HomeMy WebLinkAbout6.0_Fractional Homeownership_PA2022-0202
Planning Commission
February 23, 2023
Item No. 6
Fractional Homeownership (PA2022-0202)
Staff will give a presentation to the Commission.
February 23, 2023, Planning Commission Item 6 Comments
These comments on a Newport Beach Planning Commission agenda item are submitted by:
Jim Mosher ( jimmosher@yahoo.com ), 2210 Private Road, Newport Beach 92660 (949-548-6229).
Item No. 6. FRACTIONAL HOMEOWNERSHIP (PA2022-0202)
Since this is a matter that has attracted considerable public interest, and since the agenda
announcement says the Commission will hear a presentation and be asked to make a
recommendation to the City Council, it is very disappointing that neither the Commission nor the
public has been given any advance hint of what the report might say or what recommendation
might be suggested, nor has any background information of any kind been provided. The
absence of such information compounds the difficulty of conducting a thoughtful discussion of
what staff may have already made an unnecessarily difficult subject.
I have commented extensively on this topic in the past, including especially at the September
27, 2022, special meeting of the City Council, which was called to initiate code amendments
related to fractional homeownership, where my comments can be found starting on page 4 of
the Item 1 correspondence.
In my view, timeshare arrangements, including ones achieved through “fractional
ownership” of homes, have long been banned in Newport Beach and continue to be
banned except for the larger timeshare developments that are allowed under limited
circumstances in certain commercial districts.
In essence, I think there can be no doubt that Ordinance No. 82-14, adopted by our City Council
in 1982, was intended to prohibit, in all of Newport Beach, the “development” of any kind of
time-share “projects” in which a purchaser obtained an exclusive right to occupy a living space
for limited, recurring intervals of time. And despite its use of the words “project” and
“development,” both the statement of intent and the substance of Ordinance No. 82-14 made
clear the prohibition was on a type of land use and not confined to new construction. In
particular, it explicitly prohibited the conversion of any existing residential or hotel/motel units in
the City to a time-shared model, including Pacaso-like shared ownership.
Current City staff argues that subsequent amendments to the Zoning Code repealed the 1982
ban on converting residences to timeshares. But I am not aware of any evidence to suggest
there was ever any such intent.
Indeed, Ordinances No. 96-7 and 96-18 relaxed the complete ban to allow, subject to special
permitting restrictions, larger-scale timeshare ventures in commercially-zoned districts, including
the conversion of some existing hotel/motel units to a time-share model.
But those ordinances carefully retained the 1982 definition of “time-share” and 1982’s
prohibition on the “conversion of existing residential dwelling units into time-share units.”
Saying, as staff seems to, that the 1996 decision to allow the heavily-regulated creation of
timeshares in commercial districts was, without saying so, simultaneously intended to open the
door for the completely unregulated appearance of timeshares in residential districts makes no
sense to me.
Planning Commission - February 23, 2023 Item No. 6a - Additional Materials Received Fractional Homeownership (PA2022-0202)
February 23, 2023, PC agenda Item 6 comments - Jim Mosher Page 2 of 2
Subsequent comprehensive restatements and reorganizations of the City’s Zoning Code, in
1997 and 2010, have admittedly caused the code adopted in 1982 and 1996 to become
increasingly fragmented and difficult to follow, but neither the Council nor the public was ever
told any of those comprehensive restatements of code were intended to change the meaning of
the previously-adopted timeshare regulations.
In particular, staff has presented no evidence that seemingly conflicting post-1996 definitions of
“development” and “project” that have been introduced in connection with other Zoning Code
provisions were ever intended to affect the interpretation of the 1982/1996 time-share
regulations.
Indeed, in the City’s current Zoning Code, the essentials of those earlier regulations remain
intact:
1982’s definition of “Time share project” remains as originally written, but has been
moved to Sec. 20.70.020.V under “Visitor Accommodations (Land Use) – 7.”
1982’s prohibition on converting existing residential units of any kind to a time-shared
model continues in Sec. 20.48.220.A.2 – and would make little sense if the later
definitions of “development” and “project” that staff cites had been intended to allow it.
1996’s allowance of a time-shared land use in (and only in) certain commercially-zoned
districts where hotel/motel land use would be allowed remains in Tables 2-4 and 2-5 of
Sec. 20.20.020 (under “Visitor Accommodations, Nonresidential”) and in Tables 2-8 and
2-9 of Sec. 20.22.020 (under “Visitor Accommodations”).
