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DP logoWilliam Matthies, Dana Point

Shilpa Bhimani’s recent letter regarding short-term rentals asked questions about the situation on Beach Road. I will answer them.

The question was, “If there were supposedly 600 complaints on Beach Road, why does no one at the city have any record of it?”

The city has no record because they do not enforce their code, at least not on Beach Road. How do I know that? Code Enforcement Officer, an ironic title, Ted Harris, told me that our complaints regarding STRs should go to the police or be handled by our district security, not him.

In 2015, there were 624 calls to our security regarding STRs, as of July that year the total was 309. Year to date in July 2016, the number was 365, an 18 percent increase. Why are these numbers so high? Approximately one out of every five of the 200 homes on Beach Road are available for short-term rental, whether they’re registered with the city or not. Over 40,000 STR vehicle entries/departures a year.

The numbers I quote are gathered by the district and are accurate. Complaints cover everything from noise, illegal fires and parking to theft, vandalism and even an alleged physical assault of an 87-year-old full-time resident by a much younger and very drunk short-term renter.

Property owners who either live in their house, renting out a portion, or live next door, are responsible people who do not tolerate what the overwhelming majority of absentee owners allow. If the City Council had included a provision requiring onsite management, and most importantly, enforced their code, there wouldn’t be well over 600 complaints about STRs on Beach Road.

By the time this letter appears, the referendum date to gather signatures will have passed. If it succeeds I hope we can revisit the STR issue, creating revised enforced code that satisfies both sides of the discussion. If it fails, the forces opposed to STRs, group homes and other related problems within the city, will shift their focus to bring about much needed, widespread change throughout all levels of Dana Point government.

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comments (9)

  • Yes, the referendum will pass! We were able to gather 3,956 signatures. Only 2,100 were needed. The signatures were turned into the city a few days ago for election officials to count. The residents of Dana Point succeeded again, against the special interest driven city council.

  • William,

    Those stats are interesting and raise another question. For homes in the Coastal Zone, your HOA can simply prohibit Vacation Rentals if that is what the community wants. If only 1 in 5 homes are STRs then it would seem logical that other 4 in 5 would stop allowing them if they are creating so many issues. Why hasn’t this happened?

    Beach Road, like 1/3 of Dana Point, is under Coastal Commission Per view. They will need to sign off on any ordinance limiting or prohibiting STRs within the Coastsl Zone. It’s hard for me to understand how repealing 5.38 will make things any better for you. I could very easily see a situation where the CCC states that STRs must be allowed in all Coastal Zone areas regardless of CC&Rs.

    • First of all, Jason, why would you claim an HOA is the answer when you and one of your relatives are two of over 70 people who have and/or continue to operate illegal STRs in Niguel Beach Terrace and have been repeatedly cited by code enforcement? Funny you didn’t mention that little tidbit when you and your family were proclaiming the virtues of STRs before Council. Just a tad hypocritical, don’t you think? If NBT’s HOA can’t prevent illegal STRs like yours,, how can Beach Road or any other HOA community? The ordinance is unenforceable and you know it.

      Secondly, the Coastal Commission can’t intrude on Dana Point’s residential,zoning unless our Council is dumb enough to invite them in with an LCP. Communities like Beach Road are sitting ducks if this ordinance stands. Worse, it didn’t occur to our brilliant Council to regulate proliferation or insist on buffers between STRs to give ordinary residents some relief from the mini hotels. Talk about damaging property values. – something you and your Air B&B buddies never factor in as you exercise your “property rights” while trampling on the property rights of long term residents. But only YOUR property rights count, right? Who would knowingly buy a home between two STRs unless they wanted to run one themselves? Did you know the National Realtor Association is contemplating requiring disclosure of STRs nearby as a “nuisance”?

      Beach Road has 20% STRs now. If the ordinance passed, it could have become “Hotel Road” in no time. The CCC has already shown in Oxnard that it will overreach in the coastal zone to fine communities that try to ban STRs. If Dana Point has no ordinance, the municipal code is silent on the matter. Per the City Attorney, this would mean this land use is banned. The City and Beach Road, which is a district and not an HOA, could sue the illegal STRs to shut them down for illegal land use. You and your greedy friends demand property rights while having no conscience about the damage you inflict on the “quiet enjoyment” of your neighbors’ homes. Can’t you just buy a small hotel or apartment building in a commercial area, set up your mini hotels, rake in your dough, zand leave the rest of us alone?

