Second Home Problem – Detroit, Michigan
This article in the blank" >target="_blank" >glossary/new-york/" class="glossaryLink" data-cmtooltip="1adc8ee834ec3189b4750f263dd91a57" target="_blank" >New York Times made me wonder whether we have a Second Home problem in Detroit? For some neighborhoods/areas, like Indian Village or Boston-Edison, this might be a nice problem to have. More activity means more eyes on the street. Of course there are obvious negatives too, though the article has those covered fairly well…
travel.nytimes.com/2007/09/07/travel/escapes/07backlash.html" class="broken_link">http://travel.nytimes.com/2007/09/07/travel/escapes/07backlash.html
Second-Home Showdown
By AMY GUNDERSON
Published: September 7, 2007
FOR 30 years, Dena Aquilina has lived in an bricks/" class="glossaryLink" data-cmtooltip="12e36d7ce1e7d235107e0eebecf49a0f" target="_blank" >adobe house off a narrow dirt road in a historic area of title="Go to the Santa Fe Travel Guide." href="http://travel.nytimes.com/travel/guides/north-america/united-states/new-mexico/santa-fe/overview.html?inline=nyt-geo" class="broken_link">Santa Fe, N.M. But lately, she said, the quiet neighborhood has felt a little less tranquil. Two of the homes on her block of 12 houses aren’t occupied by full-time residents or even by snowbirds spending winters in Santa Fe, she said. Instead, a steady stream of tourists have been renting the homes for stays as short as a few nights.
The visitors, she said, sometimes disrupt the neighborhood by driving too fast or simply making too much noise. “They get this d/disneyland/index.html?inline=nyt-org" class="broken_link">Disneyland mentality because they’re on vacation,” she said. And with new cars on the block every few days, “it feels like a motel parking-lot/" class="glossaryLink" data-cmtooltip="015f75eb4090904e6f535eb738aa9c4c" target="_blank" >parking lot.”
Similar tensions have arisen in other popular getaway destinations as the vacation-home market has boomed, throwing together more short-term visitors and full-time residents. The result is a real-estate/" class="glossaryLink" data-cmtooltip="b6238c43ec80c8b00c93e4eb154da3e0" target="_blank" >real estate showdown, with communities stepping in to regulate the industry or even trying to ban short-term rentals altogether.
The issue has popped up in the Shenandoah Valley community of Massanutten Village, Va.; the Pacific Beach community in San Diego; Maui in Hawaii; Venice, Fla.; and Clearwater, Fla., where owners of 31 vacation-rental properties took the town to court after a ban was passed. A lawsuit over a short-term rental ban in Monroe County, which covers the keys/overview.html?inline=nyt-geo" class="broken_link">Florida Keys, has been in and out of court since 1999.
The tensions can be traced in part to enterprising second-home buyers who have scooped up investment properties in tourist-friendly towns, and also in part to the rise of professional management services and Web sites like Vacation Rentals By Owner (www.vrbo.com) and HomeAway.com, dedicated to helping owners make their vacation property work for them.
Quality-of-life complaints are a cornerstone of the push against short-term rentals. But Simon Brackley, the president of the Santa Fe chamber-of-commerce/" class="glossaryLink" data-cmtooltip="b43c464fc699bb45f9f100208b253a79" target="_blank" >Chamber of Commerce, questioned the validity of such claims in his city. “We are a pretty sophisticated town; people come here for the art and culture,” he said. “We’re not a college town. We don’t have tequila-drinking contests.”
Roxanne Connan agreed. For the past five years she has rented out her two one-bedroom casitas in Santa Fe. Her tenants don’t exactly fall into the party-animal category, she said. “They are mostly couples in their 50s, 60s and 70s. Some are here because they are looking to buy a house,” she said. “I’ve never once had a complaint or a problem.”
Mark Ray and his wife, Debbie, have visited Santa Fe for the past 10 years and typically stay in a vacation rental for their trips, which last from four days to two weeks. “I wouldn’t describe us as rowdy,” he said, though he admitted that he could see both sides of the issue. Some homes are on small lots and close to neighbors, making even a key/" class="glossaryLink" data-cmtooltip="3dda475f786b86e23fb28da9a86542c7" target="_blank" >low-key evening of backyard grilling a potential nuisance, he said. “Voices can carry.”
That said, Mr. Ray hopes that vacation rentals won’t be severely restricted in Santa Fe because he and his wife plan to buy a home there one day and would like to have the option to rent it out when they are not there. “Homes in Santa Fe are expensive,” he said. “Unless you are really wealthy, you need a little bit of income.”
