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HomeMy WebLinkAbout04 - Updating the NBMC for Short Term Lodging - CorrespondenceReceived After Agenda Printed February 25, 2020 Item No. 4 Subject: FW: Short Term Rental Permits From: Bob Boyhan <bob.bovhan@gmail.com> Sent: Thursday, February 20, 2020 6:15 PM To: Harp, Aaron <aharp@newportbeachca.gov> Subject: Short Term Rental Permits Dear Mr. Harp, I'm concerned about a few provisions of the proposed ordinance to amend the municipal code relating to short term lodging permits No. 2020-08. I'm writing to you hoping the Council will consider changing some of the provisions listed below 1. Section 5.9.015- article 3: Revoking the STL permits of those in the non -coastal zone. The justification for this is very unclear. There are approximately 57-59 permits — less than 4% of all permit holders in the City. This would affect mostly the properties in Corona del Mar on the inland side of PCH. It seems as though you are targeting a very small number of short term rental units as a result of you not having any control over those units in the "Coastal Zone" (an estimated 1496 total short term rental units and your trying to solve a problem by imposing stiff regulations on and potentially revoking 57-59 permits). 2. Section 5.95.017: The 1600 home cap on short term rentals. Right now, owners of duplex properties have been hit with the new State Law that requires a duplex to be rebuilt if one is torn down. Preventing owners of duplexes from operating a short term rental just compounds the problem and hurts property values. I've also learned that such a cap would probably not pass muster with the Coastal Commission, which could end up invalidating the whole law. In addition, since you can't seem to control the "Coastal Zone" what will you do if before April 1, 2030 the" "Coastal Zone" short term rentals exceeds 1542 (start to indiscriminately revoke permits of those owners on the North side of PCH). 3. Section 5.95.045 article 10: Requirement of a parking space per unit. Unfortunately many current short term rentals have no parking. Owners of properties like this would suffer a great hardship if they lost the ability to do a short term rental. I think the Council has a misunderstanding of parking related to short term lodging. Vacation tenants typically come with only one car, or none which does not add to congestion. Yearly tenants and homeowners often have many cars and this is where the problem lies, along with garages that are filled with junk. 4. Section 5.95.045 article15: Signage. As described, this is overbearing and probably not workable, as well as an intrusion into privacy. Requiring external signage highlights the fact that the property is a rental and would therefore be vacant at times thus increases the potential for break-ins and vandalism. It is my understanding that as a permit holder I must post my permit in a place where the tenant can readily see it. Having a document posted next to it with the information you suggested for an exterior sign should be enough. 5. Random Searches for Compliance. This concept is frightening and probably illegal. One Democratic candidate just took a lot of heat for his stop and frisk policy. Are you trying the same thing in a different form? My wife and I rent our property as we travel during certain time of the year and we feel it is safer to have someone in the house than not. We rent through an agent and to get maximum exposure the agent lists the property as a short-term rental with mid-term rentals available. As a result, we are for all intensive purposes considered a short term rental. We have however never rented the house for less that 30 days and in fact have been able to accommodate several Newport Beach area families who needed housing while their home was being renovated. I realize the ad hoc committee and staff worked hard on this, but I believe these provisions should be addressed before the February 25 meeting. Thanks for your consideration and I hope to be at the City Council Meeting on February 25th to personally express my concerns. Cordially, Robert J. Boyhan Subject: FW: Short Term Rental Law From: Don Abrams <don@abramscoastal.com> Date: Friday, February 21, 2020 at 12:06 PM To: "Herdman, Jeff' <jherd man@newportbeachca.gov>, "Dixon, Diane" <ddixon@newportbeachca.gov>, "Avery, Brad" <bavery@newportbeachca.gov>, "Duffield, Duffy" <dduffield@newportbeachca.gov>, "Muldoon, Kevin" <kmuldoon@newportbeachca.gov>, "O'Neill, William" <woneill@newportbeachca.gov>, "Brenner, Joy" <JBrenner@newportbeachca.gov> Cc: "Jurjis, Seimone" <sjuriis@newportbeachca.gov>, "Harp, Aaron" <aharp@newportbeachca.gov> Subject: Short Term Rental Law Dear Members of the Council: I've spoken to a few of you privately about the short term rental law and would like to address the entire Council at this time about the proposed new provisions. While I generally support reasonable regulation of housing in the City, I'm concerned about a few provisions of the new short term rental law, which I'm hoping the Council will consider changing. As I said at the hearing on Tuesday, February 11th, the law has many worthwhile provisions that I support, but a few which are onerous, that I don't. Before beginning, I would note that only 35 Citations were issued in 2019 with regard to short term rental violations, according to the staff report at the February 11th meeting. This is a tiny number in light of the many thousands of vacation leases that occurred in the City during that time. Of course, we should assume that there were many, perhaps hundreds of complaints that weren't citation worthy. How should these have been dealt with? Now that we have a published list on the City website of the names and phone numbers of every vacation rental owner, it seems that the complaining party should first ask the offending party to stop, second call the owner of the home, and as a last resort, call the police. This should handle the vast majority of problems. We can't legislate people into good neighbor conduct. My specific objections to the proposed provisions are as follows: 1. The 1600 home cap on short term rentals. No one answered when I questioned where this number came from at the February 11th hearing. Right now, owners of duplex properties have been affected by a new State Law that requires a duplex to be rebuilt if one is torn down. Preventing owners of duplexes from operating a short term rental just compounds the problem and ultimately hurts property values. I've also learned that such a cap might not pass muster with the Coastal Commission, which could end up invalidating the whole law if this cap provision is passed. On a side, but important note, at least two members of the Council may currently have short term rental permits. For members with permits to vote on a provision that limits others from getting permits would seem to be a conflict of interest. I believe all members of the Council should explore whether they may have a conflict regarding this provision, and if necessary discuss the matter with Counsel Aaron Harp. The City has said there are 1461 properties with short term licenses. In a City of 85,000 properties, 1461 is not a large number. Limiting the number of short term permits will just drive potential short term homeowners underground, which will leave the City unable to regulate them or get the TOT (Transient Occupancy Tax) the City is entitled to. This is what often happens in other Coastal cities and would be a mistake for Newport Beach. 2. Requirement of a parking space per unit. Unfortunately many current short term rentals have no parking or inadequate parking. Owners of properties like this, who now have licenses, would suffer a great hardship if they lost the ability to do a short term rental. I think some members of the Council may have a misunderstanding of parking related to short term lodging. Vacation tenants typically come with only one car, which does not add to congestion. Yearly tenants and homeowners often have many cars and this is where the problem lies, along with garages that are filled with junk, as well as seasonal guests visiting homeowners, yearly, and vacation rentals. 3. Signage. As it's been described, I believe this is overbearing and probably not workable, as well as an intrusion into privacy. If every Realtor were required to have a sign on each rental property, this alone would be a big improvement. 4. Random Searches for Compliance. Seimone mentioned at the February 11th Hearing that the City might conduct compliance searches. This concept is frightening and probably illegal. Members, I know the ad hoc committee and staff worked hard on this, but I believe these provisions should be addressed at the February 25th meeting. If the City were going to do one thing to improve short term rentals, I would recommend a minimum stay of 2 or 3 days. This would have more impact and be more reasonable than the changes discussed above. I would appreciate having my letter put in the packet for the February 25th hearing. Thank you for listening. Don Abrams 714.325.9055 Subject: FW: Please Vote YES on Ordinance 2020-8 RE: Short Term Rentals From: laciwit@gmail.com <iaciwit@gmail.com> Sent: Friday, February 21, 2020 3:24 PM To: Dept - City Council<CityCouncil@newportbeachca.gov> Subject: Please Vote YES on Ordinance 2020-8 RE: Short Term Rentals Please Vote YES on Ordinance 2020-8 RE:Short Term Rentals Dear Council members, My name is Jacqueline Wittmeyer. My husband and I have lived in our home for 35 years in Corona Del Mar. I am a Realtor with Surterre Properties. I have up to this point been silent and suffering living next door to a short term rental. The tenant in the rear unit next door is renting one of their bedrooms on Airbnb. Many of their rentals have been one night stays. I own a duplex with my husband, and we live in the front unit. We rent our back unit to long term tenants. I am hoping to eliminate the short term rental activity in our neighborhood as it has been so disturbing to what was once a peaceful home and neighborhood for us and for our tenants. Let me share some of my thoughts with you, please forgive the random order: 1. No one will be denied their property right to rent with the passing of this ordinance. What I am hoping for is to gain protection from the hotels being operated in our residential neighborhoods. Income from long term rental units is available to any owner of a duplex. The argument of denial of income is not accurate. 2. The owners/Landlords of R-2 properties can and do rent their properties for income, they do not need Short Term Lodging to get an income. I am one of these R-2 duplex owners. It is the large internet companies operating short term rentals that are benefiting at the expense of our residents. 3. No one is denying property rights because rental income IS allowed in R-2 properties. What this ordinance is doing is preserving my property rights for income from my long term tenants, including my right and theirs to peace and tranquility in my home and neighborhood. 4. Sleepless nights- Coming and going throughout the night, suitcases rolling, loud conversations..."where is it?", visitors arguing at times with f -bombs flying between 2:30 and 3:15am. Perhaps late flights from LAX? I have found myself sleep deprived after nights in a row of such disturbances. 5. This is affecting my long term tenants and their peace, which is my income. This is decreasing my property value, and I am concerned. 6. One morning at 7:40am this week one of the visitors was standing in the alley behind our home on a loud and long speaker phone conversation, f -bomb conversation about a woman, while he was smoking pot. Do I need to spend the later years of my life calling the police regularly to complain? I don't want to live like that. 7. 10 more years of sleepless nights is frightening. I would like this to be considerably shorter. I know of Corona Del Mare residents who finally gave up, sold their home and decided to move in order to live in peace. 8. Overnight guests are vacationers, not neighbors. Their mode and agenda is different from a quiet night's sleep. Allowing Short Term Rentals is allowing a hotel business in a residential neighborhood. 9. With 3 foot side yard setbacks, our properties are less than 6' apart from one another. 10. 