On Aug. 9, our City Council will consider the sub-committee’s short term lodging (STL) ordinance as an alternative to the unanimously passed Planning Commission draft ordinance. While the Commission’s proposal allows STL in non-residential zones, the sub-committee’s proposal would also allow it in residential zones for up to 14 days a year. There are other differences, but permitting STL in residential neighborhoods is the issue most distressing to Laguna residents.
Airbnb’s website currently states the average Laguna house rental property costs $336 per night, that’s $4,704 for fourteen nights, netting around $4,100 to the landlord after Airbnb fees and Laguna taxes.
Now consider the neighbors’ plight. California law mandates that a home seller disclose issues potentially detrimental to its value. A neighborhood STL is such an issue. If you doubt this, ask, “If I were considering two homes, identical in every way except one is close to an STL property, which would I buy?”
Real estate experts know a reduced supply of interested buyers inevitably acts to reduce a home’s value. Assume the effect is small, say 1%. Zillow states the median Laguna Beach home value as just over $1,800,000. A 1% drop would result in an $18,000 price reduction. And that loss impacts every nearby home. How many homes? The City believes properties within 300 feet are affected enough to require notification of any STL permit application. That’s around 20 to 80 homes. A 1% loss on 50 homes results in a cumulative loss of $900,000! Think that’s too high? Cut it in half; the neighborhood losses are still 100 times one landlord’s annual gain!
It gets worse. Just allowing residential zone STLs may require disclosure by every Laguna home seller even if his neighborhood doesn’t yet have an STL house.
Laguna residents don’t want to intrude on our neighbors. We are basically considerate and we are willing to compromise so all may benefit. But plant a tree obscuring ocean views and though it may benefit you, expect your neighbors’ screams because you’ve harmed their enjoyment and the values of their homes. In the same way, the sub-committee’s proposal would allow one person to enrich himself at his neighbors’ much greater expense.
This is not compromise. This is abuse. I respectfully request before any Council member votes to allow STL in residential neighborhoods, first please explain to us why you would abet such abuse.
Tom Halliday, Laguna Beach