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c�<,FORN'P City Council Staff Report
February 11, 2020
Agenda Item No. 20
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Seimone Jurjis, Community Development Director - 949-644-3232,
sjurjis@newportbeachca.gov
PREPARED BY: Evelyn Tseng, Revenue Manager, etseng@newportbeachca.gov
Monique Navarrete, License Supervisor,
mnavarrete@newportbeachca.gov
PHONE: 949-644-3153
TITLE: Ordinance No. 2020-8: Amending the Newport Beach Municipal
Code for Short Term Lodging
ABSTRACT:
At the January 22, 2019 City Council Study Session, staff presented an update on
short-term lodging activities in the City. Due to complaints received by the City Council
and staff, the City Council formed an ad hoc committee to review the current provisions
in the Newport Beach Municipal Code (NBMC) Chapter 5.95 and to make
recommendations for any potential changes. The complaints received from residents
included issues with noise, too many guests in one unit, shortage of available street
parking, or overflowing trash. For the past year, the ad hoc committee received public
input at several community events and meetings, and worked with staff in drafting
recommended changes to the short-term lodging ordinance. Staff incorporated these
recommendations and drafted the attached ordinance for the City Council's consideration.
RECOMMENDATION:
a) Find this action is exempt from the California Environmental Quality Act (CEQA)
pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because
this action will not result in a physical change to the environment, directly or indirectly;
and
b) Waive full reading, direct the City Clerk to read by title only, introduce Ordinance
No. 2020-8, An Ordinance of the City Council of the City of Newport Beach, California,
Amending Section 1. 05.020 Subsection (F), Section 3.16.060 and Chapter 5.95 of the
Newport Beach Municipal Code Relating to Short Term Lodging, and pass to second
reading on February 25, 2020.
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FUNDING REQUIREMENTS:
If the proposed ordinance is adopted, the additional requirements will require increased
staff resources for administering and enforcing the program. Staff will evaluate and bring
recommended staffing adjustments as part of the proposed FY 2020-21 Budget.
Additionally, the estimated cost of an outsourced answering service is anticipated to cost
$35,000 per year.
To offset the increase in costs, staff proposes to complete a fee study and return to City
Council with a revised short-term lodging permit fee from the current amount of $103 per
year. Transient occupancy tax revenue will also increase. Although staff cannot project
the increase at this time, historically, the cost of staffing for short-term lodging compliance
has been more than offset with revenues derived from discovery and enforcement efforts.
BACKGROUND:
The NBMC permits short-term lodging in areas where zoning primarily allows for
residential duplex and multifamily structures. The City Council first adopted the
short-term lodging permit ordinance in 1992 in an effort to regulate the long-standing
practice of renting dwelling units on a weekly and monthly basis.
In April 2004, the City Council adopted an updated ordinance that precluded a short-term
lodging permit from being issued in Single-family Residential (R-1) zones and other areas
intended for single-family residential uses. At the time, 212 properties zoned for single-
family uses held short-term lodging permits. The dwellings on those properties were
considered to be "grandfathered" and allowed to continue with short-term lodging activity.
In January 2019, the City Council held a study session on short-term lodging and later
formed an ad hoc committee to review and recommend changes to the ordinance in
response to increasing community concerns and complaints on short-term lodging activity
affecting residential neighborhoods. The ad hoc committee included City Council
Members Diane Dixon, Joy Brenner, and Jeff Herdman. The committee members hosted
several community events and meetings to gain public input from residents, property
owners, as well as property managers and agents.
The proposed Ordinance (Attachment A) incorporates input from the residents and
owners, balancing the needs of both. The committee recommends the proposed changes
regarding parking, noise, maximum occupants, information and rules for guests, contact
information, a cap to the overall number of permits issued, removal of units outside the
coastal zone, and requirements for agents and hosting platforms.
It is important to note that the rental of short-term lodging units for 30 -days or less is not
considered a property right. Renting a unit for 31 days or longer is a property right. The
proposed changes to the short-term lodging ordinance does not violate owners' property
rights.
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DISCUSSION:
The ad hoc committee as well as the City Council held several events and meetings with
the community to gain their input. The following dates were opportunities for the
community and the City Council to provide their input:
• January 19, 2019
— City Council Study Session
• August 19, 2019 —
Community Meeting
• October 14, 2019
— District 5 Town Hall (Council Member Jeff Herdman)
• October 26, 2019
— District 6 Town Hall (Council Member Joy Brenner)
• November 19, 2019
— City Council Study Session
• February 3, 2020
— District 1 Town Hall (Council Member Diane Dixon)
The community provided extensive input, much of which has been incorporated into the
draft ordinance. The challenge for the ad hoc committee was proposing changes that
would fairly balance the concerns of the residents living next to short-term lodging units
with the priorities of the property owners who operate them. Correspondence was
received after the draft ordinance was placed on the City's calendar making it available
to the public (Attachment C).
Currently, 1,465 units are active with short-term lodging permits. These units generate
approximately $4 million in annual transient occupancy tax revenue.
The following is a summary of the proposed changes to the short-term lodging ordinance:
Parking
Lack of parking is a major issue associated with short-term lodging. The proposed
ordinance requires on-site parking for every short-term lodging unit that applies for a
permit. The required on-site parking space may include a garage, carport, driveway, or
tandem spaces. The new requirement would remove some vehicles from City streets and
alleviate some of the parking impact to residents. Staff believes a small number of short-
term lodging units will not be able to comply with this requirement. As proposed, if the
property owner cannot provide an on-site parking space, then the property is not eligible
for a short-term lodging permit.
Maximum Unit Occupant Load
At the outreach meetings, residents have complained of overcrowding in the short-term
lodging units. The draft ordinance proposes a maximum occupancy limit for each unit
based on two people per bedroom plus two additional people. For example, a two-
bedroom unit would be limited to six people total (two people times two bedrooms, plus
two additional people). The proposed calculation for occupancy is an industry standard
that is accepted in many communities.
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Interior Information Rules for Guests
In order to ensure all guests have the basic information they need for their stay in Newport
Beach, another proposed requirement is each short-term lodging unit shall post the
following information in the interior of the unit:
a) Name and number of a local contact available at all times, that is located within
b)
C)
d)
twenty-five miles;
The number and location of on-site parking spaces;
Street sweeping and trash collection schedule; and
No amplified sound between 10 p.m. and 10 a.m.
Exterior Signage and City's Answering Service
A unique provision that is proposed is a requirement for exterior signage on every
permitted short-term lodging unit. The sign will be a maximum of two square feet in size
and posted in a location that is visible from the public right of way. The exterior sign will
display the primary contact name, the City's answering service phone number and the
maximum occupancy limit for that unit. The City will contract directly with an answering
service and utilize a local number.
The purpose of the exterior sign is to allow surrounding residents that may be impacted
by activity at a short-term lodging unit to be able to immediately report the issue to the
City's answering service. When the answering service receives a complaint, they will
contact the property owner directly and report the issue. Staff believes that the answering
service will: 1) assist in managing the increase in service calls to City staff that will arise
from these ordinance changes, and 2) help the City better collect data about the number
and type of complaints on short-term lodging units. It is intended that staff will receive
daily reports from the answering service, allowing staff to investigate if a violation is taking
place. If a property owner is not reached by the answering service, staff will still receive
the report and follow up with the property owner or investigate the complaint. If a violation
of the NBMC is observed, then staff can issue a citation as further discussed under
Violations, Penalties, and Appeals in this report.
Limit on Number of Permits Issued
If every eligible unit in the City decided to apply for a short-term lodging unit, the number
of lodging units could potentially be over 10,000. In order to address resident concerns
that the City retain its residential neighborhoods, and still allow for residential short-term
lodging, the draft ordinance provides for a maximum cap on the number of short-term
lodging permits at 1,600 permits. Any application for a permit received after 1,600 permits
have been issued will be placed on a waiting list maintained by the Finance Department.
The current number of permits issued at the time of writing this report is 1,465 permits,
which means an additional 135 permits could be issued before the cap is reached.
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To further address the number of active short-term lodging permits issued, the ordinance
proposes to phase out short-term lodging units outside the coastal zone. Currently, there
are 58 active short-term lodging units outside the coastal zone. Those existing short-term
lodging units will need to cease operation after a ten-year phase out period. No further
short-term lodging permits will be issued outside the coastal zone.
Staff recommends that the regulations regarding the permit cap and the non -coastal zone
limit be effective immediately. The rest of the ordinance would be effective as of July 1,
2020, to give staff time to update the forms and processes necessary to implement the
ordinance.
Advertising Short -Term Lodging Units
In order to ensure that prospective guests know that the unit is properly permitted by the
City, the draft ordinance will require property owners who advertise their short-term
lodging unit on a hosting platform or through print literature, to post the short-term lodging
permit number issued by the City. This requirement will also assist the City confirming
the legality of the short-term lodging unit.
Agents and Hosting Platforms
To address concerns that agents and hosting platforms may be facilitating illegal rental
units in the City, the proposed ordinance provides that agents and hosting platforms
cannot complete any bookings unless the short-term lodging unit is listed in the City's
registry. In addition, agents and hosting platforms must disclose the unit's address, length
of stay, responsible person and price paid to the City. If an agent or hosting platform
collects a fee for the booking of the transaction, then they shall also collect the transient
occupancy tax.
Violations, Penalties, and Appeals
In order to ensure compliance with the short-term lodging requirements, the proposed
ordinance provides for stricter enforcement regulations, allowing for suspensions and
revocations, depending on the violation of the short-term lodging regulations. In addition,
the new ordinance clarifies that violations of the short-term lodging ordinance would result
in penalties up to $250, $500 and $1,000, if such violations occurred within a year of each
other.
The new ordinance also provides an appeals process, which allows an owner to request
a public hearing before a hearing officer if the short-term lodging permit has been
suspended or revoked.
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Coastal Development Permit
Staff believes the proposed changes do not violate the Coastal Act and will not require a
Coastal Development Permit. Short-term rental units are considered visitor -serving
accommodations and the number of allowed units in the coastal zone is not proposed to
be reduced.
Staff Resources
Short-term lodging unit owners are required to obtain a short-term lodging permit and a
business license, as well as remit transient occupancy tax. Owners and operators of
illegal units who fail to comply with the City's requirements have an unfair advantage, and
their units can be a detriment to the residential neighborhoods. The City dedicates staff
resources within the Finance Department and Community Development Department to
level the playing field for all owners and operators.
In the Finance Department, a part-time Senior Fiscal Clerk position, 21 hours per week,
is dedicated solely to short-term lodging. The position was created to identify unpermitted
short-term lodging units, and together with our contract with Host Compliance, a company
that provides leads through website search tools, has been successful in growing the
transient occupancy tax revenue from residential lodging by nearly 20 percent over the
last four years. From June 2015 to November 2019, revenues attributable to these
resources was approximately $2.5 million. With the success in these efforts and growth
in number of permits, the workload to administer the program has also significantly grown.
