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HomeMy WebLinkAbout18 - Short Term Lodging Amendments to Chapter 5.95 and Title 21 of the NBMC (PA2020-048) - CorrespondenceReceived After Agenda Printed October 13, 2020 Item No. 18 From: Rieff, Kim Sent: Monday, October 12, 2020 9:08 AM To: Mulvey, Jennifer Subject: FW: Short term rental meeting -----Original Message ----- From: Karen Carlson <kkc2616@aol.com> Sent: Monday, October 12, 2020 9:03 AM To: Dept - City Council <CityCouncil@newportbeachca.gov> Subject: Short term rental meeting [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. Dear City Council As a long time resident of "old" Corona del Mar flower streets I strongly support the proposed rental regulations, most important being a CAP ON PERMITS TO 1550, a 3 night minimum, and 25 age limit. The other remommendations are also needed. Thank You Karen Carlson Received After Agenda Printed October 13, 2020 Item No. 18 Subject: FW: Proposed Ordinance No. 2020-26 - Request for Historical Data Supporting Statements Made About STL Units From: Carmen Rawson <carmen rawson@att.net> Sent: Monday, October 12, 2020 12:29 AM To: Lewis, Jon <JLewis@nbpd.org> Cc: Jurjis, Seimone <siuriis@newportbeachca.gov>; Dept -City Council <CityCouncil@newportbeachca.gov> Subject: Proposed Ordinance No. 2020-26 - Request for Historical Data Supporting Statements Made About STL Units NBPD Chief Lewis, Proposed Ordinance No. 2020-26 includes, on the first page, the following statement: "WHEREAS, the Police and Fire Departments frequently respond to complaints of noise disturbances, disorderly conduct and other illegal activity at short term lodging units," I am requesting herein for the NBPD and the NBFD to provide the following data - segregated by type of complaint, for 2019 and if possible for the first half of 2020: - Total number of complaints (that were found to be valid) - How many of said complaints were associated with a STL unit - How many of said complaints were associated to long term residents - How marry of said complaints were associated to day visitors to the city - How many of said complaints were associated to bars/restaurants patrons At the very minimum the data should provide granularity to the claim made in the proposed ordinance (noise disturbances, disorderly conduct, illegal activity, etc). On the same page of the proposed ordinance the following statement is included: "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;" Please provide an explanation about the above mentioned statement. What is the difference, in the ability to enforce, when the violation is caused by a resident versus a STL unit occupant versus a day visitor to our city? Your responding to this request is appreciated. Regards, Carmen Rawson From: Carmen Rawson <carmen rawson@att.net> Sent: Monday, October 12, 2020 12:39 AM To: Dept - City Council <CityCouncil@newportbeachca.gov>; Jurjis, Seimone <sjurjis_@_newportbeachca.gov> Cc: Connie Adnoff <connie@beachviewrealty.com> Subject: City Council Mtg 2020-10-13 - Comments/Questions to Proposed Ordinance No. 2020-26 Mr. Jurjis and City Council members, Regarding the proposed Ordinance No. 2020-26 1 have the following comments/questions: Section 4 of the ordinance: The title of Section 5.95.030 used to read "Application for Permit" and it now reads "Applicant for Permit", which seems to be an error. Section 8 of the ordinance In the new Section 5.95.043, entitled "Transfer of Permit", there is no reference made to the non -conforming STL units (located on R-1 zoned or on mixed-use zoned property). Does that mean that a STL Permit, of a non -conforming STL unit, could also be transferred to i.e. a new property buyer? Please clarify. I consider a transfer to a heir very different than a transfer to a new buyer. The latter should not be allowed for non -conforming STL units. Section 10 of the ordinance: Regarding the added conditions 22.b, 22.c and 23, to Section 5.95.045, once again the STL units are being harshly targeted. For over a year we have had construction going on in our block. Now, we have another construction project starting on the other block next to ours. Just about every single day we have contractors parking on the alley (and not while loading or unloading). So is the City requesting the general contractors to keep a daily log of all the license plate numbers for all vehicles which are used by their subcontractors, labor, materials delivery service, etc? The answer is NO. Are the general contractors and/or property owners being held responsible for any parking violation by their subcontractors, labor, materials delivery service, etc? The answer is NO. How about Hotels in the Balboa Peninsula area, which we all know do not have enough on-site parking to accommodate all their guest vehicles. Are they required to provide the license plate numbers for all vehicles which are used by all their guests? The answer is NO. Are the Hotels managers and/or owners held responsible for any parking violation by their guests? The answer is NO_ And for condition 23 - what does it mean that the "owner shall be responsible for any violation by a transient user or transient user's guest"? Does it mean that the property owner could receive a notice of violation per Section 5.95.060 with a corresponding administrative citation of $1,000, $2,000, $3,000, and the potential of suspension and/or revocation of the STL Permit? Because, i.e., a transient user parked in the alley? Please clarify. As part of the same thought, should long term residents get a $1,000 citation for parking in the alley while their garages are being used for storage? Should a contractor get a $1,000 citation for parking in the alley and have their building permit put "on hold" with a "Stop Work" notice? I like to emphasize once again that having a STL unit does not automatically equate to more vehicles being brought to the City by the transient users at once. To give you a specific example we have a dwelling unit with 5 bedrooms. We used to rent this unit short-term for a maximum occupancy of 12. Our transient users were families who brought to the property (to the City) no more than 3 vehicles. Sometimes they brought one (1) 15 -passenger van for the whole family and their belongings. Converting this dwelling unit to a yearly lease means having five (5) professionals (roommates), as long term tenants, who have a total of 5 vehicles. In other words -more vehicles than what we had with the short-term transient users!!! Enough with blaming STL units for all the parking problems in the City... Sincerely, Carmen Rawson Received After Agenda Printed October 13, 2020 Item No. 18 From: Sent: To: Subject: Rieff, Kim Monday, October 12, 2020 7:45 AM Mulvey, Jennifer FW: Short term rentals on newport island -----Original Message ----- From: Joe Foster <Joe.Foster@westcoastturf.com> Sent: Sunday, October 11, 2020 10:46 AM To: Dept - City Council <CityCouncil@newportbeachca.gov> Subject: 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. Our family has owned a home on Newport Island for 15 years we have been impacted by short term rentals by the number of cars and people they bring in this small island, parking violations double parked on sidewalk parked on corner where we are not able to get out .This is a very dangerous situation . Thank you for your consideration on this issue Joseph and Laura Foster 4018 Channel Place Newport Island Received After Agenda Printed October 13, 2020 Item No. 18 From: Rieff, Kim Sent: Monday, October 12, 2020 7:49 AM To: Mulvey, Jennifer Subject: FW: Short Term Rentals on Newport Island -----Original Message ----- From: Lynn Friedman <haus2ful@gmail.com> Sent: Sunday, October 11, 2020 5:34 PM To: Dept - City Council <CityCouncil@newportbeachca.gov>; Dixon, Diane <ddixon@newportbeachca.gov>; Avery, Brad <bavery@newportbeachca.gov>; Duffield, Duffy<dduffield@newportbeachca.gov>; Muldoon, Kevin <kmuldoon@newportbeachca.gov>; Herdman, Jeff <jherdman@newportbeachca.gov>; Brenner, Joy <J Brenner@ newpo rtbeachca.gov>; O'Neill, William <woneill@newportbeachca.gov> Subject: 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. Dear City Council Members, My wife and I purchased our home on Newport Island 20 years ago. Our attraction to The Island was the quaint atmosphere. We could live on the bay, close to the waves and out of the war zone. Well unfortunately that is no longer the case, the war zone has expanded to Newport Island. The on -shore breeze allows us to live comfortably without air conditioning, but the late evening loud noise necessitates that we close our windows. The on going party seen is now an every evening occurrence. This lifestyle is not conducive for a family residential area. I did not think we were moving next door to a hotel. Please re-examine the STR policy. I believe a 30 day minimum stay would allow Home owners an opportunity to rent their property and still maintain the residential feel we once had. Thank you for reconsidering the STR policy Regards Jeff & Lynn Friedman 3704 Channel Place Newport Island Received After Agenda Printed October 13, 2020 Item No. 18 From: Rieff, Kim Sent: Monday, October 12, 2020 7:49 AM To: Mulvey, Jennifer Subject: FW: Short term rental public comment -----Original Message ----- From: Bob Carroll <bob.a.carroll@gmail.com> Sent: Sunday, October 11, 2020 9:31 PM To: Dept - City Council <CityCouncil@newportbeachca.gov> Subject: Short term rental public comment [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. City Council Members: I write concerning the request for public comment on short term rentals. We have owned our home here on the peninsula for over a decade. Please cap or reduce the permits; Require weekly rental (as opposed to daily or even three day — there is simply too much congestion and too few parking spaces as travelers overlap); Regulate parking for any STRs, limiting the number of cars that are permitted per STR; Reduce the occupancy levels per STIR household; Add a curfew/no party policy with quiet hours after 9 p.m. and before 9 a.m. Extra policing and enforcement should be provided. Thank you, Bob Carroll Received After Agenda Printed October 13, 2020 Item No. 18 From: Rieff, Kim Sent: Monday, October 12, 2020 7:50 AM To: Mulvey, Jennifer Subject: FW: Regarding short term rental discussion -----Original Message ----- From: Jenifer McAninch <jenifermcaninch@gmail.com> Sent: Sunday, October 11, 2020 10:14 PM To: Dept - City Council <CityCouncil@newportbeachca.gov> Subject: Regarding short term rental discussion [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. Dear City Council: As a Newport Beach peninsula resident, I have personally experienced the inconveniences and troubles associated with the increase in short term rentals. We simply have too many and not enough enforcement. I have literally left my home to stay elsewhere because I have no peace here. Please cap or reduce the permits; Go back to weekly rentals (no daily stays and even a minimum 3 day results in too much congestion on the overlapping days as people come and go); even consider rationing the stays/rotating the stays so entire blocks are not rented; Require mandatory parking spaces be provided to guests and a minimum number of cars per rental; Cap the occupancy levels per household to a reasonable number (i.e. no gatherings over 5 or 6 or so); Have a curfew and no -party policy and trash/disposal policy; Extra policing and enforcement is required. We have owned our home here for over a decade. This situation is out of control and I am saddened by it. Please restore peace by addressing the abundance of permits. Thank you, Jenifer McAninch Sent from Jenifer's iPhone Received After Agenda Printed October 13, 2020 Item No. 18 From: Rieff, Kim Sent: Monday, October 12, 2020 7:50 AM To: Mulvey, Jennifer Subject: FW: Short Term Rental Comments From: Deborah Gubernick <dgubernicks@gmail.com> Sent: Sunday, October 11, 2020 10:23 PM To: Dept - City Council <CityCouncil@newportbeachca.gov> Subject: Short Term Rental Comments [E7(TEWMAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. I have added my voice previously but ask again that you: - Limit the number of STR permits - Reduce the number of occupants permitted at each property (it is too dense to accommodate the occupants your current proposal provides; 2 per room in a 4 bedroom is 8 plus living room is 10 — when most houses are best for 4-5 people max) - Put residents first by Have STR people come without their cars/make resident parking a priority Note: The street we live on on the peninsula has several year round renters. They are not the problem or the disruption. Received After Agenda Printed October 13, 2020 Item No. 18 From: Rieff, Kim Sent: Monday, October 12, 2020 7:53 AM To: Mulvey, Jennifer Subject: FW: Public Comment - Short Term Rentals From: Mark Hardy <markhardyl3@outlook.com> Sent: Monday, October 12, 2020 5:10 AM To: Dept - City Council <CityCouncil@newportbeachca.gov> Subject: FW: Public Comment - Short Term Rentals [E)CMMAL EMAIL] DO NOT CLICK Links or attachffwn-ts unless you recognize the sender and know the content is safe_ City Council Members: I write concerning the request for public comment on short term rentals. We own a home on the peninsula. Our input is as follows: Please cap or reduce the STR permits; Require weekly rental (as opposed to daily or even three day) to reduce the overlap and overabundance of travelers; Regulate/limit parking for any STRs so residents have first priority for parking; Regulate and reduce the occupancy levels per STR household; Add a curfew and no party policy with quiet hours after 9 p.m. and before 9 a.m. Increase policing and enforcement. Thank you, Mark C. Hardy Home Owner Received After Agenda Printed October 13, 2020 Item No. 18 Subject: FW: Short Term Lodging Hearingof October 13, 2020 From: P Edson Sent: Sunday, October 11, 2020 1:26:04 PM (UTC -08:00) Pacific Time (US & Canada) To: City Clerk's Office Subject: Short Term Lodging Hearingof October 13, 2020 My name is Pam Edson and my husband and I owners/managers of a short term rental duplex which is also our home. I have a few points that I would like to voice to the city council as they consider the upcoming ordinance. I am in favor of all the provisions with the exception of: Section 5.95.045, Subsection (A), (2), of Chapter 5.95. of Title 5 Concerning the minimum age for a renter, I am in total agreement and have had a minimum age of 25 for my property for the last 8 years. The issue is the enforcement of this age restriction using the Airbnb platform. Even though Airbnb is in possession of the guest's age, to date they have not agreed to share this information with their hosts. Indeed the direction seems to be the opposite as they recently launched Project Lighthouse in an effort to prevent discrimination. Hosts no longer see profile photos, last names or home cities until after the reservation is booked. The government ID that the guest provides is also unavailable to hosts. While this may be effective on the discrimination issue, it eliminates any possibility of a host being able to vet a guest, including their age. For the same issues just outlined above it is awkward for the host to be asking these questions directly of the guest, the guest may not be truthful, and it brings up additional privacy issues. So to sum up, Airbnb has the age infom %3bon but will not share with hosts. Is it possible for the city to draft an agreement with Airbnb where hosts can simply have this minimum age confirmation? Maybe a simple badge that states: Minimum Age Met Section 5.95.045, Subsection (A), of Chapter 5.95. of Title 5 Condition (22)(b) I cannot imagine how this would work? Most guests do not have additional guests come as I also limit the home's daytime occupancy but here is a very common scenario we are seeing this year: New parents and their newborn arrive for a stay. Grandparents have been self -quarantining and arrive to see their newest grandchild for the first time. New parents are parked in the garage and the grandparents are parked on the city street I can certainly ask the guests upon booking to provide all their license plate numbers since at this point the decision on which car to bring will most likely not be determined. Or if the guest is flying in I can ask them upon arrival to send me a message with the rental car's plate number. But at what point during the stay is the host to obtain the license plate number of the visitors, in my example the visiting grandparents? And as a guest wouldn't you feel that this was highly intrusive considering that they would be parking on city streets? And since most guests will head to the beach, at which point is the parked car a guest of a short term rental versus a visitor of the beach? Most importantly this condition looks to be a nightmare to properly, fairly and legally enforce. Most of our parking issues surround the full time rentals with far more occupants than off street parking. Why not spend your efforts on the big picture? (23) Since most of the parking issues on my street are related to rentals with 4-6 adults living in one home with no off street space, are you planning to expand this provision to full time rentals also? Again this condition looks to be a nightmare to properly, fairly and legally enforce. I think it is imperative that the process be defined and communicated to the public before this is even considered by the council. Thank you for your time. Pam Edson 1132 9th St Newport Beach, CA 92663 pamedson(cDgmail.com 949-698-2222 Received After Agenda Printed October 13, 2020 Item No. 18 Subject: FW: Short term vacation rentals From: Cherie Flournoy Sent: Saturday, October 10, 2020 11:13:32 AM (UTC -08:00) Pacific Time (US & Canada) To: City Clerk's Office Cc: Dept - City Council; O'Neill, William Subject: Short term vacation rentals With the uproar about short term rentals I thought you might benefit from my perspective. I am a single woman & a senior citizen. My only source of income is social security & renting a single bedroom in my home. I bought my home to use as my primary residence in 1998 from my parents who had owned it since 1964. It was a family home used as a summer beach house & 10 month rental property. 10 years after renovating the interior & moving into the home, I lost my job & fell on hard times. After a couple years not being able to get comparable income jobs & in an effort to save my home & bring money in to pay the bills I decided to try Airbnb with short term rentals in the extra bedroom in my home. At the time, I called the city offices and asked if there was anything I had to do to legally rent out a room in my home part time??? I was told since it was a room and not the house I was good to go. When I did short term rentals with Airbnb, I never had any complaints from neighbors and had nothing other than respectful & courteous guests. It was a blessing as it provided extra income I needed & was a wonderful way to meet new people from all over the world. However, A couple years later I would receive a nasty letter from city notifying me I needed a business license & permit and fining me over $2200. for not having them. I explained circumstances & said I would be happy to get those things just hadn't been told I needed. I immediately paid for both -short time later I received another letter denying my license & permit and the a bility to rent a room in my home short term. They also insisted I pay the fine & never returned the $ paid for the license/permit they were denying. I tried to work something out with city but they were very hostle... It appeared I was being pushed out & definitely being treated unfairly when many neighbors were allowed to do the same thing without restriction. I spoke with a couple lawyers & was told that the city didn't have the right to deny me that especially since my home had been a rental property since 1964 & several of my next door neighbors were allowed to do short term .... why not me? Unfortunately I didn't have the financial means to fight city hall.] asked what my options were and was told the city would only allow me to rent Month to month with a minimum of 30 days... so that's what I have been doing ever since. When I was able to rent short term I brought in aprox $2200- 2700. Monthly ...which was very helpful to a senior living on a $1500. SS check only. By taking the option away from me the city cut my rental income in half & thus my standard of living. I'm not some rich land lord making bank and renting out to a bunch of disrespectful party kids..lm an honest law abiding community volunteer that rents a single bedroom to a single guest and is just trying to live a quiet life in the home I love. There are many people like me that depend on rental income to make ends meet and keep their homes. The city doesn't hurt the many wealthy residents of NB it hurts people like me. Is that your intention??? I would suggest the city stop being the boot on the neck of people like myself and implement some behavioral rules & restrictions that protect area residents, but carry warnings & consequences for vacation rental companies, off site landlords & guests that violate those rules. I have been a resident of Newport Beach peninsula since I was 10 & I have watched as our charming community is little by little being destroyed by the tearing down of our history and by the giant homes being allowed & packed into our neighborhoods, the littering & dog feces left on our streets & beaches, as well as the homeless population allowed to move in & sleep on our sidewalks & beaches and the rise of petty crime & theft in our neighborhoods. I think these are the more pressing issues the city council needs to address the least being short term rentals. I would welcome some of our elected officials making efforts to stop those things that are a major problem to the survival of the beach community many of us loved to call home. Regarding short term rentals there is a way to protect the rights of homeowners & residents as well as those with investment property. Please don't punish everyone for the actions of a few. Thank you for your time. Sincerely, Cherie Flournoy Received After Agenda Printed October 13, 2020 Item No. 18 Subject: FW: Opposition to Allowing Only Owner Occupied STR on Newport Island From: Lori Bowman Sent: Friday, October 9, 2020 6:42:24 PM (UTC -08:00) Pacific Time (US & Canada) To: City Clerk's Office; Dept - City Council Subject: Opposition to Allowing Only Owner Occupied STR on Newport Island To Newport Beach City Council Members, We are writing to oppose the recommendation being considered to only allow owner occupied STRs on Newport Island. As noted in our previous emails to the City Council, we currently own a home on Newport Island with our siblings that has been in the family for over 80 years. We share the home for get-togethers, reunions and vacations with relatives and friends. We also rent the house throughout the year on a short-term basis and rely on the rental income to help with the cost of home maintenance, repair and other property -related expenses. We are responsible renters and do not rent to parties who cause disturbances or damage property. We follow all city rules related to STRs and renew our business license and STR permit on a timely basis. Our property does not fall under the "owner occupied" category and it would cause significant financial hardship to maintain our property if we were unable to generate short-term rental income. We are aware of the ongoing problems with short-term tenants who are disruptive, dimrspectful and damage property and we understand the importance of establishing rules and policies to penalize property owners on the Island who rent to the "bad seeds". However, we don't believe that as responsible property owners we should be penalized for those owners who do not follow the rules and who rent their homes out in an irresponsible manner. Those in favor of the owner occupied recommendation cite Newport Island as a unique residential community and their reasons for supporting this recommendation - parking problems, density of homes, narrow streets, etc. - are the same problems that all other areas in Newport Beach have experienced with short term - rentals. It is simply unfair to single out Newport Island as a special community with unique problems while the rest of the city is not under the same STR restrictions. We understand the need and importance to compromise so all NI resident and property owner needs and viewpoints are considered but don't believe that the only solutions are to only allow STRs for a small percentage of property owners or to abolish STRs altogether on Newport Island. Thank you for your time and consideration. Best regards, Lori & Lynne Bowman Property Owners 506 38th St., Newport Island Cell Phone: (310) 621-1237 Received After Agenda Printed October 13, 2020 Item No. 18 From: City Clerk's Office Sent: Saturday, October 10, 2020 9:00 AM To: Mulvey, Jennifer, Rieff, Kim Subject: FW: Short term rentals From: Alex Izbicki Sent: Saturday, October 10, 2020 8:59:58 AM (UTC -08:00) Pacific Time (US & Canada) To: City Clerk's Office Subject: Short term rentals [EXTERNAL ■MAIL] DO NOT CLICK links or att3rhments unless you remgnize the sender and know the content is safe. I am writing this as a resident of Newport Beach. Any restrictions on short term rentals is absolutely an overreach by our city government. Many people especially those that are elderly depend on short term rentals in order to live. We have a police force that can enforce existing noise ordinances and of course we have a building and safety department that enforces any property encroachments upon neighbors. We as a community must work on the good faith of neighbors who will take care of their properties and not encroach upon their fellow residents instead of tuming to the city to regulate somethingthat is a n infraction on free trade which is guaranteed by the US Constitution. Any restrictions is considered unreasonably burdensome and should not be imposed by any means. People have a right to do with the properties what they feel as long as they are within the confines of zoning laws and local noise and living ordinances. Any infringement upon this goes against the spirit of free trade and it's a definite infringement upon the free will of property owners to do with their property as long as it falls within the broader zoning and legal confines of the community. I am asking you not to instill any sort of restrictions as they're already exists Restrictions and limits in our city. Thank you Alex Izbicki Received After Agenda Printed October 13, 2020 Item No. 18 Subject: FW: Newport Island Short Term Leases. -----Original Message ----- From: Ron White <rawhite06O4@gmail.com> Sent: Friday, October 09, 2020 1:49 PM To: Dept - City Council <CityCouncil@newportbeachca.gov> Subject: Newport Island Short Term Leases. To: Newport Beach City Council members. I am a home owner on Newport Island. I strongly oppose the many existing short term lease permits on our island and vehemently oppose any expansion. In fact, I believe permits should be pulled, especially for chronic offenders whose properties consistently cause problems stemming from noise, drunkenness and overall terrible behavior. I honestly do not understand why the STL problem is still an issue after months of complaints and community involvement. Why does Newport Beach have so many more STL permits than the neighboring beach communities to the north and south? I don't buythe argument that NPB has always been a vacation destination when the the other communities have not. People have been vacationing in Laguna and Huntington for decades. Why is there no enforcement of noise complaints? I have never heard of a single summons or ticket ever issued in response to neighbor complaints. Am I wrong on this? Why are so few people given the freedom without fear of penalty to make the vast majority of us miserable. I am curious if council members have weekly STL homes on their blocks. I am guessing the answer is "No". This seems like such a huge problem and issue that someone, perhaps one of my neighbors, could run for city council on a platform that would primarily be based on banning short term leases. Can you imagine the universal support that person would experience? I am guessing that some or most property owners that have STL permits have multiple properties that they are renting out. If that is the case, then a few hundred people are causing thousands and thousands to be miserable. That does not seem at all fair nor just. I will volunteer to knock on doors or make phone calls for any current or prospective city council member that takes a serious stand against short term rentals. Please feel free to hold me to this promise!!! I am relatively new to the area and have been very impressed when ever I have needed to interact with the city. I would hope that at some point, our cries for help will be heard and we will get some relief from this nightmare either in the form of additional restrictions on STL and or ENFORCEMENT. Thank you very much for your service and I hope I can count on you to help. Best regards, Ron White 500 39th Street Unit A 414-6-4-8411 Received After Agenda Printed October 13, 2020 Item No. 18 Subject: FW: Newport Islands Short Term Rental Needs and Ordinance Requests From: Scott McFetters <smcfetters@outlook.com> Sent: Wednesday, October 7, 2020 4:41 PM To: citycouncil@newportbeachca.gov; newportislandiim@gmail.com; Chris Harano <chris@harano.com>; Laura Brightwell <laura@lauriebrigthwell.com>; drs6080@gmaii.com; winfieldwells@gmail.com; bluesand.ty@gmail.com; 'Mark Markos' <msm619@ymail.com>; Larry Leifer <lawrelei@gmail.com>; Bud Reveley <budreveley@gmail.com>; Barry Mycorn <r1meguities1@gmai1.com>; ibowerbank@prof unditymarketing.com; roger@catalinacomponents.com; Mike Veal <mike@goldcoastglass.com>; ken@eclecticfinishes.com; thomas@stratcomponent.com; Richard Wolpow <rwolpow@pocnettech.com>; Martin O'Hea <mohea@bixbyland.com>; Jeff Friedman <ifriedman@turnerfiber.com>, penny reveley <pennyrevelev@amail.com> Subject: Newport Islands Short Term Rental Needs and Ordinance Requests Honorable City Council, I hope your day is going well! Please see the attached for Newport Islands needs and some STR ordinance request based upon our ongoing issues and loopholes with enforcement. STR's do not work and will not work in the Newport Island's residential community and must be banned immediately or owner occupied. We do not want busine-ces or hotels operating in our residential neighborhood_ That is why we have an assortment of hotels at all price points throughout the City of Newport Beach. They are zoned correctly, have plenty of parking a nd on- site security. You do not have to call the police all the time for issues that you are getting no economic gain from. We also have areas that are not as residential that seem to be fine with STR's. It should be a neighborhood or community choice and that is who you are supposed to represent first. Businesses second. Short term Rentals/Hotels have been hell on Newport Island and they are unsafe let alone a severe threat to keeping our neighborhood residential. We refuse to allow our neighborhood be to turned into hotel row or be called the war zone. The City of Newport beach created this problem with all the recent STR permits, it was not a problem a year and a half ago. There were no ordinances for Newport Police or Code Enforcement to enforce except large out of control parties until recently. We thought the new ordinances would help but there has been zero enforcement. In my area alone the neighbors and I have called the police over 30 times for illegal parking, noise, less than 4 days stays, construction code violations, blocking sidewalks with trash cans and carport gates. We have pictures and evidence. We thought the owners were getting cited and they would have their STR permits suspended or revoked. We found out this week that all the police or code enforcement did was issue warnings. What a waste of time and who gives the police and code enforcement the right allows transient renters from keeping the residents unsafe on and ongoing basis by blocking our access out of garages, sidewalks and streets! Let alone letting the hotels next door dictate when we get to sleep. Newport Islands permanent residents or long-term renters still account for over 90% of the island's population. Newport Island has had a severe short-term rental problem for about a year and half now, which has been a problem since the STR' exploded onto Newport Island. I think all operators on Newport Island are from out of town because the local operators new that it would not work with the parking, lot sizes and the push back from the permanent or long-term residents. The operators we mostly see have raised investor money and need growth at any cost to the existing neighborhoods. They don't have the repeat customers that the old in town operators have. They are competing for same day last minute reservations with the hotels with not vetting what so ever. No track record of repeat clients. They have great rules that they don't enforce because no one ever comes on site unless there is a problem. The city should add some of these rules into the 1 ordinances. They are already approved by the worst STIR Operator https://avantstay.com/house-ruies on Newport Island. The other operator is similar. Newport Island had around three part time STR's and then the city allowed another fifteen or so permits without any type of safety, traffic, noise, study done period. Newport Island is the only neighborhood in Newport that I am aware of that has parking permits because the parking was so bad before STIR became the new uncontrollable growing virus that is impacting our neighborhood that is residential. City Council has heard horror stories, seen pictures, videos, emails, testimony, etc. of all the ongoing safety, noise and the STIR owner/operators attempt to change the character of the neighborhood. We have been told that the City want's its $4,000,000 plus share of the profits but does not have the money to enforce violations. Did you know that they City of Newport Beach only has four Code Enforcement for everything including real estate, STR's and other areas they are supposed to monitor? I think only a couple work a day and the leave around 5:00 PM before any of the issues start that they have to witness to give the owner citation. It is trickery at its best! Occupancy is the issue everything else is just a symptom on Newport Island. Putting 10, 12 or more people in a STIR house that is less that 2,000 square feet on a 2,300 square foot lot after converting a closet and dining room into two bedrooms ( permits? ), without heat or air conditioning works out great for everyone else who needs to work or go to school when there is no room inside so they sit out on the patio on the water and talk or party all night. Bye the way, the average occupancy on the Newport island has to be 3 or 4 people max. The STIR or hotels as they are called cannot support the amount of people which is the City Fire Code which is meant to be a maximum in a building. What a disaster. Let enough people check that is already party size in a residential neighborhood so the owner who does not live on the Island, the operator and the city make money. None of them would allow a STIR next to their own home. Please be responsible and ban STIR on Newport Island or at a minimum make the owner occupied. Thank you for your support! Please let me know how I can assist. Best regards, Scott McFetters Received After Agenda Printed October 13, 2020 Item No. 18 Subject: FW: Newport Islands Short Term Rental Needs and Ordinance Requests From: Martin O'Hea <mohea@bixbyland.com> Sent: Friday, October 09, 2020 11:59 AM To: Dept - City Council<CityCouncil@newportbeachca.gov> Subject: RE: Newport Islands Short Term Rental Needs and Ordinance Requests [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. As a follow up to Scott's comments I would like to briefly give you my thoughts as a 35 year resident of Newport Island. Case in point on our collective concerns happened last night with a STR having 5 people & 5 cars with frequent additional guests but only 3 available parking spots. Cars were parked on the side walk, in front of a fire hydrant, in front of a garage and boxing in my wife's car on a street end. Given the ingress/egress of our tiny island this could cause a myriad of safety issues for the residents (and ultimately liability issues for the city). Throw on top of that the concerns about noise/pollution/loud partying, etc in a very confined area and the whole issue has become untenable for the entire neighborhood. As city council members you have a fiduciary responsibility to the concerns of your constituents as well as to the business community and the city finances so 1 understand it's a balancing act. However, Newport Island warrants some specific attention for all of the reasons island residents have already expressed_ Therefore, besides voting on some issues that effect the city as a whole we feel it necessary to request that Newport Isiand be given some additional protection by either banning STRs a Itogether (which will help you get the current # under the cap) or if that cannot be accomplished at this time than requiring owner/occupied for Newport Island which would presumably be a big step in the right direction. Respectfully, Marty O'Hea Received After Agenda Printed October 13, 2020 Item No. 18 Subject: FW: Newport Island Short Term Rentals From: Bud Reveley <budreveley@gmail.com> Sent: Friday, October 09, 2020 10:47 AM To: Dept - City Council<CityCouncil@newportbeachca.gov> Cc: Markof, Mark & Melissa <mnk218@yahoo.com>; Scott McFetters <smcfetters@outlook.com> Subject: Newport Island Short Term Rentals It should be no surprise that the residents of Newport Island are resisting the massive 500%growth in STRs over the last two years. This was done in complete secrecy without regard to the safety and the impact on our once secure and peaceful neighborhood. We had a wonderful environment unknown to the chaos of West Newport. When 1 moved here 25 years ago, my friends would always ask, 'where's Newport Island?" That's how wonderfully we were immune to all that goes on on the peninsula. 1 am surprised to hear that the Council has received only a few comments from us. Perhaps you haven't been listening closely at various Zoom meetings recently. If so, 1 want to assure you that this subject has consumed us as residents and owners of expensive real estate. There are at least 80-90 property owners and residents on Newport Beach that are extremely interested in a solution to our problems of traffic, parlirrg, trash, and obnoxious noise levels at night. A number of residents had a zoom meeting with the City Manager and staff from Code Enforcement and Police. During this meeting it was made clear that our peaceful enjoyment of our neighborhood has been invaded and the City personnel were made aware as to why strict enforcement was needed to weed out irresponsible STIR operators. We were told that a 24 hour hotline would soon be initiated to better respond to our issues. That has been in operation for about 10 days and still we see no citations being issued. When police do come only warnings are given for parking in driveways, red zones, in front of fire hydrants, and obstructing street flow. It is apparent that enforcement of regulations will not happen. This by the way is consistent with other regulations not enforced such as motorized vehicles on the Boardwalk and dangerous illegal fireworks on the 4th of July. 1 was told on July 5th by the watch officer that 100 police were in the field and only 2 arrests were made. It's obvious to us that Newport officials pay more attention to visitors than fellow residents. This must change. We suggest that there be no more STR's ever issued for our Island. When homes with an STIR are sold, its permit will extinguish and not be transferred to the new owner. It seems clear to me that STR's take away opportunities for more permanent residential properties that are important so that people employed in the area can avoid long commutes to work. I believe the State of California is making moves to demand more local housing, which the City must respond to. Appropriate and necessary enforcement of regulations by City personnel is essential to solving this problem and City Management has failed in their duties._ It's important that an investigation into this matter is done by Council. They work for you and us. Thank you for your attention to this problem. 