1 have not filed a formal complaint with the police because of intimidation and threats from the "manager" of our next door short term rental, at my front door after dark. I have talked with several police officers who have encouraged me to file a complaint, but I have explained to them my fear of reporting and therefore hesitation to do so. 11. Many residents are silently suffering. These vacation rental companies are concerned with making money, but it is at our expense, we suffer as they profit. How could this be allowed to continue? 12. 1 would like the 10 year time frame reduced, the minimum night stay significantly increased. 13. We are not allowing our garages to be auto repair shops, we don't allow our patios to be restaurants, why would we allow our bedrooms to become hotels? Please help us, please vote yes. Sincerely, Jacqueline Wittmeyer Jacqueline Wittmeyer iaciwit@gmail.com 949.338.9393 DIRE #01124168 From: Sharon Boles <sharonaboles@gmail.com> Sent: Sunday, February 23, 2020 7:21 PM To: Larry Leifer Cc: Dept - City Council; Mark & Melissa Markof; Jim Miller; Chris Garber Subject: Re: Comments Regarding Short Term Rental Properties [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. Larry, I totally agree with your opinion. It is so well written that it deserves to be published in the media. You have captured the feelings of those of us who love our neighborhoods and absolutely detest the landlords who do not care about anything but the money that their "cashcows" are bringing in to their coffers. The City has even erroneously issued permits for short term and "Airbnb" rentals in our complex even though we are in an area strictly zoned against same. You are right to say that our City must rigorously monitor and regulate where and how many permits are issued in any given area and heavily fine the egregious infractions caused by some of the occupants of these properties. Sharon On Sun, Feb 23, 2020 at 5:57 PM Larry Leifer <lawrelei@gmail.com> wrote: Please see the document attached. Thank you. Larry Leifer To; Newport City Council Members Comments Regarding Short Term Rentals 2/23/2020 Short Term Rentals are like a virus adversely infecting the lives of our long term residents on Newport Island. The owners of short term rental properties are absentee landlords whose objective is simply personal profit, does not benefit their neighbors quality of life, and whose concern for the consequences of their transient tenants behavior is negligible. The profusion of these short term rental properties is comparable to permitting unzoned and unregulated commercial motels to situate among private homes. These STR's are now randomly located on most streets of this congested Island nesting among long term residences. Even assuming that all the customers of short term rentals behave properly during their stay, the process and frequency of vehicles and people coming and going, searching for addresses and parking, then moving in and moving out has created a feeling of chaos. There is also evidence of overcrowding by transient occupants as well as by visiting party guests. The current count of approximately 15 to 17 short term rental properties on the island is tantamount to having created a continuing public nuisance. This is a very high density of STR's on the Island which is far higher than the average density on the Peninsula. It is clear that the City of Newport Beach needs to exercise control of STR profusion and especially establish effective controls in high density residential areas as Newport Island and the Finley Tract in particular that are tightly bounded with narrow streets and very scarce street parking.. This kind of concentration makes misbehaving STR tenants all the more aggravating and warrants prompt police response to resident neighbor complaints. It also requires effective sanctioning of short term resident property owners and guests who do not comply with city ordinances. Respectfully, Lawrence J. Leifer 3706 Channel Place Newport Island 92663 949-650-7120 From: Meredith May <may_meredith@hotmail.com> Sent: Sunday, February 23, 2020 11:20 PM To: Dept - City Council Subject: Fwd: IMMEDIATE ACTION REQUESTED: SHORT TERM RENTALS on NEWPORT ISLAND [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. ATTN: NB City Council Below is my email I sent to Diane Dixon on 2/15/2020 and received no response. Unfortunately I cannot attend the city council meeting on Tuesday 2/25. Please use my email to voice my opinion/concerns. I live next door to a Newport Island short term rental on Marcus Avenue. This property has a huge patio on the water with a dock and it is a constant party everyday and night. NOT a good environment to raise my 2 young children. Thank you, Dr. Meredith May Begin forwarded message: From: Meredith May <may_meredith@hotmail.com> Date: February 15, 2020 at 8:47:28 PM HST To: "ddixon@newportbeachca.gov" <ddixon@newportbeachca.gov> Subject: IMMEDIATE ACTION REQUESTED: SHORT TERM RENTALS on NEWPORT ISLAND Hello Diane, I attended the NB City Council Meeting on Tuesday 11 February 6:30PM as I was informed by a neighbor that short term rentals on Newport Island was on the agenda. I brought my 2 young children with me that night (no babysitter) and could not stay as I learned from the officers at the door that the regular meeting would not start until 7PM, but that the study session was not even completed. My husband and I decided that we could not sit through 30 minutes, let alone 2 hours with our 2 young children. I later heard from a neighbor that the issue was not addressed at the meeting until 9PM, so I am glad I did not stay. When will the short term rentals on Newport Island be addressed again with the city council? I want to make sure I attend and would like to know the time I should be there. Short term rentals on Newport Island is a major issue right now. I have lived here for 10 years and last summer was one of the worst. I live next door to a short term rental and it is a constant party everyday and every night! You expect this on the beach side over on Seashore, but not on Newport Island. That is what made this island so special. When I first moved here, I was told by my neighbors that everyone on the island either has dogs or kids which was true, but not anymore. The family quiet residential feel is gone. It is very unfortunate that we pay high taxes to live in a nice neighborhood that is now going downhill by all the rowdy teenagers and twenty something year old tenants that arrive weekly or for just a few nights. It is not normally families renting, it is groups of young adults in their twenties or an adult renting it out for younger kids who is not on the property. I do not appreciate the bad language and cigarette/marjuana smoke next door to me and my small children all hours of the day. I do not have A/C since I live at the beach and now I cannot leave my windows open as we will be engulfed in 2nd hand smoke. Foul language, hiring DJ's to play on the patio, partying on huge boats with music blaring when tenants are allowed to also rent the boat slip from the property owner, loud music/yelling, peeing and smoking in the street, trash, etc, PARKING is a constant issue since the tenants think it is fine to park on neighbors property. I have contacted the owner of the rental property and Burr White rental management company multiple multiple times last summer with emails, phone calls and texts. It is a complete inconvenience for me and my family to have to deal with this on a daily basis. I should be able to come home and be able to park behind my garage to get my kids out of the car safely without having to ask the renters every day to move their car and every week to move their trash cans to their property. This summer, I am going straight to the city with my complaints and pictures. I hope to hear from you soon as to how this issue is going to be addressed. Thank you very much for your time and consideration. Dr. Meredith May Newport Island Resident Subject: FW: Regarding tonights meeting From: Pam Murray <pam@casadebalboa.com> Sent: Tuesday, February 25, 2020 12:49 PM To: Dept - City Council<CityCouncil@newportbeachca.gov>; donabrams@sbcglobal.net; Eric Spitz <ericlgs@yahoo.com> Subject: Regarding tonights meeting February 25, 2020 Dear Mayor, City Council, and City Manager, Regarding Short Term Lodging changes. On February 11, 2020, city council voted, passing sweeping changes to Short Term Rentals that not only will affect home owners ability to pay their mortgages, earn a living, but the value of the properties themselves absent the right to pass on the permit in a sale or to heirs of the property as a "first right of refusal". This may require a class action suit on behalf of those that "own" their property, have the proper permit, and have rented in good standing for many decades while the city has filled its coffers.. All permitted owners should have received notice of this meeting and vote well in advance. I only knew of this meeting by receiving an email from a third party the day before. This violates our rights. At issue are noise complaints generated involving police for unruly guests most likely in usually large parties. Per Don Abrams, two years ago there were 50 complaints and last year only 35 citations out of how many rentals stays? The peninsula, at the very minimum, has always had a large number of vacation rentals. People that bought there and on Balboa Island were/are highly aware of vacation rentals. I agree that the advent of, in particular AIRBNB, which charges no fee to list, unlike VRBO, has changed the landscape of controlled vacation rentals, but that fault rests on the shoulders of the city. The city is responsible for a lot of the issues at hand. You have many rentals that are either not permitted or permitted to a tenant with the owner unaware., or permitted for too many guests. Many rent to a number of guests that far exceeds what would be considered comfortable. That, alone, is a prescription for loud parties... regardless of noise restrictions. You not only have an opportunity for abuse but for uncollected taxes as well. The city, clearly, was not prepared for this onslaught but instead limiting permits without the proper information and weeding out bad listings is your answer. Rules should be implemented and enforced before the number of permits is capped as there will be permits found to be invalid due to lack of ownership or lack of proper insurance coverage. Before you determined what changes to make, did the city hire a consultant? If so, where is that report? If not, why not? If the city hasn't already, they should consider hiring a compliance company, such as "hostcompliance.com", to give the city information and weed out bad faith actors. I have done a quick search on AIRBNB for STAYS in Newport Beach, CA and 9 guests. You can see very quickly that the first listing is by one person in particular (not sure if the owner) with several properties, advertising a 5 bedroom for 16 PLUS guests at $202/nt. The unit is in a residential area not in the coastal area (put your mouse over the rate on map) .They have other listings as well What the city should require for permits: 1. Require that each vacation rental not only have a business license, a permit, but ALSO permission from the owner, and proof of vacation rental insurance coverage in order to obtain and maintain the permit. Many properties are not insured properly even through management companies. Homeowners insurance is not sufficient for renting short term and may invalidate any claim if companies have not been notified of how the property is being used as short term rentals. There are companies that deal with vacation rental insurance specifically such as Proper Insurance and Foremost (make sure Vacation Rental Insurance). The city is likely liable in instances where they have issued a permit to a non -owner without proper insurance. 2) Require that the permit number be first in all listings and advertising. It's easier to look for. 3) Require proper number of permitted guests be on listings and advertising. Requiring a sign on the property with the guest limit does nothing. Listings and advertisements of the rentals must limit the number of guests period. If an advertisement states 16 guests for a 3 bedroom, is rented, and guests show up for check-in and see a total of 8 guests on a sign ... they are still going to enter and stay. I did a search on AIRBNB and there are loads of properties offering more guests than entitled which should be 2 more than the number of bedrooms as the city has suggested. 