Page 2: Does legalization of home rentals adVANCE Mammoth?
Mike Vance was Mammoth’s Community Development Director from 1998-2003. He then returned to Whistler, where he served as Community Development Director until earlier this year. He is now a private consultant.
I called Vance this week to ask him about the latest proposal to legalize single-family home rentals in Mammoth.
He first touched upon the Whistler experience. He said Whistler has dealt with the issue on three separate occasions.
About 30 years ago, he said, Whistler approved a rezoning measure to allow some home rentals in subdivisions for pensiones and bed-and-breakfast establishments.
Limits were imposed as to how many there could be and how far apart they were located.
All have front desks, signage, business licenses and are members of the local resort association. All are mandated to appear like typical residences within the neighborhood.
These type of rentals have had few problems and have been integrated quite seamlessly into the community.
Later on, said Vance, there was a second effort to legalize the rentals of chalets and villas. This didn’t pass.
According to Vance, UK tour operators had been renting homes for the winter season (~4 months at a time), bringing in a person to look after it, and then continuously dumping tour buses full of guests in to stay. This led to a number of complaints from neighbors.
The third debate about rentals occurred fairly recently with the development of two subdivisions; one by a golf course and the other adjacent to the ski hill.
The proposal was to have all the homes be eligible for nightly rentals, and this proposal was advanced during the planning stages, so someone buying into the neighborhood would know exactly what they were getting into (before they ever moved in). The homes were required to have business licenses and memberships to the resort association and all had maximum occupancy requirements. This also passed.
As Vance said, “We drew a line in the sand that existing neighborhoods had to behave like neighborhoods.”
When he heard about Mammoth’s latest proposal, Vance said that further phases of Snowcreek’s development would present a logical opportunity.
He also thought something might work in Starwood using Whistler’s pensione/B&B concept.
But in general, he was wary. “If existing stock is renting at 35% [occupancy], I’d look carefully at how many [beds] I’m bringing on.” He added that whatever is brought on has to have a level of service and quality.
Vance then spoke briefly about a concept called Net Promoter Score (NPS). In short, NPS tries to measure the percentage of people who leave a resort with a positive impression and share that impression with their friends. Brand hotels aim for NPS scores in the high 80s or low 90s.
“If a unit doesn’t have a front desk, if the sheets aren’t changed regularly … that will affect the score.” In turn, that affects how people view Mammoth.
“What does it do to the Mammoth brand? How will it be viewed by the visitor community? Will it grow the market, or displace the existing market?”
Properties that rent through whistler.com, for example, all have an NPS score, said Vance.
In particular, Vance said the Town should seek more data before pushing forward with the home rental idea. If the Town is looking at the Canyon area as one possible opportunity, it should know what the current occupancy percentages are at Mountainback and 1849, for example. In Whistler, average occupancy is at 65% but the idea of bringing on even more rental units is contentious. In Whistler’s most recent version of a General Plan review, said Vance, the community opined that it didn’t want any more commercial development or any additional nightly rental units.
“The idea sounds great, to grow the pie,” Vance concluded, “but boy, I’d be careful … Mammoth is fragile [right now] … and there’s no such thing as a quick fix. [Fixes] usually take time.”
Simas blasts BID
Count Grumpy’s owner Gregg Simas as a vocal opponent of the proposed BID (Business Improvement District) plan.
The plan, as outlined by MMSA CEO Rusty Gregory, calls for an aggressive Town marketing campaign so we can “grow” ourselves out of the current economic morasse exacerbated by the $48.5 million airport litigation judgment. It calls for a 1.5% sales tax, a 1% lodging tax and a 2% lift ticket tax.
These taxes are not supposed to be called taxes, however, because taxes is a dirty word. They’re assessments to be passed through to customers, who ostensibly don’t look at their bills too closely.
Simas said in a Wednesday morning interview, “We assume they will suck it up and accept a pass-through tax … but sooner or later they are going to stop coming if we continue to pass on our problems.”
“The old adage,” he continued, “is that if it snows, they’ll come. But I’m not so sure that applies so well anymore. There are so many other economic pressures [the average Californian is now dealing with].”
As a business owner, Simas himself says he is at his limit and that one more tax might be enough to push him over the edge. “I’m still paying the assessment for Old Mammoth Road, for crying out loud,” he said. Higher tax will translate into reduced volume, he said, “And I’ll be the one eating it.”
Further, Simas says his biggest competition isn’t a Roberto’s or a Shogun. His biggest competition is Vons, and a BID charging 1.5% will give Vons just that much more of a competitive advantage.
Then he questions what the money will be spent on. “Why does Grumpy’s care if they extend air service?” The point is, he said, we’re alienating our Southern California customer base because we’re so expensive, and all the planes in the world won’t bring in enough new, rich, naive, unalienated visitors to make up the difference.
Not only that, Simas views this as just the first bite of the apple which doesn’t even address the Town’s lingering financial problems. “Shouldn’t we solve our deficit first?” he asks rhetorically.
As far as he’s concerned, Simas doesn’t support a BID or a straight lift ticket tax on MMSA. Instead, he believes “we should all learn to do more with less … if Mammoth Lakes just had its best summer ever using existing marketing dollars, why can’t they do that for winter?”
The only revenue-enhancement idea Simas thought had merit was one which has been bandied about for at least 15 years; that of a resort card, where visitors pay a resort fee, but on the flip side, they receive use of amenities like the skating rink or Whitmore Pool, and participating retailers can offer resort discount tie-ins. “At least there’s value-added,” he said.
