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My House is Your Hotel 

As alternative lodging sites soar in popularity, regulators sharpen their gaze

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Tom and Kath Collom's home sits in a short row of similarly pointy-roofed, 1902 saltbox Victorians in a semi-industrial neighborhood just north of Eureka's Old Town. The bay is close by, as is the first of several bridges inchworming across to the Samoa Peninsula. The houses are cute, their surroundings humble. On a weekday evening, the loud hum of a refrigeration business permeates the atmosphere. At a nearby apartment complex, a guy missing his front teeth helps breaks down cardboard boxes inside a fenced recycling station. "I'm homeless," he says. Three cats — no, four ... five, maybe more — wander in and out of the sidewalk in front of an elderly neighbor's house, stopping to lick paws and sidle up to strange pant legs. The Colloms' own cat, a fluffy black-and-rust named Tab, flops on the couple's small porch, unfazed by a new person walking up the steps. After several knocks, the bright blue door opens and a smiling Kath says, "Come in!"

The Colloms' house is one of about 160 places in Humboldt County listed for rent on Airbnb, a lodging website where people with spare room hook up with travelers looking for something other than the typical hotel experience: wine and flowers on the table, perhaps, or star-gazing from an outdoor claw-foot tub, and maybe fresh local coffee, breakfast, local lore, travel tips and new friends.

There are similar sites, including VRBO ("Vacation Rental By Owner"), but Airbnb is the youngest and most thriving. It boasts 11 million guests and 600,000-plus listings in at least 34,000 cities in 192 countries, according to co-founder Brian Chesky. It's valued now at $10 billion by major investors, making it larger than big hotel chains such as Hyatt, according to the New York Times. It's especially taken off in the last couple years. Two and a half years ago, when the Colloms decided to convert Tom's former "man room" into a short-term rental and list it on Airbnb, there were at most a dozen listings in Humboldt on the site, says Kath. In the time since, despite the proliferation of competition, the Colloms have had 270 reservations amounting to about 600 guests. This June it was booked 19 out of the 30 days. Other Humboldt spaces show equally strong bookings.

Like many Airbnb hosts, the Colloms, who moved to Humboldt from Petaluma in 2000, got into it to help pay off their mortgage. But they've become hooked on the social aspect. They've had guests from all over the world: Australia, China, Sweden, the Netherlands, England — well, just about every country in Europe and then some, says Tom. And while some guests pass through with just the briefest of interactions, others make a lasting impression. During the last presidential election, Tom says, laughing, guests from "at least seven different countries" offered him and Kath "asylum" if Mitt Romney won.

"At first it was weird to have strangers in our home," Tom says. "But now when we don't have guests it's like, 'Where are the people?'"

Ah, all those people. They make tax collectors, hoteliers, housing advocates and others wonder: Are these alternative-hotel guests paying local taxes, as they would have to if they stayed in a traditional hotel? Do their hosts have business licenses? Are host houses zoned for vacation rentals? Are these residential short-term rentals impacting the hotel industry's revenues? Are they hogging housing stock in tight markets?

Battles rage around the planet over these issues. Locally, our cities and the county are in various stages of dealing with them. Furthest along is the city of Trinidad, where 17 percent of the housing stock is tied up in vacation rentals, many of which list through Airbnb.

Airbnb is a classic rags-to-riches story of the digital variety. In 2007, two design students who didn't have enough money to pay rent created sleeping space in their apartment for paying travelers. They appointed it with air mattresses and made their guests breakfast. The idea grew. They acquired another partner, then employees, and now they're all over the world. They're part of a growing list of entrepreneurs in what's called the "sharing" or "peer-to-peer" economy who create fee-based online venues for people to rent (or sometimes truly share) their services or underused things. Others include independent taxi service (Uber, Lyft, Sidecar), errand running (TaskRabbit), parking spaces (ParkAtMyHouse), recreational and technical equipment, and even pets (BorrowMyDoggy). It's an alternate-universe economy in which participants sidestep (often illegally, if unknowingly) many of the regulations and taxes to which their more conventional counterparts adhere.