4) Require that "Terms of Service" on all vacation rental listings and advertising sites (they ALL have them) include information on "Good Neighbor Policies" regarding noise and the city code. We have an automatic "Good Neighbors" email there I can see if read so there is no confusion. 5) Require a minimum age (25) to rent. We do. I m not sure if this violates laws for the city though The above will certainly shake out all bad permits. Other considerations Some longstanding properties that do not have a parking space on the property need to be grandfathered in regarding parking. The city should offer parking permits for these rentals (not the cars). There has been a long history of vacation rentals that has serve travelers, owners, and the city well for many decades generating many millions for the city in no only ax revenue on the rental, but dining and purchases as well. We have filled a need for those that would not be able to visit otherwise. There should be a good deal of consideration for those of us that have gone before AIRBNB et all. If the permit limit is put in place, there should be the right to pass on the permit in a sale or to heirs of the property as a "first right of refusal". Thank you in advance of tonights meeting which I am, unfortunately, unable to attend. Kind regards, Pamela Murray Casa de Balboa 949-500-3183 Subject: FW: short term lodging From: Behnaz Mandavi <beamandavi@yahoo.com> Date: Friday, February 21, 2020 at 4:12 PM To: "O'Neill, William" <woneill@newportbeachca.gov> Subject: short term lodging I'm concerned about a few provisions of the proposed ordinance to amend the municipal code relating to short term lodging permits No. 2020-08. I'm writing to you hoping the Council will consider changing some of the provisions listed below 1. Section 5.9.015- article 3: Revoking the STL permits of those in the non -coastal zone. The justification for this is very unclear. There are approximately 57-59 permits — less than 4% of all permit holders in the City. This would affect mostly the properties in Corona del Mar on the inland side of PCH. 2. Section 5.95.017: The 1600 home cap on short term rentals. Right now, owners of duplex properties have been hit with the new State Law that requires a duplex to be rebuilt if one is torn down. Preventing owners of duplexes from operating a short term rental just compounds the problem and hurts property values. I've also learned that such a cap would probably not pass muster with the Coastal Commission, which could end up invalidating the whole law. 3. Section 5.95.045 article 10: Requirement of a parking space per unit. Unfortunately many current short term rentals have no parking. Owners of properties like this would suffer a great hardship if they lost the ability to do a short term rental. 1 think the Council has a misunderstanding of parking related to short term lodging. Vacation tenants typically come with only one car, or none at all which does not add to congestion. Yearly tenants and homeowners often have many cars and this is where the problem lies, along with garages that are filled with junk. 4. Section 5.95.045 orticle15: Signage. As described, this is overbearing and probably not workable, as well as an intrusion into privacy. 5. Random Searches for Compliance. This concept is frightening and probably illegal. I realize the ad hoc committee and staff worked hard on this; but I believe these provisions should be addressed before the February 25 meeting. Thanks for your consideration and I hope to be at the City Council Meeting on February 25,11 to personally express my concerns. Mandavi. Behnaz Subject: FW: Short Term Rentals: As a long time resident of Newport Beach/Corona Del Mar we and my neighbors are adamantly opposed to the assault of short term rentals on our wonderful, peaceful city. These companies are profiting at our expense. Any Landlord can -----Original Message ----- From: outlook_A84F5C01A01243C1@outlook.com <outlook_A84F5C01A01243C1@outlook.com> On Behalf Of outlook_A84F5C01A01243C1@outlook.com Sent: Friday, February 21, 2020 10:02 AM To: Dept - City Council <CityCouncil@newportbeachca.gov> Subject: Short Term Rentals: As a long time resident of Newport Beach/Corona Del Mar we and my neighbors are adamantly opposed to the assault of short term rentals on our wonderful, peaceful city. These companies are profiting at our expense. Any Landlord can g... As a long time resident of Newport Beach/Corona Del Mar we and my neighbors are adamantly opposed to the assault of short term rentals on our wonderful, peaceful city. These companies are profiting at our expense. Any Landlord can get income from renting without short term rentals which equate to living next door to a hotel business. Please vote yes on this ordinance to protect us next Tuesday. Please help the residents. Thank you. Gordon J. Wrubel Subject: FW: Ref: Newport Island STR From: trvintoomuch@aol.com <trvintoomuch@aol.com> Sent: Sunday, February 23, 2020 10:08 AM To: cityCouncil@Newport Beachca.gov Subject: Fwd: Ref: Newport Island STR -----Original Message ----- From: Dixon, Diane <ddixon(o)-newportbeachca.gov> To: trvintoomuch(c).aol.com <trvintoomuch(D-aol.com> Sent: Sun, Feb 23, 2020 8:53 am Subject: Re: Ref: Newport Island STR Thank you for writing. Please write to the entire city Council at cityCouncil@Newport Beachca.gov Diane Diane B Dixon Council Member District 1 949.287.9211 On Feb 23, 2020, at 7:31 AM, "trvintoomuch(c�aol.com" <trvintoomuch(o)-aol.com> wrote: Ms. Dixon.- As ixon: As a home owner and full time resident on Newport Island we want to express our 100% support for the concerns and actions being recommended by our neighbors regarding the referenced subject matter. Our travel schedules do not allow us to attend weekday evening council meeting but anything that keeps our Newport Beach hidden and treasured island safer and quieter has our full support. Regards Larry Stolzenberg Carol Ghelarducci 405 39th Street Subject: FW: Vote YES on Ordinance 2020-8 re: Short Term Rentals From: R A <ryan.archdeacon@gmail.com> Sent: Sunday, February 23, 2020 11:36 AM To: Dept - City Council<CityCouncil@newportbeachca.gov> Subject: Vote YES on Ordinance 2020-8 re: Short Term Rentals Dear Council members, My name is Ryan Archdeacon. I am a business professional that has lived in Corona del Mar for over 6 years and am happy to say that I am a new homeowner in Corona del Mar as of 4 months ago. I have experienced first hand the negative impact that short term rentals have on the quality of life in CDM. Thank you for VOTING YES on Ordinance 2020-8. While Ordinance 2020-8 is a step in the right direction to protect the quality of life that Newport Beach has been known to offer its residence, we should be considering even stricter rules that require a minimum of 4-7 nights for short terms rentals. Best, Ryan Archdeacon CDM Homeowner & Resident for 6+ years Regards, Ryan Archdeacon ryan.archdeacon@gmail.com Subject: FW: Vote YES on Ordinance 2020-8 re: Short Term Rentals From: Aaron Giroux <aarongiroux@gmail.com> Sent: Sunday, February 23, 2020 11:44 AM Cc: Dept - City Council<CityCouncil@newportbeachca.gov> Subject: Re: Vote YES on Ordinance 2020-8 re: Short Term Rentals To Whom It May Concern: My name is Aaron Giroux. I am a young professional and home owner that has lived in Corona del Mar for over 8 years. I have experienced first hand the negative impact that short term rentals have on the quality of life in CDM. Thank you for VOTING YES on Ordinance 2020-8. While Ordinance 2020-8 is a step in the right direction to protect the quality of life that Newport Beach has been known to offer its residence, we should be considering even stricter rules that require a minimum of 4-7 nights for short terms rentals. Best, Aaron Giroux 620 1/2 Poinsettia Avenue Corona del Mar, CA 92626 Subject: FW: Short Term Lodging Permit Ordinance # 2020-8. From: Colleen Howes <chowes@sabp.com> Sent: Monday, February 24, 2020 2:38 PM To: Herdman, Jeff <jherdman@newportbeachca.aov> Subject: Short Term Lodging Permit Ordinance # 2020-8. Good afternoon Councilman Herdman, I have been a resident of Corona del Mar for 40 years and I have a STL permit in the non -coastal zone. I am once again urging you to vote against Short Term Lodging Permit Ordinance # 2020-8. 1 realize this was voted on February 11, 5-2 in favor of putting it on the consent calendar for the February 25th meeting. However, Mayor O'Neill told me he is planning to pull the item for discussion so that people will have the chance to voice their concerns at public comment. I also know that you could make a motion to reconsider this proposition and prevent it from passing tomorrow. I realize the ad hoc committee and staff worked hard on this ordinance to amend the municipal code relating to short term lodging permits and while I agree with many of the provisions, I believe there are some serious flaws within this ordinance. A large group of STL permit holders have organized a united campaign to get the word out about this provision as very few people knew that council voted to pass this on February 11th. One big concern is the provision revoking the STL permits of those in the non - coastal zone. There are approximately 57 permits in the non -coastal zone with the majority being in Corona del Mar. That is less than 4% of all permit holders in the City of Newport Beach The justification for this is very unclear and from numerous discussions with council members and after meeting with the City Attorney the main reason I have been able to gather is "because we do not have to get approval from the Coastal Commission". How can this be a valid justification for revoking our permits? Also claims that there have been hundreds of noise complaints when in fact, according to the Newport Beach Police Department in 2019 there were only 64 noise violations in the entire city of Newport Beach and only 2 that could possibly be in the non -coastal zone in CDM. These 2 may or may not be STL rentals as the police report only lists a street name and I have the reports to substantiate this. Another erroneous claim is that STL guests impact the parking availability. After speaking with other STL permit holders in Corona del Mar, nothing could be farther from the truth. Short term renters usually have only 1 car or none at all, while my former long term renters usually had two cars. We urge you to consider grandfathering in this group of 57 STL permit holders. In 2004 when the city amended the municipal code to require STL permit holders to be R-2 properties, the council agreed to grandfather in 120 existing R1 zoned STL permit holders. Also the outdoor signage requirement as described, is a health and safety issue endangering the safety of the homeowners and renter alike. Thank you very much and I urge you to make a motion to reconsider this proposition. We will have a large group of concerned STL permit holders attending the meeting tomorrow. I will very much look forward to your reply. With Gratitude, Colleen Howes From: Rieff, Kim Sent: Tuesday, February 25, 2020 10:10 AM To: Mulvey, Jennifer Subject: FW: Short Term Rentals - Problems From: Sabrina Peden <sabrinapeden@hsfranchise.com> Sent: Tuesday, February 25, 2020 9:36 AM To: Dept - City Council <CityCouncil@newportbeachca.gov> Subject: Short Term Rentals - Problems [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. Dear City Council, I have been a resident and homeowner in Newport Beach for 2 years. We love the city and especially our community on Newport Island where we live. However, during the past year the amount of Short Term Rentals have reached a level that is not acceptable anymore. Currently there are more than 15 STR on our small island and lots of issues that are a result of that. I can't even count the times anymore that I have been woken up in the middle of the night by loud visitors. The amount of garbage these rentals produce is out of control. Stepping over throw up in the morning when I walk our little dog is not something I want to experience on a weekly basis. We paid over $1200/sqft to live in a neighborly community in Newport Beach. But we don't even have many neighbors