By QUINTON SMITH/YachatsNews.com
When the Yachats City Council opens a hearing Tuesday night on its 2-year-old vacation rental ordinance most of the drama from the past will likely be gone.
Some vacation rental managers and owners are expected to attend to argue against the limit of 125 licenses in the city. A few homeowners will likely be there to say they should be able to do whatever they want with their property. Others may show up to tell how their neighborhood has been over-run by rentals and visitors constantly coming and going.
But what’s likely gone will be the hundreds of people who crowded into hearings in 2017 when the council asked for comments on the proposed ordinance that put a limit on rentals.
What’s replaced it is the realization by most people that a limit on the number of vacation rentals has gone unchallenged in the courts, is supported by the council, and that both neighbors and rental managers are apparently using and dealing with the do’s and don’ts.
Tourist communities around Oregon have been trying to deal with burgeoning number of vacation rentals since the 2008 recession and the rise of online booking services.
Yachats was one of the first to put a cap on the number of rentals.
After years of citizen studies, hearings and meetings, the City Council approved a two-year pilot program in September 2017 to limit the number of licenses and update a long list of requirements and regulations.
That ordinance expires in September, so the council is asking Yachats residents and property owners to weigh in on how it has worked and what, if anything, should be changed, thrown out, added or tweaked.
Mayor John Moore said the council is just starting the discussion “and we’ve got plenty of time and don’t need to rush it.”
“We’d like to get input from anyone who can point out any unintended consequences of the ordinance — things that weren’t considered at the time that turn out to be problematic,” Moore told YachatsNews.com in an email.
Moore expects the council to hear from companies and individuals who have always been opposed to the cap on vacation rentals. But he says the council has three new members, himself included, who were not involved in hearings two years ago.
“There hasn’t been an outcry lately but the issue hasn’t been brought up lately,” he said. “It’s time to discuss it.”
The council meeting begins at 6 p.m. Tuesday, May 14 – a day earlier than the council’s usual monthly evening meeting.
The background
Yachats first started regulating – but not limiting — vacation rentals in 2002. Like now, most of the regulations involved having a local contact to handle problems, rules over garbage pickup, parking and a process for complaints and appeals.
That ordinance was updated in 2014 with small wording changes.
The cap approved in 2017 came after the number of vacation rentals grew to at least 20 percent of all houses in the city. The neighborhoods most affected were those with the best views — along Ocean View Drive north of downtown and Yachats Ocean Road and neighborhoods south of the river.
Two years ago there were 145 licensed vacation rentals; there are now 138.
Once the number drops below 125, the city can begin issuing new licenses.
Objections to the cap were based on limiting uses of property, especially by owners who wanted rental income to help support what was typically a second home. Based on water use, the city estimates up to half the 800 houses in the city are second homes.
Property owners objecting to the limit said the issue should not being whether someone liked or disliked a vacation rental in their neighborhood, but whether the renters were following rules and whether the city was enforcing them.
People objecting to the rentals argued that the constant coming and going of vacationers fundamentally changed the character of residential neighborhoods.
In addition to a yearly licensing fee of $200 to $400, owners also pay city and state transient rental taxes on any rent they collect – 9 percent to the city and 1.8 percent to the state. Of the $1.04 million in lodging taxes paid to Yachats in fiscal 2017-18, an estimated 25 percent – or $250,000 — came from vacation rentals.
The arguments for restrictions
One of the people in Yachats who has studied vacation rentals the most is Tom Laurenitz, a former finance consultant with the city and who with former city administrator Joan Davies and resident Kathy Perkins spent months during 2017 and 2018 surveying each rental and studying issues with the ordinance.
Their report to the council in 2018 focused on a complaint system that doesn’t quickly alert the city to problems – complaints go first to rental managers – and poor adherence to requirements for signs, contact information and misplaced garbage cans.
“The process was designed to hold the owner accountable, but most of that was outsourced to management companies,” Laurenitz. “That effectively transferred enforcement to management companies.”
The Laurenitz/Davies/Perkins study did not address the license limit. But Laurenitz says there are alternatives, at least one of which would require much more city involvement.
One idea is to have two classes of licenses. One would be for people renting their homes for less than 10-20 days a year, for example. The other license would be for owners using them as a business. They would be subject to conditional use permits for operating a business in a residential zone, requiring a Planning Commission hearing and allowing comments from neighbors.
Another alternative, Laurenitz suggests, is freeing up more licenses by raising quarterly fees for people not using them. Shortly before the limit went into effect in 2017, at least 10 people took out licenses for their homes as a hedge against possible future use, but are apparently not using them.
Kathy and Keith Perkins built their house on Rock Drive just off Yachats Ocean Road in 2002. There are 11 other houses in their neighborhood.
Over the years, seven of the homes became licensed vacation rentals with the capacity to hold 82 people, Keith Perkins said, with cars overflowing parking spots, driveways and streets during the busy season.
“Living in the middle of seven houses that are vacation rentals … we did not move here for that,” Kathy Perkins said. “It’s frustrating to me.”
That has changed the past few years as at least three oceanfront houses changed hands with new owners opting not to rent.
The Perkins’ also want the city to step up oversight of rentals and increase enforcement, but want to find a method of reporting issues without turning neighbor against neighbor.
“There is no enforcement by the city, so consequently if you have a violation there’s almost no where to turn,” she said.
The arguments against restrictions
Jamie Michel, development and operations manager for Yachats-based Sweet Homes Rentals, is fighting limits on vacation rentals up and down the coast.
Michel says Sweet Homes supports regulations on guest use and behavior but adamantly oppose Yachats’ cap on licenses.
“When the city put the cap on, we pushed north” into Newport where it now has a second office, she said. The company manages 85 properties, 20 of which are in Yachats. It has 65 employees and last year had a payroll of $1.3 million, Michel said.
One of Sweet Homes’ clients is Tom Darcy, who owns a small farm near Brownsville. He bought a duplex on West Third Street in 2012 as an investment and a place to vacation when it wasn’t rented.
But the 2017 ordinance added language that said licenses can’t transfer to a new owner, even to a family member. Darcy said that has cut the pool of people interested buying his property. It’s especially irksome, he said, because his duplex is in a commercial, not residential, zone.
“I figured it deprecated $100,000 when they took away the ability to transfer the license,” Darcy said. “For a retired person that’s a chunk of money.”
That’s the same issue for Candy Neville of Eugene, who owns an eight-bedroom vacation rental on 1.3 acres off King Street, and Ron Spisso of Alsea, who owns a three-story, six-bedroom rental on Lemwick Lane overlooking the beach. Spisso’s property is for sale. Both want the opportunity to keep their properties in their family when they grow too old to manage it or after they die.
“This is my retirement, whether I’m selling it or renting it,” Neville said. “It puts me and my heirs in an awful position.”
She would like the city to grandfather in the ability to transfer licenses for anyone holding them before the current ordinance went into effect.
“The city needs to account for businesses that have operated quietly and successfully,” Neville said. “Yachats always was a place for vacationers … and all the retirees there now were once vacationers.”
Not a peep about the lack of housing for local renters?
I agree. Longer term rental property seems like such a scarce commodity here for people who live on the local economy. I am surprised this is not being discussed as an aspect of the vacation rental issue.
I would like you to interview business owners to see how the cap on vacation rentals have affected their business. It has definitely had an effect on property owners values in real estate, FYI.