Airbnb is the most successful, dominating ground broken first by VRBO almost 20 years ago and significantly improving on the model, says Michael Reinman, who owns Redwood Coast Vacation Rentals. Instead of just reviews of the rentals, as on VRBO, Airbnb has reviews of hosts and guests. The site has an easier format for listing a place, Reinman adds. And while it can cost between $300 and $1,000 to list a place on VRBO, he says, Airbnb charges nothing.

Airbnb does charge transaction fees: Hosts pay 3 percent per transaction, and guests pay 6 to 12 percent. The site handles listings and payments, provides 24/7 customer support for hosts and guests, and sends hosts start-up packages that include a first aid kit and a carbon monoxide alarm. Hosts often charge a cleaning deposit, and Airbnb provides $1 million in damage insurance. And it reports hosts' earnings to the IRS so they can pay income tax.

Listings on Airbnb run the gamut. In Humboldt, they go from $38 to nearly $700 a night. Thirty-six of the 158 current listings are either shared rooms or rooms in a house. Most of these are cheaper rentals, such as the Colloms' ($65), a room in an "eclectic" apartment in Ferndale ($38) and rooms in an old farm house on West End Road ($40-$42) whose owner, Jennifer Garcia, will abandon her own bedroom for guests if the demand is there. The rest of the listings are self-contained living quarters — mother-in-law units, apartments and whole houses. With the exception of a $55 two-bedroom flat in Arcata, most of these run between $70 and $250 a night. And the rest go even higher; many of the swankiest are Trinidad-area, ocean-view vacation homes fit for (and used by) celebrities.

There are also some funky outliers: a boat named Obsession, owned by Arcata Public Works Director Doby Class and his wife, Kim, that's docked at Woodley Island Marina; a cabin and corral (for your horse) in faraway Hyampom; a yurt in Arcata; an Airstream trailer in Eureka; the old pulp mill workers' union hall in Samoa converted by artist Steven Vander Meer into a studio with separate guest quarters; and the late Alex Cockburn's Lost Coast Tower in Petrolia, which daughter Daisy Cockburn manages — its lengthy description includes raptures over the view, garden and artful surroundings, and warnings of the 520-foot steep climb up a dirt path to the WiFi-free, minimally provisioned redoubt occasioned by bats.

Many Humboldt listings are offered directly by their owners and tap into that traditional Airbnb model in which guests are fed at least breakfast and can hang out a little with their hosts and, say, learn to juggle or commission a professional massage.

A few hosts manage several listings. And Reinman manages 48 — nearly a third of Humboldt's inventory. His rentals are mostly in Arcata and Trinidad, and most run between $200 and $400 a night. One, at $672 a night, is the most expensive on Humboldt Airbnb. It's a sleek vacation home built for a Redding surgeon and designed by Vancouver, B.C. architect Brian Hemingway to fit a long, narrow space overlooking the ocean in Trinidad.

Reinman is a full-time property manager, not a homeowner looking for a side income.

"I look at Airbnb as another channel to get people to book with us," he says, adding that he also uses TripAdvisor, FlipKey and VRBO.

But even Reinman, or one of his managers, meets his guests to give the transaction a personal feel. Recently, he's begun throwing mixers to get all of his guests together, and he also invites local vendors such as Holly Yashi and Kayak Zak's.

Reinman's success parallels Airbnb's — it's taken off. About nine years ago, the former Wall Street bond trader and Peace Corps volunteer was teaching math and Spanish when he decided to rent out his garage to vacationers. Then he helped a friend rent his house. Soon he quit teaching to market vacation rentals full-time.

Now he manages 60 properties (including the 48 on Airbnb) for 40 homeowners. He pays hotel taxes on all of them — and that'll amount to about $150,000 this year, he says.

