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Rental Market Being Squeezed By Home-Sharing Apps Like Airbnb

OAKHURST – The success of Airbnb and other home-sharing websites has created “a serious shortage” of long-term rental properties in Eastern Madera County, say those familiar with the rental market.

On a scale of one to ten, Rhonda Salisbury, CEO at Visit Yosemite | Madera County, thinks the problem is “at least a seven or eight.”

“But we’re not unique,” Salisbury says. “Whether it’s San Francisco or Italy or here, just about every place these days seems to be in need of more affordable long-term rentals.”

Salisbury said the issue used to be limited to places like Bass Lake, “which has always had a high number of vacation rentals. Now, with Airbnb,” she adds, “it just seems to have exploded everywhere else here too.”

Mountain Home Property Management in Oakhurst currently has just two long-term rental properties for rent.

“It’s a really sad situation up here,” says owner Kathleen Shinaver. “For the last year or so, I’ve had hardly anything. We used to advertise five or ten places each week. Now, there’s nothing.”

According to Zillow, less than a dozen long-term rentals are “available” in Eastern Madera County right now.

But a search of vacation home-sharing website VRBO reveals more than 500 available short-term rentals in Oakhurst alone.

Dee Salazar, who is on the Chamber Alliance board of the Madera County Economic Development Commission, which helps the Bass Lake, North Fork, Coarsegold and Oakhurst Chambers collaborate on regional economic development projects, says the area’s “economic stability — and future development potential” depend on increasing the inventory of long-term rentals.

Salazar, a busy Bass Lake Realtor and property manager, says it’s “getting hard to find people willing to rent their homes month-to-month.”

“But in order to feed our growth,” Salazar says, “we’ll need a larger workforce. And the people who come here to work but aren’t ready to buy yet will need to have more realistic options.”

Salisbury agrees and says the housing shortage hits area employers hardest during the busy summer months. “I know Yosemite and Aramark always have a hard time finding enough people.”

Area developers currently don’t have “much appetite” for creating new, affordable, multi-family units in and around Oakhurst, according to Realtor John Thor.

“Unfortunately, there really isn’t that much cheap land available right now,” Thor says, “especially within walking distance of shopping in downtown Oakhurst. So that’s put a damper on new development. What we need is more multi-family zoning [building lots] closer to town.”

Thor says it currently costs “at least $10,000 per unit” just to hook up to Oakhurst’s sewer system. “So someone wanting to build a 4 or 6-unit development is looking at having to spend at least another $50,000 to $75,000. And if they’re further from the road, the price just gets higher.”

By comparison, Thor says it currently costs about $2,000 for sewer hook-ups in Fresno. “It’s just become way too expensive to build anything right now in the mountains, which is why we have a critical shortage of affordable housing here.”

The Picayune Rancheria of Chukchansi Indians just closed escrow on a 20-unit apartment complex in Coarsegold which the Tribe plans to use as affordable housing.

Salisbury says some other area businesses are also resorting to building or buying housing for their workforce. “More and more are having to hire people from places like Fresno and then ask them to commute to work.”

Airbnb has really been a game changer, Salazar says. “When property owners realize they can make more money renting short-term, they do it.”

Madera County Treasurer and Tax Collector Tracy Kennedy says the county currently reaps about a million dollars a year from transient occupancy tax (TOT) and tourism business improvement district (TBID) assessments generated just by Airbnb alone.

“The numbers are increasing every quarter,” says Kennedy. “Right now, the county gets a quarterly, lump-sum payment from Airbnb.” Depending on the time of the year, Kennedy says the check averages “between $200,000 and $300,000.” (The county charges 11 percent tax on all short-term rentals — 9 percent TOT and 2 percent TBID.)

Kennedy told the board of supervisors Tuesday (May 7)  to expect overall short-term rental TOT revenues for the current fiscal year to come in at about $3.2 million.

This week, supervisors also approved a request from Kennedy that will allow her department to contract with Host Compliance, a Seattle-based company that assists more than 200 local governments around the country in “maximizing tax revenues.”

Under the terms of the agreement, the county will pay Host $117,000 over the next three years for “short-term rental compliance” monitoring services.

Airbnb currently does not give the county an itemized list of what properties its clients are renting. “Right now, we’re just having to trust their accounting is accurate, which is why we’re converting to the new system,” says Kennedy.

Property owners who rent out their houses directly via apps like VRBO are responsible for collecting taxes — and forwarding them to the county — and Kennedy’s department currently has one employee solely dedicated to tracking private short-term rental activity.

“We rely on those homeowners to report and pay the taxes they are supposed to be collecting,” Kennedy says. “But that doesn’t mean everyone always follows the rules. When it comes right down to it, we really don’t know what we don’t know.”

Kennedy says county code enforcement officers will investigate reports of people “illegally” renting their property. “They usually come in from neighbors who complain about all of the increased activity in their neighborhood,” Kennedy says.

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