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Over-tourism Issues face Napa

Writer's picture: Paul WagnerPaul Wagner

It has been a strange year for tourism around the world. From Juneau to Venice, Barcelona to Bhutan, local inhabitants have taken to the streets to express their concern about the impacts of tourism on their local community. And while Napa has yet to see a protest, there are plenty of grumblings about the impacts tourism has on our community. The money tourism brings to Napa funds as much as forty percent of the local government budgets, but is that enough to counteract to high costs of living, the traffic, and the loss of a real sense of community?


Clearly, Napa as a world-class tourist destination impacts our community in many ways. The most obvious positive ones are increased employment, economic benefits, tax revenues, and increased/enhanced lifestyle options for locals. Negative impacts are the cost of living, especially housing costs, and traffic. But the question for many Napans is whether or not we have that balance right, and what we can do about it. And few in the city or county government seem to be looking at the topic in those terms.


The economic benefits are well documented. According to the recently released 2023 study by Visit Napa Valley, the local agency in charge of promoting tourism in Napa, we receive 3.7 million visitors per year, which generates some $2.5 billion in revenue, and $107.5 million in tax revenue. Given the struggles of local government to pay for the services we currently receive, it is hard to imagine what Napa would be like without this money.


And it’s not just money. Again, according to that same survey, tourism generations over 16,000 jobs in Napa, and those jobs generate approximately $500 million in salaries. Few people in Napa can look at the street they live on and not identify at least one neighbor who is employed in tourism here. But those jobs are not particularly well paid. The Napa Valley Vintners Association prides itself on paying agricultural workers the highest wage for such workers in America, more than $40,000 per year. But based on the study from Visit Napa Valley, the average salary of a working in the tourism and hospitality industry is far less than that, below $32,000 per year.


The Napa Valley Vintners has a Napa Neighbors program that offers discounts to local residents. The discounts, in most cases, are 10% off, or perhaps a two-for-one tasting. But when the average price of a bottle of Napa Cabernet is now more than $100 per bottle, according to a Forbes magazine article, it’s a safe bet that few workers in Napa’s tourism business can afford even a single bottle, even with the ten percent discount.


Natalia Guzman, a recent graduate of Napa Valley College’s Wine Program, lamented this recently when she explained that the students in the program can’t afford to buy or taste the wines from local wineries. “It’s sad and frustrating,” she said, “I’d like to know more about these wines, and tell people about them, but as a student, there’s no way I can afford to try them.” She is working with local wineries to create a program for the students, but progress has been slow.


It’s not just the wines in Napa that have priced themselves out of reach of the local community. The median price of a single-family home in Napa is now nearly $1 million, and the prices continue to rise to meet demand. “We are pricing ourselves out of existence,” said John Salmon, a local developer. “And locals can’t afford what we offer to buy what we’re selling.” Some of that is a result of absentee owners, people who don’t live in Napa, but have a second home here that they use a few weeks of the year. “In the Napa Yacht Club, where I live,” said Salmon, “I would guess that 25% of the houses are owned absentee owners.”


“It’s even worse in Yountville and St. Helena,” says Chuck Shinnamon, who has brought this to the attention of local leaders. He is citing a housing study commissioned by Napa County

Supervisors. In those two cities, the ratio is about fifty percent. “Half the housing in those towns is not available for locals.” The study cites a mismatch between the larger, more expensive homes that continue to be built in Napa County and the need for more affordable housing for those working in the key sectors: agriculture, tourism, health care and education. “If the workers in those sectors cannot afford to live in Napa,” says Shinnamon, “then we begin to lose the sense of community. That’s huge.”


It’s not a problem unique to Napa. Tourist destinations around the world are struggling to come to grips with these issues. Venice now charges a fee for day-trippers to enter the city. Juneau, Alaska, Mallorca Spain, and other cities have announced limits to the number of cruise ships allowed to dock in their ports/ And Amsterdam even went so far as to run an advertising campaign asking tourists to stay home. Tiny Bhutan charges every tourist $100 to enter the country—funds which are then used to mitigate the impacts those tourists have on the local community.


Protests in Spain have been given international coverage this summer, with residents squirting tourists with water pistols in Barcelona and marching the streets in Valencia. “We have to do something,” says Santos Morales of Sevilla. “The situation is insane. There is no room for locals to live.” Morales lives on a small plaza near the cathedral. “When we moved here, thirty years ago, there were fourteen houses and fourteen families. Now eight of those houses are for tourists. We’ve lost something very important, our community.”


