Letter: STRs have a massive financial impact on Paso Robles
To the editor,
To date, neither the City Council nor the STR naysayers not the STR proponents have put a number on the true economic boost STRs have on the Paso Robles economy. That is a mistake. Even affordable housing is not affordable without employment, so if low income housing is important to Paso, decent employment is even more so.
The numbers are surprisingly large. The assumptions in these calculations are just that, assumptions, so you can play the assumptions and see what you get. The numbers used here are in large part based on the data being bandied about as part of this debate, partly from looking at rents posted on vacation rental sites and partly on anecdotal information from STR owners.
By definition, these numbers are not accurate and won’t become accurate unless new data is gathered. That said, the assumptions are intended to be conservative, and therefore while it is possible that the economic impact is lower than suggested, it if far more likely that the economic boost is a multiple of what is suggested.
The calculation assumes the following:
• That there are 300 vacation rentals in Paso Robles;
• That the average cost per night of rental is $300;
• That most vacation rentals are only rented out 75 nights per year;
• That an average of four (4) people stay in each rental;
• Each visitor spends an average of $200/day on food, drink, wine, other shopping while visiting; and,
• The average cleaning fee for each rental is $200.00
Based on the foregoing, the STRs in Paso Robles bring the following influx of tourist dollars to Paso:
Annual Rental Fees – $6,750,000 (300 rentals x $300/night x 75 nights)
Annual Visitor Spending – $18,000,000 (300 rentals x 4 persons/rental x 75 nights x $200)
Annual Sales Tax – $900,000 ($18,000,000 x .5%)
Annual TOT – $500,000 (and likely substantially more when all amounts owed are collected. Based on the $6,750,000 rental calculation, the City should be collecting $675,000 annually)
Annual cleaning fees – $1,500,000 (assuming 3 night average stays – $300 x $200 x 25)
Based on the foregoing, vacation rentals bring $27,650,000.00 to this community every year.
Yes, you read that right, STRs bring almost $28 million dollars to Paso Robles, every year! Even if you cut it in half, it is still a big number. If you multiply it – as no doubt an actual economist would – it becomes enormous.
And where does all this money go? To the local merchants, restaurants, wineries, tourist attractions and so forth who, in turn, use the funds to pay their employees, buy more goods, pay to keep their establishments in good repair and so forth. One member of the City Council told me that the tourists spend a tremendous amount of money downtown, to an extent that it has caused prices to rise and locals to avoid downtown to find lower prices.
On top of these impacts, you can be sure that every STR owner has spent a significant sum – maybe $50,000? – just to bring their STRs online. New paint, new trim, new fences, new landscaping, new heaters & air conditioning, new floors, new furniture – whatever. Based on that number, another $15,000,000 has gone into the local economy in the last few years.
To those who think that STR visitors would just go to hotels, think again. Once people discover vacation rentals they tend to avoid hotels whenever possible. If there are no STRs to rent in Paso some folks will go to hotels, most will go to other city’s that do have vacation rentals. As a long term vacation renter, the only time I, or anyone I know, uses a hotel is when we are traveling for business or only spending a night or are in a big city and a hotel is easier. Or maybe in Las Vegas. The fact is, vacation rentals offer an experience as different from hotels as hippos are different than jellyfish.
Last, because Paso not only allowed, but actually encourage, folks to establish vacation rentals for so long, and deemed said uses to be compliant in all zones, including R-1, the existing STRs are all legally grandfathered in and valid. Should the City persist in their needless “phase out” of STRs in R-1, it will risk enormous financial liability should this matter end up in court.
The City Council was right to enact reasonable regulations for the conduct of STRs – those will be invaluable for all concerned and will very likely address any future conduct issues. If the City Council persists with the proposed “phase out” it will not only be making legally indefensible decision, it will also be betraying all of the people who, in good faith, relied on the City when establishing their vacation rentals and operating them all of these years. Let’s hope the City Council sees the wisdom of keeping the regulations that are now in place, grandfathering all existing STRs and keeping the numbers of STRs reasonable in the future. That way we have the best of all worlds, a robust economy, solid employment, well-regulated vacation rentals, solid income (TOT and Sales Tax), and no needless lawsuits to prevent the city from sticking it to existing STR owners.
Kenneth G. Robertson
Anchorage, Alaska
