Dear Mendocino County Officials, 

We are writing to express our support for the implementation of strict regulation for short-term rentals in the Mendocino County Division I Zoning Code. As a concerned group of citizens that form the Housing Working group of the GrassRoots Institute of Mendocino County, we believe that such regulation is necessary to address a number of pressing issues that have emerged in recent years. 

The key factor that makes this regulation necessary is the reduction of housing stock available to people who live and work here on the coast.  Short-term rentals have become increasingly popular in recent years, and many property owners are choosing to rent out residential units on a short-term basis rather than making them available for long-term renters. This has resulted in a decrease in the availability of affordable workforce housing, making it more difficult for many people to find suitable places to live. The increase in short-term rental properties has led to an increase in housing prices, making it even more difficult for residents to find affordable housing. In such a rural county with large terrain barriers to travel swiftly between developed areas of the county, this causes certain regions to decline economically due to a lack of availability of secure housing.  

Two years ago, the Mendocino Coast Housing Action Team conducted a survey of Mendocino Coast employers, regarding the impact of housing on the Coast and their businesses.  Over two-thirds of employers stated that the primary impediment to both hiring and retaining quality employees was adequate workforce housing.  Respondents ranged from the hospital and school districts to hospitality and small businesses. The connection between short-term rentals and the dearth of workforce housing became particularly clear in the comments, where vacation rentals were mentioned multiple times.

Another issue that has emerged with the rise of short-term rentals is the corporatization of this market. Rather than being a way for individual property owners to earn some extra income, many short-term rentals are now being owned or managed by corporations or other high-wealth non-local entities, that are focused solely on maximizing profits. This has led to the displacement of long-term residents who can no longer afford to live in these areas, increased noise and disruption in residential neighborhoods, and the loss of essential services when employees are forced to leave the area in search of housing. The corporatization of short-term rentals has also led to a decrease in the quality of life for residents in these areas, as many short-term renters do not have the same level of investment in the community as long-term residents. 

In light of these concerns, we urge you to consider implementing strict regulations for short-term rentals in the Zoning Code. We recognize that Tourism is an essential industry in this region, and therefore STRs should not be banned. Housing is equally if not more important and the equilibrium must be curated in order to mesh the two. This could include limits on the number of short-term rentals that can be operated in a given area, as well as requirements for property owners to obtain permits and undergo regular inspections to ensure that their rental properties meet certain safety and quality standards. These regulations must be implemented and enforced to ensure that short-term rentals do not continue to negatively impact the availability of affordable housing and the quality of life for residents in our county. Please see our recommendations below. 

The first recommendation is to implement a 3-tier system which regulates the three different categories of STR hosts, and defines the types of permits necessary for each type. The second recommendation is in regard to new ADU construction.  

Regulation recommendations

• Tiering regulations - these regulations are proposed, as inspired by a proposal by the Housing Action Team (HAT):
• Tier 1 would represent a scenario where the owners are living in the home, and renting out a room or two to guests. 
  This would likely qualify for a Business License. This aligns closest with the Accessory Use Regulations of Room and Board as seen in MCC Sec. 20.164.015(L); “The renting of not more than two (2) rooms for occupancy by transient guests for compensation or profit.”
• Tier 2 - The owner lives on the property and rents a separate unit for short-term rentals.
  This could likely be an Administrative Permit, such as for Family Care Units. The ordinance would need to define the findings necessary, which would specifically define what constitutes a “private or public nuisance” as referred to in MCC Sec. 20.192.075 
• Tier 3 - The property is not the primary residence of the owner. 
  This scenario should likely require a Major or Minor Use Permit
  The County could easily refer to tax records to determine if the property in question is the owner’s primary residence. There should also be a self-attestation by the applicant regarding resident primacy status. “Primary resident” should be defined as “residing in the home for more than 180 days of each calendar year”
  The Use Permit would be required to adhere to the findings specified in MCC Sec. 20.196.020. 
  Short Term Rentals may not be newly converted in a housing unit that was previously occupied by a tenant for 12 months or more, in the past 3 years. This is meant to prevent the conversion of long-term tenant housing to Short Term Rentals. A similar restriction is found in the SB 9 regulations.
  Regarding new Accessory Dwelling Units (ADU), we propose that a similar deed restriction to the Coastal Zone’s MCC 20.458.020(F) regulation be implemented that forbids renting of Short Term Rentals anywhere on the property once a new ADU is permitted. This would allow for an increase in the long-term housing stock.
  We also advocate for the return of Second Residential Units as a permissible use to all districts that allow Single-Family Residences, in addition to ADUs.  SRUs would not have STR limitations, as would ADUs. 
  For phase-in of these regulations, we recommend that existing STRs must adhere to the new requirements upon annual renewal of their business license. 
  We hope that Mendocino County incorporates these recommendations into the ordinance.