Airbnb tells its hosts to check with their local regulatory agencies to find out what local taxes, fees and regulations apply to them. In Humboldt County and its cities, hosts are required to collect from guests 10 percent of the rent in hotel tax (called a transient occupancy tax) and 2 percent of the rent in tourism business improvement district tax. They need a business license. And some neighborhoods are not zoned for hoteling.

Local governments rely on self-reportage from hosts renting through sites like Airbnb. But many don't bother.

In San Francisco, where Airbnb started and where short-term residential rentals (30 days or less) are actually illegal, legislation is in the works to lift the ban and register, regulate and tax them. In New York City, the company's biggest market and where short-term rentals are illegal if the owner isn't present, the city pressured Airbnb into handing over its list of hosts; Airbnb, meanwhile, is pointing its finger at the city saying it wants to pay the $21 million it owes in back hotel taxes but can't because city laws render Airbnb spaces illegal. In Aspen, Colo., and Austin, Texas, Airbnb listings are now licensed and taxed. In Spain's Catalonia, whose Barcelona is awash in (illegal) Airbnbs, officials just lobbed a 30,000-euro fine at the company.

In Humboldt's own dinky, scenic city of Trinidad, city officials have been working since 2011 on a vacation rental ordinance. The city's just waiting for the California Coastal Commission to sign off on the thing, says City Manager Karen Suiker. It would regulate such things as parking and water usage, which matters because the whole city's on septic systems. It also might include a cap on the number of vacation rentals allowed in the city limits.

Suiker says people have trouble forming close-knit neighborhood watch committees in Trinidad because so many of their neighbors' houses are vacation rentals.

In Arcata, Finance Director Janet Luzzi says there doesn't seem to be an impact on housing stock in Arcata from short-term vacation rentals because so much of Arcata's housing stock is rentals. And, she says she's noticed an increase lately in the number of vacation rental owners who do report their operations and pay hotel taxes. Responsible ones include Reinman and Christy Laird who runs the eight-unit Arcata Stay Lodging Network.

But Luzzi wants to pull everyone into the fold. She's about to hire a contractor who will scour the Internet, add up all the short-stay Arcata rentals, and compare them to a list of ones already registered with the city. Then the city will send letters to those not registered telling them to get a business license (about $40) and start paying their combined 12 percent in hotel and tourism taxes.

"It's important because it levels the playing field for all those people who are collecting and reporting," she says. "I get a lot of whispers in my ear from folks who are being compliant. It bothers them that other folks are giving a 12-percent discount on their rates."

In Eureka, city staff is concerned about the scofflaw Airbnbers, says Finance Director Paul Rodrigues. Some hosts proactively abide by all regulations, he says, but there aren't enough resources to track down those who don't.

It's hard to know who, exactly, the non-reporting Airbnbers within city limits are, he says, because Airbnb listings don't give full addresses. But Rodrigues says he hasn't yet noticed a negative impact from short-stay rentals. And the city's got bigger priorities — like going after derelict motels that suck up police and other resources.

"Small cities already are strapped financially," Rodrigues says. "It's hard to chase small dollars when you're plugging holes everywhere else."

Humboldt County, likewise, hasn't noticed a drop in tax revenue collected from mainstream hotels since the rapid rise of Airbnb, says Humboldt County Treasurer and Tax Collector John Bartholomew. But it could happen, he says. Like Eureka, the county can't devote much effort to pursuing compliance. All 58 counties are struggling with this, Bartholomew says.

"Our association, the California County Treasurer and Tax Collectors, we've actually been discussing these issues," he says. "It's all about fairness — that we treat everybody the same."

If the traditional motels and hotels have to get business licenses and pay hotel taxes, he says, so should their unconventional counterparts.

"I anticipate we will have some proposed legislation for a legislator to pick up as part of their platform next year," Bartholomew adds.