Although rentals of less than 30 days were made illegal in much of Santa Fe several years ago, the short-term rental business has continued to thrive. While management companies and second-home owners admit that they may not have been following the letter of the law, they say the city has continued to accept their payments of lodgers’ taxes on rentals, even ones that are technically illegal.
The Santa Fe City Council formed a task force to re-examine the issue in 2005. A 75-member vacation rental owner’s group has also been formed, and several proposals to tighten short-term rentals have been put forward. One proposal, to be voted on by the City Council in November, would limit rentals to one per seven-day period, require that the homeowner apply for a $1,000 annual rental permit and piece/" class="glossaryLink" data-cmtooltip="4315c173e67577be2e7c77d1904e7ef4" target="_blank" >cap the number of short-term stays at 17 per property per year.
THE proposals are seen by the rental industry and some local officials as restrictive enough to shut down the business. “It would kill the industry,” said Mr. Brackley of the Chamber of Commerce. “And it is a good industry. It employs a lot of people.”
But Karen Heldmeyer, a Santa Fe city councilor who supported a proposal to limit short-term rentals to just two a year that was killed by the city’s finance committee this August, said she hoped that reining in the industry would address a bigger problem. “The purpose is to maintain the residential character of a neighborhood,” she said.
While management firms and real estate agencies say that they have only been able to confirm one official complaint to the city over short-term rentals, Ms. Heldmeyer said the true number was much larger, adding that there has been “very little good record keeping.”
How such rules will be enforced remains a question, Ms. Heldmeyer said. Even towns that have long had bans on short-term stays have difficulty enforcing them. In Pismo Beach, Calif., short-term rentals have been illegal in much of the city for more than a decade, but Mayor Mary Ann Reiss, who is also a real estate agent, said enforcing the ban was difficult. “We only enforce by complaint at this time,” she said.
In Big Bear Lake, Calif., a resort community east of Los Angeles in the San Bernardino National Forest, the issue of short-term rentals will be on the ballot in 2008. The Private Home Rental Initiative would require owners of vacation rentals to secure a permit in addition to the local business license currently required, make their properties comply with the Americans with Disabilities Act, submit to yearly inspections and have a property manager or owner on call around the clock to respond to complaints. A study commissioned by the city estimated that the passage of the initiative could cut local sales tax revenue by 12 percent, cause a 50 percent loss of jobs in the rental industry and potentially hurt real estate values.
Of course, people involved in the Big Bear vacation rental industry, which attracts visitors for skiing in the winter and boating in the summer, are worried. “Very few owners would be able to comply with this ordinance,” said Nick Lanza, the owner of Big Bear Vacations, a rental agency. “We feel that it is so restrictive it could put us out of business.” He said that much of the support for the initiative was coming from commercial lodging businesses (the ordinance was sponsored by a local bed-and-breakfast owner). “They feel that we are unfair competition,” he said.
On Maui, the owners of an estimated 800 vacation rentals operating without a permit in neighborhoods not zoned for short-term rentals are now being approached by county zoning enforcement officers. Jeffrey Hunt, the planning director for the County of Maui, said that the five zoning officers on staff were asking homeowners to roll up the short-term welcome mat.
“We are talking to them and giving them a reasonable amount of time to shut down their business,” Mr. Hunt said. The hope, he said, is that these homeowners will seek out tenants staying at least 180 days and fill the dearth of long-term rentals on the island. Alternatively, owners can halt rentals, apply for a permit to operate short-term lodging, and sit back and wait for county council approval. Mr. Hunt said the application permit process was already slow, even before the new crackdown. “Some of the applications have been sitting there for years,” he said.
WHILE fights over the future of vacation rentals can be contentious, JoAnn Yukimura, a county councilwoman on Kauai, said she had tried to write legislation that would satisfy both sides. There are designated areas on Kauai that are permitted to have short-term rentals, but an estimated 1,000 vacation rentals have popped up outside of those zones all over the island, Ms. Yukimura said.
“In some neighborhoods, it is more than 50 percent rentals,” she said. “It moves an area towards a horizontal hotel.” Her proposal would allow current short-term rentals, even those outside the designated areas, to continue accepting guests as long as the homeowner has been paying the local lodgers’ taxes, but it would restrict future rentals outside of approved areas on the island.
Ms. Yukimura said she hoped this would stop the spread of short-term lodging, which she said had been growing aggressively for understandable reasons. “This is an issue for very desirable places.”