  • Mary Jane,

    The claims that I continue to operate Short Term Rentals at Niguel Beach Terrace are unfounded and simply not true. Years ago, when the ordinance was first put in place, I had reservations I needed to keep, and I thus paid the fine rather then forcing people to cancel their vacations here. That was a very long time ago and was actually a great example of the ordinance working properly. For the last few years we have rented to a couple of tenants long term. My parents purchased their condo to be closer to their grandkids, but because short term rentals are not allowed there they sold their home. Furthermore, Ted Harris, STR code enforcement officer has stated there are 5 verified issues regarding STRs over the last few years. I can assure you none of those had to do with me.

    Within Niguel Beach Terrace there use to be over 100 Short Term Rentals before the Ordinance was put in place. With the Ordinance in place no one in Niguel Beach Terrace was able to get STR permits because our CC&Rs don’t allow for them. At that point almost all STRs stopped, which Code Enforcement helped to ensure. Today there may be a handful operating illegally but it is no where close to the level that we had prior to the ordinance. Once again this is a fact verifiable by Ted Harris, Dana Point’s STR code enforcement officer.

    I would highly recommend you research what the Coastal Commission can and can not do within the Coastal Zone. Almost anything our City Council decides with regards to limiting or prohibiting Short Term Rentals must be signed off by them as part of an amendment process to our Local Coastal Program. The example of what is happening to the Mandalay Shores HOA in Oxnard is a great example of what can happen when cities don’t work with the CCC. Mandalay Shores must now pay a $30,000 a day fine until their CC&Rs are adjusted to allow Short Term Rentals. That is uninsurable litigation, that the CCC will collect on. The assessments that owners in that HOA now face are extraordinary.

    Beach Roach is in a special Interest zone, and as such owners on that street can vote whether or not to allow Short Term Rentals. Since only 20% of homes are STRs, it would seem logical that if they were causing such great issues, the other 80% of owners would vote to prohibit them. Why has this not happened?

    There are many property owners within the Coastal Zone, that hope to see the Ordinance repealed as it will allow them to operate STRs unhindered. Going back to the way things were before the Ordinance provides limited mechanisms for the city to police, enforce or prohibit Short Term Rentals. As our City Attorney, Patrick Munoz stated at the City Council meeting September 6th, without the Ordinance the city is left having to sue homeowners who refuse to stop operating their STRs, they have no other enforcement mechanisms. Litigating against hundreds of owners would ultimately tie up our city in long and drawn out court battles. We simply don’t have the money, personal or resources to go down this path. That is the reason why the city did nothing to prohibit short term rentals prior to the Ordinance’s implementation.

    Finally, the idea that allowing short term rentals has anything but a positive impact on home prices is ridiculous. 1) CAP rates are higher with STRs than with long term rentals 2) the pool of potential buyers increases when STRs are permitted and 3) it provides increased flexibility for all owners. If you compare home prices at Corniche at Ritz Pointe, where they allow STRs, you will note that over the last 3-years condo prices are up dramatically more then at Niguel Beach Terrace, where they are prohibited.

  • Hmm.. Very interesting, Jason. So you paid fines “years ago” — ” a very long time ago”? Really? Why do records at the City of Dana Point show that you and your relatives paid fines on 10/29/15 (less than a year ago) for several violations dated as recently as 9/28/15? Those pesky public records are a little inconvenient, aren’t they? Didn’t that ordinance pass in 2013? How then, could someone like you, who has been one of the most vocal proponents of this ordinance, be so mistaken about the fact that rentals less than 30 days are illegal in NBT? And weren’t you at one time a Board member, who would and should have known exactly what the CC& Rs say in that community?

    And as far as the CCC goes. Let’s be clear. They have NO jurisdiction in City affairs unless the City files an LCP for a zoning change as you state above. If no change is requested, the CCC has no right to tell the City anything about what it allows in residential zones. If the ordinance is effective, why do these units continue to operate? This whole thing needs a thorough and public investigation. I’m sure there are some honest people out there, but it’s clear unscrupulous STR owners continue to game the system and the City does nothing about it.

    And re: property values? Come on. Let’s get real. You’re quoting stats for condos, where the numbers may work, but would you pay $5 or $6million for a residence on Beach Road with an STR next door., or worse, on both sides? Good luck with that one. And no point forming an HOA as you state the CCC wouldn’t allow it. Different rules for coastal and non coastal residents. Doesn’t seem quite fair to me, but then again, what’s fair at all about this whole controversy?