In the Balearic Islands, the situation has become a crisis. “We have no housing for the people who need to live here,” says Pedro Amengual of Mallorca. “Twenty-five percent of our houses are owned by foreigners. In Ibiza it is so bad that schoolteachers are forced to live in tents on the beach, there is no housing for them.” Being on an island seemed to exacerbate the problem. In Galveston, the nearest communities off the island are twenty minutes away across a causeway—in an area beset by tropical storms. The city is currently considering raising the minimum wage for hospitality and tourism employees to over twenty dollars an hour, a huge jump from Texas’ $7.25. The Canary Islands has similar problems, with housing costs being beyond the reach of those working in tourism.


Linsey Gallagher, executive director Visit Napa Valley, recognizes the problem. “The ability for our staff members to live in Napa, that’s a challenge,” she says, “many of them are driving in from a long way away. But the hospitality industry is charging an additional 1% of Transient Occupancy Taxes (TOT) to support workforce housing, and that’s now up to $23M that we are providing to local communities to help solve this problem.”


That may make a difference, but the amount of traffic into Napa each morning paints a different picture. Kate Miller, the Executive Director, Napa Valley Transportation Authority, has her doubts. “It is not the tourists that are causing the traffic,” says Miller. “It’s the workers who serve these tourists that are causing the traffic. Local trips are up to 60,000 or 70,000 per day. And when you add in the more than 30,000 people who commute into Napa, it’s clear that while the jobs may be in Napa, but many of the workers are coming in from Fairfield, Vallejo, American Canyon, and beyond.” (It should be note that approximately 25,000 people commute out of Napa County to work as well.)


The NVTA is currently in the process of awarding the contract for the next study traffic study. “We know that Bel Air Plaza is the number one traffic generator,” says Miller, “and fifty percent of the trips by people in Napa are trips under 5 miles. A lot of those could be done by walking or biking or public transit. That would get cars off the road. But our highway infrastructure has made it really easy to commute. We’ve gotten rid of our streetcars, and so many of our communities have been built around the automobile rather than pedestrians.”


Miller explains that making bigger highways is no longer an option. “Highway capacity expansion doesn’t really work,” she says, “it just increases demand. And Caltrans can no longer fund that kind of growth. They are resisting simply increasing capacity. Roundabouts get approved because they also improve safety and allow bikes and pedestrians more safely. But they also increase traffic flow, without adding new lanes. That will make is easier for workers to get here, adding roundabouts, removing traffic lights, both in Napa and American Canyon. We’re also looking at the intersection of Highway 12 at Highway 29 with the same goal. We have lots and lots of projects for the future.”


Can tourism dollars fund this level of construction? “Measure U will fund some of this. about $1.2 billion,” says Miller. “And this would not be a new tax, it just continues Measure T. And we need to do it now. We are losing ground—construction costs are rising at fifteen percent a year, bond rates are going up at 2% a year. Every year we delay, we lose ground. And I want to point out that this money doesn’t go into the pockets of government, it goes to contractors who are doing the work. Without that, we have to piecemeal everything together. It’s much slower that way and it always costs more.”


But the essence of the problem is simple. “We are not providing housing for our workers where they work,” says Miller. “That’s true all over California.”


“Look, it’s a simply law of supply and demand,” says Randy Gularte, a realtor with fifty years of experience in Napa. “There is limited that land can be developed. Years ago, the Get a Grip on Growth movement really limited the housing units that could be built. Now it’s come back to bite us. You can see the same things in places like Carmel and Marin. But developers go where the money is. In Napa, that’s in single family homes.”


“The trend is that the lower paying jobs are held by people not living in Napa,” says Napa Councilwoman Beth Painter, who has forty years of experience in land use and planning. “Even if you wanted to take public transportation, it’s not really an option. So yes, we are adding traffic to the roads. Restaurants, hospitality, wineries, retail, those are all low paying jobs.”


“We’re spending money on freeway exchanges, but we’re not creating the support systems for the people of this community.” says Cass Walker of the Gasser Foundation. “75% of City of Napa workers used to live in Napa, now those figures are reversed. It’s closer to 25%. Yes, there is money being spent on affordable housing, but without the rest of this infrastructure in place, we are just making things worse. Retired people can’t afford to move out of their homes into smaller houses, which means that many large homes are not available for families. That makes for an aging community—one that no longer has school age children. Our schools are shrinking, and our families are moving outside the area. Then they either commute here to work, or they work elsewhere.”


“What we need most in Napa is children,” admits Napa Mayor Scott Sedgley. “It’s not possible to build our way out of that. A lot of our commuters are happy not to live here. And we don’t have the population density to justify public transit right now. Public transit just doesn’t address the workforce. I think we should look at making transit free. If we can get more mixed-use downtown that will help.”


