HomeMy WebLinkAboutCD Short-term Rentals 2019____________________________________________________________________________________
FOR CITY CLERK ONLY
Council Meeting: 02/19/2019
Disposition: Accepted report and provided direction to staff
Agenda Item No: 6.b
Meeting Date: February 19, 2019
SAN RAFAEL CITY COUNCIL AGENDA REPORT
Department: Community Development
Prepared by: Paul Jensen (EG),
Community Development Director
City Manager Approval: ______________
TOPIC: SHORT-TERM RENTALS
SUBJECT: INFORMATIONAL REPORT ON SHORT-TERM RENTAL APPROACHES,
REGULATIONS, BEST PRACTICES AND OPTIONS; FILE NO. P18-013
RECOMMENDATION:
Accept report and provide direction to staff on next steps relating to one of three short-term rental policy
options.
EXECUTIVE SUMMARY:
On August 20, 2018, the City Council was presented with a comprehensive report on a broad range of
housing topics and issues. The City Council directed staff to follow-up on four, specific housing issues,
including short-term rentals (STR). Regarding this topic, staff was directed to return with an informational
report on potential short-term rental policy options. This report presents information on STR data, best
practices for regulations and enforcement, transient occupancy tax (TOT) revenue projections, program
costs, and project cost-recovery fees. It also presents for the following STR policy options:
•Option 1: Status quo- continue with no regulation, permitting or active enforcement
•Option 2: Minimal enforcement - including regulation, permitting, and tax and fee collection
•Option 3: STR ban - including prohibition and enforcement
Staff estimates that the City could collect between approximately $18,000 and 105,000 in potential
transient occupancy tax (TOT) from active STRs in a given year. On average, TOT collection could be
approximately $39,000 annually. The wide range in potential TOT is due to changes in factors including
fluctuations in demand and changes in the number of active STR listings. Depending on the three policy
options referenced above, first-year program costs would range between $0 to approximately $63,800
and ongoing costs ranging between approximately $5,100 and $46,900 annually. Staff estimates that for
Options 1 and 3, the program would not have a positive balance due to the lack of TOT collected or a
program fee to cover costs. Staff estimates for Option 2 that if a program fee is charged, the program
would have a positive balance.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2
BACKGROUND:
A. Introduction
The STR phenomenon has mushroomed in the last several years. The phenomenon is the result of: a)
the high demand for and cost of housing in the Bay Area; b) tourism and the high cost of lodging; and c)
the residential property owner’s struggle to make their extremely high mortgage payment. Regarding the
latter, the property owner will readily admit that the rent from their short-term rental supplements their
income and mortgage payment.
Opinions range regarding STRs but often fall into one of two categories. Those in the “pro” camp believe
it is a way to address the housing crisis and offer a financial subsidy to the struggling property owner.
Those in the “con” camp find that short-term rentals are a nuisance and are changing the character of
and commercializing our single-family neighborhoods, thus reducing our permanent housing stock.
At present, the City of San Rafael does not prohibit, regulate, tax or enforce short-term rentals. In 2016,
as part of the review of the Junior Dwelling Unit (JDU) ordinance, the City Council directed staff to monitor
short-term rental activity. Staff was directed to periodically report back to the City Council on the growth
and trends for this activity and to log complaints. To assist in this effort, on June 10, 2016, the City entered
into a three-year contract with Host Compliance, a STR data and enforcement service to provide the
following short-term rental monitoring services:
• Provide the City with trend monitoring, a monthly report that is sent via e-mail showing the active
short-term rental listings;
• Provide the City with a monthly report on the address identification of the short-term listing;
• License the City to hosted software for access to the number and location of short-term rentals.
Staff has prepared this informational report to follow up on staff direction from the City Council and to
analyze potential actions that can be taken to regulate short term rentals.
B. Existing Short-Term Rentals Activity in San Rafael
1. Active Rentals
Based on listing level date provided by Host Compliance as of December 2018, there are 286 active
short-term rentals in San Rafael.1 As seen in Table 1, the largest STR property type—as described by
the host—is a three-bedroom house, with 75 listings. The second largest property type is a four-bedroom
house, with 53 listings, followed by zero-bedroom apartment/condominiums, with 29 listings.
1 Note, that while 286 active rentals have been identified as of December 2018, this number represents a high -end estimate as
some of these listings may be active but may not have been rented. The number of active rentals fluctuates, but the number of
listings has steadily increased since staff has monitored. At on-set of monitoring in 2016, the active listing count was 150.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 3
Table 1. Listings by Host-described Property Type for 2018
Figure 1. Active Short-Term Rentals in San Rafael, 2018
As seen in Figure 1 (above), short-term rentals are relatively geographically distributed equally across
the City, with the highest concentrations in the West End, Gerstle Park, and Dominican neighborhoods.
Property Type 0 1 2 3 4 5 6 7 Total
Apartment/ Condominium 29 -4 8 6 1 2 -50
Bed & Breakfast -----2 1 -3
Boat 1 -------1
Camper/RV/Campsite 1 --1 ----2
Cottage --3 2 ----5
Guest suite 2 -1 5 6 3 1 -18
Guesthouse --3 3 3 ---9
Hotel Room 4 -------4
House 4 2 24 75 53 15 5 1 179
In-law ---1 1 ---2
Other ---1 1 1 1 -4
Studio --1 1 ----2
Townhouse 1 -2 4 ----7
Total 42 2 38 101 70 22 10 1 286
Note: Listing descriptions are self-provided by the host and are not City
prescribed.
Bedrooms
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 4
2. Short-Term Rental Complaints Logged to Date
Over the past three years of monitoring, staff has tracked and recorded inquiries and complaints about
short-term rentals. During this time frame, the City received less than one dozen inquiries and complaints.
The following is a summary of the types of complaints that have been received:
• Multiple short-term rentals on the same street or very closely spaced; concerns about change in
neighborhood character, traffic, safety and quality of life.
• Shared driveway and other shared infrastructure with a neighboring property where there is an
active short-term rental. Concerns about potential liability, which is shared by both property
owners. Guests are unaware of the protocols that are typically respected between the property
owners such as designated parking areas and cleared driveway access.
• Concerns that short-term rentals reduce the housing supply for long term residents; impacts to
the hotel/motel business owners and increase the cost of rental housing.
• Neighbor actively (almost every night) using home as a short-term rental; noise and evening
parties. Guests often mistake their home and knocked on the neighbor’s door, sometimes late at
night.
• Regarding general inquiries, most have been focused on questions about permitting, business
license and taxes.
C. Short Term Rental Approaches and Regulations
In 2018, the Community Development Department commissioned the following “white papers” to present
general data on and best practices for STR approaches, regulation and taxing.
• Overview of leading regulatory and enforcement approaches used by local governments to
achieve common short-term rental related policy objectives, Prepared by Host Compliance, LLC,
April 2018
• Short-Term Rentals in San Rafael, Prepared by Allison Griffin, November 2018
A STR webpage has been created on the City of San Rafael website. This webpage, which can be
accessed here includes links to both white papers. Some of the key information on regulations (e.g.,
approaches in neighboring Marin jurisdictions) and best practices on enforcement, fees, fines and
penalties is presented below.