The part-time position must now also process initial and renewal applications, track
accounts, and provide customer service and enforcement. Approximately 2 years ago, a
new renewal process was implemented in order to obtain the property owner's agreement
to the short-term lodging regulations and understanding that the short-term lodging permit
was not a property right. The renewal process is more labor intensive, with sometimes
multiple interactions with a single property owner, resulting in a backlog of other
administrative duties associated with short-term lodging.
In addition to the current backlog, the proposed ordinance will require additional hours to
ensure a timely implementation of the ordinance, as well as ongoing compliance with the
updated requirements. For example, currently reviewing and processing a new short-term
lodging application takes approximately 45 minutes. The new application review and
process under these proposed amendments, which will include location of property,
signage, number of bedrooms, and parking oversight, will add approximately 30 minutes.
In the Community Development Department, Code Enforcement officers play an
enforcement role with the City's short-term lodging program. Code Enforcement staff
respond to complaints related to the operation of illegal units, noise, or complaints related
to trash. If the new ordinance is adopted, staff estimates the number of complaints will
double in its first year from 35-40 open cases to 70-80 open cases per week. This is a
10% increase in overall caseload for the Code Enforcement staff.
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Staff is evaluating the necessary additional resources needed to successfully implement
the proposed changes and provide appropriate customer support, both for property
owners with short-term rentals and residents with concerns about a short-term rental
property in their neighborhood. The needed resources under evaluation include
additional contract or part-time staff and an increase of one or two part-time positions to
full-time. The permit fee would also be analyzed in conjunction with the resource
requirements, and it is anticipated the additional fee revenue will cover the additional cost.
If the ordinance amendments are adopted, staff will bring additional staffing resources
considerations as part of the proposed FY 2020-21 Budget.
ENVIRONMENTAL REVIEW
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
This agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENTS:
Attachment A
— Ordinance No. 2020-8
Attachment B
— Redline Strikeout
Attachment C
— Correspondence
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Attachment A
Short Term Lodging Ordinance
K:
ORDINANCE NO. 2020- 8
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF NEWPORT BEACH, CALIFORNIA, AMENDING
SECTION 1.05.020 SUBSECTION (F), SECTION 3.16.060
AND CHAPTER 5.95 OF THE NEWPORT BEACH
MUNICIPAL CODE RELATING TO SHORT TERM
LODGING
WHEREAS, Section 200 of the Charter of the City of Newport Beach ("City")
vests the City Council with the authority to make and enforce all laws, rules and
regulations with respect to municipal affairs subject only to the restrictions and
limitations contained in the Charter and the State Constitution, and the power to
exercise, or act pursuant to any and all rights, powers, and privileges, or procedures
granted or prescribed by any law of the State of California;
WHEREAS, the City is a popular beach resort community that serves a large
number of tourists during the summer months;
WHEREAS, this influx of tourists burdens City streets and services with heavy
volume of vehicle traffic and heavy demand on parking, sewage, and refuse facilities,
paramedics and police services;
WHEREAS, the Police and Fire Departments frequently respond to complaints of
noise disturbances, disorderly conduct and other illegal activity at short term lodging
units;
WHEREAS, a large number of short term lodging units are located in residential
areas where dwelling units are occupied by the property owner or long term tenants and
these permanent residents are adversely impacted by the noise, traffic, refuse and
demand for parking resulting from occupancy of short term lodging units;
WHEREAS, the presence of such visitors within the City's residential
neighborhoods can sometimes disrupt the quietude and residential character of the
neighborhoods and adversely affect the community;
WHEREAS, the City has an interest in preserving its housing stock and the
quality and character of its existing single and multi -family residential neighborhoods;
WHEREAS, occupants of short term lodging units are generally not residents of
the City and the City has limited ability to enforce provisions of the Newport Beach
Municipal Code and the Penal Code related to disorderly conduct when violated by
occupants of short term lodging units;
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WHEREAS, on May 11, 1992, the City Council adopted Ordinance 92-13,
establishing regulations for the operation of short term lodging units within residential
zones to mitigate the impact of this use on the residents of the City, and
WHEREAS, the City Council has reviewed and considered evidence and
documentation attesting to the need to further regulate and control short term lodging
units in residential zones to ensure that: short term lodging units are regulated in a way
to maintain harmony with surrounding uses; and all transient occupancy taxes and
visitor serving fees are properly collected and remitted to the City.
NOW THEREFORE, the City Council of the City of Newport Beach ordains as
follows:
Section 1: Section 1.05.020 Subsection (F) of Chapter 1.05 of Title 1 of the
Newport Beach Municipal Code is hereby amended to read as follows:
F. In the case of administrative citations issued for violations of Chapter 5.28
[Live Entertainment Establishments]; Chapter 5.32 [Cafe Dances]; Section 10.50.020(H)
[violation of terms or conditions of a use permit issued by the City]; Section 14.36.030
resulting in bay or beach closure [Illicit Connections and Prohibited Discharges];
California Fire Code section 107.5 (as adopted by Code Section 9.04.010); or California
Fire Code section 107.5.1 (as adopted by Code Section 9.04.020), administrative fines
shall be assessed in the following amounts when authorized by the City Manager or his
or her designee:
1. A fine not exceeding one thousand dollars ($1,000.00) for a first violation;
2. A fine not exceeding two thousand dollars ($2,000.00) for a second violation
of the same ordinance or permit within one year from the date of the prior violation; and
3. A fine not exceeding three thousand dollars ($3,000.00) for a third violation,
or any subsequent violation, within one year from the date of the prior violations.
Section 2: Section 3.16.060 of Chapter 3.16 of Title 3 of the Newport Beach
Municipal Code is hereby amended to read as follows:
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3.16.060 Registration of Hotel.
Within thirty (30) days after commencing business each operator of any hotel
renting occupancy to transients shall register the hotel with the Finance Director and
obtain a "transient occupancy registration certificate" to be at all times posted in a
conspicuous place on the premises. The certificate shall, among other things, state the
following:
A. The name of the operator;
B. The address of the hotel;
C. The date upon which the certificate was issued; and
D. The following statement: This transient occupancy registration certificate
signifies that the person named on the certificate has fulfilled the requirements of the
Uniform Transient Occupancy Tax Ordinance (Chapter 3.16 of the Newport Beach
Municipal Code) by registering with the Finance Director for the purpose of collecting
the tax from transients and remitting the tax to the Finance Director. This certificate
does not authorize any person to conduct any unlawful business, to conduct any lawful
business in an unlawful manner or to operate a hotel without strictly complying with all
local laws, including those requiring a permit from any board, commission, department
or office of the City. This certificate does not constitute a permit.
The requirements of this section shall not apply to the operator of a hotel
required to obtain a short term lodging permit pursuant to Section 5.95.020.
Section 3: Chapter 5.95 of Title 5 of the Newport Beach Municipal Code is
hereby amended to read as follows:
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Chapter 5.95
SHORT TERM LODGING PERMIT
Sections:
5.95.005 Purpose and Findings.
5.95.010 Definitions.
5.95.015 Residential Properties Eligible for Short Term Lodging Permits.
5.95.017 Maximum Number of Permits.
5.95.020 Permit Required.
5.95.025 Agency.
5.95.030 Applicant for Permit.
5.95.035 Denial of Permit.
5.95.040 Filing Fee.
5.95.045 Conditions.
5.95.047 Violations of Permit Conditions by Transient User, Occupant or Guest.
5.95.050 Agent and Hosting Platform Responsibilities.
5.95.055 Issuance of Administrative Subpoenas.
5.95.060
Violations and Penalties.
5.95.065
Suspensions and Revocations.
5.95.070
Permits and Fees Not Exclusive.
5.95.080
License and Permit Closure.
5.95.005 Purpose and Findings.
The City Council of the City of Newport Beach finds and declares as follows:
A. An ever-increasing number of tourists renting short term lodging units is
increasing the demand for City services and creating adverse impacts in residential
zones.
B. Over a thousand dwelling units within residential zones near the City's beaches
and harbor are rented for less than thirty (30) consecutive calendar days with the vast
majority of those rentals occurring during the summer when the demand for parking and
City services is the greatest.
C. Many of the occupants of short term lodging units are permanent residents of
areas distant from Newport Beach and the City has no effective way to prevent
occupants from continuing to violate provisions of this Code and the Penal Code
relating to noise, disturbances and disorderly conduct. The only effective way to
minimize the problems associated with occupancy of short term lodging units is to
impose responsibility on the owner of the property, either personally or through an
agent, to control the conduct of guests and occupants.
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D. Numerous incidents involving excessive noise, disorderly conduct, vandalism,
overcrowding, traffic congestion, illegal vehicle parking and accumulation of refuse are
directly related to short term lodging units, which increasingly require response from
police, fire, paramedic and other City services.
E. The increase in demand for City services resulting from short term lodging units
overburdens, and threatens the City's ability to provide necessary services.
F. Many short term lodging units are operated by agents and/or absentee owners
who exercise little or no supervision or control of occupants.
G. There has been an increase in the number of lodging units booked on a short
term basis where the owner of the unit does not have a short term lodging permit,
affecting the ability of the City to properly regulate the impacts caused by the illegal
operation.
H. There has been an increase in the number of lodging units booked on a short
term basis where the owner of the property has not taken steps to ensure the transient
occupancy tax and visitor service fee is collected and/or remitted to the City, resulting in
an unfair business advantage to these illegal operations and loss of revenue necessary
to provide City services.
I. Problems with short term lodgings are particularly acute in residential districts
where the peace, safety and general welfare of the long term residents is threatened.
J. There has been an increase in the number of short term rentals in areas of the
City outside of the Coastal Zone, which affects neighborhoods that have traditionally not
had short term rentals. It is in the City's interest to stop issuing new permits in areas
outside the Coastal Zone after March 31, 2020 and to stop renewing permits for short
term lodging units outside of the Coastal Zone after March 31, 2030.
K. To ensure the effective enforcement of this Code, it is necessary to have the
owner include the short term lodging permit number issued by the City on all
advertisements for a short term lodging unit so the transient user knows the owner is
authorized to rent the lodging unit on a short term basis.
L. To make sure the transient user knows the total cost associated with renting the
lodging unit and to prevent fraud, it is necessary for the owner to ensure the transient
user is informed of the amount of the transient occupancy tax and visitor service fee,
prior to completing a booking transaction.
M. The restrictions of this chapter are necessary to preserve the City's housing
stock, the quality and character of the City's residential neighborhoods as well as to
prevent the continued burden on City services and adverse impacts on residential
neighborhoods posed by short term lodgings.
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5.95.010 Definitions.
For the purpose of this chapter, the following definitions shall apply:
A. "Accessory dwelling unit" shall have the same definition as set forth in Chapter
20.70 of Title 20 of this Code.
B. "Agent" shall mean any person who is authorized in writing by the owner to
represent and act for an owner.
C. "Booking transaction" shall mean any reservation or payment service provided by
a person who facilitates a short term lodging rental transaction between a transient user
and owner for the use of a unit for a period of less than thirty (30) consecutive calendar
days.
