Milpitas Opens Door To Short-term Rentals

MILPITAS, CA -- The east Silicon Valley town may be the latest vacation hotspot if its City Council approves a short-term rental ordinance as requested for staff to work on.

About a month ago, Milpitas took up the matter that has crossed the desk of many a council member from across the Silicon Valley through the state and onto the nation and the around the world. Short-term rentals allow room to house rentals to those who seek accommodations through channels such as Airbnb, which has grown exponentially to the point the San Francisco-based company wants to expand into San Jose by 2020.

In true the Silicon Valley spirit, the online hospitality company started out as a solution to two young designers unable to afford San Francisco hotel lodging while trying to attend a conference. The "Air" part of the name may seem like an online term, but it refers to an air mattress -- which is what the designers ended up on at the time.

See also

• Airbnb Books Space To Grow In So. Bay

People who book lodging through HomeAway and VRBO (Vacation Rentals by Owner), have also enjoyed a rapid rise to relevancy as a global-branded peer-to-peer home-sharing industry.

Many municipal governments in Santa Clara County have adopted their own ordinances. Others are beginning to address the regulation of short-term rentals. Los Altos, Mountain View, San Jose and Sunnyvale took the big step in enacting theirs. Campbell, Gilroy, Morgan Hill, Monte Sereno, Palo Alto, Santa Clara and Saratoga have no regulation in place or no plans to allow them.

If managed effectively, the advantage to the cities that do lies in the additional transient occupancy tax. Milpitas stands to gain about $260,000 more in the 14 percent TOT from devising its regulations, its two community and economic development department heads indicated.

"Council asked us to amend the zoning code," said Daniel Degu, the Milpitas community development director. Short-term rentals are defined as occupancy under 30 days.

Short-term rentals command new guidelines in residential zoning districts as they have the potential of changing the character of a residential neighborhood if left for the visitor to decide how to behave and the host to determine the frequency and number of people allowed.

The following guidelines will be discussed:

• Impose TOT registration and compliance on STRs.
• Require an STR business license and annual license fee.
• Require an STR special-use permit.
• Require a local contact person.
• Limit the number of days allowed per year.
• Limit the number of guests at one time.
• Limit the number of STRs.
• Address on-site and off-site parking requirements.

According to Host Compliance, there were about 341 STRs available within the city limits as of November 2018. Of the 341, almost three-quarters of them are single-family - with 25 percent multi family dwellings and the remainder unknown property types.

About 220 STRs - 64.5 percent - are listed with Airbnb as of July 2018, according to Airbnb officials. With the majority of STR operators in Milpitas utilizing Airbnb, city staff engaged the company in discussions regarding a voluntary tax collection agreement.