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Final decision for rentals in Coastal Zone lies with Coastal Commission

By Andrea Papagianis

In three 4-1 City Council votes last Tuesday, Dana Point moved to alter its municipal code and Local Coastal Program to allow short-term vacation rentals in residential neighborhoods.

Councilman Carlos Olvera continued his streak of voting against allowing such uses.

Debate swirled over the practice’s legality for years, but in April, the council adopted an ordinance permitting and regulating short-term rentals of less than 30 days. Now, such rentals are considered businesses in the city’s eyes.

Beginning in January, vacation rental owners must register with the city and be in compliance with certain health and safety codes. Owners will now also be subject to the same 10-percent tax—transient occupancy tax—that hotels and campsites are. According to a staff report, the city could see roughly $400,000 annually from existing rentals, adding to the estimated $10.2 million collect in TOT last year. The bed-tax is the city’s largest, single-source of revenue.

The votes last week addressed where these businesses can operate. Of the city’s estimated 250 vacation rentals, about 80 percent fall within the Coastal Zone, requiring and amendment to the city’s LCP, allowing the rental use. Any changes to the city’s governing document must first be approved by the California Coastal Commission.

Back in March, the Coastal Commission had a year-long backlog, meaning the

Steven Pride, a vacation rental owner, raised concerns about meeting the city’s registration deadline. He told the council a cashier at City Hall knew nothing about the permitting process.

Ursula Luna-Reynosa, the city’s community development director, said regulation implementation will be flexible to allow all owners to be in compliance.

Related Stories:

City Council Approves Short-term Vacation Rentals, with Regulations

Home or Hotel, When Homeowners Become Hoteliers 

Clashing Opinions on Vacation Rentals Fly at Coffee Chat

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