Quite specifically, the principal public concern I have heard is about the conversion of existing
residential units in residential districts to timeshare units through a change to Pacaso-style
fractional ownership, and there has never been any statement of intent to allow timeshares in
residential districts.
My conclusion is that the Pacaso-type model of home ownership was banned in 1982 and
remains banned in non-commercial districts.
Rather than recommending the Council adopt new regulations, my suggestion is the
Planning Commission simply recommend the Council affirm to staff our City’s long-
existing prohibition on residential timeshare conversions.
If the meaning of the current code is as unclear as staff claims it is, this could be accomplished
through a new and clearer ordinance approved with the caveat that it is a restatement of
existing law, not an adoption of new law – for, at least in my view, continuing an existing
regulation is much better than attempting to justify new regulations.
Planning Commission - February 23, 2023 Item No. 6a - Additional Materials Received Fractional Homeownership (PA2022-0202)
From:Gary Cruz
To:Planning Commissioners
Subject:Fractional Ownership
Date:February 21, 2023 5:46:38 PM
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Dear Commissioners,
I understand there will be a discussion regarding fractional ownership on the upcoming agenda. I am
not sure the commission understands how many homeowners are against fractional ownership.
Regretfully I am unable to attend in person, but I would like to offer my perspective on it.
It is disappointing that it has taken this long for the discussion to ensue. It was presented to the
commission a long time ago and it feels like taking no action is counter to what has been asked of
the commission. Residents most certainly are in the dark on where the city stands on it and we are
frustrated by a lack of action.
Please envision how it feels to not know what the position of the city has on this issue. The short-
term lodging issue became a crisis when the city took no action, and it seems like history is repeating
itself.
Personally, I have three homes within 100 yards from me that have recently sold, are up for sale or
soon to go up for sale. Each one is a potential fractional ownership. One shared ownership property
already exists about 300 yards away. This is a residential neighborhood and the thought of
corporations taking over the residential neighborhood is depressing. Regardless of the quality of the
people that purchase a share in a house the fact is they do not live here and are basically on vacation
while resident go to work. There is no control over who they let use their week or whether they are
renting it out under the table.
Everyone considers fractional ownership as timeshares except fractional ownership companies. A
recent article says it all:
How to get rid of a fractional ownership time share
1. Sell it
2. Give it away
3. Work with your timeshare company
4. Hire a reputable timeshare exit company
I also read that Pacaso recently laid off 100 workers and that they were focusing on cities where they
already had a foothold. Do we want to be one of those cities where fractional ownership is
condoned. Are we going to stand around while other cities ban them? Given the state is trying to
create housing do we want to create less housing by offering fractional ownership?
Gary Cruz
Newport Island
Planning Commission - February 23, 2023 Item No. 6b - Additional Materials Received Fractional Homeownership (PA2022-0202)
From:L M
To:Planning Commissioners
Subject:Item 6 - Fractional Homeownership
Date:February 22, 2023 4:17:45 PM
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I am opposed to Fractional Homeownership! This model is almost identical to timeshare
ownership and is incompatible for use in my neighborhood!
I live on the Balbia Peninsula. This ownership structure should not be allowed to evade thelimitations we placed to avoid short term property usage burdens on the City and our natural
resources.
Thank you,Larry Mathena
Planning Commission - February 23, 2023 Item No. 6b - Additional Materials Received Fractional Homeownership (PA2022-0202)
Planning Commissioning Meeting 2023-02-23 – Item 6 – Fractional Homeownership
Planning Commissioners and City Staff,
Not knowing what details will be presented and discussed about the subject during the meeting I would like
to express the following:
1.Rather than focusing the discussion on “Fractional Homeownership” the discussion should be focused
on “Shared Deed Ownership Timeshares”.
2.The issue under review is not a fractional ownership (co-ownership) through an LLC, Trust, etc where
the fractional owners are family members and/or friends. What is under review is a fractional ownership
where specific/structured time restrictions exist for the use of the dwelling by the various co-owners
(who are mostly strangers among them).
3.Pacaso business model is a “Shared Deed Ownership Timeshare” business. For more detail supporting
this statement please refer to the letter submitted by Maureen Cotton representing the Pier to Pier
(Central Newport Beach Community) Association.
4.Investopedia definition of “Shared Deeded Ownership Timeshare”: Shared deeded ownership gives
each buyer a percentage share of the physical property, corresponding to the time period purchased.