1 look forward to seeing a solution soon to reduce the number of STR's and assure that no more are issued for Newport Island. J. L. Reveley 508 38th St Received After Agenda Printed October 13, 2020 Item No. 18 Subject: FW: City of Newport Beach: Council to Consider Additional Short -Term Rental Reforms From: Terri Lockhart Sent: Thursday, October 8, 2020 5:08:25 PM (UTC -08:00) Pacific Time (US & Canada) To: City Clerk's Office Subject: FW: City of Newport Beach: Council to Consider Additional Short -Term Rental Reforms [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. cityclerk@newportbeachca,gov Dear City Council, I think that those guys are mean!!!! Making all of these rules to limit who can use the beach. Not all of us can afford to take a three night vacation. Some working people enjoy coming to the beach. You don't own the whole beach, if you don't want to live in peoples' vacation then move. Terri Lockhart Received After Agenda Printed October 13, 2020 Item No. 18 Subject: FW: Short term rental reforms comment for the City Council From: Pengalo Sent: Thursday, October 8, 2020 3:50:20 PM (UTC -08:00) Pacific Time (US & Canada) To: City Clerk's Office Cc: mary@loravance.com Subject: Short term rental reforms comment for the City Council Aloha, and thank you to the city for keeping me appraised of the ongoing revisions in short -term -lodging regulations and restrictions. My grandparents built our house on Amethyst in 1930, and it is the home I grew up in. It is now rented month- to-month in the winter and weekly in the summer, and I have a business license and short -term -rental permit for our home. I am submitting these comments in response to an email I received from the city regarding consideration of "Additional Short Term Rental Reforms" which I received 10/8/2020 and include at the end of my comments for your reference. spedfica ly obpd to the fourth leform"_ 'Tiold property owners responsible for parking violations by tenants that occtu at the rental property or in dose pro)amity to the property_" This is rkkcukous- parking violations go beyond the scope of reasonable property owner responsibrTrtres for their tenant behavior. i post the street - sweeper days in the house, the city posts them conspicuously on the street, and if a tenant chooses to ignore them or forgets to get up early and move their car (or violates any other parking or driving codes or laws) that is really not my fault, nor is my responsibility to move their car for them. When parking enforcement issues a citation they have the means through the vehicle license to determine the actual violator and assess the fine to the person committing the crime- even if it is a rental car since the companies know who has rented from them. Will the city also hold me responsible if they have a traffic accident in front of my house, or drive the wrong -way down north bay front ally (3 houses down)? Will I also be held responsible if they choose to ride their bike on the sidewalk or don't clean up after their pet? Holding me responsible for their parking violations may be convenient for the city in terms of collecting the fine, you certainly know where to find me, but that does not make it right or just. I hope that what is right and just still matters to a majority of the Council! I urge the Council to reject this unreasonable and unjust "reform" and, if parking violations are that big a problem, increase support for parking enforcement and collection, and consider " wheel cuffing" violators' cars to assure collection of fines and correction of the offending driver's behavior. I support and urge adoption of the proposal to allow transfer -on -death of the permit to immediate family and on sale of the property, and encourage the Council Members to do what they think is best for the city regarding the other three reforms. Thank you, and best wishes for us all! Peter Leinau, owner 324 Amethyst Balboa Island 559 683 7408 Received After Agenda Printed October 13, 2020 Item No. 18 From: Rieff, Kim Sent: Friday, October 09, 2020 2:32 PM To: Mulvey, Jennifer Subject: FW: Short Term Rentals on Newport Island From: Penny Gilbert <peennyg@hotmail.com> Sent: Friday, October 09, 2020 2:14 PM To: msm619@ymail.com; Dixon, Diane <ddixon@newportbeachca.gov>; Dept - City Council <CityCou nci I @ newportbeachca.gov> Subject: Short Term Rentals on Newport Island tEXTERK%L ERUQ DO MT CM finks or aitadunetrts trr> im yvu recognize the seneW a W know the content is safe. Once again I am writing to you regarding our Short Term Rental problem on Newport Island. My property at 409 38th St., has been own by the Gilbert family since 1946. ft was purchased for family use not as an investrnent property. would fully support owner occupied Short Term Rentals if the owner managed the property. The property next door to mine, at 407 38th St., was purchased recently as a n investment by two parties and although one of them lives on the property, the property is managed by Seabreeze. Last week the police log shows that at 12.30 AM on October 5, 2020 they responded to a "disturbance party" "400 block 38th St.", "unfounded". This was a disturbance that brought 4 or 5 police cars after the tenants responded with racial slurs and what is considered "trash talk" to my daughter-in-law after she asked the renters to go inside as children were sleeping. It was around midnight. There was lights on in the owners unit but no response. The Seabreeze representative was called and tried to sort things out at which time my neighbors sided with my daughter-in-law. The police only noted it as "unfounded". The police has been called to the property many times due to noise and shouting. The property has a hot tub on the roof which exacerbates the noise problems. The resident owner does not become involved, probably because Seabreeze is commissioned to manage the property. The police note on their log each time disturbance "unfounded" they only issue warnings not violations. As I have been told, Code Enforcement will not file a complaint unless they are present and can attest to seeing the violation. Without complaints filed by the police or code enforcement, these permits are not revoked or suspended. I would like Newport Island to be treated like the residential neighborhood it was meant to be. The Short Tern Rentals that continue as owner occupied to also be owner managed. I would also like to see the police take reports when they have to respond with multiple units. Penelope Gilbert 409 38th St. Newport Beach, CA 92663 (760) 861-2499 Received After Agenda Printed October 13, 2020 Item No. 18 From: City Clerk's Office Sent: Friday, October 09, 2020 12:30 PM To: Mulvey, Jennifer; Rieff, Kim Subject: FW: Short term housing From: janedavis110@roadrunner.com Sent: Friday, October 9, 2020 12:29:32 PM (UTC -08:00) Pacific Time (US & Canada) To: City Clerk's Office Subject: Short term housing [EXTERNAL E1MAKI DO NOT WCK Finks or attachmerts unless you recpgribm the sender and know the content is safe_ I received an email about proposed changes in the short term housing rules. I thought we were done with this. How about some time to see how the new rules are working? I note a proposed rule to make owners responsible for renters parking violation. How can you enforce this rule? As an owner I don't know the cars my renters may use while renting my home. Jane Davis Balboa island Received After Agenda Printed October 13, 2020 Item No. 18 From: Rieff, Kim Sent: Friday, October 09, 2020 10:35 AM To: Mulvey, Jennifer Subject: FW: STR Newport Island - Owner Occupied Only From: Sabrina Peden <peden.sabrina@gmail.com> Sent: Friday, October 09, 2020 10:34 AM To: Dept - City Council <CityCouncil@newportbeachca.gov> Subject: STR Newport Island - Owner Occupied Only (E)(TE tNAL EMAIL) DO NOT CLICK links or attachments unless you recngn¢e the sender and know the content is safie. Dear City Council, I hope this email finds you well. My husband Ray and I are writing this email to voice our opinion regarding STR's on Newport Island. While we fully support the need to protect public access to our beautiful beaches as a right for all to enjoy, the explosion of STR's that are facilitated by online booking agencies has resulted in numerous issues that negatively impact our quality of life on a daily basis. It has become very clear over the past months that the situation will not change without strong regulations. There is a daily influx and churn of visitors who display little consideration and regard for the rest of us. This is bad enough, but the worst part is that if not tomorrow, then the next day we have to start all over again as another group of inconsiderate guests show. Repeat and repeat. When authorities are contacted the results are warnings but no citations. It is beyond frustrating. The guests who come here for only a few nights are by and large here to party. They have no consideration for safety. Speeding, blocked sidewalks. God forbid you have an emergency. When we ask to please keep distance due to COVID- 19, we get insulted. This isn't a resort community. Newport Island is a residential neighborhood with hard working families. We chose to buy here because it wasn't the same party situation as on the peninsula. We want to be part of a community. Have neighbors who we can have a chat with while walking the dog. We are exhausted and quite frankly have already started talking to our realtor. If the rules don't change to "Owner Occupied Only", we will definitely sell and leave Newport Beach all together. We appreciate the City Council's attention to this matter. Kind Regards, Sabrina and Ray Peden 12 Received After Agenda Printed October 13, 2020 Item No. 18 From: Rieff, Kim Sent: Friday, October 09, 2020 9:34 AM To: Mulvey, Jennifer Subject: FW: STR on Newport Island -----Original Message ----- From: Gary Cruz <garycruz2@icloud.com> Sent: Friday, October 09, 2020 9:34 AM To: Dept - City Council <CityCouncil@newportbeachca.gov> Subject: STR on Newport Island [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. Dear Council Members, Thank you for your service and your time addressing this issue. I've been to and spoken at two city council meetings and one planning committee meeting. I've written multiple letters months ago when the topic was on the council and planning agendas. My approach is that Newport Island is a residential community that houses mostly owner occupied dwellings. I wish I knew how many rentals (STR and LTR) are on the island but I am confident that there are more issues with rentals than with owners. I think the city council should standby and support what type of community the majority of residents want to live in. If the majority want to live in a neighborhood of mostly rentals then so be it and I will abide by that and as the Seabreeze representative stated at the planning commission meeting SHARE NEWPORT. There is an incorrect perception which was vocalized by a couple of those speaking in favor of STR, that we are a small but vocal group. My suggestion is we present a concrete presentation (signatures/survey/petition) that represents how many of us are against any increase in STR and who are in favor of putting some restrictions on current STR and limiting the number of new permits. The STR owners and agencies have used the relatively low number of citations as fact that there are limited issues. They fail to report the fact that police are resistant to issuing citations noting that they have to see the violation to issue a citation. There is nothing we can do with the lack of parking, the onslaught of construction on the island or with LTR, however we should be able to do something about an increase of 400% in STR that we are currently experiencing. Gary and Gina Cruz 503 38th St Newport Beach, CA 92663 16 Received After Agenda Printed October 13, 2020 Item No. 18 From: Rieff, Kim Sent: Friday, October 09, 2020 9:03 AM To: Mulvey, Jennifer Subject: FW: Short term rentals on Newport Island -----Original Message ----- From: Robin macgillivray <robinmacgiIIivray@att.net> Sent: Friday, October 09, 2020 9:02 AM To: Dept - City Council <CityCouncil@newportbeachca.gov> Subject: 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. > My husband and I are residents of Newport Island. Since purchasing our home in 2009, we have seen a tremendous increase in short term rental activity here. This increase correlates to more noise, traffic, trash, cars and people on our island throughout the year, and especially in the summer months. Our streets are narrow, we have only one two-way road onto the island, parking is extremely Limited, our homes are very dose to each other, we have no front yards, we cool our homes by leaving windows open, and our residents include very young children as well as senior citizens. These Newport Island characteristics are not compatible with the large and rowdy groups that congregate in the short term rental properties. I join my fellow island residents who have written and spoken to you expressing objection to the proliferation of STRs and the related problems. We strongly urge you to take action that reduces the number of units on our island that can be rented out on a short term basis, increases the number of nights that constitute 'short term,' limits the number of people and cars allowed per property, requires parking permits year round, restricts parties and activities that spill into our streets, expands patrols by law enforcement and penalizes excessive noise, music, profanity and trash. > Thank you for your support! > Robin Macgillivray Sent from my iPhone 17 Received After Agenda Printed October 13, 2020 Item No. 18 From: Rieff, Kim Sent: Friday, October 09, 2020 7:07 AM To: Mulvey, Jennifer Subject: FW: Short term Rental proposal From: Gary Boyles <gboyles@pacbell.net> Sent: Thursday, October 08, 2020 8:21 PM To: Dept - City Council<CityCouncil@newportbeachca.gov> Subject: Short term Rental proposal IE)CTERNAL E MML] DO NOT cucK links or attachments unless you recognize the sender and know the content is safe_ Mayor O'Neill and Mebers of the NB City Council You are scheduled to revisit the issue of shortterm rentals on October 13. 1 live at 600 E Oceanfront in a 24 unit condominium complex known as The Rendezvous. Until the last few years, short term rentals here were always for a week minimum. I am proposing the City adopt a one week minimum stay for any short term rentals that are in a complex largerthan four units. I propose this because almost all short term renters are here for a party and with a week minimum those of us who live in the complex would only have to endure one party each week instead of the current situation which causes us to endure at least two rotations of renters each week with the inherent party that goes with the rental Gary E. Boyles (949)466-9008 19 Received After Agenda Printed October 13, 2020 Item No. 18 From: City Clerk's Office Sent: Friday, October 09, 2020 6:43 AM To: Mulvey, Jennifer, Rieff, Kim Subject: FW: BAN STIR On Newport Island and 2 very disturbing houses on The Rialto (310&308) From: Barry Mycorn Sent: Friday, October 9, 2020 6:43:09 AM (UTC -08:00) Pacific Time (US & Canada) To: City Clerk's Office Cc: City Clerk's Office; Scott McFetters Subject: BAN STR On Newport Island and 2 very disturbing houses on The Rialto (310&308) [EXTERNAL EMAIL] DO NOT CLOCK honks or attachments unless you recognize the sender and know the content is safe. Dear mayor and honorable Councilman &Councilwoman I have lived on the Newport island for five years and love it! It's so so special It horrible with short term renters coming in droves more each year most reserved Internet or Airbnb everything about the peace quiet and caring neighbors and children that live is destroyed by short term renters please don't fool yourself and come to party city noon the party they have new management company responsible they reserved it over the Internet and they just don't care !they stay up parting on there patios with zero respect forthere neighbors they work and need getup in the morning or children to have to getup and go to school, The parking even with passes is out of control mini mini times I come home and my garage is blocked and I have to call the police have to spend money that's fair money to come out and cite them or Tow the vehicle I live directly across across the Chanel from the infamous short term rentals in the are 308 & 310The Rialto for 2 rental properties side by side Both are in terrible condition owned by one investor who will rent to 10 people or more, I have reach out to him but no return calls. If you looked into the NB Police logs the past 5 years I have been forced to call and request police assistance, when usually does no good I cannot control anything off Newport Island Parking I think it's important for you to go and look into how they break the rules how the penalties are high enough anyways I really thank you for listening to me I love living in this island I beg of you please do not let short term rentals become what they are on the other side of the bridge on the peninsula for your information I lived on the peninsula for over 40 years in this wonderful city for over 60 years and I love it here and I think you for listening to me respectfully Barry Mycorn 400 38th street Newport Beach 92663 7142407706 Sent from my iPhone Sent from my iPhone El Received After Agenda Printed October 13, 2020 Item No. 18 From: City Clerk's Office Sent: Thursday, October 08, 2020 9:10 PM To: Mulvey, Jennifer, Rieff, Kim Subject: FW: Short Term Rentals From: Nikki Leeper Sent: Thursday, October 8, 2020 9:10:03 PM (UTC -08:00) Pacific Time (US & Canada) To: City Clerk's Office Subject: Short Term Rentals [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. Hi, We are having a really hard time with the short term rental next door, as well as with the other 2 short term rentals on our block just a few houses away. I would urge the city to consider how these new permits are changing our neighborhood here in CDM. 1. Multiple permits should not be given on the same small block. 2. Absentee owners should not be allowed to run a short term rental business when they have no ties to the neighborhood and don't have to live with the fall -out The worst offender on our block is the unit next door which is owned by absentee owners. I have said before...it is one thing if someone wants to rent out their back unit as a vacation rental and are on site to manage it, but quite another when an out of state owner is allowed to purchase a building, never live in it, and turn it into a hotel of sorts at their neighbors' expense! Every few days we have new folks coming in who could care less about noise, parking, trash, etc. Unfortunately the courteous renters are now the exception, with the majority of people looking to party and stay up all night. This gets old REALLY fast in a beach community with closely spaced houses. The onerous should not be on neighbors to call the police or the new complaint hotline in the middle of the night time and again. Someone should live on site to deal with issues should they arise. Please consider these 2 important issues when voting to increase permits! Thanks, Nikki Leeper (Longtime CDM resident) Sent from my iPhone 21 Received After Agenda Printed October 13, 2020 Item No. 18 From: City Clerk's Office Sent: Thursday, October 08, 2020 3:34 PM To: Mulvey, Jennifer; Rieff, Kim Subject: FW: Short term lodging changes From: Zane Beadles Sent: Thursday, October 8, 2020 3:34:13 PM (UTC -08:00) Pacific Time (US & Canada) To: City Clerk's Office Subject: Short term lodging changes [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. Hello - I would like to provide a recommendation for the meeting next week. If short term lodging permit holders will be held responsible for parking violations committed by theirtenants, the city needs to ensure a system is in place to notify the permit holder within a short amount of time (days not weeks) of the violation so the permit holder can pass that cost along to renters. Thanks! Zane Beadles zbeadles@gmail.com 27 Received After Agenda Printed October 13, 2020 Item No. 18 From: Rieff, Kim Sent: Monday, October 12, 2020 12:37 PM To: Mulvey, Jennifer Subject: FW: Stl From: nancy gardner <ngardner636@gmail.com> Sent: Monday, October 12, 2020 12:33 PM To: Dept - City Council <CityCouncil@newportbeachca.gov> Subject: Stl D :'t i ! ! t R t � � . �r..• �a � _a� � nr � .:. e � � � ar c: �:� Broke wrist,can't type, support stl proposals and expansion of broader view of gp by heuc• N Gardner Received After Agenda Printed October 13, 2020 Item No. 18 From: City Clerk's Office Sent: Monday, October 12, 2020 11:52 AM To: Mulvey, Jennifer; Rieff, Kim Subject: FW: Ordinance No. 2020-26: Short Term Lodging From: Lori Hamel Sent: Monday, October 12, 2020 11:52:14 AM (UTC -08:00) Pacific Time (US & Canada) To: City Clerk's Office Subject: Ordinance No. 2020-26: Short Term Lodging [EXTERNAL EMAIL] DO NOT C CK funks or attachments unless you � anizp the sender and know the content is safe Mr. Mayor and Councilmembers: I am not sure why you are making changes to this ordinance at almost every city council meeting since March. As a resident, it is exhausting and very time consuming trying to keep up and having to write and speak at so many meetings over a six-month time. There are too many unanswered questions regarding the implementation of the current STL regulations to proceed with additional controls and limitations at this time. In the absence of reliable fact -based data, the proposed cap for 1,550 permits and 3 -night minimum stay is an arbitrary number that the Ad -Hoc committee has decided upon without any research to back up. There is no justification to limit stays to 3 nights and this will only just reduce the income substantially for me and other rental owners and also the city. I don't understand the motivation of city council to make such quick decisions and push through so many changes over the past 6 months. There are quite frankly not enough complaints against STL for you to be adding this the agenda so often. As of July, there were only 87 total complaints (some of those probably for unpermitted STL holders). However, you felt justified to spend almost $30k a year for an answering service to handle these complaints and to keep proposing more and more stringent changes. I am left wondering if hotels are lobbying you to make these changes before the election, as that would be the only reasonable explanation, as they would clearly benefit by having no STL available for under 3 nights. Clearly 87 complaints is not the reason. Even the planning commission rejected most of these ideas as there is not enough justification. I urge you to please stop and do your duty to conduct an economic impact report and study the data behind this issue thoroughly before making continuous changes at every meeting. Lori Hamel Received After Agenda Printed October 13, 2020 Item No. 18 From: City Clerk's Office Sent: Monday, October 12, 2020 11:27 AM To: Mulvey, Jennifer, Rieff, Kim Subject: FW: STL Permits From: Colleen Howes Sent: Monday, October 12, 2020 11:26:56 AM (UTC -08:00) Pacific Time (US & Canada) To: O'Neill, William Cc: Herdman, Jeff; Dixon, Diane; Duffield, Duffy; Avery, Brad; Brenner, Joy; Muldoon, Kevin; City Clerk's Office Subject: STL Permits [EXTERNAL B4A11] DO NOT G I CK Unks or attwhrrients imless you remgrriae the sender and Know the cont nt is safe_ Mr. Mayor and Councilmembers: Regarding Agenda Item #18 Regarding the Short Term Lodging issue, there are too many unanswered questions regardingthe implemerrtabon of the current STL regulations to proceed with additional controls/limitations at this time_ The 24-hour answering service is not yet working property, and confusing communications have been sent a nd then retracted to STL owners (without notifyingthe managers who handle the rentals). PLEASE CONTINUE THIS ITEM UNTIL AFTER THE FIRST OF THE YEAR AND GIVE USA CHANCE TO WORK ON NECESSARY CLARIFICATIONS TO PHASE 1 BEFORE INSTITUTING ADDITIONAL HARMFUL REGULATIONS TO THIS IMPORTANT REVENUE STREAM FOR THE CITY. In the absence of reliable fact based data, the proposed cap number is a made up number that the Ad -Hoc committee has decided upon without any research to back up that number. Please do your duty to conduct a fact based economic impact report and study the data behind this issue thoroughly. If at that point a cap number were to be applied, it will have some basis in data and research to back it up. We have seen no empirical evidence that the ad-hoc committee has considered when coming up with their recommendations, only anecdotal evidence that is completely unreliable from both sides Please do your duty to the City, the people of Newport Beach and this very important issue and do not rush this decision. PLEASE CONTINUE THIS ITEM UNTIL AFTER THE FIRST OF THE YEAR. Best Regards, Colleen Howes Resident of Corona del Mar Received After Agenda Printed October 13, 2020 Item No. 18 From: City Clerk's Office Sent: Monday, October 12, 2020 11:15 AM To: Mulvey, Jennifer; Rieff, Kim Subject: FW: Oct. 13 City Council Mt. re Short Term Rentals From: Larry Leifer Sent: Monday, October 12, 2020 11:14:09 AM (UTC -08:00) Pacific Time (US & Canada) To: Dept - City Council; City Clerk's Office; citymanager@newportbeachca.gov Subject: Oct. 13 City Council Mt. re Short Term Rentals [WERNAI ERAAIL] DO NOT LUCK finks or attachrner>ts unless you recngnaw the sender and know the content is safe - Honorable Newport Beach City Councilpersons: In Regard to October 13"' Council Meeting Agenda Item on Short Term Rental Regulation Now is the time for our City Council to act in a responsible and meaningful way to correct an intolerable situation we have been facing on Newport Island. The advent of Short Term Rentals has caused dally stns on the owners and long term residents of the Island by accomrnodabng the onslaught of short term renters, their vehK:Ies, move-in/move-out turnover, their visitors and their often disregard of acceptable behavior. Too marry properties have been permitted as Short Term Rentals for this small, high density island which has only one ingress and egress and narrow streets that do not even allow two way passage without one car moving aside to the curb. This is further complicated by the continuing traffic mix of workmen, repairmen, home deliveries and neighborhood visitors to ourtriangular shaped small island making the additional traffic load and parking competition from short term lodgers a nightmare for the residents. Essentially we have too many commercial lodging operations concentrated in a dense residential neighborhood that is, by its very nature, not planned, zoned or built for transient lodgers. Every municipality including Newport Beach has ordinances regarding the establishment of commercial lodging such as motels and hotels which specify living space, amount of parking spaces, access, safety, hours of operation and the law abiding conduct of operators and guests. In the event of violations the mechanisms for enforcement are clearly identified and the means of enforcement established. Sadly, those regulations mandated for commercial lodging properties are obviously overlooked in the case of Short Term Rentals that use private homes in residential neighborhoods. Many STIR owners and their agents see the promise of multiplying their income by commercializing their property and ignoring the impact on the neighborhood. The STIR owner has property rights, but so do their neighbors who have chosen the Island for its quality of life and the anticipation of quietly enjoying their property. It is devastating when the transiency of STR's intrude to the extent that quiet enjoyment of life in your home and neighborhood is threatened. I agree with the proposed regulations that would require a 3 -night minimum stay for all short-term lodging rentals; limit the total number of short-term rental permits to 1,550 and create a waiting list for new permits once the cap is reached;. prohibit short-term rentals to anyone under 25 years of age and hold property owners responsible for parking violations by tenants that occur at the rental property or in close proximity to the property. I also agree that it would be acceptable to allow the transfer of short-term lodging permits to immediate family upon the death of a permit holder. However_1 strongly disagree that an existing permit be allowed to transfer to new owners upon sale. The use of the property for Short Term Rentals is a city permit not a deeded right and the new owner should apply for a new permit to avoid potential abuse. The property is still a residence in a residential neighborhood and it is improper to automatically extend the short term use of that property in the community. Conceivably the new buyer could be acting on behalf of a booking agency further extending commercialism in the neighborhood. In the case of Newport Island specifically, I would like to see the City Council push for all Island STR's beinq owner occupied. The presence of an owner's on-site presence will reduce the disturbance and disregard that has been far too common by transient lodgers who have no inhibitions about behaving badly. Thank you for your efforts in getting the Short Term Rental problems under control. We need to get back to a more peaceful life here without compromising the essential nature of our residential neighborhood. Sincerely, Lawrence and Susan Leifer 3706 Channel Place, Newport Island 949-290-2627 Received After Agenda Printed October 13, 2020 Item No. 18 Subject: FW: FINAL Mark Letter to City From: Mark Markos <msm619@ymail.com> Sent: Monday, October 12, 2020 1:37 PM To: Dept - City Council<CityCouncil@newportbeachca.gov> Subject: Fw: FINAL Mark Letter to City Dear City Council, First, I want to say thank you to the council and the Short Term Rental commission for working hard to put in place the new ordinance, 24 hour hotline and soon a cap on future STRs. Your help to clean up an unchecked industry adversely affecting us here locally is very much appreciated. Unfortunately, loose enforcement of basic rules and city codes is set up to fail us. In the past 60 days, there have been over 30 STR complaints made by residents on Newport Island consisting calls, emails and the city's online complaint form, which most go into significant detail and many also provide supporting photos to effectively demonstrate the issues and violations. Disappointingly and shockingly, not a single violation was issued in this timeframe, despite the number of complaints made by residents. Police only issue warnings (which are not recorded and hence there is no trackable data to show important trending and analytics); code enforcement will only issue a citation/violation if they witness the infraction (they have already gone home when the real parties start); and no one issues violations for the constant illegal parking that block our sidewalks (preventing the elderly and disabled from taking walks), fire hydrants (preventing emergency vehicles from doing their jobs), and street access (multiple residents have been unable to get to their vehicles because of ridiculous, egregious blockings). So, once again our residents are left to self -police the problem the city created. As a result of failing to enforce simple rules and codes, the situation is growing uglier by the day: now there are verbal altercations transpiring between residents and unruly out-of-town guests when they are asked by our residents to move their vehicle blocking access or keep quiet after hours. I understand these STR guests feel entitled to have a good time when they are paying $800 - $1000 per night, but enough is enough! Newport Island is primarily a residential neighborhood and short term rentals have no place on this tiny small island with a single ingress and egress, narrow two way streets that act as one way streets, houses positioned just mere feet from one another, and extremely limited parking (approximately only 50 total parking spots). At this juncture, the situation has absolutely become a liability for the city from a safety standpoint. The time is coming when an emergency vehicle will not be able to gain access to an emergency situation on the island due to excessive vehicle overcrowding. Put simply, this situation creates the potential for major harm to lives and/or property. It's not a matter of IF this will happen, it's WHEN it will happen. If the city would have done a short term rental hotel impact study on the island (like they do with other hotels), it would have been abundantly clear that these "mini hotels" should not exist on a small island like Newport Island. We are challenged as is with our tiny streets, let alone compounding the matter with 17 STR permits being handed out in a very short period of time. Please do the right thing for our residents and only allow true owner -occupied STRs to operate on Newport Island, or simply ban them all together. We deserve our peace, enjoyment and safety back --- and we desperately need your help. Thank you in advance for taking the time to solve this urgent situation. This is a ticking time bomb waiting to explode. Regards, Mark Markos Received After Agenda Printed October 13, 2020 Item No. 18 From: City Clerk's Office Sent: Monday, October 12, 2020 4:59 PM To: Mulvey, Jennifer; Rieff, Kim Subject: FW: short term rental restrictions From: Gail Krueger Sent: Monday, October 12, 2020 4:58:31 PM (UTC -08:00) Pacific Time (US & Canada) To: City Clerk's Office Subject: short term rental restrictions [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. I am writing this in the hope that we can convince the city council members to vote for more (and enforced) restrictions on short term rentals that have greatly impacted our lives as residents on Balboa Peninsula - and the impact has definitely not been for the better. In just the past year, these rentals have increased and what we felt was our piece of paradise has become infested with party houses who have no regard for the permanent residents whose space they share - and very close space indeed! This past spring and summer, we were subjected to loud music, fireworks almost nightly, drinking way beyond excess resulting in obscene behavior and trash on our property (not to mention vomit and more...), and other issues that come from people who are in our area for a week or less and care not one bit about any of us who actually LIVE there. We have tried talking to the owners of these rentals and the management companies who are SUPPOSED to be managing them, and though they say that they understand and will work to make it better, that has just not been the case. We have had to call the police and/or the management companies (and often both!) several times in one night - and then the night after that, and the night after that, and on and on. We understand people wanting to come to our beautiful area and beaches, but they SHOULD be responsible for maintaining that beauty and the values that we have for keeping it that way. And at this point, there are FAR too many short term rentals to be managed correctly and efficiently by the city - police department, health department, and all involved in maintaining what was once an amazingly wonderful place to live. PLEASE help us, the permanent residents, to gain control of our homes, property and sanity once again! Most of us in our neighborhood are at our wits end with trying to manage these problems, and we need the help of the council members as we are not seeing it get better, but significantly worse. Thank you so much for taking the time to listen, and respond, to our issues. We really need to get this under control. Regards, Gail and John Krueger 1821 W Bay Ave. Received After Agenda Printed October 13, 2020 Item No. 18 Subject: FW: Newport Island STR's From: Lawrence Robinson <Irobin5419@aol.com> Sent: Monday, October 12, 2020 3:56 PM To: Dept - City Council<CityCouncil@newportbeachca.gov> Subject: Newport Island STR's [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. Dear Newport Beach City Council Members As you continue to review the issue of short term rentals on Newport Island I want emphasize that the situation continues to be a major problem. When my wife and I purchased our home on Newport Island 6 112 years ago, our reattor from Burr -White directed us to Newport Island stath g that this is a great family friendly bcation unlike the "war zone" across the bridge. The reason it is such a calm family location is because short term rentals are not allowed on the island!! She stated the minimum rental is 1 month so you don't get al the craziness associated with the short term crowds over in the "war zone". This was the primary reason we selected Newport Island to purchase our home. Needless to say we have been shocked by the proliferation of STR's on the Island over the past few years and the problems that have arisen as a result I have spoken out directly in front of the City Council on 2 occasions regarding this issue in hopes they will get the fact that Newport Island is completely different than the "war zone" and we want to keep it that way. I am very supportive of those that want investment property but let's keep it to the 1 month minimum I was told when I purchased. By doing that, or following the Santa Monica model requiring the homeowner to be on the premises, would accomplish both. I could go into the issues that STR's have caused us personally regarding beer cans in the gutter, trash on the street, loud noise late at night, illegal parking, urinating on the street, numerous people sleeping in the garage on air mattresses, etc, etc. but I know the City Council is already aware of these and other issues but it appears they want to pretend it doesn't really happen. I'm hoping that the Council can see that this Island is a place where people live and raise a family, not just a place to buy an investment property to make a buck! Thanks again, Larry and Anna Robinson 405 40th St Newport Island Received After Agenda Printed October 13, 2020 Item No. 18 From: Rieff, Kim Sent: Tuesday, October 13, 2020 7:32 AM To: Mulvey, Jennifer Subject: FW: City Council Mtg 2020-10-13 - STL Requirement That Each Rental Unit Provide One Parking Space From: Carmen Rawson <carmen_rawson@att.net> Sent: Monday, October 12, 2020 5:01 PM To: Dept - City Council <CityCouncil@newportbeachca.gov>; Jurjis, Seimone <sjurjis@newportbeachca.gov> Subject: City Council Mtg 2020-10-13 - STL Requirement That Each Rental Unit Provide One Parking Space :'� : i E • i ! ' i i ,t . m • .i � a.� .