NAPA (KPIX) — A new real estate company is buying homes in single-family neighborhoods and reselling them to up to eight owners at a time. Neighbors in Napa Valley say it is making a bad housing crisis even worse.
Rainier Avenue in Napa is a quiet, working-class neighborhood with 1,300-square-foot homes normally selling for about $700-800,000. But one was just purchased by a company called Pacaso that is offering the house for sale to up to eight buyers, each getting 44 days in the home and each paying $184,000 for their share.READ MORE: Former California Senator Barbara Boxer Assaulted, Robbed In Oakland's Jack London District
The idea of offering a “time-share” vacation home in a suburban neighborhood isn’t sitting well with the neighbors.
“It’s people that aren’t going to use the doctor here, the dentist here, their kids won’t go to school here. And they’re not paying transient tax,” said neighbor Cindy Ruff. “Rent a hotel, rent a condo, but not sneaking into our neighborhoods. This is where we live!”
“Second home ownership is a problem in itself. This, I think compounds it,” added neighbor Paula French.
They say converting residential homes into co-owned vacation houses is making it harder for working people to find an affordable place to live.
Pacaso founder and CEO, Austin Allison says by selling a home to eight buyers rather than one, they’re actually easing the housing crisis.READ MORE: New Wildfire Burning In Tulare County In Sequoia National Forest
“For every one Pacaso that we manage in a market, we’re removing up to eight second-home owners from that competition pool that the primary owners would have otherwise been competing with,” he said.
Allison says because Pacaso homes are owner-occupied, they are not time-shares. But in St. Helena, where Pacaso has purchased other homes, the City Attorney disagrees and has declared them illegal under a town law prohibiting time-shares.
Pacaso has filed a lawsuit as a result. Meanwhile, in Napa, where there is no law against so-called “fractional ownership,” the Rainier Avenue neighbors can only let the company know how they feel about it by displaying signs on the street that say, “Don’t commercialize our neighborhood. Stop Pacaso.”
“We’re trying to figure out how to do this,” said neighbor Thom Lichtenstein. “We’re going up against a billion-dollar corporation and we’re flinging stones.”
Allison says his company is offering second-home ownership to people who may not be able to afford it or who don’t want to buy a house that will be vacant for most of the year.
“It’s really not up to other neighbors to say who can or can’t own in their neighborhood,” he said. “Just because somebody can’t afford a $1.5-million home, doesn’t mean they shouldn’t be able to co-own a $1.5-million home with a couple of other people of their choosing.”MORE NEWS: East Bay Area Residents Among 4 Killed In Horrific Minnesota Accident
Pacaso was only formed about six months ago and is currently operating in about a dozen markets in Western states. Over the next six months they say they plan to expand throughout the entire United States and, eventually, internationally, as well.