anymore as investors just buy up property and rent it out week by week. Not to mention the amount of taxes we are paying. The city needs to put a stop to this madness. Respectfully, Sabrina Peden 41538 1h St Newport Beach, CA 92663 615-638-0469 From: City of NB Questions Sent: Tuesday, February 25, 2020 10:28 AM To: City Clerk's Office Cc: Mulvey, Jennifer Subject: FW: Feedback for City of Newport Beach From: City of Newport Beach <NoReply@newportbeachca.gov> Sent: Tuesday, February 25, 2020 8:06 AM To: City of NB Questions <questions@newportbeachca.gov> Subject: Feedback for City of Newport Beach You have received this feedback from Stephen Prough < Steveproughl@me.com > for the following page: https://www.newportbeachca.gov/government/city-council/council-ordinances/proposed-ordinances I support the short term rental ordinance 2020-8. This has been a very serious issue in Desert Communities. It should read a minimum of 1 week From: timrhone@cox.net Sent: Sunday, February 23, 2020 1:54 PM To: Dept - City Council Subject: Vote Yes on on Ordinance 2020-8 Short Term REntals [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. Dear City Council Member, Please regulate these short term rentals which are threatening our way of life. We are paying high housing prices and taxes to live in a residential area NOT in a hotel district. How do you collect TOT tax? Does the City have code enforcement officers to monitor this accurately? Tim Rhone Real Estate Broker Surterre Properties (949) 374-2959 timrhone@cox.net DRE lic. -#00685152 From: PAULA FELL <paulafell@cox.net> Sent: Sunday, February 23, 2020 1:57 PM To: Dept - City Council Subject: Vote Yes on Ordinance 2020-8 Short term rentals [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. Dear City Council, Vote Yes on Ordinance 2020-8 Short term rentals If a unit is an Airbnb it is then one less dwelling unit in town, reducing the count of the needed dwelling units mandated by the state. Paula Fell From: Penny Gilbert <peennyg@hotmail.com> Sent: Sunday, February 23, 2020 3:34 PM To: Dept - City Council Subject: Short Term Rentals [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. I am writing to the Newport Beach City Council because of my concern regarding the proliferation of short term rentals on Newport Island. The property at 409 38th St. has been in my family since 1946 and has been home to four generations of Gilberts. Needless to say we have seen many changes over the years. Whereas it used to be a place where one could safely raise a family, it is no longer so. The character of the neighborhood has changed and not for the better. I am surrounded on both sides by three and possibly four short term rentals (Airbnb). Both buildings are zoned R2 and each has 2 units. I have found most renters are inconsiderate and have no awareness of the parking limitations. They, in many instances, are disrespectful and disruptive. They have parked behind my garage many times and when asked by my daughter-in-law to move their car one yelled at her as if she was in the wrong bringing several permanent residents to her aid. last night they even left a car parked In the middle of the alley. Short term renters have also placed trash in my cans when theirs were overflowing resulting in our having to hide our trash cans behind a fence. Newport Island used to be a place where you knew your neighbors. Now we are surrounded by transients and my grandchildren have less freedom of movement and are less safe than my children were at the same ages. Newport island is uniquely ill suited for the Airbnb industry given how close together the houses are and the density of the area. Perhaps Newport Beach should take a lesson from Laguna Beach with regard to banning short term rentals from residential areas. Penelope Gilbert 409 38th St. Newport Beach, CA 92663 (760) 861-2499 From: Mark Markos <msm619@ymail.com> Sent: Monday, February 24, 2020 7:32 AM To: Dept - City Council Subject: NEWPORT ISLAND SHORT TERM RENTAL SITUATION [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. To all Newport Beach city council members, My name is Mark Markos, I live with my family at 407 39th Street on Newport Island. I have lived on the island for close to 15 yeas and purchased my home 10 years ago because this island represented the epitome of family neighborhood beach living. It was a place I knew I could raise my family at the beach without the nonsense and noise of the 100 block with all the short term rentals. Little did I know that right under my nose the city was allowing our beautiful island to be transformed into a short term rental nightmare. This all happened without the residents even knowing. Our quiet, peaceful beautiful island has become a party place for out of town revellers. We have approx.109 homes on our small quaint island with approx. 55 general parking spaces and I believe we are going to lose 4 or those with the new construction on Channel Place (old Edwards Family house) leaving the residents with very limited parking options for their guests. Parking has become almost impossible and it appears to be directly related to the increase in STR's. Now within the last year or so we have between 15-17 short term rentals on the island (approx. 14 %) where the rest of Newport Beach (peninsula, CDM and Balboa) has about a 3% STIR density. I have 2 young daughters 6 and 9 and I am surrounded by several neighborhood kids that play at the park, ride bikes, skateboards and scooters around the island. It used to be a safe place for our kids, but now all parents are on high alert for the people speeding, disregarding stop signs and endangering our kids. I will give you 2 instances that I personally was involved in. Our neighbor, Roger on Channel PI. had a large group that rented his house and his guests were speeding up and down the alleys and streets at unsafe speeds to the point that multiple neighbors ran out side to see what all the car noise was about. I finally caught up with the driver and ask her politely to slow it down as we have kids playing all over the place. Her and the passenger not so politely told me to F"%#@k off and sped away. The disregard for the safety of our kids as well as the disrespect to me as well as the others who own and live there was completely unacceptable. There was another instance where a driver ran the stop sign on Marcus near the park nearly hitting one of our kids. I followed them to their rental on Marcus and warned them in a not so nice way and what they said to me is they were upset that they could not find parking anywhere. I hope for the cities sake that the oversight of allowing our island to become overcrowded with STIR guests for some extra license fees doesn't prove to become a liability when one of our children gets hit by an unsafe temporary guest of a short term rental who doesn't know or want to follow the rules of the road on the island. I am only sharing the unsafe driving situations that I have encountered, but there are many other situations that are happening due to the increase in STR's (excretion in public, excess late night noise, smoking dope in front and back of the rentals, the vulgar language and pornographic movies being filmed on docks. Also, the illegal parking is a constant, I have confronted the guests and they have told me they will just pay the $50.00 ticket so they don't have to move. My question to the city council is how did you let this happen and how are you going to change it? I don't want our island to be thrown in with the general STIR proposed changes as our situation is much different and needs to be treated accordingly. We have small narrow streets, limited parking, children playing throughout the island and a very family oriented neighborhood setting, Mark Markos 949 524 6094 Subject: FW: Short Term Lodging Permit From: Natalie Nevins <nfuJ527@icloud.com> Date: Thursday, February 20, 2020 at 8:39 PM To: "O'Neill, William" <woneill@newportbeachca.gov> Subject: Short Term Lodging Permit I'm concerned about a few provisions of the proposed ordinance to amend the municipal code relating to short term lodging permits No. 2020-08. I'm writing to you hoping the Council will consider changing some of the provisions listed below 1. Section 5.9.015- article 3: Revoking the STL permits of those in the non -coastal zone. The justification for this is very unclear. There are approximately 57-59 permits — less than 4% of all permit holders in the City. This would affect mostly the properties in Corona del Mar on the inland side of PCH. Section 5.95.017: The 1600 home cap on short term rentals. Right now, owners of duplex properties have been hit with the new State Law that requires a duplex to be rebuilt if one is torn down. Preventing owners of duplexes from operating a short term rental just compounds the problem and hurts property values. I've also learned that such a cap would probably not pass muster with the Coastal Commission, which could end up invalidating the whole law. Section 5.95.045 article 10: Requirement of a parking space per unit. Unfortunately many current short term rentals have no parking. Owners of properties like this would suffer a great hardship if they lost the ability to do a short term rental. 1 think the Council has a misunderstanding of parking related to short term lodging. Vacation tenants typically come with only one car, or none at all which does not add to congestion. Yearly tenants and homeowners often have many cars and this is where the problem lies, along with garages that are filled with junk. 4. Section 5.95.045 article15: Signage. As described, this is overbearing and probably not workable, as well as an intrusion into privacy. 5. Random Searches for Compliance. This concept is frightening and probably illegal. I realize the ad hoc committee and staff worked hard on this, but I believe these provisions should be addressed before the February 25 meeting. Thanks for your consideration and I hope to be at the City Council Meeting on February 25" to personally express my concerns. Natalie Nevins Sent from Mail for Windows 10 Subject: FW: Proposed ordinance for Short Term Lodging Permits No. 2020-08 From: Lori Hamel <lorihamel@hotmail.com> Sent: Monday, February 24, 2020 10:00 AM To: Dept - City Council<CityCouncil@newportbeachca.gov> Subject: Proposed ordinance for Short Term Lodging Permits No. 2020-08 To City Council: I am a resident and homeowner in the flower streets of Corona del Mar in a duplex zoned R-2. I live in the front house as a single mom with my ten-year old daughter. I rent the unit over the garage. I am dependent on this rental income to afford my house. Currently, I have a STL permit. I'm very upset and concerned about the provision of the proposed ordinance to amend the municipal code relating to short term lodging permits No. 2020-08 below: • Section 5.9.015- article 3: Revoking the STL permits of those in the non -coastal zone. The justification for this specific provision is very unclear, violates my property rights, and is unconstitutional. When I purchased my house in 2016 both short-term and long-term rentals were allowed. should be able to continue to earn rental income, short and long-term, as allowed when I purchased the property. This was a major factor when I purchased a duplex R-2 property and certainly impacted the price I had to pay for my home four years ago. I also believe this provision will also be a legal issue for the city as in the recent rulings made against Austin, TX last year. I understand that as an existing STR permit holder that I will be allowed to renew my STL permit for up to 10 years, but this still is unacceptable as I was not limited to this timeframe when I purchased my home. I have invested money to renovate and furnish my rental and I believe that limiting my future rental income - just based on the coastal zone - is not fair to me or all other homeowners especially those with R-2 lots with a duplex. If you want to make this part of the ordinance, then it would only be fair to be in effect for home purchases made after the date of the ordinance, but even then, this would reduce the value of R-2 zoned homes for resale by reducing the rental income potential. Further, this provision would only impact less than 4% of all existing permit holders. I am not even sure why this is a necessary part of the new ordinance since