Shared deeded ownership interest is often held in perpetuity and can be resold to another party or willed
to one's estate.
5.California’s “Vacation Ownership and Time-share Act of 2004” (Chapter 11210) defines “Time-share
plan” as follows: “…means any arrangement, plan, scheme, or similar device, other than an exchange
program, whether by membership agreement, sale, lease, deed, license, right to use agreement, or by
any other means, whereby a purchaser, in exchange for consideration, receives ownership rights in or
the right to use accommodations for a period of time less than a full year during any given year, on a
recurring basis for more than one year, but not necessarily for consecutive years”.
6.Although California’s “Vacation Ownership and Time-share Act of 2004” (Chapter 11210) regulations
only applies to “Time-share plans” consisting of more than 10 time-share interests, the “Time-share
plan” definition clearly describes what Pacaso is doing with their business model. One of the reasons to
keep the fractional ownership to a maximum of eight (8) fractional owners seems to be not to have to
comply with the regulations imposed by California’s “Vacation Ownership and Time-share Act of 2004”
(Chapter 11210).
7.Timeshares have never been allowed in Newport Beach’s Residential Coastal Zoning Districts. The city
residents do not want Timeshares to be allowed in the residential areas of the city.
8.Timeshares are allowed in Newport Beach’s Mixed-Use and/or Commercial Coastal Zoning Districts so
the focus should be for Pacaso, and others, to bring their business model to said areas of the city.
9.During the 2022-10-06 Planning Commission Study Session city staff presentation included “Option A”
(prohibit timeshares in residential zones”, which city residents support) and “Option B” (create Fractional
Ownership Land Use and regulate, which city residents do not support). Regarding the suggested “500
feet separation between other fractionals” of “Option B” please note that most of the residential areas in
the Balboa Peninsula, Balboa Island and Corona del Mar are not R-1 but R-2 or RM so such suggested
“separation” would have no benefit to most areas.
Planning Commission - February 23, 2023 Item No. 6c - Additional Materials Received Fractional Homeownership (PA2022-0202)
10. As some may argue in favor of allowing Pacaso, and others, to operate Timeshares in our residential
areas and for city staff to develop standards to regulate them (rather than prohibit them) please think of
the unintended consequences:
a) Pacaso business model reduces permanent housing in our city
b) Pacaso business model increases housing pricing so it becomes less affordable to locals
c) The “fractional homeowners” will have “property rights” so can they truly be regulated? How?
d) Pacaso may cooperate with the regulations but how about other companies who may decide to
operate in our city (i.e. Ember Homes, Nelson Family Estates, Fractional Villas, Elite Destination
Homes, etc)
I urge the Planning Commissioners and City Staff to take firm action to stop the “Shared Deed Ownership
Timeshare” operations in our city’s residential areas. Any other outcome will be detrimental to our coastal
residential areas.
Sincerely,
Carmen Rawson
949-278-2447 Cell
Planning Commission - February 23, 2023 Item No. 6c - Additional Materials Received Fractional Homeownership (PA2022-0202)
From:Cheryl
To:Planning Commissioners
Cc:hello@mynewportbeach.org; Stapleton, Joe; Avery, Brad; Avery, Brad; Grant, Robyn; O"Neill, William; Kleiman,
Lauren
Subject:regarding fractional ownership
Date:February 22, 2023 5:25:25 PM
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City Council Members and Planning Commission:
My husband and I have resided at 311 Island Avenue on the peninsula since 1995. We valueour neighbors and our neighborhood and urge the City to look long and hard at what the
consequences of fractional ownership will be .Please refer to information sent to you by our Pier to Pier representative Maureen Cotton
about the Pacaso website and how fractional ownership would work. It is a time share, nomatter what they call it. The City has an obligation
to consider and protect the quality of life of its residents, and fractional ownership onlybreaks down neighborhoods. We live here. Our roots are here. We look out for each
other and care about each other.
We will continue following this issue and hope to see 'fractional home ownership' prohibitedin Newport Beach, just as time share ownership is.
Thank you for hearing us.
Keith & Cheryl Garrison
311 Island Avenue
Planning Commission - February 23, 2023 Item No. 6c - Additional Materials Received Fractional Homeownership (PA2022-0202)
From:escapeartist55 (null)
To:Planning Commissioners
Subject:Item 6 - Fractional Homeownership
Date:February 23, 2023 5:21:56 AM
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I am opposed to Fractional Homeownership! This model is almost identical to timeshare ownership and is
incompatible for use in my neighborhood!
