Pacifica City Council
170 Santa Maria Avenue
Pacifica, CA 94044
Dear Members of the Pacifica City Council,
Pacifica for Responsible Tourism is a group of homesharers who make our public coastlines accessible and affordable to a broader group of people by offering alternative accommodations– “short-term rentals” or STRs – to groups, primarily families. In addition to facilitating lifelong memories in our wonderful city, we represent nearly $2 million per year in revenue for the city1.
Because we have not received complaints for our STRs, we were blindsided by the sentiment of the council meeting in June 2024 and are writing to present much-needed facts and a representation of the reality of the vast majority of Pacifica’s STRs. We have attempted to speak with the anti-STR group Pacifica Homes Are Not Hotels and city council members on multiple occasions but have been largely ignored (huge thank you to the few who have engaged with us!). We hope to have more communication in the future.
We are thoughtful hosts: we respectfully connect with our neighbors, aggressively reject guests who may create nuisances, and stand against disrespectful STR hosts who create nuisances for Pacifica. We have even contacted Airbnb’s corporate team and the city of Pacifica to offer our help in weeding out bad hosts. 99% of homes in Pacifica are not STRs. And only four homes out of Pacifica’s 15,000 contribute 50% of all STR complaints1 (Pacific Coast TV, 2024, 31:30). These hosts must be summarily dismissed, and Pacifica can succeed by changing its ordinance in a few simple ways while protecting the enormous benefits of STRs. You can rein in bad actors while protecting:
1. The $2m that STRs contribute to city revenue contributes to every Pacificans’ well-being. The vast majority of these funds are contributed by unhosted STRs or STRs where an entire home is rented out.
2. Affordable access to the beach: the California Coastal Commission’s vision is for the coast to be available “for all to enjoy,” and it is usually much cheaper per person to book an STR. Many of our guests are families from inland California cities who come to escape the heat. For reference, a three-bedroom AirBnB costs about the same per day as a hotel room but can accommodate a whole family with three generations who cannot afford three hotel rooms and can therefore no longer visit our town.
3. Housing affordability: Every actual analysis we have seen, whether by Pacifica’s STR office, UC Berkeley, or the Harvard Business Review, shows with hard data that STRs have zero to no effect on rental prices. The reality is that the bulk of the factors driving rental prices are exogenous to Pacifica.
Banning all unhosted rentals or putting day limits on them would significantly overreact to the very few bad STR hosts, destroying the benefits above. Smart, simple regulation and enforcement tools exist to keep neighborhoods peaceful while preserving the above benefits and one’s right to host. Curtailing all unhosted STRs would go much too far, significantly harming or even bankrupting hosts, and leaving Pacifica with a long-lasting anti-outsider NIMBY brand. All Pacificans and city workers would suffer from a reduced city budget. Unlike large rental corporations, most STR hosts depend on the income they earn from hosting and would suffer financially. Families looking for affordable accommodations in our community would no longer be able to spend their time and money in Pacifica.
Cutting the sizable STR tax revenue from the city budget would hurt all Pacificans, and Pacifica is already a low-revenue city per capita compared to some nearby towns.
1. At nearly $2m (projected), the STR tax income plus increased sales taxes from tourism revenue represent close to 5% of the city’s budget. The majority of STR tax revenue comes from unhosted STRs.
2. The average tourist spends more money on Pacifica’s businesses than the average resident: Airbnb estimates that for every $100 spent on an Airbnb stay, guests spend about $264 on other goods and services, such as local businesses, restaurants, attractions, shops, and more.10
3. Local jobs (cleaning staff, repair people, spa maintenance, etc.) would be eliminated.
4. Half Moon Bay is paying the price of eliminating its STRs, and Pacifica is in a far worse position if we do the same. Eliminating STR revenue drops Half Moon Bay’s lodging tax revenue by just 4%, down to $8.6m, thanks to its many more hotels. Pacifica would drop its total lodging tax revenue by over 50%, down to just $1.5m1 ((Pacific Coast TV, 2024, table at 39:36). Furthermore, the city of Half Moon Bay already collects 3x the overall revenue per capita revenue than Pacifica.