there is a limit to the total number of permits allowed. This particular provision would unfairly only affect mostly the R-2 properties in Corona del Mar on the inland side of PCH, including mine. I also believe that you have failed to give enough public notice about this issue. Most homeowners outside of the coastal zone in CDM are not aware of this new potential rental limitation. No notice has been sent to advise us of this proposed change. I only became aware of this as I recently applied for a STL permit. Thanks for your consideration and I will be at the city council meeting on February 25th to personally express my concerns. Lori Hamel 711 Jasmine Ave Corona del Mar MELINIDA LUTHIN LAW VN East Coast Highway suite 201 • Corona del Mar • California 92625 • P949.673.1161 • Melinda LuthinLaw.com Via Email The Honorable William O'Neill and Members of the Newport Beach City Council 100 Civic Center Drive Newport Beach, CA 92660 February 24, 2020 Hon. Will O'Neill: woneill e,newportbeachca.gov Hon. Diane Dixon: ddixon@,newportbeachca.gov Hon. Brad Avery: bavery@newportbeachca.gov Hon. Duffy Duffield: dduffieldnnewportbeachca.gov Hon. Kevin Muldoon: kmuldoon@newportbeachca.gov Hon. Jeff Herdman: iherdman@nenortbeachca.gov Hon. Joy Brenner: joy@newportbeachca.gov Re: Opposition To Proposed Amendment To The Short Term Rental Permit Ordinance Dear Mayor O'Neill and Members of the City Council: I represent a group of homeowners who own properties in the R2 zone of Corona del Mar, North of Pacific Coast Highway and who hold Short -Term Rental (STR) permits for their properties. This letter summarizes the problems related to the City Council's consideration of Proposed Ordinance 2020-8 (PO 2020-8) regarding STRs in Newport Beach. SUMMARY PO 2020-8 intends to impose an arbitrary outright ban on an existing permissible use of some, but not all properties located within a zoning district. PO 2020-8 is a zoning ordinance, it is subject to the procedural and substantive requirements of the City's charter and Municipal Code as well as State and federal law. To say that the City's adoption of PO 2020-8 is ill conceived and poorly executed is an understatement. The provisions of PO 2020-8 offend and violate State and federal constitutional protections, and the means by which the City Council intends to adopt Proposed Ordinance 2020- 8 violates local, state and federal procedural and substantive law. PROPOSED ORDINANCE 2020-8 IS AN IMPROPER ATTEMPT TO MODIFY A ZONING ORDINANCE UNDER THE GUISE OF REGULATING BUSINESS PERMITS PO 2020-8 purports to be a mere modification to Business Permits. This is false. PO 2020- 8 is an arbitrary rezoning of R2 properties North of PCH. Despite the fact that the Zoning Code permits STRs at all properties in R2 Zones, PO 2020-8 bans STRs for all properties located North Newport Beach City Council Letter Re: Proposed Ordinance 2020-8 February 25, 2020 Page 2 of PCH in Corona del Mar, including those properties for which STR permits have been granted. PO 2020-8 is an unlawful attempt by the City to restrict land use. PO 2020-8 Is A Zoning Ordinance. According to section 20.18.020 of the Zoning Code, "Table 2-1 indicates the uses allowed within each residential zoning district and the permit required to establish the use, if any, in compliance with Part 5 of this title (Planning Permit Procedures)." (CNB Muni Code, § 20.18.020.) STRs are among the uses permitted in R2 zoning districts. It is not possible for the City to adopt PO 2020-8, with its ban of STRs, without also amending Chapter 20.18 and Table 2-1 of the Zoning Code. PO 2020-8 is a Zoning Code Amendment, like it or not. It is disingenuous for the City to contend that a complete ban of STRs North of PCH is somehow not a change of land use or restriction within a district, which, by definition is a zoning ordinance. This is especially true, where, as here, the Zoning Code itself states that STRs are allowed as of right at all properties zoned R2. Regardless of where PO 2020-8 will be located in the Municipal Code, because PO 2020-8 obliterates a permitted use of land, it is a zoning ordinance subject to the procedural and substantive rules of the Government Code. (Gov. Code, §§ 65850, 65853.) The City May Not Circumvent The Procedural And Substantive Requirements For Zoning Changes Under The Auspices Of Amending A Business Permit Ordinance. Any change or restriction of STRs must be made in the same mode as the original enactment of the Zoning Code. (Johnston v. Claremont (1958) 49 Cal.2d 826, 835.) The Government Code sets limits on the substance of and procedures for enacting and amending land use restrictions. (Gov. Code, § 65850, et seq.) "[C]hanges of uses and restrictions within a district can be accomplished only through an amendment of the zoning ordinance, and the amendment must be made in the same mode as its original enactment." (Johnston v. Claremont (1958) 49 Cal.2d 826, 835, fn. 4.) An "amendment of any section(s) or subsection(s) of an ordinance may be accomplished by the subsequent adoption of an ordinance which specifically modifies the section(s) or subsection(s)." (CNB Charter, § 418.) If the City wants to attempt to ban STRs for all R2 properties North of PCH in Corona del Mar, it must do so by adhering to the procedures for adopting an ordinance amending the Zoning Code. Because PO 2020-8 makes no amendment to the Zoning Code, it does not comport with the City Charter or with the Government Code. Newport Beach City Council Letter Re: Proposed Ordinance 2020-8 February 25, 2020 Page 3 The City may not pretend to amend Table 2-1 of chapter 20.18 of the Zoning Code by amending chapter 5.95 of the Business Licenses And Regulations Code. The land -use restrictions of PO 2020-8 should be in Chapter 20.48 (Standards for Specific Uses) of Title 20 (PLANNING AND ZONING) of the CNB Municipal Code. These restrictions and designations have no place in Title 5 (BUSINESS LICENSES AND REGULATIONS). THE PROCEDURES VIOLATED AND CONTINUE TO VIOLATE LOCAL, STATE AND FEDERAL LAW For Myriad Reasons, The City Council May Not Adopt PO 2020-8 At The February 25"' Council Meeting. Ordinances shall not be passed within five days of their introduction. (Gov. Code § 36934; Newport Beach City Charter ["CNB Charter"], Art. IV, § 412.) The purpose of the requirement that ordinances be introduced at least five days before their passage is to give time for consideration, with a view to prevent hasty and ill-considered legislation. (In re Validation of East Bay Municipal Utility Dist. Water Bonds of 1925 (1925) 196 Cal. 725.) PO 2020-8 is a quintessential example of why ordinances must not be adopted on the fly. At the last City Council meeting, Mayor O'Neill moved to deny adoption of PO 2020-8, which was seconded by council member Muldoon. Instead of permitting a vote, council member Brenner interrupted the proceedings and made a "substitute" motion to adopt PO 2020-8. Immediately thereafter, the City Attorney suggested (improperly) that Ms. Brenner should amend her motion. However Ms. Brenner was not fully able to process the unprompted hints given to her by the City attorney so she punted and made a nebulous motion to adopt PO 2020-8 "as amended" without identifying her purported "amendment." The council meeting video and the proposed minutes show just how unclear Ms. Brenner was in making her suggested "amended" motion, which, in effect was an "amended substitute motion." No Version Of PO 2020-8 Was Introduced At The Last Council Meeting. An ordinance is introduced at a City Council meeting upon the reading of the ordinance, or upon reading of the title of the ordinance if all councilmembers waive the reading. (CNB Charter, Art. IV, § 412.) No version of PO 2020-8 was read in full and the council members did not waive the reading. Newport Beach City Council Letter Re: Proposed Ordinance 2020-8 February 25, 2020 Page 4 Ms. Brenner's "Motion" was not announced. "The motion must be stated (or announced) by the Presiding Officer prior to opening the subject to debate." (Council Policy A-1.) This did not happen. Because The Most Recent Version of PO 2020-8 Has Yet To Be Introduced, Council May Not Adopt It At The February 25`h Council Meeting. Two hearings are required to adopt any ordinance, including approving a development agreement or a rezoning. (See Gov. Code § 36934.) In the event that any ordinance is altered after its introduction, the same shall not be finally adopted except at a meeting held not less than five days after the date upon which such ordinance was so altered. (CNB Charter, Art. IV, § 412.) In addition to impermissibly chiming in during Council debate (CNB Policy A-1), after Ms. Brenner made her motion, Mr. Harp, without being asked, stated that PO 2020-8, as noticed, did not contain some certain "language" that was apparently known to Ms. Brenner, but unknown to the public. Mr. Harp suggested that Ms. Brenner amend her motion to include an amendment to PO 2020-2 that included this secret language. In response to Mr. Harp's unsolicited suggestion, Ms. Brenner stated that she wished to amend her motion to include the secret language that "Mr. Harp had circulated." This language was never read or provided to the public. In viewing the video of the last City Council meeting, it is apparent that the newly amended PO 2020-8 contains secret language that the City Council secretly reviewed and approved outside of the council meeting. Aside from the blatant Brown Act violation, where, as here, the language of the proposed ordinance is not introduced until the council meeting, then the ordinance may not be adopted at that meeting. (CNB Charter, Art. IV, § 412.) Despite City staff's claims, the February 25th reading of Proposed Ordinance will not be a "second reading" of anything. If the council attempts to adopt PO 2020-8 at the February 25th council meeting, it will be void. (W. Hollywood Concerned Citizens v. City of W. Hollywood (1991) 232 Cal.App.3d 486; County of Los Angeles v. City Council of Lawndale (1962), 202 Cal. App. 2d 20.) The matter of PO 2020-8 was not properly noticed. Notice of proposed amendments to the Zoning Code must be properly noticed. (Gov. Code, § 36933; CNB Muni Code, § 20.66.030). Compliance with the Brown Act notice requirements is not sufficient to provide the required notice; notice must be "provided in compliance with Chapter 20.62." (Ibid.) "[A]dvance notice Newport Beach City Council Letter Re: Proposed Ordinance 2020-8 February 25, 2020 Page 5 of the hearing shall be given and the hearing shall be conducted in compliance with [Chapter 20.62 of the CNB Municipal Code]." (CNB Muni Code, § 20.62.010.) The notice must contain specific information, it must be mailed or delivered directly to nearby property owners, and it must be posted. (Gov. Code, § 65091; CNB Muni Code, § 20.62.020.) The "notice must, at a minimum, be reasonably calculated to afford affected persons the realistic opportunity to protect their interests." (Horn v. County of Ventura (1979) 24 Cal.3d 605.) No notice was given that contained the requisite information, no notice was posted anywhere, and no notice was delivered or mailed to any nearby property owners. In addition, several property owners requested notice, and none received any notice as required. (Gov. Code, §§ 65092, 65856; CNB Muni Code, § 20.62.020.) When zoning is enacted by the city council, land owners by statute are entitled to notice and hearing. (Gov. Code, § 36933.) Instead of being given notice of the proposed zoning amendment, many property owners were told by council member Brenner that PO 2020-8 would not affect them at all. "[L]and use decisions which `substantially affect' the property rights of owners of adjacent parcels may constitute `deprivations' of property within the context of procedural due process." (Horn v. County of Ventura (1979) 24 Cal.3d 605.) Because the homeowners were not given proper notice, adoption of PO 2020-8 will violate their statutory and constitutional rights. Members With A Conflict Of Interest May Not Vote On PO 2020-8 And Must Physically Remove Themselves From Deliberations. No public official at any level of state or local government shall make, participate in making or in any way attempt to use his official position to influence a governmental decision in which he knows or has reason to know he has a financial interest. (Gov. Code, §§ 