Summary:
Pacaso has sold over $1 billion in shares, offering fractional ownership in luxury homes.
The startup aims to resolve the "empty second homes problem" in California's vacation spots.
Communities like Sonoma have raised concerns about rising housing prices and community disruption.
Pacaso homes reportedly see 89% usage compared to 39% for traditional second homes.
Owners appreciate the model for making luxury living more accessible and fostering community ties.
The Rise of Pacaso
Pacaso, founded by Austin Allison, addresses the "empty second homes problem" in California's sought-after vacation spots through co-ownership. The startup has sold over $1 billion in shares, boasting listings in 40 markets worldwide, including Europe and Mexico. With ambitions to expand into the Caribbean, Pacaso has achieved unicorn status shortly after its launch.
Challenges Ahead
Despite its growth, Pacaso faces legal challenges and community pushback. Cities have sought to regulate its operations, with some like Sonoma outright banning fractional ownership. Mayor Patricia Farrar-Rivas expressed concerns that Pacaso's model drives up housing prices and disrupts community cohesion.
Innovative Ownership Model
Pacaso allows up to eight owners to share a luxury home, granting each 44 days of use per year. Critics argue this model circumvents regulations meant for short-term rentals. However, a report from the Bay Area Council Economic Institute claims Pacaso homes are utilized 89% of the year, compared to 39% for traditional second homes.
Community Relations
Allison acknowledges the initial resistance from communities, emphasizing that Pacaso owners are more invested in their neighborhoods than typical short-term renters. The company has worked with cities like Palm Springs to establish co-ownership guidelines that differentiate its model from short-term rentals.
Controversies and Criticism
Despite its successes, residents like Craig Kipp from Park City, Utah, express concerns over the long-term impact of co-ownership on community character. Critics also highlight issues with how Pacaso markets properties, claiming some homes are listed without owners' consent.
Positive Outcomes
On the flip side, many owners praise Pacaso for providing access to luxury living that was previously unattainable, fostering a sense of belonging within the community. Jon Grauman, a luxury real estate agent, shares his positive experience as a fractional owner in Napa Valley, feeling more integrated into the area.
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