The Peninsula was a lovely place (even though 80000 people came in summer) to live when we bought our home. It
has turned into a zoo ALL YEAR LONG since the commissioners have approved 1600 short term rentals and now
considering Fractional (ie timeshare). How many persons on the commission live on the Peninsula)?
Take a lesson from Laguna and Huntington Beach where none or a fraction are allowed.
How much money does the City need to improve tourism at the cost of the long term owners?
Sara Abraham.
Sent from my iPhone
Planning Commission - February 23, 2023 Item No. 6c - Additional Materials Received Fractional Homeownership (PA2022-0202)
From:Linda Orozco
To:Planning Commissioners
Cc:Chosty NB
Subject:Item 6 - Fractional Homeownership OPPOSED
Date:February 23, 2023 8:57:02 AM
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To NB Planning CommissionI have been a resident/owner on the Balboa Peninsula since 1983. During that time, I’ve seen the city of NewportBeach treat the Peninsula, and its residents as second class citizens of the city. Over the decades, the city hascreated segregationist rules to treat the peninsula separately. Specifically, I’m talking about short term rentals, drugand alcohol rehab houses, half way houses, homeless, etc. Now the new topic is fractional ownership?
The rules should be simple. Anything the city adopts for the Peninsula should be good enough for any other part ofthe city, including Big Newport, Corona Del Mar, Newport Coast, Crystal Cove, etc.
I strongly oppose timeshares and/or fractional ownership anywhere in Newport Beach, particularly the Newportpeninsula. The peninsula is already densely populated with horrific traffic problems. If the city believes thatfractional ownership is a good thing, please begin with our neighbors inland, such as Crystal Cove, Newport Coast,or big Newport. Sort out the progress of such fractional ownership in those residential neighborhoods before youbring it to the Peninsula alone.
I am strongly opposed to Fractional Homeownership. This model is almost identical to timeshare ownership and isincompatible for use in my residential neighborhood!
Sincerely,
Linda Orozco, Ph.D. 1800 block Balboa Blvd.Cell. 949-413-5483
Planning Commission - February 23, 2023 Item No. 6d - Additional Materials Received After Deadline Fractional Homeownership (PA2022-0202)
From:Elliott Bonn
To:Planning Commissioners
Subject:Item 6 - Fractional Homeownership
Date:February 23, 2023 10:07:14 AM
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I am opposed to Fractional Homeownership! This model is almost identical to timeshare ownership and is
incompatible for use in my neighborhood!
Elliott Bonn
714-299-9758
Planning Commission - February 23, 2023 Item No. 6d - Additional Materials Received After Deadline Fractional Homeownership (PA2022-0202)
From:jepalm@earthlink.net
To:Planning Commissioners
Subject:Fractional Ownership - Item #6
Date:February 23, 2023 4:58:17 PM
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content is safe.
We are 100% against the proposed fractional ownerships in our community.
These “short term stays” will lead to noise and parking issues and cause disturbance to our now
perfect community.
Hotels and Airbnb’s belong in areas zoned for such use and NOT in quiet residential neighborhoods!
Please vote NO on this issue!
We thank the Planning Commission for your understanding and NO vote!
Sincerely,
Jan-Erik and Diane Palm
1104 W. Bay Ave
Newport Beach, CA 92661
Planning Commission - February 23, 2023 Item No. 6e - Additional Materials Received After Deadline Fractional Homeownership (PA2022-0202)
Central Newport Beach Community Association
PO Box 884 • Newport Beach, CA • 92661-0884
www.MyNewportBeach.Org
February 21, 2023
City of Newport Beach, Planning Commission
100 Civic Center Drive
Newport Beach, CA 92660
Subject: Item 6. Fractional Homeownership (PA2022-0202)
Dear Planning Commissioners, City Staff, and City Councilmembers:
Apologies in advance for the length of this letter. We thank you for engaging with Central Newport Beach
Community Association (CNBCA) on the matter of fractional homeownership—which is just an alternate
expression for timeshare ownership, as evidenced below. Let me get right into it.
