Facts About LLC Co-ownership in St. Helena

I have lived in the Napa Valley for nearly 24 years, with 20 of those years in St. Helena. I have worked in both Calistoga and St. Helena, and have spent the last decade in the local wine industry. My partner and I raise our children here, and we are active voters, volunteers, and supporters of neighboring local businesses.As someone who calls St. Helena home, I was disappointed that the St. Helena Planning Commission recently proposed new rules to outlaw shared home ownership, in a move plainly targeted at my employer, Pacaso. For context, Pacaso serves a total of four homes in the City: that’s just 0.1% of all homes in St. Helena. These homes are co-owned 100% by families in individual property LLCs. Pacaso supports these families as their full-service property manager. It’s no secret that we at Pacaso don’t see eye to eye with the city of St. Helena on their attempts to limit LLC co-ownership under the guise of limiting timeshares. We oppose this latest proposal because it is a governmental overreach into how people can own real estate.As a company, we aim to work with communities to find common ground, and that’s the path we chose in St. Helena. Unfortunately, City leaders, as recently as this January, have rebuffed our good-faith attempts to find a reasonable compromise to resolve our differences. Not content with threatening to spend millions of dollars in public funds on needless litigation costs, the City now appears dead-set on a regulatory path that would limit people’s right to own property in ways that go well beyond co-ownership through Pacaso. We think that’s unfortunate, especially as we can hopefully all agree that this City’s time, energy, and resources are better spent addressing the very real challenges this community faces, including vacant storefronts, access to affordable water, and dry-season preparedness. LLC co-ownership has been an established practice for decades. To date, this has taken the form of several friends sharing a second home or grandchildren inheriting a home. According to County tax assessor records, more than half of residences in St. Helena (50.6%) are owned in an LLC or a trust that allows for multiple owners. That’s just what Pacaso does — it helps people own real estate in an LLC. Assurances from City staff that “not all properties” owned in an LLC are in the City’s sights for future enforcement actions should be little comfort to anyone who co-owns property with friends and family, and will presumably have to open their books and prove to City code-enforcement officers that their ownership arrangement is acceptable in order to stay in the authorities’ good graces.Second home ownership can be inefficient, exclusionary and wasteful, as second homes owned by just one family typically sit vacant up to 80% of any given year. Pacaso, on the other hand, offers a more sustainable way to own and enjoy a second home. In return, St. Helena benefits from year-round economic activity from better-utilized second homes, and a more vibrant community filled with families with a long-term connection to the community — not empty homes with the blinds closed.We strictly vet buyers, and we actively enforce rules that ensure that Pacaso owners are responsible, committed, and respectful of the space they are in. We also do NOT allow Pacaso owners to use their homes as short-term rentals.Our local economy is built on the service industry, with world-class restaurants, wineries and hotels. It’s no surprise that people wish to own property here and enjoy the lifestyle for more than the occasional weekend. With this in mind, I find it astonishing that local leaders would send the message to aspiring homeowners who value our way of life that they cannot fully partake in the Napa Valley lifestyle unless they have the means to own 100% of a home. We will continue to stand by people’s right to own a house in any configuration that they choose. A vote for the City’s ordinance is a vote for intrusive, restrictive homeownership policies and litigation costs at the expense of important local causes, and a vote against supporting our small businesses year-round. Before committing to this path, let’s think carefully about what kind of community we want to have, and not give in to overheated rhetoric about four homes.

Why we’re standing up for LLC co-ownership in St. Helena

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