We found out the hard way that a house near us is part of the vacation-ownership site Pacaso. We’re wondering if this business model is legal in our area—St. Helena is in the midst of a battle with the company—because our new one-eighth-share neighbors are partying it up when they’re in town. —M.
Pacaso, which buys properties and then sells one-eighth shares as vacation homes, has indeed purchased two in the area—one at 1131 Las Alturas Road in November, and the other at 2084 East Valley Road last month—and more could conceivably be on the way. A one-eighth share of the Riviera house (above) is $1.085 million, and all are spoken for; the Montecito house (below) is $1.294 million per share.
I ran the question of legality by the county’s Planning & Development department, which has regulations about short-term rentals:
Our regulations don’t consider cases where there are multiple owners, but I don’t think Pacaso ‘circumvents’ them, necessarily. If multiple owners are using a property, it’s not a rental at all, short-term or long-term. However, it seems like the concept is to provide multiple owners a vacation home, and this could bring some of the nuisance issues we see with short-term rentals from people who are only staying a short time. Our short-term rental regulations were developed, in part, to deal with these nuisance issues, maintain neighborhood character, and to preserve permanent housing stock. To answer your question, it appears selling multiple shares in a home is legal from a land use planning perspective—but something we should pay attention to.
It stands to reason that the city’s response would be similar. Then I asked what to do if a neighbor causes problems.
If someone has a complaint and believes a neighbor is violating the County’s land use ordinances (a parking violation, for instance), they may file a complaint. This site has information on how to do that. In some cases, it may also be appropriate to contact law enforcement (noise violations), and for the unincorporated County, this would be the Sheriff’s Office. If properties are location in a City, the City would need to be contacted for enforcement action.
A rep for Pacaso, meanwhile said that all owners must sign the company’s code of conduct:
Pacaso owners agree to abide by the following policies:
—Pacaso homes are designed solely for the personal use and enjoyment of owners and their personal guests. Rental of Pacaso homes is strictly prohibited.
—Large events or parties that would cause disruption for the neighborhood are prohibited.
—Quiet hours are observed from 9 p.m. to 7 a.m.
—Owners may bring up to two dogs onto the property. Dogs cannot weigh more than 80 pounds each and no other animals are allowed (except certified assistance animals).
—Pacaso owners are strongly encouraged to avoid parking on the street unless absolutely necessary.
—No trash or garbage is allowed to accumulate, and garbage containers must be stored out of sight except on collection day.
—No part of a Pacaso home may be used for commercial purposes.Violations of Pacaso’s owner policies may result in monetary penalties or a temporary suspension of stay rights.We are looking forward to being your neighbor. If you are a neighbor with a question or would like to report a concern, please contact us at [email protected].
There’s no way to know whether Pacaso’s threat of enforcement has any teeth, but the only way to find out is to tell the company when the neighbors get out of line. If the problem becomes widespread, the city and county could always follow St. Helena’s lead and try banning the model outright.
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At least the noise is only 1/8 of the time.??? What if my regular neighbour is noisy or has a vacation home he and his friends are using?
Sometimes it’s not the model itself what is wrong…
Just my 2 cents
Why not go to Picasso directly, as a potential buyer, and find out if you can rent your share out?
In Napa where they touted their Code of a conduct, there was one Pacaca that had a woman running a yoga retreat out of it, and a new one that advertised a “third bedroom that can be locked off and rented separately.” That was an ad they placed in the local paper. Where do you know an OWNER of a property that has to sign a code of conduct from a third party company to purchase (other than a developments CCRs). It operates like a timeshare and relays on the neighbors to encore the rules via complaints to a “home manager” employed by Pacaso. It’s a transient vacation rental in the guise of ownership.
Peaceful living space is essential. This article reminds me to avoid stack and pack multi-family units, to never share a wall, and to seek an acre or more for distance from inconsiderate others. Occupied ADUs built right up to the contiguous neighbor’s border pose a similar problem. WHY no demand from locals to City or County of Santa Barbara officials to push back?