Per the Pacaso website, the maximum continuous stay in a Pacaso for a 1/8-share owner is capped at 14
days and back-to-back stays are prohibited. One-eighth (1/8) share owners are allowed to book six (6)
stays and any stay greater than 7 days counts as two stays, encouraging 2- to 7-day stays. Back-to-back
stays are prohibited with a gap between stays equal to or greater than the length of your previous stay.
Planning Commission - February 23, 2023 Item No. 6e - Additional Materials Received After Deadline Fractional Homeownership (PA2022-0202)
Central Newport Beach Community Association
PO Box 884 • Newport Beach, CA • 92661-0884
www.MyNewportBeach.Org
The Pacaso Model meets the definition of a timeshare, which is already prohibited by City code.
The City of Newport Beach has never seen a commercial business come into single-family and multi-
family-zoned neighborhoods with the express goal of upending single- and multi-family ownership by
converting homes into 8 timeshare units. Unlike hotels where transient overnight traffic is permitted or
where permitted short-term rentals exist, the impact of having unpermitted, transient overnight traffic in
single- and multi-family neighborhoods will be profound and adverse.
Pacaso home use is fundamentally different from historic single-family usage.
The sense of neighborhood and community that prevails in single-family zoned areas will be
destroyed. Areas where neighbors know each other, take in each other’s garbage cans, or collect
packages will be replaced by a rotating cast of unrelated people with no connection to the
neighborhood.
This change will be permanent, as once homes are converted into 8 timeshares, the likelihood
that they will ever revert to historic single-family homeownership is all but eliminated as it would
take persuading all 8 entities to sell.
Home utilization will create occupancy patterns that are prohibited in Single-Family zoned areas
as Pacaso homes will change occupancy as often as they wish (e.g., up to 3 times per week):
Without a Short-Term Lodging Permit, stays for less than 30 days are prohibited. Per the Pacaso
website, the maximum continuous stay in a Pacaso for a 1/8 share owner is capped at 14
days and back-to-back stays are prohibited. One-eighth (1/8) share owners are allowed to book 6
stays and any stay greater than 7 days counts as two stays, encouraging 2- to 7-day stays.
Pacaso neighborhoods will bring frequent blitzes of cleaning/maintenance crews to support the constant
turnover, increasing attendant activity, traffic, and garbage buildup.
To further illustrate how dissimilar the Pacaso Model is from single-family homeowners, Pacaso owners
do not store personal items inside the home. They are provided storage units. Garages will
accommodate the required eight (8) storage units, making the garage unusable for parking, and placing
an increased demand on street parking.
Pacaso can be terminated as Property Manager and “the owner group can … self-manage the property.”
Anyone who has participated in shared property management, via a Homeowners Association (HOA) or
similar mechanism, understands this model can be very difficult. Each Pacaso property will be its own
“HOA.” Pacaso’s assertion that they will provide professional management is illusory. Per the Pacaso
website, Pacaso can be terminated as the property manager and “the owner group can … self-
manage the property.” It is not hard to imagine reasons to terminate Pacaso (e.g., poor performance, an
effort to save management fees, etc.) with the resulting potential downside of eight (8), unrelated owners
having to agree on upkeep, maintenance, and repairs—leading to poorly maintained properties with no
single, responsible entity required to implement solutions. Imagine broad swaths of Newport Beach
neighborhoods with such properties.
Fractional ownership is classified—by the City—as type of “limited use overnight visitor accommodation.”
In §21.48.025 – Visitor Accommodations of Newport Beach Municipal Code Chapter 21.48 – Standards
for Specific Land Uses, it states, “If the review authority determines that the development will impact lower
cost visitor-serving accommodations, or provide only high or moderate cost visitor accommodations, or
limited use overnight visitor accommodations such as timeshares, fractional ownership and condominium-
hotels, then mitigation commensurate with the impact shall be provided…”
Planning Commission - February 23, 2023 Item No. 6e - Additional Materials Received After Deadline Fractional Homeownership (PA2022-0202)
Central Newport Beach Community Association
PO Box 884 • Newport Beach, CA • 92661-0884
www.MyNewportBeach.Org
There is a reason why the City has zoned neighborhoods for permitted uses and prohibited uses.
Ordinance No. 2020-15—An Ordinance of the City Council of the City of Newport Beach, California,
Amending Section 3.16.060 and Chapter 5.95 of the Newport Beach Municipal Code Relating to Short
Term Lodging—details the adverse impacts that short-term lodging and limited use overnight
accommodations, including:
City streets and services are burdened with an increased demand on parking, sewage, and
refuse facilities, paramedics, and police services (responding to complaints of noise disturbances,
disorderly conduct, and other illegal activity).
