With tourism to the Napa Valley still growing, generating hundreds of millions of dollars in lodging and tax revenues, American Canyon may have to decide if it wants to open its doors to online vacation rentals made popular by Airbnb and similar websites.
For now city leaders are punting on the issue, preferring to focus on other important matters, like residential and business development. But the temptation may be too great down the road to not make it easier for residents to rent portions or all of their homes through online services like Airbnb.
“Given our proximity to Napa and the valley, I see the potential for this purpose to grow in American Canyon,” said Councilmember Kenneth Leary during a recent discussion about vacation rentals.
Currently, American Canyon doesn’t allow for home-based vacation rentals for the most part. A mishmash of old ordinances resulted in allowing some areas of town — such as homes in the Vintage Ranch and La Vigne neighborhoods — to have them, but only if homeowners first approach the Planning Commission and get a use permit.
Community Development Director Brent Cooper said no resident so far has bothered to take this step. But that doesn’t mean some folks aren’t already renting a room or sofa to tourists.
“A scan of the Airbnb website showed there are 14 of these unpermitted vacation rentals happening in the city today,” Cooper told the City Council on Aug. 15.
Cooper said the city hasn’t gone after these 14 homeowners because “enforcement is complaint based.” He added that over the past four years, the city has received only six complaints.
So the use of Airbnb in American Canyon right now is “low level,” Cooper said.
But in presenting some background on vacation rentals to the City Council, Cooper broached the question: should the city allow these rentals without requiring a permit from the Planning Commission?
The consensus among the council members, who took no formal action on the subject, amounted to “let’s talk about this another time.”
Mayor Leon Garcia said the city should concentrate on Watson Ranch, or expanding the city’s business base, among other things.
Others on the council, like Mark Joseph and David Oro, noted Airbnb rentals could help local residents make more money, particularly older residents on fixed incomes.
But they agreed with Garcia that it wasn’t necessary at this time to change local ordinances impacting this issue.
Cooper also pointed out that the city could improve its tax base by facilitating Airbnb rentals, which would be subject to a 12 percent transient occupancy tax, or TOT, the same tax that hotels pay.
That said, American Canyon might have to hire more staff to ensure residents paid their TOT as part of Airbnb opportunities, said Cooper. The city also might have to hire more code enforcement officers — it currently has only one — if it suddenly had more vacation rentals and more complaints stemming from them.
“There could be more overhead to collect these revenues,” he said.
Cooper informed the council that the cities of Napa and St. Helena allow Airbnb rentals, but Yountville, Calistoga and the unincorporated county do not.
Napa has had its problems with neighbors complaining about the use of nearby homes for vacation rentals, resulting in noise and other problems, Cooper said.
He warned that these rentals have the potential to “change a neighborhood’s character.”
In a previous discussion about accessory dwelling units, Cooper mentioned that vacation rentals, if allowed, could encourage homeowners to rent rooms or cottages to tourists rather than roommates because the former are more lucrative. That in turn could mitigate the city’s hopes of accessory dwelling units providing more affordable housing in American Canyon.
Nevertheless, there is money to be made off the tourism market in Napa County, including from those staying one or more nights.
The Napa Valley Register reported on Tuesday that lodging revenues hit “an all-time high of $408 million — an increase of 7.8 percent — for the 12 months ending June 30,” based on data from Visit Napa Valley.
The average daily room rate went up 5.4 percent, from $300 to $316, while the occupancy rate held steady at 73.3 percent.
Also, the total number of visitors to the Napa Valley increased 6.3 percent from 2014 to 2016, from 3.3 million to 3.5 million — and the amount of TOT and other visitor related taxes received by Napa County jumped 25 percent.
With demand for overnight accommodations still rising, and the potential for residents and the city to make money off this cash cow, American Canyon may be faced someday with a tough decision — as well as a host of related policy questions — over allowing Airbnb’s within its city limits.