Letter: Banning Short-Term Rentals Violates Coastal Act

Shilpa Bhimani, Dana Point

The fact that approval of the short-term rental ordinance has been tabled twice is deeply concerning. The city shouldn’t enforce prohibitions of short-term rentals without seeking approval from the Coastal Commission. They also need to act very carefully when considering encroaching on a resident’s property rights.

One of the primary purposes of the Coastal Act is to promote public access. Prohibiting short-term rentals would act as a significant barrier to access. This issue is further exacerbated by the fact that multiple hotels in Dana Point have been shut down in recent years. By prohibiting short-term rentals, you move to a model where at most one person could rent a property every 30 days, so at most 12 tenants per year.

With the current ordinance, a different person could rent a property every two days, so 182 different tenants per year. More realistically, the average tenant stays for one week and occupancy rates are normally at 65 percent. So the average vacation rental homeowner has 34 tenants per year. When limited to 30-day stays, it’s very hard for it to pencil out, forcing owners into 12-month leases with a single tenant. If you assume there are 200 short-term rentals in the city, in a given year you could have around 6,800 unique guests across the city. When short-term rentals are prohibited, the number of unique tenants could drop as low as 200. This obviously has a dramatic impact on coastal access. This issue is further exacerbated by the loss of hundreds of thousands of dollars in tax revenue and millions in lost revenue for our local businesses.
Prohibiting short-term rentals creates an environment where walking distance access to the beach is only available to the rich who can afford to buy or rent there long-term. This goes directly against the Coastal Act, whereby its primary purposes are to promote public access.

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