1. STR Regulations in Marin Jurisdictions
As part of the Short-Term Rentals in San Rafael report, current STR regulations across jurisdictions in
Marin were compiled in a table and presented in Attachment A of this report. The following is a summary
of this information:
• The Town of Tiburon and the City of Sausalito explicitly prohibit STRs. Several cities/towns
(Belvedere, Corte Madera) prohibit STRs by default (Zoning Code does not address) or by
interpretation (Larkspur). The Town of Fairfax and City of Novato prohibit STRs unless a Use
Permit is issued.
• Like San Rafael, the Towns of Ross and San Anselmo have “no explicit STR regulations.”
• The County of Marin and the City of Mill Valley permit, regulate, and tax STRs. The City of Mill
Valley does not allow Accessory Dwelling Units (ADU) built after January 2017 to be used as a
STR.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 5
• The table presents the percentage of active STRs to total housing units. This percentage ranges
from 0.41% for the City of Larkspur to 4.23% for the City of Mill Valley. Assuming the current,
active 286 STRs in San Rafael, this total equates to 1.2% of the total housing units Citywide
(23,900 total housing units).
As follow-up to the STR survey, staff contacted City of Mill Valley to discuss their permitting structure,
enforcement and other experiences with their program. The oversight and management of the Mill Valley
program is done by their Finance Department (registration, business license and TOT) with enforcement
provided by Host Compliance. According to Mill Valley staff, since 2015. they collected $450,000 in TOT.
Further, it was reported that the Host Compliance enforcement service has been successful and there
has been no need for City Code Enforcement staff intervention.
2. Best Practices for Enforcement to Consider
As part of the commissioned white papers, the following policy design best practices for potential STR
regulation in San Rafael were identified:
• Employ a passive “complaint-based” enforcement strategy rather than prohibiting or banning
STRs outright;
• Expand the existing Transit Occupancy Tax (TOT) ordinance to include residential STRs;
• Adopt an STR ordinance including explicit requirements for occupancy maximums, parking
minimums, interior and exterior signage, host training, and local contacts;
• Develop a program with sufficient enforcement staffing to ensure consistent enforcement and
compliance monitoring of STR as soon as an ordinance is passed;
• Develop an easy and streamlined online permit application and tax collection process; and
• Collaborate with existing STR Platforms—such as Airbnb or VRBO/HomeAway—to aid in host
registration and TOT collection and remittance.
3. Fee Options to Consider
The following fee options were also identified through the white papers and additional staff research:
• Registration Fee- Registration fees are the most common form of cost-recovery methods used
for STR programs. Simply, registration fees are set to recover all or a portion of projected costs
incurred by the jurisdiction to operate the program, including start-up costs. These fees are
charged per rental at the time a host registers their rental. Some programs are set up to charge
different fees based upon the type of rental, for instance applying higher registration fees for
commercial rentals or lower fees for partial home rentals. Some jurisdictions charge lower
registration fees that are not completely cost-recovery to encourage host compliance.
• Renewal Fee- A renewal fee is charged upon the renewal of a host’s registration. Often these
fees are significantly less than the registration fee and reflect on-going program cost. Like
registration fees, renewal fees may not be cost-recovery in order to encourage ongoing
compliance.
• Business License- This option requires STR hosts to maintain a business license in order to
operate. Two versions of this option exist. The first version requires the host to obtain only a
business license to comply, either paying for the license at the City’s existing rate or a new created
STR class. The second version requires hosts to obtain a business license in addition to a
registration fee. Often the license is incorporated into the registration fee to streamline the
payment process. In this version, finance-related staffing costs would be covered under the
business license fee.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 6
• Platform Fees- Some jurisdictions charge a platform fee to the company used by the hosts to
operate their STR. These platforms would include Airbnb, HomeAway, or VRBO.
In addition to levying fees on hosts, waiving fees can be useful as an incentive to register. Several
jurisdictions have charged no or reduced fees during early enrollment periods to encourage host
compliance.
4. Fine and Penalty Options to Consider
As discussed above, San Rafael has received few complaints regarding STRs. Even with a low complaint
rate, the use of STR fines and penalties can be used to incentivize compliance and host registration. The
following fine and penalty options have been utilized in other jurisdictions:
• Use Existing Fine Schedule- The most common process for imposing fines and penalties for STR
programs is to utilize the existing fine schedule for hotels and motels. Since most programs use
hotel and motel definitions for STRs to collect and remit TOT, it is logical to use the same fine
schedule.
• Two-Tiered Fine Schedule- A two-tiered fine schedule includes a set of fines for registered STRs
and another set for unregistered STRs. Often the fines for unregistered rentals are substantially
higher than the registered rental fine schedule—usually an existing fine schedule. The two-tiered
fine schedule is intended to incentivize registration by providing an increased penalty for both
failure to register and non-compliance. One example of this fine is setting the fine for the first
offense equal to two times the average nightly rental rate multiplied by the minimum night stay.
For each additional offense the fine would increase by two times the average nightly rental rate
multiplied by the minimum night stay (i.e. second offense- four times, third offense- six times,
etc.). Note, penalty maximums are limited to $500 per violation in San Rafael.
• Three-Strike Ban- A three-strike ban is used to identify and remove problematic hosts from the
STR program. This ban removes any host that receives three fines or unresolved complaints. A
three-strike ban incentivize compliance and quick abatement of complaints. Airbnb has published
their support for such a ban.2
ANALYSIS:
A. Analysis of Use and Business Status
One of the questions that has been raised is if a STR is defined as a “business.” As noted above, STRs
are currently not regulated or enforced, and the host/property owner is not required to obtain a City
business license. San Rafael Municipal Code Chapter 10.04 (Business License Tax), Section
14.04.010E, F and G includes the following definitions:
E. Business. As used in this chapter, "business" includes professions, trades, occupations,
operation and/or ownership of an apartment, hotel, rooming house, or other living
accommodations, and all other callings, whether or not carried on for profit and livelihood.
F. "Engaged in business" means conducting, managing, or carrying on of any business by any
person as owner, officer, agent, manager, employee, servant or lessee.
2 Airbnb Policy Tool Chest
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 7
G. Evidence of Doing Business. When any person shall by the us e of signs, circulars, cards,
telephone books or newspapers, advertise or hold out or represent that he is in business in
the city, or when any person holds an active license or permit issued by a governmental agency
indicating that he is in business in th e city or when any person makes a sale, takes an order,
renders a commercial service or performs any other similar act within the city, and such person
fails to deny by a statement given under penalty of perjury to the administrator that he is not
conducting a business in the city after being requested to do so by the administrator, then
these facts shall be considered prima facie evidence that he is conducting a business in the
city.
For the City to issue a business license, it must first be determined that the business is allowed in the
zoning district for which it is proposed. San Rafael Municipal Code Section 14.03.030 (Zoning Code)
presents land use definitions that are used for making this determination. This Code section does not
include a definition for “short-term rentals.” However, the Zoning Code includes the following land use
definitions for “home occupations” and “hotels,” which have been loosely-linked to STRs:
"Home occupation" means an accessory use of a dwelling unit, conducted entirely wit hin the
dwelling unit, carried on by one (1) or more persons, all of whom reside within the dwelling unit,
as further defined in Section 14.16.220, Home occupations.
"Hotel" means any building or portion thereof containing multiple guest rooms designed for
compensation, primarily for the accommodation of transient travelers, with eating, drinking,
banquet and recreational facilities related to the hotel use, but not including those facilities
defined as residential care facilities.
