Occupancy Taxes and STR Permit in Santa Cruz, CA?

Sally358
Level 1
United States

Occupancy Taxes and STR Permit in Santa Cruz, CA?

On 8/4/18 I received a form letter email from Airbnb informing me that the "County" of Santa Cruz is requiring permits to host  a short-term rental and that I can apply under a grandfather clause before 9/17/18.  I immediately applied.  In doing the application, I was confused by some of the terminology so did a websearch which pulled up the "City" of Santa Cruz requirements which noted there was also a grandfather clause but the deadline was in July.  Airbnb never notified me of this.

 

I have now attempted to apply for the city permit, but seem to have no grandfathering and am lacking in optimism that I will get one. 

 

The county responded to my application by saying I don't need one as my property is in the city.  

 

The more I dig into this issue, the more frustrated I am.  No one seems to be able to tell me where the Occupancy taxes Airbnb has been collecting from my tenants has been going.  I've heard (rumor) that the city and county had an agreement and the county sent that money to the city.  Seems if that is the case I should be eligible for a permit.

 

Am I the only Host having this experience.  I am a 4 year Super Host and so disappointed.

Sally

8 Replies 8
Stephanie801
Level 1
Santa Cruz, CA

Sally, you are definitely not the only host going through this and I'm sorry to hear what you are going through. I'm about to embark on a journey with the city as well. I have been an airbnb host since 2010, and they are trying to peg us down to disable our rental. We purchased our home with the intention of having an Airbnb rental to help us with our mortgage payments and now they are saying that the space where we have out B'n'b is an uninhabitable space. I just received notice that there was a complaint about our listing, and they want to come by to inspect our home. I'm worried about what they will decide. Kepp me posted of your findings!

Good luck to you!

*S

 

 

Rex0
Level 2
Santa Cruz, CA

Hello, I am having the same issue here in Santa Cruz. I've been on the phone with the city and Airbnb all week. Very frustrating. Have either of you gotten any resolution?

Yes I have an update. I was able to obtain a permit. But first I had to pay the back TOT taxes for four years that AirBNB was not collecting even though the site implies they were. It was $13k!  If that was not bad enough, there were $6k in additional penalties and late fees that I also had to pay. So $19k. 

 

I appealed the penalties and and fees with the city. It is not looking good. 

 

I am am very unhappy with AirBNB and their lack of help with any of this. 

Sally did you ever get this sorted out? I called and emailed Airbnb 25 times and finally made them understand that I’m dealing with the city and not the county. If they were collecting $ for four years then you need to go after the county and demand it back, as it was not theirs to collect! It took a lot of convincing but I finally got someone in Airbnb’s tax department to understand that they needed to stop collecting for the county and allow me to collect privately (which is a big pain in the ass) and manually send to the city each month. I’d love to know where your 13k went to because it didn’t go towards payment of taxes. I hope this whole thing hasn’t stressed you out too much!!

Hi Rex,

I also live here in the city of Santa Cruz.  I was considering renting my 2-bedroom house with airbnb, but am concerned with the permit process. Now that we're in May 2019, has there been any changes?

I'd also like to know if any progress has been made or changes since 2018?

Amber284
Level 1
Santa Cruz, CA

Is there any active work to increase the airbnb in Santa cruz county? We hope to begin hosting an Airbnb room bedroom as we need the income. On the website the county said they were not issuing permits to the unincorporated of Santa Cruz so I thought well we’re unincorporated were in Boulder Creek that shouldn’t be a problem when I went to the clerk they said they were not issuing any permits and that there was a just restricted limit to 250 permits given out from Live Oak to Boulder Creek that whole geography!!!!!! Considering that large geography it seems ridiculous it’s not even the same occupancy of one hotel in bedrooms. I am wondering if there is any movement in the community for Airbnb trying to mitigate this ridiculous restriction I’d like to be on board with any support I can we have towards this movement.

On June 16 the Board of Sups is holding a public hearing to consider county code changes on the proposal to limit short-term vacation rentals in order to preserve housing stock for long term residency.

