Editor:
Billy Fried’s column last week regarding short-term lodging missed the mark. He claims financial benefits to the owner, citing one renter who purportedly, “makes $30,000 to $40,000 a month in summer” and “does it because she needs the money.” Then he wrote, “many on fixed or no incomes with hefty mortgages … get help from renting a room.” Let’s examine the math behind these supposed benefits. (The numbers vary, but the principal remains.)
A typical Laguna home may sell for $1.5 million. Now assume the owner obtains a permit to rent out part of it for short-term lodging. Assume the owner nets $40,000 a year (let alone $40,000 a month.) If resold, this house-with-income could well sell for $400,000 more ($1.9 million). This is a windfall for him, but what does this do to all future owners, each forced to pay more for the property?
There will be no “extra” income. Rental income will go to finance the higher purchase cost. A future owner will be no better off than had they been able to buy the house without rental income for $400,000 less. And unless they run an (albeit small) hotel, our potential future Laguna neighbors, the ones Mr. Fried thinks are helped by short-term lodging, could instead be priced out of that home altogether.
What about the effect on the town? Mr. Fried’s admonition to, “ban mercenary investors,” isn’t practical. Laguna Beach could cease being a small town of neighbors, which hosts tourists. Over time it may become a tourist attraction with an ever-declining, increasingly financially challenged non-renting population trying to shoehorn itself in amidst mini-hotels offered for short-term rental.
Sure, the first wave, those of us already owning homes who convert them could reap a windfall. It is perhaps against our own personal financial interest to bar short-term lodging. It was against the financial interests of many property owners 40 years ago when Laguna down-zoned to ban (among other things) high-rise Miami style condos and hotels to save our town’s unique residential character.
Are we still willing to forgo a personal financial windfall for the good of Laguna Beach? How we answer will decide whether we promote our commitment to community, whether we protect our quality of life, whether we preserve the character of our town.
Tom Halliday, Laguna Beach