At present, these definitions and use types do not fit squarely-in-the-box for defining a STR. Depending
on the policy direction chosen by the City Council, changes may be needed to the Zoning Code to include
STRs. Changes may include: a) adding a definition for STR as an allowed use; or b) exempting, from the
Zoning Code, STR listings that are registered and permitted through a pote ntial STR program. If a STR
program is pursued, staff will return to City Council for consideration of any required changes, if
necessary.
The City’s Transient Occupancy Tax (“TOT”) provisions are set forth in Chapter 3.20 of the San Rafael
Municipal Code. By its terms, the tax is collected from “transients” staying at a “hotel.” Section 3.20.020
defines “hotel” and “transient” as follows:
“’Hotel’ means any structure, or any portion of any structure, which is occupied or intended or
designed for occupancy by transients for dwelling, lodging or sleeping purposes, and includes
any hotel, inn, tourist home or house, motel, studio hotel, bachelor hotel, lodging house, rooming
house, apartment house, dormitory, public or private club, mobile home or house trailer at a fixed
location, or other similar structure or portion thereof.”
“’Transient’ means any person who exercises occupancy or is entitled to occupancy by reason of
concession, permit, right or access, license or other agreement for a period of thirty (30)
consecutive calendar days.”
The City Attorney has advised that private homes being offered for tenancies for periods of time not
exceeding 30 days, would fall within the business tax code definition of a “hotel” and their occupants
would qualify as “transients” for purposes of the TOT. A specific definition added to the business tax code
for “short-term rentals” is not needed in order for the City to collect TOT. However, if a STR is defined as
a hotel for business tax and TOT purposes, then the Zoning Code land use definition for hotel would have
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 8
to be amended as it currently defines such a use as containing “multiple guest rooms.”. Further, it would
be advisable to amend the home occupation provisions of the Zoning Code to explicitly not apply to STRs.
If STRs fall under the land use definition of a hotel, and the host/property owner is collecting income from
the rental, then it is considered a “business.” Meeting the definition of a hotel is critical in defining STRs
as a business. If a property owner merely chooses to rent out rooms in their home as a shared rental
and/or to share household expenses, then it is not a business by this definition.
B. Estimated TOT Revenue from STRs
Staff estimates that the City could generate revenues between approximately $18,000 and 105,000 in
TOT in a given year. On average, TOT collection could be approximately $39,000 annually (Table 2).
The City charges a ten (10) percent TOT and a two (2) percent Marin County Business Improvement
District Tax Assessment (MCBIDCA), which is remitted to the County. The wide range in potential TOT
is due to changes in factors including fluctuations in demand and changes in the number of active STR
listings. A full methodology for how staff accounted for these natural fluctuations and determined the
estimated TOT revenue range is available in Attachment B.
Table 2. Overall Estimated Annual Tax Revenue from Short Term Rentals
Staff used data from 2014 to 2018 to estimate the potential average revenue generated by STRs in San
Rafael.3 Staff calculated revenue estimates by first determining the average number of STR rentals
operating in San Rafael, the average nights those STRs were rented, and listings average rate per night.
Staff calculated the average annual revenue per listing by multiplying for each year a listing was active:
1. the average number of days rented that year, and
2. the average listing rate per night.
The average annual revenue per listing was then calculated based upon the listing size and multiplied by
the number of STR listings of that size with revenue in 2018. Finally, these revenues were then added
together to determine the total annual revenue. Staff analyzed “Entire Home” and “Partial Home” rentals
separately. This separate analysis was due to a wide distribution of property sizes and rental rates.
C. Other Program Revenue Options
In additional to TOT, the City can also leverage fees and fines to help provide program cost-recovery.
As described in the white papers commissioned by the Community Development Department, most
jurisdictions include fees and fines in their program design, with $250 as the national average for a STR
registration fee. Three main areas of consideration arise when setting fees and fines:
3 Yearly data on listings estimated days rented and average rate provided by Host Compliance.
Low* Mean High*
Overall Estimated "Entire Home" Host Revenue 144,171$ 323,487$ 865,273$
Overall Estimated "Partial Home" Host Revenue 36,340$ 73,894$ 186,559$
Total STR Host Revenue 180,510$ 397,381$ 1,051,832$
Estimated TOT Collected (10%)18,051$ 39,738$ 105,183$
Estimated MCBIDTA Collected (2%)3,610$ 7,948$ 21,037$
* Rental units with an Estimated Average Revenue of $0 are not included in analysis.
** Low= .5 Standard Deviations below the mean; High= 1.5 Standard Deviations below the mean.
Estimated Average Annual Tax
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 9
1. Fees that are set too high--even if cost-recovery--can deter hosts from compliance, leading to a
decrease in TOT revenue collection and increase in enforcement costs;
2. Fees that are easy to pay and understand increase compliance, for example a sign registration
and fee that can be completed online and include all required submittals (i.e., registration fees
and business license, if different); and
3. Fines that utilize existing fine schedules are easier for staff to implement.
D. Home-based STRs vs. Investment Properties
In addition to the potential fiscal impacts of an STR policy for the City, a potential STR policy will also
have impacts on STR hosts as well as their neighboring communities.
1. Impacts on Short Term Rental Hosts
Staff analyzed active STR listings to better understand the average profile of an STR host using data
from Host Compliance and Assessor Records. The assessed value was used as an indicator of the last
time the property was sold or major improvements were made to a property. The average assessed value
of residential properties being used as an STR is $862,605 (Table 3).4 While there are STR listings in
properties last assessed in 1975, more than half of active STR listings, 148, are in properties assessed
since 2010. 2018 was the assessed year with the highest number of STR listings, with 38 listings and an
averaged assessed value of $1,040,121.
Table 3. Average Assessed Home Value of Active Residential STR Listings by Assessed Year
STRs also provide a relatively simple and effective way for home owners to generate revenue from their
properties. As described earlier, the average “Entire Home” STR listing generates an estimated $3,441
per year (Table B.1, Attachment B), and a “Partial Home” STR list generates $1,800 per year (Table
B.3, Attachment B). These figures suggest that STR hosts include both new properties owners with
larger mortgage payments and older property owners looking to find ways to generate supplemental
income through STRs.
2. Investment Properties
In the process of developing this report, staff received numerous calls regarding interest in purchasing
properties in San Rafael as investment properties for the explicit purpose to use the property as a
4 Only properties with a residential land-use were included in this analysis to control for commercial properties
(like hotels) listing units on STR platforms.
Last Assessed Year Number of Listings Average Assessed Value
1975-1979 2 $97,756
1980-1984 --
1985-1989 13 $771,815
1990-1994 8 $481,610
1995-1999 25 $447,443
2000-2004 22 $680,971
2005-2009 50 $902,726
2010-2014 66*$794,220
2014-2018 82 $1,138,707
Total 274 $862,605
* 6 2013 listings were removed due to discrepancies in the assessed value.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 10
commercial STR. In these circumstances, the property owner is either an individual or a business
acquiring the property to rent full time as an STR. If the owner is local, they may manage the property
internally. If the owner is out of the area, they may arrange for a local person or company to manage the
property or act as the responsible party in the case of a complaint.