County Supervising Planner Steve Werner says one major hurdle is zoning: Many short-term rentals are in residential zones not designed for transient occupancy. If such a rental has a resident occupant and the guests are served breakfast, it might qualify as a standard bed-and-breakfast — but owners still need to register under the cottage industry provisions. If a residentially zoned rental has only short-term guests, the homeowner can apply for a v-combined ("v" for vacation) overlay, which "establishes some performance criteria," Werner says.

"It requires a special permit," he says. "They could come into the planning department, apply, a notice would go out to the neighborhood and an opportunity would be provided to request a public hearing before the planning commission."

Then the owner can get a business license and go through the health and safety inspections that process requires, and start paying those hotel and tourism business district taxes.

The only place where there's a broad-scale v-combined zone overlay now, Werner says, is in portions of Shelter Cove. But there's talk about establishing an overarching vacation overlay pattern for the entire county, he says. County Supervisor Ryan Sundberg is working on this, along with other folks including Reinman, the vacation-rental magnate (who also worked with Trinidad on its ordinance). Sundberg did not respond to two calls and an email from the Journal.

Legalities aside, might all these homey vacation rentals popping up all over the county ultimately be a good thing?

Yes, says Tony Smithers, executive director of both the Humboldt County Convention and Visitors Bureau and the Humboldt Lodging Alliance. Airbnb, at least originally, targeted a visitor Smithers says Humboldt otherwise probably wouldn't get — "someone who's traveling on a budget but wants to see the area." It injects tourists into neighborhoods often not on the conventional tourist maps, which Airbnb proponents say is breathing new life into some areas.

"There's a whole new demographic sample now: millennials, who really want to experience a destination the way locals do," Smithers says. "Staying in a home, not a hotel, gives them that authentic experience they're looking for. And everyone in our industry is talking about how to package and market authenticity."

Smithers also praises Reinman and his steadily growing collection of upscale vacation rentals. These are places that might be sitting empty most of the year, except when their owners use them, Smithers says.

But yes, he says, you Airbnbers should be paying taxes.

"There's room for everyone and more power to you," says Smithers. "But you're benefiting from the destination marketing that we're helping to pay for through the bed tax and tourism business assessment. And you're benefiting from public safety and other street services that the bed tax pays for through the general fund."

Jocelyn Chapman doesn't mind paying those fees and collecting those taxes to rent her custom-designed home in Trinidad to vacationers. She lives in San Francisco now. She says she tried selling the home she and her ex-husband rebuilt 20 years ago. She tried renting it long term, using a property management company — but quit after a renter turned it into a marijuana grow house.

Now she lets Reinman handle it.

"Mike is very expensive," she says. "But he takes care of the cleaning, garden, insurance, water, utilities, Internet and maintenance. You get suitcases ramming into walls, and it's not like your own house where if something breaks you can just live with it. You have to fix it right away."

Even so, she makes more money from the short-term renters. But that's not to say there aren't problems.

Once, a college student rented the place, invited a few friends over, word spread there was a party and the place was overrun and trashed. Reinman says he let the woman pay off the $1,300 in damages and fine over six months.

Airbnb has a built-in vetting system with its reviews section, in which hosts and guests critique each other on their respective member profiles. Still, not every match works out. The Colloms say they had a guest who complained incessantly about their decorations. Garcia, with the West End Road farm house, once had a guest from Alabama whose mom made his reservation using her profile. He was 24, and very sick.

"His health was so bad," Garcia says. He seemed addled, she says, like a starving person. He couldn't figure out the bus schedule to town, and he begged her to go buy his juice. She didn't know if she should call social services. "I was really worried," she says. "I emailed his mom and said, 'Your son needs in-home care and that's not what I'm offering and do you know that his health is so bad?'"

She didn't hear back from the man's mother and, after his three reserved days, he left.

But, Garcia says, mostly her experiences have been good. And she'll probably keep hosting even if she has to start collecting local taxes. She'd probably raise her rates, though, which bothers her.

