The guest editorial by Sarah Filosa, Pacaso Public Affairs Manager in Park City, that appeared in the September 3-6 edition of the Park Record, completely misrepresents the impact of unchecked fractional ownership in single family neighborhoods.

The incursion of Pacaso into many communities has resulted in a flurry of activity. Several communities have successfully petitioned courts to issue cease and desist orders to stop Pacaso including South Lake Tahoe, CA, Palm Springs, CA, Carmel-by-the Sea, CA, and Monterey County, CA.

Several others have crafted new regulations, some of which have already been enacted, to specifically ban fractional ownership. These communities include North Haven, NY, St. Helena, CA, Paradise Valley, AZ, Palm Desert, CA, and Indian Wells, CA. In the case of St. Helena, CA, Pacaso’s response was to sue the city. This may be a “test case” of sorts and Pacaso has demonstrated that any community opposing their practices may face costly litigation.

Many of these cities had long standing bans on short-term rentals and timeshares. However, new regulations were deemed necessary as Pacaso has repeatedly claimed that short term rental and timeshare bans do not apply to their model.

In her guest editorial Sarah Filosa writes “Pacaso homes are owned by an average of six families who come back over and over again, just like any other second homeowners. It’s not a revolving door of thirty new groups on average every year like you find in short-term rentals.” Ms. Filosa ignores the fact that many communities have made it clear they perceive Pacaso’s model as a timeshare. Communities that have banned short-term rentals and timeshares value a traditional single family home experience that would be destroyed by the incursion of fractional ownership into their neighborhoods.

Ms. Filosa goes on to state “Pacaso is committed to supporting the Park City community and maintaining its existing character.” If this is to be believed, why is Pacaso fighting back and litigating against communities that perceive their model analogous to a timeshare and thus not allowed? Pacaso does not seem to recognize existing community bans on timeshares and has proven litigious when challenged. Ms. Filosa also states, “there are about 6,500 second homes in Park City which, on average, sit empty 89 percent of the year.” Ms. Filosa does not cite any sources for these figures. Nonetheless, she ignores the fact that vacant homes do not contribute to our already overcrowded roads and trails, our overbooked restaurants, or our crowded ski resorts. Increasing occupancy of existing homes will only exacerbate these issues. This is especially true since the high-end homes desired by Pacaso can accommodate large numbers of people. It does not appear that shareholders will be limited to the number of guests they can bring.

Admittedly, Park City and Summit County have many housing challenges. The most pressing issue seems to be the lack of affordable housing. Selling shares in multimillion-dollar homes for which shareholders have only 6.5 weeks of residency in two-week increments will not alleviate the housing shortages facing our community.

The Park City Planning Department is proposing Land Management Code amendments that will “prohibit fractional ownership of Single-Family Dwellings in primarily residential areas.” Furthermore, the proposed amendments will “allow fractional ownership of Single-Family Dwellings in those zoning districts where Timeshares and Private Residence Clubs are allowed.” I urge the Park City Council to adopt these proposed amendments and for the Summit County Council to follow suit.

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Housing availability and cost is a complex ongoing problem facing Utah as we remain one of the fastest growing states in the nation. Balancing the need for affordable housing while still preserving open space and maintaining the character of existing neighborhoods is especially challenging. Unfortunately, there is a new player in the housing market that particularly threatens established single-family home neighborhoods in Summit County and throughout the state.

Fractional ownership, or timeshares, are nothing new and such ventures are well established in many areas of Utah and are mostly clustered near resorts. Fractional ownership is allowed at many condominium and vacation club projects in Utah that currently serve a certain clientele consisting of mostly vacationers and investors.

However, there are now companies trying to establish fractional ownership in existing single-family home neighborhoods, many of which that expressly prohibit short term rentals in order to preserve their community environment. Seemingly most active in this arena is Pacaso, a San Francisco based corporation. Pacaso is currently purchasing homes in desirable locations throughout Summit County and Utah.

Once Pacaso or companies like them purchase a single-family home they form a unique Limited Liability Corporation  (LLC) which then sells shares (usually one eighth) of the property. In this case, each “owner” receives 6.5 weeks availability per year, but they cannot stay more than two weeks in a single visit. This results in a minimum of twenty-six changeovers in residents/occupants per year. If the “owners” choose to sublet their available time the frequency of arrivals and departures could be exacerbated. Even if subletting is prohibited, policing such activities is nearly impossible given the proliferation of vacation rental websites. Pacaso also collects various monthly fees from each shareholder to manage the property thus effectively setting each home up as a business which is also expressly prohibited by many homeowners’ associations.

If this practice is allowed in primarily single-family home communities it can only produce negative impacts for the residents and will change the very nature of our neighborhoods. In my view this practice should only be allowed in areas already zoned for fractional ownership of some sort.

The Park City Planning Department is already studying this issue and is proposing to allow fractional ownership of Single-Family Dwellings only in those Zoning Districts where Timeshares and Private Residence Clubs are currently allowed. The Summit County Council has acknowledged they are aware of this issue and are planning to consider it as part of a broader discussion of the housing situation in the county.I urge all residents of Summit County to contact their representatives and beseech them to prohibit this practice at least in established single-family neighborhoods.  The tranquility and family friendly atmosphere of these enclaves is being threatened in a fundamental way.

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