D. "City Manager" shall mean the City Manager of the City or his or her designee.
E. "Finance Director" shall mean the Finance Director of the City or his or her
designee.
F. "Gross floor area," shall mean the area of the lodging unit that includes the
surrounding exterior walls and any interior finished portion of a structure that is
accessible and that measures more than six feet from finished floor to ceiling.
Stairwells and elevator shafts above the first level shall be excluded from the calculation
of gross floor area.
G. "Home -sharing" shall mean an activity whereby the owner hosts a transient user
in the owner's lodging unit, for compensation, for periods of less than thirty (30)
consecutive calendar days, during which time the owner of the unit lives onsite, in the
unit, throughout the transient user's stay and the owner, the transient user and any
other occupants live together in the same unit as a single housekeeping unit.
H. "Hosting platform" shall mean a person, other than an owner or agent, who
participates in the short term lodging business by collecting or receiving a fee, directly or
indirectly through an agent or intermediary, for conducting a booking transaction using
any medium of facilitation.
I. "Lodging unit" or "unit" shall mean a "dwelling unit" as that term is defined in
Chapter 20.70, of Title 20 of this Code. An accessory dwelling unit shall not be
considered a lodging unit or unit for purposes of this chapter.
J. "Owner" shall mean the person(s) that hold(s) legal and/or equitable title to the
lodging unit.
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K. "Person" shall mean any individual and any form of business entity including, but
not limited to, all domestic and foreign corporations, associations, syndicates, joint stock
corporations, partnerships of every kind, clubs, business or common law trusts,
societies, or limited liability company.
L. "Residential district" shall mean those areas of the City so designated by Title 20
of this Code as well as any other area in the City designated for a residential use as part
of a Planned Community Development Plan, Specific Area Plan or Planned Residential
District.
M. "Short term" shall mean a lodging unit that is rented or leased as a single
housekeeping unit for a period of less than thirty (30) consecutive calendar days. This
also includes home -sharing.
N. "Short term lodging unit registry" shall mean the published registry maintained by
the City that sets forth a list of all owners and the address of all units that have a valid
short term lodging permit and business license with the City, a copy of which is
available, without charge, to any person who requests a copy and which shall be
accessible on the City's website.
O. "Single housekeeping unit" shall have the same definition as set forth in Chapter
20.70 of Title 20 of this Code.
P. "Transient" or "Transient user" shall mean any person or persons who, for any
period less than thirty (30) consecutive calendar days either at his own expense or at
the expense of another, obtains lodging in a lodging unit or the use of any lodging space
in any unit, for which lodging or use of lodging space a charge is made.
5.95.015 Residential Properties Eligible for Short Term Lodging Permits.
Only properties in a residential district that are authorized under Titles 20 and 21 of this
Code and this chapter shall be eligible for a short term lodging permit.
A. Subsequent to June 1, 2004, no permit shall be issued to or renewed for any
dwelling unit on any parcel zoned for "Single-family Residential (R-1)" or that is
designated for a single-family residential use as part of a Planned Community
Development Plan, Specific Area Plan or Planned Residential District, unless a permit
has previously been issued for that lodging unit and the permit was not subsequently:
1. Closed by the Finance Director because the unit is demolished or rebuilt
on or after July 1, 2020;
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2. Closed by the Finance Director because the unit is modified in any way
that increases gross floor area by more than twenty-five percent (25%) on or after July
1, 2020; or
3. Revoked.
B. Prior to April 1, 2030, no permit shall be issued to or renewed for any lodging unit
located outside the Coastal Zone, unless the owner had a permit for the lodging unit on
or before March 31, 2020, and the permit was not subsequently revoked.
C. On or after April 1, 2030, no permit shall be issued to or renewed for any lodging
unit located outside the Coastal Zone.
D. No permit shall be issued to or renewed for any owner that does not have at least
one parking space for each unit in a garage, carport, or driveway at the property.
5.95.017 Maximum Number of Permits.
A. The maximum number of short term lodging permits shall be limited to sixteen
hundred (1,600) at any time.
B. If the City has issued the maximum number of permits available, the City shall
maintain a waiting list. An application for placement on the waiting list shall be
submitted to the Finance Director, on a form approved by the Finance Director, and
shall be accompanied by a fee established by resolution of the City Council. In the
event a short term lodging permit becomes available, the Finance Director shall notify
the person or persons next in order on the waiting list. The notice shall specify that
applications will be accepted for ten (10) calendar days after the date of the notice, and
that failure to apply within the ten (10) calendar day period shall result in removal of the
person or persons receiving notice from the waiting list. Notice shall be deemed given
when deposited in the United States mail, with the first class postage prepaid, and
addressed as specified by the person or persons on the waiting list. The City shall not
be liable for a failure to notify any person or persons on the waiting list since placement
on the list does not create any property right in any person or persons on the list nor any
contractual obligation on the part of the City.
5.95.020 Permit Required.
No owner of a lodging unit shall advertise for rent or rent a lodging unit located within a
residential district for a short term without a valid short term lodging permit for that unit
issued pursuant to this chapter.
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Ordinance No. 2020 -
Page 9 of 20
5.95.025 Agency.
An owner may retain an agent to comply with the requirements of this chapter,
including, without limitation, the filing of an application for a short term lodging permit,
the management of the short term lodging unit or units, and the compliance with the
conditions to the short term lodging permit. The permit shall be issued only to the owner
of the short term lodging unit or units. The owner of the short term lodging unit or units
is responsible for compliance with the provisions of this chapter and the failure of an
agent to comply with this chapter shall be deemed non-compliance by the owner.
5.95.030 Applicant for Permit.
An application for a short term lodging permit shall be filed with the Finance Director
upon forms provided by the City and shall contain the following information:
A. The name, address and telephone number of the owner of the unit for which the
short term lodging permit is to be issued.
B. The name, address and telephone number of the agent, if any, of the owner of
the unit.
C. Evidence of a valid business license issued by the City for the separate business
of operating a short term lodging unit or units.
D. The number of bedrooms in the lodging unit.
E. The number of parking spaces available onsite and a description indicating the
location and size of each parking space.
F. A proposed location for the placement of the sign required to be posted on the
exterior of the unit.
G. A certification that the applicant has reviewed the covenants, conditions and
restrictions, if any, and a short term use is permitted at the location pursuant to the
terms of the covenants, conditions and restrictions, if any.
H. Acknowledgement of receipt and inspection of a copy of all regulations pertaining
to the operation of a short term lodging unit.
I. Such other information as the Finance Director deems reasonably necessary to
administer this chapter.
20-17
Ordinance No. 2020 -
Page 10 of 20
5.95.035 Denial of Permit.
If permits are available for issuance, no application filed by an owner for a permit or
renewal of a permit for a unit eligible to be used as a short term lodging unit, as
provided for in Section 5.95.015 and this Code, shall be denied unless the owner does
not have a current valid business license; or the short term lodging permit for the same
unit and issued to the same owner has been revoked.
5.95.040 Filing Fee.
An application or renewal application for a short term lodging permit shall be
accompanied by a fee established by resolution of the City Council, provided, however,
the fee shall be no greater than necessary to defer the cost incurred by the City in
administering the provisions of this chapter and for providing the answering service.
5.95.045 Conditions.
A. All permits issued pursuant to this chapter are subject to the following standard
conditions:
1. The owner shall enter into a written agreement with the transient user that
requires all persons residing in the short term lodging unit to live as a single
housekeeping unit; and that the transient user limit the overnight occupancy of the short
term lodging unit to two occupants per bedroom plus two persons per lodging unit. The
owner shall ensure that the overnight maximum occupancy is not exceeded.
2. The owner shall use best efforts to ensure that the transient user,
occupants and/or guests of the short term lodging unit do not create unreasonable noise
or disturbances, engage in disorderly conduct, or violate provisions of this Code or any
state or federal law pertaining to noise, disorderly conduct, the consumption of alcohol,
or the use of illegal drugs.
3. The owner shall, upon notification that any transient user, occupant and/or
guest of his or her short term lodging unit has created unreasonable noise or
disturbances, engaged in disorderly conduct or committed violations of this Code or any
state or federal law pertaining to noise, disorderly conduct, the consumption of alcohol
or the use of illegal drugs, promptly use best efforts to prevent a recurrence of such
conduct by any transient user, occupant or guest.
4. The owner of the short term lodging unit shall use best efforts to ensure
compliance with all the provisions of Title 6 of this Code.
5. The owner of the short term lodging unit shall provide the transient user
with a copy of Sections 5.95.047, 10.28.007, 10.28.010, 10.28.020, 10.58.030, and
10.66.020 of this Code.
20-18
Ordinance No. 2020 -
Page 11 of 20
6. The owner of the short term lodging unit shall post a copy of the short term
lodging permit and a copy of the conditions set forth in this subsection in a conspicuous
place within the unit. The notice shall contain the following:
a. The name of the local contact person(s) and phone number at
which that person(s) may be reached on a twenty-four (24) hour basis. The local
person(s) must be located within twenty-five (25) miles of the unit and shall respond to
any call related to the unit within thirty (30) minutes.
b. The number and location of onsite parking spaces.
C. The street sweeping schedule for all public right-of-ways within 300
feet of the unit.
d. The trash collection schedule for the unit, and the Code rules and
regulations concerning the timing, storage and placement of trash containers and
recycling requirements.
e. Notification that no amplified sound or reproduced sound is
allowed outside or audible from the property line between the hours of 10:00 p.m. and
10:00 a.m.
f. Notification that any transient user, occupant or guest is
responsible for all activities occurring on the property and that any transient user,
occupant or guest may be cited and fined for creating a disturbance or violating any
provision of this Code.
7. With respect to any short term lodging unit that is located in any Safety
Enhancement Zone, the owner of the unit and any agent retained by the owner shall
take immediate action during the period that the Safety Enhancement Zone is in effect
to prevent any transient user, occupant or guest from engaging in disorderly conduct or
committing violations of this Code or state or federal law pertaining to noise, disorderly
conduct, the consumption of alcohol or the use of illegal drugs.
8. The owner shall:
a. Ensure that all transient occupancy taxes and visitor service fees
are collected and remitted to the City and otherwise comply with all transient occupancy
tax and visitor service fee requirements, as set forth in Chapters 3.16 and 3.28.
20-19
Ordinance No. 2020 -
Page 12 of 20
b. If the owner uses an agent to collect and remit the transient
occupancy tax and the visitor service fee, the owner shall be responsible for ensuring
that the agent collects and remits the transient occupancy tax and the visitor service fee
to the City pursuant to the requirements set forth in this chapter, Chapter 3.16 and
Chapter 3.28.
C. If the owner uses a hosting platform to collect and remit the
transient occupancy tax and the visitor service fee, the owner shall: (i) be responsible
for ensuring that the hosting platform collects and remits the transient occupancy tax
and the visitor service fee to the City in accordance with this chapter; and (ii) when filing
a return in accordance with Sections 3.16.070 and 3.28.040, the owner shall provide the
City with a copy of all receipts showing the date the short term lodging unit was rented,
the amount of transient occupancy tax and visitor service fee collected by the hosting
platform, and proof that the transient occupancy tax and visitor service fee was remitted
to the City.
