City on track to regulate short-term rentals, debate still swirls between renters and neighbors
By Andrea Papagianis
An increasing number of vacationers from San Clemente to Seal Beach are snubbing hotels and seeking comfort in a home away from home. And while the concept of vacation home rentals is a far cry from new—following noise and nuisance complaints—coastal Orange County municipalities are playing catch up with local and national trends to either regulate or disallow such property use.
Short-term rentals have been on Dana Point’s radar since 2006, and city leaders have deliberated regulations dating back to 2009. But with Planning Commission recommendations on hand for nearly three years, the debate remained fairly silent—at least on the council level—until last year.
In June, after an update on the status of short-term vacation rentals, city staff surveyed some 400 randomly selected residents. With a sampling of just over 1 percent of the some 33,000 people in Dana Point, the city found that 50 percent of those polled believed short-term vacation uses should be allowed. The number increased to two-thirds—or 66 percent—when a permitting process and restrictions were added to the equation.
However, the survey found support for short-term rentals was highest among those without known vacation rentals in their neighborhood and those unaware of the city’s zoning code—which prohibits such property use in residential areas.
The city operates under a permissive municipal code, meaning unless something is specified it is considered illegal. Since the city of Dana Point’s code is silent on the subject, short-term rentals are prohibited, but proposed regulations would alter this.
Longtime Beach Road resident, Charles Hoose, said the city has yet to make a valid argument as to how this sort of business use is compatible within a residential neighborhood. Hoose said he’s experienced everything from excessive noise, trash and parking issues, and added those not living with vacation rentals don’t clearly understand the issues associated with tenant turnover.
But Councilman Scott Schoeffel argued the real necessity of the ordinance is to deal with those situations where people have no effective remedy. While existing municipal codes cover troubles of noise and trash, Schoeffel said the ordinance gives the city a way to monitor issues and deal with them efficiently.
“The purpose of this ordinance is to solve problems, not create them,” Scheoffel said, expressing his hope that in the long run these complaints will occur less and less.
A quick search of www.vrbo.com, Vacation Rentals by Owner, shows 250 rentals in Dana Point—about 175 of which are managed by owners, not management companies. And with 54 rentals listed in Niguel Beach Terrace alone, the complex neighboring Strand Beach, accounts for a majority of short-term rentals in the city.
Currently, the estimated 250 short-term rentals operate freely without being subject to the Transient Occupancy Tax (TOT) that hotels, inns and campsites are. This 10 percent bed tax is placed on revenue generated by short-term rentals of less than 30 days. According to a staff report, the city could collect roughly $400,000 annually from existing rentals.
Niguel Terrace condominium owner, Coleen Reily, said vacation rentals are a huge asset to the city and positive in every way. She rents her one-bedroom, two-bath condo for weeklong stints during the spring and summer, and said she’s never had a problem with short-term tenants staying at her home or in those of her neighbors. Riley attributed owner involvement to keeping things in order and said she screens all renters, because in the end they are staying in her home.
“I do not want them (vacation renters) damaging my property or disturbing my neighbors,” she said.
On the flip side of the argument, and the opposite end of town, is 66-year-old surfer and retired Los Angeles firefighter Gary Clark. He and is wife Janeann built their Capistrano Beach home some 38 years ago, when Clark said they knew their neighbors. Now situated in the middle of the Palisades, in a single-family neighborhood, Clark said he is surround by two “motels,” and “who wants a motel next door?”
“A neighborhood is built on neighbors, people knowing each other, people helping each other and we know everyone on our street, except those operating businesses,” he said. Clark fears that with no restriction to the number of rentals allowed, his street—of 12 homes—could soon be overrun by unruly vacationers.
That fear, assistant city manager, Mike Killebrew said is unfounded. At the Civic Association Coffee Chat in January, Killebrew, who spearheaded the city reports, said there was nothing stopping vacation rentals from exploding now, and it was unlikely to happen.
If City Council approves regulation measures, amendments would be required to the health and safety ordinances, municipal and zoning codes—to establish universal business guidelines, implement the taxation of rentals and alter zoning to permit rental use. The latter requiring both City Council and Planning Commission approval.
Because zoning modifications in the proposed ordinance include properties that fall within the coastal zone, approval from the California Coastal Commission would be necessary. An estimated 80 percent of rentals in Dana Point fall within this zone.
“Vacation rentals of single-family homes are not zoned for but are encouraged,” said Teresa Henry, the south coast district manager for the California Coast Commission. With ordinance approval, the city would apply for a coastal zone amendment to its Local Coastal Program (LCP) to allow rentals. Henry said that due to furloughs and backlogged work, the process could take up to a year.
Under the proposed city ordinance, all vacation rentals would be subject to compliance with fire, building and safety codes, as well as an initial inspection administered by the city, in order to be permitted to operate. A new part-time position would be established in order to implement and enforce the program, with start-up costs being estimated at more than $75,000 for the employee’s first year and $54,000 each year after.
Some, like Hoose, fear a part-time employee will not be sufficient enough to enforce the ordinance and the responsibility will often fall upon residents.
“It’s wrong for the city to assume these rules and regulations and believe that residents will act as an enforcement body,” he said.
In an email, City Manager Doug Chotkevys confirmed that the city would rely on neighbors for tips and complaints, and said enforcement procedures have yet to be established.
So—for now at least—if the ordinance is passed, the city and homeowners have until at least January 15, 2014 to hammer out the details.