The impacts of these types of properties and owners are two-fold. First, STR investment properties have
strictly commercial interests. Operating a residential property as a commercial interest can conflict with
zoning requirements as well as skirt regulatory requirements other similar commercial properties—like
hotels and motels—are required to meet. Second, STR investment properties remove a long-term
housing option from the community. Removing long-term housing options from residential areas can lead
to increased housing and rental prices. One academic report estimates a one (1) percent increase in
Airbnb listing leads to a 0.018% increase in rents and a 0.026% increase in house prices.5 While these
estimates indicate a small increase, any such increase is acutely felt given the regional housing crisis
and can perpetuate displacement in communities that are most sensitive to changes in housing costs.
To address these impacts, some jurisdictions have created STR policies that prohibit strictly commercial
use of an STR. Jurisdictions enforce commercial bans by various methods such as either limiting the
number of listings a host can operate or requir ing only owner-occupied listings. Other jurisdictions have
created STR policies that regulate these properties differently. These policies include a required local
contact as well as increased fee schedules, inspections, and fines.
E. STR Regulation and Enforcement Options
Based upon the above analysis, staff has developed three STR policy options for City Council
consideration (Table 4, Page 12). Host Compliance has also provided a list of key responsibilities by
entity based on compliance monitoring services (Attachment D). Staff used this list, as well as staffing
at other jurisdictions, to estimate staffing requirements for the proposed STR policy options.
1. Compliance Monitoring Software
Since the widespread adoption of short-term rentals, several companies have developed online software
to assist jurisdictions in the implementation of STR regulations. This compliance monitoring software is
a highly cost-effective tool for enforcement of any STR policy as it provides a wide range of services at a
cost significantly less than that incurred by a jurisdiction developing and maintaining such services
internally. These services include:
• STR Address Identification- an online dashboard with address and rental information for all
identifiable STRs;
• Compliance Monitoring- outreach and monitoring of STR listings for compliance with a
jurisdiction’s zoning and regulations;
• Permitting and Registration- online and mobile registration or permitting including collection of
payments, signatures, and required documents;
• Rental Activity Monitoring and Tax Collection- monitoring of STR listing rental activity and
support for TOT collection;
• Complaint Hotline- 24/7 staffed hotline for neighbors to report non-emergency STR problems.
Currently, the City has a contract with Host Compliance to perform STR address identification and
monitoring. This contract is for $5,130 per year and expires on June 10, 2019. This contract could be
expanded to include compliance monitoring software plus additional services. Alternatively, if the City
decides to expand STR monitoring, a competitive bid process could be conducted to assess the
capacities of new companies to this space.
5 Barron, Kyle and Kung, Edward and Proserpio, Davide, The Sharing Economy and Housing Affordability:
Evidence from Airbnb (March 29, 2018).
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 11
For this report, staff used cost estimates provided by Host Compliance to project the compliance
monitoring costs for the proposed STR program design options. Based upon these estimates, the City
would incur the following on-going costs for Compliance Monitoring software for each option:
• Option 1: $5,130/ year (continue monitoring only; no active enforcement)
• Option 2: $18,073/ year (all available services)
• Option 3: $13,073/ year (all available services except permitting and registration)
2. Option 1- Status Quo
The first proposed STR policy option is to maintain the existing efforts. Under this option, staff would
continue to passively monitor STR activity in San Rafael, responding to any complaints via the existing
complaint-based process. There would be no active enforcement or permitting as well as no collection of
STR TOT revenue.
3. Option 2- Minimal Enforcement 6
The second proposed STR policy option is to develop a new program to collect TOT revenue and a cost-
recovery fee with minimal enforcement. This program design would require the following for STR listings
and their hosts:
• Host training and self-inspection,
• Local contact for listing,
• Occupancy maximums,
• Parking minimums,
• External signage identifying the unit as a STR,
• Internal emergency contact information, and
• Vegetation Management Plan that addresses potential wildfire risks.
Compliance monitoring software would be used as a cost-effective tool to provide a streamlined
registration and monitoring process. Most administrative tasks and day-to-day operations would be
conducted automatically through the software or the software provider’s staff. Software would include the
following services:
• STR Address Identification,
• Compliance Monitoring,
• Online and Mobile Permitting and Registration,
• Rental Activity Monitoring and Tax Collection,
• Complaint Hotline staffed by compliance monitoring software provider.
During the first year of the program, one-time staffing costs would include those associated with program
implementation including: program management, legal review, technology development, and permit and
TOT processing. Additionally, Staff would develop an STR workshop for hosts to learn about the program
requirements. No new staffing would need to be hired.
After the first year of the program, on-going staffing costs would be kept to a minimum. On-going staffing
costs would be limited to program management, registration auditing, responding to complaints, and TOT
6 Note: Staff did not consider a policy design in which TOT collection and remittance was required, but the City did
not maintain a compliance monitoring or enforcement mechanism. Staff chose not to consider this policy design
due to the ineffectiveness of these programs evident in the best practices of other jurisdictions. For example,
according to the Host Compliance white paper, when launched, the City of Petaluma’s STR program operated
without a strong compliance monitoring or enforcement mechanism. During the first two years of this program,
only 23 permits were issued out of over 200 listings available online. After two years, Petaluma contracted with
Host Compliance and over several months was able to increase compliance to about 75% of available listings.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 12
processing. Staff has assumed 120 total staff hours for this proposed STR policy option. In Mill Valley,
with a comparable policy, on-going staffing hours are estimated at 80 total hours per year to manage
registration and tax collection for 159 STR listings. As noted above, over the past three-years since the
launching of their program, Mill Valley has collected approximately $450,000 in TOT revenue.
4. Option 3- Short-Term Rental Ban
The final proposed STR policy option is an outright ban on short-term rentals. Due to the ban, no TOT or
program fees would be collected. Compliance monitoring software would be used as a cost-effective tool
for monitoring and enforcement. Software would include the following services:
• STR Address Identification,
• Compliance Monitoring,
• Rental Activity Monitoring, and
• Complaint Hotline.
While the software would be able to identify STR listings and notice banned listings, staff would be
required to enforce the ban for it to be effective. This increase in enforcement requirements would mean
a corresponding increase in on-going code enforcement and program management staffing hours. Hiring
of an additional part-time code enforcement officer would likely be necessary. The City of Sausalito
currently has an STR ban that is actively enforced. Even with this ban, As of January 8, 2019, Sausalito
City staff estimated roughly 157 homes listed on STR platforms.
Table 4. Short-Term Rental Policy Options
F. Other Measures to Consider for Regulating STRs
Option 2 would permit tax and regulate short-term rentals. Should this option be pursued, additional
property-related regulations may be appropriate to consider for STRs proposed in residential zoning
districts. The following are several suggested regulations that could assist in reducing potential
neighborhood impacts and nuisances:
Compliance Monitoring Enforcement Revenue
Option 1- Status
Quo
(No regulation or
permitting)
- Maintain Existing Address Identification
contract with Host Compliance.
- Staff passively monitors STR Activity
- Staff responds to
Complaints (i.e. Police for
parking and noise violations,
Code Enfrocement for code
violations)
- No TOT Collection
- No Program Fee
- Possible Code Enforcement
Citations
Option 2- Minimal
Enforcement
(Permit, Tax, and
Regulate)
- Expand or Acquire a new Compliance
Monitoring Software Service to perform:
Address Identification, Compliance
Monitoring, Permitting and Registration,
Rental Activity and Monitoring and Tax
Collection, and Complaint Hotline.
- Hosts complete registration, self-inspection,
and fee payment online or on mobile phone.