The three key elements, jobs, housing and traffic, are all connected. “The biggest employers in Napa are tourism, wineries, health care, and schools,” says Jeri Hansen, executive director of the Napa Chamber of Commerce. “But the employees of those industries can’t afford to live here. Housing costs are too high. At the same time, there are lots of people who are driving out of Napa to work every day. Where are they going? Could we attract some of those businesses to Napa? How do we provide some of those high-income jobs here in Napa? We are building jobs at a fast rate, but only for people who live in Fairfield, or Vallejo, or Dixon. How is that helping Napa?”


Hansen points to a lack of information, and a lack of resources. “The Napa Valley Economic Development Center disappeared in 2009, and the Small Business Development Center is now a shared office with Solano County,” she says. “The City of Napa has a development department, but they are mainly focused on helping new businesses navigate the local permitting system. They don’t really focus on attracting targeted businesses. We need to diversify our economy, but we don’t know what would work right now. The Chamber is studying this, and we hope to have some answers by spring of 2025.”


The task is a formidable one. Building housing for 30,000 commuters would overwhelm Napa, especially since so much of that housing would have to be affordable. And building affordable housing in Napa is a challenge. Finding jobs for the 25,000 that currently commute out of Napa might be just as difficult.


“There are a lot of impediments to trying to get anything done,” says John Salmon. He lists them off. “Permitting is slow and expensive in Napa, and we don’t give anyone a break for affordable housing. Zoning is another. So many parts of the city simply aren’t zoned in a way that makes affordable housing possible, including large tracts of publicly owned property. I’ve tried. The fundamental costs to adding housing, even when I got land for free, simply didn’t pencil out. The costs won’t even let you come close to breaking even. The requirement that we provide a parking space for every bedroom, well, with housing in the urban center, maybe we don’t need so many parking places. People could walk or take transit. But that’s not in the regulations. We keep doing what we’ve always done, and it’s not working.”


Hansen agrees. “Right now, we would like to see more affordable housing built, but the city also requires every new construction to have a parking space for every bedroom,” she says. “If we could build housing downtown, some of the people wouldn’t need parking because they could work within walking distance. But everything is Napa is designed around cars.”

“The new general plan will allow higher density housing,” says realtor Gularte, “We’ll get more condos and apartments built. And that will help soften the market. But I bet that thirty percent of the new owners in the Napa Pipe project are going to be second homeowners, and that won’t help a bit.”


There is a way forward, Salmon insists. “Local government, city and county, work together to package grants and generate funding to help, but that would mean the bureaucracy would have to show some flexibility, a willingness to cooperate. And that means we need leadership—leadership that’s not afraid of innovation.”


Kate Miller thinks that public transit could help with the housing crisis, but some of it would be expensive. “The railway line runs through Napa,” says Miller. “We would need to upgrade the sidings, grades and gauges to move it to light rail. And if it were privatized would then use it for tourism. If public money pays for it all, there are real restrictions on how the money is used. We currently work with SMART Sonoma Marin Area Rapid Transit) and they are working with the state to improve their connections in Novato to the Capital corridor to connect with Sacramento and central California. That would certainly help the traffic in Jameson Canyon. We have a bus that operates through there, but it is a limited service now.”


There are other steps that could improve things as well. “The city has put in a lot of sidewalks and on-street bike paths,” says Miller. “The new underpass at Highway 29 is a big step forward. Plus, we are now looking at Class 4 bike lane, complete with a barrier between the bike lane and the cars, on Brown’s Valley Road.”


Richard Mendelson, author of Common Ground, a book on the future of the Napa Valley, suggests a number of ways to look at the problem, and the future. “Winery growth and tastings rooms need to go into the southern part of the county,” says Mendelson. “Look at American Canyon—it is our only growing community, and it is ethnically diverse. Twenty percent of the voters in Napa County now live there, and it will become a political power. It’s an important part of the wine industry. And it’s within reason to see public transit there.”


Over in Europe, Jordi Valls, Barcelona’s deputy mayor, says the city needs more industry and technological innovation to offset tourism’s economic weight. It accounts for 14 per cent of the city’s GDP and he says the government does not want that proportion to be much higher. “We don’t want to be absolutely dependent,” he says of tourism. “We have to find a balance.” In Napa, Mayor Scott Sedgley notes the key role of tourism in the economy: “It’s a blessing to have tourism to create jobs here. If it weren’t for the hospitality industry and its revenue, we’d have a hard time providing services to our community, ones like fire protection, police, water, etc."


The problems are not unique to Napa, as a recent story on CNN illustrated. It quotes Sebastian Zenker, a professor in tourism at Copenhagen Business School, as he discusses the steps cities around Europe are taking to address the issue. Amsterdam’s “Stay Away’ ad campaign gets mentioned, but so do other initiatives, each with its own concerns. “’If you increase prices and you attract more wealthy people, this solves the crowding effect, but at the same time it increases the inflation and the gentrification problem.’” And that, in turn, creates more housing problems.


