Proponents of easing restrictions say county missing out on revenue

NAPA -- The Napa County Board of Supervisors voted unanimously to uphold a ban on short-term vacation rentals in unincorporated parts of the county after legal staff determined that any changes to the policy would have to be put to a public vote.

Such rentals have always been illegal in unincorporated Napa County, but many residents and hospitality professionals have lobbied for eased restrictions recently, arguing that scores of such rentals exist and generate significant revenue.

But after the board heard from legal counsel that it did not have the authority to alter the ban – part of the Napa County General Plan -- supervisors said their hands were tied.

Compliance with the general plan and stepped up enforcement were the key factors in upholding the ban, according to Fifth District Supervisor Keith Caldwell.

“I think the issue comes down to the fact of the matter that vacation rentals have always been illegal in this county,” he said.

Mr. Caldwell said he’s been sympathetic to rentals and agreed the economic impact is significant. But, he added, “Based on our general plan, we could not do it under the existing ordinance. “

Proponents of altering the ordinance have one option left – getting the issue on the ballot for a Measure J vote, a 1990 law passed to limit growth on the agricultural preserve.  In 2008, Measure P extended the original ban and required that any zoning changes on the ag preserve be put to a public vote.

Liza Graves, owner of Beautiful Places, a villa rental company that operates in Napa, Sonoma and Mendocino counties, has argued in favor of easing restrictions, detailing the economic benefits that legalized rentals could have.

She said such rentals generate as much as $45 million a year throughout the county, based on conservative estimates that factor in direct spending on food, wine, retail, art, entertainment, homeowner allocations toward taxes, mortgage, landscaping and other factors. The county could stand to receive nearly $1.45 million in transient occupancy tax revenue if around 235 rentals were allowed and overseen by the county.

“The view of the coalition of homeowners and interested parties for allowing and taxing vacation rentals is this was an unfortunate decision,” she said. “We disagree with the staff’s decision, and we feel it will have a negative impact on the local economy. It will impact real people in a negative way, and the county loses out on the potential to collect TOT.”

Proponents suggested limiting the number of short-term rentals used for less than 30 days to 300, saying that a similar number already exists.

Those in favor of maintaining the ban said the ag preserve needs vigorous protection, and it is the very core of Napa’s success as a wine and agricultural destination.  Most in favor of the ban said their counterparts should gather enough signatures for a ballot measure, and let voters have the final say.

Ms. Graves said it was too soon to say if or when proponents would seek a ballot measure.

Mr. Caldwell said enforcing the ban will prove challenging, given that the county is already financially stretched thin.