87100, 87200.) When a member of the City Council, Board, Commission, or Committee has, or reasonably believes he/she has, a conflict of interest, the official shall abstain from any participation in the decision. The member shall disclose the reason for the abstaining prior to the vote on the matter that involves the conflict of interest. (Council Policy A-1, id., Policy A-3.) "A Council Member who is disqualified by reason of a conflict of interest in any matter shall not remain in his or her seat during the debate and vote on such matter, but shall request and be given the permission of the Presiding Officer to step down from the Council table." (Council Policy A-1.) Newport Beach City Council Letter Re: Proposed Ordinance 2020-8 February 25, 2020 Page 6 Even where a council member has a conflict which he or she believes to be immaterial, council member "shall disclose the interest at the meeting" and "disclosure of the interest or conflict shall be made a part of the public record." (Council Policy A-1, id., Policy A-3.) Here, PO 2020-8 includes provisions capping the number of STR permits at 1,600. According to the Staff Report, currently there are approximately 1,500 STR permits. PO 2020-8 includes a provision restricting the STR permits to geographical areas that include properties owned by council members and that affect STR businesses owned by at least two council members. At least two council members hold multiple STR permits. These council members have a financial interest in PO 2020-8 because the proposed permit cap will affect their STR businesses and will affect their real property interests. (Gov. Code, § 87103.) In addition, PO 2020-8 includes a proposed ban on STRs in Corona del Mar North of Pacific Coast Highway. At least one council member lives in and owns multiple properties in Corona del Mar North of Pacific Coast Highway. These properties are located directly adjacent to several STRs which will be subject to the ban proposed in PO 2020-8. This council member has a conflict in interest due to the member's property interest. No council member disclosed any conflict of interest, none removed themselves from deliberation, and none abstained from voting on (the prior version of) PO 2020-8. The above conflicted council members may not participate in deliberations or vote on PO 2020-8. PO 2020-8 VIOLATES STATUTORY LAW AND CONSTITUTIONAL PROTECTIONS Municipal ordinances undertaking to regulate use for business enterprises are subject to investigation in courts, with view to determining whether they constitute lawful exercise of police power or whether, under guise of enforcing police regulations, there has been unwarranted and arbitrary interference with right to carry on lawful business, to make contracts, or to use and enjoy property. (People v. Hawley (1929), 207 Cal. 395.) PO 2020-8 Violates The Equal Protection Clauses of the State and Federal Constitution. The purpose of comprehensive zoning is attainment of unity in construction and development of city, along lines of reasonable regulations which tend to promote health, safety, morals, and general welfare of community. (Miller v. Board of Public Works (1925) 195 Cal. 477.) A zoning Newport Beach City Council Letter Re: Proposed Ordinance 2020-8 February 25, 2020 Page 7 ordinance must not unfairly discriminate against a particular parcel of land. (Reynolds v. Barrett (193 8) 12 Cal. 2d 244.) The power to regulate use of property or conduct of business is not arbitrary. (Ex parte Hadacheck (1913) 165 Cal. 416.) Regulation of use of property must rest upon reasonable exercise of police power, and restrictions that are unreasonable and unnecessary upon the use of private property or the pursuit of useful activities may not be imposed. (Skalko v. Sunnyvale (1939) 14 Cal. 2d 213.) A land use ordinance must not produce arbitrary or capricious results. (Arnel Dev. Co. v. Costa Mesa (1980) 28 Cal.3d 511, 520.) Land use changes must reasonably relate to welfare of affected region. (Arnel Development Co. v. City of Costa Mesa (1981) 28 Cal. 3d 511; Associated Home Builders etc., Inc. v. City of Livermore (1976) 18 Cal. 3d 582.) An ordinance excluding any commercial use must be reasonable, and the exclusion must bear some reasonable relation to the public interest. (Sunny Slope Water Co. v. Pasadena (1934), 1 Cal. 2d 87.) The City stated two reasons for banning STRs on the North side of PCH in Corona del Mar. First, council member Brenner stated at the council meeting that "We are getting complaints galore," yet when I asked to see the complaints, Vicki King, of the City Records Department stated that she needed an extension of time to "gather" my requested records. To date, I still have not received any of the alleged "complaints galore" upon which the City purportedly based PO 2020- 8. The fact that the City cannot produce any evidence of even one complaint indicates that the City did not propose PO 2020-8 for the purpose of addressing any complaints regarding STRs. Second, the City stated that it chose to ban STRs North of PCH in Corona del Mar, while permitting STRS at all other locations in Newport Beach because it did not want to subject PO 2020-8 to the scrutiny it would receive by the Coastal Commission if it attempted to ban STRs in the Coastal Zone. The City's interest in circumventing the scrutiny of the Coastal Commission is arbitrary and unrelated to any legitimate rational basis for modifying a land use ordinance. It is clear that PO 2020-8 unfairly discriminates against R2 properties located North of PCH in Corona del Mar. Depriving these properties of vested rights without any logical basis, while permitting other R2 properties in the same town to enjoy the rights deprived, violates federal and state statutory and constitutional law. Newport Beach City Council Letter Re: Proposed Ordinance 2020-8 February 25, 2020 Page 8 PO 2020-8 Violates The Coastal Land Use Plan Policies. CNB's Coastal Land Use Plan recognizes that "[p]articularly for large families, [STR] dwelling units provide an affordable alternative to hotels and motels.." Policy 2.7-3 states that the City will "[c]ontinue to authorize short-term rental of dwelling units pursuant to permits and standard conditions that ensure the rentals will not interfere with public access and enjoyment of coastal resources." Policy 2.3.3-6 states that the City will to "Continue to issue short-term lodging permits for the rental of dwelling units as a means of providing lower-cost overnight visitor accommodations while continuing to prevent conditions leading to increase demand for City services and adverse impacts in residential areas and coastal resources." The STR ban contained in PO 2020-8 is contrary to both Policies. PO 2020-8 Does Not Implement, And Is Not Consistent With The General Plan. Land use changes must be consistent with the local general plan. (Gov. Code, § 65850; Arnel Development Co. v. City of Costa Mesa (19 81) 28 Cal. 3d 511; Associated Home Builders etc., Inc. v. City of Livermore (1976) 18 Cal. 3d 582.) To be "consistent" with the General Plan, the land use restriction or modification must (1) be compatible with the General Plan, (2) not frustrate the General Plan's goals and policies, and (3) include definite, affirmative commitments to mitigate adverse effects of the General Plan. (Napa Citizens for Honest Government v. Napa County Board of Supervisors (2001) 91 Cal. App. 4th 342.) Here, there is nothing in the City's General Plan indicating any plan to reduce or restrict STRs. PO 2020-8 is not consistent with the General Plan. The City Failed To Consider The Housing Needs of The Region. The City shall consider the effect of any proposed land use ordinances on the housing needs of the region in which the local jurisdiction is situated and balance these needs against the public service needs of its residents and available fiscal and environmental resources. (Gov. Code, §65863.6.) The City made no such consideration. PO 2020-8 Impermissibly Takes A Vested Property Right. Table 2-1 of the Zoning Code states that Short Term Rentals are "Permitted by Right," in all areas zoned R-2. Despite this, the City Attorney, and councilmember Brenner repeatedly claim that a property owner's right to rent their property on a short term basis is not a vested property right. They are wrong. "The rights of users of property as those rights existed at the time of the adoption of a zoning ordinance are well recognized and have always been protected." (See, e.g., Hansen Brothers Enterprises, Inc. v. Newport Beach City Council Letter Re: Proposed Ordinance 2020-8 February 25, 2020 Page 9 Board of Supervisors (1996) 12 Ca1.4th 533.) This is especially true where, as here, the current local law specifically grants the property right that the proposed law seeks to take away. No matter how many times the City Council and staff proclaim that PO 2020-8 does not take away a property right; it does. Their unsupported assertion does not become a "fact" simply by repetition. (Grant -Burton v. Covenant Care, Inc. (2002) 99 Cal.App.4th 1361.) PO 2020-8 Violates Requirement Of Uniformity Of Regulations. Land use "regulations shall be uniform for each class or kind of building or use of land throughout each zone." (Gov, Code, § 65852.) The STR ban for some, but not all of the R2 Zoned properties in Newport Beach is an arbitrary land -use restriction that violates the law mandating uniformity for R2 properties. A monopoly must not be granted to business establishments and enterprises already situated in unrestricted districts under guise of regulating business and segregating it to a particular district. (Wickham v. Becker (1929) 96 Cal. App. 443.) By prohibiting the existing and new STRs North of PCH in Corona del Mar, PO 2020-8 will grant a monopoly to property owners in other parts of Newport Beach. Where plain effect of zoning ordinance is to prevent all business within city except that of favored places already established, and to grant to such places business monopoly, it is void. (Wickham v. Becker (1929) 96 Cal. App. 443.) This is the exact effect of PO 2020-8. PO 2020-8 will prevent all STRs in Newport beach except those places in which certain council members conduct STR business. For all of the above reasons, the City Council must not adopt Proposed Ordinance 2020-8. Yours truly, Melinda M. Luthin, Esq. of MELINDA LUTHINILAW Subject: FW: Airbnb comments re: draft short-term rental ordinance Attachments: Airbnb redlines - Newport Beach ordinance - 2.21.20 (v2).pdf; 2020-2-21 - newport beach str letter.pdf From: kevin.brunke@airbnb.com <kevin.brunke@airbnb.com> Sent: Friday, February 21, 2020 4:30 PM To: Dixon, Diane <ddixon@newportbeachca.gov>; Avery, Brad <bavery@newportbeachca.gov>; Duffield, Duffy <dduffield@newportbeachca.gov>; Muldoon, Kevin <kmuldoon@newportbeachca.gov>; Herdman, Jeff <iherdman@newportbeachca.gov>; Brenner, Joy <JBrenner@newportbeachca.gov>; O'Neill, William <woneill@newportbeachca.gov>; Dept - City Council<CityCouncil@newportbeachca.gov> Cc: Matt Middlebrook <matt.middlebrook@airbnb.com>; Davida Silverman <davida.silverman@airbnb.com>; Benjamin Lee <ben.clee@airbnb.com>; John Choi <iohn.choi@airbnb.com>; Jurjis, Seimone <siuriis@newportbeachca.gov>; Tseng, Evelyn <ETseng@newportbeachca.gov>; Leung, Grace <gleung@newportbeachca.gov> Subject: Airbnb comments re: draft short-term rental ordinance Dear Mayor O'Neill and Honorable Councilmembers, On behalf of Matt Middlebrook, Airbnb's head of Public Policy for California, I'm submitting a letter responding to Newport Beach's draft short-term rental ordinance that is being considered by council this Tuesday, February 25. The letter is attached. We commend the Council and City staff for the thoughtful approach that Newport Beach has taken to regulate short-term rentals. Airbnb is in complete alignment with the City's goals to ensure that illegal listings do not operate in the City. We also want to ensure that the City is able to recoup all transient occupancy taxes (TOT). The attached letter sets forth considerations on the technical aspects of implementation so that we can make sure we are able to do our part to ensure that guests reserve legal short-term rental units and that tax collection goes smoothly. We understand that these technical details often require time and attention, and we respectfully request the opportunity to discuss these minor changes further with your staff as the City moves forward with implementation. Thank you for your time and consideration of our comments. We look forward to our continued engagement with the City of Newport Beach. Sincerely, Kevin Brunke ATTACHMENT A 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; 4-3 Ordinance No. 2020-8 Page 2 of 20 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: 4-4 Ordinance No. 2020-8 Page 3 of 20 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; 8. 