  • Jason Colaco, Dana Point Reply

    Mary Jane,

    Wow, I guess my speeding tickets are public recored too 🙂 Impressive research! You just provided a great example of how thorough our Code Enforcement is. Last year, Ted Harris found an advertisement where I had conflicting 30-day and 7-day minimums advertised. It was an honest mistake, as I had long term tenants with long term leases at that time. My email exchanges with Code Enforcement are also public record describing the issue in detail. In any event, its a great example of our Ordinance working properly, I shouldn’t have been advertising and thus paid a hefty fine, even though I had long term tenants. And no, I have never been on the Board of Niguel Beach Terrace, but I am very clear on our CC&Rs. Not sure where you are getting your facts from.

    With regards to the CCC, without an LCP the city has no enforcement mechanisms outside of litigation. 1/3 of our community is in the Coastal Zone. Without our 5.38 and an LCP please explain how our city will police, regulate and manage STRS in these areas.? And how do we put in place regulations without CCC sign off? By the way, you do realize this is where the vast majority of STRs operate…

    If you have real hard facts that STR owners continue to game the system, please provide them. Your conspiracy theories are comical. Code Enforcement and the Sheriff communications don’t back up your claims.

    Regarding property values, there are STRs in Newport Beach, the Hamptons and in Malibu. Price per square foot there are much higher then in Dana Point. Your assertion that STRs impact home values at the high end are simply unfounded. Furthermore, Beach Road in in a Special Interest Zone. They don’t need an HOA to prohibit STRs. A simple vote of the people would allow them to prohibit VRs, but that has never happened because the vast majority are in support of STRs and of property rights.

  • Jason, you seem to play fast and loose with the truth. It’s interesting that you actually had two violations last year, and your relatives had 3. Guess all of you made those “honest mistakes” several times.

    When the truth comes out, we’ll see just how effective this ordinance really is. Kind of curious that no other community has taken Dana Point’s stance, but maybe they just made “honest mistakes” too, and didn’t realize that we should ALL open up mini-hotels, rake in the dough and watch our real estate values soar. We won’t have any neighborhoods, of course, but that’s a minor detail. Amazing that any of us survived without STRs the way you’re selling them. Why don’t you just buy one of those vacant lots and open up a hotel and leave your neighbors alone? They’d probably throw you a great goodbye party.

  • Mary Jane – Thank you! Jason has had this comeuppance coming for a long time. His comments in forums across the city have frequently not been credible. Thanks for the getting facts on the table and making clear what many of us suspected. Keep up the good work!

  • Jason Colaco, Dana Point Reply

    Mary Jane,

    I’m happy to use myself as an example of how the ordinance is in fact functioning properly. In June of 2014 we were issued STR Permits in Niguel Beach Terrace, I received mine on June 4, 2014. The permits we were issued were temporary due to a conflict between our CC&Rs and our Rules & Regulations. We were thus given time to resolve the issue while still operating our STRs. By early 2015 our permits were taken away because we were unable to achieve a 75% supermajority in our community”s vote. I still had some bookings and ended up paying the fine, rather then canceling my guest’s booking. I’ve mentioned this before. By October we had long term tenants, but Code Enforcement identified the issue with my VRBO advertisement and fined us again. I paid the fine and fixed the ad.

    In the end, I think there are some important lessons to learn here:
    1) There use to be 100 STRs in Niguel Beach Terrace and now their are none (or close to it). Clearly code enforcement has been very thorough in policing things as they were literally able to catch that VRBO had a conflict with regards to the minimum days being advertised.
    2) Because of the ordinance, our city had a mechanism to fine. Prior to the ordinance the only option the city had was to litigate.
    3) Unlike other cities where STRs have exploded, according to Ted Harris, the number of STRs in our city has actually decreased over the last 3-years.
    4) The ordinance gave HOAs in the coastal zone a mechanism to prohibit or limit STRs. Without the ordinance the Coastal Commission will likely push back hard on any limitations, as we’ve seen with the Mandalay Shores issue in Oxnard.

    In the end, I think its important to note that when the Chandler and Doheny Families built the first developments in Dana Point, they were mainly vacation rentals for the well to do in Los Angeles. Our city got its start as a resort town, and STRs have been a part of our fabric since the beginning. With the ordinance we have mechanisms to prohibit, police and manage short term rentals so that they don’t negatively impact our community. I’m raising 3-children here in Dana Point with my wife, and that is the last thing I want. The Ordinance may not be perfect, but its a good start and can be adjusted over time. Its hard for me to understand why we’d want to repeal it all together, leaving 1/3 of our community in the Coastal Zone exposed to the Coastal Commission.

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