- :.Mrd r - A .nom . � . � - Ne. �:. -a City Council members and Mr. Jurjis, As a follow up to the email below we were informed by Council Dixon that the council had received many wriden and public comments about properties that could not comply with the requirement of providing one (1) parkog space to the STL unit guests. We strongly believe that providing one (1) parking space per STL unit will help reduce the parking violations of, for example, having vehicles parked on the alley or over sidewalks. Besides addressing the parking needs of the persons mentioned in our previous email, one (1) parking space will also help with the guests being able to unload/bad their vehicles while parked at the property rather than on public ways. Regarding properties that currently have a STL permit(s) and that TRULY can not provide one (1) parking space per STL unit then these properties could be "grandfathered" and considered "non -conforming" due to parking requirements. Any new STL permit to be issued should be to properties that can provide one (1) parking space per permit. Meaning no more "non -conforming" units. Also, the transfer of a STL permit to a new buyer, for the "non -conforming" STL units, should only occur if the new buyer makes the STL unit conforming as it relates to parking. Another idea regarding parking violations committed by STL unit's guests (or anyone else!) is perhaps to set up an escalating citation pricing whereas if the same vehicle parks blocking the alley several continuously days then the citations received by the owner of the vehicle become increasingly more expensive. Just a thought. Regards, Carmen Rawson From: Ken & Carmen Rawson <ckrawsonCcDatt.net> To: Diane B Dixon <ddixonPnewp_ortbeachca_gov> Cc: Carmen Rawson <carmen rawson(�),att.net> Sent: Thursday, October 8, 2020, 06:04:43 PM PDT Subject: STL Requirement That Each Rental Unit Provide One Parking Space Diane - During the city staff presentations, held during the year at Town Hall and community outreach meetings regarding the new proposed STL rules, one item that showed up was the "Requirement That Each Rental Unit Provide At Least One Parking Space". This is something that we fully endorse as each week, at guest move out, the following persons may be at the property doing their required work: • Cleaning Crew • Linen Service (if required) • Maintenance Personnel (if required) • Drop off/Pick up person for rental bicycles & beach equipment (if applicable) At our units we schedule these persons (as applicable) so they have an open parking space to use, this prevents them from having to double park in the alley or in front of a neighbor's house. Can you explain the reason this requirement was not included in the new Ordinance No. 2020-15? Thank you for taking the time to reply. Ken Rawson 949-278-2447 Received After Agenda Printed October 13, 2020 Item No. 18 Subject: FW: Newport Island STR parking on sidewalks, fire lanes, blocking streets, fire hydrants, etc. From: Scott McFetters <smcfetters@outlook.com> Sent: Monday, October 12, 2020 6:17 PM To: Dept - City Council<CityCouncil@newportbeachca.gov> Cc: Chris Harano <chris@harano.com>; Laura Brightwell <laura@lauriebrigthwell.com>; drs6080@gmail.com; winfieldwells@gmail.com; bluesand.ty@gmail.com; Martin O'Hea <mohea@bixbyland.com>;'Mark Markos' <msm619@ymail.com>; newportislandiim@gmail.com; Larry Leifer <lawrelei@gmail.com>; Bud Reveley <budreveley@gmail.com>; penny reveley <pennyreveley@gmail.com>; Barry Mycorn <rlmeguities1@gmail.com>; ibowerbank@profunditymarketing.com; roger@catalinacomponents.com; Mike Veal <mike@goldcoastglass.com>; ken@electricfinishes.com; thomas@stratcomponent.com; Richard Wolpow <rwolpow@pocnettech.com>; Jeff Friedman <ifriedman@turnerfiber.com> Subject: Re: Newport Island STR parking on sidewalks, fire lanes, blocking streets, fire hydrants, etc. Get Outlook for iOS From: Scott McFetters <smcfetters@outlook.com> Sent: Monday, October 12, 2020 5:00 PM To: citycouncil@newportbeachca.gov Cc: Chris Harano; Laura Brightwell; drs6080@gmail.com; winfieldwells@gmail.com; bluesand.ty@gmail.com; Martin O'Hea;'Mark Markos'; newportislandiim@gmail.com; Larry Leifer; Bud Reveley; penny reveley; Barry Mycorn; Ibowerbank@profunditymarketing.com; roger@catalinacomponents.com; Mike Veal; ken@electricfinishes.com; thomas@stratcomponent.com; Richard Wolpow; Jeff Friedman Subject: Newport Island STIR parking on sidewalks, fire lanes, blocking streets, fire hydrants, etc. Honorable City Council, Please see some of the sample safety parking issues we are having on Newport Island Get Outlook for iOS Received After Agenda Printed October 13, 2020 Item No. 18 From: Rieff, Kim Sent: Tuesday, October 13, 2020 7:35 AM To: Mulvey, Jennifer Subject: FW: No Enforcement for Short Term Rentals on Newport Island! From: Scott McFetters <smcfetters@outlook.com> Sent: Monday, October 12, 2020 7:42 PM To: Dept - City Council <CityCouncil@newportbeachca.gov> Cc: 'Mark Markos' <msm619@ymail.com>; Chris Harano <chris@harano.com>; roger@catalinacomponents.com; Barry Mycorn <rlmequitiesl@gmail.com>; ken@electricfinishes.com; Laura Brightwell <laura@lauriebrigthwell.com>; Larry Leifer <lawrelei@gmail.com>; drs6080@gmail.com; winfieldwells@gmail.com; bluesand.ty@gmail.com; Martin O'Hea <mohea@bixbyland.com>; Jim Miller <newportislandjim@gmail.com>; Bud Reveley <budreveley@gmail.com>; penny reveley <pennyreveley@gmail.com>; thomas@stratcomponent.com; roger@catalinacomponents.com; Richard Wolpow <rwolpow@pocnettech.com>; Jeff Friedman <J Friedman @turnerfiber.com>; Mike Veal <mike@goldcoastglass.com>; Joe Bowerbank<jbowerbank@profunditymarketing.com>; mundocane@yahoo.com Subject: No Enforcement for Short Term Rentals on Newport Island! [EXTERNAL ENUJI.] to wwcum r or lvau remguzethesendera W%tthe is safe. Honorable City Council, No Code or Police enforcement on Newport Island. Please start at the bottom of the email. Best regards, Scott From: Murray, John <imurray@newportbeachca.gov> Sent: Monday, October 12, 2020 4:47 PM To:'Scott McFetters' <smcfetters@outlook.com> Subject: RE: 3717 Channel Scott, It appears that PD issued written warnings rather than citations and that is the reason why Finance is not moving forward with the hearing. Thank you, Community Development Department Code Enforcement Officer II Irrwrrav(i ne�eoott¢eachcagov 949-270-8137 From: Scott McFetters <smcfetters@outlook.com> Sent: Monday, October 12, 2020 2:11 PM To: Murray, John <imurray@newportbeachca.eov> Subject: Fw: 3717 Channel [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. John, I hope you had a great weekend. Did you find out what happened below? You said they were cited and paid the fine at 3717 Channel. Monique says they were warnings. Best regards, Scott 714-343-1657 From: Navarrete, Monique <MNava rrete@newportbeachca.gov> Serer Monday, October 5, 202010:40 AM To: "Scott McFetters' <smcfetters@outlook.com> CC D'ocon, Diane <ddixon@newportbeachca.eov>; 'Mark Markos' <msm619@ymail.com> Subject: RE: 3717 Channel Good morning Scott, I understand and hear your frustration, however at this current time the permits for 3717 Channel are not subject to suspension. The parking violations forwarded by Code Enforcement have been confirmed Newport Beach Police Department issued them as warnings and no citation/fine was issued. We are working with the police department and parking control officers to ensure enforcement. The Ad -Hoc committee continues to meet to discuss resolutions regarding outstanding issues. The discussion of additional conditions will be presented to City Council on 10/13/2020. In regards to the videos, pictures and documentation you have, staff cannot issue violations based on them. An officer or code enforcement staff must witness the violation. As previously discussed, the owner will be required on the upcoming renewal to disclose the square footage of the dwelling and indicate how many guests are permitted. The last discussion we had this property shows a total gross are of 1,993, therefore it would be entitled to 10 guests. Monique Navarrete City of Newport Beach License Supervisor 949-644-3148 From: Scott McFetters <smcfetters@outlook.com> Sent: Friday, October 02, 2020 9:51 AM To: Navarrete, Monique <MNavarrete@newportbeachca.gov> Cc: Dixon, Diane <ddixon@newportbeachca.gov>; 'Mark Markos' <msm619@ymail.com> Subject: 3717 Channel [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. Monique, I hope your Friday is going well! As you are aware, we have, pictures, videos, links, websites, and other evidence regarding ongoing suspected code violations ( permits, additional bedroom, bathrooms, conflicting square footage and other work and safety concerns) which was initially reported with evidence to your office and code enforcement last year. These violations alone have caused damage to my family and the neighborhood by allowing at least four more people on the permit than a two bedroom would have allowed last until recently. Your team could have easily pulled the last permitted plans from the planning department to verify the actual amount of rooms. The STR owner should lose their permit if they are violating code and manipulating room count for more people and more profit, In a small house, on a small lot with no heating for air-conditioning. So where does everyone go when it's too hot and no room? Outside. The other reason the permit should be revoked are all the illegal parking incidents, less than 4 -day stays, noise, occupancy, trash and the out of neighborhood charter changes it is causing. Enforcement by code enforcement and the police have been horrible. Warnings or no shows. I have pictures and videos, of over 15 parking violations that were not cited, 3 or 4 Less than 4 days stays since the ordinance went into place, loud after 10:00 PM, etc. Let's not forget the 5 rentals that were allowed after the no STR sublease went into place. No one has explained how Avanstay is still operating? Can you? Their website specifically says they are not a management company but that has longterm leases on all their properties. It is my understanding that code enforcement sent you over two or three violations that would call for suspension of the STR permit. That is nothing compared to what they have gotten away with and continue to get away with if you are allowing them to continue to operate with exaggerated, unpermitted our unconfirmed room numbers, square footage, etc. Can I please get an update on what actions are being taken? This has been an open issue for close to a year and is unacceptable. Thank you, Scott McFetters 714-343-1657 Received After Agenda Printed October 13, 2020 Item No. 18 From: Rieff, Kim Sent: Tuesday, October 13, 2020 7:36 AM To: Mulvey, Jennifer Subject: FW: No Enforcement for Short Term Rentals on Newport Island! From: Bud Reveley <budreveley@gmail.com> Sent: Monday, October 12, 2020 8:01 PM To: Richard Wol pow <rwol pow@ pocnettech.com> Cc: Dept - City Council <CityCouncil@newportbeachca.gov>; Barry Mycorn <rlmequitiesl@gmail.com>; Chris Harano <chris@harano.com>; Jeff Friedman <jfriedman@turnerfiber.com>; Jim Miller <newportislandjim@gmail.com>; Joe Bowerbank <jbowerbank@profunditymarketing.com>; Larry Leifer <lawrelei@gmail.com>; Laura Brightwell <laura@lauriebrigthwell.com>; Mark Markos <msm619@ymail.com>; Martin O'Hea <mohea@bixbyland.com>; Mike Veal <mike@goldcoastglass.com>; Scott McFetters <smcfetters@outlook.com>; bluesand.ty@gmail.com; drs6080@gmail.com; ken@electricfinishes.com; mundocane@yahoo.com; penny reveley <pennyreveley@gmail.com>; roger@catalinacomponents.com; thomas@stratcomponent.com; winfieldwells@gmail.com Subject: Re: No Enforcement for Short Term Rentals on Newport Island! J ::. 1 f t E . tr r e,� 04 �� �s� +�t er �_ -s Agree. On Mon, Oct 12, 2020 at 7:57 PM Richard Wolpow <rwolpow@pocnettech.com> wrote: Completely unacceptable - Richard A. Wolpow > On Oct 12, 2020, at 7:41 PM, Scott McFetters <smcfetters@outlook.com> wrote: Received After Agenda Printed October 13, 2020 Item No. 18 From: Rieff, Kim Sent: Tuesday, October 13, 2020 7:35 AM To: Mulvey, Jennifer Subject: FW: No Enforcement for Short Term Rentals on Newport Island! -----Original Message ----- From: Richard Wolpow <rwolpow@pocnettech.com> Sent: Monday, October 12, 2020 7:58 PM To: Scott McFetters <smcfetters@outlook.com> Cc: Dept - City Council <CityCouncil@newportbeachca.gov>; Mark Markos <msm619@ymail.com>; Chris Harano <chris@harano.com>; roger@catalinacomponents.com; Barry Mycorn <rlmequitiesl@gmail.com>; ken@electricfinishes.com; Laura Brightwell <laura@lauriebrigthwell.com>; Larry Leifer <lawrelei@gmail.com>; drs6080@gmail.com; winfieldwells@gmail.com; bluesand.ty@gmail.com; Martin O'Hea <mohea@bixbyland.com>; Jim Miller <newportislandjim@gmail.com>; Bud Reveley <budreveley@gmail.com>; penny reveley <pennyreveley@gmail.com>; thomas@stratcomponent.com; Jeff Friedman <jfriedman@turnerfiber.com>; Mike Veal <mike@goldcoastglass.com>; Joe Bowerbank<jbowerbank@prof unditymarketing.com>; mundocane@yahoo.com Subject: Re: No Enforcement for ShortTerm Rentals on Newport Island! [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. Completely unacceptable - Richard A. Wolpow > On Oct 12, 2020, at 7:41 PM, Scott McFetters <smcfetters@outlook.com> wrote: Received After Agenda Printed October 13, 2020 Item No. 18 From: Rieff, Kim Sent: Tuesday, October 13, 2020 7:32 AM To: Mulvey, Jennifer Subject: FW: Newport Island STR parking on sidewalks, fire lanes, blocking streets, fire hydrants, etc. Attachments: IMG_0520 jpg; IMG_0568 jpg; IMG_0653 jpg; IMG_0705 jpg; IMG_1019 jpg; IMG_ 1039jpg;IMG_1120jpg;IMG_1132jpg;IMG_1138jpg;IMG_1174jpg From: Scott McFetters <smcfetters@outlook.com> Sent: Monday, October 12, 2020 5:01 PM To: Dept - City Council <CityCouncil@newportbeachca.gov> Cc Chris Harano <chris@harano.com>; Laura Brightwell <laura@lauriebrigthwell.com>; drs6080@gmail.com; winfieldwells@gmail.com; bluesand.ty@gmail.com; Martin O'Hea <mohea@bixbyland.com>;'Mark Markos' <msm619@ymail.com>; newportislandjim@gmail.com; Larry Leifer <lawrelei@gmail.com>; Bud Reveley <budreveley@gmail.com>; penny reveley <pennyreveley@gmail.com>; Barry Mycorn <rlmequities1@gmail.com>; jbowerbank@profunditymarketing.com; roger@catalinacomponents.com; Mike Veal <mike@goldcoastglass.com>; ken @electdcfinishes.com; thomas@stratcomponent.com; Richard Wolpow <rwol pow@ pocnettech.com >; Jeff Friedman <jfTiedman @tu rnerfiber.com> Subject: Newport Island STR parking on sidewalks, fire lanes, blocking streets, fire hydrants, etc. [EI(TEN NAI EMAUJ DO NOT CLICK Unks or attachments urdess you recognize the ceder and know the content is safe - Honorable City Council, Please see some of the sample safety parking issues we are having on Newport Island. Get Outlook for iOS Received After Agenda Printed October 13, 2020 Item No. 18 From: Rieff, Kim Sent: Tuesday, October 13, 2020 10:42 AM To: Mulvey, Jennifer Subject: FW: Short term rentals -----Original Message ----- From: John Foster <John.Foster@westcoastturf.com> Sent: Tuesday, October 13, 2020 10:41 AM To: Dept - City Council <CityCouncil@newportbeachca.gov> Subject: Short term rentals [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. Gentlemen and Ladies, As a family we have have been residents of Newport Island for over 70 years, currently We spend 6 months yearly on the Island. The Island is a residential community and not a cheap hotel or entertainment area which is what the three day rental allows to happen I have no problem with weekly rentals which have been a staple in Newport Beach for decades. Three day rentals bring in a non residential atmosphere to a amily residential community. The island size has very limited parking and short term rentals challenge this shortage as most bring in 2 to 4 vehicles. This is a an uncomfortable exchange when people compete for parking spots. I would ask staff to communicate with this community on the issue before making their recommendations. We all have mailing addresses and would eagerly reply. John, Joan Foster. 4020, 4022 Channel PI. Received After Agenda Printed October 13, 2020 Item No. 18 From: Sent: To: Subject: Rieff, Kim Tuesday, October 13, 2020 9:13 AM Mulvey, Jennifer FW: Newport Island STR From: Mike Veal <mike@goldcoastglass.com> Sent: Tuesday, October 13, 2020 9:12 AM To: Dept - City Council <CityCouncil@newportbeachca.gov> Cc: Scott McFetters <smcfetters@outlook.com>; msm619@ymail.com Subject: Newport Island STR [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. Mike Veal/3714 Channel Place. At this point, the entire City Council should be more then aware of the continuous problems the full time residents have encountered in regard the STR issues. I am certain you have all seen the photos, read the complaints about the TOTAL lack of enforcement on parking, blocking ingress AND egress and sidewalks, lack of enforcement on loud and unruly groups, fights in the streets, and the total disregard of common decency that comes from the proliferation of the STR units. It is apparent the opinions of the full time residents carry little weight to a number of members. It is public knowledge how each member votes. It is an OH WELL they are NOT in my district attitude. I know you are aware this is an Island, there is one way on and one way off! The STR problem is not regulated as advertised. The rental companies are mainly unresponsive. If they do respond, those companies cannot control and are not capable of controlling ANY problem. They do not have any legal or law enforcement standing, thinking otherwise is idiocy! Once the party is over and the damage is done, what makes anyone think the STR renters would care if told to leave? Regardless of what the owners say, in their words, " I pay a lot of money to the management firm to take care of problems, and they are responsive", is beyond a moronic statement. I call BS, I've called each of them more then once to no avail! What is needed is ENFORECMENT as in ticketing, arrests, and/or towing. Short of that, issuing a warning is a close to keystone cops as you can get. I don't get it. It is a cartoon. STR groups, individuals or other entities, know they have a free reign and hence the laissez-faire attitude that is so apparent. It is obvious NBPD has marching orders NOT to enforce any of the traffic, noise or unruly gathering statutes on the roles now? It doesn't take an Einstein to determine where those orders to NBPD come from. Look in the mirror. One may be able to form a collusion opinion of some sort. Or at least take the time and make the effort to sniff it out. As a former residence of Newport Island, I'm shocked and disappointed council member Mr. Duffield is inclined to vote with STR side. Newport Island is such a small enclave with VERY limited parking, as the entire council is more than aware, and I'm shocked that common sense can't seem to come to the surface. Then again, common sense isn't as common as you would think. I would hope that the Newport Beach City Council would vote with their heads and not with the revenue side of things. This is NOT WORKING. I've done my research and I know which candidates will get my vote. Ignoring the majority for the benefit of the few doesn't seem logical and will end unfavorable. Regards Mike Veal President ;7J C�� r< /� _ _ 306 East Alton Santa Ana, Ca 92707 714-557-7212 Received After Agenda Printed October 13, 2020 Item No. 18 From: City Clerk's Office Sent: Tuesday, October 13, 2020 8:55 AM To: Mulvey, Jennifer; Rieff, Kim Subject: FW: Comments on STR Rule From: Scott Carpenter Sent: Tuesday, October 13, 2020 8:55:13 AM (UTC -08:00) Pacific Time (US & Canada) To: Dept - City Council; Avery, Brad; Dixon, Diane; Duffield, Duffy; Herdman, Jeff; Brenner, Joy; O'Neill, William; Muldoon, Kevin Cc: City Clerk's Office Subject: Comments on STR Rule [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. Members of the Council, I would like to comment on the proposed cap if 1,550 permitted short term rentals in Newport Beach. I believe that this number is purposely set low in an attempt to essentially stop and the kill the growth of short term rentals in Newport Beach. I think this number unfairly penalizes two specific groups of people. First, those that have been in line with getting a new permit that haven't been able to do under the emergency ordinance. These are residents of the community that applied under the current rules, followed the process, and are now going to be penalized because of this cap that wasn't in place when they made their decisions about a property purchase or a major move. Second, this will prevent small businesses from moving forward with the recovery from Covid. The effect of banning new permits during Covid was an over -reach because STRs were not allowed to operate in any event. This was clearly a situation where a few on the council politicized Covid to a policy gain. Ideally, "Phase 2" should be tabled until more robust data and learnings are in place from "Phase 1". I would suggest that the council adopt a less stringent cap on permits to 1,800 and at a minimum allowthose permits that have been in waiting since the emergency ordinance move forward as they were submitted prior to the proposed cap. Secondly, I would propose that phase 2 have the the following: • Any STR permit that pays less than $1,000 annual in taxes for two successive years be subject to termination. Having a home take up a permit should not be allowed; any home with a permit should be producing TOTs for the City. • The number of permits should be allowed to increase annually by 5-10 units. For those to say that Newport Beach will all of the sudden have 10,000 rental units is absurd. If that were the case, there would already be 10,000 permits under the current rules. However, the market doesn't bear the need for 10,000 permits, much less more that about 2,000 permits. Regarding the overall need for "Phase 2", 1 find it deeply concerning that the short term rental task force (council members against short term rentals) are pushing this so quickly after "Phase 1". Let's be honest, the data about violations doesn't support such measures (in fact violations have gone down), there is not sufficient data since the new rules have taken effect, and the period in which the new rules took effect is highly unusual (Covid 19). Simply put, "Phase 2" is highly reactionary to a few and not based on accurate data. As you can see, I am supportive of the new rules and in fact supportive of some of the other rules being proposed. However, this process is NOT based on factual data and there is no clear set of data from the Phase 1 nor the so-called hotline established by the City. The hotline is still suspect because to this point the data being collected, how it is recorded, what is recorded has not been shared with the stakeholders of this industry that contributes a large amount of tax revenue to the City. Thank you, Scott Scott Carpenter Owner/General Manager iTrip Newport Beach (949) 929-8640 scottp,itripnewportbeach.com www.itripnew ortbeach.com Lr v -d4 _ ri0.rI 6 Received After Agenda Printed October 13, 2020 Item No. 18 From: City Clerk's Office Sent: Tuesday, October 13, 2020 1:19 PM To: Mulvey, Jennifer; Rieff, Kim Subject: FW: Short Term Lodging Changes From: Kirsten Sent: Tuesday, October 13, 2020 1:19:07 PM (UTC -08:00) Pacific Time (US & Canada) To: Dept - City Council; City Clerk's Office Subject: Short Term Lodging Changes [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. Dear Council Members & City Clerk, I have received numerous emails from both Airbnb and VRBO regarding today's meeting agenda. Prior to your meeting, I would like to voice my opinion with the hopes that you will make decisions that favor the residents of the Balboa Peninsula community and Newport Beach. As a permanent resident/owner and on-site manager of a vacation rental on 29th Street, I ask that you please: 1. Set the vacation rental minimum nights stay to 3 nights from September - May. And, 7 nights minimum stay requirement June - August. Summer weekly's would significantly eliminate the weekend party houses and lesson the parking drama that takes place every time a property is turned over during the summer. I don't know one vacation rental owner that would oppose a 7 - day minimum summer mandate. 2. STOP issuing new STL's. There are enough and through attrition it would be beneficial to the community to reduce that number. Across the entire State of California there is a shortage of rental properties. By adding STL's you are reducing the number of homes available to full-time renters and even some owner occupants. We want more permanent residents living our streets. Thank you. Kirsten Schmieder Tel. 949-903-2533 Received After Agenda Printed October 13, 2020 Item No. 18 From: Rieff, Kim Sent: Tuesday, October 13, 2020 12:24 PM To: Mulvey, Jennifer Subject: FW: Short Term Rental regulations From: Mark Younglove <markyounglove@gmail.com> Sent: Tuesday, October 13, 2020 12:19 PM To: Dept - City Council <CityCouncil@newportbeachca.gov> Subject: Short Term Rental regulations [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. Councilmembers: I am generally in agreement with the proposed ordinance except for the section which would place a limit on the number of short term rentals. My reasons for this are: - I am unaware of any information showing that short term rentals produce more problems to the city and its residents and visitors than other city occupancies including owner occupants, long term lease occupants, or hotel occupants. If you have data showing that short term rentals produce an inordinate number of problems I believe you need to show it to the public to justify any additional regulations or prohibitions. - Short term rentals are clearly a large net positive for the city financially both the the city budget itself and to the residents and business owners in the city. Therefore, there is no reason financially to restrict them. - Newport beach has always been a place for the entrepreneurial, creative and productive. Short term rentals serve and are a benefit to all of those. Please do the positive thing for the city and assist not attack short term rentals and their owners and guests. Thank you, Mark Younglove 517 36th St owner 951 212 5934 markyounglove@gmail.com Received After Agenda Printed October 13, 2020 Item No. 18 airbnb October 12, 2020 Honorable Members of the City Council Newport Beach City Hall 100 Civic Center Dr Newport Beach, CA 92660 Dear Honorable Councilmembers, On behalf of Airbnb, thank you for the opportunity to provide input on the City of Newport Beach's Ordinance 2020-26. Airbnb supports reasonable regulations on short-term rentals that protect public safety and preserve neighborhood integrity. We are proud to have worked with the City of Newport Beach to provide input on the city's short term rental ordinances to help ensure 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. As you know, the California Coastal Act guarantees "maximum access" and the protection and encouragement of lower cost visitor recreation and facilities along the coast. In spite of these goals, high travel and accommodation costs have reduced access to the coast, particularly for low to moderate income households and communities of color in California. A 2017 UCLA survey authored by Dr. Jon Christensen and Dr. Philip King found that 75 percent of respondents cited the high cost of accommodation as a barrier and 62 percent of respondents felt that a coastal visit is too expensive. The issue has been compounded by the high cost of development and loss of nearly 25,000 lower cost hotel rooms since 1989 which has made it harder for many to visit the coast. To build on the work from the 2017 UCLA study, Airbnb commissioned Dr. Philip King, Associate Professor of Economics at San Francisco State University, to look at the issue of equitable access. In his report-- "UnegualAccess: Protecting Affordable Accommodations Along California's Coast"-- Dr. King builds on prior work completed by the California Coastal Commission and the Coastal Conservancy which found that access to the coast has been severely restricted for many Californians, at least in part, due to economic reasons.The lack of affordability in overnight accomodations, not only for low and middle income households is serious concern. Dr. King's report (attached), provides an in-depth overview of the barriers to coastal access and offers recommendations including how short-term rentals can play an important role in increasing access, affordability, and support for local communities. Dr. King's report makes clear that short-term rentals can be part of the solution: Short-term rentals serve as a helpful tool to increase the supply of lower cost accommodations along the California coast and expand access by making it more affordable for California families to visit. Travel cost and overnight accommodations are the most cost prohibitive barriers to visiting the coast This is certainly more acute for low and moderate income households, minority communities, and Californians who live in the inland areas of the state, such as the Central Valley or Inland Empire. During this unprecedented crisis caused by the COVID-19 pandemic, policymakers are at the forefront in tackling the many issues of inequity that have invariably surfaced in 2020. We aim to be partners in this fight to ensure access to California's coast. With regard to Newport Beach's ordinance, we appreciate that the City is aiming to preserve both coastal access and public safety. Proposed amendments to the municipal code includes a minimum three consecutive night stay on all bookings. We strongly encourage the Council to eliminate the minimum night requirement. A minimum stay costs families an extra hundreds of dollars and will put overnight stays at the coast out of reach for many families. In Del Mar, the California Coastal Commission staff noted the restrictive role high night caps place on the availability of lower cost accommodations.Subsequently, many cities along the California Coast have avoided minimum night requirements, while others including Dana Point and Oceanside have opted for a two -night minimum. Newport Beach should revisit its three night requirement. Thank you for the consideration of all of the issues that we have raised regarding the proposed amendments. We would like to reiterate our willingness to collaborate with the city in developing a fair, balanced short term rental regulatory framework, and our comments here are offered in that spirit. We are happy to address questions or comments you may have. Sincerely, ( ep (f(2 - John Choi Policy Manager 2 Ineqi � tL Access Protecting Affordable Accommodations Along the California Coast �r Ineqi � tL Access Protecting Affordable Accommodations Along the California Coast Table of Contents o6 Introduction o8 Executive Summary 10 Alternative Options: Short -Term Rentals 11 The Housing Crisis and Coastal Affordability 12 Financial Resilience 14 Coastal California Case Studies 14 North San Diego County 15 City of Santa Barbara 17 City of Pismo Beach 18 Potential Solutions and Recommendations Access Issues on the California Coast zv The Coastal Act 22 Associated Costs and the value of Beach Recreation 25 _ack of Supply of Affordable Accommodation 31 Short -Term Rentals Aid in Providing Louder Cost Accommodations 31 Limits of the Coastal Act and an Alternative 33 Short -Term Rentals Can Reduce Accommodation Costs and Increase Diversity of Supply 35 Reducing Price Hikes at Peak Periods Unequal Access: Protecting Affordable Accommodations Along the California Coast 2 Equity, Affordability, and Displacement on the Coast Acute Lack of Affordability Lack of Development 41 Restrictive Housing Policies 41 The Costs of Restrictive Regulations 42 Displacement Inland Reduces Coastal Access 44 The Housing Crisis and Coastal Affordability 46 Resilience 48 Where do California Cities Get Their Revenues? 49 Increasing City Revenues to Pay for Resilience 52 Financing Resilience for Local Communities Case Studies—The Potential for Affordability on the Coast 55 North San Diego County 57 Affordability on the North Coast 58 Affordable Accommodations 59 Short -Term Rentals Provide Affordable Access 63 Tourism as a Revenue Source 64 Regulating STRs 66 City of Pismo Beach 66 Affordability in Pismo Beach 66 Affordable Accommodation and STRs 69 Reliance on Tourism 69 Regulating Short Term Rentals 70 Santa Barbara 70 Affordability in Santa Barbara 70 STRs, legality, and zoning in Santa Barbara 73 Regulating Short Term Rentals 74 Discussion Unequal Access: Protecting Affordable Accommodations Along the California Coast 3 75 Solutions 75 Access for All 76 Short -Term Rentals 77 Best Practices for Regulating STRs 79 Creating Policies that Encourage Access for Low Income and Underserved Communities 82 Conclusion 83 Glossary 86 References Unequal Access: Protecting Affordable Accommodations Along the California Coast Bios Dr. Philip G. King Dr. Philip G. King received his PhD in Economics from Cornell is 1987 and has been an economics professor at San Francisco State for over 30 years; he was Department Chair from 2002-2005. He has worked on the economics of coastal resources in California for over 25 years and has published numerous peer-reviewed papers in journals such as Climatic Change and Ocean and Coastal Management. His work on coastal access includes a report with Jon Christensen of UCLA on Access for All, which examined disparities in coastal access. Recently, Dr. King conducted the economic analyses for eight local coastal programs including Oceanside, Ventura County, and Imperial Beach. He is currently working with the State Lands Commission evaluating the impacts of sea level rise on California tideland properties. Dr. King also served as chair of the SF State Foundation's Finance and Investment committee and implemented their divestment from fossil fuel stocks. Sarah Jenkins Sarah Jenkins is a research assistant with Dr Philip King. Her interest in coastal access for Californians was developed while living inland in Stockton, California. She is especially interested in the equity aspects of Dr. King's coastal work, drawing on an interest in structural discrimination. Sarah has previously worked in International Development in Washington D.C. and for a global health non-profit. Sarah holds degrees in Economics and International Relations from University of the Pacific. Unequal Access: Protecting Affordable Accommodations Along the California Coast Introduction Our report, "Unequal Access: Protecting Affordable Accommodations Along California's Coast"was slated for release in March 2020 with the goal of analyzing the role short-term rentals can play in expanding access to California's coast. The COVID-19 pandemic and "shelter in place" order put those plans on pause as the state and local jurisdictions grappled with how to handle the unfolding public health crisis. In the following months, the COVID-19 pandemic has created a "new normal" of limited mobility, minimal tourism, and economic strife. Local governments nationwide are facing steep budget deficits as a result of decreased tax revenues. Things are far from the normal California summer season. However, as many have noted, this time may be a time for growth, change, and reflection, allowing us as individuals and communities to not simply return to normal, but to create something better and more inclusive. It is uncertain what this year holds, but it is likely that following the pandemic the "staycation" will become more popular. For California, this likely means more visitors to the beaches, and more demand than ever for accommodations—especially those that offer increased privacy and safety. The past few months have forced Americans to not only face a public health crisis, but a social and cultural crisis as well. The pandemic has disproportionately impacted Black and Latino Americans "in a widespread manner that spans the country, throughout hundreds of counties in urban, suburban and rural areas, and across all age groups," according to a comprehensive study of federal data from the New York Times. Compared to White Americans, Black and Latino Americans are three times as likely to contract the coronavirus, and twice as likely to die'. In the midst of this crisis, two months after this report was scheduled to be released, George Floyd's death at the hands of Minneapolis police sparked nationwide protests over a criminal justice system that systematically discriminates against people of color, especially black males. The history of unequal access in California extends to one of our most sacred treasures, our beaches. Until as recently as 1960, California's beaches were segregated. Even after laws were passed to eliminate de jure discrimination, de facto segregation continues. However, there are at least two monuments in California worth remembering: the monument at "Inkwell" Beach in Santa Monica, and the monument at Bruce's Beach (Manhattan Beach, Los Angeles County). These two beaches allowed African Americans to visit the beach during segregation. While today these formal barriers to beach visitation have ended, participation in coastal recreation at beaches, campgrounds, surf sites, tide pools and other spots is heavily skewed against people of color, and towards largely affluent groups who already have access. As our report documents (along with many excellent studies) access to California's coast is heavily skewed towards a richer, older and whiter demographic. This skewing is first and foremost caused by the high cost of housing on California's coast, though other historical and cultural barriers are also important. Increasing access requires recognizing these disparities and enacting policies to remedy them. Coastal communities need to be aware of and sensitive to these barriers—many of which are economic—in their local coastal plans and policies. With many low and middle-income 1 OppeI, Richard A. Jr etall, "The Fullest Look Yet at the Racial Inequality of the Corona Virus," New York Times. July 5, 2020. Unequal Access: Protecting Affordable Accommodations Along the California Coast 6 Californians living inland, providing affordable overnight accommodation is crucial for inclusive coastal access. Unfortunately, as work completed by the Coastal Conservancy and Coastal Commission indicates, the supply of affordable hotels has actually decreased over the past twenty years, and the current outbreak of COVID 19 is having a profound effect on the hospitality industry and may lead to permanent closures, especially for smaller operations with limited access to capital markets. At the same time, dozens of communities in California, many of them affluent, have placed a de facto ban and additional restrictions on short-term rentals, up to and including outright bans. In our study, we discuss two of the coastal cities -- Del Mar and Santa Barbara -- that have actively sought to restrict short-term rentals and hence access to the coast. These restrictions lower the supply of overnight accommodations and drive up the price, making access even more affordable for underserved communities. To meet these challenges, the State and local coastal communities must embrace change and encourage policies that increase access. Short-term rentals (STIRS) are one possible solution. STIRS require no new construction, generate significant local taxes, and provide overnight accommodations in cities that have few other options. In addition to the loss/damage to life, the COVID pandemic has wreaked havoc on State and local governments. By one estimate, the State of California will lose $2.5 billion in taxes this year (2020) and local jurisdictions will lose over a billion dollarsz. Unlike the federal government, state and local governments cannot borrow money to make up for budget deficits, so budgets will need to be cut during a pandemic. For local governments, short-term rentals can provide a significant new source of revenue, without raising taxes, while also increasing access to the coast. Our report examines these issues and provides a number of recommendations for policies that would increase access„ e.g., setting aside a certain percentage of STRs for underserved communities. We believe achieving access for a// will require the cooperation of all stakeholders including the private sector. Finding a solution—as with many issues highlighted by recent events—will require dialogue between business, State and local government, environmental and social justice groups, and other stakeholders, in order to forge a sustainable and equitable long-term solution. Dr. Philip G. King and Sarah Jenkins 2 See Estimates of State and Local Government Revenue Losses from Pandemic Mitigation, By Stephan Whitaker, Policy Economist II, Federal Reserve Bank of Cleveland May 13, 2020, https://www.clevelandfed.org/newsroom-and-events/publi- cations/cfed-d istrict-data-briefs/cfdd b-20200513-estimates-of-state-and-loca I -govern ment-revenue-losses-from-pandemic- mitigation.aspx. Unequal Access: Protecting Affordable Accommodations Along the California Coast 7 Executive Summary The 1976 California Coastal Act was created to protect and preserve California's iconic coastline and beaches and to ensure that everyone has "maximum access ... [to] recreational opportunities" of this precious resource'. The Act created the California Coastal Commission with the mandate to help protect and ensure access. Today, however, this access is being threatened by the high cost of California's coastal real estate, which has pushed many Californians to move inland, farther away from the coast in search of affordable housing. Numerous studies, cited within this report, have found that while visiting the coast is highly desired by most Californians, many feel that a visit is simply too costly. Travel costs and accommodation are the most prohibitive expenses— expenses which continue to increase as more of California's middle- and low-income families are displaced inland due to housing costs. The high cost of accommodation along the coast presents a significant barrier for many households. The supply of affordable rooms fails to meet the demand of millions of residents who do not live close enough to the coast to make a daytrip. Over the past decade, many budget hotels along the coast have closed or have been refurbished and raised their prices well beyond what many families can afford. Economy class hotels along the coast have closed at a far greater rate than other, more expensive types of accommodations. Many previous studies point to a significant decline in the number of overnight coastal accommodations that are affordable (defined as 75% of the average daily price for a hotel room in California, which was $137 a night in summer 2018). The lack of such options means that some households who would otherwise visit the coast cannot, because they cannot afford the cost of an overnight stay (Figure E1 below). Loss of Hotel Rooms 30000 25000 24124 20000 15000 10000 5000 4 4384 ■ 4029 01806 _ 960 66 Economy Midscale Upper Midscale Upscale Upper Upscale Luxury Figure Es: Loss of hotel rooms in California by class (Ainsworth 20M. 3 1976 California Coastal