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Beach-goers enjoy the summer sun on Live Oak Beach near a... (Larissa Mueller/Sentinel file)
LIVE OAK — A new county law aimed at rowdy summer vacationers is proving to be an unexpected boon for the county, doubling the number of vacation rentals on the books and potentially adding more than $1 million to the county's tax rolls, a Sentinel review of tax records has found.
The flood of new registrations began even before the law was passed, when county officials made clear that existing rentals operating without a license would be grandfathered in, a move that triggered a rush to the county building.
The development is surprising since rental owners during the debate over the new law consistently portrayed themselves as law-abiding, tax-paying operators, said county Supervisor John Leopold, who represents Live Oak and was a driving force behind the new law. But, he added, the law was not about drumming up revenues for the cash-strapped county.
“The driver of creating our ordinance was about neighborhood preservation, not about collecting money,” Leopold said.
Before the law's passage, the county raked in about $4 million annually from transient occupancy taxes, mostly from large hotel or resort operations such as Seascape Resort. But about $1 million of that money comes from rentals of homes, in-law units or studios, providing a cozy entree for vacationers from across the globe to Santa Cruz County's charms.
When the county began serious debate on the controversial law in June of last year, about 120 vacation rentals were registered with the county, paying the county's 10 percent tax on short-term rentals. That number is now up to more than 230 — and it's expected to climb higher. Even by conservative estimates, that should at least double the $1 million in tax revenues that comes from rentals of homes, in-law units or studios.