9. The owner shall utilize the City's answering service and shall provide the
City with the name and twenty-four (24) hour phone number of a local contact person(s)
(who reside within twenty-five (25) miles of the property) who shall ensure compliance
with this chapter in a timely manner. The owner or agent must provide a new local
contact person and his or her phone number within five (5) business days, if there is a
change in the local contact person(s).
10. The owner shall ensure that all available parking spaces onsite, which
may include garage, carport, and driveway spaces, as well as tandem parking are
available for the transient user, occupant or guest of the short term lodging unit. The
owner shall disclose the number of parking spaces available onsite and shall inform the
transient user, occupant and/or guest that street parking may not be available.
11. The owner shall maintain a valid business license and short term lodging
permit when engaging in short term lodging.
12. The owner shall include the City issued short term lodging permit number
on all advertisements for the rental of the short term lodging unit and shall ensure the
transient user is informed of the amount of the transient occupancy tax and visitor
service fee prior to completion of the booking transaction.
13. The owner shall ensure that a permitted short term lodging unit is only
used for residential purposes and not used for non-residential uses, including, but not
limited to, large commercial or non-commercial gatherings, commercial filming and/or
non -owner wedding receptions.
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Ordinance No. 2020 -
Page 13 of 20
14. The owner shall ensure that no amplified sound, or reproduced sound is
used outside or audible from the property line between the hours of 10:00 p.m. and
10:00 a.m. and that the transient user does not violate the requirements set forth in this
chapter, Chapters 10.28, 10.58 and 10.66.
15. The owner shall post, on a sign not to exceed two square feet, which shall
be approved by the City, the local primary contact name, the phone number for the
City's answering service, and maximum overnight unit occupancy. The sign shall be
posted at a location on the exterior of the unit readily visible from public right of way,
subject to the approval by the City, in lettering of sufficient size to be easily legible.
B. The City Manager shall have the authority to impose additional standard
conditions, applicable to all short term lodging units, as necessary to achieve the
objectives of this chapter.
C. The City Manager shall have the authority to impose additional conditions on any
permit in the event of any violation of the conditions to the permit or the provisions of
this chapter subject to compliance with the procedures specified in Section 5.95.065.
5.95.047 Violations of Permit Conditions by Transient User, Occupant or Guest.
In addition to other provisions of this Code, it shall be unlawful for any transient user,
occupant or guest of a short term lodging unit to:
A. Exceed the overnight occupancy limit designated for the short term lodging unit.
B. Use street parking prior to utilizing all available onsite parking space(s) for the
lodging unit.
C. Place trash for collection in violation of this Code's rules and regulations
concerning:
1. The timing, storage or placement of trash containers; or
2. Recycling requirements.
D. Amplify or reproduce sound between the hours of 10:00 p.m. and 10:00 a.m.:
1. Outside of the lodging unit; or
2. That is audible from the property line for the lodging unit.
E. Use the short term lodging for any non-residential purpose, including, but not
limited to, large commercial or non-commercial gatherings, commercial filming and/or
non -owner wedding receptions.
20-21
Ordinance No. 2020 -
Page 14 of 20
5.95.050 Agents and Hosting Platform Responsibilities.
A. Agents and hosting platforms shall collect all applicable transient occupancy
taxes and visitor service fees for the rental of a short term lodging unit for which the
agent or hosting platform collects or receives any fee or other payment, whether directly
or indirectly, for advertising, conducting, managing, facilitating, handling or effecting a
booking transaction for the short term lodging unit. The agent and hosting platform shall
remit to the City any transient occupancy taxes or visitor service fees collected by the
hosting platform or agent to the City before the last day of the month following the close
of each calendar quarter or on the day specified by the Finance Director if a different
reporting period has been established. Nothing herein shall be deemed to relieve an
operator, as that term is defined in Sections 3.16.020 and 3.28.020, from complying with
the requirements set forth in Chapters 3.16 and 3.20 of this Code.
B. Subject to applicable laws, agents and hosting platforms shall disclose to the City
on a regular basis each home -sharing and vacation rental listing located in the City, the
names of the persons responsible for each such listing, the address of each such listing,
the length of stay for each such listing and the price paid for each stay.
C. Agents and hosting platforms shall not:
1. Complete any booking transaction for any short term lodging unit unless
the unit is listed in the City's short term lodging unit registry as having obtained and
maintained a valid business license and short term lodging permit issued by the City.
2. Collect or receive a fee, directly or indirectly for facilitating or providing
services ancillary to an unpermitted short term lodging unit including, but not limited to,
insurance, concierge services, catering, restaurant bookings, tours, guide services,
entertainment, cleaning, property management, or maintenance of the short term
lodging unit.
D. A hosting platform operating exclusively on the internet, which operates in
compliance with subsection (A), (B), and (C) above, shall be presumed to be in
compliance with this chapter, except that the hosting platform remains responsible for
compliance with the administrative subpoena provisions of this chapter.
E. The provisions of the section shall be interpreted in accordance with otherwise
applicable state and federal law(s) and will not apply if determined by the City to be in
violation of, or preempted by, such law(s).
20-22
Ordinance No. 2020 -
Page 15 of 20
5.95.055 Issuance of Administrative Subpoenas.
The City Manager shall have the authority to issue and serve administrative subpoenas
to the owner, agent or hosting platform, as necessary, to obtain specific information
regarding short term rental listings located in the City, including but not limited to, the
names of the persons responsible for each such listing, the address of each such listing,
the length of stay for each such listing and the price paid for each stay, to determine
whether the short term rental listing complies with this chapter. Any subpoena issued
pursuant to this section shall not require the production of information sooner than thirty
(30) calendar days from the date of service. A person that has been served with an
administrative subpoena may seek judicial review during that thirty calendar day (30)
period. Failure to respond to an administrative subpoena in accordance with the terms
set forth therein shall be punishable in accordance with Section 5.95.060 and the City
may file a judicial action to compel compliance with the subpoena.
5.95.060 Violations and Penalties.
A. Any violation of this chapter is punishable as provided in Chapters 1.04 and
Chapter 1.05 of the Code.
B. Except as provided in subsection (C), in the case of any administrative citation
issued pursuant to this chapter, administrative fines shall be assessed in the following
amounts:
1. A fine not exceeding two hundred and fifty dollars ($250.00) for a first
violation.
2. A fine not exceeding five hundred dollars ($500.00) for a second violation,
within one year of the date of the prior violation.
3. A fine not exceeding one thousand dollars ($1,000.00) for a third violation,
or any subsequent violation, within one year of the date of the prior violation.
C. In the case of a short term lodging permit for a dwelling that is located in a Safety
Enhancement Zone, the penalty for the failure to comply with any standard condition
during the period that the Safety Enhancement Zone is in effect shall be a fine of one
thousand dollars ($1,000.00).
5.95.065 Suspensions and Revocations.
In addition to any fine or penalty that may be imposed pursuant to any provision of this
Code including, but not limited to Section 5.95.060, a short term lodging permit for a unit
may be suspended or revoked as provided in this section.
20-23
Ordinance No. 2020 -
Page 16 of 20
A. Suspensions/Revocations.
1. Except as otherwise provided in this subsection, if any person violates a
short term lodging permit condition two (2) or more times in any twelve (12) month
period or any other provision of this Code, state law or federal law, two (2) or more
times in any twelve (12) month period, and the violation relates in any way to the unit
that has a short term lodging permit, the short term lodging permit for the unit may be
suspended for a period of six (6) months in accordance with subsection (B).
2. In the case of a short term lodging permit for a unit that is located in a
Safety Enhancement Zone, if there is a violation of any provision of this Code during the
period that the Safety Enhancement Zone is in effect, the short term lodging permit for
the unit may be suspended for a period of one (1) year or revoked in accordance with
subsection (B).
3. If a lodging unit that is subject to a short term lodging permit has been the
location of two or more loud or unruly gatherings, as defined in Chapter 10.66 of this
Code, while the lodging unit was occupied on a short term basis, within any twenty-four
(24) month period, the permit may be suspended for a period of one (1) year or revoked
in accordance with the subsection (B). A loud or unruly gathering that occurred prior to
the passage of fourteen (14) calendar days from the mailing of notice to the owner in
compliance with Section 10.66.030(D) shall not be included within the calculation of the
two or more loud or unruly gatherings required to revoke a short term lodging permit.
4. If a person violates Section 5.95.020 in regards to any unit that has had a
short term lodging permit suspended pursuant to subsection (B), the short term lodging
permit for the unit may be revoked in accordance with subsection (B).
5. If any person violates a short term lodging permit condition or any other
provision of this Code, state or federal law within six (6) months of having a previously
suspended short term lodging permit reinstated for a unit, and the violation relates in
any way to the unit that has the short term lodging permit, the short term lodging permit
for the unit may be revoked in accordance with subsection (B).
6. If any person violates a short term lodging permit condition three (3) or
more times in any twelve (12) month period or provision of this Code, state or federal
law three (3) or more times in any twelve (12) month period, and the violation relates in
any way to the unit that has a short term lodging permit, the short term lodging permit
for the unit may be revoked in accordance with subsection (B).
7. If any person fails to collect and remit transient occupancy tax or the
visitor service fee in accordance with the requirements of this chapter, Chapters 3.16 or
3.28 in regards to any unit that has a short term lodging permit, two or more times within
any thirty six (36) month period, the short term lodging permit for the unit may be
revoked in accordance with subsection (B).
20-24
Ordinance No. 2020 -
Page 17 of 20
B. Permits shall be suspended or revoked, only in the manner provided in this
section.
1. The Finance Director shall conduct an investigation whenever he or she
has reason to believe that an owner has committed a violation of a permit condition, this
Code, state or federal law related to a permitted unit. Such investigation may include,
but is not limited to, on-site property inspections. Should the investigation reveal
substantial evidence to support a finding that a violation occurred that warrants a
suspension or revocation of the short term lodging permit, the Finance Director shall
issue written notice of intention to suspend or revoke the short term lodging permit. The
written notice shall be served on the owner in accordance with Section 1.08.080, and
shall specify the facts which, in the opinion of the Finance Director constitute substantial
evidence to establish grounds for imposition of the suspension and/or revocation, and
specify the proposed time the short term lodging permit shall be suspended and/or that
the short term lodging permit shall be revoked within thirty (30) calendar days from the
date the notice is given, unless the owner files, before the suspension and/or
revocation becomes effective, a request for hearing before a hearing officer, who shall
be retained by the City, and pays the fee for the hearing established by resolution of the
City Council.
