City Upholds Short-term Rentals Ban

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Council votes to maintain ban on new rentals in neighborhoods

By Daniel Langhorne, Special to the Independent

The Laguna Beach City Council on Tuesday agreed to continue its ban on new short-term rentals in residential neighborhoods, but also grandfathered permits for 38 homeowners who are currently licensed to market their homes on AirBnb and VRBO.

The vote passed 3-2 with Mayor Pro Tem Steve Dicterow and Councilman Peter Blake opposed, because they believe the new measures unfairly limit homeowners’ property rights. Blake and Dicterow also argued that Laguna Beach could follow the lead of other cities like Palm Springs in imposing heavy fines or revoking permits of operators who don’t follow city law.

City Council members were forced to take up the issue of short-term rentals, which include any paid lodging for visitors staying 30 days or less, after California Coastal Commission staffers advised Laguna Beach that it needed to make changes to preserve public beach access. The Coastal Commission generally believes that short-term rentals offer an alternative for families who wouldn’t otherwise be able to stay near the beach.

Greg Pfost, the city’s director of community development, said there are 110 licensed short-term rentals in Laguna Beach, but also acknowledged city staffers are trying to police a host of unlicensed short-term rentals.

Blake said he is worried that the City Council majority’s opposition to short-term rentals may encourage investors to instead establish sober living homes, which the city has limited authority to regulate.

“My concern with this situation is that we’re not giving ourselves any of the benefits of the short-term rentals like the [transient occupant tax],” Blake said. “I’m also concerned the person who is potentially looking at a short-term rental wakes up one morning and decides to put six meth addicts in there.”

After receiving feedback from Coastal Commission staffers, the City Council also agreed to repeal its ban on converting residential units that don’t conform with the Municipal Code and are in the downtown commercial mixed-used zone. Coastal Commission staffers anticipated that this ban would have excluded 5,400 residences from becoming short-term rentals. Going forward, homeowners in the commercial mixed-used zone can apply for waivers if they don’t have enough on-site parking typically required by city law.

City staff was also pleasantly surprised to hear that Coastal Commission administrators wouldn’t oppose the city’s prohibition on converting affordable housing, senior housing, and disabled housing into short-term rentals.

Laguna Beach resident Ronnie Rogers said he lives in the guest house behind the two-bedroom cottage he uses for short-term rentals and was supportive of the city’s current system of regulating his business and collecting transient occupancy tax. His clientele is typically limited to families with children, elderly couples with grandchildren, and elderly couples traveling together.

“As long as the owners have firm rules, which I do, I think they work great,” Rogers said. “These people get to come to places they would otherwise never get to come to Laguna for.”

Jim Danziger, a Laguna Beach resident and professor of political science at UC Irvine, argued that short-term rental operators are not the only homeowners who have property rights. Their neighbors also have rights to not be unduly burned by noise pollution, trash, and traffic generated by commercial uses, he said.

“They are profit-making hotels that are very well run to make money but aren’t managed,” Danziger said.

Mayor Pro Tem Dicterow said he would have liked to have seen a compromise where short-term rentals would be allowed in residential neighborhoods if the property owner lives on-site.

“I think what we’ve found in society is when we have an outright prohibition on something that’s in high demand, it sometimes encourages people to violate the rules and then it becomes an even bigger problem,” Dicterow said.


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