The City of Paso Robles took one step closer to declaring ordinances for the operation of short-term rentals. Also known as homestays, STRs can be limited to a single room or an entire house and are not rented longer than six months. The City began the process of regulating STRs four years ago after receiving a series of complaints from the public. The voiced grievances centered around noise pollution, loss of parking and that these types of small businesses were overrunning their neighborhoods.
For years, the City has conducted studies, formed task forces and listened to hours upon hours of public comments in search of a compromise that balances the needs of the general public without destroying the booming micro-economy that supports tourism and generates revenue in the form of a transient occupancy tax.
“Right now the reason we’re in this place is because four years ago we had people reporting problems with short-term rentals,” Mayor Steve Martin said. “This room was filled with people in good will to put a set of rules into play that everybody could live by and make the best of the situation for everyone.”
The Council stood on the cusp of finalizing an ordinance earlier this year but a private citizen brought to light a conflict of interest from one of the board members and the Council was forced to go back to the drawing board. Council member John Hamon, along with his sister, are named as beneficiaries in a trust owned by their parents who own a short-term rental. With the new knowledge coming to light, previous decisions were scrapped and the Council had to start over again. Mayor Pro Tem Steve Gregory’s recusal brought the fate of STRs down to three people, Mayor Martin, council member Fred Strong and council member Maria Garcia.
Once again the City is poised to make a decision but in a surprise move, the second reading was pulled from the consent calendar and opened for public comment. The consent calendar is a grouping of agenda items that can be passed in one motion rather than rehashing actions that have already been discussed and decided upon.
After another marathon Council meeting of listening to public opinions both opposed and in support of homestays, the remaining board members chose not to approve the second reading of rules that would forbid additional homestays in residential zones (R-1) and phase out existing ones. Instead, the Council decided to vote on grandfathering in existing homestays in R-1 zones while setting a maximum limit of 75 that would be accomplished by attrition. The Council also added more bite to the City’s disciplinary actions with STRs that disrupt their neighborhoods by adding noncompliance fines of $500, $750 and $1,000 for each consecutive violation.
The motion hinged on the subject of grandfathering in the existing STRs and the uncertainty of how many actually existed in the City. Martin stated that the council wanted to be fair to the business owners who had “played by the rules” while balancing the desires of the communities. More than 200 business licenses for STRs were applied for in R-1 zone alone. However, City Manager Tom Frutchey stated that there are only approximately 200 hundred STRs in the entire city were generating any significant TOT revenue. A granted business license does not guarantee the space would be rented every day or even every weekend. The discussion did not broach the number of possible illegally operated STRs.
After several reiterations of the motion by Frutchey at 11:30 p.m. (council meetings begin at 6:30 p.m.), the council unanimously voted to place the new ordinance on agenda for its first reading. The ordinance closely resembles option B presented by the task force in June. The new STR stipulations passed its first reading hurdle on July 16 and if it clears the second reading at the August 6 council meeting will become the new guidelines for homestays operating in Paso Robles.
Frutchey reminded the Council that the ordinance only lasts for three years and then the Council can revisit it and decided to keep or change the ordinance as they see fit.