Fountain Valley City Council rejects short-term rental permit ordinance, looks to ban practice

After mulling a decision on whether to allow short-term rentals for more than a year, the Fountain Valley City Council on Tuesday night unanimously rejected an ordinance that would have done so.

Going a step further, the council also directed staff to prepare an ordinance that explicitly bans short-term rentals in the city.

Between August and December last year, the council met three times to consider short-term rentals. Those discussions indicated that a council majority was interested in allowing short-term rentals with some restrictions.

The ability to enforce regulations on short-term rentals factored strongly into the council’s decision not to pass the ordinance. Fountain Valley has one code enforcement officer, and the projected revenue from transient occupancy tax would not have been substantial enough to cover the cost of additional officers.

Councilman Glenn Grandis disclosed he operates short-term rentals in Big Bear and Palm Desert. He said code enforcement personnel costs about $100,000 per person, according to conversations he’s had with people familiar with short-term rentals and code enforcement in Big Bear.

“The problem that I see is we don’t have the enforcement capability like they do in Big Bear,” Grandis said. “In Big Bear, they have four full-time code enforcement people. They work nights, they work weekends. In order for us to do it in Fountain Valley, we would need the same thing.”

Dozens of people packed the council chambers to weigh in on the issue, with some watching from outside the door. There was significant public pressure to vote down short-term rentals, as the majority of the roughly 40 speakers on the item voiced their opposition to the practice, expressing concerns related to noise, parking, privacy and safety.

Some speakers also railed against the argument that tourists would boost local businesses, saying that those staying in the short-term rentals were more likely to head to neighboring cities to visit beaches and theme parks.

Councilman Ted Bui asked Police Chief Matt Sheppard how officers intervene when residents call about nuisance behavior occurring at a shot-term rental.

“I heard here several times tonight that [the public] witnessed or were subjected to behavior that is a nuisance, and that they have not called the police when they wish they would have called the police,” Sheppard said. “I wish they would call the police because we can go out, and we can assist with curbing that behavior.”

Mayor Patrick Harper noted a desire to prioritize residents over businesses.

“I’m not against short-term rentals, in general, but I just don’t think they’re right for Fountain Valley,” Harper said. “I am sympathetic to the hosted method — maybe those could be considered on a case-by-case basis. If there’s a hardship or somebody has a particular situation they want to apply for, we can consider that, but I think the most reasonable thing to do would be to ban the rentals and also develop some sort of enforcement mechanism to make sure that we enforce the ban.”

Several nearby cities, including Costa Mesa, Huntington Beach and Irvine, have not permitted short-term rentals.

Since the municipal code did not expressly permit short-term rentals, city officials had taken the position that those operating short-term rentals were doing so illegally. The city collects transient occupancy tax at a rate of 9%, and Grandis vowed once again to hold those who had not paid the tax accountable.

“I now want to make sure we tackle the back taxes owed,” Grandis said. “I don’t want that to just slip through. It really just bothers me, and I think we need to put up an ordinance that states something that we’re going after them. We need to come up with a policy, and I want it to be really strict and strong.”

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