Act, Section 30210 Unequal Access: Protecting Affordable Accommodations Along the California Coast 8 During the high season—from mid-June until September—prices are often much higher than at other periods (see Figure E2 below). The supply of coastal hotel rooms is particularly strained during the summer when there are not enough hotel rooms of any class let alone those classified as lower cost. Hotels respond to this demand with increased prices. An accommodation that may have been affordable to a lower-income family in February is far out of reach in July when most Californians wish to visit the coast. $280.00 $260.00 $240.00 $220.00 $200.00 $1801)o $150.00 $140.00 $120.00 $100Ao Average Daily Rate Comparison August'17September October November DecemberJanuary'18 February March '18 April'18 May'18 June'18 July '19 '17 '17 '17 '17 '18 Average Daily Rate Statewide—Avergge Daily Rate Coastal Sample Figure E2: Average daily rate for overnight accommodation in California: coastal and non -coastal. Camping may provide an option for some households seeking lower cost accommodation. However, coastal campsites are also very limited, especially in summer, and some are under threat from coastal erosion. The supply of campsites in California has not kept up with demand, especially in high season. Moreover, even though booking a campsite is affordable, it requires costly equipment that may exclude many families and often requires one to make reservations well in advance. Studies of camping participation also indicate that despite the relatively low cost, participation in camping also skews heavily towards more affluent groups and away from communities of color. The lack of affordable accommodation along the coast creates a significant barrier to coastal access and makes it harder for families to visit. Given this challenge, it is imperative that California explore alternative means to expand the supply of lower cost coastal accommodations. Unequal Access: Protecting Affordable Accommodations Along the California Coast 9 Alternative Options: Short -Term Rentals One possible solution to the lack of affordable overnight accommodations on the coast are short- term rentals (STRs). Unlike campsites or hotels, expanding the number of STRs does not require new construction on or near California's coastline but instead utilizes existing properties. Rentals allow for the use of property otherwise unoccupied and may offer much needed income to hosts in expensive coastal communities. STRs have been providing accommodation for Californians wishing to visit the coast for decades, offering a significantly different experience than staying in a hotel or camping. Indeed, the California Coastal Plan, which laid the groundwork for the California Coastal Act, mentions home -sharing as a means of coastal access dating back prior to 1975. In addition, STRs may be especially suited to families or larger groups as they often offer kitchens, gathering spaces, multiple bedrooms and bathrooms, and are often less expensive per visitor than a hotel room. As indicated in the literature review in this study, empirical studies of STRs indicate that the entry of STRs typically results in lower hotel rates, especially at peak periods. STRs offer competition and a flexible supply, which can be scaled to meet demand more easily. Hotels respond to this competition by lowering their prices. This benefits all visitors, including those who do not utilize the rentals. Furthermore, STRs can bring in visitors who may not have been able to access the coast before or may have chosen not to due to the difficulty of finding accommodation in the high season or desiring the specific amenities they can find at an STR. Short-term rentals also make sense economically in communities where demand is highly seasonal as is the case with many coastal communities where beach and other recreation peaks in the summer. Building new hotels to serve a demand for a few months of the year makes little sense, and hotels must charge high rates in peak summer months to remain economically viable. Short-term rentals have become more popular along California's coast and elsewhere as online platforms make it easier for potential visitors to locate, evaluate (through photos, maps, and other guest ratings), and book a property all in a few minutes. The recent popularity of STRs has also led to concerns in local communities about the character of neighborhoods that have traditionally been composed of single-family dwellings occupied by one family. Coastal communities up and down California have struggled with how to regulate STRs. Unequal Access: Protecting Affordable Accommodations Along the California Coast 10 The Housing Crisis and Coastal AfFordability California's housing crisis is most acute in the Coastal region, near rapidly growing economic powerhouse cities such as San Francisco and Los Angeles. In these cities, demand for housing has far surpassed supply. Due to a combination of regulatory lags, permitting issues, and pushback against higher density construction and up -zoning, there has not been a substantial increase in housing construction necessary to meet this demand. Local authorities face pressure from many residents who worry about the burdens associated with expanding the supply of housing. As a result, housing has become scarce and prices have skyrocketed. Rising housing costs have displaced many middle- and low-income residents inland. This means that many Californians, including nurses, police, teachers, and service workers, cannot afford to live where they work and must suffer long commutes. This displacement often results in a concentration of exclusive wealth and resources along the accessible only by the wealthy. This report focuses on the lack of access to California's coast. Several key studies by the California Coastal Conservancy, the Coastal Commission, and others have highlighted this access issue and all point out that the increased cost of coastal access falls disproportionately on low- and moderate- income households as well as communities that have been historically excluded or discouraged from going to the coast, such as Latino residents and people of color. Latino Californians in particular desire to visit the coast but are especially sensitive to the high costs of travel and accommodation. As discussed in this report, the counties of California's Inland Empire, where a visit to the coast on a hot summer day likely requires an overnight trip, are virtually all Latino majorities. For many inland families, the cost of a necessary overnight stay is a major impediment to visiting the beach. Indeed, California's coast has become increasingly inaccessible—with the majority of areas far more affluent, less diverse, and older than the state overall. This exclusivity produces an inequity that runs counter to the aims of the California Coastal Act. Access to the resources and opportunities associated with California's coast is not distributed fairly among California's diverse population. Often, those who can afford to spend the least to visit the coast must spend the most as lower-income communities inland face the highest travel costs and accommodation burdens. As the case studies in this report indicate, cities that have become less and less affordable, like Santa Barbara or Del Mar, have also enacted restrictive legislation limiting short-term rentals. just as these cities have often imposed restrictive ordinances and zoning laws to limit affordable housing for their residents, they have also imposed similar restrictions on short-term rentals with similar results. Unequal Access: Protecting Affordable Accommodations Along the California Coast 11 Financial Resilience As communities across California discuss and debate adapting to climate change, one issue is clear: adaptation will be expensive. For example, a recent study (Aerts et al. 2018) estimated that Los Angeles County will face climate change costs of $4.3 to $6.4 billion by 2100. All of these expenses will be on top of existing financial obligations for education, public safety, affordable housing and many other issues facing California today. Local governments will need new or enhanced sources of revenue to pay their share of climate resilience. The California Coastal Commission and Coastal Conservancy have sponsored work on numerous local coastal programs (LCPs) aimed at helping coastal communities adapt to sea level rise. While these LCPs differ, all have one thing in common—their implementation will be costly and must be financed somehow, including local participation. Transient occupancy taxes (TOTS) offer local governments a revenue stream that can easily grow. Unlike property taxes or sales taxes, in California 100% of TOT revenues go to local communities. While TOT rates vary by local jurisdiction, most coastal communities in southern California have a TOT rate of at least 12%. However, efforts to block STRs often lead to the development of black or grey markets where STR operators do not pay TOTs to their local community. This deprives these communities of revenues necessary to fund the additional public services required, such as lifeguards, public safety, improving beaches or other facilities. Encouraging coastal communities to make STRs properly regulated and tax -paying is critical for financing resilience. Expanding STRs not only increases access but also increases financial resilience through increases in TOT revenues. Moreover, as discussed in detail in this report, other potential sources of local financing, e.g., Geologic and Hazard Abatement Districts (GHADs) or other levies on property taxes tend to promote resilience pathways that protect private property (e.g., armoring) at the expense of public property. Unequal Access: Protecting Affordable Accommodations Along the California Coast 12 Coastal California Case Studies The case studies provided in this report illustrate some of the issues facing coastal communities. All communities want to keep their residents safe and preserve their environment. However, some communities have done so in a manner that excludes many visitors, particularly lower income households, erecting barriers to entry such as high permitting fees for STRs and severe restrictions on who can offer STRs and in what neighborhoods. The STRs policies of three distinct regions along California's coast were examined, and each provides a specific understanding of the impacts of local policy on the affordability of STRs. As these case studies indicate, short-term rentals can coexist with residential neighbors. Oceanside's Good Neighbor Policy for short-term rentals provides an excellent example. The city has strict policies on issues that matter to local residents, including trash, parking, noise, and extra visitors. Oceanside's Good Neighbor Policy includes serious fines for people who violate these rules. Another common argument against STRs is that they drive up local real estate prices, facilitating gentrification. Some empirical studies indicate STRs can have a modest impact on property values, but these impacts must be taken into context. The residential real estate in most of these coastal communities is already beyond the means of the vast majority of Californians. Therefore, reducing STRs in coastal communities simply reduces access to those who cannot afford to buy such properties but can afford to rent them for a short time. Indeed, in our case studies, communities, such as Del Mar and Santa Barbara which already have significantly higher home prices, higher rents, and higher median incomes, were also the same communities which placed more serious restrictions on STRs. Unequal Access: Protecting Affordable Accommodations Along the California Coast 13 North San Diego County The first case study in this report examined five coastal communities in North San Diego County: Del Mar, Solana Beach, Encinitas, Carlsbad, and Oceanside. All of these communities are very popular beach destinations in the summer and have significant regulations on STRs. Our analysis of STIR policies in North San Diego County indicates that communities that have restricted short- term rentals the most have the highest overnight rates. The City of Oceanside has more affordable accommodations than its neighbors to the south while at the same time also providing more affordable accommodations for its long-term residents as well. 0 o Northern San Diego � ° o B •9 8 o ❑ �� o0 ❑ e e ❑ ❑a� e8 °o ° ❑ ❑ ❑ ❑ b ❑ Oceanside ° o ❑ o• O � ® p o 0 o O ❑ �S ° Carlsbad 8 o � o 0 00 0 ❑ _`: o o° ® ° ❑ o°�° � • 0000 a A 0 0 po° 0 00o 0 o 8P®• Rental Home ®08 0 ' Affordable Q o o cine as o o No 04� ni og o Yes ° Private Room Rental o�a Affordable ❑ Yes o 0 City Limit ° 0 Coastal Zone Boundary Within 0.5 mile of the Coast -S lana Beach A ° Del Mar C_Mlle I �— Figure E3: Affordability of STRs in North San Diego County, Figure E3 above graphically illustrates the affordability issue in North San Diego County. The darker (redder) areas indicate more affordability; the lighter (more yellow) areas indicate less affordability. As one would expect, the areas along the coast are less affordable. However, pockets of affordability still remain farther north, particularly in Oceanside, which has a more accommodating STIR policy. On the other hand, more exclusive communities like Del Mar offer fewer affordable overnight accommodations. Unequal Access: Protecting Affordable Accommodations Along the California Coast 14 City of Santa Barbara In Santa Barbara the regulatory environment is particularly difficult. The city's enforcement and zoning policies towards STRs has been described as a "ban" since STRs are classified as hotels. As a result, STRs are only permitted in areas zoned for hotels, and operators are required to submit to many of the same regulations as a hotel owner, including frequent inspections and renovations. Since 2015 the city has begun aggressively enforcing this zoning ordinance. This policy has resulted in a lack of affordable accommodation in the City of Santa Barbara since few areas are zoned for hotels. The added enforcement risk to operators has reduced supply and increased costs, reducing affordability. The maps in Figures E4 and E5 below show the results of Santa Barbara's restrictive STR policies. There are few affordable accommodations, and those that are available are away from the coast. Easing STR regulations, and thereby allowing a greater supply of STRs in other areas of the city, would significantly increase affordability and access. Recently, the ban on STRs in Santa Barbara's coastal zone was overturned in the Kracke v. The City of Santa Barbara case. Judge Borrell ruled that the enforcement significantly changed the ability for Californians to visit and access the coast and that such a development would have required the approval of the California Coastal Commission. The ruling effectively allows rentals in the coastal zone to be operated immediately in the same manner as they were prior to 2015 during when operators obtained a permit and collected TOTS. The city is appealing the ruling. MWZones Where Short-term Rentals Require Review & Approval _ l O R -AH (R4) - Residential Multi -Unit and Hotel _ Clt (G%, L.0 -P) -Commercial Reetdcted - C -G (C-2)- Commamial General hi11 M -C (C-M)-Manufactadng Commercial - - - M-1 - Light ManufacWdng (Coastal Zane only) r J' O HRC -1 - Hotel and R.1 -d Commerce I (Coastal Zone -1y) -� =- C'elito O HRC -2 - Hotel and Related Commerce II (Coastal Zona only) o •._-�_; - oc - o<aaa Ralatae cammama (coastal zona onN) - I�I—y' 1 _ Zones Where Short-term Rentals are Prohibited [� 4 East San R qua L, 7 O Zones Whem Short-term Rentals are Prohibited to - Upper East t ilchcock markan I_- 101 C ucalyptus Hill ,.. Oa l P rk nne...vei o.• `74 W LV aIIM�='� .. � O w a war Wpsl �' a w,m zsm a,ee zom w e 1 West Mesa City of Santa Barbara East Mesa Zones Where Short-term Rentals® Require Review and Approval Date. 10/31/2017 Figure E4: Santa Barbara's zoning limits STRs to areas already zoned for hotels. Unequal Access: Protecting Affordable Accommodations Along the California Coast 15 Santa Barbara City O • o Missln ° • y • ` Canyon O �e a •°❑ El 0 a��s� ❑ o�w ❑ ❑ ❑ ° • • ❑ -❑❑ arp s, p O O ° _ ', a ❑• , O • •pDo 00 h 0 gam" •• �• w° El rp❑ �°❑ ° ❑ o � ' °"'0 o • • El CC, o❑� 0 E o o ❑o as ° •40 s M° 0 0 <� y E)O °o °o❑� ❑ M�°� o El • • 3'�"`y❑ 8" ❑ O U ° 00 ,,0 •' • °e oO ° °0�� Rental Home Private Room Rental ❑' El a Affordable Affordable ElO O No El No ❑ ° o Yes ❑ Yes o° o o❑ v A ° ° ° O ❑8 o o ElO ° 0 0 City Limit 04'o o O � C— Coastal Zone Boundary _ off_ ° Within 0.5 mile of the Coast Figure E5: Affordability of STRs during peak season in Santa Barbara. Unequal Access: Protecting Affordable Accommodations Along the California Coast 16 City of Pismo Beach The California Coastal Commission has suggested that Pismo Beach's short-term rental ordinance is a model for other communities. However, as this study indicates, Pismo Beaches' permitting fees, coupled with a required business tax, imply that STIR landlords must pay over $450 for the right to rent out their property even if only for a week or two. The high fees represent an obstacle and possible deterrent to residents who might consider home sharing as a means to supplement their income. This might explain why Pismo Beach's STRs are less affordable than many other communities in this study. Regulations on short-term rentals can help communities promote public safety alongside access and respond to the valid complaints of residents around issues such as noise, traffic, etc. These regulations, however, should not constitute barriers or bans which prohibit STRs or make STRs too expensive for low and moderate -income families, thus reducing coastal access. A well -regulated supply of STRs can also provide significant revenues for local communities in the form of transient occupancy taxes (TOTS). In addition to paying for the increased costs of public safety, these revenues can be used by coastal communities to help strengthen resilience in order to adapt to sea level rise. Unequal Access: Protecting Affordable Accommodations Along the California Coast 17 Potential Solutions and Recommendations After evaluating the impacts of regulations on the availability and affordability of STRs, this report makes the following recommendations for how local jurisdictions can maximize access to the coast. These simple policy changes will help reduce the costs, delays, and confusion, thereby encouraging compliance and regulations as well as affordability. Simple, streamlined registration Make permitting easy and swift Cities require TOT payment and cooperate with STR platforms where possible Allow STRs in most or all coastal neighborhoods No minimum on number of nights Reduces the costs to operators, costs which are passed on to renters and reduce affordability Allows for more affordability by making it easier to increase the supply of STRs; also encourages registration with the City Ensures TOTS are collected from all operators Increases affordability near the coast, helping increase coastal access for those who need it most Ensures that families who cannot afford multiple nights can still visit the coast Maximum night cap of 180 nights or more. Helps promote affordability via greater supply of STRs, No night cap on shared space rentals supported by Commission Ensure compliance with "Good Neighbor Policies" Promotes harmony between STRs and the residents and make renters aware of rules neighboring them, and promotes public safety Require parking be provided by STRs where Reduces traffic associated with STRs and promotes reasonable agreement with local residents. Reduces parking costs for visitors Unequal Access: Protecting Affordable Accommodations Along the California Coast 18 The City of Oceanside's Good Neighbor Policy (in appendix) and other policies generally provide a good example for other cities to follow when implementing STR policies. In communities where parking is an issue, communities should require STIRS come with adequate parking depending upon the number of guests. These same communities may also wish to encourage transportation modes other than cars, such as local buses and shuttles, bike rentals, etc. Additionally, this report recommends that the state, local governments, and non-governmental organizations (NGOs) play an active role in developing programs that target underserved communities and households with low or moderate income in order to increase the affordability of, and hence access to, the coast. State agencies, local governments, foundations and community organizations could support and fund programs that encourage or subsidize low-income families or those from underserved communities to stay overnight near the coast. STRs should be part of the solution. Expand the Explore the Coast Overnight Program to include STRs, and include STRs in other pilot programs Create affordable STR program with eligibility criteria. Cooperation with NGOs helps these programs reach those most in need of easy access to the coast. STRs better serve large groups and families and provide additional amenities for families. Many STRs are more affordable. It is easier to expand the supply of affordable accommodations through STRs, unlike other lodging, which requires new construction on the coast. Establishing eligibility criteria ensures that Californians most in need of affordable accommodation have access. Unequal Access: Protecting Affordable Accommodations Along the California Coast 19 Access Issues on the California Coast The Coastal Act California's beaches have an almost mythological allure worldwide. The California coastline is not only a crucial aspect of the identity of the state and its residents but also one of its prized tourist attractions. Millions flock to the state's beaches every year, especially during the peak summer season. In fact, of the more than 200 million in-state leisure trips California residents took in 2016, over 20% were to the beach (Conservancy 2019, 14). As the California population continues to grow, especially inland where summer temperatures are increasingly hot, beach trips will likely become even more popular, but only if Californians can afford to visit. Access to the coast is threatened by rising costs. A 2017 study found that 62% of California families felt that a visit to the coast is simply too expensive (Christensen & King 2017, 3). These families are primarily concerned with the high costs of parking and lodging along the coast, a problem which is especially concerning for minority residents and residents of inland counties (Christensen & King 2017, 3). The high cost of a coastal visit can mean that middle- and low-income families cannot afford coastal access at all. Unequal Access: Protecting Affordable Accommodations Along the California Coast 20 This disparity is especially disheartening in a state where access to the coast is guaranteed by law. In California, the coast (below the mean high tide line) and waterways are public land and intended for beneficial public use. The 1976 California Coastal Act aims to protect California's beaches and coastline and promote visitation. The California Coastal Act defines the coast as a "distinct and valuable resource belonging to all" and ensures "maximum access, Which shall be conspicuously posted, and recreational opportunities shall be provided for all the people consistent With public safety needs and the need to protect public rights." (Coastal Act, Section 30210) The Coastal Act not only places importance on coastal protection but also includes an imperative mandate that all Californians should have maximum access to coastal recreation regardless of income. Several recent reports by the California Coastal Commission and the California Coastal Conservancy noted that this mandate goes above and beyond protection and preservation. It necessitates the promotion of access for those who would otherwise be unable to afford it. Specifically, the California Coastal Act requires the protection, encouragement, and "where feasible" provision of "lower cost visitor and recreation facilities" (Conservancy 2019, 14; Ainsworth 2016, 1). This stipulation in the California Coastal Act gives the State government the capacity to ensure and protect access to the coast. The requirement for the preservation and provision of lower cost facilities is vital to providing equitable access to all Californians. Without lower cost overnight accommodations, many individuals with low or moderate incomes will be, and in many cases already are, unable to afford the high cost of visiting the coast. This results in unjust inequity (Ainsworth 2016, 8). It is not sufficient for the coast to be legally accessible by the public; there must be a diverse set of options that allow everyone, regardless of income, an ability to access the coast. Presently, the majority of Californians cannot afford overnight accommodations in coastal areas (Ainsworth 2016, 24). Despite the California Coastal Act's promise of access for all, inequity persists and is perhaps more pervasive than in recent decades. The high cost of living in coastal counties has pushed lower and moderate -income Californians inland. This has resulted in longer drives and in many cases, requires an overnight stay if families wish to visit the coast. Desire to visit the coast is relatively high among all of California's diverse demographics, yet important barriers to access persist which make visits to the coast too costly for lower income communities. In fact, one study found 62% of California voters perceive coastal access as a problem (Christensen & King 2017, 3). Historically, public access has been unequally distributed among different groups. High land costs and explosive economic growth on and near the coast have exacerbated this situation. While the Coastal Act aimed to remedy these issues, it has fallen short. The Coastal Act's stipulation for lower cost facilities includes the promotion, preservation, and provision of lower cost overnight accommodations (Ainsworth 2016, 1). These protections are meant to address one of the most significant barriers facing visitors to the beach: the cost of overnight accommodation and the scarcity of alternative, affordable accommodations. As mentioned, many low- and middle-income Californians have to travel greater distances to reach the coast and may need accommodation. This is a pressing issue as income inequality in the state Unequal Access: Protecting Affordable Accommodations Along the California Coast 21 deepens. In a recent survey, 75% of respondents cited the lack of lower cost accommodation options as a reason they do not visit the coast as much as they would like (Christensen & King 2017, 3). Travel costs—the chief barrier to coastal access—are not equitably distributed among California's diverse demographics. High costs to travel to and stay in coastal communities more heavily burden lower income populations and prohibit some from visiting. Associated Costs and the Value of Beach Recreation Although the California Coastal Act guarantees access to the coast to all Californians, recent studies show that costs associated with visiting the coast impose barriers that prevent many lower income and minority communities from visiting. Many families, despite strong desire to visit the coast, simply cannot accommodate high nightly rental rates into their budgets. Understanding the value California residents place on a trip to the coast will better help to illustrate the significance of high costs. Californians visit the coast for many reasons; the coast provides recreational opportunities, which benefit psychological and physiological health as well as provide much needed leisure, a connection to the ocean, and an escape from the scorching summers inland (Christensen & King 2017, 3; Reineman 2016, 91). In other words, all visitors place some value on their visits—although perhaps not in dollars. This value is not always fully captured in the cost of the trip, especially since beaches in California are generally free. Thus, coastal visits have a non -market value, or a worth to visitors that is not explicit in commercial costs. Understanding the value of a beach trip can help illustrate the decisions which go into a visit, allowing economists to model consumer surplus. In this case, consumer surplus is the value of the visit once the costs have been accounted for, or how much "bang for your buck." While the average visitor may not calculate their exact costs and associate an explicit, monetary value to their visit, costs do play a role in decisions to visit the coast. The amount a visitor is willing to pay for a trip can reveal the implicit value of the trip (Christensen & King 2017,5; Medford 2018). This is especially important regarding trips to the beach, as beach access is generally free and thus has a "non -market value." Economists have developed a wide variety of models to estimate the "non -market value" of visiting natural resources where access is free. One of the most common models is the "travel cost model." In a 2017 survey, Christensen and King used this model to conduct an intercept survey of select beaches in Southern California to estimate a visitor's "willingness to pay" (WTP) to visit the coast. Researchers have compared the value of a beach visit to the associated costs to better understand the economic barriers that impact coastal access (Christensen & King 2017; Medford 2018). Medford (2018, 3) determined the value of beach recreation in Southern California using a visitor's choice of site and the number of trips taken to reveal his/her willingness to pay, and thus, the value assigned to the trip. The study found higher income demographics have a higher willingness and ability to pay for coastal accommodation. Medford (2018) sought to understand how consumer surplus and WTP varied by ethnic and racial group—an important aspect of creating equity in coastal access. Minority populations historically have faced both cultural and Unequal Access: Protecting Affordable Accommodations Along the California Coast 22 legal barriers to beach access. These barriers have carried over into feelings of marginalization and being unwelcome, resulting in a lower desire to visit. Medford (2018, 1) found evidence of this phenomenon, noting that Black and Asian populations on average visit the beach less. More significant than race alone, however, was "travel cost." Minority groups were on average more responsive to high travel costs. Higher sensitivity to travel cost suggests these populations derive a lower consumer surplus, or benefit, from their visits. In order to ensure access for all Californians, these preferences need to be taken into account. Willingness To Pay For A Coastal Visit, Per Night Ln C7. ID 4.D Od CID Ln { $10K $10K - $15K - $15K $25K ■ $25K - $35K - $50K - $75K - $100K - >$150K $35K $50K $75K $100K $150K Annual Household Income Figure 1: Willingness to pay for a visit to select Southern California beaches by income bracket (Christensen & King, 2017). Latino residents in particular consider the cost of accommodation as a major barrier to visiting the coast. Christensen and King (2017) found that Latino voters rated affordable accommodation a major issue and were on average able to pay $16 less per night than respondents overall. This is especially significant during the summer holidays when demand for coastal recreation is at its peak and prices are the highest. Latino populations are especially vulnerable to the lack of affordable coastal accommodations given that Latinos in California have a 52% lower median income, at $51,853 in 2017, compared to the median income for white, non -Latino residents of $78,903 according to the latest numbers (US American Community Survey, 2017). For households in Southern California's non -coastal counties—particularly those with high Latino populations, such as the Inland Empire—access to affordable overnight accommodations is critical since accessing the coast for a daytrip is difficult given traffic patterns and travel costs. According to data from the U.S. Census 2018 American Community Survey (ACS), Latino households make up the majority of the population in virtually all Southern California inland counties. Table 1 below shows these counties have a higher percentage of Latino households than the rest of the state overall. Unequal Access: Protecting Affordable Accommodations Along the California Coast 23 ry 6 ri en f1j yr 00all 1 $25K - $35K - $50K - $75K - $100K - >$150K $35K $50K $75K $100K $150K Annual Household Income Figure 1: Willingness to pay for a visit to select Southern California beaches by income bracket (Christensen & King, 2017). Latino residents in particular consider the cost of accommodation as a major barrier to visiting the coast. Christensen and King (2017) found that Latino voters rated affordable accommodation a major issue and were on average able to pay $16 less per night than respondents overall. This is especially significant during the summer holidays when demand for coastal recreation is at its peak and prices are the highest. Latino populations are especially vulnerable to the lack of affordable coastal accommodations given that Latinos in California have a 52% lower median income, at $51,853 in 2017, compared to the median income for white, non -Latino residents of $78,903 according to the latest numbers (US American Community Survey, 2017). For households in Southern California's non -coastal counties—particularly those with high Latino populations, such as the Inland Empire—access to affordable overnight accommodations is critical since accessing the coast for a daytrip is difficult given traffic patterns and travel costs. According to data from the U.S. Census 2018 American Community Survey (ACS), Latino households make up the majority of the population in virtually all Southern California inland counties. Table 1 below shows these counties have a higher percentage of Latino households than the rest of the state overall. Unequal Access: Protecting Affordable Accommodations Along the California Coast 23 Table s: Latino/Latino Residents as a Percentage of Population in Southern California Inland Counties. Data from the U.S. Census 2os8 American Community Survey. Fresno 994,400 531,677 53.5 Imperial 181,827 153,757 84.6 Kern 896,764 483,846 54 Kings 151,366 83,200 55 Madera 157,672 91,939 58.3 Merced 1 274,765 1 165,438 1 60.2 Riverside 2,450,758 1,214,445 49.6 San Bernardino 2,171,603 1,171,925 54 Tulare 465,861 303,657 65.2 Southern Valley 7,745,016 4,199,884 54% Rest of State 31,301,112 11,211,879 36% California, total 39,557,045 15,540,142 39.3% While high travel and accommodation costs are particularly significant for residents of inland counties, these costs weigh heavily in planning a coastal visit for all California residents. Naturally, if the associated costs of the trip are too high, those with fewer means would choose not to go. Survey work from UCLA on beachgoers found this to be the case, concluding that lodging and transportation costs are the paramount concerns, and indeed barriers, to beach access (Christensen & King 2017, 4). While the UCLA study did not analyze lodging costs, they illustrated part of the affordability problem. They "calculated that the average value of a multi -day trip to the coast was $605.05, meaning that visitors were on average willing to budget roughly $605 for the trip. Round trip travel costs amount to on average $194.41—not including the price of overnight stays—leaving $410.64 in the typical budget for all other expenses. With overnight visitors staying an average of four nights on the coast, the surplus value'left over for accommodations is just $102.66 per day"' (Christensen & King 2017, 6). That $102 is likely insufficient as many coastal zone accommodations ask more in their daily rate. Furthermore, that nightly rate leaves nothing left over for excursions or even food. The already high costs of lodging on the coast are prone to increases as demand for coastal accommodation exceeds supply. Hotels dramatically raise rates during the peak season, making it even harder for the majority of Californians to visit the coast. While this creates a barrier for many Californians to visit the coast, the UCLA study also found that willingness to pay for lodging Unequal Access: Protecting Affordable Accommodations Along the California Coast 24 increases with income where wealthier populations are willing to pay premiums. For the aims of the Coastal Act to be met, accommodations need to exist along the coast that offer lodging for more than just the wealthy. Lack of Supply of Affordable Accommodation The cost of coastal accommodations concerns the majority of visitors to the beach. High travel costs—and in particular the exorbitant cost of lodging on the coast—can prohibit coastal visits and impede access to the coast. In fact, the only California populations who reliably stay on the coast are white, age 55 or older, who earn more than $200,000 annually (Conservancy 2019, 16). Another study found that this demographic already has higher ability to access the coast. Reineman (2016, 101) mapped census demographics in relation to coastal access points and found that "by virtue of their place of residence, white, wealthy, senior Californians live disproportionately closer to public coastal access points than other groups" (Reineman 2016, 99). The coast, according to this research, is overwhelmingly white and is also predominantly wealthy. The average annual household income increases with proximity to the coast, such that those living closest to the ocean make 20% more than the state average, and low income communities are largely concentrated inland (Reineman 2016, 97). Inland Californians, therefore, face not only higher travel costs but also a greater cost burden in comparison to their incomes. This compounds coastal access inequality. Inland California populations are on average less wealthy, younger, and more diverse than the communities on the coast. This is true for those in coastal counties but also for those who must travel much further to reach the coast, such as those who live in the San Joaquin or San Fernando Valley. As demonstrated in table 2 below, data from the US Census indicates that households in inland counties in southern California have annual incomes $25,000 lower than households in coastal counties, reducing their ability to afford a coastal visit. These are the communities most in need of affordable accommodation if all Californians are to have access to the coast. Recall that those of lower incomes budget less for a coastal trip, and this is especially true for communities of color. Compared to the communities with the closest proximity, and therefore easiest access to the coast, those who live inland face high travel costs coupled with fewer means. Table 2: Demographic data from the U.S. Census shows that the California coastal population is wealthier, whiter, and older than the populations of inland counties. Coastal Sample Inland Counties Age, Percent of Population Over 65 1['193 12.3 Percent White, Non -Latino 5N11PA 34.0 Average Median Household Income $ 83,995.00 $ 58,082.83 4 "Coastal Sample" includes the counties of Marin, San Francisco, San Mateo, Santa Cruz, Orange, and the cities of Mon- terey, Pismo Beach, San Diego, Oceanside, Los Angeles, Malibu, Long Beach, Oakland, Oxnard, and Huntington Beach. The "Inland Counties" are those counties within reasonable travel distance to the coast and large populations: Sacramento, Fresno, Riverside, San Bernardino, Stanislaus, and Merced. Bakersfield city was also included as Inland. Unequal Access: Protecting Affordable Accommodations Along the California Coast 25 These Californians have to travel the furthest to the coast and therefore have the highest travel costs. At the same time, inland populations are less able to pay the high asking prices for accommodation (Christensen & King 2017, 4). According to US Census data, populous areas inland—including Sacramento, Fresno, San Bernardino, and Bakersfield—have lower median incomes and larger Latino populations than cities along the coast (see Table 2, above). Californians inland face higher travel costs with tighter budgets. Thus, it follows that inland populations visit less often, especially those from the Central Valley, "with 39 percent visiting less than once a year" (Christensen & King 2017, 3). If the aims of the 1976 California Coastal Act are to be met, more low- cost coastal accommodations need to be provided or else this disparity will persist. Presently, those with greater means have more opportunities to access overnight accommodation and the coast itself, and this is not a result of their place of residence alone. There are simply not enough affordable accommodations on the coast, and during the peak summer season there is not enough accommodation overall. Lodging is often the most expensive part of a coastal vacation, making its scarcity critical. Publicly owned options can help keep the cost of accommodations low, but these are typically campsites or lodges and a few hostels. They act as a bulwark against the increasing lack of affordability on the coast, especially important given that the California coast has lost 24,720 economy hotel rooms since 19895, more than twice the number of non -economy rooms (Ainsworth 2016, 1). While the population in California has grown, affordable accommodation options for lower income residents on the coast have shrunk. 