More than half of the legally permitted vacation rentals in Laguna Beach are owned by people who don’t live here, according to a city planning report.
Of the 36 properties officially allowed to rent to visitors or vacationers for less than 30 days, 58 percent have out-of-town landlords, says a report compiled in March for the Planning Commission by Ann Larson, assistant director of community development.
Four of those are owned by corporations, she said. Another 25 percent list the property as the owner’s mailing address and 17 percent of the owners have a Laguna Beach mailing address, but live elsewhere in town. The permitted properties offer a total of 81 units.
“So, 17 percent might legitimately live here but they’re living in another house,” said Larson. “It seems pretty apparent that 75 percent of the existing properties are owned by individuals who do not live at the property. And it’s even higher than that because some of the people have their address listed at the home and they don’t live there.”
Based on the report’s findings, the Planning Commission unanimously voted to deny short-term housing in all non-commercial areas, passing the final decision to the City Council. On April 12, the council rejected the planning commission’s proposed ordinance banning short-term rentals in residential areas. Instead, the council asked city staff to draft an alternate ordinance that would permit short-term rentals in residential zones with the caveat that the owner live at the property or reside in town. Council member Rob Zur Schmiede dissented, supporting the commission’s ordinance.
Even though the issue wasn’t on this week’s City Council agenda, seven people spoke Tuesday against short-term lodging, urging the council to maintain stability in Laguna’s residential neighborhoods by nixing the home-stay trend popularized by online services such as Airbnb.
“I’m concerned that in hindsight we will look back at any allowance of short-term rentals in residential zones as the day Laguna sold its soul,” said local businessman and resident Mark Christy. If they’re allowed, Christy said, the city will be “flooded” with short-term rentals.
“We have not been flooded in the past,” Mayor Steve Dicterow countered. Council member Zur Schmiede corrected Dicterow’s comment. “We haven’t been flooded with legal permits,” he said. “We have been flooded with illegal use.”
Airbnb currently lists more than 300 short-term rentals available in Laguna Beach.
As a result of compelling testimony from long-term renters evicted because landlords switched to more lucrative short-term rentals, the City Council imposed a moratorium on issuing new short-term rental permits last year, which is in effect until October.
But the direction given to city staff earlier this month suggests the council is considering allowing short-term rentals under certain conditions. The council directed city staff to prepare an ordinance regulating the short-term rentals to a limited number of weeks per year if the owner resides on the property.
“You’re constantly having people come and go who you don’t know. You don’t have that connection of having neighbors who know you,” said Larson. “You can’t regulate that. You can’t condition that. The only way you can regulate it, is by not allowing short-term lodging.”
Larson says she gets calls every day from out-of-town buyers asking about the legality of short-term rentals and when the moratorium will end. “We’re a world-renowned destination. We could fill up every single house with tourists,” she said.
The commission found there were plenty of commercially zoned properties, 200 in all, that include residential units, “with many more potential allowable units” that could be rented short-term, according to the report.
Another 200 rental properties are under investigation by the city for illegally offering short-term rentals, 55 percent of them are owned by out-of-towners with another 45 percent of owners listing their address at the rental property, according to the 222-page report.
“They call it home-sharing, but in fact they’re not really sharing a home,” Larson said. “That’s not what’s happening. Entire homes are being rented and the owners don’t even live in town.”
As far as she knows, Larson said there are three permitted short-term rental properties in town where the owner is living on the property. As for residents who need to augment their income through home-sharing to continue living in their home, there are very few, she said.
The city-permitted properties range from small cottages to oceanfront homes, according to a listing in the report. “Whatever types of people who would rent a hotel room are the same types of people renting a house,” she said. “Some of these are big, huge homes. These are not inexpensive places.”
Other coastal cities are also wrestling with neighborhood disturbances stemming from the boom in home-stay rentals. In Newport Beach, short-term rentals have overtaken Balboa Peninsula with 662 units and Balboa Island with 226 units. Last year, Newport took in $2.2 million in taxes from short-term rentals alone.
In San Clemente, there are currently 510 permitted short-term rentals, said city planner Adam Atamian. And the city receives endless complaints. The city’s planning commission drafted an ordinance that slashed the number to 70 that could expand to more units in the specified area, Atamian said. If approved by the city’s council members on May 3, the remaining 430 units will be phased out over two years.
Larson, who is retiring June 30, was criticized as being biased in her report by members of a new group called Home Sharing Laguna Beach at the April 12 City Council meeting. “You can get thousands of dollars for a week,” said Larson. “I can totally understand why people want to do it. And if you don’t live here in town, I mean, who would care if the town turns into a tourist attraction? I’m trying to protect and implement the requirements of the general plan and the zoning code. It won’t take a zillion study sessions to figure out what’s going on. We could do this pretty quickly.”