Laguna Beach is the latest Beach City to slap a moratorium on short term rentals. The city council voted to grant a 45 day stay on new requests for short term rentals while it studies what to do in the long term.
The move comes after city residents complained of an increase of loud parties, traffic congestion, littering, and vandalism. The city received 56 complaints about unpermitted renters in 2104 and 19 new complaints last month alone, Assistant City Manager Christa Johnson reported.
Thanks to the advent of online booking services such as Airbnb, VRBO and HomeAway, homeowners and investors in popular tourist destinations have turned their rooms or entire house into spare cash. Several at the council meeting attributed the complaints to the growing popularity of vacation rentals, the L.A. Times reports.
What will this mean for short term rentals?
The moratorium means the city won’t grant any new permits to those wishing to rent out their homes for less than 30 days, while they are exploring their options. Among these options are: an outright ban on rentals of under 30 days, making already dense residential areas off limit, and adding city staff to monitor ads.
While staff could look into laws that might reign in the worst consequences of the short-term rentals, Mayor Bob Whalen said the city’s priority must be to enforce compliance of the old laws or new ones.
Whether or not the rules are changed, Mayor Pro Tem Steve Dicterow wants to identify and deal with violators. He proposed trying to penalize web sites for listing properties without permits, according to the Laguna Beach Indy.
Current Rental Permits
Laguna established a permit process for short-term lodging in 1999. Of 100 applications since then, 64 received approval. Yet there are hundreds of short-term rental listings available online.
Homeowners wishing to rent to weekenders currently must pay a $275 fee to apply for a permit and notify neighbors of their intent. If no one objects, the city’s planning manager will approve the permit and the homeowner is required to obtain a business license and pay a 10 percent transient occupancy tax on the rental rate. Vacation Rental Report Laguna Beach California.
If the permit is denied, owners will often continue to rent illegally, because the financial gain generally outweighs any nominal fines. Some people are getting $20,000 to $40,000 a month illegally catering to short term renters.
How are vacation rentals handled elsewhere?
Vacation homes do have their benefits: Owners make money, travelers get a better experience than in a hotel and pay less –especially for big families or groups– and cities can make money by charging taxes. But some cities find the benefits aren’t worth the hassle.
Elsewhere in Orange County, Aliso Viejo banned short-term rentals due to complaints from neighbors.
Newport Beach re-evaluates permits every two years. If there are violations, permits can be revoked. The city charges 10% for each rental under 30 days, just as it would a hotel stay. There are about 700 short-term rental units around town. Last year, the city pulled in about $1.95 million from vacation rental taxes.
Vacation rentals are allowed but monitored in Dana Point and San Clemente. San Clemente, for example, also collects a tax for short-term rentals, generating about $280,000 each year for about 300 registered homes.
Santa Monica banned short-term rentals a few months ago and officials there said they likely removed 1,400 of 1,700 vacation rentals advertised on short-term lodging websites. The rules only allow short-term rentals in cases where the host stays on site.
About Jaleesa Peluso Coastal Homes
Jaleesa Peluso and her team at Berkshire Hathaway specialize in Laguna Beach Real Estate. Our professional services also include management and marketing of luxury vacation rentals and long term rentals. For more information contact us at (949) 395-0960 or www.jaleesapeluso.com.