30000 25000 24720 20000 15000 10000 5000 Economy Loss of Hotel Rooms 4384 4629 IBM No 960 _ 68 Midscale Upper Midscale Upscale Upper Upscale Luxury Figure 2: Loss of hotel rooms in California by class (Ainsworth 2oi& 5 Ainsworth (2016) reported that nearly 70% of the rooms lost since 1989 have been economy rooms whereas 10% have been upscale and less than 0.2/0 luxury hotel rooms. Unequal Access: Protecting Affordable Accommodations Along the California Coast 26 The existing accommodations on the coast are also under threat from rising property values and conversion to higher cost lodging. Lower cost hotels are critically threatened, closing at more than double the rate of moderate and high price hotels, resulting in the dramatic loss of hotel rooms indicated in Figure 2 (Ainsworth 2016, 1). They are being replaced by expensive condominiums, resorts, and hotels, thereby decreasing the supply of more affordable accommodations and increasing rates such that many coastal cities only offer 5% of the available rooms at a lower cost—those with a daily rate less than 75% of the California average, which qualifies a room as "affordable" (Ainsworth 2016, 2). Historically, low-cost accommodations were more accessible, but now the percentage of economy rooms has decreased dramatically with proximity to the coast. Furthermore, an "economy" room on the coast is likely to be more expensive than its equivalent inland. The supply of roughly 13,000 affordable overnight accommodations on the coast (only 7,500 rooms in Southern California) does not come close to matching the needs of the 12.6 million households within 150 miles of the coast, approximately half of which are low income (Conservancy 2019, 13). Staying overnight at the coast is simply unaffordable for many California residents. Presently, 45% of Californians find accommodation options on the coast to be too expensive or inconvenient (Conservancy 2019, 14). The California Coastal Act's mandate allows the Coastal Commission some leeway in providing lower cost accommodation options, primarily in dealing with development. The Coastal Commission has required some builders of new hotel developments to construct 25% of their rooms to be designated as affordable rooms and assesses an in -lieu fee of $100,000 for lower cost rooms (Commission 2019, 25). Some hotels meet this requirement not by reducing the rates of their rooms, but with offsite solutions, such as hostels (OC Register; Commission 2019, 24). While this measure helps provide affordable options, it fails to match the preferences of the majority of beachgoers who wish for privacy. Instead, this policy essentially provides separate, and not equal, accommodations for low- and moderate -income groups. The replacement of lower cost hotels with hostels also creates a dichotomy for visitors and may prevent some from being able to visit (Commission 2019, 23). In this new scenario, mid-range accommodation options vanish. Camping and RVs Hostels 8�a3 4M 319 R%J Hotels& Motels Cabins 4,6B3 (35%1 33 (025%6 Figure 3: Distribution of louver cost coastal accommodation types (Conservancy 2019). Unequal Access: Protecting Affordable Accommodations Along the California Coast 27 Furthermore, enforcement of the in -lieu fee often falls to local governments who see the policy as a suggestion rather than a rule (Access Denied, 2019). This results in developers getting away with drastically reducing the supply of affordable hotels along the coast without any hope of replacing those lost. Additionally, former commissioners interviewed by the Southern California public television station KCET explained that the fees collected, some $22 million, have been untouched despite plans to build lower cost options including campgrounds and hostels (Access Denied, 2019). Sky high coastal property values motivate developers to build luxury condos and resorts rather than affordable hotels which may not be fully booked all year. Coastal communities seem to prefer these developments over those that would service lower-income residents. In one case, Malibu residents stymied the construction of a campground for foster children despite earmarked funding (Access Denied, 2019). However, when luxury developments curtail residents' access to beaches, public opposition combined with the backing of the Coastal Commission can prevent privatization, such as with the Miramar Hotel in Santa Barbara where the Commission threatened a fee of $11,000 a day for restricting access to the public beach (Access Denied, 2019). The Commission has the power to enforce the goals of the Coastal Act, but they are understaffed and often impeded by the actions of coastal municipalities. 9,000 8,000 7,000 6,000 � 5,000 O E Q 4,000 3,000 2,000 1,000 0 Hotels & Motels Nco 0 Private 4683 ■ Public 0 Camping & RVs Cabins Hostels 0 0 188 3433 13 131 4830 20 0 Figure 4: Accommodation ownership distribution on the coast (Conservancy 2019, 12). Unequal Access: Protecting Affordable Accommodations Along the California Coast 28 The current supply of lower cost coastal accommodations also tends to fall disproportionately toward camping and RV parks. A recent study by the Coastal Conservancy focused on "lower coast coastal accommodations"—defined as those with a rate of 75% or less of the statewide average— and found that 62% of these options are camping or RV sites (Conservancy 2019, 11). These are often publicly owned. Campsites are in very high demand and often reserved long before the peak season begins. However, surveys of beachgoers reveal that many do not wish to camp or stay in a hostel (Ainsworth 2016, 12, 26). Others, especially those from low income or minority households, may lack the necessary camping equipment. The costs of starting to camp are high with the average first-time camper spending $181.61 for gear that first trip (Coleman 2017, 2). Camping, although a more affordable option, is not equitable either. Furthermore, despite the lower fees for overnight camping, campers tend to skew toward more affluent groups and minority representation among campers is limited. Providing more campsites may not increase access for underserved groups as noted in one study which found 78% of campers were white (Coleman 2017, 8). While campgrounds continue to grow in popularity, they are not an option for everyone, nor do they meet the needs of all potential visitors. The majority of overnight beachgoers choose to stay in hotels (54%) or with friends or family (29%) (Christensen & King 2017, 6). Many campgrounds near the coast are also threatened by coastal erosion and campsites may be lost. For example, South Carlsbad State Beach in North San Diego County, has a number of campsites threatened by erosion. Hotel/Motel/STR Family or Friends Table 3: Availability of Louver Cost Coastal Accommodation Types vs. Demonstrated Demand (Christensen & King M7,, 6) 54% 35% 29% N/A Camping/RV/Boat 10% 62% Visitors' Second Home 4% N/A A shortcoming of many coastal accommodations is the lack of facilities, such as kitchen access or group spaces. An overnight stay typically carries other costly expenses, especially the cost of eating out. Staying in a motel or hotel forces a family to dine out, which increases the cost of their visit. Alternative accommodation types can offer families the ability to cook and also can accommodate larger groups than a traditional hotel rooms, further reducing costs. Overwhelmingly, studies of beachgoers illustrate that low-income and moderate -income families, people of color, and those from inland communities in California simply cannot afford to stay at the coast and therefore do not visit as much as they would like. Many barriers exist, such as the cost associated with travel and the lack of options for large groups or families. The lack of lower cost coastal accommodation in particular—and especially for those who do not wish to camp— creates a significant barrier for many Californians and undermines the aims of access for all. Unequal Access: Protecting Affordable Accommodations Along the California Coast 29 Table 4. Insufficient Number of Louver Cost Coastal Accommodations in 2o16, Coastal Conservancy 13,332 20,301,136 Del Norte: 1,254 Rooms 43566 9.033 15,857,484 Humboldt: 1,373 Rooms 1 t'»a 51$48 EW5 18,754 Mendocino: Coastal Zone * 1 mile inland 1,317 Roams n,976 za3,an 2931 $ 21.361 � 3705n P � Sonoma:t 1e3,000 216 Rooms 9 1,124 Marin: 4�` 96 384 Rooms San Fran CISCO: 259.356 1,V7,425 714W 14.051 0 Rooms 1,805,m s3w 17,645 San Mateo: 0'282 210 Rooms 714,744 t.ae5a56 1s3 xesoot -W Santa Crux: 451 Rooms 770,931 987,160 58,051 Monterey: r 594 Rooms J 110211 4� San Luis Obispo: 1,691 Rooms 278,690 2306,754 Santa Barbara: 439,3915 388 Rooms Ventura: 170 10A57YS 348 Roams Los Angeles: 23M892 547 Rooms Orange: — .- 594 Roans � 313]711 3�� 178.&77 San Diego: 3,965 Roams Figure 5: Lower cost coastal accommodations by county (Coastal Conservancy 2019). Unequal Access: Protecting Affordable Accommodations Along the California Coast 30 At the same time, coastal accommodations also exhibit seasonality in prices; the cost of an overnight stay during the peak season from June to September is significantly higher than other times of the year. Hotels respond to increases in demand by increasing prices as they cannot readily adjust their supply of rooms (Zervas 2016, 1). The result is that while the travel costs associated with a visit to the coast for a family from inland California may not increase during peak season, it is likely the cost to stay overnight increases dramatically should they choose to stay at a hotel—if they can find a room. In order to ensure all Californians have access to California's coast, one must recognize these demographic disparities. Indeed, it is not unreasonable to state that the biggest barriers to coastal access in the State of California are economic barriers: the cost of travel is highest for the families who can least afford to pay. Consequently, the State of California, in partnership with local communities and other stakeholders, needs to address these economic barriers to coastal access if it is committed to ensuring access for all. The state needs measures that promote easier access for low- and moderate -income families and communities who live inland, particularly families who cannot take a daytrip to the coast. Further, to achieve equity in access, California must address these barriers, and increase the volume of affordable accommodations, and identify strategies to decrease the price hikes during peak season. Short -Term Rentals Aid in Providing Lower Cost Accommodations Limits of the Coastal Act and an Alternative Despite the mandate to promote, encourage, and provide affordable opportunities for coastal access, the California Coastal Act does not give the California Coastal Commission the authority to regulate the price of overnight accommodations. They lack oversight of private entities' rates to ensure affordability. In fact, the Coastal Act was amended in 1981 to prohibit the Commission from regulating the cost of overnight accommodations. The amendment expressly states that "the commission shall not [sic]: (1) require that overnight room rentals be fixed at an amount certain for any privately owned and operated hotel, motel, or other similar visitor -serving facility located on either public or private lands; or (2) establish or approve any method for the identification of low or moderate income persons for the purpose of determining eligibility for overnight room rentals in any such facilities." This prohibits the Commission from interfering directly in the coastal accommodation market (Ainsworth 2016, 6) and makes it more challenging to provide lower cost accommodations, which are a necessary part of providing coastal access for all. However, while the Commission lacks regulatory authority over the price of overnight accommodation, it can influence the supply of lodging. Increasing this supply, particularly if it encourages more affordable options, would reduce rates and increase access. Greater supply of affordable accommodations can provide competition and in turn help drive down nightly rates across all accommodation types along the coast. Various government agencies are in the process of making renovations and expansions to existing public options, such as campgrounds and cabins (Conservancy 2019; Christensen & King 2017). While these expansions will help to alleviate some of the burden, they do not address the "desire for privacy, comfort, convenience, or security" that Unequal Access: Protecting Affordable Accommodations Along the California Coast 31 discourages some visitors from staying at lower cost coastal accommodations, such as campsites and hostels (Conservancy 2019, 18). Hotels, motels, and the like on the coast are almost all privately owned—and expensive. In light of the lack of lower cost coastal accommodations and the need to expand access for all, the Commission has recognized the role of short-term rentals in providing distinct amenities and more affordable options (Schwing et al 2018, 2). Despite their historical presence along the California coast, short-term rentals have not been thoroughly evaluated or considered as a means to help meet the state's demand for lower cost accommodations. There are a wide variety of such rentals at a range of costs more suited to the varying needs of consumers and the distinct attributes they may seek to find in an accommodation (Ainsworth 2016,13; Midgett 2017, 64; Choi 2015, 16). The availability of short- term rentals brings a new selection of lodging options that may open up more opportunities for coastal access and reduce barriers in the form of more inexpensive coastal accommodations. They also offer a variety of accommodation types better suited to a wider range of travelers. For example, some groups may wish to cook their own food, which is rarely an option with traditional lodging options, and others may be part of a large group or family and be facing the prohibitive cost of two, three, or even four hotel rooms. Short-term rentals can help meet the needs of these travelers. Short-term rentals (STIRS) are not a new phenomenon. In fact, Californians have been using STRs to vacation at the beach for decades (Ainsworth 2016, 7; Midgett 2017, 55). The planning documents supporting the California Coastal Act mentions vacation home -sharing in 19756. What has changed in recent years is the advent of new technologies to connect consumers and short-term rental operators, thus increasing the ability to short-term renting of residences that would otherwise sit empty (Midgett 2017, 54). This means that families can now more readily rent out a small beach house, with a variety of amenities, that might be another family's vacation home. A resource that would have sat unused now offers Californians the chance of a more affordable vacation. Not only does the wide variety of short-term rental options draw consumers but so does the affordability. Price, as explored in the coastal surveys and research into hotels, is one of the major factors in accommodation selection and the decision to vacation overall (Choi 2015, 2; Christensen & King 2017, 6). Short-term rentals provide a lower cost option, especially for larger groups, families, and those who may not be able to afford hotel accommodations (Ainsworth 2016, 11, 13, 50; Renau 2018, 2; Choi 2015, 2). While there is wide variation in the cost of short- term rentals, the range largely reflects the variety in attributes and size. Rentals, in some studies, were not the lowest priced option 7. However, when considering rentals as an option for families or larger groups, a home sleeping three to four people would, in many cases, be much more affordable than booking two rooms in a hotel'. This also does not take into account other benefits 6 From the California Coastal Plan of 1975, which outlines policy recommendations which became the California Coastal Act. (California Coastal Zone Conservation Commission 1975, 155) https://digitalcommons.law.ggu.edu/cgi/viewcontent. cgi?article=1090&context=caldocs_agencies 7 CBRE found that Airbnb rentals could be more expensive with "the average rate paid for an Airbnb unit over the 12 months ending in September 2015 was $148.42. This is 25% higher than the average hotel rate of $119.11. Part of the reason for higher rates can be attributed to the amenities found at some Airbnb units... 34% of the Airbnb units have 2 or more bedrooms and the rates for units with 2 or more rooms are offered at a considerable premium to single room units" (CBRE 2017, 10). 8 An entire home sleeping three to four people may cost US$60 a night in Paris on Airbnb (the median rate is US$96), making a family stay in the city far more affordable than booking two rooms in a hotel. This could help explain why the occupancy rate for entire homes is in general higher than for private rooms. In these cases, Airbnb is likely bringing into the market some visitors who would not otherwise have been able to afford to make the trip (Coyle et al. 16). Unequal Access: Protecting Affordable Accommodations Along the California Coast 32 of home sharing—such as access to a kitchen, parking space(s), or perhaps even bikes or beach equipment—which impart an additional value to the visitor. Additionally, since many short-term rental services focus on the price -value relationship for the customer, they offer a better value than similarly priced hotels (Choi 2015, 2). The increased affordability and flexibility of short-term rental accommodations offer low- and middle-income visitors more options. Studies have shown that many visitors would not have been able to go on vacation without access to STRs in a variety of locations (Renau 2018, 3; Interian 2016, 132; Coyle 16). Furthermore, given that families were especially sensitive to lodging costs on the California coast and often seek specific attributes and larger spaces, short-term rentals may be particularly crucial in increasing access for that demographic. Short -Term Rentals Can Reduce Accommodation Costs and Increase Diversity of Supply One of the most attractive features of short-term rentals is their value. Travelers are seeking the most "bang for their buck" on vacation, and often, rentals provide that. STRs meet the needs of many travelers for a diverse set of amenities and facilities. As mentioned earlier in this report, STRs provide a better value per visitor due to their increased capacity to host families and large groups and the wide range of amenities they offer visitors, such as parking, kitchen access, gathering spaces, etc. These facilities can help reduce the overall cost of a vacation. The increased popularity of STRs benefits vacationers outright through better value but also by providing increased supply and perhaps competition to hotels, forcing them to lower their prices. In one of the landmark studies on this topic, Zervas examined hotel revenues and the Airbnb market in Texas and found that the impact of STRs appears most clearly in "less aggressive hotel room pricing," which benefits all travelers, including those who do not utilize STRs (Zervas 2016, 1). The impact of STRs may not always negatively impact hotel revenues as STRs can bring in new visitors and help the tourism economy overall. Increasing demand for STRs reflects a desire for diverse options and better value; however, their presence can also indicate more demand for the area overall, which might counteract the reduction in average daily rates for hotels. Aznar found that more rentals correlated with an increase in hotel return on equity, explained by the fact that a high number of rentals indicates an attractive location (Aznar 2017, 147). Coyle also found a positive impact on hotels when examining the London market where increased Airbnb presence actually increased the rate received by hotels (2016, 3). The sharing economy can compete with hotels by offering a different sort of service with a unique structure. STRs pop up throughout cities where there is demand for lodging. They do not require centralization or maintaining inventory, which helps lower costs (Interian 2016, 130). Rentals offer a more sustainable option that requires fewer resources and helps increase access with more diverse accommodation options and better value. STRs also fulfill the desire for sustainable travel options. Furthermore, they capitalize on collaboration and efficient use of property hosts already own, eliminating the high fixed costs faced by hotels (Interian 2016, 130; Aznar 2017, 150). These fixed costs are what force hotels to adjust their prices rather than their supply. In contrast, the sharing economy is an "asset light business model' which can easily scale to meet demand (Blal 2018, 2). This allows short-term rental hosts to capitalize on unused assets and consumers to find a better value in their accommodation options. Unequal Access: Protecting Affordable Accommodations Along the California Coast 33 While the presence of short-term rentals can indicate a particularly attractive location and directly compete with hotels in an area, many rentals lie outside of main hotel districts. A study in Texas found that 70% of Airbnb properties are outside hotel -rich districts, suggesting that rentals not only compete but also compliment hotels, offering more options to travelers (Zervas 2016, 2). In the case of the California coast, this may include areas with great waterfronts and beaches where there has not been sufficient investment to build many accommodations. Several studies have evaluated what makes a short-term rental competition for a hotel. The degree of competitiveness depends on several factors, including the supply of rooms, the neighborhood, character of the structure, and type of sleeping accommodation (CBRE 2016; Aznar 2017, 152). Taking into account these factors, these studies clearly found that in areas with a high number of STRs alongside hotels, rentals compete with hotels. Hotels face greater price pressure in areas with large numbers of rentals in comparison to traditional hotels and where there is growth in the number of rentals available (CBRE 1). As hotels face costs that are fixed in the short run, they need to keep occupancy high even with this level of competition (Neeser 2015, 8). The hotel industry is forced to respond to the presence of STIR with price—rather than inventory—cuts, and so naturally pushes back against the sharing economy. The impact of this newfound competition is not felt evenly throughout the hotel industry. In areas where there is sufficient supply of rooms to meet demand, such as parts of Texas, the hotels most impacted by the presence of short-term rentals are low end, economy options. There is clear segmentation in adverse effects on hotels with lower end hotels the most negatively impacted (Midgett 2017, 65). Zervas discovered this impact, noting the impact on revenue was magnified at lower price tiers (Zervas 2016, 4). This was especially the case when looking at those hotels that did not have conference facilities. However, this is less of a concern on the California coast and in the large cities examined in these studies as business travel is not the primary motive for visitation. While studies note the vulnerability of low-end accommodation providers to competition from short term -rentals, they did not find evidence of exits from the market (Bial 2018; Neeser 2015; Zervas 2016). Budget hotels may lose more revenue comparatively when STRs enter the market, but this does not appear to force them to shut down. On the California coast, the distinct lack of lower cost options and insufficient supply of economy hotels may mitigate the concern of STRs competing with economy hotels. Rather, the presence of STRs on the coast enables more budget conscious visitors to access the coast when they may not have been able to afford it previously. Within the hotel market there is not only differentiation in type of hotel (economy, midscale, upscale, and luxury) but also within consumer preferences. Some consumers may prefer to stay in a hotel and be less open to staying in a STR. Others may like the ambiance of a rental and be early adopters. Considering the aim of increasing access to the coast, it is possible that the competitive effect of the sharing economy would reduce the price of hotels, enabling more options and more access—and also increase the "economic pie" --enabling those who otherwise would not have come to visit the coast (Bial 2018, 2). Further study is needed, however, to understand the effect of the sharing economy in a market quite distinct from major cities and business hubs, such as the California coast. Unequal Access: Protecting Affordable Accommodations Along the California Coast 34 Reducing Price Hikes at Peak Periods The most popular time to visit the California coast is the summer when temperatures soar inland and the allure of the ocean grows. The increase in demand also makes summer the most expensive time to visit due to the dramatic increase in the price of coastal accommodations and the lack of availability. Campsites are often booked up months in advance, and for those who prefer not to camp or cannot secure a campsite, hotels are in short supply and far more expensive than at other times during the year. With the high cost of coastal land, it is not profitable to build low cost hotels or similar lodging. High fixed and startup costs not only restrict the construction of new hotels but also influence the price of hotel rooms at peak times. Hotels cannot increase supply, due to high fixed costs, so they increase rates (Zervas 2016, 22). For consumers, this means that an "economy" hotel may be affordable to some visitors only during the off-season (Ainsworth 2016, 15). Additionally, there are enormous differences in prices for similar accommodations between inland and coastal hotels, including accommodations within the same brand. This increased disparity during peak periods limits the ability of even moderate -income Californians to visit the coast. $280.00 $260.00 $240.00 $220.00 $200.00 $lWoo $160.00 $140.00 $120.00 $100.00 Average Daily Rate Comparison August'17 September october November DecemberJanuary'18 February Mardi '18 April'18 May'18 June '18 July'18 '17 '17 '17 117 '18 —Average Daily Rate Statewide—Avergge Daily Rate Coastal Sample Figure 6: Average Daily Rates (ADRs) for hotels in California M8 (California Hotel and Lodging Association). STRs could drive competition and reduce hotels' ability to dramatically increase rates during peak periods, an effect that would be especially desirable along the coast. During the high season, June to September, hotels are often fully occupied and respond to this increased demand by raising prices. The figure above shows the prices for hotels from February to July in 2018. Coastal zone hotels clearly increased their rates more dramatically in the summer—the peak season—than the statewide average. Given that these hotels are already more expensive than those off the coast, this can then severely hinder travel plans for lower income and working-class families. Unequal Access: Protecting Affordable Accommodations Along the California Coast 35 Unlike hotels, the availability of STRs can offer greater supply of overnight accommodations during peak times without the fixed costs required for owning and maintaining a hotel year-round (Zervas 2016, 2). This is particularly true for "Mom and Pop" STRs where the owners rent out their first and second home as a way to supplement their income. This fluid supply has been shown to mitigate the pricing power and price premiums of hotels during peak demand (CBRE 2017, 13; Zervas 2016, 25). Consumers now have more options due to the greater supply and are able to opt -out from the more expensive hotel rates. In other words, the competition and increased supply provided by STRs can force hotels to charge less in the peak season. This effect, then, can help keep prices down and offer more volume and variety of accommodations, thus increasing access to the coast. Unequal Access: Protecting Affordable Accommodations Along the California Coast 36 I i Equity, Affordability, and Displacement on the Coast a `' Reducing the cost of overnight accommodation has become especially critical as more and more Californians move inland and are therefore forced to stay overnight on the coast when they visit. The California Coastal Act recognized the importance of providing and encouraging lower cost accommodations long before the housing crisis created the acute need seen today. The growth in volume and ease of accessibility of short-term rentals (STRs), rather than precipitating this crisis, is a symptom of the lack of affordability in the coastal region. STRs offer a more affordable lodging solution for those who cannot afford to live near the coast or who have been pushed out of the communities nearest to the coast. The housing crisis is, therefore, not a crisis caused by STRs but rather an affordability crisis stemming from increased income disparities, exorbitant housing costs, and decades -long policies that make it harder to build denser, multi -family residential developments. In California, development does not always respond to demand due to complex zoning laws and a maze of regulatory policies and processes. Furthermore, homeowners in desirable, often high-income communities push back against development and exacerbate the problem. This creates exclusivity and a lack of affordability that pushes low- and middle-income Unequal Access: Protecting Affordable Accommodations Along the California Coast 37 residents to move inland. This creates the acute need for lower cost accommodations along the coast that STRs can help address. The rising popularity of STRs, therefore, is a democratic solution to the crisis—a way for those who have been priced out of the region to still access the coast. Acute Lack of Affordability California faces a particularly acute affordability crisis. In the coastal region, the lack of affordable housing and development is more severe than in the rest of the state. California's most expensive cities cluster along the coast, concentrating economic opportunity where housing is scarcest. Low-income and working-class families cannot afford to live in the coastal region due in large part to the lack of affordable housing supply. As the rent burden has increased, the lack of affordability has expanded to middle-income households as well (Chapple 2016, 88). While low-income households can apply for vouchers and federal aid, middle-income households are especially squeezed. Once, decades ago, these areas possessed a naturally occurring affordable housing stock— housing that the average family could afford without government aid. Today, however, housing prices in the coastal counties have skyrocketed and there is less and less affordable housing every day. Formerly affordable areas have also been converted into upper -middle and upper-class neighborhoods. There is a critical lack of affordability in small California coastal communities, especially in Southern California. Housing prices have greatly outpaced incomes for many Californians, and this, in turn, has placed an undue financial burden on residents that is unsustainable. Faced with unsustainable costs, low- and middle-income residents cannot remain in coastal communities. Presently, housing costs are so high in the Los Angeles area that "households earning up to 115 percent of area median income, or $69,800 per year, are unable to afford local housing costs," while in San Francisco a "household earning $140,000 per year, or 179 percent of area median income" struggles (McKinsey & Company 2019). These high costs largely stem from a shortage of housing supply, which disproportionately impacts the lower and middle-class residents of impacted areas. The most dramatic housing shortages are near powerhouse cities along the coast—Los Angeles and the greater Bay Area. Families priced out of these regions tend to move inland. Rising costs overburden these households with a majority in some areas spending over 30% of their income on housing (Freeman & Schuetz 2016, 227; Marcus & Zuk 2017, 4). The situation in California is such that most nurses, teachers, and service industry workers cannot afford to live where they work. Even a decade ago, before the housing crisis reached present day levels, a majority of residents in coastal counties were unable to afford rents as shown in Figure 7 below. As a result, low and moderate -income households cannot afford to live in the coastal areas of California. This reduces coastal access for all but a small segment of the population, forcing inland residents to travel further and pay expensive lodging costs to enjoy the beach. Unequal Access: Protecting Affordable Accommodations Along the California Coast 38 Households in MSA unable to afford rent Thousand 57% 18 Figure 7: Percent of California residents by metropolitan statistical area unable to afford rent (Quigley 2005). Lack of Development The affordability crisis is largely due to high demand and lack of supply in California's powerhouse cities and the regions surrounding them. As demand has risen, there has not been a corresponding spike in development. Experts argue that in order to reduce prices, California needs to substantially increase housing production (Smith-Heimer 2019, 69; McKinsey 2019). It would be expected that in a market with high rents and high demand, there would be a great deal of construction—and that this construction would be focused on higher density housing (typically multifamily housing rather than detached single-family dwellings). However, many California cities have not built enough housing to meet this demand (Chapple 2016, 90). This is especially problematic as the resulting lack of supply drives up the cost of existing units and reduces options for those in need of affordable housing in a market where price increases have long -since outpaced incomes (Freeman & Schuetz 2016, 224). Low- and moderate -income families can no longer afford existing units or find new ones. As Figure 8 shows below, development, particularly in coastal counties, largely occurs only in the luxury sector with profit only for those who supply high-income households (Chapple 2016, 85). Thus, what little construction there is does little to bring down prices, and units that were once affordable are converted into high-income housing. Unequal Access: Protecting Affordable Accommodations Along the California Coast 39 Estimated 2016 Single Family Home Building Permit Distribution by Household Income Affordability $500,000+ $200,000 - $500,000 $95,000 - $200,000 $54,000 - $96,000 $32,000 - $64,000 1 $0 - $32,000 1 0% 1090 20°0 3000 40°0 5000 50°0 Figure 8: Single family home building permits in California skew towards high-income homes. While there is certainly demand for new housing, potential projects are curtailed by California's especially chaotic and restrictive system, rooted not only in regulatory but also political, economic, and cultural factors (McKinsey & Company 2019). There are various regulatory measures which reduce development and affordable housing stock. Zoning, which often reserves little land for multifamily housing, imposes serious restrictions. However, Mckinsey (2019) identified many units throughout the state that could be developed on vacant land already zoned for multifamily development. The lack of multifamily zoning presents less of a barrier than the ad hoc process of informal barriers which slows down development and imposes various unpredictable costs (Murray & Schuetz 2019). Delays, committees, and various other measures stall the permitting process and increase costs. This creates chaos in the regulatory environment and imposes unnecessary delay and permit costs on developers. Rather than encourage new construction, studies have shown that the regulatory environment severely inhibits, and indeed prohibits, the expansion of much needed affordable housing. In the most expensive cities, regulations and informal controls have reduced construction nearly to zero. The most expensive cities—which are also near the coast—have built very few apartments over the past five years and largely issued no permits for their construction (Murray & Schuetz 2019, 10). These cities benefit from booming economies and strong tax bases and would rather have a higher ratio of jobs to housing to avoid negatives like high public expenses and traffic, and they see less tax revenue from large multifamily projects (Metcalf 2018, 70). The segment of the housing market most lacking development is also most needed: multifamily housing. It would be expected that in areas with expensive land costs, developers would be incentivized to build at higher density—and thus prioritize multi -family rather than single family Unequal Access: Protecting Affordable Accommodations Along the California Coast 40 housing—but that is not happening in California (Murray & Schuetz 2019, 3). The market for housing has broken down, and the development of apartments does not seem to be correlated with rents. High rents should motivate high levels of development, but in California that is not the case. The lack of development, especially of high-density development, keeps rents high and prioritizes the construction of expensive, single-family housing aimed at the wealthiest homeowners. Multi -family units increase density and lower costs in the face of high demand, yet these projects face strong opposition. As a result, affordable housing tends to be built where land is cheap and political opposition is weak. These areas—often outside economic opportunity zones—limit the ability of low-income families to move to opportunity and lead to the construction of housing in outer lying suburbs (Freeman & Schuetz 2016, 228; Chapple 2016, 90). Opposition to multifamily housing stems not only from the lack of profitability but also from the difference between potential renters and existing homeowners. In California, particularly in the coastal zone, owners tend to be older, wealthier, and whiter than potential renters (Reineman 2017; Murray & Schuetz 2019; Bliss 2019). When considering designated or subsidized affordable housing in addition to market -rate housing, this difference is all the more apparent. Opposition to multi -family (and especially designated affordable) housing in expensive cities and the coastal zone preserves the exclusivity of access to the wealth of resources there, including easy access to the coast (Owens 2019, 499 518). These actions undermine the aims of access for all outlined in the California Coastal Act and help create the acute need for affordable lodging in these elite areas. Restrictive Housing Policies Many homeowners in more affluent parts of the coastal region oppose additional housing development, specifically through restrictive zoning rules that limit multi -family and other affordable housing options. Similarly, restrictive policies target short-term rentals and keep the price of coastal accommodations high. Reineman's (2017) work demonstrated that the immediate coastal zone is already wealthy and white and existing economic pressures have driven coastal counties toward further homogeneity. By reducing the affordable housing stock these areas are kept expensive and exclusive as low- and middle-income households are forced out. The Costs of Restrictive Regulations Restrictive regulations result in less development, especially affordable and multi -family development. This drives up home prices and forces those of middle -and low -incomes to move. As in many other states, regulation and zoning are left to local municipalities in California and even sometimes directly decided by the voters via referendum (Metcalf 2018, 67). Because homeowners often make up the voting base, governments frequently adopt laws that reflect their preferences over those of renters and other less politically connected groups (Murray & Schuetz 2016, 13; Metcalf 2018, 70). Advocates of up -zoning and increasing density have not managed to clearly address how