Weighing Rules to Restrict Short-term Rentals

With one resident calling it the “scariest” proposition to face the city yet, members of a City Council subcommittee reopened discussion to the public on how to govern short-term rentals Tuesday in the council chambers.

“This is going to take away our community, our neighborhoods, our friends,” said Barbara Metzger, a long-time community activist.

With the internet increasing the popularity of short-term rentals due to enterprises such as Airbnb and VRBO, the council subcommittee is considering enacting tighter regulations prior to Oct. 1, when a moratorium on short-term rental permits is set to expire.

In April, the council rejected restricting short-term rentals to commercial areas exclusively and voted instead to consider new rules. After an hour of testimony, subcommittee members Bob Whalen and Mayor Steve Dicterow indicated they favor allowing short-term rentals in owner-occupied residences. “The perception was that we were strongly open to relooking at everything, which certainly wasn’t the case for me,” said Whalen.

“It was really a question of whether you wanted to make some minor use of your principle residence, because that’s not changing the nature of the housing stock and that’s not crowding out renters, which I think is a very valid point,” he said, “because the economic incentive of turning a property into a short-term rental property is so huge.”

To clarify any confusion, Dicterow said the subcommittee’s suggestions would simply modify rather than replace the ordinance proposed by the city’s planning commission.

The rationale of the initial draft ordinance, explained assistant Community Development Director Ann Larson, was that short-term lodging is a commercial enterprise. The city’s general plan does not allow that type of commercial use in residential zones, she said.

In debating the draft ordinance in April, the council discussed whether to allow short-term lodging in residential zones under specific restrictions, such as for a limited number of days a year and in owner-occupied properties. “As a general rule, short-term lodging is prohibited subject to being permitted,” Dicterow affirmed.

Any changes to the existing ordinance must be considered by the council by the end of July to ensure that a finalized law takes effect prior to Oct. 1, Dicterow said.

Since the moratorium was imposed last May, there have been 372 violation investigations, said Community Development Director Greg Pfost. Dicterow requested more information on “better enforcement and stronger penalties” for the next meeting set for 4:30 p.m. on Thursday, July 14, at the Susi Q Community Center.

Whether the owner needs to be on the property while a portion of it is being rented will also be addressed. Dicterow also requested that Pfost determine if short-term rentals comply with the city’s general plan, which guides land uses. Pfost said he will also look into the impact an increase in short-term lodging would have on affordable and long-term rentals.

Changes to the proposed ordinance will be available by July 7 on the city’s website, according to Pfost.

There are currently 36 properties with 81 units legally offering short-term rental, said Larson. “Over the past few years now, with the technology…it has mushroomed into a really intense commercial use because people can get the word out that it’s available,” she said. Prior to the moratorium, Larson said short-term lodging with a permit was allowed in all residential zones.

Larson presented a list she had compiled of how other California cities are handling the same issue. Aliso Viejo, Carmel, Ojai and West Hollywood prohibit all short-term rentals. Dana Point, Solana Beach, Palm Desert and Malibu permit short-term lodging in all zones. Hermosa Beach, Huntington Beach, Newport Beach, Santa Barbara, San Clemente, Seal Beach, Mammoth Lakes and Manhattan Beach prohibit short-term lodging in single-family residential zones but allow it in other zones. Napa, San Francisco, San Luis Obispo and Santa Monica allow some type of home-sharing if the home is owner-occupied or is the primary residence.