- Staff responds to
unresolved complaints filed
with the Complaint Hotline.
- Staff performs annual audit
of STR submitted
documentation.
- TOT Collection and Remittance
- Cost-Recovering Program Fee
(including Business License)
- Online Payment for fees and
TOT
- Potential Program Fines
Option 3- STR Ban
(Prohibit and Enforce)
- Expand or Acquire a new Compliance
Monitoring Software Service to perform:
Address Identification, Compliance
Monitoring, Rental Activity and Monitoring,
and Complaint Hotline.
- Staff actively monitors STR Activity
- Staff actively responds to
all complaints and
addresses identified as an
active STR.
- No TOT Collection
- No Program Fee
- Possible Program Fines
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 13
• Require a minimum residential lot size.
• Require that the residence comply with the City’s minimum off-street parking regulations.
• Limit one STR per residential lot.
• Prohibit STR on residential lots accessed by a driveway that is shared with another neighboring
lot(s).
• Require spacing or separation requirements between short-term rentals.
• Prohibit allowing Accessory Dwelling Units from being used as a STR.
The one caution about adding property-related regulations is that they could increase the need for hands-
on enforcement. While some of the regulations listed above can be vetted or flagged as part of the initial
application screening process, confirmation of compliance would require an actual site inspection by a
City inspector.
G. Conclusions
According to Community Development Staff, the status quo (Option 1) has not been problematic. Since
staff began monitoring STR activity in 2016, the Community Development Department has received fewer
than a dozen complaints and concerns. The projected TOT revenue does not demonstrate a significant
increase in net revenue. Additionally, due to a wide range of projected TOT revenue, TOT revenue is
unlikely to offset the expenditure without a program fee. Should the City Council decide to move forward
toward STR regulation, staff supports Option 2 and strongly opposes pursuing Option 3.
COMMUNITY OUTREACH:
A public notice of this meeting was mailed to stakeholders, agencies and special interest groups 15 days
prior to this meeting (Attachment E). Those noticed included, among others, all neighborhood
associations, the Federation of San Rafael Neighborhoods, housing advocacy groups, and the San
Rafael Chamber of Commerce.
As part of the preparation for this report, staff contacted representatives from Airbnb and the San Rafael
Chamber of Commerce. This outreach included phone calls reviewing the proposed STR policy design
options and to receive feedback.
Representatives from Airbnb expressed willingness to work with the City to develop a minimal
enforcement policy design. Airbnb representatives stressed the importance of developing a streamlined
and transparent registration and payment process. Staff also discussed with Airbnb representatives the
ability for their platform to automatically collect and remit TOT as is currently done through STR listings
regulated by the County of Marin. Staff was informed that the Airbnb platform does have this capability
but requires the City to enter into a Voluntary Compliance Agreement (VCA). VCAs are agreements
between Airbnb and the jurisdiction stipulating that Airbnb will collect and remit TOT as a lump sum for
all STR on their platform.
Staff outreach to the San Rafael Chamber of Commerce included a conversation with Joanne Webster,
President and CEO. The Chamber expressed support for maintaining the “status quo” STR approach. If
the City decided to move forward with new program design, however, the Chamber of Commerce has
indicated that they would be willing to work with the City to develop a streamlined and cost-effective
program.
FISCAL IMPACT:
There is no fiscal impact associated with this informational item.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 14
This section outlines the estimated costs associated with the proposed STR policy options. This section
also includes estimates for cost-recovery fees and annual balances for the proposed options. If the City
Council decides to move forward with a new STR policy, further staffing analysis will be needed to
accurately estimate program costs.
STR Program Option Costs
1. Option 1- Status Quo
Staff estimates no first-year costs for Option 1 as there are no changes proposed to the existing process.
Staff estimates on-going costs of $5,130 to cover the costs associated with the Host Compliance contract,
under the existing contract amount (Table C.1, Attachment C).
2. Option 2 - Minimal Enforcement
Staff estimates first-year costs for Option 2 at approximately $34,907. These staffing costs include first-
year program management, permit processing , technology development, and expanded compliance
monitoring software services. Additionally, these costs include staff time for conducting an STR workshop
and for the City Attorney to develop a VCA with STR platforms. Staff estimates on-going costs of
approximately $26,500 (Table C.2, Attachment C). These costs would cover expanding STR
Compliance Monitoring Services as well as on-going staffing costs as described in the Analysis section.
3. Option 3 – Short-Term Rental Ban
Staff estimates first-year costs for Option 3 at approximately $60,835. These staffing costs include first-
year program management, technology development, and expanded compliance monitoring software
services. Additionally, these costs include staff time for conducting an STR workshop and for the City
Attorney to develop an appropriate ban ordinance. Staff estimates on-going costs of approximately
$46,900 (Table C.4, Attachment C). These costs would cover expanding STR Compliance Monitoring
Services as well as on-going staffing costs as described in the Analysis section.
Cost-Recovery Fee
Based upon the estimated program costs, Staff estimates a 100 percent cost-recovering registration fee,
paid at the time of initial registration, of $156 for Option 2. Staff estimates a 100 percent cost-recovering
renewal fee, paid every year after initial registration, of $119 for Option 2 based upon an average of 224
units active in the last 10 months. Fees were not calculated for Option 1 and Option 3 (Table 6).
Table 6. Estimated Cost-Recovery STR Program Fees
Overall Estimate of Revenues/Expenditures
Staff analyzed annual balances for all options given the low, mean, and high estimate for TOT revenue
collection presented in the Analysis section. Staff presented both year one and ongoing annual balances
with estimates for if the program collected a cost-recovery fee or if no fees were collected using TOT as
the only program revenue (Table 7). Staff included this “no fees collected” estimate to determine a
program would be cost-recovery without a program fee. As discussed in the Background section, some
jurisdictions charge no program fee or one that is not fully cost-recovery due to the additional TOT
revenue expected.
Option Units*Initial Registration Fee Renewal Fee
1) Status Quo 224 --
2) Minimal Enforcement 224 $156 $119
3) STR Ban ---
* Unique STR properties in San Rafael in past 10 months as identified by Host Compliance
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 15
Staff estimates that for Options 1 and 3, the program will not have a positive balance under any scenario
due to the lack of TOT collected or a program fee. For Option 2, staff estimates that in all scenarios where
a program fee is charged, the program would have a positive balance equal to the TOT collected. Under
the scenario where no fees are collected, Option 2 would have a positive Year One and on-going balance
under the mean and high estimate. Option 2 would have a negative Year One and on-going balance
under the low estimate.
Table 7. Estimated Cost-Recovery STR Program Fees
OPTIONS:
The City Council has the following options to consider on the matter:
• Accept the report and direct staff to return with program design and draft ordinance relating to
one of three short-term rental policy options;
• Direct staff to return with more information on one or more short-term rental policy options;
• Accept the report with no follow-up action; or
• Reject the report.
RECOMMENDED ACTION:
Accept report and provide direction to staff on next steps relating to one of three short-term rental policy
options.
