City extends temporary ban on short-term rentals

The Laguna Beach City Council on Tuesday extended a moratorium on issuing new permits for short-term rentals.

The council’s 4-1 vote adds an additional 90 days to an existing ban on the approval of applications from homeowners wanting to rent out space for 30 days or less. Mayor Pro Tem Steve Dicterow dissented.

The council voted for a 45-day ban at its May 19 meeting after residents complained that temporary tenants are loud and that they create litter and parking problems on neighborhood streets. The ban was set to expire July 3.

Regulation of short-term rental units has garnered greater attention with the growth in popularity of Airbnb and Vacation Rentals By Owner, which advertise rooms for rent in cities throughout the world.

Backers of short-term rentals say they are an affordable alternative to a hotel.

City staff requested a moratorium for 10 1/2 months to research possible solutions, including whether short-term rentals could be relegated to certain areas, but the council considered that an excessive period of time.

Councilman Kelly Boyd suggested the moratorium be trimmed to 90 days.

“My concern is how many of them are out there that we don’t know about,” Boyd said.

City code allows for short-term rentals provided property owners obtain a onetime $275 permit. Homeowners who secured a permit before the 45-day ban are still allowed to rent space.

City staff members have said many owners do not register with the city and rent rooms in secret. When people don’t register, the city misses out on the revenue from so-called transient occupancy taxes.

Dicterow suggested a 30-day moratorium and did not support the 90-day ban.

“I find this a troubling issue,” Dicterow said. “I see merits on each side. We want to protect the quiet enjoyment of the neighborhood, but people should have the right to do short-term rentals under the right circumstances.

“I can’t imagine a circumstance where I would support an outright prohibition. If we do things on a case-by-case basis and put the right protections in place, I think we can achieve what we want.”

Councilman Rob Zur Schmiede said this is more than a matter of rowdy renters.

“You have residentially zoned neighborhoods that over time, in very popular areas, become transient. They become hotels,” Zur Schmiede said. “I don’t think that is what a lot of people signed on for when they bought their home.

“It starts to erode your rental-housing stock when you’ve got too many of these.”

City staff is expected to provide recommendations at the council’s Aug. 18 meeting.