2. If the owner requests a hearing and pays the hearing fee, established by
resolution of the City Council, within the time specified in subsection (B)(1), the Finance
Director shall serve written notice on the owner, pursuant to Section 1.08.080, setting
forth the date, time and place for the hearing. The hearing shall be scheduled not less
than fifteen (15) calendar days, nor more than sixty (60) calendar days, from the date on
which notice of the hearing is served by the Finance Director. The hearing shall be
conducted according to the rules normally applicable to administrative hearings. At the
hearing, the hearing officer will preside over the hearing, take evidence and then submit
proposed findings and recommendations to the City Manager. The City Manager shall
suspend or revoke the short term lodging permit only upon a finding that a violation has
been proven by a preponderance of the evidence, and that the suspension or
revocation is consistent with the provisions of this section. The City Manager shall
render a decision within thirty (30) calendar days of the hearing and the decision shall
be final.
C. If a short term lodging permit is suspended, it shall be the owner's responsibility
to vacate any future bookings and remove all advertisements related to the short term
rental of the unit during the term of the suspension. If a short term lodging permit is
revoked, it shall be the owner's responsibility to vacate any future bookings and remove
all advertisements related to the short term rental of the unit.
20-25
Ordinance No. 2020 -
Page 18 of 20
D. After any suspension, the owner may reapply for reinstatement of the short term
lodging permit which shall be processed in accordance with Section 5.95.030, provided
the owner has paid the City all amounts owed the City in accordance with this chapter
and Chapters 3.16 and 3.28 of this Code.
5.95.070 Permits and Fees Not Exclusive.
Permits and fees required by this chapter shall be in addition to any license, permit or
fee required under any other chapter of this Code. The issuance of any permit pursuant
to this chapter shall not relieve the owner of the obligation to comply with all other
provisions of this Code including, but not limited to, those provisions pertaining to the
use and occupancy of the lodging unit or the property on which it is located as well as
the collection and remittance of transient occupancy taxes and visitor service fees in
accordance with this chapter and Chapters 3.16 and 3.28.
5.95.080 License and Permit Closure.
A. Any owner that has ceased operating a short term lodging unit shall inform the
Finance Director in writing of the date of the last rental, and having done such, the short
term lodging permit shall be closed. The City will send a final transient occupancy tax
and visitor service fee bill, which will be due and payable thirty (30) days from the date
of the invoice.
B. The Finance Director shall close any permit that has no short term lodging
activity for a period of two consecutive years by remitting zero dollars on the required
transient occupancy tax and visitor service fee forms and or has failed to return the
transient occupancy and visitor service forms. After any permit closure pursuant to this
subsection, the owner may reapply for reinstatement of the short term lodging permit
which shall be processed in accordance with Section 5.95.030.
C. Any dwelling unit on any parcel zoned for "Single-family Residential (R-1)" or is
designated for single-family residential use as part of a Planned Community
Development Plan, Specific Area Plan or Planned Residential District that has a short
term lodging permit issued on or before June 1, 2004, shall have its short term lodging
permit closed by the Finance Director if the unit is demolished or rebuilt on or after July
1, 2020; or if the unit is modified in any way that increases gross floor area by more
than twenty-five percent (25%) on or after July 1, 2020.
Section 4: The recitals provided in this ordinance are true and correct and are
incorporated into the substantive portion of this ordinance.
20-26
Ordinance No. 2020 -
Page 19 of 20
Section 5: If any section, subsection, sentence, clause or phrase of this
ordinance is for any reason held to be invalid or unconstitutional, such decision shall not
affect the validity or constitutionality of the remaining portions of this ordinance. The
City Council hereby declares that it would have passed this ordinance and each section,
subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or
more sections, subsections, sentences, clauses or phrases be declared invalid or
unconstitutional.
Section 6: The City Council finds the introduction and adoption of this
ordinance is not subject to the California Environmental Quality Act ("CEQA") pursuant
to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable
indirect physical change in the environment) and 15060(c)(3) (the activity is not a
project as defined in Section 15378) of the CEQA Guidelines, California Code of
Regulations, Title 14, Division 6, Chapter 3, because it has no potential for resulting in
physical change to the environment, directly or indirectly.
Section 7: Except as expressly modified in this ordinance, all other Sections,
Subsections, terms, clauses and phrases set forth in the Newport Beach Municipal
Code shall remain unchanged and shall be in full force and effect.
Section 8: The Mayor shall sign and the City Clerk shall attest to the passage
of this ordinance. The City Clerk shall cause the ordinance, or a summary thereof, to be
published pursuant to City Charter Section 414. The Chapter headings for Section
5.95.015, Residential Properties Eligible for Short Term Lodging Permits and Section
5.95.017, Maximum Number of Permits, as set forth in Section 3 of this ordinance, shall
become effective thirty (30) days after adoption of this ordinance. Section 5.95.015,
Residential Properties Eligible for Short Term Lodging Permits, and Section 5.95.017,
Maximum Number of Permits, as set forth in Section 3 of this ordinance, shall become
effective thirty (30) days after the adoption of this ordinance. The remainder of this
ordinance shall become effective July 1, 2020.
20-27
Ordinance No. 2020 -
Page 20 of 20
This ordinance was introduced at a regular meeting of the City Council of the City
of Newport Beach held on the 11th day of February, 2020, and adopted on the 25th day
of February, 2020, by the following vote, to -wit:
AYES.-
NAYS:
YES:
NAYS:
ABSENT:
WILL O'NEILL, MAYOR
►,ra1*36
LEILANI I. BROWN, CITY CLERK
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
A '0� (f - # 'n�
AARON C. HARP, CITY ATTORNEY
20-2s
Attachment B
Redline version of Short Term Lodging Ordinance
20-29
REDLINE
Section 1.05.020(F)
F. In the case of administrative citations issued for violations of Chapter 5.28
[Live Entertainment Establishments]; Chapter 5.32 [Cafe Dances]; Chapter [S,ho
Term Lodging Dern* , --Section 10.50.020(H) [violation of terms or conditions of a use
permit issued by the City]; Section 14.36.030 resulting in bay or beach closure [Illicit
Connections and Prohibited Discharges]; California Fire Code section 107.5 (as adopted
by Code Section 9.04.010); or California Fire Code section 107.5.1 (as adopted by Code
Section 9.04.020), administrative fines shall be assessed in the following amounts when
authorized by the City Manager or his or her designee:
1. A fine not exceeding one thousand dollars ($1,000.00) for a first violation;
2. A fine not exceeding two thousand dollars ($2,000.00) for a second violation
of the same ordinance or permit within one year from the date of the prior violation; and
3. A fine not exceeding three thousand dollars ($3,000.00) for a third violation,
or any subsequent violation, within one year from the date of the prior violations.
20-30
3.16.060 Registration of Hotel.
Within thirty (30) days after commencing business each operator of any hotel
renting occupancy to transients shall register the hotel with the Finance Director and
obtain a "transient occupancy registration certificate" to be at all times posted in a
conspicuous place on the premises. The certificate shall, among other things, state the
following:
A. The name of the operator;
B. The address of the hotel;
C. The date upon which the certificate was issued; and
D. The following statement: This transient occupancy registration certificate
signifies that the person named on the certificate has fulfilled the requirements of the
Uniform Transient Occupancy Tax Ordinance (Chapter 3.16 of the Newport Beach
Municipal Code) by registering with the Finance Director for the purpose of collecting the
tax from transients and remitting the tax to the Finance Director. This certificate does not
authorize any person to conduct any unlawful business, to conduct any lawful business
in an unlawful manner or to operate a hotel without strictly complying with all local laws,
including those requiring a permit from any board, commission, department or office of
the City. This certificate does not constitute a permit.
(Fd. 2012 18 § 5,i012: QFd. 2003 12 § 1 (part), 2003)The requirements of this
section shall not apply to the operator of a hotel required to obtain a short term lodging
permit pursuant to Section 5.95.020.
20-31
Chapter 5.95
SHORT TERM LODGING PERMIT
Sections:
5.95.005 Purpose and Findings.
5.95.010 Definitions.
5.95.015 Residential Properties Eligible for Short Term Lodging Permits.
5.95.017 Maximum Number of Permits.
5.95.020 Permit Required.
5.95.025 Agency.
5.95.030 Applicant for Permit.
5.95.035 Denial of Permit.
5.95.040 Filing Fee.
5.95.04500 Conditions.
5.95.047 Violations of Permit Conditions by Transient User, Occupant or Guest.
5.95.050 Agent and Hosting Platform Responsibilities.
5.95.055 Issuance of Administrative Subpoenas.
5.95.060 Violations/ and Penalties Revocatnor .
5.95.065 Suspensions and Revocations. Procedure for imDos+to„
5.95.070 Permits and Fees Not Exclusive.
5.95.080 License and Permit Closure PeRalty.
5.95.n� 09vAmortozation and AMResty Dor
5.95.005 Purpose and Findings.
The City Council of the City of Newport Beach finds and declares as follows:
.......................................................................................................................................................................................... .
20-32
A.— An ever --increasing number of tourists renting short term lodging units is
severely eSGala+gin^increasing the demand for City services and creating adverse impacts
in residential zones.
B. Several Over a thousand dwelling units within residential zones near the
City's beaches and harbor are rented for less than thirty (30) consecutive calendar days
with the vast majority of those rentals occurring during the summer when the demand for
parking and City services is the greatest.
C. _Many of the occupants of short term lodging units are permanent; residents of
areas distant from Newport Beach and the City has no effective way to prevent occupants
from continuing to violate provisions of the Muni^paTthis Code and the Penal Code
relating to noise, disturbances and disorderly conduct. The only effective way to minimize
the problems associated with occupancy of short term lodging units is to impose
responsibility on the owner of the property, either personally or through an agent, to
control the conduct of guests and occupants.
..............................................................................................................
D. Numerous incidents involving excessive noise, disorderly conduct,
vandalism, overcrowding, traffic congestion, illegal vehicle parking and accumulation of
refuse are directly related to short term lodging units which increasingly require response
from police, fire, paramedic and other City services.
E. The increase in demand for City services resulting from short term
ledgeslodging units overburdens, and threatens, the City's ability to provide
suGhnecessary services.
F. Many short term ledgi igslodging units are operated by agents and/or
absentee owners who exercise little or no supervision or control of occupants.
G—.G. There has been an increase in the number of lodging units booked
on a short term basis where the owner of the unit does not have a short term lodging
permit, affecting the ability of the City to properly regulate the impacts caused by the
illegal operation.
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H. There has been an increase in the number of lodging units booked on a short term
basis where the owner of the property has not taken steps to ensure the transient
occupancy tax and visitor service fee is collected and/or remitted to the City, resulting in
an unfair business advantage to these illegal operations and loss of revenue necessary
to provide City services.
Problems with short term lodgings are particularly acute in residential districts
where the peace, safety and general welfare of the long term residents aye threatened.
9—.J. There has been an increase in the number of short term rentals in areas of the City
outside of the Coastal Zone, which affects neighborhoods that have traditionally not had
short term rentals. It is in the City's interest to stop issuing new permits in areas outside
the Coastal Zone after March 31, 2020 and to stop renewing permits for short term lodging
units outside of the Coastal Zone after March 31, 2030.
K. To ensure the effective enforcement of this Code, it is necessary to have the owner
include the short term lodging permit number issued by the City on all advertisements for
a short term lodging unit so the transient user knows the owner is authorized to rent the
lodging unit on a short term basis.