Still, Half Moon Bay is now facing a significant budget deficit of $4m as its “underperforming hotel tax has created serious structural problems.” 11 According to its staff report, “Without increased ongoing revenues, the city will need to make significant cuts that will affect valued programs and services, and potentially impact the health, safety, and quality of life in Half Moon Bay.” Extensive Data Shows No Effect on Long-Term Rental Prices It is relieving news that the extensive data on STRs show an undetectable impact on rental prices. Every actual analysis we have seen, whether by Pacifica’s STR office, UC Berkeley, or the Harvard Business Review, shows with hard data that STRs have no impact on rental prices. We strongly encourage the council to look at the hard data before concluding the inaccurate trope that the 150 STRs in a 15,000-home city can meaningfully affect rental prices. The counter-intuitive hard data is that:
Rental prices in Pacifica have actually fallen in inflation-adjusted dollars since Pacifica’s STRs grew from 2021 to today.
Rents in Pacifica have decreased by 8% in real dollars after the STR program took shape. Over the past three years:
1. Average national rents increased by 21%2.
2. Inflation has been 15%.
3. Pacifica rents have increased by a mere 7% in nominal dollars2, representing a decline of 8% in real dollars over the time its STRs took shape. It should not be surprising that the few STRs do not affect rental prices in any measurable way.
Countless studies looking to prove that STRs increase rental prices return no to negligible findings.
Pacifica’s own investigation found that “STRs impact [is] minimal when below 1% of housing stock” (STRs are currently at or below 1% of housing stock). Further, note that national rental prices are not fixed; they increase by roughly 5% every year. Against this background, it’s difficult for researchers to find the nearly imperceptible effects of STRs, especially when considering that STRs bring a number of positive benefits to a town’s finances and quality of life. At best, eliminating STRs could decrease rental prices by a negligible 0.36% (many studies show zero change). Keep in mind that annual national rental growth has been 20x that. We encourage readers to view our table of studies integrated into this analysis in the appendix.
Consider that Half Moon Bay banned STRs, and their average rent has not changed compared to Pacifica. The only change is that middle-income families can’t afford to visit Half Moon Bay anymore, and the city faces large cuts to municipal programs11.
If it seems counter-intuitive, remember that 99 out of 100 homes in Pacifica are not STRs, so it’s unsurprising that STRs have a negligible impact on prices (but an outsized positive impact on city revenue).
Against these data, it is not reasonable to be certain that banning STRs would make a detectable improvement in rental prices. However, it is certain that banning STRs would cause a deleterious impact on the city budget that benefits all Pacificans, suppress business activity, and eliminate access to the beach for many families.
We Need Legislation That Removes Bad Actors
1. Three strikes and you’re out: founded complaints should be used to eliminate bad actors. Consider fines as well.
2. Require that all STR hosts be reachable by a registered phone number within 20 minutes if an issue arises and be able to physically respond within 60 minutes if necessary.
3. Implement designated quiet hours from 10 pm to 7 am to ensure that STRs are not disruptive to neighbors. Hosts must track decibels on their properties.
4. Even Half Moon Bay, whose council was aggressively against STRs, grandfathered in their unhosted, non-primary residence STRs as the financial injury would be catastrophic to many hosts, even triggering bankruptcy.
We are lovers of Pacifica and create more lovers of our town via our lovingly curated STRs. Happy, lively towns have tourists. Only four listings are responsible for 50% of complaints; we can eliminate them with thoughtful, reasonable regulations. Blunt-force banning unhosted STRs would have no positive impact on rental prices, cripple the city’s budget for all residents, and prevent affordable access to the beach all in the unchecked, overreaching interest of a small number of those wealthy enough to own homes near Pacifica’s beaches.