Finally, said Simas, we’ve got to figure out a way to restore public safety to some degree. “All it’s gonna take is one incident [to deter people from coming to Mammoth].”
This is in response to the motel operators and condo owners that oppose the legalization of single family home rentals. Let me make this clear, you are not in direct competition with the single family rental homes. We are a complete exception to the norm in comparison to other mountain towns with our rental policies. Do you think the high-end renter would prefer to stay in your motel or condo given the choice of a more spacious, private and comfortable option. Many that can afford would prefer to not have a shared jacuzzi with the public. They would like to park at their front door and stay in accomodations that provide privacy and comforts that condos and motels are never going to be able to provide. I have rented my house monthly in the past and when the same group wanted to rent again and the house was not available, those chose to go to Lake Tahoe instead. I have stayed in single family in Deer Valley in the most exclusive neighborhoods and our group blended in neighborhood without any disturbance to any others what so ever. I could elaborate mcuh more as to why this ordinace should be a no-brainer but another important factor is the decline of property values in this county. Our property tax roles have taken one of the biggest hits in the state and certaintly as large as any mountain town in country. The legalization of the homes will reverse this trend greatly. The revenue created will open new markets for home buyers that would like to purchase a home but need revenue to afford. This is a huge factor in today’s buyer. If the properties can be marketred for rental than the values will increase over time greatly. This in turn, will increase the valuations of all properties. This is not a new concept but basic business principles. Its been proven in other mountain towns and would be no differnt here. The original general plan did not call for the rental of homes but the economic climate and facts have changed. You make smart business decisions to move the future forward and realize that decisions made decades ago need to reviewed and adjusted to fit the current economic times. There were decisions made in this county that have sent the town on the verge of bankruptcy. Here is an oppoutunity to incease revenur, strengthen property values and provide guests the oppoutunity to have better accomodations, never before offered. I truly hope for the benefit of everyone in the future that the facts are examined and the correct decision is made to move our area forward.
Let’s for a moment, ignore the fact that permitting nightly rentals in single family neighborhoods will severely impact those neighborhoods and residents in a negative manner. Instead, let’s look at the unsubstantiated assertion that allowing nightly rentals will result in an increase in transient occupancy tax (TOT) revenue.
First, opening single family homes to nightly rentals will simply cannibalize existing rental income. Except for the very busiest of holidays, there is little shortage in Mammoth for rentals big enough to fit large families and groups. High occupancy condos abound in Mammoth. As a result, opening single family homes to nightly rentals will merely take business away from large condominium units, reducing tax revenue from one source and replacing it with another. If we’re lucky, this would only lead to a revenue neutral result. However, by their very nature, home rentals are prime for tax evasion, which could actually lead to a decrease in overall TOT collection.
If single family homes were opened to nightly rentals, there would be little or no way to catch cheats. This is because once a neighborhood is opened to nightly rentals, it will be impossible to know which visitors are being asked to pay the tax by the owner and which are not. Right now, few homeowners risk renting their homes on a nightly basis, because their renters will stick out like a sore thumb in quiet residential neighborhoods. But once whole neighborhoods are opened up to nightly renters, tax evasion will be easy. Given our town’s past and current failures to properly collect TOT from private individuals who own condos, there is little hope that they will be able to properly regulate and enforce TOT laws in residential neighborhoods.
So before we throw away one of our last and best remaining assets, (the charm of our neighborhoods and foundation of our year-round residents) let’s recognize that doing so won’t even accomplish the goals intended. Instead of having TOT collected by reputable commercial lodging businesses, who wouldn’t dare risk the loss of their business licenses due to tax evasion, we will instead increase our reliance on the goodwill of hundreds of private second homeowners who have little fear of being caught if they don’t pay their fair share of taxes.
Proponents of nightly rentals continue to site comparisons to destination resorts such as Aspen and Vail. However, it was this type of “keeping up with the Joneses” thinking that got our humble town into the giant mess it is in today. The idea that we must be something that we’re not has already cost us dearly, both in money and in quality of life. Let’s not allow a continuation of that type of thinking to further undermine the remaining things that make our town special.
Ive lived next to one of these houses in June Lake…..heres the routine: Friday night and its dumping bigtime. about 1130 pm 3-4 cars pulled up w/ music very loud and voices very loud.Car doors slamming,music very loud, scraping ice off the wind shields ect. The renters cant get into the cabin/house because its dumping and there is no place to park because the driveway wasnt plowed and the street is very narrow. So they hang out and argue/discuss/plan their next move…..”hey, that driveway is shoveled out and there is only one car parked in it….we’ll apologize in the morning when the residents come over here and ask us to remove our cars from his driveway so he can go to work”…this is only the first night. And next Friday night it will be another group of loud idiots, doing it all over.Is this what you want Mammoth? Is revenue more important than the peace of mind for the year round residents?
If residential homes were rented in a smart manner like Whistler, I think that would be great. The problem I have with Mammoth and the property rental market is that owners don’t seem to want to drop prices to meet market conditions. Midweek rentals are often a joke. There is realistically little demand but the discount for midweek is minor in comparison. The same applies to how the mountain prices their lift tickets. If they want to get folks up midweek, drop ticket prices by 30-40%. Other areas are willing to do this. Depending ont he fly in non-socal economy to save the town is just not realistic. Simas is spot on with his observations. My take on the airport fiasco is that the Mountain pressured the town into pulling those levers and the Mountain should pay it back via a tax on tickets.