea to turn his Crescent Park home into an Airbnb rental set off a maelstrom of protest last week, becoming perhaps an object lesson on the forces of commerce that some say are harming single-family cohesion in the city's neighborhoods.
Gordon Stewart, who grew up in his mother Betty's three-bedroom, two-bath home and inherited the residence, was having a hard time finding a family or suitable single renter to lease the home at 1245 Lincoln Ave. So he approached his neighbors with a new idea: to lease the home to two men who would sublet the home for Airbnb rentals.
Instead, neighbors circulated emails and wrote complaints to the city, culminating on Tuesday, Oct. 4, with protests before the City Council.
Stewart did an about face after he received a letter from the city notifying him that by city law he cannot rent the house out for stays of less than 30 days. At the council meeting, he expressed remorse for upsetting his neighbors.
Stewart did not know that what he was doing was illegal, he said. He thought he was helping to reduce a crisis by providing affordable housing for young workers employed by one of the city's burgeoning technology enterprises, he said.
But the city's letter outlined specific regulations that he and others who seek to rent out their homes in the short term cannot ignore.
The municipal code, for instance, defines rentals for less than 30 days as hotels, motels and dormitories, which are not allowed in single-family, R1-zoned neighborhoods.
In addition, hotels and other transient-occupancy uses are subject to the city's 14 percent transient-occupancy tax.
Stewart told the City Council that he has made peace with his neighbors; the proposal is off the table. Many of those neighbors are now helping him to find a suitable family to lease the house. He is asking for $6,000 a month.
But residents told the council Tuesday that the city must develop a concrete strategy and, potentially, additional ordinances, to rein in transient rentals such as those on Airbnb.
Though the council discussed the issue in March 2015, it declined to take any action, with members deeming the problem not urgent enough. City Manager Jim Keene indicated that city staff would monitor the situation for a year, but short-term rentals have not been placed on the council's agenda since then.
Stewart has rented the home to families since 1998 and he has never had a problem, he said. But a downturn in the rental market took him by surprise, he told the Weekly on Friday.
He typically leases the home out for a minimum of a year to 18 months. But recent ads haven't gotten much traction, he said. Then two men, one who already rents out rooms on Airbnb and the other a real estate agent, approached him for a master lease and offered to leave the worries to them to sublet the house on Airbnb.
But his neighbors, who said the plan was to add four or five beds to each bedroom, balked at the idea of up to 14 strangers potentially rotating through the home every few days.
"The problem we have with greedy actors seeking to take advantage of Airbnb is not over," said Azadeh Malek, a neighbor. "We're facing predators looking for single-family homeowners in our desirable neighborhoods and homeowners willing to let them do so."
A family is generally defined as an individual or a group of persons living together as a "housekeeping unit," she said.
"Anyone with common intelligence knows that finding 14 people on Airbnb, each at a different time and at different terms who come to a three-bedroom, two-bathroom house to simply rent a place to sleep, who are not a static group of persons but an ever-changing array of individuals who may not even know each other by name, cannot possibly be construed as a bonafide housekeeping unit," she said.
Another of Stewart's neighbors, Dawn Billman, said on Friday that she is helping him to find a renter. She acknowledged that Palo Alto has a housing problem, but she doesn't see short-term rentals that last only a few days or weeks as a solution.
"As a community we need to thoughtfully look at the changes taking place," she said.
Billman has heard from many people throughout the city who have experienced large numbers of transient renters in their neighborhoods, she said. She doesn't have a problem with families renting out a room to supplement their income, and she thinks it offers an opportunity for visitors to experience what Palo Alto is about.
But the constant comings and goings of so many short-term renters ultimately hurts the community, she said. Such transient renters aren't contributing to the fabric of Palo Alto -- to its schools and government -- and that erodes Palo Alto and its neighborhoods, she added.
The solution must come from the city, she and others said.
"This is an issue that needs to be carefully looked at in the Comprehensive Plan. Airbnb did not exist the last time the city put that document together," Billman said. "As a community, that needs to be looked at as we prepare the next one and we need to think about what the city will look like in 15 years."
Stewart and some Crescent Park residents have a different take.
"Palo Alto has a huge housing problem. I thought I would actually help balance that," Stewart said.
One resident who spoke at the City Council meeting echoed similar views.
People are rightly concerned about noise, traffic, parking and unknown people in their neighborhood, an Addison Avenue man who identified himself as David said. But his mortgage and property taxes makes it necessary to rent out his six-bedroom home, he said.
He rents to visiting families and corporate groups when he and his family are out of town. And it's becoming a way of economic survival in the city, he said.
"I'd be concerned that you don't accidentally hurt Palo Alto families that are increasingly relying on Airbnb to get by," he said of any additional regulations. "In our case, it allows us to supplement our family income and allows us to take part in this community."