Sincerely,
Anna Tong, Russell Jones, Elda Kong, Wayne Thai, Alexandros Vardakostas, and Albert Zhang, on behalf of Pacifica for Responsible Tourism Appendix
Study Title Findings
Pacifica’s own analysis of STRs1 ((Pacific
Coast TV, 2024, slide deck at 40:52)
“Housing and Financial Impacts: STRs
impact minimal when below 1% of
housing stock”
Regulation and the High Cost of Housing
in California.3
Price elasticity is 0.36%, meaning
Pacifica’s AirBnBs, at worst, increased
rent by 0.4% which is in the noise of
detectability. For comparison, the national
average rent rise every year is nearly 15x
higher.
Airbnb and Rents: Evidence from Berlin4 STRs in Berlin may have increased the average monthly rent by $5.76
Is home sharing driving up rents?
Evidence from Airbnb in Boston.5
STRs in Boston may have increased the
average monthly rent by $7.75
What Does Banning Short Term Rentals
Really Accomplish6
Of the amount that rental prices
increased, “Airbnb contributed to about
1% of aggregate rent growth”
Airbnb Activity and Rental Markets in
Canada7
“at most less than 1 percentage point can
be attributed to increased Airbnb activity.”
A study of STRs in Canada
Do short-term rental platforms affect
housing markets? Evidence from Airbnb
in Barcelona8
Barcelona data indicates that 1% of
housing stock used as STRs increases
rents by 1%
Four months later: An update on New
York City’s short-term rental rules9
“Analysis reveals no significant decrease
in rents or boost to rental inventory four
months after New York City’s strict shortterm rental rules went into effect” Sources
1. Pacific Coast TV. (2024, June 24). PCC 6/24/24 - Pacifica City Council Meeting - June 24, 2024 [Video]. YouTube.
https://www.youtube.com/watch?v=SeNRHmdVtOo
2. Point2Homes. (n.d.). Average Rent in Pacifica, CA. Retrieved August 20, 2024, from https://www.point2homes.com/US/Average-Rent/CA/San-MateoCounty/Pacifica.html
3. Quigley, John, M., and Steven Raphael. 2005. "Regulation and the High Cost of Housing in California." American Economic Review, 95 (2): 323–328.
4. Duso, Tomaso and Michelsen, Claus and Schaefer, Maximilian and Tran, Kevin Ducbao, Airbnb and Rents: Evidence from Berlin (August 2020). DIW Berlin Discussion Paper No. 1890, Available at SSRN:
https://ssrn.com/abstract=3676909 or http://dx.doi.org/10.2139/ssrn.3676909
5. Horn, K., & Merante, M. (2017). Is home sharing driving up rents? Evidence from Airbnb in Boston. Journal of Housing Economics, 38, 14-24. https://doi.org/10.1016/j.jhe.2017.08.002
6. Calder-Wang, S., Farronato, C., & Fradkin, A. (2024, February 15). What does banning short-term rentals really accomplish? Harvard Business Review. https://hbr.org/2024/02/what-does-banning-short-term-rentals-really-accomplish
7. The Conference Board of Canada. (2023, October 11). Airbnb activity and rental markets in Canada. https://www.conferenceboard.ca/product/airbnb-activity-andrental-markets-in-canada/
8. Garcia-López, M.-À., Jofre-Monseny, J., Martínez-Mazza, R., & Segú, M. (2020).
Do short-term rental platforms affect housing markets? Evidence from Airbnb in Barcelona. Journal of Urban Economics, 119, 103278.
https://doi.org/10.1016/j.jue.2020.103278
9. Airbnb. (2024, January 18). Four months later: An update on New York City’s short-term rental rules. Airbnb News. https://news.airbnb.com/four-months-lateran-update-on-new-york-citys-short-term-rental-rules/
10.Airbnb. (2024, April 3). Travel on Airbnb generated $85B in economic activity in the US. Airbnb News. https://news.airbnb.com/travel-on-airbnb-generated-85b-ineconomic-activity-in-the-us/
11.Rusch, H. (2024, June 26). Half Moon Bay facing $4M structural deficit: Council’s budget seeks to make up difference with unassigned funds and economic uncertainty reserve. The Daily Journal.
https://www.smdailyjournal.com/news/local/half-moon-bay-facing-4m-structuraldeficit/article_703013f2-3362-11ef-96a9-ff542625a5a4.html