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: 4-5 Ordinance No. 2020-8 Page 4 of 20 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 Application 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. 4-6 Ordinance No. 2020-8 Page 5 of 20 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. 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. 4-7 Ordinance No. 2020-8 M. The restrictions of this chapter are necessary to preserve the CP$4e >t 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. 4-7 Ordinance No. 2020-8 Page 6 of 20 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. 8. "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 celleetIng eF Fece4ving a fee, OFeetly er iRdiFeGtly thFGLAgh an agent er—iR+Med+ar}, fer c -e o^ facilitating a booking transaction using any medium of facilitation. "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. OR Ordinance No. 2020-8 Page 7 of 20 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. 0. "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; 4-9 Ordinance No. 2020-8 Page 8 of 20 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 unitin 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. 4-10 Ordinance No. 2020-8 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 Application for Permit. An application for a short term lodging pennit shall be filed with the Finance Director upon forms provided by the City and shall contain the following infonnation: A. The name, address and telephone number of the owner of the unit for which the short term lodging permit is to be issued. 8. 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, ifany. H. Acknowledgement of receipt and inspection of a copy of all regulations pertaining to the operation of a short term lodging unit. Such other information as the Finance Director deems reasonably necessary to administer this chapter. 4-11 Ordinance No. 2020-8 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 4-12 Ordinance No. 2020-8 with a copy of Sections 5.95.047, 10.28.007, 10.28.010, 10.28.020, 1 B.I&-MQf&U 10.66.020 of this Code. 4-12 Ordinance No. 2020-8 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 be in substantial compliance with a template created by the City, which shall be available on the City website, and 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. 4-13 Ordinance No. 2020-8 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. 4-14 Ordinance No. 2020-8 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. 16. The owner shall not rent a short term lodging unit for less than two consecutive calendar days. 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 4-15 Ordinance No. 2020-8 Page 14 of 20 That is audible from the property line for the lodging unit. 4-15 Ordinance No. 2020-8 Page 14 of 20 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 or hosting platforms ledging- Rq shall collect all applicable transient occupancy taxes and visitor service fees that are imposed on the transient, pursuant to Chapters 3.16 and 3.28, from the transient, or from the person paying for such rental, at the time payment for such rental is made. 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 3.28 of this Code, or to interfere with the ability of a hosting platform and an owner to enter into an agreement regarding fulfillment of the requirements of this section. 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. 6+f} Hosting platforms shall be required to prompt hosts to include the City -issued registration number in their listing(s), in a format designated by the City. Upon notice from the City that a listing is non-compliant, hosting platforms shall cease any short-term rental booking transactions for said listing(s) within five business days. A hosting platform shall not complete any booking transaction for any residential property or unit subject to a City notice, until notified by the City that the residential property or unit is in compliance with the local registration requirement. 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 4-16 Ordinance No. 2020-8 limited to, insurance, concierge services, catering, restaurant bcF*015 We, 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). 4-16 Ordinance No. 2020-8 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. 8. . 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 priorviolation. 3. Afine 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). 4-17 Ordinance No. 2020-8 Page 16 of 20 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. 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 (8). 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 (8). 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 (8) . 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(0) 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 (8), the short term lodging permit for the unit may be revoked in accordance with subsection (8). 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 (8). 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 (8). 4-18 Ordinance No. 2020-8 Page 17 of 20 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). 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 (8)(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 4-19 final. Ordinance No. 2020-8 Page 17 of 20 4-19 Ordinance No. 2020-8 Page 18 of 20 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 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 4-20 Ordinance No. 2020-8 gross floor area by more than twenty-five percent (25%) on or after . *6,1 0 4-20 Ordinance No. 2020-8 Page 19 of 20 Section 4: The recitals provided in this ordinance are true and correct and are incorporated into the substantive portion of this ordinance. 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 orindirectly. 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. 4-21 Ordinance No. 2020-8 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: — — — — — — — — — — — — — — — — — — — — — — ABSENT: — WILL O'NEILL, MAYOR ATTEST: LEILANI I. BROWN, CITY CLERK APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE C AARON C. HARP, CITY ATTORNEY 4-22 airbnb February 21, 2020 Honorable Mayor and Members of the City Council Newport Beach City Hall 100 Civic Center Dr Newport Beach, CA 92660 Dear Mayor O'Neill and Honorable Councilmembers, On behalf of Airbnb, I would like to commend the council and City staff for the thoughtful approach that Newport Beach has taken to regulate short-term rentals. These conversations are never easy, create challenging questions and require the city to balance the interests of residents, small businesses and other stakeholders. Ultimately, we believe the City has settled on an ordinance that continues the rich tradition of vacation rentals in Newport Beach, while controlling for concerns about quality of life and neighborhood impacts. Airbnb is in complete alignment with the City's goals to ensure that illegal listings do not operate in the City, and we also want to ensure that the City is able to recoup all transient occupancy taxes (TOT). As the City moves forward with its short-term rental ordinance, we hope to work in partnership with you to see it implemented in a way that ensures a high rate of compliance across all hosting platforms so that hosts can continue to choose the hosting platform that is best for them to advertise their property. This letter sets forth considerations on the technical aspects of implementation so that we can make sure we are able to do our part to ensure that guests reserve legal short-term rental units and that tax collection goes smoothly. From past experience with cities across the country and within California specifically, we hope our insights will be helpful to staff as they implement the ordinance. To that end, we are submitting these comments to address Section 5.95.050(A) and (C) of the proposed ordinance that we believe, with slight revisions, will improve the City's ability to implement reasonable short-term rental regulations, thereby allowing us to meet the city's goals while supporting our host community. The letter also outlines some of our new trust and safety measures Airbnb has taken to ensure the safety of our guests, hosts, and neighbors. Section 5.95.050(C) - Advertising Short -Term Rental Units We understand that the intent of Section 5.95.050(C) is to prevent illegal short-term rental listings in Newport Beach. We support this important goal. As written, however, hosting 888 Brannan Street Fourth Floor San Francisco, California 94103 United States 1 of 5 platforms will need to verify a registration number against a city registry before completing a booking. As Expedia noted in their comments addressed on February 10, 2020, this would require the City to maintain a list of permitted units that is updated daily — but ideally in real time. Importantly, this implementation scheme could be unduly burdensome for City staff and could result in some hosts being denied the opportunity to list their property for short-term rental on a hosting platform if the City is unable to maintain a registry in real time. In our experience, it has been difficult for cities — even large cities with a large tourism base — to update their registries consistently, creating uncertainty for everyone. Alternatively, the intent of the ordinance —to prevent illegal listings from operating in Newport Beach — could also be met by requiring hosting platforms to remove illegal listings upon notice from the City. This notice and takedown framework is what Airbnb has agreed to in Santa Monica, San Francisco, Seattle, and Portland — and what is being proposed in Sacramento and Cupertino. We have found that this compliance framework works and that it is something all hosting platforms can agree to, creating equal opportunity for hosts to engage with various hosting platforms. To make notice and takedown easy for the City to implement, hosting platforms can make sure that hosts input a permit number with their listings. The City can then check the listings against their permit records and notify a hosting platform of any violations, which the hosting platform then removes within a few days. In addition to having a permit number listed on the website, hosting platforms can also provide the City a list of all short-term rental advertisements and their corresponding permit numbers. Hosting platforms would not be able to re -advertise a listing that was previously taken down for short-term rental use until notified by the City that the listing is compliant. We propose the alternative framework below adopted by other cities that will allow us to comply with the spirit of Section 5.9S.050(C) and ensure the city achieves its goal of platform compliance. Below is suggested language. 5.95.050 (c) (1) "Hosting platforms shall be required to prompt hosts to include the City -issued registration number in their listing(s), in a format designated by the City. Upon notice from the City that a listing is non-compliant, hosting platforms shall cease any short-term rental booking transactions for said listing(s) within five business days. A hosting platform shall not complete any booking transaction for any residential property or unit subject to a City notice, until notified by the City that the residential property or unit is in compliance with the local registration requirement." Alternatively, the City could issue subregulatory guidance offering this method of compliance and incorporate a "safe harbor" provision into the ordinance. Below is suggested language for the safe harbor provision: 888 Brannan Street Fourth Floor San Francisco, California 94103 United States 2 of 5 5.95.050 (F) "A hosting platform shall be presumed to be in compliance with this Chapter if it does either of the following: (1) Operates in compliance with subsections (A) - (C) above, or (2) Complies with Administrative Guidelines promulgated by the City that describes how the hosting platform must satisfy the hosting platform responsibilities in this Chapter." 