Dear Council
Unfortunately, I have a business engagement which was set up before learning of this topic so I cannot attend the Council Meeting in person.
That said, here are some points from some previous exchanges with the City Staff.
Further, I am glad the City is finally getting some money from these Short Term Rentals. But money is not everything. There has been a lot of discussion around whether private equity firms and companies like Zillow are buying properties usurping natural residents from either ownership opportunity and/or rentals. Further, consistent with many other studies, a 2020 (”Investment and Disinvestment as Neighbors”) commissioned by the City of Menlo Park described how the use of homes as short-term rentals deprives the residents of housing.
Why is the City so slow to respond or unwilling to share the results of studies with its residents?
I ask that the Council direct the Staff to provide the details of the HdL report and what the City, in some other communications, claimed was a community workshop that favored short-term rentals (conducted on January 10, 2017, attached). I have also attached the report I received in May of 2022 here (1916-05122_HdL-Menlo_Park_STR_Activity_as_of_Feb_28_2022).
A) If you recall, on July 28, 2020, the City Council approved the appropriation of $35,000 from the general fund unassigned fund for fiscal year 2020-21 for a short-term rental (STR) compliance contract to activate enforcement of municipal code for transient occupancy tax collection for short-term rentals beginning in January 2021.
The council agreed to delay enforcement of the ordinance until January 2021. The delay was because Council Members Mueller and Carlton thought some households who can afford to have an extra house rely on the income from short-term rentals and that the tax could drive up prices.
While this position, that the interests of those with second or more homes (and those of corporations) outweigh the needs of those without housing, did not make sense, starting the collection later than never was still better than not.
See Almanac August 2020 edition.
B) However, while enforcement was to begin in January 2021, the City took no action.
C) On May 11, 2021, via Staff Report 21-098-CC of 5/11/2021, the City sought authorization from the city manager to execute an agreement with HdL Companies to provide transient occupancy tax administration and audit services for a fixed fee and short-term rental transient occupancy tax enforcement for a performance-based revenue share.
D) In July of 2021 the City Council authorized the signing of a contract with HdL Companies for the administration and enforcement of the Transient Occupancy Tax Ordinance. The contract started on 7/1/2021. The contract included identification and compliance of “AirBandB” type activities within the city limits. The contractor began begin developing the database in early July, with verified numbers to be made available after 10/31/2021.
E) I was informed that as of 10/16/2021, the contractor (HdL) had identified 136 potential STR operations (a number higher than that reported in the current Staff Report 24-131-CC (101 as of 8/13/2024) within the City Limits of Menlo Park. Of those, according to County tax records, 13 are owned by LLC, and 1 is owned by an Inc. (Corporation). While it may not be unusual for rental properties to be set up as an LLC, most of them were not occupied by the owners of the LLC.
Of the 136 potential STR operations, HdL verified that 40 were actively renting. Four (4) of those were LLCs.
F) To date, the Menlo Park residents have not received the detailed results of this report, except for this recent update with numbers and dollars.
G) Furthermore, I have a few other questions. Aside from tax, the information gathered via HdL can be useful to gain insight into how short term rentals are operating in the city of Menlo Park.
a) When asked for details (without asking for personal information), Menlo Park stated that the information was “confidential.”) and at some point, a Staff member stated that it was “Attorney Client Privileged” 😳😳 What part of the information does the City consider confidential or Attorney-Client Privileged? Perhaps the addresses of the locations? They already advertise these units.
b) Is the data you gathered from publicly available databases (or perhaps from Airbnb itself)?
The insight that can be gathered includes:
1) Which neighborhood (e.g., Sharon Heights, Allied Arts) the properties are located in?
2) What is the duration of rental during the year (San Francisco has a 90 days per year maximum limit)?
3) What is the nature of property owners (not the unique names)? San Francisco limits STRs to properties where the owner lives permanently in the property for at least 275 days a year.
4) Are they registered with the City as a short-term rental?
5) What is the number of unhoused nights per year (same as #2)?
6) Are they what San Francisco would consider ineligible for short-term rental (I understand Menlo Park does not have this, but if we were to apply SF laws)?
7) the nature of renters: are they natural persons or businesses (e.g., Facebook)? There’s been exchanges that companies are using Airbnb to rent for their visitors, etc.
All of this information is really relevant to these housing discussions, and it would be a shame not to include it in the report.
Best
Soody Tronson
Menlo Park resident