L. To make sure the transient user knows the total cost associated with renting the
lodging unit and to prevent fraud, it is necessary for the owner to ensure the transient
user is informed of the amount of the transient occupancy tax and visitor service fee, prior
to completing a booking transaction.
M. The restrictions of this chapter are necessary to preserve the City's housing stock,
the quality and character of the City's residential neighborhoods as well a5 to prevent the
continued burden on City services and adverse impacts on residential neighborhoods
posed by short term lodgings. (Ord. 92=13 § 3 (part), �
5.95.010 Definitions.
For the purpose of this chapter, the following definitions shall apply:
A. "Accessory aweiiina unit" snail nave the same definition as set forth in Chanter
20.70 of Title 20 of this Code.
20-34
B. "Agent" shall mean any person who is authorized in writing by the owner to
represent and act for an owner.
C. "Booking transaction" shall mean any reservation or payment service provided by
a person who facilitates a short term lodging rental transaction between a transient user
and owner for the use of a unit for a period of less than thirty (30) consecutive calendar
days.
D. "City Manager" shall mean the City Manager of the City or his or her designee.
E. "Finance Director" shall mean the Finance Director of the City or his or her
designee.
F. "Gross floor area," shall mean the area of the lodging unit that includes the
surrounding exterior walls and any interior finished portion of a structure that is accessible
and that measures more than six feet from finished floor to ceiling. Stairwells and elevator
shafts above the first level shall be excluded from the calculation of gross floor area.
G. "Home -sharing" shall mean an activity whereby the owner hosts a transient user
in the owner's lodging unit, for compensation, for periods of less than thirty (30)
consecutive calendar days, during which time the owner of the unit lives onsite, in the
unit, throughout the transient user's stay and the owner, the transient user and any other
occupants live together in the same unit as a single housekeeping unit.
H. "Hosting platform" shall mean a person, other than an owner or agent, who
participates in the short term lodging business by collecting or receiving a fee, directly or
indirectly through an agent or intermediary, for conducting a booking transaction using
any medium of facilitation.
I. "Lodging unit" or "unit" shall mean a "dwelling unit" as that term is defined in Title
20 of this Code where the dwelling unit or residenGe, ORGluding the bedreern, kitGhen and
bath, is rented or leased to a person or group of persons living as a single housekeeping
ea�Chapter 20.70, of Title 20 of this Code. An accessory dwelling unit shall not be
considered a lodging unit or unit for purposes of this chapter.
20-35
J. "Owner" shall mean the person(s) or entity(mes) that hold(s) legal and/or
equitable title to the lodging unit.
G. "Shert term" mean GGGU anGy of a ledging unit fer a period ref thirty (30)
nnnsenUhive nalendar days er le cc K. "Person" shall mean any individual and
any form of business entity including, but not limited to, all domestic and foreign
corporations, associations, syndicates, joint stock corporations, partnerships of every
kind. clubs. business or common law trusts. societies. or limited liabilitv comoanv.
L.
"Residential district" shall mean those areas of the City so designated by Title 20 of
the MuniGilGedethis Code as well as any other area in the City designated for a
residential use as part of a Planned Community Development Plan, Specific Area Plan or
Planned Residential District.
E. "city Manage M. "Short term" shall mean a lodging unit that is rented or leased
as a single housekeeping unit for a period of less than thirty (30) consecutive calendar
days. This also includes home -sharing.
N. "Short term lodging unit registry" shall mean the published
registry maintained by the City that sets forth a list of Newport Reanh or his er her
reonentiV- occi`vneeo
F,onanee DireEtorshall nea-Rall owners and the FinanGe DirronGte address of
the of
ef- New )F his er- BeaGh "herFl8e. (Ord. � § 20
r1 3, Ord. z`-008 5 § 2
2008; Ord. 92_1r3 § 3 (lpart)199�-)
No owner of a lodging unit IGGated within a residential diStriGt shall rent that unit fer a short
term with all units that have a valid short term lodging permit {and business license with
the City, a copy of which is available, without charge, to any person who requests a copy
and which shall be accessible on the City's website.
O. "Single housekeeping unit" shall have the same definition as set forth in Chapter
20.70 of Title 20 of this Code.
P. "Transient" or "Transient user" shall mean any Derson or Dersons who, for a
period less than thirty (30) consecutive calendar days either at his own expense or at the
20-36
expense of another, obtains lodging in a lodging unit or the use of any lodging space in
any unit, for which lodging or use of lodging space a charge is made.
5.95.015 Residential Properties Eligible for Short Term Lodging Permits.
Only properties in a residential district that are authorized under Titles 20 and 21 of this
Code and this chapter shall be eligible for a short term lodging permit` f„r that unit issued
pursuant to this GhaYI+U�o.
A. Subsequent to June 1, 2004, no permit shall be issued subsequent. -to june 1, 2004
teor renewed for any dwelling unit on any parcel zoned for "Single-family Residential (R-
1)" or that is designated for a single-family residential use as part of a Planned Community
Development Plan, Specific Area Plan or Planned Residential District, unless a permit
has previously been issued for that dwellieglodging unit and the permit was not
subsequently: T rd 2004_6 § 1, 2004: Ord 92 13 § 3 (paFt), 199
1. Closed by the Finance Director because the unit is demolished or rebuilt on
or after July 1, 2020;
2. Closed by the Finance Director because the unit is modified in anv wav that
increases gross floor area by more than twenty-five percent (25%) on or after July 1,
2020; or
3. Revoked.
B. Prior to April 1, 2030, no permit shall be issued to or renewed for any lodging unit
located outside the Coastal Zone. unless the owner had a Dermit for the lodaina unit on
or before March 31, 2020, and the permit was not subsequently revoked.
C. On or after April 1, 2030, no permit shall be issued to or renewed for any lodging
unit located outside the Coastal Zone.
D. No Dermit shall be issued to or renewed for anv owner that does not have at least
one parking space for each unit in a garage, carport, or driveway at the property.
5.95.017 Maximum Number of Permits.
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A. The maximum number of short term lodging permits shall be limited to sixteen
hundred (1,600) at any time.
B. If the City has issued the maximum number of permits available, the City shall
maintain a waiting list. An application for placement on the waiting list shall be submitted
to the Finance Director, on a form approved by the Finance Director, and shall be
accompanied by a fee established by resolution of the City Council. In the event a short
term lodging permit becomes available, the Finance Director shall notify the person or
persons next in order on the waiting list. The notice shall specify that applications will be
accepted for ten (10) calendar days after the date of the notice, and that failure to apply
within the ten (10) calendar day period shall result in removal of the person or persons
receiving notice from the waiting list. Notice shall be deemed given when deposited in the
United States mail, with the first class postage prepaid, and addressed as specified by
the person or persons on the waiting list. The City shall not be liable for a failure to notify
any person or persons on the waiting list since placement on the list does not create any
Property right in any person or persons on the list nor any contractual obligation on the
part of the City.
5.95.020 Permit Required.
No owner of a lodging unit shall advertise for rent or rent a lodging unit located within a
residential district for a short term without a valid short term lodging permit for that unit
issued pursuant to this chapter.
20-38
5.95.025 Agency.
An owner may retain an agent or a representative to comply with the requirements of this
chapter, including, without limitation, the filing of an application for a short term lodging
permit, the management of the short term lodging unit or units, and the compliance with
the conditions to the short term lodging permit. The permit shall be issued only to the
owner of the short term lodging unit or units. The owner of the short term lodging unit or
units is responsible for compliance with the provisions of this chapter and the failure of an
agent to comply with this chapter shall be deemed non-compliance by the owner.(04
92 13 3 (p ), 199
5.95.030 Applicant for Permit.
An application for a short term lodging permit shall be filed with the Finance Director upon
forms provided by the City and shall contain the following information:
A.— The name, address and telephone number of the owner of the unit for which
the short term lodging permit is to be issued.
B.— The name, address and telephone number of the agent, if any, of the owner
of the unit.
C. Evidence of a valid business license issued by the City for the separate
business of operating a short term ledgi igsigdging unit or units.
■
0ss ed by the City for the bedrooms in the lodging unit.
l=E. The number of Darkina saaces available onsite and a description indicatin
the location and size of each parking space.
F. A proposed location for the placement of the sign required to be posted on the
exterior of the unit.
20-39
G. A certification that the applicant has reviewed the covenants, conditions and
restrictions, if any, and a short term use is permitted at the location pursuant to the terms
of the covenants, conditions and restrictions, if any.
H. Acknowledgement of receipt and inspection of a copy of all regulations pertaining
to the operation of a short term lodging unit.
F—. —I. Such other information as the Finance Director deems reasonably
necessary to administer this chapter. (Ord.°2 13 § 3 �^� 49
5.95.035 Denial of Permit.
Nelf permits are available for issuance, no application filed by an owner for a permit or
renewal of a permit for a unit eligible to be used as a short term lodging unit, as provided
for in Section 5.95.015 and this Code, shall be denied unless a peF the owner does
not have a current valid business license: or the short term lodaina Dermit for the same
unit and issued to the same owner has been revoked pursuant +„ SeGtion 5.95.065 of +hyo
Ghapter�92 133 (p 992/
5.95.040 Filing Fee.
ARAn application or renewal application for a short term lodging permit shall be
accompanied by a fee established by resolution of the City Council, provided, however,
the fee shall be no greater than necessary to defer the cost incurred by the City in
administering the provisions of this chapter. (Ord. °i 13 § 3 (part), 92) and for providing
the answering service.
5.95.050045 Conditions.
A.— All permits issued pursuant to this chapter are subject to the following
standard conditions:
1. The owner shall enter into a written er oral agreement; with the
transient user that requires all persons residing in the short term lodging unit to live
as a single housekeeping unit: and that the transient user limit the overnight;
occupancy of the short term lodging unit to a speGifiG Rum,�two occupants,
20-40
2— per bedroom plus two persons per lodging unit. The owner shall ensure that
the overniaht maximum occuoancv is not exceeded.
2. The owner shall use best efforts to that the transient user,
occupants and/or guests of the short term lodging unit do not create unreasonable
noise or disturbances, engage in disorderly conduct, or violate provisions of this
eedeCode or any State La state or federal law pertaining to noise, disorderly
conduct, the consumption of alcohol, or the use of illegal drugs.
3.— The owner shall, upon notification that ^^^many transient user,
occupant and/or geestsggest of his or her short term lodging unit havehas created
unreasonable noise or disturbances, engaged in disorderly conduct or committed
violations of this EedeCode or State La any state or federal law pertaining to
noise, disorderly conduct, the consumption of alcohol or the use of illegal drugs,
promptly use best efforts to prevent a recurrence of such conduct by these
any transient user, occupant or quest.
4. The owner of the short term lodging unit shall use best efforts to
n6UFeensure compliance with all the provisions of Title 66 of the Muni^��-this
Code (garba a refuse
5. The owner of the short term lodging unit shall provide the transient user with
a copy of Sections 5.95.047, 10.28.007, 10.28.010, 10.28.020, 10.58.030, and
-10.66.020 of this Code.
