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By Breeana Greenberg
A week after councilmembers had voted to approve a new short-term rental program that will permit and regulate local vacation rentals in Dana Point’s coastal zone, they failed on Tuesday, July 19, to pass a separate ordinance that would have regulated STRs throughout the rest of the city.
In a 3-2 decision, the council voted down the proposed ordinance to regulate vacation rentals outside of the coastal zone. Only Mayor Joe Muller and Councilmember Richard Viczorek voted in favor of the proposal.
The failed ordinance would have mirrored the coastal-zone version of the STR program. Had it passed, there would have been a cap of 70 non-primary STR permits, creating a citywide cap of 185 non-primary STRs.
“This ordinance, it mirrors what we did last week,” Viczorek said. “What we did last week, when we bifurcated the coastal zone from the non-coastal zone, was to emphasize that we have jurisdiction over the non-coastal zone area.”
“What we’re doing tonight is to be consistent with what we were talking about before we made that division, when we were talking about 185 as the number that we were limiting to the non-primary STRs,” Viczorek continued.
During the council’s special meeting on July 12, a 3-2 majority, with Mayor Pro Tem Mike Frost and Councilmember Jamey Federico dissenting, voted to approve a coastal development permit that caps the number of permits the city can issue for non-primary STRs at 115 in the coastal zone.
Property owners can apply for the non-primary STR permit if they intend to rent out homes other than their primary residence to visitors for fewer than 30 days.
In response to the STR program council passed last week, Muller requested staff draft the latest ordinance, according to the city’s staff report.
The city currently has 63 non-primary STRs outside of the coastal zone, so the cap of 70 permits would have allowed for seven additional permits.
Similar to the program regulating STRs in the coastal zone, the 70-permit cap would reduce by one each time the city issues permits for homestay, multi-family homestay or primary residence STRs.
Both programs aimed to encourage more homestay, multi-family homestay and primary residence STRs—a variation of rentals in which the owner either lives on-site or is traveling for a short time during a guest’s stay. The coastal zone program did not issue a cap for such permits, and the failed ordinance would not have, either.
“This is geared, just as was the case with the coastal development permit, to encourage short-term rentals in the mixed-use parcel scenario, or in the homestay scenario, multi-family homestay or primary residence,” City Attorney Patrick Muñoz said.
Muñoz added that these types of short-term rentals are generally less likely to create “nuisance conditions” than non-primary rentals.
The proposed ordinance was brought for a first reading on Tuesday night with the intention of not bringing the ordinance back for a second reading, if the ordinance had been passed, until the program regulating STRs in the coastal zone went into effect.
“Part of the strategy and the thinking behind all this is to do a first reading now—we have no plan to bring a second reading back at any particular time yet; the idea is to see what happens with the coastal development permit,” Muñoz said.
Muñoz explained during his presentation on the proposed ordinance that the city could have adopted the short-term rental program regulating permits outside of the coastal zone as an urgency ordinance, but decided that it would be in the city’s interest to wait until the coastal zone program gets implemented.
With the new coastal STR program approved last week, a Notice of Final Action was sent to the California Coastal Commission, where an appeal may take place. Dana Point Director of Community Development Brenda Wisneski explained during the July 12 meeting that if an appeal occurs, the commission will have 49 days to decide whether it is a “substantial issue.”
Federico noted that he believes in property rights and appreciates that the program broke down the types of STRs, allowing homeowners to rent out their residences while traveling or rent out half of their duplex.
However, he said he felt that the proposed ordinance should have a cap on all types of STRs, knowing that the council could increase the caps if they’re reached.
“By having no caps, there’s a lot of risk in that, I think,” Federico said. “What we do tonight not only affects the people who live here today, but it affects the people who might consider moving here or buying here.”
“If we have an unlimited number of permits, 10 years from now … we may be encouraging people who want to have vacation rentals, or part-time or second homes moving to our city,” Federico continued.
Frost agreed that there should be caps on all types. Frost added that he wants to see more details on enforcement and ensure that there’s adequate enforcement available if the city were to pass a program with no caps on homestays or primary STRs.
Muller explained that the reasoning for not capping homestays or primary STRs is that those living on-site should have the right to rent out their property on a short-term basis.
“If you live there, you have the right to do with your property what you want to do with it,” Muller said. “If you’re an investor, that’s a very different thing. If you’re going to buy a house and then just do short-term rental on it, you don’t live in town, that’s very different in my mind.”
Those living on-site will be the first neighbor to deal with any problems with visitors, Muller added, and there’s enforcement in place for permit holders causing nuisances.
Current permit holders, many of whom said they rely on their short-term rentals to afford to live in Dana Point, spoke in favor of allowing vacation rentals in the city.
Understanding that current permit holders are concerned with the future of their short-term rental properties, Viczorek noted that these permits will continue to be grandfathered in, both in the absence of a program at the moment and in the event that an ordinance is approved.
“The intent is to grandfather those people in; we’re not looking to take away people’s livelihoods for the people who have current STR permits,” Viczorek said.
Existing STR permits outside of the coastal zone are still grandfathered in and subject to the city’s business regulations established in the Dana Point Municipal code.
Breeana Greenberg is the city reporter for the Dana Point Times. She graduated from Chapman University with a bachelor of arts degree in English. Before joining Picket Fence Media, she worked as a freelance reporter with the Laguna Beach Independent. Breeana can be reached by email at firstname.lastname@example.org