“Affordable housing is one of the answers,” says Mendelson. “But where can it go? We have 180 beds for farmworkers, but that doesn’t even scratch the surface. We have 5,000 full time farmworkers here. The Napa Valley Vintners Association has a sub-committee that does good work, but it’s a drop in the bucket. And that housing has to be outside the Ag Preserve. You want it in the cities, not in ag land. But I think we really have to survey our ag lands and see if there aren’t areas that couldn’t be developed for housing. Not all of it is perfect for ad. Some of our workers are now staying in garages. If I had to pick one thing, I would focus on that, without creating a burden on the areas up valley.”


As for hospitality workers, Mendelson includes those issues in the discussion of farmworkers. “I include the farmworkers with the hospitality workers, he says, “I think hotels need to be required to build enough housing for all the employees they will attract to the area. Napa Pipe has a major affordable housing component, and that might help.” Those two groups together are more than 20,000 people who work in Napa and have a very difficult time finding housing here.


Barcelona’s Mayor estimates that there are some 10,000 short-term rental apartments in the city that are operating illegally. Gallagher of Visit Napa Valley suggests that the number might be as high as 800 in Napa. Putting those back into the long-term rental inventory would make a difference in rental prices. Mayor Sedgley is aware of the issue. “We have a third-party company that checks those, and it’s like playing whack-a-mole. We can’t keep up with what people are willing to do,” he says. “I’d like to find some RV spaces, that wouldn’t impact our housing, but our mobile home parks tell me that more of those parks don’t pencil out.”


Amsterdam has now prohibited the construction of any new hotels. All new construction must include a plan for taking another hotel off the market. “Mallorca is trying to limit sales of residential property” says Amengual. “They could only be sold to local residents. But we’re running into issues with existing EU laws on that.” And Lisbon, Portugal, will no longer issue new licenses for short-term rentals.


“And each topic has so many layers,” says Hansen. “Take hotels. We are seeing fewer tourists, and they are spending more per person, but some locals are still angry about high hotel prices here. Should we reduce those prices? Wouldn’t that just increase visitor traffic? And it would reduce revenue. But if we build more hotels, we’ll need more employees. And that means more affordable housing, or more traffic.”


Mayor Sedgley agrees: “We don’t have that many hotel rooms to begin with,” he says. We have 5,500 hotel rooms right now. Sonoma has 8,300. And Monterey has 12,900. And we have very little in the pipeline. We’ve added 200 hotel rooms in the last five years. We’ve added two hotels since I’ve been here. Sure, there are projects on paper, but nobody has broken ground. And it is a slow process. That property over by the Oxbow has been in development for so many years.”


Hansen is sure the answer lies within the community, but she is unsure how to get there. “I would like to be a convener, to bring people together to talk about these important issues,” she says, “but I’m afraid. I’m afraid of being attacked. I am afraid that public discourse in Napa won’t get past the yelling, each side digging in, and we won’t get anywhere. I don’t know exactly how we can start that conversation. But we need to do it.”


“Look, we’re a destination and our community is a part of the tourist experience,” says councilwoman Painter. “We want visitors to meet our local community and have great conversations. I hope that’s what people who visit find wonderful about visiting Napa. My cup is always half full. I think the future looks really good. I think we have to provide things that are exciting for everyone, including locals: better parks, recreational programs that are low cost or free all of which should be exciting for locals.”


The question is, says Hansen: “What can we do right now? What levers can we pull to make a difference right now?”


“Thanks to the latest construction on the flood project, there is a big piece of property across from Walmart,” says realtor Gularte. “I’d love to see someone do something with that. Maybe the Napa Vintners could use it for farmworkers housing. We’ve built very little of that in the last few years. And we need it. But we really need new ideas, and better solutions. I am not in favor of eliminating zoning, but why not let people convert commercial properties into residential? Commercial properties are having a lot of trouble right now. Why not take that Safeway downtown and develop it into both a residential project and grocery store? We always hear how we need more housing, but there’s always some reason why it can’t get done.”


Mendelson doesn’t see tourism or new residents as purely problematic. “Newcomers aren’t the problem,” he says, “Newcomers who have no connection to Napa and no sense community are another question. But as long as they’re involved in the community, they can be part of the solution. A lot of this really does come down to Nimbys, because people don’t want affordable housing near them. It’s not just Napa, you are seeing this world-wide.”


How should we move forward? Mendelson says that the process is an important as the ideas. “If every stakeholder yells at the others, we’ll get nowhere,” he says, “The devil is in the details.”

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