Catering to the wealthy for second and third homes is NOT solving the housing crisis……….
August 24, 20216:30 AM ET
Brad Day and his neighbors in California’s Sonoma Valley have noticed a real estate startup is turning houses in their community into limited liability corporations. A group has formed to oppose the company’s moves. Day’s favorite sign reads, “The Pacaso house is the big one on the right with no soul.”
The county, Day says, had designated their neighborhood an “exclusion zone,” which bans Airbnb-style, short-term rentals to preserve the “residential character” of communities. But Pacaso argues that its clients are not short-term renters. They are co-owners of an LLC. This also means they don’t have to pay the typical taxes on short-term rentals. Likewise, in the nearby town of St. Helena, Pacaso was trying to circumnavigate a city ban against timeshares with the same argument. Day says he and his neighbors saw Pacaso’s newfangled business model as nothing more than a “glorified timeshare” with a legal strategy aimed at “skirting regulations that are designed to keep communities intact.”