At the Crossroads Over Short-term Lodging

Elected officials on Tuesday, Aug. 9, are expected to decide between two proposed ordinances to regulate short-term lodging in Laguna Beach, a divisive issue in a town with an affordable housing shortage and a responsibility overseen by the Coastal Commission to promote lower-cost visitor accommodations.

One measure drafted by the city’s Planning Commission would restrict rentals of less than 30 days to visitor-serving, commercial areas, while the other, devised by a council subcommittee, would allow homeowners to rent out their premises in neighborhoods on a limited bases, just two 14-day periods a year.

Over the last year and in previous hearings, many residents expressed vociferous objections to short-term lodging, raising concerns about the city’s ability to enforce regulations and investors converting long-term rentals into short-term ones.

Homesharing 4 Laguna Beach, whose 100-plus members endorse the rental concept popularized by online websites, urge city officials to reject new rules and instead allow the old rules to continue, which allowed short-term rentals anywhere under a permit process where neighbors were noticed and property owners paid bed tax. No new permits have been issued since May 2015, when a moratorium, due to expire Oct. 1, was imposed. Nevertheless, scores of scofflaws continue to operate. While just 34 legal permits exist, Airbnb for example, lists 116 rentals in Laguna Beach currently.

“The proposed regulations are a de facto ban,” said Jason Vogel, one of the group’s organizers and five-year local resident. He owns one rental property in Laguna Beach and a score of others in Los Angeles. “Let’s not be the test case; let’s see where the courts come down on this,” Vogel said.

Indeed, other coastal cities that have enacted short-term rental regulations are confronting legal challenges to their ordinances.

The San Clemente Vacation Rental Alliance sued the city of San Clemente and the Coastal Commission in Orange County Superior Court on June 20, asking the courts to set aside restrictions that the group says will reduce vacation rentals by 87 percent.

In May, the San Clemente City Council voted to restrict most vacation rentals to designated visitor-serving sections, impose parking constraints and give existing operators in residential neighborhoods two years to shut down.

As San Clemente lacks an approved local coastal plan, which certifies that land use complies with the Coastal Act, the city is required to seek approval for its ordinance from the Coastal Commission.

Hermosa Beach, which also lacks a local coastal plan, adopted a total ban on short-term lodging May 24. The city was sued in Los Angeles Superior Court on June 27 by Jim Holtz, who claims the city can’t enforce its prohibitions without seeking approval for its ordinance from the Coastal Commission.

“When you take all these units off the market, it changes the intensification of use,” said Alan Block, Holtz’s Los Angeles attorney, who in the 1980s worked as counsel to the Coastal Commission in the attorney general’s office. “One of the primary purposes of the Coastal Act is to promote public access,” he said.

And the Coastal Commission staff, in issuing advisory letters to Hermosa Beach and Laguna Beach, has made no secret of its endorsement for regulations rather than bans on short-term lodging. But in its letter to Laguna, staff also described proposed restrictions in residential areas as “overly restrictive” and would likely be found inconsistent with the Coastal Act, said Charles Posner, a planning supervisor for the Coastal Commission. He suggested as part of any ordinance, the city provide a utilization study with demand projections.

Whatever is approved by the City Council, before it becomes effective, it will require certification for consistency with Laguna’s local coastal plan by the Coastal Commission, Community Development Director Greg Pfost said. “We’ll see what happens; they’re making their point,” he said, though the city lacks a study of the town’s vacation rental operations.

“This is an evolving area in policy and law.” said Laguna Beach City Manager John Pietig. “We’re all trying to learn from each other,”

As courts make rulings, the ordinance could be revised again, Pfost said.

For his part, David LaMontagne, who owns a rental home next to his own, suggests allowing market forces to play out. The market for rentals is but 12 weeks long, said LaMontagne, who in 2005 traveled with his family to 28 countries in 10 months. “We went from flat to flat,” he said, contacting the Chamber of Commerce in each town to find home rentals.

“It’s a bummer to feel at odds with my own community,” he said.