Short-term rentals, long-term controversy

Citizens debate temporary tenants: Guests or pests?

When Susanne Paulson checked the internet site listing for her guest cottage, she couldn’t believe what she read.

“After Sept. 23, it has an owner’s hold on it,” the site said, according to Paulson. “It’s just blank.”

An owner’s hold usually means the owner blocked out the calendar and stopped accepting outside reservations in order to accommodate family visits.

But the Langley resident said she didn’t place the hold.

Vacasa, the rental company managing “The Carriage House,” the two-bedroom apartment above her garage, placed the hold. The reason? Apparent confusion over a six-month moratorium that the City of Langley adopted in July on accepting new applications for short-term vacation rentals in residential zones.

The ban doesn’t curtail existing short-term rentals from continuing to do business. However, a recent public hearing revealed many residents, such as Paulson, are confused by what the moratorium means.

City planners say the moratorium is intended to give them time to consider how online short-term rental services such as Airbnb, Homeaway, VRBO and Vacasa are affecting Langley neighborhoods, the housing market, long-term rental availability and the local economy.

When she asked the city about the need to stop renting, Paulson said she was told the moratorium didn’t apply to her.

“Now, I’m just mulling this all over in my mind,” she said.

Communities across the country enacted similar moratoriums on new short-term rental applications, mostly to allow time to figure out how to rein in the wild west of online bookings that often bypass local licenses and taxes.

All have the same goal, which is crafting new regulations that balance residents’ desire to generate income while also appeasing fears that neighborhoods will be marred by itinerant travelers and all the possible baggage that comes with them — noise, cars, parking woes, late-night parties.

Langley’s guest lodging ordinances date back to the days of letter writing, travel agents and home telephones. Back when there were few alternatives on the road besides a hotel, motel or bed and breakfast.

“There’s no intention to fight Airbnb, no way,” Langley Mayor Tim Callison said after hearing residents express numerous pros and cons at Monday’s city council meeting. “There is no animosity in any form. We just want to have fair rules that everyone understands. We’re asking for six months to develop those rules and put them in place.”

In June, the Coupeville Town Council also voted not to allow any applications for six months for “transient accommodations,” as its code calls short-term home stays.

“The town codes regarding small-scale vacation rentals have not been updated in 18 years,” Planning Director Owen Dennison said.

Airbnb, the $25 billion company that started out with three guys renting floor space and four air mattresses in San Francisco, adjusted its business model early on to include lodging and other taxes to appease the hotel industry and local municipalities.

But trying to get the entire short-term rental market to follow suit is the challenge. Brigid Reynolds, director of community planning, said 50 short-term rental rooms were estimated to be available in Langley in 2015. That number increased to 195 according to an informal internet search at the end of last year.

“We estimate 75 percent are operating without a business license,” she said.

The State Department of Revenue requires that property owners renting out homes, rooms, condominiums, time shares, cabins, camping site or RV sites for less than 30 consecutive days need to register with the state so retail sales tax and applicable lodging taxes are collected.

The requirement applies to property owners advertising rentals through online marketplaces or if they are using a property manager, according to the state website.

Short-term rentals are a hot market showing no signs of slowing down.

“Whenever a house goes up for sale, the first question I get is, ‘Can I do a VRBO there?’” Reynolds said.

Besides the loss of city revenue from uncollected lodging tax and the potential noise and nuisance factor in residential areas, there’s also “the impact on Langley’s community character,” some residents pointed out.

“The town has a choice to make,” Randy Eiler said, “to become a mini Carmel (California) or do you want to become more for the residents? “

April Sanders of Tara Vacation Properties pointed out that vacation rentals will continue to flourish because “the beauty of having a vacation rental is you still get to use it.”

Sanders told the council she knows businesses get a boost by the number of restaurant take-out boxes and bottles from local wineries left behind in the room rentals. Like others, she asked how the city planned to enforce new regulations on short-term rentals in an equitable manner.

Sharen Heath, owner of Raven Room Guest House on First Street, said short-term rentals shouldn’t be demonized because “they’re the best thing that’s happened to Langley in a long, long time.”

She estimates a couple easily spends $350 on meals, shopping and excursions over a weekend in Langley, in addition to paying the cost of the Airbnb room.

“Multiply that by four weekends a month at 30 Airbnbs within the city and you come up with a significant economic boost to our local economy,” she said in an interview.

Cost and connection will continue to make neighborhood short-term vacation rentals popular, many predicted.

“Home stays are fun and fulfilling,” Heath said. “They contribute to some basic human desires, I think, for connection, for learning, and for understanding.”

Laws and regulations governing short-term rental markets around the country are constantly changing. Some cities, such as San Diego and Santa Barbara, have severely curtailed the practice while others have imposed fines as high as $20,000 for violating new laws. Others are considering adding an additional tax to help fund low-income housing.

Several residents said they knew of local people who were forced to move when landlords decided short-term rentals were more profitable.

Having fewer and fewer places to rent — or pricing them out of reach for service industry workers who are cooking, cleaning and making coffee for visitors — ultimately affects tourism, some commented.

Short-term rentals also provide jobs. Susanne Paulson, the woman facing a blank reservation screen after enjoying “a great summer” of guests, said she knows Vacasa employs local people and pays a fair wage.

Real estate representatives said average pay for cleaning vacation rentals is about $25 an hour.

“I’m proud of that,” Paulson said. “I’m not providing affordable housing but I am providing jobs.”

Paulson has been renting out property in many forms in Langley over the past two decades; a bed and breakfast, long-term rentals and now, short-term rentals.

For about a dozen years, she and her husband, Bill, hosted visitors at their 100-year-old Victorian house, “The Maine Stay” on First Street with a wide, welcoming veranda and cozy upstairs bedrooms.

Then came bed and breakfast burn-out.

The couple built a spacious apartment above their garage and decided to rent it out for extra income to residents who stayed about two years. Then came more grandsons, more family holiday gatherings in Langley.

“We’ve been renting it as a vacation place for about five or six years, mostly in the summer and we kept it available for family in the winter,” Paulson said.

Then came short-term rental weariness.

“This year we decided to let Vacasa rent it,” she said. “They take care of the bookings, taxes, cleaning and send you a check very month.”

Paulson said she’s earning more income through Vacasa, that manages 9,500 vacation homes in 11 countries, than renting on her own because of the company’s social media marketing, which includes 3-D virtual tours. She’s always paid lodging taxes, always had a business license.

“It’s not fair to not pay your rightful share of taxes,” Paulson said. “I tried to do everything right. It’s sort of a slap in the face when you bring income into the economy here.”

A recent public hearing about short-term rentals packed Langley’s City Hall meeting room. Like other towns nationwide, Langley is wrestling with how to regulate residential homes being used as tourist rentals.                                (Photo by Patricia Guthrie/Whidbey News Group)

A recent public hearing about short-term rentals packed Langley’s City Hall meeting room. Like other towns nationwide, Langley is wrestling with how to regulate residential homes being used as tourist rentals. (Photo by Patricia Guthrie/Whidbey News Group)