Sacramento Could Restrict Converting Apartments Into Short-Term Rentals On Sites Like Airbnb

Sacramento could be the next city to prevent owners of apartments and multi-unit housing from using those spaces as bed and breakfasts or short-term rentals like AirBNB. 

Currently, the owners of single-family homes and multi-family housing, including duplexes and apartments, are allowed to offer rooms and units online. That may change, however, if the city council adds restrictions.

On Tuesday, the city’s Law and Legislation committee approved taking a look at updating these rules, including removing multifamily units off the short-term rental market.

Councilman Steve Hansen told the committee the city had been approached within the last year by developers who want to turn existing multifamily buildings, and those under construction, into short-term rentals.

“I was surprised it’s not prohibited by our code. There is no process if you want to convert a residential structure into a hotel,” Hansen said.

Councilmember Eric Guerra agreed that these conversions are a concern because they reduce the housing stock and increase rent prices.

“This could be problematic. I know it’s been brought up in the community of Elmhurst and I’m glad we’re moving forward on this,” Guerra said.

The committee voted to take a proposal directly to the full City Council. 

Councilman Jay Schenerir underscored the desire for quickness. “Whatever the fastest route to council is, you get to take it,” he said. A new survey from the personal finance website WalletHub perhaps underscores this sense of urgency: Sacramento in the bottom 10 percent of cities nationwide for housing availability and affordability.

Garrett Norman with the city's Community Development Department says duplexes, triplexes and apartment units are not prohibited from being used by short-term rental sites like AirBNB, HomeAway and VRBO, which impacts availability of housing.

"The concern is the implications that [allowing multi-unit sites to be available for short-term rentals] would have on the existing rental housing stock within the city limits and the impacts that would have on our already tight [rental] housing market," Norman said.

In Sacramento, a homeowner with a short-term rental permit may rent out a room or a home that is not a primary residence for up to 90 days. For additional days, the owner would be required to obtain a conditional use permit, which is more expensive and requires city approval.

Many communities are reviewing their short-term rental rules. Under a new Placer County ordinance, homeowners must obtain a permit to operate a residence as a vacation rental property. The new regulations include everything from quiet hours between 10 p.m. and 7 a.m., a requirement to provide bear bins for garbage and occupancy limits of two adults per bedroom at night. 

In San Francisco,  a room in a residential unit can be rented out as long as the owner lives on site. A room or home can only be rented for 90 days each year..

New York City requires a homeowner to live on-site for any short-term rental less than 30 days, and prohibits short-term rentals of triplexes or larger units.

Yardi Matrix, an online service that collects real estate and rental data, says Sacramento’s rental prices increased by 5.3 percent last year

Representatives from the short-term rental industry, housing advocates and property owner associations did not return calls by deadline to discuss the city’s proposed changes.