�-6. The owner of the short term lodging unit shall post a copy of the short term
lodging permit and a copy of the conditions set forth in this seEtieesubsection in a
conspicuous place within the unit. The notice shall contain the following:
a. 6—The name of the local contact persons) and phone number at
which that Person(s) may be reached on a twenty-four (24) hour basis. The
local person(s) must be located within twenty-five (25) miles of the unit and
shall respond to any call related to the unit within thirty (30) minutes.
20-41
b. The number and location of onsite aarkina spaces.
C. The street sweeping schedule for all public right-of-ways within 300
feet of the unit.
d. The trash collection schedule for the unit, and the Code rules and
regulations concerning the timing, storage and placement of trash
containers and recycling requirements.
e. Notification that no amplified sound or reproduced sound is allowed
outside or audible from the property line between the hours of 10:00 p.m.
and 10:00 a.m.
f. Notification that any transient user, occupant or quest is responsible
for all activities occurring on the property and that any transient user,
occupant or quest may be cited and fined for creating a disturbance or
violatina anv provision of this Code.
7. With respect to any short term lodging unit that is located in any Safety
Enhancement Zone, the owner of the unit and any agent retained by the owner
shall take immediate action during the period that the Safety Enhancement Zone
is in effect to prevent ^^^many transient user, occupant or geesfsguest from
engaging in disorderly conduct or committing violations of this eedeCode or State
t=awstate or federal law pertaining to noise, disorderly conduct, the consumption
of alcohol or the use of illegal drugs.
8. The owner shall:
a. Ensure that all transient occupancy taxes and visitor service fees are
collected and remitted to the City and otherwise comply with all transient
occupancy tax and visitor service fee requirements, as set forth in Chapters
3.16 and 3.28.
b. If the owner uses an agent to collect and remit the transient
occupancy tax and the visitor service fee, the owner shall be responsible
20-42
for ensuring that the agent collects and remits the transient occupancy tax
and the visitor service fee to the City pursuant to the requirements set forth
in this chapter, Chapter 3.16 and Chapter 3.28.
C. If the owner uses a hosting platform to collect and remit the transient
occupancy tax and the visitor service fee, the owner shall: (i) be responsible
for ensuring that the hosting platform collects and remits the transient
occupancy tax and the visitor service fee to the City in accordance with this
chapter; and (ii) when filing a return in accordance with Sections 3.16.070
and 3.28.040, the owner shall provide the City with a copy of all receipts
showing the date the short term lodging unit was rented, the amount of
transient occupancy tax and visitor service fee collected by the hosting
platform, and proof that the transient occupancy tax and visitor service fee
was remitted to the Citv.
9. The owner shall utilize the City's answering service and shall provide the
City with the name and twenty-four (24) hour phone number of a local contact
person(s) (who reside within twenty-five (25) miles of the property) who shall
ensure compliance with this chapter in a timely manner. The owner or agent must
provide a new local contact person and his or her phone number within five (5)
business days, if there is a change in the local contact person(s).
10. The owner shall ensure that all available parking spaces onsite, which may
include garage, carport, and driveway spaces, as well as tandem parking are
available for the transient user, occupant or guest of the short term lodging unit.
The owner shall disclose the number of parking spaces available onsite and shall
inform the transient user, occupant and/or quest that street parking may not be
available.
11. The owner shall maintain a valid business license and short term lodging
permit when engaging in short term lodging_
12. The owner shall include the City issued short term lodging permit number
on all advertisements for the rental of the short term lodging unit and shall ensure
20-43
the transient user is informed of the amount of the transient occupancy tax and
visitor service fee prior to completion of the booking transaction.
13. The owner shall ensure that a permitted short term lodging unit is only used
for residential purposes and not used for non-residential uses, including, but not
limited to, large commercial or non-commercial gatherings, commercial filming
and/or non -owner wedding receptions.
14. The owner shall ensure that no amplified sound, or reproduced sound is
used outside or audible from the property line between the hours of 10:00 p.m. and
10:00 a.m. and that the transient user does not violate the noise requirements set
forth in this chapter, Chapters 10.28, 10.58 and 10.66.
15. The owner shall post, on a sign not to exceed two square feet, which shall
be approved by the City, the local primary contact name, the phone number for the
City's answering service, and maximum overnight unit occupancy. The sign shall
be posted at a location on the exterior of the unit readily visible from public right of
way, subject to the approval by the City, in lettering of sufficient size to be easily
legible.
B._ The City Manager shall have the authority to impose additional standard
conditions, applicable to all short term lodging units, as necessary to achieve the
objectives of this chapter.
C. The City Manager shall have the authority to impose additional conditions
on any permit in the event of any violation of the conditions to the permit or the provisions
of this chapter subject to compliance with the procedures specified in Section 5.95.065.
rd. 2-003-F�0, 2003: n�2 13 § 3�n� 992)5.95.065.
5.95.060047 Violations PeRalt;es/Revocat;^n. of Permit Conditions by Transient
User, Occupant or Guest.
20-44
addition to
• • .
M
to the other provisions of • •
3. The E)WRer has wilfully violated the PFOVISOE)RS ef this Ghaptepi-Of fin r '1 11-
O -this Code, it shall be unlawful for anv transient user. occuDant or auest of a short term
lodging unit to:
1 For the first violation withiR aRy twelve (12) MORth period, the penalty A.
Exceed the overnight occupancy limit designated for the short term lodging unit.
B. Use street parking prior to utilizing all available onsite parking space(s) for the
lodging unit.
C. Place trash for collection in violation of this Code's rules and regulations
concerning:
1. The timing, storage or placement of trash containers; or
2. Recycling requirements.
D. Amplify or reproduce sound between the hours of 10:00 p.m. and 10:00 a.m.:
1. Outside of the lodging unit; or
2. That is audible from a -RE A+eethe property line for the lodging unit.
E. Use the short term lodging for any non-residential purpose, including, but not
limited to, large commercial or non-commercial gatherings, commercial filming and/or
non -owner wedding receptions.
5.95.050 Agents and Hosting Platform Responsibilities.
A. Agents and hosting platforms shall collect all applicable transient occupancy taxes
and visitor service fees for the rental of a short term lodging unit for which the agent or
20-45
hosting platform collects or receives any fee or other payment, whether directly or
indirectly, for advertising, conducting, managing, facilitating, handling or effecting a
booking transaction for the short term lodging unit. The agent and hosting platform shall
remit to the City any transient occupancy taxes or visitor service fees collected by the
hosting platform or agent to the City before the last day of the month following the close
of each calendar quarter or on the day specified by the Finance Director if a different
reporting period has been established. Nothing herein shall be deemed to relieve an
operator, as that term is defined in Sections 3.16.020 and 3.28.020, from complying with
the requirements set forth in Chapters 3.16 and 3.20 of this Code.
B. Subject to applicable laws, agents and hosting platforms shall disclose to the City
on a regular basis each home -sharing and vacation rental listing located in the City, the
names of the persons responsible for each such listing, the address of each such listing,
the length of stay for each such listing and the price paid for each stay.
C. Agents and hosting platforms shall not:
1. Complete any booking transaction for any short term lodging unit unless the
unit is listed in the City's short term lodging unit registry as having obtained and
maintained a valid business license and short term lodging permit issued by the
City.
2. Collect or receive a fee, directly or indirectly for facilitating or providing
services ancillary to an unpermitted short term lodging unit including, but not
limited to, insurance, concierge services, catering, restaurant bookings, tours,
guide services, entertainment, cleaning, property management, or maintenance of
the short term lodging unit.
D. A hosting platform operating exclusively on the internet, which operates in
compliance with subsection (A), (B), and (C) above, shall be presumed to be in
compliance with this chapter, except that the hosting platform remains responsible for
compliance with the administrative subpoena provisions of this chapter.
E. The provisions of the section shall be interpreted in accordance with otherwise
applicable state and federal law(s) and will not apply if determined by the City to be in
violation of, or preempted by, such law(s).
20-46
5.95.055 Issuance of Administrative Subpoenas.
The City Manager shall have the authority to issue and serve administrative subpoenas
to the owner, agent or hosting platform, as necessary, to obtain specific information
regarding short term rental listings located in the City, including but not limited to, the
names of the persons responsible for each such listing, the address of each such listing,
the length of stay for each such listing and the price paid for each stay, to determine
whether the short term rental listing complies with this chapter. Any subpoena issued
pursuant to this section shall not require the production of information sooner than thirty
(30) calendar days from the date of service. A person that has been served with an
administrative subpoena may seek judicial review during that thirty calendar day (30)
period. Failure to respond to an administrative subpoena in accordance with the terms
set forth therein shall be punishable in accordance with Section 5.95.060 and the City
may file a judicial action to compel compliance with the subpoena.
5.95.060 Violations and Penalties.
A. Any violation to -a -of this chapter is punishable as provided in Chapters 1.04 and
Chapter 1.05 of the Code.
B. Except as provided in subsection (C), in the case of any administrative citation
issued pursuant to this chapter, administrative fines shall be assessed in the following
amounts:
A fine not te�Qexceeding two hundred and fifty dollars ($250.00-YLfgor
a first violation.
2. Fer a senend vielatien within any twelve (1 \�}h permed, the penalty sh�l
range from 2. A fine not te eXGeedexceeding five hundred dollars ($500.00)
to reVeGatmen of the permit'for a second violation, within one year of the date of the
prior violation.
3. Fer a thirdyielatien within any twelve (12) m�entrh permed, YeRal
raRge from 3. A fine not t�edexceeding one th"�o�"�ussand dollars
($1,000.00) to reVOGatien of the permit; andfor a third violation, or any subsequent
violation. within one vear of the date of the arior violation.
20-47
4. F=E)F a fourth violatiOR WithiR aRy tW81V8 (12) ME)Rth peried, the permit shall be F8VE)ked
0n aF,Gov�rGwith t he oroVicionc of SeGtiOR 5.Q�.T
_C. _In the case of a short term lodging permit for a dwelling that is located in a Safety
Enhancement Zone, the penalty for the failure to comply with any standard condition
during the period that the Safety Enhancement Zone is in effect shall be a fine of one
thousand dollars ($1,000.00` and/or reVE)Ga{iO the permit for a peried not less than
sixty (60) days.).
D. —ReveEatmen-5.95.065 Suspensions and Revocations.
In addition to any fine or penalty that may be imposed pursuant to any provision of this
Code including, but not limited to Section 5.95.060, a short term lodging permit for Leud
or Unruly ly Gathering a unit may be suspended or revoked as provided in this section.
A. Suspensions/Revocations.
1. Except as otherwise provided in this subsection, if any person violates a
short term lodging permit condition two (2) or more times in any twelve (12) month
period or any other provision of this Code, state law or federal law, two (2) or more
times in any twelve (12) month period, and the violation relates in any way to the
unit that has a short term lodging permit, the short term lodging permit for the unit
may be suspended for a period of six (6) months in accordance with subsection
2. In the case of a short term lodaina permit for a unit that is located in a Saf
Enhancement Zone. if there is a violation of anv provision of this Code durina the
period that the Safety Enhancement Zone is in effect, the short term lodging permit
for the unit may be suspended for a period of one (1) year or revoked in accordance
with subsection (B).
