In the two decades since the monthly town meetings have become a regular part of the Three Rivers community calendar, there have been several hot-button agenda items including the demise of the Three Rivers Ambulance, river access, public safety, fire protection, and how to coexist with bears. But none have elicited a greater response or more emotion than the recent proliferation of vacation rentals in town, which was the agenda item at the Monday, August 7, Town Hall meeting, conducted by the Three Rivers Village Foundation.
As is customary when Three Rivers confronts controversy, public opinion and the pros and cons appear equally divided. On the pro side are those property owners who see the short-term rentals as a financial windfall. Many vacation rental owners who live in Three Rivers see it as a way to earn income or supplement retirement.
Absentee owners have seized the opportunity to capitalize on the spike in visitors to the local national parks as an investment opportunity. These owners have furnished capital to upgrade aging properties while generating income for a new class of property managers, housekeepers, gardeners, and maintenance workers, many who derive their sole income from servicing these businesses. The clientele of these prolific rentals also fuel local businesses like restaurants, stores, gas stations, and tourist services.
On the flip side are the minority of poorly managed properties, especially those in areas with higher density like the Cherokee Oaks neighborhood. One homeowner said she has vacation rentals on both sides of her residence that constantly disturb the peace with a steady stream of strangers. She feels unsafe in her own home and her children can no longer play outside on their own, she said.
Several at the meeting made emotional pleas because so many owners are pursuing the revenue from these short-term rentals that it is a challenge to find a long-term rental situation. This is forcing working families with children to move and live elsewhere and commute to keep their jobs, they said.
A vocal contingent of these folks feel there is only one option and that is to cease and desist operating un-permitted and unlicensed businesses on residentially zoned property.
The unregulated aspect of short-term rentals is what has many residents concerned, from hotel owners who have to comply with laws that govern their industry to residents who live in close proximity to a vacation home that accommodates large groups. Cited were listings on websites like Airbnb, VRBO, and Home Away that advertise Three Rivers accommodations that sleep more people than what the home was originally permitted to accommodate.
“The septic systems for these residential building permits were designed for two persons per bedroom,” said Mike Hauber of Three Rivers. “Many of these properties are located on the river so the overflow effluent in the systems that fail is going directly into the river.”
Tulare County TOT policy
Since there has been an outcry from so many Three Rivers residents, as well as the recent request from the Three Rivers Village Foundation to participate in a town meeting, a panel of county officials participated in Monday’s meeting. They all agreed that Three Rivers and its vacation rentals have caught their attention.
To open the vacation rentals discussion, Hiley Wallis, deputy tax collector, presented an overview of what the Transient Occupancy Tax (TOT) is and who is required to pay. In 2016, Three Rivers contributed more than $1.5 million in TOT revenue, more than half of what all the rest of unincorporated Tulare County contributed.
The TOT is a fee of 10 percent on each room night for a property that is rented for less than 30 consecutive days, but more than 15 days a year.
The TOT ordinance was last updated in 2015 and it appears that another update might be forthcoming. Wallis said each vacation rental operator must keep a consecutively numbered ledger and receipt book for each rental, make quarterly payments to the county, and even pay the tax on room nights that are complimentary.
The problem remains enforcement and bringing all the properties into compliance. More than 100 properties are currently on the tax roll but the county believes there are at least 100 more not in compliance.
There is a non-compliance TOT hotline: 636-5250 (callers may remain anonymous).
Many homeowners spoke up to say that vacation rentals are not compatible with residential neighborhoods.
“How can you collect taxes from a business in a residentially zoned area and it not be called a commercial business,” asked Anne Bragg, who resides in Cherokee Oaks.
Not all Cherokee Oaks residents are opposed to vacations rentals but most believe, according to those who weighed in at the meeting, commercial businesses should not operate in a residentially zoned neighborhood without a special use permit.
Mike Washam, Tulare County’s associate director of the Resource Management Agency and director of economic development, answered that the R-1 zoning allows an owner to rent up two rooms of a residence by right.
“The vacation rentals are a new development that only since the Internet have they been possible in these numbers,” Washam said. “It’s a more complicated process to change or pass a new zoning ordinance than to come up with some form of registration or license.”
Eric Coyne, assistant to the County’s chief administrative officer, said the tax collector is currently surveying Three Rivers neighborhoods looking for those who are not paying TOT.
“In the first three months of 2017, we have already levied $60,000 in fines for vacation rentals that are not paying TOT,” Coyne said. “There is also a request in the new budget to be approved in September that calls for more personnel and resources for TOT collection and
Washam said the most expedient way to ramp up the process might be to require some type of TOT registration or license.
“That way we could send an inspector to determine the appropriate level of use for each property,” Washam said.
Coyne concluded by saying the county officials will next update Supervisor Crocker on the Three Rivers meeting and will be back to continue the dialogue at the October 2 meeting.
“We heard you this evening loud and clear, Three Rivers, and this is the beginning of a deliberative process to determine our options here,” Coyne said. “We have to reach out and give the public a chance to weigh in.”