more housing in an expensive area helps everyone. The lack of consistency in local zoning regulations impose costs on developers who must negotiate a confusing labyrinth of rules and restrictions. The costs associated with this process are passed on to renters or buyers and increase the already high housing prices. Quigley (2005, 327) Unequal Access: Protecting Affordable Accommodations Along the California Coast 41 examined the responsiveness of housing stock to demand and the construction of new housing and found that both are lower in highly regulated cities. This finding was especially pronounced in the rental market. This means that in one of the fastest growing areas in the country—and an economic powerhouse that attracts workers seeking opportunities—there are fundamental barriers to development which keeps costs high. Furthermore, the promise of property taxes encourages local governments to prioritize single-family over multi -family development (Freeman & Schuetz 2016, 218). Additionally, cities in California glean a share of sales tax. This creates another incentive in favor of retail and upper-class housing over more dense, affordable options (Quigley year, 323). Thus, affordable housing tends to be constructed in less -desirable, outer lying suburbs, further from economic opportunity (Freeman & Schuetz 2016, 228; Chapple 2016, 90). Such is the case in the coastal region where the lack of supply in comparison to demand has led the cost of housing to soar. The regulatory chaos, incentives against affordable housing, high level of income inequality, and local opposition to eliminating restrictive zoning rules are the foundational pillars of California's affordability crisis. Combined, these barriers precipitate a crisis in California far greater than what STRs might impact. Displacement Inland Reduces Coastal Access The lack of housing options for low- and middle-income families in the coastal region of California has forced many of these families to move inland. When residents are displaced to the more affordable areas inland, it results in inequitable access to not only the benefits of living near a strong city economy but also inequitable access to the California coast. Unequal access to housing exacerbates the disparities in coastal access already discussed in this paper. Moving inland also means that for Californians of moderate incomes to visit the coast, they will likely need affordable accommodations. With the loss of economy options and overall lack of supply of traditional lower cost coastal accommodation, an acute need arises for alternative forms of lodging to meet this growing need. Table 5: Median Income and Home Price Comparison, Coastal and Inland (U.S. Census Bureau and Zillow Data) Coastal Sample $83,995.00 $1,059,306.25 1261% Inland Sample $58,082.83 $338,021.86 582% Unequal Access: Protecting Affordable Accommodations Along the California Coast 42 As previously stated, many households are forced to move inland because their incomes have not kept up with the increase in housing prices. As Table 5 shows, the median listing price of a home in the coastal region is over 12.5 times the median income for that region. Inland, the median listing price is under 6 times the median income. The relative affordability of inland communities attracts families priced out of the markets in the coastal zone. SACRAMENTO Oauis 51. Marone SANTA ROSA VbtBYllle gvhrwrt PArk Napa Petaluma Nevofo Fairridld SANI Figure g: Displacement from the Bay Area (Berkeley News 2018). Elk C_ OSIS LC1d. W STOCKTON N People Who Moved: a 1200 240--400 440-604 640-800 S40`1coo 10O —1200 1200-1600 1600+ Given that the modern economy is primarily service -driven, pushing service workers out of middle-class housing markets is concerning. This is especially true in the coastal region where the disparity in incomes is so high. These workers—both low- and middle-income—simply cannot earn enough to remain in the strained housing market near the coast. Forcing these households inland increases their travel costs, especially if they choose to stay overnight on the coast. Short-term rentals can help alleviate some of this burden both for visitors and those who wish to fight to remain living in the coastal region amid skyrocketing prices. Some families may find themselves able to alleviate some of these pressures through STRs by renting their homes part-time to visitors. In this way, some residents may be able to afford to remain in their neighborhoods despite increasing costs. The sharing economy may offer less -wealthy residents of coastal communities a way to continue living there by shifting some of the economic burdens of ownership Qefferson- Jones 2015, 558). In markets such as the coast, where the costs of living are increasingly high, the supplemental income from short-term rentals can offset expenses and allow residents to remain (Horn 2017, 14; McNamara 2015, 169). This could also help owners afford maintenance or Unequal Access: Protecting Affordable Accommodations Along the California Coast 43 renovations, which would mean that short term -rentals may increase property value in the long run Qefferson-Jones 2015, 573). These expensive real estate markets are particularly suited to short term rentals as most areas with high hotel premiums also have high land costs (CBRE 2017, 11). Being able to rent out their home might help some owners retain residence in the coastal zone or to afford a vacation home when they otherwise could not. This increases their access to the coast and offers a method of access for renters. This model of the sharing economy focuses on the small homeowners who rent out extra space or a sporadically used vacation home. These "Mom and Pop" rentals sometimes make up the majority of operators. Airbnb notes that 95% of all hosts have one listing (CBRE 2017, 9). While some short-term rental operators may have excess housing, which is marketable—such as a family vacation rental—many are simply renting out extra rooms and spare space in their home (Lee 2016, 243). This extra revenue has many uses, especially in an expensive area like coastal California. As mentioned, the income enables hosts to live where they might otherwise not be able to afford, but it may also help cover groceries or pay for college (McNamara 2015,155; Wachsmuth & Weissler 2015, 1148). The costs of living on the coast are high and pose a distinct barrier to access. Allowing, and indeed promoting, STRs on the coast would likely simultaneously result in some residents being able to remain when they would otherwise be forced out by the high cost of living or housing scarcity and in increased options and affordability for visitors. The benefit of STRs on the coast comes from increased access for those that cannot afford to live there—the majority of Californians—so that the coastal zone becomes not an exclusive enclave of the wealthy but a shared resource available to and accessible for all. The Housing Crisis and Coastal Affordability The situation in many coastal communities is one of profound neighborhood changes—a pushing out of low -and middle-income residents as more wealth concentrates in the region. This change in neighborhoods appears to be a form of gentrification: the influx of middle- and upper-class residents which revitalize a neighborhood at the expense of its lower-income residents. However, displacement from coastal cities is not necessarily gentrification in the classical sense but rather a function of the rent burden placed on low- and moderate -income households (Chapple 2016, 86). As incomes in an area grow and market -rate housing is built, the value of those formerly affordable homes rises such that residents are pushed out or cannot afford to move in. This severe mismatch between housing costs and incomes displaces low-income communities, especially communities of color (Marcus & Zuk 2017, 3). The demand for housing in the coastal region displaces less wealthy residents who cannot keep paying rising rents nor find similar accommodations. As discussed, this has pushed many residents inland --away from the striving economies in coastal cities and away from easy coastal access. This situation is not created by short-term rentals but rather by the high demand and lack of sufficient affordable development. Many critics of STRs claim that the presence of rentals can lead to gentrification; however, in the context of the coastal region of California, this argument is profoundly flawed. Unequal Access: Protecting Affordable Accommodations Along the California Coast 44 The argument that short-term rentals induce gentrification applies less in the coastal region of California because most communities have already gentrified. For rentals to promote gentrification, the presence of STRs must (a) offer far more revenue than the traditional housing market and (b) induce a high degree of displacement and neighborhood change that would not otherwise occur. In the coastal areas of California, this displacement occurs from the broken housing market with or without short-term rentals. In fact, Chapple (2016, 85) argues that the potential revenue gains in these areas has "long since been recaptured," and that gentrification has already taken place. Indeed, in looking at cities like San Francisco, price pressures are so extreme that the entire city is expensive (Freeman & Schuetz 2016, 219). Nearby in San Mateo County, one study (Marcus & Zuk 2017) found that 33% of households had left San Mateo County, largely for the Central Valley or further out in East Bay. In their survey, of the 20% that remained in their same neighborhood, many moved into crowded conditions (Marcus & Zuk 2017, 6). In order to find housing comparable or superior to what they had been forced to leave, residents moved to areas with fewer services and away from economic opportunity. In these areas, the economic growth, income disparity, and housing shortage engineered a situation where displacement and gentrification rapidly ensued. On the coast, there are simply fewer affordable areas left. In these areas, it is hard to argue that STRs will displace residents of lesser means when the housing market continues to displace most of them. Coastal communities, already expensive compared to those inland, lack the affordable housing that critics argue is threatened by STRs. In a classic case of gentrification, STRs would bring in an influx of investment which would transform a disadvantaged community. In California, few of these communities remain in the coastal region as formerly blighted areas have long since been transformed by the housing crisis. Rather than protecting affordability and the character of low-income neighborhoods, what those who wish to ban STRs perceive as "threatened" is the character of already expensive, exclusive coastal areas. Without affordable lodging options, former residents of coastal communities face an undue and unjust burden in visiting the coast. Much like the arguments against affordable housing, residents seek to protect their exclusive access to the coast and see increased access for a wider swath of Californians as a threat. Unequal Access: Protecting Affordable Accommodations Along the California Coast 45 -W AN, w ii`..- . 4W _ .� � t - rz�', Resilience "Resilience is the ability of an urban asset, location and/or sys- tem to provide predictable performance .,. under a wide range of circumstances" Jeb Brugman, Financing the Resilient City (2009), P. 217 9 The housing crisis is only one demand on local governments and the State of California's limited resources. Climate change will adversely impact communities across the state with coastal communities under threat from sea level rise and possibly other threats, such as mudslides and fires. Local communities across California are now engaged in the process of planning for sea level rise and other hazards exacerbated by climate change. Although there is currently a strong debate about the nature of these adaptation strategies, often couched in terms of green (emphasizing coastal restoration or retreat) versus gray (armoring), all of these adaptation strategies have one thing in common: they are all extremely expensive. For example, a recent study published in the Annals of the New York Academy of Science (Aerts et al. 2018) estimated that Los Angeles County alone will face climate change related costs of between $4.3 and $6.4 billion by 2100. A study in Oceanside, CA estimated coastal adaptation costs of over $250 million by 2040. Costs for other coastal cities will be similarly high. 9 Brugman, Jeb, Financing the Resilient City, Environment and Urbanization, V. 24(1): 215-232, p. 217. Unequal Access: Protecting Affordable Accommodations Along the California Coast 46 These coastal communities will have to come up with the money for adaptation. Many of the large capital costs of these projects will likely be financed by various state and local bond issuances (Resources Legacy Fund, 2018). However, like any loan, bonds simply shift costs forward; cities and other government and private entities will ultimately need to raise large sums of money in order to pay for resilience. In many cases, cities will either be expected to cost share or will be expected to take over certain aspects of the project (e.g., maintenance). This will all be on top of the services that cities currently provide and which are already underfunded in many areas. Therefore, cities will need to find new revenue sources, and increasing taxes is not only unpopular but extremely difficult to legislate. Although cities can and should expect help from the State of California and U.S. government agencies, these sources of funds have been in decline as revealed when examining the percentage of the average California's city government total budget. In 1974-75, Federal and State Grants accounted for 21 % of a city's budget; today that figure is less than 10% on average10 (Coleman 2016). Much of this money is also tied to particular programs and projects, so that city governments have little say or discretion over how the money is spent. Discretionary tionary Revenues and Spending Typical Fall Service City qoo� - Property Fire Tax 70% Sales & Use Tax oliCe + Frar�hfaes 40% utility 30% .i User Tax Parks&Rec $usnLic Tax Library 20'x. Hotel Tax Streets 10% - Planning Other Other o% Revenues Exenditures Figure so: Revenue (taxes and fees) vs. spending for average California city. 10 Coleman, Michael, A Primer on California City Revenues, Part Two: Major City Revenues, Western City, December 1, 2016 http://www.westerncity.com/article/primer-california-city-revenues-part-two-major-city-revenues Unequal Access: Protecting Affordable Accommodations Along the California Coast 47 Sales taxes, another significant source of local revenue, have also failed to keep up with overall economic activity in California. In California, as in many states, sales taxes only apply to goods and not services. In the last 30 years, consumers' spending patterns have shifted toward more services and fewer goods, resulting in slower rates of growth for sales taxes. Moreover, since wealthier households tend to spend a greater proportion of their income on services than poorer households, the failure to tax services makes the sales tax more regressive (California Budget Center 2011). With growing populations already straining cities revenue and increasing demand on public services, the relative decline in sales tax revenues further reduces cities' discretionary budgets. The lack of funds curtails the potential cash flow for necessary resiliency projects. The transient occupancy taxes generated by STRs can help make up for the slower growth in sales tax revenues. Where Do California Cities Get Their Revenues? While city governments obtain some of their budget from the state and federal governments, the primary source of revenue is their tax base. Figure 10 in the previous section presents data on revenue versus spending for the average California city (which can vary from city to city). The majority of most city budgets are dedicated to public safety, such as fire and police departments. These services are necessary and only increase in need as California populations grow and natural disasters plague the state. The majority of the remaining budget goes to other traditional city services, such as parks and recreation, planning, street services, libraries, etc. On the government revenue side, property and sales taxes still make up over half of a typical city's general fund revenues. However, as noted above, sales taxes have failed to keep up with economic growth since services are not taxed and have become an increasing share of California consumer's spending. Sales taxes are regressive; even with food and rent excluded from sales taxes, lower income households pay a higher percentage of their income than wealthier households on sales taxes. Outside of sales taxes, municipalities in California rely on a combination of other tax sources. One such additional revenue stream, Utility User Taxes (UUTs), have become more important as a source of general funds for cities, representing, on average, 15% of general fund revenues for cities that have a UUT. These are taxes on a consumers' usage of utility services, such as electricity, sewage, water, sanitation, and cable television. Local governments assess UUTs based on the consumer's usage of the service. Business licenses and fees (e.g., recreational fees for a swimming pool) account for just under 10% of a typical California city budget and are generally used to partially offset corresponding city services. Transient Occupancy Taxes (TOT), also known as hotel taxes, representjust over 10% of taxes for the average city. These taxes are primarily paid by visitors to the area, rather than the residents, making them more popular. While TOT represents a small part of the average city's revenue, coastal cities with significant visitation can have much higher TOT revenues. These taxes can be a crucial revenue source useful for offsetting the cost of tourist services in addition to the general public services. Unequal Access: Protecting Affordable Accommodations Along the California Coast 48 Increasing City Revenues to Pay for Resilience Increasing local resilience to climate change will require cities to raise more revenues. Raising revenues from each of these sources poses different challenges. The primary source of municipal government revenues is through the various tax sources. Measures in California law restrict the ability of jurisdictions to alter their taxes even when the needs for revenue are critical. Adapting to climate change and promoting climate change resistance poses one such critical circumstance, especially for those communities most adversely impacted by rising sea levels. Without a new revenue source, or expanding an existing one, these governments will likely lack the revenue to either directly pay for resilience or to pay back future bond issuances. The discussion below highlights the major sources of revenue for California's cities, each with their own limitations, and also discusses the prospect of Transient Occupancy Taxes as a revenue stream. Property Taxes In California, unlike many other states, property taxes, though collected at the county level, are distributed via the State Board of Equalization back to local governments. While property taxes constitute a significant portion of city and county revenues, the ability to increase property taxes is limited. In 1996, California voters approved Proposition 218, "The Right to Vote on Taxes Act," which "substantially expanded restrictions on local government revenue -raising including taxes, assessments and property related fees" (League of California Cities 2019). Furthermore, these property tax increases must go to support "the acquisition or improvement of real property" (California City Finance, 2019). This means that the uses of collected taxes are limited to the state's purchase of property or improvements to structures on government property. The definition of real property includes various trees and mines but does not include waterways or the coast, which would assist in its use for necessary resiliency work on the coastline. Prop 213 requires a two-thirds majority for all property tax supported bond measures, except for school districts, which have a lower threshold of 55%. The two-thirds supermajority requirement put a damper on bond measures, and less than half of bond measures requiring a two-thirds vote have passed since 2001, whereas 84% of measures requiring a 55% measure (for schools) have passed. Since the 55% measures include schools, their high success rate may also be related to continued local support for schools. Overall, the limitations on property taxes have reduced the state's ability to collect them and thereby reduced the budget. In addition to property tax levies to support school or other bond issues, California law also supports a number of special property tax districts, including independent financing districts (IFDs) which can issue additional fees (e.g., Mello Roos) or property tax levies generally on new or substantially improved property. For protection of existing property, the state has created geological hazard abatement districts (GHAD)s. A GHAD comprises an independent agency focused on the abatement and prevention of geological hazards in the area for which it was created. They have defined boundaries of that area and obtain their funding within it. A number of GHADs have been created across the state to help homeowners and other property owners protect their property against geologic hazards, such as earthquakes or coastal erosion (e.g., in Malibu). One potential disadvantage of GHADs on the coast, however, is their focus on protection of private property over other uses. For example, a GHAD may favor coastal armoring over other adaptation scenarios since armoring will protect coastal property. However, this armoring may also diminish coastal recreation if already eroding beaches erode further. Unequal Access: Protecting Affordable Accommodations Along the California Coast 49 Sales Taxes As discussed, another primary revenue source for cities are sales taxes. Sales tax revenues largely do not meet the needs of California cities, and measures to expand them have a low success rate. Under Bradley Burns Uniform Local Sales and Use Tax legislation, California allocated 1 % of sales subject to sales taxes to incorporated cities or counties with another 0.25% allocated for local transportation, which are typically allocated to counties (California State Auditor 2017, 8). California law allows local jurisdictions to add on sales taxes at the city or county level to support other services. Since 2001, many measures have been passed to add-on sales taxes for local transportation; many of these were extensions of already existing sales taxes that needed to be ratified. However, if one examines sales tax increases not allocated to transportation, the success rate for new sales tax measures in California since 2001 has been less than 50%. The most successful other tax measures have involved libraries, street/roads, and public safety, but the majority of these ballot measures have failed (Ca City Finance 2019. 11-14). The lower likelihood of passing a sales tax increase diminishes the ability of municipalities to use sales tax as a source for their much-needed resiliency budgets. As noted above, sales taxes have two other problems. First, they are regressive—lower income houses pay a higher percentage of their income in sales taxes since they spend more of their income on items subject to sales taxes. This creates an equity problem as it is unjust for those with fewer means to pay more for public services. Second, sales tax revenues in California have failed to keep up with economic growth since services (e.g., haircuts) are not subject to sales taxes and services have become a larger part of California consumers' budgets. Utility Users Taxes Taxes based on a consumer's use of a service, Utility Users Taxes (UUTs), have increasingly yielded important revenue streams. However, utilities will be especially stressed by climate change, and taxes or utility rates will have to increase substantially to pay to make key infrastructure more resilient. Climate change will increase the need for certain services, such as electricity (for uses such as air conditioning), and likely damage some existing systems, necessitating repair. UUTs are typically levied by cities on utilities such as electricity, water and telephone use. While voters have generally approved continuing existing UUTs, most ballot initiatives attempting to increase existing UUTs have failed in California since 2001 (CA City Fin 2019). Additionally, local phone calls were traditionally a significant source of UUT revenue, but the advent of new technologies in telecommunication has made charges for local telephone calls a relic of the past. To respond to these changes, many cities have revised/modernized UUTs, however the majority of these ballot measures resulted in reductions in UUT fees. Climate change will have a significant impact on many utilities as cities will be required to modernize, harden, and relocate many power, gas, electric, water, and telecommunications lines. Voters facing the prospect of power outages or loss of other valuable utilities may be willing to approve UUTs targeted at improving utility infrastructure. Consequently, it's unlikely that UUT revenues can be used to fund resilience projects, other than supporting and moving existing infrastructure, requiring funding from other sources for other resilience tasks. Unequal Access: Protecting Affordable Accommodations Along the California Coast 50 Business Licenses and Fees These fees are generally collected for services rendered by a city or county and may include licenses for operating businesses within the community, recreational fees for community services such as a local swimming pool, and parking fees. These licenses and fees are generally subject to a vote by a city council or county Board of Supervisors. Parking fees may be used to support resilience projects in cases where parking lots/structures are threatened by coastal erosion. Transient Occupancy Taxes In looking for potential revenue sources to fund resiliency projects, cities (especially those on the coast) could look toward Transient Occupancy Taxes (TOTS). Sometimes referred to as hotel taxes, TOTS are levied on hotels and short-term rentals of less than 30 days. Under California law, cities and counties (for hotels and rentals in unincorporated areas) may levy TOTS with a two-thirds vote. According to the California State Controller's Office", the vast majority (over 90%) of cities and counties have some sort of TOT. The most common rate is 10%, but quite a few popular destinations in California have significantly higher rates that allow them to capitalize on the demand for tourism in the area. For example, Anaheim has the highest rate (15%), while Los Angeles, San Francisco, and a few other high -demand cities charge 14%. Although TOTS require a two-thirds vote, these taxes are often popular since non-residents generally pay for them and they are often seen as a mechanism for reimbursing the costs of hosting visitors (e.g., public safety, beach recreation). Since 2001, the majority of TOT measures have passed despite the requirement of a two-thirds vote. One potential issue with TOTS is non-compliance. STRs offer a potentially lucrative source of TOTS if they are brought into compliance while still encouraging the existence of the rental. As discussed in the next section, TOTS from STRs have increased substantially as STRs have become increasingly popular and as more have been brought into compliance. Transient Occupancy Taxes from Short -Term Rentals Easier access to STRs through new platforms has not only increased access to popular destinations, such as the California coast, but also the potential to greatly increase revenues in these areas. In the City of Los Angeles, for example, revenue from short-term rental transient occupancy taxes go to the city's general fund and help pay for community services. However, in order to capitalize on this possibility, cities need to find a way to regulate STRs without imposing high costs on hosts. These costs, such as the murky regulatory environment or high permit fees mentioned above, can impose barriers to entry. This reduces the number of rentals the cities can collect taxes from, discourages small "Mom and Pop" hosts who cannot pay the high fees, and may force some STRs to continue without permits. Table 6 below summarizes the revenue sources available to local governments in California, along with the typical use for any tax /fee increases, the political hurdles necessary for an increase, and the potential advantages and disadvantages of each tax/fee. 11 California Cities Transient Occupancy Tax Revenue, Tax Rate, and Effective Date, Fiscal Year 2016-2017 https://sco. ca.gov/Files-ARD-Local/LocRep/2016-17%2OCities%20TOT.pdf Unequal Access: Protecting Affordable Accommodations Along the California Coast 51 Table 6: Examination of Revenue Sources for California Cities Financing Resilience for Local Communities To return to the quote at the beginning of this section, resilience can be defined as "the ability of an urban asset, location and/ or system to provide predictable performance ... under a wide range of circumstances" (Brugman, 2009). Facing the threat of climate change, California cities need to increase their ability to fund and execute resilience. In all likelihood, climate change adaptation will require local governments to increase taxes and fees in a wide variety of ways, including property and sales tax increases as well as increases in utility rates or user fees to pay for infrastructure improvements. In California, cities are limited in terms of their ability to raise revenues between the taxes and fees discussed above. As indicated in Table 6 above, each type of tax/fee has advantages and disadvantages. TOTS offer one of the most feasible methods of increasing taxes, particularly for Unequal Access: Protecting Affordable Accommodations Along the California Coast 52 Requires Ballot Mea- Involves entire Raises Housing Property Tax Levy School Districts sure: 2/3 for general community Costs levy; 55% for schools I Special Assess- Protection against Requires Formation Coastal Property Owners may have GHADs emphasize ment District (e.g., Geological Haz- of District and Ap- higher i her Ability to property protection GHAD, IFD) ards proval of Special Tax over other uses Revenues have Lower income Sales Tax Transportation lagged economic Spread evenly groups pay higher growth; Requires 2/3 across consumers percentage (Re - Ballot Measure gressive tax) Often used to Academic Studies Low Income Developer Fee Housing. Environ- Requires New support Affordable indicate these fees mental Mitigation Development Housing raise the cost of housing in CA General Fund, Requires 2/3 Ballot Can be used to Most increase mea- Utility/User Fees Utility Improve Measure support utility sures have failed ment resilience Business Licenses Providing Ser- vices, General Requires City Counsel Helps offset cost of May be regressive. Limited ability to and Fees Revenue (or similar) Vote public services raise revenue Requires 2/3 Ballot Increased Coastal Requires new hotel construction Parks and Rec- Transient rection, General Occupancy Tax Measure or Increas- Access correlated or lowering STR Fund Revenue I ing Hotels/ STRs with higher TOTS restrictions Financing Resilience for Local Communities To return to the quote at the beginning of this section, resilience can be defined as "the ability of an urban asset, location and/ or system to provide predictable performance ... under a wide range of circumstances" (Brugman, 2009). Facing the threat of climate change, California cities need to increase their ability to fund and execute resilience. In all likelihood, climate change adaptation will require local governments to increase taxes and fees in a wide variety of ways, including property and sales tax increases as well as increases in utility rates or user fees to pay for infrastructure improvements. In California, cities are limited in terms of their ability to raise revenues between the taxes and fees discussed above. As indicated in Table 6 above, each type of tax/fee has advantages and disadvantages. TOTS offer one of the most feasible methods of increasing taxes, particularly for Unequal Access: Protecting Affordable Accommodations Along the California Coast 52 services oriented for visitors, such as maintenance of beaches and other public parks. Additionally, the potential to increase TOT revenue exists in the prospect of bringing existing STRs into compliance and promoting better regulations. For communities on the California coast, TOTS can provide needed revenues to offset the cost of serving visitors (e.g., public safety) as well as help preserve beaches and other sensitive coastal habitats. In addition to increasing TOT rates, many local communities have the opportunity to increase TOT revenue by allowing for more STRs or by bringing existing STRs into compliance (by paying TOTS). This would allow coastal communities to improve their resilience without burdening their populations and simultaneously increase coastal access for visitors by helping legitimize STRs as a source for affordable accommodations along the coast. Table 7: Potential for City Revenue Sources to Finance Climate Resilience Property Tax Levy Special Assessment District (e.g., GHAD, IFD) Sales Tax Developer Fee Utility/User Fees Business Licenses and Fees Transient Occupancy Tax Can help support property protecting infrastructure, especially for schools. Can help support protection of private property, in particular shoreline protection. Can help support transportation infrastructure. Can make new developments more resilient. Can help support utility infrastructure resilience. Can help support local programs. Parking fees can help offset threats to parking. Can help support beaches, parks, and visitor supporting services. Unequal Access: Protecting Affordable Accommodations Along the California Coast 53 Y7? Case Studies— The Potential for Affordability on the Coast California's coast is available to all, which makes California's coastal communities some of the most in -demand real estate in the country. California's coastal cities tout beachfronts, plentiful coastal access, and offer a calm respite from the larger cities—or at least an escape from the Inland Empire's heat. Unfortunately, many of California's coastal communities have become unaffordable. Not everyone in California can afford to live in, or even visit, them. This section examines a few case studies of different coastal communities in California. The first case study examines North San Diego County, specifically the Cities of Del Mar, Solana Beach, Encinitas, Carlsbad, and Oceanside. This region showcases how affluent communities not only discourage construction of affordable housing and lodging but also have the most restrictive regulations on short-term rentals. Data from a summer 2018 sample of STRs demonstrates that Unequal Access: Protecting Affordable Accommodations Along the California Coast 54 wealthier areas—in particular Del Mar—impose more restrictions and a higher degree of exclusivity in lodging, keeping costs high and inaccessible to most Californians. Unlike North San Diego County, the second case study examines the different regulatory environments for STRs in Pismo Beach and the City of Santa Barbara. While STRs are legal in Pismo Beach, they are expensive to operate due to the burden of high permitting fees. Additionally, Santa Barbara's near ban on STRs demonstrates how restrictive regulations increase the cost of accommodations and forces budget conscious visitors away from the coast. In all of the sample cities, coastal access is limited due to the cost of housing, cost of overnight accommodations, and acute lack of supply for lodging in the high season. However, there are differences in the way each of these communities have approached the issue of providing coastal access via increased affordability and lodging supply. These differences contribute to dramatic disparities in affordability, which could be addressed through policy changes. North San Diego County The communities in North San Diego County line a popular stretch of the California coast and offer access to prime beaches, such as Del Mar City Beach, Carlsbad State Beach, Torrey Pines, Moonlight, Fletcher Cove, Oceanside, and many others. These seaside towns offer smaller communities and a well-maintained coastline often amenable to families. However, due to the lack of affordable real estate and accommodation, many Californians cannot afford to live in or visit these towns. Despite many similarities and close proximity, the five sample cities differ greatly in their degree of affordable accessibility as well as in demographic makeup. As Reineman's (2017) work predicts, these communities are predominantly comprised of individuals who are wealthy, white, and typically older than the median age for California. The population of Del Mar is the oldest, wealthiest, and least diverse of the focus cities. On the other hand, Oceanside is much less expensive and more diverse. Table 8: Demographics in North San Diego County Communities, SANDAG data 2o18 Del Mar Solana Beach Encinitas Carlsbad Oceanside $ 129,880.00 !1:111"", 60% $ 111,476.00 44.2 1 47% $ 106,960.00 41.9 63% $ 107,605.00 1 41 55% $ 67,754.00 36.8 53% Unequal Access: Protecting Affordable Accommodations Along the California Coast 55 San Diego Association of Governments (SANDAG) statistics indicate that Del Mar is the least diverse with over 85% white residents, the most affluent, and also the oldest by median age. Encinitas and Solana Beach are also predominantly white and older. All three coastal communities are significantly less diverse than the rest of California overall. Homogeneity along racial and socioeconomic lines is a trend along the coast; the Californians with the easiest access to the coast by virtue of their residence tend to be white, affluent, and older (Reineman 2017). This is especially evident in Del Mar. While North Coastal San Diego adheres to this trend, and the lack of access overall, Oceanside is an interesting outlier. The city is much more diverse than the others in the study. Additionally, housing is more affordable. Oceanside demonstrates that more affordability is possible, especially in terms of affordable housing and accommodation, if regulations are in place to promote supply and affordability. 140,000 120,000 100,000 80,0()0 60,000 40,000 20,000 0 Median Household Income in North San Diego Del Mar* Solana Beach Encinitas Carlsbad Oceanside mMedian;ncome —CA Nationwide Figure ii: Median household income in North Coastal San Diego is higher than the statewide and national average. Unequal Access: Protecting Affordable Accommodations Along the California Coast 56 Affordability on the North Coast Housing affordability is especially important because coastal communities are not only more affluent on average than the rest of the state but also more expensive to live in. The housing shortage—and in particular the lack of affordable housing—is more severe in coastal cities. Simply put, a low-income household cannot afford to live in most of these communities due to a severe lack of more affordable options and multi -family housing. Typically, this lack of affordability creates an enclave of wealthier residents on the coasts and reduces access for lower-income households as they are pushed further inland. While the vacancy rates, according to a 2018 SANDAG assessment, are relatively high, the vacant homes are not affordable for most Californians. Furthermore, many homes in Coastal North San Diego County are second homes which sit unused for much of the year. In most of the small coastal communities, median home prices and rent are much more expensive than the average for San Diego County. The notable exception is Oceanside. On the other extreme is Del Mar with a median home price nearly 3x the rest of the county. The high cost of living in these communities creates an especially acute need for affordable housing. The lack of affordable housing has been addressed in the San Diego Area Governments (SANDAG) housing needs assessment. This study helps planners determine how much housing needs to be constructed and to target that housing for specific income brackets: Very Low, Low, Moderate, and Above Moderate. The 2017 assessment found that the coastal communities in this case study alone need 5,521 homes for Very Low- and Low -Income households. The diversity in affordability, demographics, and housing needs between these coastal communities allows for comparison. Del Mar, for example, would be expected to have less ease of coastal access than Oceanside and more restrictive attitudes in local politics. 