Permanent residents and long-term tenants’ peace, safety, and general welfare are negatively
impacted with increased noise, traffic, refuse, and demand for parking resulting from short-term
lodging by a variety of occupants.
Destroying the quality and residential character of the City’s existing single family and multi-family
homes.
The increase in demand for City services resulting from timeshare/fractional homeownership overburdens
and threatens the City's ability to provide necessary services to long-term residents. By creating its own
definition/business model, Pacaso and similar organizations have developed an alternative expression for
timeshare ownership. This type of ownership is already banned by the City. Also, unless the operating
agreement states unequivocally that each one-eighth owner must use his/her 44 days consecutively, the
City’s regulations on Short-Term Rentals is being circumvented (i.e., securing short-term lodging permits,
fulfilling the requirements of the Uniform Transient Occupancy Tax Ordinance, etc.).
Pacaso’s website states that one of the “Pros” to this type of ownership is “Potential Rental Income.”
In Newport Beach, timeshares are prohibited. We think the City of Newport Beach wisely made this
zoning decision, because timeshares are an incompatible use within our neighborhoods. We believe that
the Pacaso Model is prohibited by code and request that the City of Newport Beach take action to prevent
further violations by Pacaso and similar businesses that seek to create timeshare-type businesses/
activities in areas where they are prohibited by the City’s zoning ordinances.
As the City of Newport Beach performs its analysis, CNBCA and our 300+ members encourage the City
to remember why single-family and multi-family zoning exists and why the City limited the number of
Short-Term Lodging Permits. We request that the City of Newport Beach not allow uses that are
inconsistent with the zoning intent and current short-term lodging ordinances.
Given the foregoing ordinances and municipal codes, fractional homeownership should be banned since
it is just an alternate expression for timeshare ownership. The property manager or owners of each
existing property should be subject to securing short-term lodging permits and fulfilling the requirements
of the Uniform Transient Occupancy Tax Ordinance. Until short-term lodging permits can be secured
(there is already a wait list), each one-eighth owner should be informed of the requirement to occupy the
property for no less than 30 days to comply with our City’s codes and ordinances.
Planning Commission - February 23, 2023 Item No. 6e - Additional Materials Received After Deadline Fractional Homeownership (PA2022-0202)
Central Newport Beach Community Association
PO Box 884 • Newport Beach, CA • 92661-0884
www.MyNewportBeach.Org
We thank City Staff, the Planning Commission, and City Council for its willingness to engage with the
residents on this topic. We believe if the City of Newport Beach does not take action to enforce our zoning
laws, codes, and ordinances to prevent this alternate timeshare ownership model from taking over our
neighborhoods, the sense of community will be irreparably harmed. The CNBCA Board and our members
are happy to engage further with you or others in the city government on this topic.
Respectfully,
CENTRAL NEWPORT BEACH COMMUNITY ASSOCIATION
Maureen Cotton
President
Planning Commission - February 23, 2023 Item No. 6e - Additional Materials Received After Deadline Fractional Homeownership (PA2022-0202)
From:MORGAN DAVIS
To:Planning Commissioners
Subject:Item 6 - Fractional Homeownership
Date:February 23, 2023 6:03:21 PM
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I am opposed to Fractional Homeownership! This model is basically weekly rentals, and should not be allowed
where zoning does not allow weekly turnover.
Morgan Davis
Sent from my iPad
Planning Commission - February 23, 2023 Item No. 6e - Additional Materials Received After Deadline Fractional Homeownership (PA2022-0202)
1
Rodriguez, Clarivel
Subject:FW: Planning Commission Feb 23 Discussion and Recommendations re Fractional Ownership
From: Denys Oberman <dho@obermanassociates.com>
Sent: February 25, 2023 2:39 PM
To: celimore@newportbeachca.gov; Rosene, Mark <mrosene@newportbeachca.gov>;
sklaustermeire@newportbeachca.gov; llowery@newportbeachca.gov; Harris, Tristan <THarris@newportbeachca.gov>
Cc: Jurjis, Seimone <sjurjis@newportbeachca.gov>; BOB YANT <byant@aol.com>; Russ Doll <radoll@roadrunner.com>;
Nancy Scarbrough <Nancy@nancyfornewport.com>; SmartPearl1@hotmail.com; ckrawson@att.net; Fred Levine
<fredric.mark.levine@gmail.com>; CdMRA <info@cdmra.org>; dho@obermanassociates.com
Subject: Planning Commission Feb 23 Discussion and Recommendations re Fractional Ownership
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Chair Ellmore, Vice Chair Rosene, Secretary Klaustermeier ,Commissioner Lowrey and Commissioner Harris‐
We would like to thank the Planning Commission and also City staff, for the work and discussion surrounding the issue of
Fractional Ownership/timeshare businesses.
