Senator McGuire introduced legislation this week to help build stronger communities and make vacation rentals follow the law

Thursday, March 19, 2015

Sacramento, CA – Senator Mike McGuire (D-Healdsburg) introduced legislation that provides a simple solution to one of California's growing challenges: Regulating Online Vacation Rental Businesses.

The premise of Senate Bill 593 (SB 593) is simple. Where vacation rentals are legal, the bill will assist local jurisdictions in their regulation and collection of Transit Occupancy Taxes (TOT). More than 400 California cities and 55 counties impose a TOT. Where vacation rentals are illegal by local ordinance, the bill will prohibit online vacation rental businesses from making a rental.

SB 593 – the Thriving Communities and Sharing Economy Act - will empower local control by providing the data needed to gather desperately needed funding for parks, road improvements, fire and police services and promote safe neighborhoods. 

In addition, SB 593 will empower communities to protect the quality of life of their residents by upholding local ordinances that protect against the degradation of neighborhoods, or in some cases, not allowing vacation rentals based off of local Online Vacation Rental Businesses (OVRB) ordinances.

“This bill is simple – It makes online vacation rental businesses follow local laws, just like the rest of us. Where vacation rentals are legal, this legislation will provide cities and counties the tools they need to collect bed taxes which help build stronger neighborhoods. Where vacation rentals are illegal - the bill prohibits the online platforms from making the rental,” Senator McGuire said. “The Sharing Economy is all about sharing in our state’s prosperity and that means taking care of our roads, parks and making sure our communities are safe.”

SB 593 reinforces local ordinances by requiring online Vacation Rental Businesses to disclose information (address of host rental, amount of nights stayed, and amount paid by the visitor) to the cities and counties (similar to the way hotels - and some law abiding rental owners - currently report their TOT). This information will allow cities and counties to ensure their local laws are being followed.

Recent studies and news articles have shown that the largely unregulated OVRBs have not only impacted neighborhoods with rowdy late night parties, public intoxication and noise complaints, many owners do not pay required bed-taxes and business license taxes.

OVRBs have also shifted residential units into tourist units, rapidly increasing neighborhood rents especially in large cities like Los Angeles and San Francisco.

The legislation already has broad support from local elected officials, members of public safety organizations, business leaders and neighbors.

Sonoma County Supervisor Susan Gorin –“I want to thank Senator McGuire for proposing this legislation.  He and I worked closely on this issue when we served as Supervisors together, and I am proud to continue to partner with him at the State level. SB 593 will help Sonoma County effectively regulate its vacation rentals, while respecting the individual preferences of local jurisdictions.”

CSAC Executive Director Matt Cate – “The California State Association of Counties (CSAC) greatly appreciates Senator McGuire’s leadership in making sure local communities have the ability to regulate on-line hosting platforms,” said CSAC Executive Director, Matt Cate.  “In particular, we support the Senator’s legislation to ensure cities and counties can collect transient occupancy taxes that fund critical services in our communities.”

Geyserville resident Victoria Heiges lives in a rural residential neighborhood and has dealt with the impacts of having several nearby homes turned into party-style vacation rentals every weekend. “There are limos clogging our country roads, renters partying late into the night, and hiking through our private property. These strangers have changed our bucolic neighborhood into party central, all while the landlords have raked in more than $100,000 a year and not paid a dime to make our community a better place,” Heiges said.

Humboldt County Treasurer-Tax Collector John Bartholomew – “We as County Tax Collectors must treat all tax payers equally under the law, including all short term lodging providers with regard to their obligation to pay Transient Occupancy Tax. However the explosion of short term lodging enabled through sharing economy companies online, with their necessarily opaque location listings, has made it nearly impossible for us to collect TOT from those owner operators. Therefore I fully support legislation which would enable us to efficiently collect TOT from operators of internet sites and/or the lodging owners they represent.”

To schedule an interview with Senator McGuire, or for more information or questions, please contact Kerrie Lindecker, Communications Coordinator, at 707-319-3654, or email her at kerrie.lindecker@sen.ca.gov.