ATTACHMENTS:
A. STR Regulations in Marin County, November 2018
B. Estimated TOT Revenue Range Methodology & Detailed Analysis
C. Estimated Fiscal Impacts of STR Program Options
D. Key Responsibilities by Entity Based on Compliance Monitoring Services
E. Public Notice of Short-Term Rental Information Report to City Council
Low Estimate
Option
Year 1-
Fees
Ongoing-
Fees TOT Year 1 Ongoing
With Fees
Collected*
No Fees Collected
(TOT Only)
With Fees
Collected*
No Fees Collected
(TOT Only)
1) Status Quo $0 $0 $0 $0 $5,130 $0 $0 -$5,130 -$5,130
2) Minimal Enforcement $34,907 $26,576 $18,051 $34,907 $26,576 $18,051 -$16,856 $18,051 -$8,525
3) STR Ban $0 $0 $0 $60,835 $46,948 -$60,835 -$60,835 -$46,948 -$46,948
Mean Estimate
Option
Year 1-
Fees
Ongoing-
Fees TOT Year 1 Ongoing
With Fees
Collected*
No Fees Collected
(TOT Only)
With Fees
Collected*
No Fees Collected
(TOT Only)
1) Status Quo $0 $0 $0 $0 $5,130 $0 $0 -$5,130 -$5,130
2) Minimal Enforcement $34,907 $26,576 $39,738 $34,907 $26,576 $39,738 $4,831 $39,738 $13,163
3) STR Ban $0 $0 $0 $60,835 $46,948 -$60,835 -$60,835 -$46,948 -$46,948
High Estimate
Option
Year 1-
Fees
Ongoing-
Fees TOT Year 1 Ongoing
With Fees
Collected*
No Fees Collected
(TOT Only)
With Fees
Collected*
No Fees Collected
(TOT Only)
1) Status Quo $0 $0 $0 $0 $5,130 $0 $0 -$5,130 -$5,130
2) Minimal Enforcement $34,907 $26,576 $105,183 $34,907 $26,576 $105,183 $70,276 $105,183 $78,608
3) STR Ban $0 $0 $0 $60,835 $46,948 -$60,835 -$60,835 -$46,948 -$46,948
* Program fees are calculated as cost-recovering for program expenses. If fees are collected, Year 1 and Ongoing program balances would be the same as they
reflect the TOT Revenue collected that year.
Revenue
Expenditures
Expenditures
Revenue
Revenue
Annual Balance
Annual Balance
Annual Balance
Year 1 Ongoing
Year 1 Ongoing
Year 1 Ongoing
Expenditures
ATTACHMENT A: STR Regulations in Marin Jurisdictions (as of November 2018)
Jurisdiction
(* TOT collected
on STRs or Hotels)
Active
Listings
Total
Housing
Units
STR %
of
Total
Housing
Current Regulations
City of Sausalito* 150 (Includes
Marin
Headlands
and Muir
Beach)
4,676 3.05%
• Prohibits STRs based on existing regulations.
• City voted to appropriate funds for a full-time enforcement officer
dedicated only to STRs (complaint-driven)
• STR permit and regulate pilot program proposal rejected by the city
(Feb 2017).
• Issue is to be discussed in Sausalito General Plan update
according to city’s website.
Town of Tiburon* 51 (includes
Belvedere)
4,207 1.21%
• Explicitly bans STRs in 2015 ordinance.
• Complaint driven enforcement.
City of Belvedere (see above) 1,079 N/A
• Prohibits STRs by default in existing permissive zoning code.
• Complaint driven enforcement.
• City does not collect Transient Occupancy Tax (TOT) and has no
plans to do so in the future.
City of Mill
Valley*
267 6,298 4.23%
• Permits and regulates residential STRs based on existing code:
requires business license, collects TOT
• Does not allow accessory dwelling units built after Jan 2017 to be
used as STRs.
• Complaint driven enforcement with using existing staff and Host
Compliance STR monitoring services
City of Corte
Madera*
30 4,081 0.73%
• Prohibits STRs by default in existing permissive zoning code
• Complaint driven enforcement
• As of a June 4, 2018 Town Council directed city staff to address
Short Term Rentals in a draft ordinance
City of Larkspur* 25 6,093 0.41%
• Prohibits STRs in residential zoning districts as an official
interpretation of existing zoning code (Oct 2015)
Complaint driven code enforcement
• Currently considering defining STRs and prohibiting advertisement
of them in omnibus zoning update (2018-2019)
Town of Ross 6 876 0.68%
• No explicit STR regulations, any complaints are addressed on an
individual basis through code enforcement
• Town Council voted to continue taking a “Wait and See” approach
after a fall 2016 community survey indicated that the town was
divided on whether to prohibit, permit and regulate, or continue
unconditionally permitting STRs.
• Town does not collect TOT, would require major voter approval to
do so
Town of San
Anselmo
80 5,464 1.46%
• No explicit STR regulations, other than requiring a business permit
Ambiguous in town code whether STRs are considered a residential
or commercial use: STRs generally permitted as a residential use
as long breakfast is not served. No TOT collected. This was put on
local ballot in 2009 and voted down because it was thought to single
the only hotel in San Anselmo: The San Anselmo Inn
Town of Fairfax* 70 3,564 1.96%
• Prohibits STRs by default in zoning code unless a Special Use
permit is obtained.
• Planning Staff is currently in the process of updating zoning
ordinance to conditionally allow STRs and collect TOT (as of 2017).
A community survey indicated that 55% of residents are in favor of
allowing accessory dwelling units to be used as STRs
City of Novato* 107 22,457 0.47%
• Prohibits STRs unless issued a special use permit as a boarding
house or bed and breakfast
Complaint driven code enforcement
County of Marin* Data
Unavailable
112,259 N/A
• Currently, STRs are unconditionally allowed in unincorporated
areas of Marin County. County planning staff is currently in the
process of drafting a third version of a proposed ordinance to
regulate STRs in unincorporated Marin
Source: City of San Rafael staff interviews and research.
ATTACHMENT B- Estimated TOT Revenue Range Methodology & Detailed Analysis
Estimated TOT Revenue Range Methodology
Staff calculated the standard deviation to estimate the potential variation in the average revenue
projections. Staff used the standard deviation to account for natural fluctuations in the vacation
rental market including:
• changes in active listings,
• changes in demand for STRs,
• changes in rental rates, and
• rentals that may not be identified.
Accounting for these variations is important because it will impact the amount of STR revenue in
a given year. Staff used the standard deviation to determine a low-end and a high-end estimate
for STR revenue projections.
Typically, 95% of the variation in an estimate is within two standard deviations from the mean
(Figure B.1). Staff found that for STR revenue was not normally--meaning the same amount of
variation above and below the mean. Instead the STR revenue indicated more variation above
the mean (Figure B.2). Staff accounted for this variation by calculating the low-end revenue
estimate as the mean minus one-half (0.5) a standard deviation. The high-end revenue estimate
was calculated as the mean plus one-and-one-half (1.5) standard deviation. Together, this range
suggests that there is a 95% likelihood that annual STR revenue will fall between the low-end and
high-end revenue estimate.
Figure B.1. Example of Normal
Distribution
Figure B.2. Distribution of Average Annual
STR Revenue by Listing, San Rafael 2014-2018
Estimated TOT Revenue from “Entire Home” STR
Staff estimated average an average annual revenue for “Entire Home” rentals of $3,441 per
listing. This estimate was based upon 353 total listings between 2014 and 2018. “Entire Home”
rentals were rented on average 20 nights per year at an average rate of $212 per night (Table
B.1).
