In last week’s Indy, Billy Fried tried to make the case that income from short term vacation leasing (STL) can help those who can’t otherwise afford to buy a home in Laguna. Unfortunately the detrimental effects of STL on that cohort outweigh the benefits.
Owners remaining in their home while renting part of it (the so-called home sharing model) are a minority of STL landlords. The city’s own survey found three-quarters of STL properties are owned by non-residents (aka investors.) For the remainder, what lender would approve a mortgage which teeters on default without STL income? For those who already own but now need extra income, a long-term lodger is a more stable income stream and is legal.
On the other hand, STL poses a significant threat to residents who don’t own their home, aka renters. If some homes currently renting long-term are converted to STL, what happens to the tenants? They must leave town, or they must compete for the dwindling supply of homes and apartments still renting long-term. This drives up rents. Each long-term rental converted to STL reduces conventional rental properties by one. (Just as converting one owner occupied home to STL reduces owner occupied homes by one.) Thus STL makes residing in Laguna both more expensive and more problematic for the people Mr. Fried aims to help. STL directly undermines the city’s long stated goal of maintaining and nurturing affordable long-term rental housing.
Mr. Fried opined that we can prohibit profiteers from buying and converting. I am interested to know what cunning test he has in mind to separate profiteers from us “normal” people uninterested in profit. Permitting STL only for owners who remain in the home doesn’t work. Other cities trying this approach reported to Laguna city staff it is nearly impossible to enforce. Absentee SLT landlords coach tenants to tell enquiring city employees that the owner just stepped out.
Mr. Fried also bemoans the effects on neighborhoods of those “second-home people,” who buy vacation homes in Laguna. If this concerns him, then he must oppose STL. Defraying costs of home ownership through STL encourages second home buying by those planning to be absent a lot anyway.
Tom Halliday, Laguna Beach