Short-Term Rentals get Long Look

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Short-term rentals got a long look from the Newport Beach City Council during the council’s study session on Aug. 9.

Community Development Director Kim Brandt presented the city council with analyses and diagrams that showed the current short-term rental zones and the future of short-term rentals within Newport Beach.

In January 2016, the City Council looked at short-term rentals in Newport Beach and requested public input regarding short-term rentals. After researching and gathering the thoughts of the community, Brandt determined a majority of residents were interested in more requirements for obtaining short-term lodging permits, more regulations on how rentals can operate, and limiting the amount of permits available.

“I believe it’s been an open and engaging process with the community,” said Mayor Diane Dixon.

To comply with citizens’ interests, Brandt recommended a two-phase approach to moving forward with short-term rentals.

The first phase would be to expand the short-term lodging operational requirements. This would include requiring permits to be renewed on an annual basis, require a homeowner’s association verification letter as part of the application, require a minimum stay period, and continue to work with online sites such as Airbnb to ensure the city received the correct amount of tax revenue owed to it.

The second phase would be determined in the fall of 2018 pending the evaluation of how well phase one worked. If more government support was needed, then additional regulations will be created including placing a cap on the total permits citywide, extending the length of the minimum stay and increasing fines.

New operational standards were also suggested, including a mandate that short-term renters would provide their guests and neighbors with a local contact person, number and location of on-site parking, trash day pick up and collection rules, street sweeping day, and information to contact the city including Newport Beach Police Department phone number.

Guests and owners that do not comply will be required to vacate guests from the unit at the end of the agreement and no future rentals would be allowed. Short-term lodging permits would have to be displayed on advertisements including those used on Airbnb and other online sites.

Currently, tax revenue is lost to the city when residents use these sites to rent out their homes. These sites are pushing back claiming that they do not need to comply to the city rules.

“They are really disrupting local government and the way things have been done for a long time,” said City Manager Dave Kiff.

Code enforcement will be key to moving forward on short-term rentals according to Brandt. In 2015, the city collected $218,700 in fees as a result of enforcement effort. Increased enforcement efforts for 2016 will include a more vigilant effort in ensuring short-term renters have listed their permit on online sites. Brandt estimates this will cost about $204,000 per year.

At present there are 1,202 permits citywide, with 212 on the Balboa Peninsula.

“Short-term rentals are a business, and they have no right to be in residential areas,” said Newport Beach resident Kirk Christiansen.

Public hearing on the issue will resume in September.


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