Table B.1. Estimate Average Annual Revenue per Unit for "Entire Home" Short Term
Rentals from 2014-2018 in San Rafael
Across all “Entire Home” listings, Staff estimates a total annual revenue of between approximately
$144,000 and $865,000 (Table B.2). Based upon this revenue, the City could collect between
$14,000 and $86,000 annually, with an average of $32,349 in a given year.
Table B.2. Overall Estimated Annual Revenue for "Entire Home" Short Term Rentals
Low* Mean High*
Standard
Deviation
0 42 18 117$ 1,007$ 2,000$ 4,980$ 1,986$
1 4 15 129$ 918$ 1,903$ 4,861$ 1,972$
2 47 26 146$ 1,645$ 3,574$ 9,359$ 3,857$
3 136 17 236$ 1,158$ 3,139$ 9,082$ 3,962$
4 96 21 230$ 1,643$ 3,317$ 8,342$ 3,349$
5 17 31 354$ 5,821$ 9,433$ 20,270$ 7,224$
6 10 16 215$ -$ 4,930$ 21,001$ 10,714$
7 1 1 177$ 177$ 177$ 177$ -$
Overall 353 20 212$ 1,266$ 3,441$ 9,969$ 4,351$
Estimated Average Annual Revenue/
* Rental units with an Estimated Average Revenue of $0 are not included in analysis.
** Low= .5 Standard Deviations below the mean; High= 1.5 Standard Deviations below the mean.
Avg. Listing
Rate/ Night
Est. Avg. Nights
Rented/ Year
Number of
Rentals*Bedrooms
Low* Mean High*
0 8 8,056$ 16,002$ 39,837$
1 1 918$ 1,903$ 4,861$
2 15 24,677$ 53,604$ 140,384$
3 32 37,059$ 100,449$ 290,619$
4 27 44,355$ 89,571$ 225,221$
5 5 29,106$ 47,166$ 101,349$
6 3 -$ 14,791$ 63,002$
7 0 -$ -$ -$
Overall 91 144,171$ 323,487$ 865,273$
14,417$ 32,349$ 86,527$
2,883$ 6,470$ 17,305$
Estimated Average Annual Revenue
Bedrooms
Number of
Rentals
* Rental units with an Estimated Average Revenue of $0 are not included in analysis.
** Low= .5 Standard Deviations below the mean; High= 1.5 Standard Deviations below the mean.
Estimated TOT Collected (10%)
Estimated MCBIDTA Collected (2%)
Estimated TOT Revenue from “Partial Home” STR
Staff estimated average an average annual revenue for “Partial Home” rentals of $1,800 per
listing. This estimate was based upon 167 total listings between 2014 and 2018. “Partial Home”
rentals were rented on average 19 nights per year at an average rate of $96 per night (Table
B.3).
Table B.3. Estimate Average Annual Revenue per Unit for "Partial Home" Short Term
Rentals from 2014-2018 in San Rafael
Across all “Partial Home” listings, Staff estimates a total annual revenue of between approximately
$36,000 and $186,500 (Table B.4). Based upon this revenue, the City could collect between
$3,600 and $18,600 annually, with an average of $7,389 in a given year.
Table B.4. Overall Estimated Annual Revenue for "Partial Home" Short Term Rentals
Low* Mean High*
Standard
Deviation
0 5 14 67$ 411$ 923$ 2,461$ 1,025$
1 5 29 151$ 3,380$ 4,410$ 7,501$ 2,061$
2 28 20 93$ 576$ 1,985$ 6,212$ 2,818$
3 59 19 79$ 836$ 1,423$ 3,183$ 1,173$
4 44 20 124$ 899$ 2,262$ 6,350$ 2,725$
5 22 15 87$ 797$ 1,296$ 2,791$ 997$
6 4 22 75$ 1,427$ 1,603$ 2,129$ 351$
7 0 0 -$ -$ -$ -$ -$
Overall 167 19 96$ 760$ 1,800$ 4,921$ 2,080$
Estimated Average Annual Revenue/
* Rental units with an Estimated Average Revenue of $0 are not included in analysis.
** Low= .5 Standard Deviations below the mean; High= 1.5 Standard Deviations below the mean.
Avg. Listing
Rate/Night
Est. Avg. Nights
Rented/ Year
Number of
Rentals*Bedrooms
Low* Mean High*
0 2 821$ 1,846$ 4,922$
1 1 3,380$ 4,410$ 7,501$
2 6 3,455$ 11,910$ 37,275$
3 16 13,382$ 22,769$ 50,929$
4 11 9,889$ 24,879$ 69,846$
5 5 3,984$ 6,478$ 13,957$
6 1 1,427$ 1,603$ 2,129$
7 0 -$ -$ -$
Overall 42 36,340$ 73,894$ 186,559$
3,634$ 7,389$ 18,656$
727$ 1,478$ 3,731$
Number of
RentalsBedrooms
* Rental units with an Estimated Average Revenue of $0 are not included in analysis.
** Low= .5 Standard Deviations below the mean; High= 1.5 Standard Deviations below the mean.
Estimated Average Annual Revenue
Estimated TOT Collected (10%)
Estimated MCBIDTA Collected (2%)
ATTACHMENT C- Estimated Fiscal Impacts of STR Program Options
Table C.1. Option 1- “Status Quo” Estimated Costs
Table C.2. Option 2- “Minimal Enforcement” Estimated Costs
One Time
New Existing New
Host Compliance Services
Address Identification $5,130
Host Compliance Sub-total
Implementation Staffing (One-Time)
Program Management 0 $0
City Attorney 0 $0
STR Workshop 0 $0
Technology development 0 $0
Permit Processing 0 $0
Community Development Staffing (On-going)
Program Management 0 $0
Code Enforcement 0 $0
Finance Staffing (On-going)
Business License & TOT Processing 0 $0 $0
Business License & TOT Review 0 $0 $0
One-Time Staffing Subtotal $0
On-Going Staffing Subtotal
Total $0
$5,130
$0
$5,130
Est.
Hours
On-Going
One Time
New Existing New
Host Compliance Services
Address Identification $5,130
Mobile Registration $5,000
Compliance Monitoring $2,535
Rental Activity Monitoring $3,380
24/7 Dedicated Hotline $2,028
Host Compliance Sub-total
Implementation Staffing (One-Time)
Program Management 60 $4,066
City Attorney 10 $1,148
STR Workshop 8 $542
Technology development 20 $1,355
Permit Processing 20 $1,220
Community Development Staffing (On-going)
Program Management 60 $4,066
Code Enforcement 20 $1,440
Finance Staffing (On-going)
Business License & TOT Processing 20 $1,205 $1,205
Business License & TOT Review 20 $1,793 $1,793
One-Time Staffing Subtotal $8,331
On-Going Staffing Subtotal
Total $8,331
$18,073
$8,503
$26,576
Est.
Hours
On-Going
Table C.3. Option 3- “STR Ban” Estimated Costs
One Time
New Existing New
Host Compliance Services
Address Identification $5,130
Compliance Monitoring $2,535
Rental Activity Monitoring $3,380
24/7 Dedicated Hotline $2,028
Host Compliance Sub-total
Implementation Staffing (One-Time)
Program Management 160 $10,842
City Attorney 10 $1,148
STR Workshop 8 $542
Technology development 20 $1,355
Permit Processing 0 $0
Community Development Staffing (On-going)
Program Management 160 $10,842
Code Enforcement 320 $23,034
Finance Staffing (On-going)
Business License & TOT Processing 0 $0 $0
Business License & TOT Review 0 $0 $0
One-Time Staffing Subtotal $13,887
On-Going Staffing Subtotal
Total $13,887 $46,948
Est.