300% 280% 260% 240% 220% 200% 180% 160% 140% 120% 100% 80% Housing Cost in Coastal Cities Compared to San Diego County Del Mar Solana Beach Encinitas Carlsbad Oceanside MMedian Home Price as %of County MMedian One Bedroom Rent %of County Median Two Bedroom Rent % County —County Median Figure 12: Housing costs in most coastal communities are far higher than the county as shown by percentages. Unequal Access: Protecting Affordable Accommodations Along the California Coast 57 Affordable Accommodations Finding affordable overnight accommodations in North San Diego coastal communities is nearly impossible during the summer high season. The meager number of affordable rooms does not begin to meet the needs of the surrounding population. The Coastal Conservancy defines Lower Cost Coastal Accommodations (LCCAs) as those with an average daily rate (ADR) 75% or less of the state average. For July 2019 (high season) this is estimated at $140.70 per night. A prospective visitor might struggle to find such options in the coastal zone. Some cities, such as Del Mar, appear to have no affordable options at all. Del Mar, despite its popularity as a destination, offers only six hotels—with only 355 rooms between them—a scarcity which helps drive up prices (Schwing 2018, 2). Furthermore, hotels with rates less than $140 in July typically offer that rate for a single full bed—hardly enough room for a family. Although camping can provide a more affordable alternative for these families, there are limited options. In many of the coastal communities there are no tent camping sites, only RV parks. This imposes high equipment costs if visitors do not own an RV. In Carlsbad and Encinitas, there are State Beaches which offer tent camping, but these few sites are booked months in advance. This might be particularly problematic for a working-class family with less certainty of the stability of their financial situation and less predictability in time off. Furthermore, camping is not an option for all families as it has high equipment costs (Christensen & King 2017; Coleman 2016). Due to the barriers to entry and the limited availability, many families would not be able to turn to camping in the North San Diego Coastal area as an affordable accommodation option. As discussed, the coast has lost many of its affordable options since 1989. The coastal region's tourism is especially seasonal, proving a challenge to the hotel business. Zervas (2016) discussed this issue, explaining that hotels face high fixed costs. This makes it especially difficult to adjust their supply of rooms to match demand—to scale up in the summer high season and scale down in the cooler months. As the cost of land on the coast has increased, economy range hotels have increasingly closed down and been replaced by upscale hotels and condominiums (Ainsworth 2017). In San Diego County, no discounted rooms have been included in new developments despite the mandate to provide affordability where feasible (Weisberg, 2015). Most recent hotel projects have been for the construction of upscale and luxury resorts (Access Denied, 2019). These new developments not only take existing LCAAs away from visitors but they also increase the associated costs of a visit by bringing in more high-end clientele and thus more upscale restaurants and shops. The areas with the most expensive hotels and fewest LCCAs typically impose the most restrictive policies on STRs, keeping prices high and lower-income visitors out. Unequal Access: Protecting Affordable Accommodations Along the California Coast 58 Short -Term Rentals Provide Affordable Access In order to evaluate the affordability of short-term rentals in North San Diego County, this paper examines data on the rental price of STRs in Del Mar, Solana Beach, Encinitas, Carlsbad, and Oceanside from summer 2018. For example, the average listing in Oceanside is $150 per night, whereas in Del Mar the average is $265. The data confirms the expectation that the more exclusive areas have less affordability. Furthermore, mapping the rental listings and their distance from the coastal zone shows that prices increase with proximity to the coast. Therefore, affordability decreases. Table g: Average Price for a Short -Term Rental in Select North San Diego County Cities for Two -Person Occupancy. Prices Determined by Capacity of the Rental. Del Mar Carlsbad Oceanside Solana Beach Encinitas $265.20 $90.36 $269.99 $268.33 $90.36 $273.41 $153.72 $133.90 $156.50 $174.27 $152.05 $175.20 $150.62 $117.55 $157.00 $166.10 $126.52 $167.82 $199.46 $137.45 $204.27 $215.87 $154.48 $217.79 $177.66 $176.20 $178.23 $194.60 $200.62 $194.50 Figure 13 below shows a scatterplot of short-term rental listings from the summer Qune, July, and August) of 2018 obtained from an independent source, Transparent Data (https://www.seetrans- parent.com). In this figure, affordable rentals (as defined by the California Coastal Conservancy) are depicted in green and unaffordable listings are depicted in red. As one gets closer to the coast, most listing become unaffordable; although, as indicated in Table 9 above, Oceanside still has many affordable listings within half a mile of the coast. Unequal Access: Protecting Affordable Accommodations Along the California Coast 59 ° ° o r\ 0 o CP •e 8 0 ID ❑ p� o o -. Ell o° 8 � .0E] ❑ o ❑ 10 ❑ ❑ ° ❑ 8ELJ3Oceanside ° . $❑ 00 0 o� �oCto b❑ o � �e 0 E81 o O � 0 C ° 0 °° ®� ° ®❑ ° 000 Northern San Diego �g °• � ❑ ° • 0 ° Carlsbad Q ° Q o 8 d qp°° °o o • El ® 8 ❑ q-� ❑ • 0060 ❑ • o ID E"p t o° 0 00 F0 0 O Rental Home e o� o o ° Affordable ° ®o im�as ° ��33Enc rg Eiod o Yes cc ED Private Room Rental �-0 Affordable o:^ ° 8 S o ° ❑ No ❑ Yes °. C7- City Limit ° ] Coastal Zone Boundary 9 Q Within 0.5 mile of the Coast �,%•Solana Beach A � Del Mar -/I, D Mile 111 Figure 13: Distribution of STRs in North San Diego County Showing Aff=ordability Increasing Further from the Coast. Special thanks to Dr. Kiersten Patsch for mapping. Unequal Access: Protecting Affordable Accommodations Along the California Coast 6o Additionally, STR listings in North San Diego County appear to be affordable or expensive in clusters. Figure 14 below constructs an average cost map which grouped the listings in 100 -meter segments around average cost and color codes the average price for each 100 -meter area. The map shows that prices of STRs cluster into groupings of high costs (for example, greater than $500 a night) and low costs (less than $100). Average prices are noticeably lower (the darker red) in Oceanside and further inland. Del Mar has more high-priced clusters (pale yellow, indicating more than $500 per night). While in some areas STRs are largely unaffordable according to the cost per two people per night, in many cases they are still more affordable than hotels, partially because a group or family would need many rooms at a hotel rather than a single home. Additionally, the supply of STRs helps lower prices and reduce the price hikes in the summer season as discussed in previous sections (Zervas 2015). Northern San Diego Oceanside 46 it Carlsbad Figure 14: Distribution o f Average Price of STRs in North San Diego County Showing Affordability Increasing Further from the Coast. Note that Del Mar, Solana Beach, and Encinitas have far fewer listings at less than $loo, or even $150. Unequal Access: Protecting Affordable Accommodations Along the California Coast 61 Average Price Per Night for 2 Peopl Private Home or Private Room — $100.DD �_ MOM �_ $200.00 <_ $400.DD VEnci,n — $3.000.ODD Coastal Zme Boundaryp Caq LimitMiles _fid Figure 14: Distribution o f Average Price of STRs in North San Diego County Showing Affordability Increasing Further from the Coast. Note that Del Mar, Solana Beach, and Encinitas have far fewer listings at less than $loo, or even $150. Unequal Access: Protecting Affordable Accommodations Along the California Coast 61 Finally, Table 10 and 11 below present affordability by number of listings. As the maps above suggest, the City of Oceanside has both the highest percentage and the highest number of affordable rentals, both homes and private rooms. The City of Carlsbad has similar percentages of affordable rentals, and Solana Beach and Encinitas also providing some affordability. Once again, Del Mar has the lowest percentage of affordable listings no matter how one looks at the data. Table 1o: Aff=ordability (Defined here as 75% of California Average Daily Rate) for All Listings, compared to those within a half mile of the coast. nal Mar Table 11: Comparing affordability of listings when defined using California ADR or the ADR of San Diego County, which is higher. Although there are more listings at 75% or less of SD ADR, Del Mar still lacks affordability. Affordable by Statewide ADR IN Affordable by Local ADR 1A ?1;% 80 30% 103 39% Affordable by Statewide ADR Encinitas 183 Percent of Listings Within 0.5 mi of coast Del Mar 12 80 16% 10 13% 30% 40 15% Solana Beach Encinitas 183 229 455 41% 78 17% 52% 89 20% 52% 232 26% Carlsbad Oceanside nal Mar Table 11: Comparing affordability of listings when defined using California ADR or the ADR of San Diego County, which is higher. Although there are more listings at 75% or less of SD ADR, Del Mar still lacks affordability. Affordable by Statewide ADR IN Affordable by Local ADR 1A ?1;% Unequal Access: Protecting Affordable Accommodations Along the California Coast 62 80 30% 103 39% Solana Beach Encinitas 183 41% 233 52% Carlsbad 229 52% 278 63% Oceanside 455 52% 551 63% Unequal Access: Protecting Affordable Accommodations Along the California Coast 62 Tourism as a Revenue Source The lack of affordable accommodations not only impinges on access for low- and moderate - income Californians but also reduces the potential tax revenue of the municipalities. All of these coastal communities rely on tourism, and the coast is the primary draw. The cities of North San Diego County draw a large share of their tax revenues from the tourism industry, and one of the primary ways in which they do this is through Transient Occupancy Taxes (TOTs). As discussed, TOTS impose a tax on visitors when they stay in the community. Traditionally this tax was collected primarily through the hotel sector, but increasingly STRs have made important contributions to TOT revenues. In all of the North San Diego County cities examined here, TOTS make up a significantly higher portion of the tax revenue for that city when compared with the county overall. TOTS have been rising over time, despite there not being a drastic boom in hotel construction or dramatic change in consumer preferences. This is likely due to the increased presence of STRs in the coastal accommodation market and efforts by municipalities to collect TOTS from them. Carlsbad and Oceanside are larger cities with greater tourist draw. They also tend to be more affordable and less exclusive than the Encinitas, Solana Beach, and especially Del Mar. These three smaller, more exclusive communities have seen similar growth in TOT revenues, although on a much smaller scale due to their smaller size and reduced number of lodging options. It is harder— and more expensive—to stay in one of these areas. TOTS can offer municipalities a crucial source of funding for projects such as adaptation to climate change, affordable housing, and public services which tourists place increased demand on. They offer an alternative to GHADs where the residents pay for an independent authority tasked with protection from geological hazards such as sea level rise. Wealthier communities, such as Del Mar and Encinitas, possess GHADs. Solana Beach is also considering adopting a GHAD (City of Solana Beach 2019, 7). Oceanside, less wealthy and more diverse, does not possess a GHAD. The potential problem with GHADs is they tend to focus on armoring rather than more sustainable coastal options, which can reduce coastline and therefore coastal access. Due to the nature of the funds, they can also reinforce exclusivity as the residents nearest a particular stretch of coast pay for its protection. In order to increase potential TOT revenues, coastal communities could turn towards STRs as a reliable source of revenue. While it takes years and millions in investment to build a hotel, STRs capitalize on and expand the use of existing property. To benefit from this revenue source, municipal governments need to embrace rules that balance the legitimate concerns of neighbors, particularly in residential neighborhoods, with California's stated goal of access for all. Restrictive STIR regulations can hinder small, "Mom and Pop" rentals from the market through commercial zone restrictions and exorbitant permitting and licensing fees. The fewer the number of nights available in STRs, then the smaller the TOT revenue leading to a lost opportunity for a community to capture the benefits of the tourism market. Unequal Access: Protecting Affordable Accommodations Along the California Coast 63 Regulating STRs The policies cities enact determine how they structure the market for STRs and can affect access to the coast. Del Mar and Oceanside illustrate this dilemma well. They have chosen divergent responses to STRs that reflect the makeup of their communities. Del Mar has very restrictive regulations that prohibit STRs in residential zones and limit their operation to the Residential - Commercial (RC) zone and the Visitor Commercial (VC) zone. This means that homeowners in a residential zone cannot rent out their vacation home or spare room without risking fines. In 2017, the city attempted to pass additional restrictions to limit STRs to no more than 28 days out of the year and impose a minimum seven day stay for visitors, while restricting STRs to the Residential Commercial and Visitor Commercial areas of the city. In the interest of providing greater access to the coast, the law was rejected by the California Coastal Commission on the grounds the proposed ordinance would negatively impact public access and affordability (Schwing 2018, 2). The staff recommended no nightly minimum and a 180 -day cap, while the Commissioners themselves eventually settled on a 3 -day minimum and 100 -night annual cap. Del Mar rejected the Coastal Commission position and is suing the state to overturn the decision. The attempt is indicative of the attitude in Del Mar towards STRs and the various ways cities enact policies which curtail affordability and reduce lodging supply. Another policy which can detrimentally impact the affordability and supply of short-term rentals in these communities is permitting. While municipalities need to keep track of their STRs and collect transient occupancy taxes, the high cost of these permits prevents many potential hosts from renting and increases the costs of the rental. Permits range in costs and often come with secondary fees, such as costly inspections and business licenses. Cities in North Coastal San Diego attach a variety of fees to their STR permits. Solana Beach, for example, charges $100 for a new permit and $55 annually to renew; Encinitas' permit costs $150; in Carlsbad the permit is free, but a business license is required at a cost based on revenue; and Oceanside's permit costs $250. Information on Del Mar's permitting was unavailable due to the pending ban. These high costs can drive some hosts towards renting illegally and others to pass the costs on to their renters, reducing coastal access. These fees are summarized below in Table 12. Even in cities that allow short-term rentals, there can be high costs that pose a barrier to entry for potential STIR operators. Permitting is one example, and punitive fines are another. As discussed earlier in this paper, some regulations on STRs can impose high risks to the host. Fines accomplish just that. Imposed for violations of ordinances, these fines can work to enforce bans on STRs. In many cities the fines are aimed at long-term zoning compliance and obtaining back taxes. The crackdown in Encinitas showcases this with fines starting at $250. Ordinance violations in Solana Beach start at $500, and a second violation costs $1000. While many areas impose these penalties, the amounts and causes are not easily discerned. Oceanside—which has the most permissive policies of this study—makes the penalty known, stating that a violation of policies will result in a misdemeanor and a fine up to $1000. However, unlike many of the more exclusive communities their policy provides for a greater range of legal STRs. If cities wish to bring operators into compliance and preserve affordability, high penalties undermine this goal. Oceanside, more affordable and diverse, is much more accommodating to visitors wishing to rent a home or room for a short stay and visit to the coast. Oceanside's policies make a trip to the beach and coast an affordable luxury to many Californians. The city allows short-term rentals in the residential areas provided rentals meet certain limits and adhere to its Good Neighbor Policy. Oceanside has many more STRs but it is also larger than Del Mar or Solana Beach. The higher Unequal Access: Protecting Affordable Accommodations Along the California Coast 64 number of STRs offers visitors many more accommodation options, especially in high season when rooms on the coast are hard to find and campsites are booked. Similarly, Carlsbad offers more affordable STRs than the other North San Diego County coastal cities. The city requires short-term rental operators to comply with its Good Neighbor Guidelines as well, which include provisions about noise, trash, and parking. Del Mar Solana Beach Encinitas Carlsbad Table 12: Short -Term Rental Regulations Attitude toward STRs Key Regulations Very restrictive. The City Attempt to prohibit almost all STRs Zone Restrictions: Not attempted a limit of 28 days permitted in Residential Zones, only permitted in Residential per year (blocked by Califor- Commercial and Visitor -Commercial and where the development nia Coastal Commission). In allows it Court proceedings with Cali- Night Caps: Proposed 28 days per calendar year. 7 night mini- fornia Coastal Commission. mum for all stays Fairly restrictive. Rentals allowed in Residential areas if stay is over 7 days, but enforcement of penalties is strict. Recent crackdown to be more restrictive. Very restrictive except in the coastal zone. Oceanside Permissive in coastal zone. Zone Restrictions: Prohibited in Residential areas if less than 7 days Fees and Permit: $100 new permit fee with $55 renewal, $500 fine for first STR policy violation Taxes: Host has to collect TOTs Zone Restrictions: Single family and duplex dwellings only. Multi -family dwellings and condominiums are prohibited from usage as short-term rentals in residential zones. Fees and Permits: $140 permit annually, policy violation fines starting at $250 Taxes: 10% transient occupancy tax hosts are to collect from renter Zone Restrictions: Banned in residential areas except in the coastal zone; required to comply with "Good Neighbor Guidelines" Permits and Fees: Permit required (free) and business license required (cost variable) Taxes: STRs are subject to a 10 percent transient occupancy tax as well as a $1 per room per night Carlsbad Tourism Business Improvement District assessment due monthly to the city. Permits and Fees: All STIR operators are required to apply for a STIR permit (fee required) unless the STR property is a hosted unit or part of a gated HOA; violations are a misdemeanor with up to $1000 fine Policies: Minimum 2 -night stay, curfew on daytime guests at 10pm, and limits on overnight occupancy Taxes: TOT collected by Airbnb in agreement with City Night Caps: Minimum 2 -night consecutive stay Unequal Access: Protecting Affordable Accommodations Along the California Coast 65 The different approaches of Del Mar and Oceanside reflect the nature of regulations in these communities. Del Mar restricts affordability through little affordable development and harsh restrictions on STRs, preserving the exclusivity of the community. Oceanside's policy is not perfect, but the openness to STRs aligns with the diversity of the community and lower housing costs. Oceanside is one of the few coastal communities that has not carved out an affluent, exclusionary enclave for its residents on the coast. Del Mar, and other communities with strict regulations severely limiting the ability of STRs to operate along the coast, reduce the supply and affordability for visitors. Communities with more reasonable regulations—designed to create harmony between STRs and permanent residents—can promote STRs, thereby increasing the supply of accommodations and lowering cost. This helps promote access to the coast without costly investments in new hotels or campgrounds. City of Pismo Beach In Pismo Beach the story of short-term rentals and affordability is more complicated. Pismo Beach's policy is touted as one of the model STIR ordinances by the California Coastal Commission, yet the city lacks affordability in accommodations. While the City is open to short-term rentals, possibly because of its reliance on tourism for the economy, it's like the majority of the other North San Diego cities: white, wealthy, and older, demographics which have been shown to dominate the coastal zone in the state (Reineman 2017). Despite this similarity, Pismo Beach has a more permissive regulatory environment than Del Mar and other small, wealthy towns. The city is more open to the existence of STRs without attempting bans and stringent restrictions on rental operators. However, without measures to reduce costs there remains a persistent lack of Lower Cost Coastal Accommodations (LCCAs) to meet the needs of the majority of Californians and provide access for all. Affordability in Pismo Beach Pismo Beach is an affluent area, like much of the coast, with high median incomes and home values out of reach for most Californians. The concentration of affluence in housing creates a need in Pismo Beach and in Santa Barbara, as it did in North San Diego County, for the construction of intentional housing for those of lower means. The Regional Housing Needs Assessment conducted by Pismo Beach (2019) revealed the city needs 62 homes to meet the needs of extremely low, very low, and low-income families -41 % of their overall housing need. Like much of the coastal region, these costs and lack of affordability push families inland and away from coastal access. Affordable Accommodation and STRs The lack of affordability in Pismo Beach extends to both traditional lodging options and short-term rentals despite the city's hospitableness. The city appears to lack any affordable hotel options. It is, however, close to state beaches with camping options. As previously mentioned, those options fill up quickly and may not meet the needs of all visitors. In particular, camping may not be an option for those who lack the means to purchase equipment. Unequal Access: Protecting Affordable Accommodations Along the California Coast 66 While STRs offer lower rates than some hotels, this study found only 38 rentals that would be considered Lower Cost Coastal Accommodations (LCCAs) by the Coastal Conservancy standard. This amounts to only 25% of all rentals in the area. It is worth noting that almost all (96%) of Pismo Beach rentals are within a half mile of the coast where prices tend to be higher, but that percentage of affordability is still very low. Although Pismo Beach generally embraces STRs, the city requires operators to apply for a permit—at cost of $399—and a business license, totaling over $450 in comprehensive fees. This permit cost has the impact of (1) discouraging homeowners from becoming hosts and therefore reducing the supply of rental, and (2) passing on that high cost on to visitors in the form of higher rates. Overall this reduces affordability. Mapping the location of STRs in Pismo Beach shows that they overwhelmingly are near the coast but also expensive. The location is ideal for visitors, but likely inaccessible to those with stricter budget constraints because of the lack of lower cost accommodations. 0 0 0 0 O ❑ 0 0 0 0Cd Rental Home Affordable 0 No 0 Yes Private Room Rental Affordable Li No El Yes o City Limit o Coastal Zone Boundary Within 0.5 mile of the Coast Pismo Beach Figure 15: Mapping the STR listings in Pismo Beach shows the close proximity to the coast and general lack of affordability. Unequal Access: Protecting Affordable Accommodations Along the California Coast 67 Pismo Beach Average Price Per Night for 2 People Private Home or Private Room <= $100.00 <= $150.00 <= $200.00 <= $400.00 = <= $3,000.00 0 Coastal Zone Boundary 0 City Limit 1! Mile Figure 16. Looking at average cost clusters for Pismo Beach shows the concentration of expensive listings. Unequal Access: Protecting Affordable Accommodations Along the California Coast 68 Reliance on Tourism Although there are not sufficient LCCAs in either Santa Barbara or Pismo Beach, there are many hotels. These fill up in the high season and the campgrounds book up far in advance. There are over 150 hotels between these two communities, and both derive much of their economic base from tourism. Pismo Beach collects nearly half its revenue via TOTS, and their collection has increased overtime 12 . This reliance on tourism may contribute to Pismo Beach's openness to STRs as part of its efforts to foster tourism and keep the town thriving. In fact, Pismo Beach's STR policy notes that the loss of TOT revenue in part motivated the regulation. With the high cost of new hotel construction, existing informal home sharing and the promise of more STRs via new platforms offer a much faster source of renewable tax revenues. This may explain why Pismo Beach lacks the affordable hotels that Oceanside offers but has a relatively permissive STR policy. The caveat is, of course, the high fees which keep affordability low and impact access to the coast. Regulating Short Term Rentals Despite the over $500 cost to operate a legal STR, Pismo Beach has been heralded by the Coastal Commission for its model STR ordinance. However, the combined cost of the permit application, business license, and the added delay of inspections reduce the ability of operators to charge affordable rates for their rental listings. The city allows short-term rental operators to share their primary residence year-round with no nightly cap if they are present for the duration of the stay and pay the $500 in fees associated with obtaining a permit. If the STR is not the primary residence, or the operator is not present, the unit has to be in specific zones. While there is a limit of 182 days per year on unhosted stays, the duration means a unit can be rented for more than the entirety of the high season. While the City's rules promote the supply of additional accommodations and in turn increased access to the coast, the expensive fees create a barrier to entry for potential short-term rental operators and thus restrict the number of potential accommodations along the coast. As expenses of permitting, licensing, and potential fines are passed on to renters, affordability diminishes. This reduces access for those who need access the most. It also reduces the City's TOT revenue since fewer properties are registered and therefore fewer taxes being collected. Table 13: Short Term Rental Regulations in Pismo Beach Zone Restrictions: Allowed in almost all residential zones and planned zones at primary residences Permit and Fees: $399 permit application fee, business Pismo Beach Relatively Permissive license required (fee required), minimum violation $750 Taxes: host collects TOTs Night Caps: Limited to 182 days per year without the owner present 12 Data compiled from the Comprehensive Annual Report for 2018 in Pismo Beach. https://www.pismobeach.org/Docu- mentCenter/View/53246/FY-2018-Ann ua I-Fi na ncial-Report Unequal Access: Protecting Affordable Accommodations Along the California Coast 69 Santa Barbara Unlike Pismo Beach, Santa Barbara has a restrictive policy towards short-term rentals. The city has more in common with Del Mar and their attempted ban on STRs. The City of Santa Barbara regulates STRs as hotels for zoning purposes. Therefore, the City of Santa Barbara considers any listings operating outside of areas already zoned for hotels illegal. With this ban, the city removed the option for many homeowners to rent out unused space to visitors and confined visitors to tourist areas. These rules reinforce the exclusivity of the community and impose great risk to hosts who may be forced to list their vacant property illegally. Such listings also do not contribute to city TOT revenues. Affordability in Santa Barbara Santa Barbara's policies towards STRs reflect the expense and exclusivity of the city overall. The median home price in Santa Barbara, according to Zillow.com (2019) is $1.14 Million—almost twice the average for Santa Barbara County let alone California overall. Santa Barbara's assessment reveals the need for 1,461 additional homes in the Very Low- and Low-income categories, or 47% of their total housing need. The lack of affordability extends to hotels as well. In Santa Barbara the ADR in July 2018 was $227.60, and a prospective visitor only finds a couple of options with "affordable" rates in July—two with rates less than $137 nightly. These options are further from the beaches and appear not to offer sufficient beds (at that rate) for a family to stay overnight. Santa Barbara is close to state parks with campgrounds as well as RV parks; however, as previously discussed, there are limitations not only on the number of sites but also on the viability of camping as an option for some families. STRs, Legality, and Zoning in Santa Barbara The study of rental listings from summer 2019 reveals the nuances of the Santa Barbara policy on the affordability of STRs. The City of Santa Barbara is unique, in this study, because in 2015 it began a "heightened enforcement program" of its zoning regulations with the objective to remove STRs from areas where they had been allowed before 2015 (Kracke v. City of Santa Barbara, 2019). By classifying rentals as "hotels," and therefore restricting them to zoning that allows hotels within the city, Santa Barbara has greatly reduced the affordability of rentals near the coast. These zoning laws, then, allow very few legal rentals within close proximity to the coastline as shown in Figure 16. The crackdown on rentals outside the commercial zone, including those in the coastal zone, constituted a change in policy for the city. Prior to 2015, the city had an informal practice of recognizing and allowing STRs provided they paid TOTS and received no complaints (Kracke v. City of Santa Barbara, 2019). In 2010 and 2014, the city attempted to bring more STRs into compliance, hoping to increase TOT revenues (Kracke v. City of Santa Barbara, 2019). Unequal Access: Protecting Affordable Accommodations Along the California Coast 70 In 2015, Santa Barbara changed its enforcement and began what constitutes a ban on STRs, because even where zoning allowed for STRs, other requirements and the difficulty of navigating the system prevent operation13. As a result, only 7% of all listings in Santa Barbara fall within a half mile of the coast and meet the California Coastal Conservancy's definition of Lower Cost. Although one-third (33%) of citywide listings are affordable, these cluster further from the coast as shown in Figure 17. Many of the more affordable listings for Santa Barbara were actually outside of the city limits where the regulations are less strict. Furthermore, obtaining a permit to legally operate a STR in Santa Barbara is nearly impossible. The City in 2017 had not issued a permit in over two years, according to a recent lawsuit, even for homes in the correct zoning (Santa Barbara Short Term Rental Alliance, 2017). Many homeowners face this obstacle even after going through the costly process of inspections—and even remodels. The city's ban on STRs violates the California Coastal Act and fails to comply with the California Coastal Commission, according to a recent lawsuit (Kracke v. City of Santa Barbara, 2019). The Court found that Santa Barbara's enforcement of zoning regulations changed the access and use of the coast, and that in order to do so they would have needed permission from the Commission to remove STRs in the coastal zone since STRs allow access for more visitors, especially those of lower incomes. A ban on STRs, because of the access they provide, would not be legally enforceable (Kracke v. City of Santa Barbara, 2019). L ue Riviera Httltlen vat y Ca` pa it Date. 1 W I &2gi a bleat Mesa Zones Where Vacation Rentals Require Review & Approval o C-1 -Limped Camme d,l -C-2. Cp of O C L • umilea C -a —Al © C -M - Cwnmernial-Merwl�ng - C - Reetn-d! Cammerclel HRC - HoW and Related Comrmrca Cialim 1111■M-1-light Manufa nrg Occ-L4 Reis—CLYdr "{P&nial} - R 4 HMd1MMdlMOP.i Re& ztl Lads Zones Where Vacation Rentals are Prohibited OZones Where W.1im Rentals — Pmhihned Eucalyplas Rill Eastsid* �M wr West Beach r y fMe-a City of Santa Barbara Zones Where Vacation Rentals Require Review and Approval Figure 17: Map provided by the City of Santa Barbara showing zoning where hotels (and STRs) are legal, 2017. 13 Council Member for the City of Santa Barbara is quoted in the Ventura Superior Court findings as stating: "I think it's incredibly confusing... it truly isn't possible, except in very rare circumstances for someone to provide the off-street parking, to meet the code requirements, to actually pull that off, as evidenced by there's only one who—after a two-year process— to successful navigate that system" (Kracke v. City of Santa Barbara, 2019, 9). Unequal Access: Protecting Affordable Accommodations Along the California Coast 71 elppar East cock am arNan Lower Riviera Oak Park '`la9 3 Westside Bel Air Dawn o ower wfs Alta M.— O ' bleat Mesa Zones Where Vacation Rentals Require Review & Approval o C-1 -Limped Camme d,l -C-2. Cp of O C L • umilea C -a —Al © C -M - Cwnmernial-Merwl�ng - C - Reetn-d! Cammerclel HRC - HoW and Related Comrmrca Cialim 1111■M-1-light Manufa nrg Occ-L4 Reis—CLYdr "{P&nial} - R 4 HMd1MMdlMOP.i Re& ztl Lads Zones Where Vacation Rentals are Prohibited OZones Where W.1im Rentals — Pmhihned Eucalyplas Rill Eastsid* �M wr West Beach r y fMe-a City of Santa Barbara Zones Where Vacation Rentals Require Review and Approval Figure 17: Map provided by the City of Santa Barbara showing zoning where hotels (and STRs) are legal, 2017. 13 Council Member for the City of Santa Barbara is quoted in the Ventura Superior Court findings as stating: "I think it's incredibly confusing... it truly isn't possible, except in very rare circumstances for someone to provide the off-street parking, to meet the code requirements, to actually pull that off, as evidenced by there's only one who—after a two-year process— to successful navigate that system" (Kracke v. City of Santa Barbara, 2019, 9). Unequal Access: Protecting Affordable Accommodations Along the California Coast 71 Santa Barbara City o • IDD 0 0 '0►° � ❑0 � n ° ° ° oma- o • ° o mm • <<44 ❑ o�• bs ❑ •• .ash waa=xe a. °❑ ❑ O -O ❑p¢`� °•, ' `•y° S'.,y „i �a• i8 • s �_ i� ❑ 8 I Q ° ...