Updated: Vacation Rental Ban Extended

Swayed by residents’ impassioned testimony about rowdy visitors eroding the quality of life in their neighborhoods, the City Council Tuesday opted to ban short-term lodging in all residential areas in Laguna Beach.

The Council called for staff to develop an ordinance prohibiting rentals of less than 30 days in residential neighborhoods, along with suggestions about possibly allowing such accommodations in areas zoned for retail and hotels.

The valid short-term lodging permits currently held by 51 property owners and accounting for 94 rentable units, will be grandfathered in for now, but may eventually be phased out.

Pending a formal law, the Council officially extended a moratorium on granting new short-term lodging permits until Oct. 1, 2016.

After a report by Assistant City Manager Christa Johnson and Assistant Community Development Director Ann Larson, followed by testimony from 23 residents, the Council quickly reached a consensus.

“I think from the testimony that I’ve heard tonight, we need to come up with a way to grandfather in the [short-term lodging permits] we have, and then I think we need to prohibit them in our residential zones,” said Council member Rob Zur Schmiede.

“We have to do something pretty strong,” agreed Council member Toni Iseman. She noted that some opponents to short-term lodging were afraid to voice their views in public for fear of reprisal from neighbors taking advantage of online booking services such as Airbnb and VRBO.

Even so, about 13 residents boldly spoke in favor of either restricting the conditions for vacation rentals in their neighborhoods or banning them outright. If they continue, “we will not have a community, we will have a hotel,” said Tom Halliday.

“Even the best tenants, they’re not neighbors; they’re not people you know,” said Greg O’Loughlin.

“The overall situation degrades and cheapens our neighborhood and our town,” agreed Rich Linting.

Indeed, the tally of citizen complaints about unpermitted vacation rentals seems to corroborate the level of disruption. Code enforcement staff received 104 calls between May 20 and July 31, with 69 calls in July alone, according to the staff report.

Other residents emphasized the effect of vacation rentals on affordable year-round housing.

Mark Christy, owner of the Ranch hotel and golf course, said though he pays good wages, “the people who work for me can’t afford to live here,” he said.

Johnson outlined the pros and cons of five options, including maintaining the status quo, prohibitions, changing permitting and stepping up enforcement to lessen neighborhood impact.

In researching solutions, staff reviewed the practices of 18 other cities, Larson told the council. They also considered the California Coastal Commission’s stand that short-term lodging is an affordable option for families visiting the beach, “and their priority is visitors, not residents,” said Larson.

Resident Debbie Naudé later pointed out that there are houses in her neighborhood listed on VRBO for $15,000 per month, which would likely not meet the commission’s affordable criteria.

Some cities, including Newport Beach, Santa Barbara, and Mammoth Lakes, prohibit short-term rentals in certain zones, according to the staff report. That option, “doesn’t work well with our topography and zoning,” said Johnson, since most of the city is zoned residential and the effect would be akin to a prohibition. Many cities use the over-the-counter permit process, but in that scenario affected property owners in the neighborhood would not have any say in the decision as they do now with the current permitting system, said Johnson.

Staff didn’t recommend prohibition, since it could drive scofflaws further underground, making enforcement of illegal units more difficult, and taking away the advantage of the transient occupancy tax, said Johnson. They therefore, recommended modifying the current system with a laundry list of stricter conditions and more proactive code enforcement effort.

Kurt Bjorkman, vice chair of Visit Laguna Beach, agreed that stricter regulations would be preferable to prohibition since “short-term lodging is here to stay.” With hotel occupancy often at capacity, they would benefit from a list of legal short-term rentals for visitor referrals, he said.

Rick Raeber said he rents through VRBO to responsible people for no less than a week who take surfing lessons, shop and dine locally, and he’s never had any complaints.

Fifty-year resident Hermien Miller, who rents a room in her four-bedroom home through Airbnb, said she hasn’t had any problems either.

“I don’t want to have to be the enforcer,” said Bob Hartman, who is tired of constant calls to report disruptions. His neighbor had put his home on the market, but is now renting it out for $1,000 day, and “it’s a hotel,” he said.

Ultimately, the Council decided prohibition would be the best solution.

“My concern is not the action we take; it’s figuring out how we can be stronger in the enforcement when people violate the rules,” said Mayor Pro Tem Steve Dicterow.

“With respect to enforcement, we’ll just have to enforce it,” said Mayor Bob Whalen. You may not eliminate all violations just as all crime is not eliminated, “but you still have to have the laws on the books,” he said.

He also said he would have liked Airbnb to be an affordable option for families vacationing in Laguna, “but these are not affordable rentals, these are hotel rates that people are getting at private residences in our neighborhoods,” he said.

Council member Kelly Boyd said he’s bothered by people buying homes with the intent to rent them, as well as owners pulling their homes from the year-round rental inventory in favor of more lucrative vacation rentals. “We can’t afford to lose year-round rentals in our community,” he said, adding, “it’s not right” that residents should lose their quality of life to their opportunistic neighbors.

Correction:

The story “Vacation Rental Ban Extended” in the Aug. 21 edition incorrectly stated that resident Bob Hartman “is tired of constant calls to report disruptions” caused by short-term renters. In fact, Hartman made a single call to the property’s management.