Totally agree!
The city of Palm Springs is attempting to ban Pacaso from doing business there. PS claims Pacaso’s business model is a time share which are not allowed. Pacaso denies this. PS is following St. Helenas lead and it will most likely end up in court.
Sounds like you have little to know information and you are clearly making assumptions.
You clearly don’ know how to use the word ‘no’. Possibly take an English course before posting to social media.
Burn in hell Pacaso.
This type of fractional ownership scheme is the new Air BnB. Better stop it before it swallows your neighborhoods. St Helena was smart. It banned any scheme that limits an Owners USE of the property to less than a year. It’s about transient use and those people are not becoming part of your community at 14 day stays at a time. In Napa they took a home in a working class neighborhood and priced out a family who was renting here and waiting for an opportunity it’s to buy. They have billions. It’s the corporatization of residential neighborhoods…
Please read the revised timeshare/fractional ownership ordinance that St. Helena’s City Government unanimously passed in April to prevent Pacaso from buying and operating more vacation properties in residential areas. In short, it is the USE of the property, not who owns it, that determines a violation of city ordinances. Pacaso wishes you to believe it is not a timeshare, yet the “owners” must share time with the others at explicitly set stays and times. Their scheme is nothing more than unregulated, transient occupancy vacation properties, right in the middle of neighborhoods of families with young children, local workers and retirees. Cities create zoning ordinances to protect the safety, peace and security of its citizens, and Pacaso’s business model should never be allowed to circumvent these local laws.
https://sthelena.civicweb.net/document/61679/Second%20Reading%20Ordinance%20Adding%20Chapter%2017.138%20.pdf?handle=499CA77709B24CD18370D22464E94CC3
EXACTLY, Connie! The ordinance does not ban a family from sharing a home for vacation use (though that may be just as bad for a neighborhood) and it doesn’t ban children who inherit a property from using it as a second home occasionally. It bans Corporate schemes that predatorily snap homes off the market in desirable areas so that tourists can “own it” and party. (No local buyer can compete with a billion dollar company paying all cash with a 15 day close. We had a neighbor who couldn’t when Pacaso snapped up a 1950’s home in our working class neighborhood, paying 900k more than it sold for 3 years prior.) Here’s another tidbit. Not only do these people skirt TOT that hotels have to pay tosupport the locals, the actual property isnt reassessed for tax increases , at least in California, unless more than 50% of the ownership changes. So as these time-sharers buy and sell their 1/8 shares over 20 years, the neighbor’s property taxes that support schools, fire, police etc, continue to climb as homes are sold. These timeshares then become a DRAIN on the local economy in even more ways. Pacaso doesn’t sell more than 4/8 shares to any one buyer as I understand it…so likely never will more than 50% sell at one time…since the “owners” don’t know each other. It’s BAD FOR COMMUNITIES.
Pacaso timeshares are built for partying. Just look at how they write them up on their website. We have 4 in our small town. Garages are turned into extra bedrooms, pools and hot tubs are added and every square inch is designed to fit as many bodies as possible. And I am talking mid-level homes within feet of the neighbors. When sharebuyers only have 2-14 days to justify the huge bucks they are shelling out, they want to make the most of it. So expect more noise and disruption. And move fast to stop this wily, predatory company.
I never thought I’d be happy to live in a boring town. I can’t imagine hearing loud noises all night and day for a couple weeks and then having to adjust to completely different loud noises all night and all day for a couple weeks God knows how many times a year. I already can’t sleep enough. Anyway I’m with you from a hick town in NC. We would not be happy about that.
Imagine paying 1.2 million for 1.2 months a year in a shared house? Where other random [people sleep and do the dirty (and worse) in the beds… Nothing about the economics of these houses makes sense. There is no upside, especially when they were all sold in the biggest bubble in decades. Besides the poor economics and upside, you are at the mercy of a corporate entity that may or may not be in existence in 5 years time… Who the heck buys these?