Sonoma County officials recently gave the go-ahead for staff to explore possible new regulations around fractional ownership.
There are some similarities between what many know as time shares and fractional ownership. Companies like Pacaso
sell partial ownership rights to homes, and serve as the property managers. Pacaso’s sales pitch says it’s the modern way to buy and own a second home.
At least, that’s the idea. In reality, neighbors recently told the county board of supervisors, fractional ownership looks very different, more like vacation rentals. At one home in Sonoma, said a caller who identified herself as Nancy, “since early February, 15 different parties have cycled through this home with two-to-14 day stays at a time. It's clearly an operation of transient commercial lodging, in a residential district, with a vacation overlay restricted zone. These visitors are not people who have purchased a share of the home."
“Try to imagine your own home with Airbnbs literally on all sides and how that would impact your life,” said Tracy Ritchet of Guerneville. “They're not breaking the law. They're not violating the noise ordinance. They're having a good time. And it's really intense to have that surrounding my own home.”
“The large rotating cast of owners and their guests on luxury estate properties that they do not have to care for themselves is bound to lead to more careless behavior when it comes to fire prevention,” said Claudia Lewis of the group PreserveCarriger
during public comment.
One person spoke up in favor of the model.
“The fractional ownership concept might be a gateway for people of less modest means to own real estate, and to be able to value from that,” said Eric Fraser from ‘Truth in Tourism
,’ a pro-vacation rental organization.
On its website, Pacaso explains, "we create a property LLC for each home, find and vet co-owners, and handle all the sales details. At closing, the co-owners enjoy 100% ownership of the home – Pacaso does not retain any shares."
A recent search for available Pacaso properties in Sonoma County revealed one in Healdsburg, and two in neighboring Napa County. The website says the whole Healdsburg property is priced at $7,150,000, but that a buyer could own 1/8 of the property for $1,066,000.
County attorney Sita Kuteira said any kind of new ban on fractional ownership in Sonoma County is still a long way off.
“At this point, I think we feel that establishing a moratorium would be even premature for where we are right now,” said Kuteira. “One of the first issues is studying the use: how do we define it and how are we able to regulate it?”
Ultimately, the board unanimously voted to direct staff to hire an outside consultant to start taking a close look at fractional ownership in Sonoma County.