Santa Cruz puts moratorium on new vacation rentals

Santa Cruz is faced with a lack of affordable housing, and some believe short term vacation rentals are part of the problem.

“We are in a housing crisis, so when we see our housing stock being eroded for short term vacation rentals, that’s a red flag for us,” said Santa Cruz Mayor Cynthia Mathews.

City officials say they’ve received complaints from tenants who say they were evicted so their home could be rented for short term use.

“We’re increasingly seeing housing being taken away for residential purposes and converted to short term vacation use,” said Mathews.

There are about 300 active vacation rentals in Santa Cruz, bringing in $1 million in tax revenue for the city each year. According to the city’s finance manager, there are roughly 150 other homes that are not registered as short term rental properties.

“Without that tax base, we don’t have enough resources for parks and rec, road improvements, public safety for responses and such,” said Marcus Pimentel, city finance director.

On Tuesday, the Santa Cruz City Council approved a 45-day moratorium on any new short term vacation rentals.

“Our other action was to approve a 10-member committee which would be broadly representative of stakeholders, some short term vacation rental owners, and neighborhood housing advocates,” said Mathews.

The committee will work to establish regulations for vacation rentals and prevent the loss of more long term rentals.

Mayor Mathews doesn’t expect a total ban on new vacation rentals, but says there could be a limit on the number of days a house could be rented.

“I think that homeowners or investors should have an opportunity to have that investment house and rent it out as they want,” said Vicki Crow, who is renting a vacation home. “But I also can see the other side of people who live here and want to be able to find affordable housing and be able to live in their home town.”

Some residents are pushing for a broader-based solution.

Nancy Abbey wears a button reading “Affordable Housing Now.”

“I think it’s absolutely necessary,” said Abbey. “I think we need to take time to deliberate, to come up with different options, to hear from the community. I don’t think it should be something decided quickly.”

The City Council has the option to extend the moratorium to 22 months, 15 days if the committee needs more time to make its recommendations. That would mean fewer vacation rental options for people like Vicki Crow.

“I’m really thankful to be able to rent a vacation home,” she said. “We looked at hotels and just having the option of a vacation home gives us the opportunity to cook our meals and have a little family time. It’s really convenient for us and we’re not sitting in a hotel room.”