A school teacher, Garcia rents to university students in the fall and spring. During college graduation, she rents to students' families. In the summer she rents to vacationers, most here to see the redwoods en route to San Francisco or Portland. She gets several recurring guests, including San Francisco optometrist Lois Valenti, who occasionally works at Site for Sore Eyes in Eureka.

Valenti says Garcia's home is the only Airbnb she's used. "I like having Jenn and the other guests to talk to," she says. "Jenn has invited me to go dancing and we have made dinners with her friends and guests."

This coziness that can develop, these friendships — that's what Airbnb is about, say the Colloms. But being regulated might prompt them to shut their cheery door to the traveling set.

"Last year we made $11,000," Kath Collom says. "So to tax that at 12 percent, it wouldn't be worth it anymore. We'd have to charge more."

And that goes against the low-impact, low-budget ethic of the Colloms, who don't even own a car or cell phones.

It's serene and pretty inside the Colloms' home this early summer evening. Soft light filters through cloth-muted windows onto a blanket-draped couch, small kitchen, dining table and conga drums. An incense stick burns in a potted plant, a fountain tinkles. There's art everywhere — flower paintings, maps, sculptures and prints of boats; in one print, tall ships teeter on the cascading edge of the world. Airbnb guests get full use of the downstairs and can come and go through a separate entrance in the side yard, where tiny-dog Sam resides. The Colloms' private space is upstairs, including an office where Kath, a licensed massage therapist, will give guests a massage for an added fee.

Downstairs is where the stories unfold — and where the Colloms likely earn not just their guests' rave reviews (except for some complaints about the location), but also the most reviews (190) of any other Humboldt Airbnbers. As one guest, "Jack," wrote on their profile, "It is reaffirming to find two such partners who exude a joy of life well beyond just the financial 'race w the rats'!"

Tom and Kath love to share local history and tips with their guests, like the best spots for shopping, dining and exploring. Tactile Kath reaches out frequently as she talks to touch her listener's arm and say, "Girlfriend!" Tom, a naturalist guide with Friends of the Dunes, says he offers to take guests hiking if he has time, or he sends them down to the boardwalk at the foot of F Street to decipher what the decorative nautical flags, each a letter, spell out (go try it!).

"And we give every international guest a sand dollar from our local beaches," says Kath.

She stretches her slender frame onto the couch and Tom sits cozily by her feet. Their first guest ever, she says, was a guy packaging up the nuclear waste at Pacific Gas and Electric Co.'s power plant south of Eureka. Their favorite was 3-year-old Ari from a small island in Vancouver who played three-string guitar astonishingly well.

"The Chinese guests were a trip," says Tom.

The three, two women and a man, barely knew each other, he continues. They had signed up on a travel board at work. But the women waited on the man hand and foot; when Kath asked about it they said that's their culture. They spent their days sightseeing in the redwoods, and at night they grew generous and a little wild.

"Their first night I get home, walk in, and the table's spread out with food," Tom recalls. "The guy wouldn't even let me take a shower. He sat me down and fed me, and pretty soon out comes the gallon of Carlo Rossi sangria — you know, that really sweet stuff."

The man kept filling Tom's glass. Finally, the Colloms escaped to bed. Later they heard someone wailing downstairs. They listened, wondering if they should go check. They decided not to. The next night, Tom asked the man about it.

"He looked at one of the women and said, 'She had a lot to drink and she went crazy,'" Tom says. He and Kath laugh, remembering fondly.

They have more stories: The man from Florida who came here with his chemistry degree and was high as a kite the whole time. The Princeton woman who never did find their place. But also the many, many guests who walked in strangers and walked out friends. That's what makes Airbnb special, says Kath.

"It's all about connections," she says.

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Heidi Walters

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Heidi Walters has been a staff writer with the North Coast Journal since 2005.

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