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Against Pacaso’s ‘fractional ownership’ scheme

Posted on May 28, 2021 by Sonoma Valley Sun

We worked hard to block Vacation Rentals in our residential area. It took two-plus years to obtain an “X over layment” Zoning from the County. Now, a company called Pacaso is circumventing that zoning by purchasing a home and then selling fractional shares (LLC or Time-share) in the ownership, making them vacation homes.

I am not opposed to time-shares in the appropriately zoned areas, but not in residential areas.

Some Background: Pacaso was founded in 2020 by Zillow co-founder and former CEO Spencer Rascoff and founder and former CEO of dotloop, Austin Allison. According to Forbes, “The company specializes in subdividing vacation homes among multiple owners, in most cases buying them up front and managing their use. The startup says it has also secured $1 billion in debt financing.“ With its deep pockets and slick marketing, Pacaso thinks it can do business in any community and ignore regulations pertaining to time-shares, vacation rentals, and transient occupancy.  Their position seems to be that because a vacation home is owned by an LLC, rather than being rented, none of these regulations apply.

As I understand it, they have purchased 1405 Old Winery Court and turned it into a time-share. They are not doing just “high-end homes,” but homes in nice neighborhoods. A group of neighbors have started a petition to stop time-shares in our residential area. This petition is to oppose the incursion of Pacaso’s fractional ownership vacation homes into the residential neighborhoods of Sonoma and nearby communities.

I highly encourage all of you to sign the petition (at Change.org) and get involved. Those of you living in the City of Sonoma may have to start your own petition.

— Micki Goedewaagen, Sonoma

 



3 thoughts on “Against Pacaso’s ‘fractional ownership’ scheme

  1. This sneaky business model pays no occupancy or transient tax. Depriving the local governments of revenue needed to deal with increased traffic, air pollution, etc generated by the whirlwind of visitors coming through the revolving door of the Pacaso homes. I don’t know any Sonoma neighbours who want this scam in their neighbourhood. Let’s ban this time share scheme from Sonoma

    1. EXACTLY!

      Rotating occupants degrading your neighborhood, not getting to “know your neighbors”.
      No moneys going to the local governments, means locals will have to deal with increased taxes to cover costs for infrastructure, etc.
      I was born and raised in “sleepy old” Sonoma,
      my Grandparents owned Neuman’s on Millerick Rd 1914-1948 and were very well known.
      Sad to see what the “Johnny Come Latelys” are doing to what used to be a wonderful place for a kid to be safe and grow up.
      Could the various municipalities band together as in a class action lawsuit against this type of developer?? Rather than having to take them on individually?
      Hopefully you can save what’s left of Sonoma, the Clydesdales have already left, what a loss to the community.

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