The California Coastal Commission (CCC) voted unanimously Thursday, Aug. 10, to deny two Dana Point residents’ request for the city’s vacation rental program to be revoked.
The revocation request, brought by residents Toni Nelson and Roger Malcolm, sought to dissolve the city’s short-term rental (STR) program, which the CCC had approved back in November 2022, based on allegations that the city provided misleading data for the state agency’s approval.
The city previously stated that it did not track which Home Owners Associations permit or ban vacation rentals in their CC&Rs and thus did not have up-to-date data to report to the commission ahead of hearings held in August and November of 2022.
As it refined its methodology and analysis, the city provided the commission with updated information on the number of HOAs within the coastal zone and housing units within HOAs.
CCC staff said discrepancies in the city data “are a result of the City refining its information and data as it performed additional research and analysis, rather than an intentional effort to misrepresent information to the Commission.”
The STR program established a cap of 115 non-primary, multi-family homestay, and mixed-use parcel non-primary short-term rentals within the coastal zone. There is no cap on primary or homestay short-term rentals.
The city also approved a separate program for vacation rentals outside of the coastal zone.
The CCC considered the revocation request on three factors: Did the city include “inaccurate, erroneous, or incomplete information?”; “Was the inclusion intentional?”; And whether the commission would have acted differently had it received accurate information.
Staff stated during Thursday’s presentation that the city did provide the commission with inaccurate information but stated that the discrepancies represent improved research and analysis methodologies.
Coastal Program Analyst Shahar Amitay also noted that the commission “knew the city’s STR program would facilitate the legalization of HOA bans on STRs via the CDP (Coastal Development) process and had an understanding that many but not all HOAs would elect to ban STRs which would further concentrate STRs in non-HOA areas of the city’s coastal zone.”
Since the program has been implemented, 17 HOAs have gone through the CDP process to enact a ban on vacation rentals, according to the commission’s staff report, with two more pending.
The city is also required to return to the commission in 2025 and 2028 with evaluations of the program to address potential impacts it may have on “public access, recreation, housing and/or community character.”
If the commission had revoked the vacation rental program, Amitay explained that it would result in the “unregulated establishment of short-term rentals in the coastal zone of Dana Point.”
City Planner John Ciampa spoke on behalf of the city, stating that it “has worked diligently and openly for over 16 years and finally obtained approval of the program back in November 16 of 2022.”
Echoing the commission staff’s statement, Ciampa noted there would be no rules or regulations on STRs in place if the revocation were granted, resulting in “significant impacts to the community character, housing and public access.”
Ciampa said the city is committed to the Coastal Commission’s conditions to return with evaluations of the program and is tracking vacation rental data not just in the coastal zone but citywide “to ensure that we’re maintaining public access while addressing community character.”
The progress of the vacation rental program will also be evaluated this winter, Ciampa added.
“Right now, we’re just rolling out the program, so it’s really too early to provide any updates on how it’s evolving, and that’s why the City Council established to see how the program is going, this fall or winter,” Ciampa said.
In her argument to the commission, Nelson stated that the vacation rental program “was granted based on grossly incorrect and misrepresented data. There is no way that this was a mistake, there is no way that they used due diligence in creating these numbers.”
Nelson argued that there was no need to wait three years to see the impacts of the vacation rental program to see that there will be concentrations of STRs outside of HOAs.
Arguing against the point that revocation would result in a proliferation of STRs, Nelson said she believed a revocation would incentivize the city to return with an amended vacation rental program that mitigates saturation.
Becca Ayala of Better Neighbors Los Angeles requested the commission deny the revocation “due to the deregulation that may occur should the CDP be revoked.”
“We also believe today’s hearing provides the commission with a unique opportunity to encourage the City of Dana Point to voluntarily take actions to further preserve access to the coast and housing,” Ayala said.
Staff noted that it intended to talk to the city about some of the ideas brought forward by Better Neighbors Los Angeles to improve data collection and mitigate the negative impacts of vacation rentals.
Commissioner Mike Wilson agreed with staff that the revocation did not meet the requirements but noted he agreed with residents’ concerns.
“I do believe this issue needs to be brought back,” Wilson said. “We have seen a pattern with relation to our approvals of these STRs in the past.”
Wilson noted that the commission saw a similar disproportionate impact on select neighborhoods when the City of Newport Beach enacted a ban on vacation rentals in single-family zones.
“The STR ordinances and legislation is ongoing,” Wilson said. “What we’re seeing is de facto land use change without CEQA from residential zoning to commercial activities within residential areas in a way that we just would never do and we’re just kind of crab-walking our way into it.”
Commissioner Paloma Aguirre noted that the commission needs to hold a broader conversation on housing in general.
Commission Chair Donne Brownsey agreed, noting that “the focus for the commission on housing issues has just exploded in terms of the amount of time we’re really spending on housing policy and housing decisions.”
Commissioner Justin Cummings agreed that the commission needs to discuss vacation rental’s impact on communities and housing stock.
Coastal Commission Executive Director Kate Huckelbridge said these are issues that the commission’s new housing committee is looking into.
In an official statement following the denial of the revocation request, the city said it “developed and approved its short-term rental program after years of proactive public outreach and hearings.”
“Monitoring and frequent program updates are in place to ensure any issues that arise can be identified and addressed,” the city stated. “The City of Dana Point appreciates the Coastal Commission’s recognition of this effort in its decision to let implementation of the program continue.”