Sometimes lottery winners are too greedy to even leave a small tip for the cashier who sold them the winning ticket.
So, too, we have winning whiners here in town unwilling to share the bounty derived from running a business with a huge government-sanctioned advantage over their competition. Such is the case with the rental property owners renting their residences for big bucks without the annoyance of providing housing for the generated employees, parking for the guests or even the inconvenience of forking out the measly $150 for a business license that everyone else is required to cough up annually.
Just in this century alone, my tiny law firm has forked over about $3,000 in license fees as have so many of my neighbors and friends running service businesses from their home: people who cut your hair, clean your car or work on your garden. Long ago, the city decided that small businesses have impacts that are not captured by the land-use code or property taxes even though our little enterprises do generate some traffic, use the streets and may, indirectly generate fractions of labor FTEs.
I can’t remember many of us parading down city hall to protest the imposition of a $150 fee to offset some of our impacts. The small contractors, service people and manual laborers that I know running baby LLCs and Schedule C operations generally pay their taxes and follow the rules as best they can understand them, annoyed but not rebellious.
Not so it would seem with property owners renting their homes and units on the internet. Their measure of entitlement is best assessed by the plaintive wailing coming from property managers who have forced the city council to back down from imposing the $150 fee using the management companies as an agent, something the state, city and USA force me and my peers to do every day: We collect and remit tax on retail sales if we have any; we collect and send withholding taxes to the state and federal government; we pay for unemployment insurance for ourselves and employees and on and on.
At least on one level, I sympathize with the crux of the complaint from property managers and their fear that requiring their clients to be licensed will cause a good portion of their clientele to go rogue, listing their properties on their own rather than forking out $150 to the city.
Again, a casual runthrough of hundreds of internet listings for residential short-term rentals shows a striking absence of full-frontal shots of the properties offered.
In Del Mar, California and other beach resorts, almost every listing includes exterior views of offered rentals, perhaps because owners there don’t feel entitled to hide their property from licensing and taxation.
In a city where greed is said to never sleep, our vacation renter class seems exceptionally woke. One need only skim through the VRBO.com listings in this community to see that the renting of residences is a big-time, profitable enterprise, commanding many hundreds or even thousands of dollars a night for what amounts to a mini-hotel experience.
The $150 license evasion savings are a tiny part of the competitive advantage residential rentals have over the hotels. The property tax savings alone are significant: A residential property is taxed at about one-quarter the rate applied to commercial properties. And VRBO/Airbnb don’t impose a land-use code that suggests that development pay for solar or green roofing, employee parking, transportation and or composting.
According to news coverage, there are approximately 2,200 residential rentals scattered throughout the city of which about 70 have applied for a planning approval for their use and perhaps 600 have business licenses. Imagine a developer asking the city for a 1,000-room lodge that would do no traffic studies, house none of its workforce and pay 25 percent of its property taxes. Noncompliance on that scale would cost an affordable-housing unit owner his/her home and get a business owner red-tagged.
About half of you may well not have liked the Lift One/Gorsuch Haus proposal because Lift One would generate too much employment, traffic and growth. Fair arguments with which I disagreed. But the competitive inequity and avarice of business owners who not only want to skip the land-use code requirements imposed on their rivals, pay a lesser property tax and squeak by a $150 license that the rest of us pay without complaint pretty much resets the bar for wokeful greed.
Mick Ireland thinks the proliferation of residential rentals has a much bigger impact on the affordable-housing shortage and generates more growth-related impacts than the Ikon pass or the handful of hotels approved in the last decade. Email him via firstname.lastname@example.org