❑O° ,JO Barb 0 9 00 • ° °8 00 ° °0 � Rental Home Private Room Rental a o �� 0 ❑ 0 Affordable Affordable a ❑ o o No ❑ No ❑ ❑ o Yes ❑ Yes A • 0 _ o / 0 City Limit o • i o Cb D Coastal Zone Boundary o e o° Within 0.5 mile of the Coast Figure 18: Summer 2018 STR Listings for the city of Santa Barbara. Listings do not adhere entirely to the map of legal areas and tend to be less affordable along the coast (only 7% of Listings within a half mile are Louver Cost Coastal Accommodations) Santa Barbara City Santa Barbara tJ Average Price Per Night for 2 People Private Home or Private Room $100.00 <_ $1s0.00 <_ $200.00 <_ $400.00 I� <_ $3,000.00 o city omit o Coastal Zone Bo -day Figure 19: A map of average price clusters in Santa Barbara City, showing the high cost (yellow) along the majority of the coast. Unequal Access: Protecting Affordable Accommodations Along the California Coast 72 Regulating Short Term Rentals Santa Barbara and Pismo Beach make an interesting comparison of policy implications since their policies differ significantly in how they regulate STRs. Santa Barbara shares much in common with Del Mar, severely restricting STRs and thereby reducing the supply of coastal accommodation. In Santa Barbara, STRs constitute hotels for zoning purposes and are therefore illegal if operating outside of the areas where hotels are allowed. With this ban, the city removed the option for many homeowners to rent out unused space to visitors and confined visitors to tourist areas. These rules and regulations reinforce the exclusivity of the community. Such listings also do not contribute to city TOT revenues. Bans on STRs claim to preserve neighborhood characteristics and promote public safety; however, they really succeed in restricting access to expensive coastal communities and preserving their exclusivity. With little local support for affordable housing development or lower-cost accommodation options (the most feasible being STRs), many inland low-income and underserved populations are effectively barred from visiting the City of Santa Barbara. Table 14: STR Regulations in Santa Barbara City Zone Restrictions: Considered hotels and there- fore illegal outside of areas within the commercial zone that allow hotels Santa Barbara Very Restrictive, STR's effectively banned Permits and Fees: Permit required, if STR is in hotel district and therefore legal Taxes: Required to be collected Unequal Access: Protecting Affordable Accommodations Along the California Coast 73 Discussion The case studies in this section indicate that restrictions on STRs can take many forms—from outright bans to high permitting/licensing fees to restricting visitors to areas which already serve tourists through more traditional overnight accommodations. Perhaps unsurprisingly, our case studies also show a very strong correspondence between communities, like Del Mar and Santa Barbara, which have limited affordability for traditional long-term rentals and have few affordable options for potential homeowners who are not already affluent and restrictions on short-term rentals. One common argument against STRs is that they increase prices for long term residents and lead to gentrification. However, the case studies in this section indicate that the areas restricting STRs the most (Del Mar and Santa Barbara) are also areas that have already limited affordability for long-term residents. Conversely, the City of Oceanside has more affordability for both long-term and short-term residents than any other coastal city in this study. Oceanside has also created a "Good Neighbor Policy" (included in an appendix to this study), which does levy significant penalties against STIR hosts and tenants who violate these policies, indicating that cities can strike a balance between protecting and preserving residential neighborhoods and allowing access to the coast. Our case studies also reveal, however, that many policies that are designed to preserve residential neighborhoods along the coast, already enclaves of affluence, effectively limit options for middle class and underserved communities who not only have been priced out of the residential market but now find themselves restricted out of the short-term rental market as well. Access for all has now become access for the affluent only. Pismo Beach also represents an interesting case study since its policies have received some support within the coastal community. Unfortunately, a close inspection indicates that Pismo Beach still has a limited number of affordable rentals despite being more accommodating than some other communities. Our analysis reveals that Pismo Beach's permitting and licensing fees are quite high even compared to other communities in this study. Pismo Beach also restricts STRs to primary residents. Ostensibly a policy limiting STRs to primary owners reduces the demand for second homes. However, like most other coastal communities in these studies (except Oceanside), Pismo Beach's home prices are already beyond the means of the vast majority of Californians, restricting STRs to primary homeowners simply restricts affordability of STRs. Similarly, high permitting and licensing fees discourage homeowners with more modest (and hence affordable) accommodations from renting out their homes short-term. In many cases, this may lead to homes that are unoccupied despite a high demand for STRs. Unequal Access: Protecting Affordable Accommodations Along the California Coast 74 t Solutions Access for All � J - The California Coastal Act guarantees "maximum access"" to California's iconic coast and beaches. To that end, the Coastal Commission has endorsed promoting coastal access and prohibiting private beaches anywhere in California. However, as discussed in more detail in the first section of this study, among many threats to coastal access in California the most significant is the high cost of coastal real estate which has forced millions of Californians to migrate inland to find more affordable housing. This inward migration has disproportionately impacted people of color and Californians from low to moderate -income groups. Those displaced inland face much higher costs for a coastal visit than those living closer to the coast. Today, too many of California's beaches have become effectively inaccessible to minority communities and lower income residents. One possible method to increase access to the coast is to promote affordable overnight accommodations. Although Californians have a variety of options for staying on the coast, most are expensive and many are unavailable during peak season between June and September. The same factors that have driven up the price of residential real estate along the coast have also driven up the cost of overnight accommodations in that area. Studies by the California Coastal 14 1976 California Coastal Act, Section 30210. Unequal Access: Protecting Affordable Accommodations Along the California Coast 75 Conservancy and the California Coastal Commission indicate this problem is getting worse: many low-cost accommodations have closed and in many cases, the real estate has been transferred to other uses. Short -Term Rentals Short-term rentals (STRs) have long been one of the alternative lodging options available to California's coastal visitors. STRs use existing homes and structures to provide additional accommodation for coastal access. Since most homes are unoccupied some of the time, STRs provide a simple, sustainable solution to the problem of coastal access. When planning for sea - level rise, using short-term rentals in existing structures may be a more sustainable alternative to building new structures for lodging on the coast. Unlike hotels, increasing the quantity of available STRs does not require more construction along California's coast. In simple economic terms, allowing more STRs increases the supply of short-term accommodations on the coast. Further, many STRs provide kitchens and accommodations for multiple households, further lowering the costs of overnight stays, especially for low and moderate -income groups and large families. Limiting STRs along the coast, particularly during the busy summer months, limits coastal access. During the summer, traditional overnight accommodations are scarce and often must be booked months in advance. Every family that cannot find or afford a short-term rental is a family that cannot stay overnight on the coast and perhaps cannot visit at all. At the local level, one of the primary reasons given for discouraging STRs is that short-term renters contribute to noise, parking problems, and may otherwise disrupt a quiet residential neighborhood. In many ways, these arguments against STRs are a replay of the arguments used to block other types of housing in coastal communities that led to the housing crisis in the first place. These STR restrictions imply that Californians, who can no longer afford to live near the coast, can now no longer afford to visit the coast. Unequal Access: Protecting Affordable Accommodations Along the California Coast 76 Best Practices for Regulating STRs The case studies and literature review contained in this paper point toward regulatory practices that can allow access to the coast while also ensuring that neighborhoods remain safe. However, some regulations pertaining to STRs can also have the effect of limiting access, especially for lower income households and underserved communities. To ensure regulations promote access, we recommend the following best practices. Simple, streamlined registration Make permitting easy and swift Cities require TOT payment and cooperate with STR platforms where possible Allow STRs in most or all coastal neighborhoods No minimum on number of nights Maximum night cap of 180 nights or more. No night cap on shared space rentals Ensure compliance with "Good Neighbor Policies" and make renters aware of rules Require parking when reasonable Reduces the costs to operators as costs are passed on to renters and reduce affordability Allows for more affordability by making it easier to increase the supply of STRs and also encourages registration with the City Ensures TOTS are collected from all operators Increases affordability near the coast, helping increase coastal access for those who need it most Ensures that families who cannot afford multiple nights can still visit the coast Helps promote affordability via greater supply of STRs supported by Commission Promotes harmony between STRs and the residents neighboring them and promotes public safety Reduces traffic associated with STRs and promotes agreement with local residents. Reduces parking costs for visitors Best Practice: Simple, streamlined registration, especially for owners renting out their homes for Limited periods. The case study of Pismo Beach in this report is particularly instructive. Although Pismo Beach is accommodating to STRs in many regards, its permitting fee, coupled with a business license requirement, push costs up to over $450 per rental per year. By comparison, a California Driver's License costs $37 and is typically good for several years. Costly inspections of residences already in compliance with local codes should be limited to properties that are rented more frequently. Unequal Access: Protecting Affordable Accommodations Along the California Coast 77 Best Practice: Make permitting easy and the process swift. In addition to lowering permitting fees, communities should make it easy and quick for owners to legally register their property for as a short-term rental and pay the required transient occupancy taxes. Allowing online registration, providing a one-page registration sheet, and ensuring the permitting process is straightforward and efficient are among the ways communities can achieve this goal. Best Practice: Cities should require and enforce the payment of TOT taxes on STR rentals, collaborating, when possible, with STR Platforms to ensure maximum collection. The generation of TOT taxes by STRs is an important benefit to the communities where rentals are allowed, and communities should maximize the collection of those taxes to support local services. When possible, cities should collaborate with STR platforms to ensure that all taxes are collected. This practice is already underway in some coastal areas, including the City of Carlsbad. These practices ensure that all STRs are in compliance with the tax policies and generate revenues that can be used to increase resilience. Best Practice: Allow STRs in most or all coastal neighborhoods. Some coastal cities (e.g., Carlsbad) allow STRs to operate in the Coastal Zone, promoting coastal access with fewer restrictions. However, many communities (e.g., Santa Barbara) have restricted STRs to commercial zones where hotels already exist. This practice significantly reduces the availability of short-term rentals and often pushes visitors into already busy tourist areas. If this commercial area is away from the coast (as is the case for much of Santa Barbara) then such policies may also increase traffic/parking problems along the coast as more families decide to drive to the beach. Restricting rentals to commercial zones further from the coast also increases the rates of those STRs nearest the coast, pushing low- and moderate -income Californians to less sought-after areas. The net effect here is, once again, a reduction in access to the coast for low - and moderate -income households. Best Practice: To ensure maximum access, communities should not place minimum restrictions on the number of nights that a residence can be rented. Del Mar and many other coastal communities have placed restrictions on the minimum number of nights a visitor must stay. Placing three -night or seven -night restrictions on renting limits access, especially for families who can only afford a one- or two -nights' stay. Best Practice: Discourage restrictions which limit the total number of nights a residence can be leased as an STR. Some jurisdictions have imposed a maximum number of nights per year that a residence can be leased as an STR. These restrictions also reduce the supply of overnight accommodations on the coast. For example, when Del Mar imposed a 28 -day maximum, the California Coastal Commission staff recommended that this restriction on coastal access be modified to a 180 -night maximum (or "cap"); however, the final Commission recommendation was for a 100 -night cap. Unequal Access: Protecting Affordable Accommodations Along the California Coast 78 Best Practice: Communities should expect short-term renters to adhere to all rules and regulations regarding noise, excess visitors, and trash. All short-term renters should be made aware of this when they check-in. The City of Oceanside's Good Neighbor Policy (in appendix) provides a good example of this best practice. The city provides all short-term renters with a one-page overview of city rules for STIRS including fines for those who violate these rules. These rules limit noise and trash and additional visitors are limited to day -time hours. The City of Oceanside's policies include serious fines (and in some case eviction) for those who violate these policies. Best Practice: In communities where parking is an issue, communities should require STRs provide adequate parking. Communities and short-term rental owners should also encourage Local. modes of transportation besides cars, such as STIR -provided bicycles, local buses and shuttles, bike rentals, etc. By encouraging rental owners to provide parking, hosts and cities can reduce the impact of traffic on the surrounding neighborhoods and also makes the cost of visiting less expensive for visitors who avoid parking costs or the cost of citations for illegal parking. It should also be noted, however, that some cities (e.g., Santa Barbara) have used parking requirements to create barriers to entry for new STIRS. The increasing availability of short-term bike rentals by private vendors may also reduce parking at busy beaches and other coastal sites. Enforcing these regulations will require some additional city resources. However, the transient occupancy and other taxes generated by STIRS and the visitors they bring in should generate more than sufficient revenue to cover these costs. These regulations should also be enforced fairly, and enforcement should not be aimed at reducing the supply of STIRS but rather at making sure all operators are following city regulations and tax policies.15 Creating Policies that Encourage Access for Loud Income and Underserved Communities Increasing STIRS along California's coast will, by definition, increase access and will also likely lower prices. However, given the high price of accommodation, there may still be an affordability gap for many coastal visitors. The state, local governments, non-governmental organizations, homeowners, and short-term rental platforms must work together as stakeholders in order to ensure access for all. This process will likely involve a give and take among all stakeholders, but the ultimate goal should be clear: to make California's coast more accessible to everyone. 15 The importance of fair enforcement is illustrated by the ruling in Kracke v. City of Santa Barbara. The case centers around a change in enforcement by the City. Prior to 2015, Santa Barbara had conducted amnesty programs to "bring into compliance" STR owners and increase their collection of TOTS. However, after 2015 the City began "aggressive" enforce- ment of its zoning regulations, resulting in reducing the number of STRs, many of which were in the coastal zone. The key issue in the case was that by reducing the number of rentals in the coastal zone, the City effectively limited access, and this "development" required approval from the California Coastal Commission. The judge ruled that in light of this, and the lack of Commission approval for the change in enforcement, the City must return to the practices from prior to 2015 and allow STRs in the coastal zone. Unequal Access: Protecting Affordable Accommodations Along the California Coast 79 In order to encourage access for low and moderate -income groups as well as underserved communities, the state or local communities may need to take other steps. We believe the following steps should be given serious consideration: State agencies, local governments, foundations and community organizations could support and fund programs that encourage or subsidize low-income families or those from underserved communities to stay overnight near the coast. STRs should be part of the solution. Expand the Explore the Coast Overnight Program to Include STRs and include STRs in other pilot programs Create affordable STR program with determined eligibility Cooperation with NGOs helps these programs reach those most in need of easy access to the coast. STRs better serve large groups and families due to multiple rooms and varied facilities, such as kitchens. Many STRs are also more affordable for these groups. It is easier to expand the supply of affordable accommodations through STRs, unlike other lodging forms such as hotels and campgrounds which require new construction on the coast. Eligibility criteria helps ensure that Californians most in need of affordable accommodation have access to those STRs with affordable rates Recommendation: State agencies, local governments, foundations and community organizations could support and fund programs that encourage or subsidize loud -income families or those from underserved communities to stay overnight near the coast. STRs should be part of the solution. A number of non-governmental organizations could be involved in sponsoring programs that would encourage greater access from underserved communities. For example: • Jr. Lifeguards: Most coastal communities in Southern California have Jr. Lifeguard programs. However, access to these programs is often limited by how far households are willing to take their kids to these programs. Since these programs are typically during weekday mornings, STRs may help a group from underserved areas stay during the week. • Churches: Coastal community churches may wish to sponsor church groups from underserved communities. Cities may wish to devote a share of transient occupancy taxes to support outreach efforts between communities of faith, which also create access to the coast. • Environmental and Social Justice Groups: Environmental and social justice groups may wish to support or foster programs that encourage access to the coast. This could include subsidizing programs such as the Jr. Lifeguard and interfaith programs mentioned above. • YMCAs or Similar Organizations: (e.g., Scouts): Local YMCAs, scouting, and similar organizations can sponsor overnight trips to coastal communities. Affordable STRs can provide part of the solution. Unequal Access: Protecting Affordable Accommodations Along the California Coast 8o • Surfing Organizations: Local or national surfing organizations may wish to sponsor surfing events that encourage surfers from underserved areas. Other Community Organizations: Organizations such as Veterans of Forign Wars (VFW), Chambers of Commerce, and various other local groups could sponsor alliances with underserved groups to sponsor coastal access. • Foundations: Both community foundations and larger foundations may wish to sponsor or subsidize programs that encourage visitors from underserved communities to come to the coast. Local governments can partner with these foundations. Recommendation: The state or local governments should expand pilot programs which increase coastal access. STRs should be part of the solution. For example, in 2017, the California legislature approved AB 250, which requires the State Coastal Conservancy to develop and implement a specified Lower Cost Coastal Accommodations (LCCA) Program intended to facilitate improvement of existing and development of new lower cost accommodations within one and a half miles of the coast. Although current lower-cost accommodations categories include hotel and motels, hostels, camping, RV's and trailers, dorm rooms, and residential outdoor education facilities (ROEFs) they do not include short-term rentals. We recommend that the State Coastal Conservancy work with the legislature to recognize short- term rentals as an additional category as part of the Explore the Coast Overnight program. As discussed in this paper, unlike other coastal accommodations, it's relatively easy to expand the supply of affordable STRs if the correct programs and incentives are in place. In contrast, creating new hotel rooms or other overnight accommodations is much more costly and also leads to more development along the coast, which many coastal groups oppose. Recommendation: Create an Affordable STIR program which provides reasonably priced overnight accommodations for eligible households. Even with reduced restrictions on STRs in coastal communities, many families may be left out. Inexpensive STRs may be booked long in advanced by more experienced users. To ensure maximum access, the state (or possibly local governments) should consider a program which makes affordable STRs available eligible households. Eligibility might include means testing using household income or other legal criteria. The end goal would be to encourage access to the coast for families who might not go otherwise. Local governments may consider waiving or lower taxes and STR providers may consider waiving or lowering their booking fees Such a policy is also consistent with several recent Coastal Commission decisions involving the development of hotels along the coast. For some hotel developments the commission has required that 25% of rooms be set aside as affordable. Providing affordable STRs could be part of a city or county's local coastal program or could be used to mitigate for other development along the coast. One simple solution would be to create a lottery which distribute visitor passes (ranked by number or letter) to eligible California households. These households would be allowed to book affordable STRs (and possibly other accommodations) before households with lower lottery outcomes. Eligibility could be based on income, zip code, or any other legal mechanism. Unequal Access: Protecting Affordable Accommodations Along the California Coast 81 Conclusion Short-term rentals provide a relatively simple way to increase access to the coast. Since most STRs use already existing property, they should be considered a relatively sustainable solution which can significantly increase the availability of overnight accommodation along the coast. The expansion of STRs over the past few years has created concern in many coastal communities about neighborhood disturbances and has led many communities to enact severe restrictions on STRs. As stated in the recent Kracke v. City of Santa Barbara decision involving the City of Santa Barbara's ban on STRs in the Coastal zone, these restrictions effectively limit access to the coast, particularly for lower income households and underserved communities. STRs need to be properly regulated. However, as the Kracke case demonstrated, too frequently local regulations are designed specifically to restrict access to STRs and hence access to the coast. Increasing coastal access regulations should be simple and transparent to all, and registration should be simple, inexpensive, and swift. Costly inspections on already permitted residential property should be avoided. The goal of any community registration process should be to help STIR owners comply with existing rules and regulations and to pay their taxes (generally transient occupancy taxes), not to exclude visitors from accessing the coast. Unequal Access: Protecting Affordable Accommodations Along the California Coast 82 Glossary Affordable Housing: In California, housing is designated as affordable based on an area's median household income. Housing is deemed affordable if costs—rent or a mortgage, including utilities— account for no more than 30% of a household's income spent. Communities in California set aside some housing for "very -low income" families, those earning less than 50% of area median income; however, the demand for this housing significantly exceeds the supply. Business License: Many cities require business licenses to allow individuals/companies to conduct business within a jurisdiction. The cost of a license typically varies by the sales/profit of that business. Some jurisdictions require short-term rental operators, or hosts, to obtain a business license at an additional cost to a rental permit. California Coastal Commission: A twelve -member governmental body established by voter initiative in 1972 and later made permanent by the 1976 California Coastal Act. It plans and regulates the use of land and water along the coastal zone and is tasked with enacting the policies of the California Coastal Act via quasi-judicial authority. The Coastal Commission provides regulatory oversight for land use and public access in the California Coastal Zone. California Coastal Conservancy: A State agency established in 1976 to protect and preserve natural lands and waterways, improve access to the coast, and support coastal economies. A non - regulatory agency, the Conservancy supports projects and resource plans on issues pertaining to the coastline and watersheds. Coastal Zone: The region where a body of water borders and intersects with land. Generally, the California coastal zone extends 1,000 yards from the mean high tide line of the ocean, or to the first major ridgeline in rural/recreational areas. Gentrification: The process of investing in, repairing, or rebuilding an area that is deteriorating or blighted, which is accompanied by an influx of more affluent households. Gentrification typically changes the character of a neighborhood and displaces low-income families. Geologic Hazard Abatement District (GHAD): GHADs allow the formation of local property tax districts for the purpose of prevention, mitigation, or control of geological hazards. These projects are funded by additional property tax levies within a GHAD. GHADs may be used to protect property against coastal erosion. Good Neighbor Policy: Typically, part of a broader city ordinance, this policy regulates disturbances in residential neighborhoods, particularly for short-term rentals. These policies require occupants of short-term rentals to limit noise, trash, late night visitors, and other behavior that could damage the quality of life in the neighborhood. The City of Oceanside has a Good Neighbor Policy—which is included in this report—and this policy provides an example of legislation which could be used to govern conduct in short-term rentals. Host: The owner of a residential property who rents out some or part of that space to visitors on a short-term (less than 30 day) basis. Unequal Access: Protecting Affordable Accommodations Along the California Coast 83 Hotel Tax: See Transient Occupancy Tax. Lower -Cost Coastal Accommodation (LCCA): The California Coastal Conservancy defines LCCAs as accommodations which have a daily rate that is 75% or less of the statewide average daily rate (ADR) for an overnight accommodation for a given time period. This report uses the LCCA rate for July 2019, $140.72. Non -market good or service: Economists refer to goods, which are provided for free (often by nature), as non -market goods. Unlike market goods, which have prices and are valued accordingly by the market, non -market goods are often undervalued since their provision is free. Maximum Capacity: The number of people who may legally inhabit a short-term rental, often defined as the number of beds + 2; although, the number may be fewer in certain cities due to local ordinances or host restrictions. Mean High Tide Line: The average of the maximum line of intersection between the water at high tide and the land. This defines the coastal boundary and in California, the boundary of public land. According to the California Coastal Act, all land seaward of the mean high tide line is public property. Note that the mean high tide line will shift with sea level rise. Mello -Roos: The 1982 Mello -Roos Community Facilities Act was created in the wake of Proposition 13 to provide an alternate method of financing necessary public improvements and services. It allows an authority to set up a Community Facilities District (CFD) with an associated Special Tax that can be used for necessary improvements and services that otherwise lack funding. The Special Tax is levied against each property in the CFD. Mom and Pop: While originally a colloquial term applied to any small business, academic literature on short-term rentals often refers to hosts, who lease their own home or a second home, as "mom and pop" operators. Mom and Pop operators are particularly sensitive to restrictions on short-term rentals. Multi -Family Dwelling: A building or structure that is designed to house several different families in separate housing units. The most common type of multi -family dwelling are apartment buildings. Multi -family dwellings can only be constructed where a certain level of density is permitted. These buildings differ from Single Family Detached Dwellings, where each structure houses one family. Permit Fee: The cost charged by a city or county to obtain legal documentation of a short-term rental. Typically, these permit fees are non-refundable. Property Tax: A tax assessed on real estate holdings levied by the governing authority of the jurisdiction where the land or property is located. Proposition 13: A proposition passed by California voters in 1978 which lowered property taxes by about 57%. Tax increases are limited to no more than 2% per year. As a result of Proposition 13, many homes and businesses are assessed and pay taxes at a much lower rate than the market value of the property. Registration: In this report, the term refers to the process by which a homeowner notifies the city or municipality that they intend to rent out their space as a short-term rental and agrees to pay the associated transient occupancy taxes. Unequal Access: Protecting Affordable Accommodations Along the California Coast 84 Resilience (to Climate Change): The characteristic of any system to maintain its integrity despite shocks from extreme weather and other phenomena accelerated by climate change. Financial resilience is the ability of communities to raise funds for climate change adaptation. Restrictive Zoning: Also referred to as Exclusionary Zoning, restrictive zoning is the use of zoning ordinances to exclude certain types of construction or land use inside a community. Many California cities have restrictive zoning laws which impede the development of multi -family and other types of affordable housing. Sales Tax: A tax levied on sales, typically retail sales. In California, the state sales tax rate is set at 7.25%. This rate is made up of a base rate of 6% plus a local rate of 1.25% that goes directly to city and county budgets. Cities and counties can add additional sales tax levies to fund local projects, such as transportation. Short -Term Rental (STR): A home or room available to rent for a period of less than 30 days. Tax Increment Financing (TIF): TIF refers to additional property tax levies within a set district to raise funding (e.g., for climate change resilience). GHADs and Mello -Roos levies are two examples of TIFs. Transient Occupancy Tax (TOT): A tax charged to travelers when they rent out a space for less than 30 days, such as a hotel room, home, hostel room, etc. TOTS are levied by cities and counties (for unincorporated areas), and revenues collected go to these jurisdictions. In California, TOT rates range from 10% to 15%. Utility User Tax (UUT): A tax paid by the users of a public service, such as electricity, water, telephone, sewage, trash, and natural gas. Willingness to Pay (WTP): An economic concept referring to the largest sum of money an individual will pay for a "non -market" good or service, such as a trip to the beach. WTP is often used as a measure of demand for non -market goods, such as a day at the beach. Zoning: A legislative process which divides an urban area into different zones with specific uses, such as residential, commercial, industrial, etc. Each zone is regulated with regard to density, location, size, and type of construction permitted. 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"Airbnb and the Rent Gap: Gentrification through the Sharing Economy." Environment and Planning A: Economy and Space50, no. 6:1147-70. https://doi.org/l 0.1 1 77/030851 8x18778038. Wassmer, Robert W. 2002. "Influences of the'Fiscalization of Land Use' and Urban -Growth Boundaries." An Economists Perspective on Urban Sprawl --Part Il. https://doi.org/l 0.1080/00420980220142655. Weisberg, Lori. 2015. "Commission still trying to preserve affordable lodging along California Coast." Los Angeles Times, August 9, 2015. https://www.latimes.com/local/california/la-me-coastal-20150810-story.html Unequal Access: Protecting Affordable Accommodations Along the California Coast 89 Wisckol, Martin. 2019. "Dana Point hotel plans stalled by Coastal Commission concerns with low-cost lodging needs." The Orange County Register, September 12, 2019. https://www.ocregister.com/2019/09/11 /dana-point-hotel-plans-stalled-by-coastal-commis- sion-over-concerns-for-low-cost-lodging/. Zervas, Georgios, Davide Proserpio, and John Byers. 2015 "The Rise of the Sharing Economy: Estimating the Impact of Airbnb on the Hotel Industry." SSRN Electronic Journal, 1-45. https://doi.org/l 0.2139/ssrn.2366898. Unequal Access: Protecting Affordable Accommodations Along the California Coast go Received After Agenda Printed October 13, 2020 Item No. 18 From: City Clerk's Office Sent: Tuesday, October 13, 2020 3:01 PM To: Mulvey, Jennifer; Rieff, Kim Subject: FW: Comments regarding additional vacation rental items being discussed today From: Bradley den Dulk Sent: Tuesday, October 13, 2020 3:00:34 PM (UTC -08:00) Pacific Time (US & Canada) To: City Clerk's Office Subject: Comments regarding additional vacation rental items being discussed today [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. Council members, I am an owner of a vacation rental property in Newport Beach and have had a permit for many years now. I was also a vacation rental property manager for ten years covering many cities along the coast from Long Beach through Carlsbad. I have been following the discussion and have two comments based on our experience as current owners and as managers. To keep this note short I am only commenting about the areas I disagree. First of all our property management company, as a policy, required a minimum three night stay for a.11 cities we operated in for many of the reasons you are concerned about. However, since not everyone's trip fits perfectly on the calendar sometimes we would end up with some open nights in the middle of the week. Our two night exception (never only one night) was acceptable to us because those who can get away during the week are the ones who want a more quiet atmosphere, are trying to avoid the crowds and the noise and tended to be budget conscience young families, empty nesters, business travelers and older couples. Please consider that a three night minimum is a must for weekends but a two night minimum during the week allows for less expensive getaways and keeps the property manager and the city from losing revenue. Based on my experience and the experience of others in this industry this is a very safe and reasonable approach. Regarding making parking violations the responsibility of the property owner. In our experience we have seen a very negative result from city's making owner's responsible (and because of these problems subsequent backtracking of these rules) for guest parking for several reasons. First, owner's and property managers cannot possibly be there to baby sit and manage a guest's every parking move on their property much less off property. Secondly, whenever someone knows they are not responsible for their actions they will also not care about what they do because the consequence are not theirs. Third, this rule would also create almost impossible enforcement, new policing and administrative overhead. Fourth, this rule downgrades the property rights of vacation rental property owners from every other property owner in Newport. Would this same rule apply to hotels on the peninsula? Truly, the only fair and reasonable solution is to make sure the guest clearly knows the city's rules in the rental agreement and house rules with the consequences squarely on the guest and using existing parking rules, signs and penalties already enforced by the city. Making the owner's responsible for a guests parking is unfeasible to manage and enforce, expensive and patently unfair to the property owner/manager. Bradley G. den Dulk Received After Agenda Printed October 13, 2020 Item No. 18 Subject: FW: CITY COUNCIIL SESSION- Amendments to Short Term Lodging Ordinance- Agenda Item 18 From: Denys Oberman <dho@obermanassociates.com> Sent: Tuesday, October 13, 2020 2:55 PM To: Dept - City Council <CityCouncil@newportbeachca.gov>; Leung, Grace <gleung@newportbeachca.gov>; Brown, Leilani <LBrown@newportbeachca.gov> Cc: dho@obermanassociates.com; Fred Levine<fredric.mark. levine@gmail.com>; Sheri Morgan <sherimorgan08@gmail.com> Subject: CITY COUNCIIL SESSION- Amendments to Short Term Lodging Ordinance- Agenda Item 18 PLEASE DISTRIBUTE AND ENTER INTO THE PUBLIC RECORD Mayor and Members of the City Council: Thank you for progressing these important Amendments to the City's Current STL Ordinance. Our thanks as well to members of the Public who have provided input and evidence; Also, our commendations to Staff for their work in capturing and conveying proposed Amendment and rationale. We request that two other items be considered and added to the amended Ordinance: 1. Along with the proposed Amendment provisions re. granting of new permits: "However, in any event, additional permits will not be considered or granted in Residential zones where there is already a permanent moratorium/cap to prohibit additional STL uses. For clarity, these are R-1 on the Balboa Penninsula. 2. Modify/expand section regarding Owner Responsibility for Parking of STLs to include: Property Owners are responsible for STL Nuisance and Disturbances associated with STL occupancy. ( note also cross- ref. to LUGO and DAC provisions of NBMC) We also request that these provisions be extended to include Property Managers /designated agents of the Owner. We ask that the Council consider and adopt these additions, and direct staff to incorporate them into the Amended Ordinance. Thank you, Denys H. Oberman Resident and Community Stakeholder Cc: this has been forwarded to Community Associations and other Stakeholders. Regards, Denys H. Oberman, CEO flOBERMAN OBERMAN Strategy and Financial Advisors 2600 Michelson Drive, Suite 1700 Irvine, CA 92612 Tel (949) 476-0790 Cell (949) 230-5868 Fax (949) 752-8935 Email: dho a-)obermanassociates.com Received After Agenda Printed October 13, 2020 Item No. 18 Subject: FW: Newport Island STRs - Again Blocking Sidewalks From: Joe Bowerbank<ibowerbank@profunditymarketing.com> Sent: Tuesday, October 13, 2020 5:21 PM To: Dept - City Council <CityCouncil@newportbeachca.gov> Subject: Re: Newport Island STRs - Again Blocking Sidewalks Dear City Council: This email is in regards to one of many STRs causing issues on Newport Island. In particular, this STR is located at 4015 Marcus Ave. Below are a couple pics that I took this past Saturday alone of 4015 Marcus Ave. on Newport Island, and what are many many issues with this STR and others on the island. Typical blocking of the sidewalk. Generally, there is also a car on the side of 4015 down Channel, which blocks the ingress/egress to the rest of Channel down to the dead end of the bay. I've had my car trapped there as a result multiple times. Constant late night partying. I have filled out the online STR complaint form multiple times now and received no response. Is it broken? If so, you might want to have it removed until such time that it works. This congestion and illegal parking is dangerous, prevents people from being able to use sidewalks, often blocks residents from ingress/egress, and precludes emergency vehicles from driving the streets. Not to mention the constant late night partying. I'll send the second correspondence that I sent via the website since no one responded. Thank you for your time, Joe Bowerbank 4007 Marcus Ave. Newport Island, CA 92663 4015 Marcus Ave. on Newport Island Saturday afternoon, Oct. 10th, 2020 The Blue Mini Cooper that Constantly Blocks Residents. Neighbor in yellow house blocked % the entire day. She was afraid to have them towed for fear of retaliation. nother angle: The week before: Same Mini Cooper from STR at 4015 Marcus Ave. blocking ALL cars from going down Channel. I was stuck as a result. Subject: FW: Newport Island Complaint that Was Never Responded to by City - as they promised From: Joe Bowerbank<]bowerbank@prof unditymarketing.com> Sent: Tuesday, October 13, 2020 5:43 PM To: Dept - City Council<CityCouncil@newportbeachca.gov> Subject: Re: Newport Island Complaint that Was Never Responded to by City - as they promised Dear City Council, I'm sending this via email, as it was never followed up on by the city, as they indicated in their online form, which was here: https://www.newportbeachca. ov/govemment/departments/finance/revenue-division/short-term-rentals/short-term- rental-prope . -complaint The below was submitted via the city's online complaint form on Oct. 6"'. Thank you, Joe Bowerbank SUBMISSION: The STR at 4015 Marcus Avenue has become a repeated problem. My wife and I live three houses down with our seven- year-old son. In the last month alone, we've seen party crew after party crew come in and out of this pad. There have been multiple groups of guys 20 -somethings. Are they old high school buddies getting back together? A frat boy reunion? Bored UCI or OCC students? Whatever the case, it is affecting our ability to sleep and our quality of life. Late night partying and yelling is typical. They ride down Marcus Avenue going to or coming from the bars --- blasting music on their bikes at 2:00 a.m. onward. And then there's the midnight drunken strut to shoot hoops at the % court in the park. Like we don't hear every single bounce of the ball and every single conversation!? And the foul language... that's a whole other issue. It's non-stop. What's more, there are cars often piled up everywhere. Last week I tried to get to my vehicle, which was parked at the end of Channel, but there were two cars on the sidewalk and another parked on the street that made it literally impossible for me and my wife to get in and out, so I decided to return later. In hindsight, I should have called Parking Patrol and will in the future. It's a freakin' Cabo San Lucas Party Pad. My wife and I do not want to raise our son in this environment. We have made the decision to start looking for another place to live that isn't peppered with STRs. Joe Bowerbank 4007 Marcus Ave. Newport Island, CA 92663 Submission IJ *wean �.rro Return Message NEWPORT BEACH SHORT TERM LODGING COMPLAINT FORM ... - ... , ... Shank •Ya1. ', ��::�':.�� dtrL+iuna.slra.r ew as-earn..flr�•,er w,s�•. •:tee Joe Bowerbank 4007 Marcus Avenue Newport Beach, CA 92663 tel: 949.378.9685 fax: 949.334.1390 ibowerbank@profunclitymarketing.com 0 �rl � -- 10-13_2020 Requested amendments to provisions of the proposed STL regulations either now or during clean-up of Ordinance 2020-15 "Permit holders or their managers shall report the number of legitimate bedrooms matching city building records with each permit, with the provision that the unit will be allowed 2 guests per bedroom plus 2 additional persons maximum. Violation of such requirement shall result in possible suspension of permit or immediate eviction of tenants." "The City to provide Nuisance plan guidelines on the City's website and permit holders are to acknowledge and agree to abide with the City Nuisance Plan guidelines when the application is signed and submitted to the city together with the annual permit fee."