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By Breeana Greenberg

An appeal has been filed against the city’s recently approved short-term rental program regulating local vacation rentals through a coastal development permit. The Dana Point Planning Commission voted 4-1 to approve the STR program during its May 9 meeting.

A public hearing at City Hall on the appeal has been set for June 21 at 6 p.m. when residents will have the opportunity to voice their opinions on the STR Program.

The new program will, among other things, set caps on the number of permits issued to home and property owners, limit permits for certain STRs to 185, and place a maximum on rental periods.

A short-term rental (STR) is defined as an entire residential house or apartment, or rooms within, that is rented out to visitors for a fee between one and 29 consecutive days. It is often arranged on websites such as Airbnb, HomeAway or VRBO.

The appeal argues two main points: that the Planning Commission doesn’t have the authority to approve an STR program, rather it should be passed through a City Council vote; and that the program would damage the character of the city. 

“This is not a legal way to do it,” Mark Zanides, one of the appellants, said. “This program would be terrible for the citizens of Dana Point. It would significantly degrade residential neighborhoods, particularly in (Capistrano) Beach and Lantern District. It would reduce available low-cost housing, disproportionately affect minorities and disproportionately affect the Lantern and Capo Beach neighborhoods.” 

Zanides and fellow Dana Point resident Kim Tarantino wrote in their appeal filed on May 23, “each of us believes, as do many other residents of Dana Point, that the short-term rental program (STR) adopted by the Planning Commission is inconsistent with the preservation and quiet enjoyment of not only our neighborhoods, but residential neighborhoods throughout the City.”

The appellants argue that because Dana Point is a permissive zoning city—meaning that unless something is specifically permitted, it is presumed to be prohibited—STRs are prohibited in Dana Point because they are not specifically permitted in the zoning code.

Because of this, the appellants believe that the STR regulatory program, allowing for new STR permits, requires both a zoning code amendment and local coastal plan amendment. They argue that the Planning Commission does not have the authority to pass the program through a coastal development permit, without City Council or California Coastal Commission approval.

“The first and important legal point is that the Planning Commission does not have the authority to do this,” Zanides said. “If this is going to be done, it should be done properly as the city attorney, council let it be done in 2016, that the City Council pass an ordinance and have it run through the local zoning text amendment and amendment to the local coastal plan.”

The appellants feel that Dana Point’s current zoning code “already ‘balance the rights and responsibilities of residents and homeowners,’” by not allowing STRs in residential areas. Zanides added that he is not opposed to STRs in commercial or mixed-use zones.

The appellants also argue that there has not been enough enforcement against illegal short-term rentals and that the program does not sufficiently outline provisions for enforcement.

“There should be a robust enforcement program with severe penalties against illegal operators,” Zanides said. “The way to do that is you require the platform’s Airbnb or VRBO to collect the (Transient Occupancy Tax) and forbid them from advertising non-licensed STRs.”

In a presentation early this year, Dana Point’s Community Development Manager Jeff Rosaler outlined the city’s enforcement efforts.

The city has collaborated with the Orange County Sheriff’s Department (OCSD), as well as the vacation rental companies Airbnb, Vrbo, and Expedia, which market short-term rentals on their websites and phone apps.

Rosaler explained that some of these companies have government liaisons who work with code enforcement officers to make sure STRs advertised on the sites are operating legally. Dana Point Municipal Code requires that STR owners publish their permit number on advertisements.

Airbnb and Vrbo have also removed listings that are operating without a permit, effectively operating illegally.

The city hired Granicus, which looks through STR advertisements and creates a list of those illegally advertised without an STR permit. It also collects the city’s transient occupancy tax from STR apps and gives an audited list of data.

For nuisance violations, Dana Point City Council passed an ordinance in 2021 enhancing regulations. Under the ordinance, permit holders will have their permits revoked upon a third violation over the life of the permit.

With the new program, permit owners can be fined the maximum amount, as allowed per state law. Upon first violation, the owner will be fined $1,500; $3,000 upon a second violation; and $5,000 for a third violation over the life of the permit.

The appeal further argues that “the new regulations clearly state that long standing residents who have an expectation of quiet enjoyment with neighbors will have no right of objection nor appeal as their neighbor is replaced by an STR investor, particularly an absentee one, and their property values and quality of life are significantly diminished.”

The appellants argue that the program benefits STR owners and leaves non-HOA homeowners and renters bearing higher densities of short-term rental neighbors.

“It would turn the city to become a transient vacation haven, which would, in our view, destroy the most important feature of our town, which is our neighborhoods, well a very important feature of our town, and it would disproportionately affect the Lantern District and Capo Beach,” Zanides said.

The appeal states that 75% of STRs are located in the two districts and that the program will especially harm lower income households.

“It will disproportionately harm lower income people and minorities because, to the extent that multi-dwelling buildings are permitted to have STRs, who do you think will be evicted,” Zanides asked.

The appeal states that “The Planning Commission appears not to have attempted to determine whether and if so how much this policy will discriminate against racial minorities (35% of Lantern District (District 4) residents and 29% citywide) and rental households (62% in District 4 and 36% citywide) many of whom cannot afford the average Dana Point rent.”

In the appeal, Zanides and Tarantino argue that the program will especially affect households in the Lantern District earning less than $50,000 or $75,000 a year.

Zanides also argued that the city has more than enough hotel rooms available to offer sufficient coastal access.

“We have thousands of rooms here,” Zanides said. “We are as open and available, we provide probably more open and available coastal access than any town I know in California, I could be wrong, but certainly among the most generous in terms of coastal access.”

“There’s no reason to squander, to crush our neighborhoods to provide more people access to the coast because we already provide access to the coast and there’s more coming,” Zanides continued. “There’s another 650 rooms coming online in the next round of hotels and there are low-cost hotels.”

The appellants conclude their argument by stating that the STR program will “affect, fundamentally, the character of our neighborhoods.”

“If there’s going to be any kind of short-term rental program, it shouldn’t be this one,” Zanides said. “This is dreadful. They have disregarded what citizens say. They’re going to turn residential neighborhoods into transient, short term hotels.”

Zanides also noted that while opponents of the program do not want to bring the issue to an initiative, the option remains on the table. He added that the ballot initiative process is a cumbersome process but finds that the current program is unreasonable.

The appeal will be heard during the June 21 City Council meeting at 6 p.m.

Breeana Greenberg

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 bgreenberg@picketfencemedia.com

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