This petition is to oppose the incursion of Pacaso’s fractional ownership vacation homes into the residential neighborhoods of Sonoma and nearby communities.

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.com, “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. 

Pacaso is currently operating fractional ownership vacation homes in Napa, St. Helena, and other North Bay towns. The company has just purchased a property at 1405 Old Winery Court, Sonoma, and has listed it as “available now” for eight ownership shares. This house is part of a quiet cul de sac of only eight homes.

Houses listed on Pacaso could have been sold to local families.  Instead, they are destined to be flipped into vacation homes.  It is unlikely that Sonoma residents will ever get to live there. Meanwhile, the increasing demand for vacation homes will continue to drive prices out of reach for working class families.

The City Attorney for St. Helena has found that Pacaso’s model is simply a time-share model by another name, and has informed them that the City intends to prohibit such uses.  Pacaso’s response was to file a law suit claiming that the prohibition is an “Invalid Use of Municipal Authority.” In other words, St. Helena doesn’t have the authority to regulate the kinds of uses that occur within its boundaries. Pacaso is attempting to circumvent both the rule and intent of these regulations through the legal sleight-of-hand of “fractional ownership”.  They argue that since a vacation home is owned by an LLC of 8 members, rather than being rented, the rules don’t apply. 

The Sonoma area has dozens of hotels/motels, licensed bed and breakfasts, and legally permitted short-term vacation rentals (STRs). The hotels/motels are located in commercially-zoned districts. The B&Bs and STRs are allowed in residential neighborhoods under strict regulation. All of these hospitality businesses collect and pay transient occupancy tax.

Pacaso would have you believe that their model of buying up houses in residential neighborhoods, upgrading them into party houses, and selling shares to transient vacationers is not a commercial enterprise and should not be regulated in any way. Like the residents in nearby communities, Sonomans are actively protesting the conversion of houses in their neighborhoods to fractional ownership vacation homes. 

Those of us opposed to Pacaso’s scheme are concerned that it will have multiple negative impacts upon the quality and character of neighborhoods. If Pacaso is allowed to circumvent the regulations designed to protect our neighborhoods, all the typical problems associated with transient occupancy in residential neighborhoods can be expected.

We the undersigned strongly oppose the incursion of “time-shares” by any other name into our neighborhoods.  We ask you to support our position by signing this petition.