5.95.050 (A) and 5.95.010 - Collection and Remittance of Transient Occupancy Tax We support the City's efforts to require hosting platforms to collect and remit transient occupancy taxes and visitor service fees on behalf of short-term rental operators. Airbnb has established more than 400 such partnerships with cities around the world to collect and remit taxes, and we would like to work with the City of Newport Beach to do the same. By creating a streamlined collection process for hosts and local tax authorities, these agreements have generated over $2 billion in revenue for local governments, helping enforcement efforts and strengthening services. As such, we suggest making minor edits to the definition of "Hosting Platform" in Section 5.95.010 and 5.95.050 (A) so that requirement captures a broader segment of hosting platforms, thereby ensuring greater compliance and greater revenue for the city. As written now, platforms, including Airbnb, could argue that they do not have to comply with the provision at all. Moreover, traditional hospitality operators, like hotels, and professional management companies that operate short-term rentals often already have systems in place to collect and remit local taxes. We have found that these professional operators often prefer to remit their own taxes, and as such, we ask that the language be amended so that they can continue to operate as they do currently. The language we suggest below ensures that professional hosts can continue to operate without interruption, and that the City will be able to receive TOT from non-professional hosts via a hosting platform. Section 5.95.010(H) "Hosting Platform" shall mean a person, other than an owner or agent, who participates in the short-term lodging business by facilitating a booking transaction using any medium of facilitation. Section 5.95.050(A) (as amended) "Agents or hosting platforms that Feeei,vee payF�qeRt feF the r n+a' e f a sheet +,,Fm - Rtal }ee}e+t shall collect all applicable transient occupancy taxes and visitor services fees that are imposed on the transient ...Nothing herein shall be deemed to relieve an operator, as 888 Brannan Street Fourth Floor San Francisco, California 94103 United States 3of5 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 3.280 of this Code, or to interfere with the ability of a Hosting Platform and an owner to enter into an agreement regarding fulfillment of the requirements of this section." Airbnb Neighborhood Tool We appreciate that the City wants to create short-term rental rules that protect public safety and neighborhood integrity, and stand ready to support your efforts to enforce regulations intended to achieve this goal. While the ordinance includes robust protections against nuisances and establishes a process for permit revocation after two violations within a 12 month period, we believe that being a good partner with cities like Newport Beach may require us to take more immediate action against activity on our platform that violates our commitment to working with cities. To demonstrate this commitment and help your community address problematic short-term rentals in your community, we want to share our Airbnb Neighbors website. The Airbnb Neighbors tool - airbnb.com/neighbors -empowers your constituents, regardless of whether they have an Airbnb account, to report concerns regarding noise, parties and other nuisances directly to Airbnb, allowing us to take appropriate action to address the issue. In addition to describing the issue and providing suggestions for remedies, if the concerned neighbor provides the listing's web address, an Airbnb team member will follow up personally with the concerned neighbor. Constituents can also make inquiries or provide feedback anonymously. We encourage you to share this tool with your constituents, local neighborhood groups, Homeowners Associations and anyone else who you believe will benefit from the tool's use. Airbnb Trust and Safety Tools While the Airbnb Neighborhood Tool helps us respond to activity that may harm neighborhood integrity, we are actively taking steps to prevent nuisance activity from occurring on the platform in the first place. Steps that we have taken to strengthen our commitment to public safety include: Risk Scoring Every Airbnb reservation is scored for risk before it's confirmed. We use predictive analytics and machine learning to instantly evaluate hundreds of signals that help us flag and investigate suspicious activity before it happens. 888 Brannan Street Fourth Floor San Francisco, California 94103 United States 4of5 Watchlist and Background Checks While no screening system is perfect, globally we run hosts and guests against regulatory, terrorist, and sanctions watchlists. For hosts and guests in the United States, we also conduct background checks. Party House Ban We have zero tolerance for unauthorized parties that create public safety risks and disturb neighbors. To that end, we have banned large parties and events in multi -family residences, such as apartment buildings and condos, and will take appropriate action against the host or guest when necessary. With Newport Beach only permitting short-term rentals in multi -family residences, we hope this step will prevent quality of life impacts. These are but a few of the steps and tools we are introducing to ensure that the City is not alone in its enforcement of its short-term rental rules and that we stand ready to assist in any way we can. We are honored to have a presence in a city like Newport Beach that has embraced vacation rentals for decades. And, as online platforms have made it easier for travelers to experience Newport's charm, we look forward to playing an active role and contributing to this history moving forward. We understand that these technical details often require time and attention, and respectfully request the opportunity to discuss these minor changes further with your staff as the City moves forward with implementation. Sincerely, Matt Middlebrook Head of Policy, California Cc: Grace Leung, City Manager Seimone Jurjis, Community Development Director Evelyn Tseng, Revenue Director 888 Brannan Street Fourth Floor San Francisco, California 94103 United States 5 of 5 From: Jacqueline Wittmeyer via Change.org <change@e.change.org> Sent: Tuesday, February 25, 2020 3:18 PM To: Dept - City Council Subject: New petition to you: Newport Beach & Corona Del Mar Short Term Rentals (less than 31 days) need city regulation [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. change.org City Council Newport Beach: you've been listed as a decision maker Jacqueline Wittmeyer started a petition on Change.org and listed you as a decision maker. Learn more about Jacqueline Wittmeyer's petition and how you can respond: 1 Newport Beach & Corona Del Mar Short Term Rentals (less than 31 days) need city regulation As the short term rental business is growing thanks to the internet, many residents in our community are faced with sleepless nights and loss of peace and tranquility in our residential neighborhoods. Currently the minimum stay is 1 night, which... WHAT YOU CAN DO 1. View the petition: Learn about the petition and its supporters. You will receive updates as new supporters sign the petition so you can see who is signing and why. 2. Respond to the petition: Post a response to let the petition supporters know you're listening, say whether you agree with their call to action, or ask them for more information. 3. Continue the dialogue: Read the comments posted by petition supporters and continue the dialogue so that others can see you're an engaged leader who is willing to participate in open discussion. CHANGE.ORG FOR DECISION MAKERS On Change.org, decision makers like you connect directly with people around the world to resolve issues. Learn more. This notification was sent to citycouncil@newportbeachca.gov, the address listed as the decision maker. Pr.vacv policy 2 Received After Agenda Printed February 25, 2020 Item No. 4 Subject: FW: STR Proposal Tax Concerns Attachments: EG Ltr to Newport Beach STR Proposal Tax Concerns 022420 FINAL.docx From: Kris Murray <kris@madaffer.com> Sent: Tuesday, February 25, 2020 1:46 PM To: Jurjis, Seimone <siuriis@newportbeachca.gov> Subject: STR Proposal Tax Concerns Seimone, Attached is a letter from Walter Gonzalez of Expedia Group in reference to our discussion yesterday. They are respectfully requesting that the provision to collect and remit the taxes be removed from the ordinance, and in turn will work with the city on a Voluntary Collection Agreement (VCA). Please review the details included in the letter and let us know if you have any questions. Thank you for the time you have provided to Expedia Group and your consideration of their request. Kindest regards, Kris Kris Murray Cell: 949-981-3743 February 24, 2020 Newport Beach City Council Will O'Neill, Mayor City Council Chambers 100 Civic Center Drive Newport Beach, CA 92660 Dear Mayor O'Neill and Members of the Newport Beach City Council, Thank you for the continued opportunity to provide input on the City of Newport Beach's efforts to regulate short-term rentals (STIRS). We are grateful for the on-going dialogue with city staff. As noted in our letter dated February 10, 2020, Newport Beach's proposed language includes new obligations on platforms—specifically, that platforms verify STIR operators' license numbers before allowing any bookings and be responsible for collecting and remitting Transient Occupancy Tax (TOT) to the City of Newport Beach. We are grateful to the city for recognizing that a longer lead-time is needed to implement the registry that the ordinance requires platforms to check listings against. We hope that there can be flexibility in that date if the city discovers that the registry is taking longer than expected. In regard to the tax collection requirement, as drafted, Newport Beach's proposed ordinance would require platforms to collect and remit TOT generated by short-term rental activity in the city. This provision requires voter approval consistent with Proposition 218, which prohibits a local government from "impos[ing], extend[ing] or increas[ing] any general tax unless and until that tax is submitted to the electorate and approved by a majority vote." The proposed language would newly "impose" tax liabilities and obligations on platforms by subjecting platforms to tax collection, recordkeeping, enforcement and remittance liabilities for tax owed as a result of short-term residential occupancies the platform facilitates. While Newport Beach's TOT is imposed on "transients" for the privilege of occupancy, tax liability is also imposed on an "operator" if tax is not remitted, whether or not it is collected by the operator from the guest. The proposed language would effectively treat platforms like "operators" for purposes of tax collection, recordkeeping and remittance liabilities. For no other purpose would platforms be considered operators—thus, the proposed amendments "impose" tax liabilities and obligations that do not exist under current law. This can only be done if voter approval is first secured. We ask that this provision be removed from the ordinance. If the City decides to delete the proposed tax provision from the ordinance, we are willing to begin discussions on a Voluntary Collection Agreement (VCA) with the City of Newport Beach. A voluntary collection agreement would streamline collection remittance for the city, relieve the 333 108th Avenue NE I Bellevue, WA 1 98004 1 USA I T +1425 679 7200 1 F +1425 679 7240 1 expediagroup.com tax collection burden from our partners and would ensure greater compliance of existing taxation obligations. Again, we are deeply grateful for the City's efforts to engage with Expedia Group and other stakeholders as part of this process. We look forward to working with you moving forward. Please feel free to contact me at wagonzales@expediagroup.com or 512-505-1615 with any questions. Sincerely, Walter R. Gonzales Government Relations Manager Expedia Group cc: Seimone Jurjis, Community Development Director 333 108th Avenue NE 1 Bellevue, WA 1 98004 1 USA 1 T +1425 679 7200 1 F +1425 679 7240 1 expediagroup.conn