3. If a lodging unit that is subject to a short term lodging permit has been the
location of threetwo or more loud or unruly gatherings, as defined in Chapter 10.66
of this Code, while the lodging unit was occupied on a short term basis, within any
twenty-four (24) month period, the permit shia4may be suspended for a period of
one (1) year or revoked.- in accordance with the subsection (B). A loud or unruly
gathering that occurred prior to the passage of fourteen (14) calendar days from
20-48
the mailing of notice to the owner in compliance with Section 10.66.030(D) shall
not be included within the calculation of the threetwo or more loud or unruly
gatherings required to revoke a short term lodging permit.(n�Znl�z (part,
2011: Ord. 2003 5 § 11, 2003: n�92— 3 § 3 (part), 1992-)
5 95 065 PFGGed ire for Imposition of Pena lties/QeVonation
Penalties, innli Jinn a notiGen If a person violates Section 5.95.020 in regards
to any unit that has had a short term lodging permit suspended pursuant to
subsection (B). the short term lodaina permit for the unit may be revoked in
accordance with subsection
5. If any person violates a short term lodging permit condition or any other
provision of this Code, state or federal law within six (6) months of having a
previously suspended short term lodging permit reinstated for a unit, and the
violation; relates in any way to the unit that has the short term lodging permit, the
short term lodging permit for the unit may be revoked in accordance with
subsection (B).
6. If any person violates a short term lodging permit condition three (3) or more
times in any twelve (12) month period or provision of this Code, state or federal
law three (3) or more times in any twelve (12) month period, and the violation
relates in anv wav to the unit that has a short term lodaina permit. the short term
ina permit for the unit may be revoked in accordance with subsection (B).
7. If anv person fails to collect and remit transient occuoancv tax or the visitor
service fee in accordance with the requirements of this chapter, Chapters 3.16 or
3.28 in regards to any unit that has a short term lodging permit, two or more times
within any thirty six (36) month period, the short term lodging permit for the unit
may be revoked in accordance with subsection (B).
Permits shall be imposed and permits shall heSUSpended or revoked, only in the
manner provided in this section.
A—.1. The Finance Director shall conduct an investigation whenever he or she has
reason to believe that an owner has committed a violation desr•rihed in Cel tion
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5.95.060(A),(G)er(n\ of a permit condition, this Code, state or federal law related
to a permitted unit. Such investigation may include, but is not limited to, on-site
property inspections. Should the investigation reveal substantial evidence to
support a finding that a violation occurred that warrants a suspension or revocation
of the short term lodging permit, the Finance Director shall issue written notice of
intention to in,n^moo ^ nonce'+„ ^n.4/suspend or revoke the short term lodging permit.
The written notice shall be served on the owner, in accordance with Section
1.08.080, and shall specify the facts which, in the opinion of the Finance Director,
constitute substantial evidence to establish grounds for imposition of the
^^suspension and/or revocation, and specify that the penalties willthe
proposed time the short term lodging permit shall be impesedsuspended and/or
that the short term lodging permit wi4shall be revoked within thirty (30) calendar
days from the date the notice is given, unless the owner files, with
the City Clerk and before _the pena!tL--,,, spension and/or revocation becomes
effective, a request for hearing before the City Manage -a hearing officer, who shall
be retained by the City, and pays the fee for the hearing established by resolution
of the City Council.
B—.2. If the owner requests a hearing and pays the hearing fee, established by
resolution of the City Council, within the time specified in subsection (A) of this
seet+er-,B1 the GityFinance Director shall serve written notice on the
owner, by written mail ^fpursuant to Section 1.08.080, setting forth the date, time
and place for the hearing. The hearing shall be scheduled not less than fifteen (15)
calendar days, nor more than sixty (60) calendar days, from the date on which
notice of the hearing is served by the Cites-Glerk.Finance Director. The Gity
Manager n4ayhearing shall be conducted according to the rules normally
applicable to administrative hearings. At the hearing, the hearing officer will preside
over the hearing er may designate a hearing ^ffinor +^ ,take evidence and then
submit proposed findings and recommendations to the City Manager. The City
Manager shall impose the n�a',1e�suspend or revoke the short term lodging
permit only upon a finding that a violation has been proven by a preponderance of
the evidence, and that the penaltysuspension or revocation is consistent with the
5.95.060(B), /C\ ^r (D) Thb
provisions o e�^ti^n o hearing e n^ndU
shall be
aGGOrding to the rules n ermall y appli abll^ to administrative hearinnSthis section.
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The City Manager shall render a decision within thirty (30) calendar days of the
hearing and the decision shall be final. ( rd. 011-13 § 2 (x)20 1: Ord. 92-13
C. If a short term lodging permit is suspended, it shall be the owner's responsibility to
vacate any future bookings and remove all advertisements related to the short term rental
of the unit during the term of the suspension. If a short term lodging permit is revoked, it
shall be the owner's responsibility to vacate any future bookings and remove all
advertisements related to the short term rental of the unit.
D. After any suspension, the owner may reapply for reinstatement of the short term
lodaina Dermit which shall be Drocessed in accordance with Section 5.95.030. provided
the owner has Daid the Citv all amounts owed the Citv in accordance with this chanter
and Chanters 3.16 and 3.28 of this Code.
5.95.070 Permits and Fees Not Exclusive.
Permits and fees required by this chapter shall be in addition to any license, permit or fee
required under any other chapter of this Code. The issuance of any permit pursuant to
this chapter shall not relieve the owner of the obligation to comply with all other provisions
of this Code including, but not limited to, those provisions pertaining to the use and
occupancy of the lodging unit or the property on which it is located. (GFd. 92--s as well
as the collection and remittance of transient occupancy taxes and visitor service fees in
accordance with this chapter and Chapter 3 (pa 924.16 and 3.28.
5.95.080 RenaltyLicense and Permit Closure.
A. Any personyiolatiRg the PFOVioiE)no of this nhapter h., owner that has ceased
operating a short term lodging unit with^„t avalid permit shall be inform the Finance
Director in writing of a-misdemeaRE r. (Ord. 92 13 § (part), 99
5.95.090 Amortozatior4the date of the last rental, and AMResty Peried
Owners -of -having done such, the short term lodging units ep rmit shall make appliGatioRbe
closed. The City will send a final transient occupancy tax and visitor service fee bill, which
will be due and payable thirty (30) days from the date of the invoice.
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B. The Finance Director shall close any permit that has no short term lodging activity
for apermit-period of two consecutive years by remitting zero dollars on the required
transient occupancy tax and visitor service fee forms and or has failed to return the
transient occupancy and visitor service forms. After any permit closure pursuant to this
nhapter within sixty 11-301 clays subsection, the owner may reapply for reinstatement of the
short term lodging permit which shall be processed in accordance with Section 5.95.030.
C. Any dwelling unit on any parcel zoned for "Single-family Residential (R-1)" or is
designated for single-family residential use as part of a Planned Community Development
Plan, Specific Area Plan or Planned Residential District that has a short term lodging
permit issued on or before June 1, 2004, shall have its short term lodging permit closed
by the Finance Director if the unit is demolished or rebuilt on or after the effeGtive date „f
July 1, 2020; or if the unit is modified in any way that increases gross floor area by more
than twenty-five percent (25%) on or after July 1, 2020.
s * & 1 • r 1
r
-
r- 1181,11111- WWI
- ------
a.'. MO. r W
20-52
Attachment C
Correspondence
20-53
From:
Craig Batley
To:
Judis, Seimone
Cc:
Will 0"Neill
Subject:
STL Code Update Unintended Consequences
Date:
Monday, February 3, 2020 8:32:04 PM
Attachments:
imaae005.ona
image011.pnno
[EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the
content is safe.
Seimone,
Succinct presentation today at Diane's town hall. As discussed, please send me (and Will) the draft
version of the STL ordinance amendment.
A couple of comments:
1. Overnight occupancy displayed on a sign attached to the property is problematic. First,
the city website lists all the permitted occupancies currently allowed on a STL permit. If a
neighbor is interested in knowing an allowed occupancy of a certain STL property, they
can check the city website. A gathering of family and friends on a patio is not indicative of
a violation of overnight occupancy. How does one determine over occupancy? Who is
going to perform a bed count? This proposal results in unnecessary consequences, such
as, lots of calls to the city complaining about over occupancy when no such violation has
occurred nor can be verified.
2. Revocation with two infractions: All infractions are not equal. For instance, if a property
is cited for "too much garbage" on Memorial Day Weekend AND a few weeks later cited
again on July 4th for too much garbage, does these infractions arise to a level of
revocation. Have you ever seen the amount of garbage for pickup on a 4th of July
weekend? Year around tenants who have parties have an abundance of garbage (the
main violators) and they are not punished. This automatic revocation needs a bit of work.
3. STL Permit CAP of 1600. There are owners who have had a STL permit for years and now
rent yearly. IF a few years henceforth these owners want to renew their permit AND the
CAP is in play they now cannot renew their permit. I suggest making an exception for
these previous permit holders to reinstate, subject to them being in good standing.
4. Answering Service. Do all operators have to use the city service OR can they subscribe to
their own 24-hour service?
5. Minimum Stay Restriction is another example that is difficult to police. However, IF such
a rule existed it should be inline with the marketplace. Most vacationers do not stay for a
full week anymore. The demand is by far for shorter stays less than a week. The main
argument is we don't want party groups (BW rents almost entirely to families which by far
are the demographic overwhelmingly booked into STL accommodations). We won't rent
to graduation parties, fraternity parties, etc. The idea is to avoid weekend -2 -night stays.
A 3 -night minimum does that.
20-54
I will review the draft when received. My observations are based on years of managing STL
properties. By default, BW & Company has 50 years of experience (20 for me) and as the ad says,
"we know a thing or two about STL. No sense in passing an ordinance that creates more staff time
and possible cheating.
Thank you for listening.
Craig
CRAIG BATLEY
C:. (949) 293.4M 0: (319)675-4630 F; (949) 675-2127
LIC C 00433751
Burr White Really Www.hurrwhigcarm
1_901 Newport BouEcvW, Newport Beach, CA 92663
From: Jurjis, Seimone <sjurjis@newportbeachca.gov>
Sent: Friday, January 31, 2020 3:43 PM
To: Craig Batley <cbatley@burrwhite.com>
Subject: RE: STL Code Update
It will not be available until its made public, which will be Feb 7
Besides we are still writing it.
SEIMONE 1URAS, P.E., C.B.O.
Community Development Department
Community Development Director
siuriisna newportbeachca.aoy
949-644-3282
�lewport,
,�Together.
From: Craig Batley <cbatle) l(@burrwhite.com>
Sent: Friday, January 31, 2020 2:53 PM
20-55