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By Breeana Greenberg

When Phil Webb and his siblings inherited their family home on Beach Road in Dana Point, the family didn’t know what to do with it. The home was in the family since the 1960s, passed down from generation to generation, landing now with Webb and his siblings. The family no longer uses the home as much as they would like, so Webb, a resident of San Marino, says he is interested in turning the home into a short-term rental (STR).

But for people like Webb, obtaining a permit for STRs in Dana Point is currently an obstacle in limbo.

Short-term rentals are defined as entire residential houses or apartments, or rooms within, that are rented out to visitors for a fee between one and 29 consecutive days. They are often arranged on websites such as Airbnb, HomeAway or Vrbo.

Short-term rentals are often arranged on websites such as Airbnb, HomeAway or Vacation Rentals by Owner (Vrbo). Photo: Lillian Boyd

No new STR permits have been issued since 2016. After residents submitted a referendum petition to rescind the STR program approved in 2013, which went into effect in 2016, the Dana Point City Council repealed the ordinance. The roughly 200 permits issued when the program began were effectively grandfathered-in and were allowed to continue operating.  As of October 1, there are 129 permits still operating throughout the city.

Since the original ordinance was appealed, the city’s STR Subcommittee has worked to develop a policy to regulate STRs. The subcommittee requested input from residents on the city’s STR program at a public workshop on Monday, Nov. 8.

The STR Subcommittee evaluated three types of short-term rentals: homestays, primary residence, and non-primary residence. Homestays are when the homeowner rents out a portion of their home for between one and 29 consecutive days and the homeowner continues to live there at all times while visitors are renting; a primary residence is when a homeowner rents out their own primary residence to visitors for between one and 29 consecutive days while the homeowner is traveling or living elsewhere; and a non-primary residence is when a property owner rents out homes other than their primary residence to visitors for between one and 29 consecutive days.

Chair of the Dana Point Planning Commission and STR Subcommittee member Eric Nelson added that the Planning Commission is focused on protecting existing residents from nuisances that may occur when neighboring an STR. In creating new regulations, the STR Subcommittee is determined to “balance everybody’s rights and make sure that, from a property rights perspective, that we’re listening to that side, but we’re also listening to those that are residents in the community, as well as HOAs and homeowners.”

The ideal STR policy would have broad support from residents and homeowners in Dana Point, Nelson explained.

“What we want to make sure is that as a community, this is what the community wants and it’s not tailored for outside interests,” Nelson said. “Not to say that there couldn’t be any, but the goal would be that it’s not encouraging that.”

In June of this year, city council updated existing STR regulations to include a minimum renter age of 25, a maximum daytime occupancy of 2.5 times the night occupancy with a maximum of 20, and no outdoor noise after 10 p.m. If there are complaints, STR owners are given a 30-minute response time to resolve them. City staff will also let next-door neighbors of STRs know that the property is operating as a short-term rental annually.

The STR Subcommittee requested input from residents on zoning, permit caps, transferability of permits, maximum stay length, and regulating multi-family unit STRs.

The STR Subcommittee asked speakers to comment on whether the city should restrict STRs to only specific zones, and whether some zones should only allow for specific types of STRs. Resident Toni Nelson spoke at the workshop in favor of Laguna Beach’s program, which no longer allows short-term lodging in residential zones.

“People in general want the residential areas to stay residential,” Toni Nelson said. “We all like staying in Airbnbs when we travel places, but nobody really, when push comes to shove, wants to have a full-time hotel next door to them.”

Toni Nelson also added that “most people don’t want a constant barrage of people coming in and out every couple of days. It’s just not conducive to residential living. We want neighbors, not tourists.”

Paul Wyatt, a former STR Subcommittee member and former Dana Point Councilmember, commented in favor of restricting STRs to only the primary residence kind.

“I really think that if you use primary residence and say ‘OK, short-term rentals can only exist where somebody lives there as their primary home—their kids go to school there, their driver’s licenses are issued from there, and their taxes show a primary residence for tax purposes,’ those little criteria would establish that for sure,” Wyatt said. “If you said, we only allow them in that situation, I think that we would get agreement from both the Coastal Commission and the residents that that was acceptable.”

After the Dana Point City Council approves an STR ordinance, it will go before the California Coastal Commission for approval. The California Coastal Act maintains that development should not interfere with public access to the coast. STRs are generally seen as providing affordable lodging along the coast.

The STR Subcommittee asked speakers if existing permits should be transferable to new owners. This would mean that if a house that was operated as a short-term rental was sold, the permit would be tethered to the property so that whoever buys the property inherits the permit. Though opinions were mixed, generally those who spoke at the workshop were against the ability to transfer permits.

Deanna Slocum has lived in Capistrano Beach and has run an STR there since 2016. As a permit holder, she spoke against transferring permits.

“Those of us that do have a short-term rental worked very hard and are very attentive, as evidenced by the enforcement situation to keep the peace, and I don’t know that a person that I would sell my home to would immediately have that same priority,” Slocum said.

The STR Subcommittee also asked speakers to comment on whether there should be an annual cap on the number of nights rented. Speakers were generally in favor of a minimum stay length, but did not have strong opinions on an annual cap.

When Mitchell Ludwig bought a house in the Lantern District, he was concerned that the short-term rental next door would be a nuisance.

“I have to say it’s been 100 percent positive,” Ludwig said. “The owner of the property is very attentive to the property; he has given me his cell phone number if there’s ever an issue.”

Out of the hundreds of renters his neighbor has had, there’s only been one issue, Ludwig said.

“It was a little bit of noise after 10 o’clock, and I had an early morning,” Ludwig said. “I texted him, and he got his neighbors to quiet down. They apologized, I heard them over the fence, and they went to sleep, and that was the end of it.”

The future of STRs in Dana Point remains uncertain as the Planning Commission and STR Subcommittee continue to work to develop a policy to regulate them. The subcommittee plans to draft a program through December with the hopes of presenting a draft STR program to the Planning Commission in early January.

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