 

I only heard about this through a friend...no mailings or communication sent.  

 

If you have an opinion on this relevant issue it is urgent that you immediately:

 

Go to Board of Supervisors site agenda: http://santacruzcountyca.iqm2.com/Citizens/Detail_LegiFile.aspx?Frame=&MeetingID=1802&MediaPosition=...

To comment on item, scroll to bottom:  Use the “Add Comments” tool on the meeting portal website.  My comments are pasted below. 

 

Also email Supervisors:  john.leopold@santacruzcounty.us ;  zach.friend@santacruzcounty.us  ;     greg.caput@santacruzcounty.us ryan.coonerty@santacruzcounty.us  bruce.mcpherson@santacruzcounty.us 

 

Director of Planning: kathy.molloy@santacruzcounty.us  cc: Susan.Galloway@santacruzcounty.us (is deputy clerk to Sups)

 

 

My letter is below: 

 

1. There has NOT been adequate notice of these significant proposed changes. As a permitted vacation rental owner with the county, you have my mailing address, email address, and phone. I received NO information from the county regarding this. 

 

The vast majority of permitted owners are entirely unaware as well. COVID- moratoriums were appropriate, reasonable & well communicated, and we complied with them. Proposing to make these significant changes on the back of the COVID financial impact, & without adequate notification is insensitive, unethical, and violates the public trust we place in you. 

 

I am working 2 jobs, managing kids with childcare & trying to work a FT job simultaneously from home. So, hearing that the County is proposing taking a way a significant income source for many people, and that we were not notified, and then when if/when we happen to find out, it's too late to arrange an entire afternoon away....It just demonstrates that you are SO OUT OF TOUCH with what people are dealing with right now. It also demonstrates complete disregard for caregivers...often women, who represent a large percentage of vacation rental permit holders.

 

2. I strongly object at face value to this section "Require all vacation rental permits throughout the County to be renewed every 5 years". It isn't clear if this applies only to new vacation rental permits or existing.It implies new & existing and I have a big problem with that.  We purchased this home, and turned it into a vacation rental because it was outside of the LODA and would not require the 5 year renewal.  

 

It is also not clear how that 5-year renewal would be processed....would people be put at the bottom of the waitlist, needing to comply with the new caps, neighborhood notice process & waitlist process?  If so, you would be essentially forcing me to sell my home, and would be taking away the security of my family, & taking away my business... I could not afford to keep it. I strongly suggest that this change applies to new permits only and not existing permits.  Alternatively, there should be a process for existing permit holders, outside the restricted areas, to retain permits at the 5 year mark if they are in good standing & without citations.  

 

3. I do not agree with the premise/ false assumption that restricting existing vacation rentals will significantly improve availability for long term rentals. Where is the data to support this assumption?  I've never been asked to complete a survey. It seems that the County does not care about real input from impacted owners, via public meetings, engagement, surveys or data collection. I will never rent out the home to long term tenants.  It is a home that I keep available for my aging parents when they come visit and that my 85 year old inlaws will need to move into when their health fails. It is the home that I already spent $100k fixing and don't want wear and tear from long term tenants, or challenges in removing tenants.  I will not be able to keep my home if this is passed as worded.  I would not have made this huge financial investment if the proposed rules were in place, or if I knew that the county could arbitrarily change the terms of my granted permit.

 

4. I strongly suggest that you remove this from the Tuesday agenda and spend some time and effort communicating with stakeholders about proposed changes and filling in the gaps related to process & applicability.  You know how to reach us, and just chose NOT TO.

 

5. Do not go back on the rules that you established for existing permit holders & that we agreed to and have complied with  Please demonstrate integrity and realize that we are not your enemy...we've worked hard & made financial investments in partnership with you and based on trust in you and the process you've laid out for us.  Calculated moves like this, without data, communication, or opportunity for input, or grandfathering, violates the public trust that we've placed in you and the process.