Hours
On-Going
$13,073
$33,875
ATTACHMENT D
Key responsibilities by entity based on services subscribed
Provided by Host Compliance
Host Compliance Customer
Mobile
Permitting
• Implementation/customization to allow
online registration and payment
• Automatically collect and verify required
documentation such as proofs of
permanent residency, landlord
permissions, HOA approvals, insurance
policies etc.
• Enable applicants to review and
electronically sign applications and
affidavits under penalty of perjury
• Instantly determine and verify permit
eligibility by cross-referencing application
info with other data sources such as
electronic zoning maps, property ownership
records, subsidized housing databases,
lists of Ellis Act evictions
• Seamlessly collect debit card, credit card
and electronic check (ACH) payments
without having to worry about PCI
compliance and complex implementation
processes
• Put renewals on autopilot by automatically
notifying permit/license holders of renewal
deadlines
• Provide requirements:
questions/documents to be
asked, email copies, tax and
penalty rules, certificate
template(if any) etc.
• feedback on initial setup and
designing of process / one-
time
• sign up for stripe (payment
gateway) / one-time
• audit if host paid using
stripe's backend / as needed
• Provide logo for the city to
use on the application
• Existing payments data per
registration if you’d like to
collect back taxes(recurring
every quarter if still collecting
mail-in application)
Address
Identification
• Creating and maintaining databases of
short term rental units
• Access control management
• Ongoing support and maintenance
security, backup and restoration
• sync with HC list of hosts
already in compliance or
registered manually over the
phone/walk-in (recurring)
• Updated assessor file
(recurring every quarter)
• Updated existing registrations
to date (recurring every
month if accepting mail-in
applications)
Compliance
Monitoring
• Monitoring of STR properties for zoning
and registration compliance
• Performing proactive/systematic outreach
to owners of non- compliant short-term
rental units using San Rafael's letter head
(additionally we can send FIRST CLASS,
CERTIFIED and/or REGISTERED letters)
• Proof of contact provided in the form of
FIRST CLASS, CERTIFIED, and/or
REGISTERED letter tracking info (where
such data is provided by USPS) and PDF
copies of all letters
• Real-time accessible reporting on zoning,
registration and legal non-compliance by
address and by owner
• Approval on template,
messaging and cadence in
which to send
• Provide letter head
• Sign off on mail recipients
lists (recurring every
month/when you want to send
letters)
ATTACHMENT D
Rental Activity
Monitoring and
Tax Audit
Support
• Integrated mobile-enabled web forms to
automate the calculation and collection of
transient occupancy taxes and fees
• WEEKLY monitoring of 50+ short-term
rental websites for signs of rental activity
• Detailed WEEKLY information on reviews
and pricing for each listing
• Consolidated utilization and revenue
estimates across listing platforms using
ADVANCED REVENUE, UTILIZATION
AND TAX FRAUD DETECTION
ALGORITHMS
• Continuously updated list of short-term
rental owners suspected of non- or under-
reporting taxes
• Pro-active, systematic and data-informed
outreach to STR operators suspected of
under-reporting taxes using Malibu’s
ADVANCED MULTI-PAGE form letters
• Provide custom reports and analytics to
support tax audits and other STR related
investigations
• Confirmation on SOW if
wanting outbound letter help
and/or online tax audit
support / one-time
• Reported revenue data (can
also be derived from existing
payments data if provided)
24/7 Dedicated
Hotline
• 24/7 staffed telephone and hotline and
mobile-enabled web form for neighbors to
report non-emergency problems related to
STR properties
• Full documentation of all reported incidents
• Digital recordings and written summary
reports of all calls
• Ability for neighbors to include photos,
video footage and sound recordings to
document complaints
• Real-time outreach to owners/managers of
problem properties (whenever owner’s
contact info is known)
• Full documentation of owner/manager
outreach activities
• Detailed reporting on incidents
• Automatic escalation of issues to
emergency responders where required
• local number available
• Code enforcement to monitor
following business day if any
complaints warrant their
attention
• easy spot check for repeat
offenders (some
municipalities have a 3 strikes
you lose your license rule)
• Local non-emergency police
line
• Emails to receive hotline
complaint notifications
NOTICE OF PUBLIC MEETING – CITY COUNCIL
You are invited to attend the City Council meeting on the following proposed project:
PROJECT: INFORMATION REPORT ON SHORT-TERM RENTALS. The City Council and public will be presented with an informational repo rt
on the topic of short-term rentals. This report will include data on the current, active short-term rentals, as well as approaches and best practices
for regulating, permitting, enforcing and taxing short -term rentals. The report will include several options for the City Council to consider such as
a prohibition on short-term rentals and allowing such rentals with different levels of enforcement. A webpage has been created on the City’s
website, which includes two “white papers” addressing this topic. This webpage can be accessed at: https://www.cityofsanrafael.org/short-term-
rentals/. City File No. P18-013
State law (California Environmental Quality Act) requires that this project be reviewed to determine if a study of potential environmental effects is required. It has
been determined that this project, which is an informational report, will have no physical impact on the environment. The Housing Forum is classified as a planning
study, which qualifies for a Statutory Exemption from the provisions of the California Environmental Quality Act Guidelines under 14 CRR Section 15262.
MEETING DATE/TIME/LOCATION: Tuesday, February 19, 2019, 7:00 p.m. City Council Chambers, 1400 Fifth Ave at D St, San Rafael, CA
FOR MORE INFORMATION: Contact Ethan Guy, Senior Analyst at (415) 485-2392 or ethan.guy@cityofsanrafael.org. Mr. Guy’s office is located
at City Hall, 3rd floor, which is open from 8:30 a.m. to 4:30 p.m. on Monday through Thursday, and from 8:30 a.m. to 1:30 p.m. on Friday. You
can also view the staff report after 5:00 p.m. on the Friday before the meeting at http://www.cityofsanrafael.org/meetings.
WHAT WILL HAPPEN: You can comment on the informational report. The City Council will be requested to accept the report and provide
direction to staff on the report options. No formal action will be taken by the City Coun cil.
IF YOU WANT TO COMMENT: You can send written correspondence by email to the address above, or by mail/hand delivery to the City of San
Rafael, 1400 5th Avenue, San Rafael, CA 94901.
At the above time and place, all written correspondence received will be noted and all interested parties will be heard. If you challenge in court the matter described above, you may be
limited to raising only those issues you or someone else raised at the public hearing described in this notice, or in written correspondence delivered at, or prior to, the above referenced
public hearing (Government Code Section 65009 (b) (2)). Judicial review of an administrative decision of the City Council must be filed with the Court not later than the 90th day following
the date of the Council’s decision. (Code of Civil Procedure Section 1094.6)
Sign Language and interpretation and assistive listening devices may be requested by calling (415) 485-3085 (voice) or (415) 485-3198 (TDD) at least 72 hours in advance. Copies of
documents are available in accessible formats upon request. Public transportation to City Hall is available through Golden Gate Transit, Line 22 or 23. Para-transit is available by calling
Whistlestop Wheels at (415) 454-0964.To allow individuals with environmental illness or multiple chemical sensitivity to attend the meeting/hearing, individuals are requested to refrain
from wearing scented products.
Attachment E