We appreciate the efforts of the Planning Commission , and those of City staff to prepare recommendations for the City
Council for the upcoming March 14th meeting.
Staff made a Presentation at the February 23, 2023 Planning Commission meeting, which was not made available to the
public for review in advance of the February 23rd meeting, despite multiple requests to staff.
We would appreciate the Commission’s direction to Staff to forward this presentation to those who requested it or
otherwise make it publicly available for review.
The presentation was of concern to the residents that attended the Feb. 23rd meeting. It seemed to suggest that
Fractional Ownership businesses be characterized and regulated by the City as Short Term Lodging—when they are
clearly a form of Timeshare . Further, the approach to regulation suggested herein would be of questionable feasibility
and effectiveness .
The proposal by a Pacasso representative that the City adopt a cap of 500 Fractional Ownership units allowed was
absurd and disrespectful.
After thoughtful discussion, the Commission proposed the following position regarding recommendations to City
Council:
1. Broaden the Definition of Timeshare in the City’s ordinances ( Fractional Ownership clearly form of Timeshare )
2. Provide for public transparency, review and permitting process through Zoning Administrator, including public
hearing *
3. Do not allow in R‐1 residential zones*
4. No recommendation made regarding a Cap on number of Fractional Ownership units
(* if Council, against residents’ position and City ordinance prohibiting timeshares, insists on allowing Fractional
businesses with regulation)
Planning Commission - February 23, 2023 Item No. 6e - Additional Materials Received After Deadline Fractional Homeownership (PA2022-0202)
2
We appreciated the Commission’s ultimate summary of their position. This is responsive to the residents’
position that Fractional Ownership businesses should not be permitted in our residential neighborhoods.
Also, we appreciate the Commissioners’ guidance to the public that, ultimately, decisions reside with the
political body, eg. The City Council; . Therefore, residents should meet with and express their position with
Council representatives.
Our Leadership Committee is comprised of representatives from Penninsula Point, Central Penninsula, West
Newport, Newport Island, Balboa island, and Corona del Mar.
Thank you again for your time and care on this important subject.
Denys H. Oberman
Oceanfront resident and community leader
Regards,
Denys H. Oberman, CEO
OBERMAN Strategy and Financial Advisors
19200 Von Karman Avenue, 6th Floor
Irvine, CA 92612
Tel (949) 476-0790
Cell (949) 230-5868
Fax (949) 752-8935
Email: dho@obermanassociates.com
CONFIDENTIALITY NOTICE: The documents accompanying this transmission contain confidential information belonging to the sender which is
legally privileged. The information is intended only for the use of the individual or entity named above. If you are not the intended recipient, you are
hereby notified that any disclosure, copying, distribution or the taking of any action in reliance on the contents of this telecopied information is strictly
prohibited. If you have received this transmission in error, please notify us immediately at 949/476-0790 or the electronic address above, to arrange
for the return of the document(s) to us.
Planning Commission - February 23, 2023 Item No. 6e - Additional Materials Received After Deadline Fractional Homeownership (PA2022-0202)
1
Rodriguez, Clarivel
Subject:FW: Fractional Ownership
From: Denys Oberman <dho@obermanassociates.com>
Sent: February 26, 2023 7:00 AM
To: planningcommission@newportbeachca.gov; Jurjis, Seimone <sjurjis@newportbeachca.gov>
Cc: BOB YANT <byant@aol.com>; Lee Pearl <smartpearl1@hotmail.com>; Russ Doll <radoll@roadrunner.com>; Nancy
Scarbrough <Nancy@nancyfornewport.com>
Subject: Fractional Ownership
[EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe.
We wish to confirm that the position of residents in the following communities is that Fractional Ownership businesses
are time share businesses, operating commercially in our residential neighborhoods:
Penninsula Point
Central Penninsula
Balboa island
Newport Island
West Newport
Corona del Mar
Fractional Ownership/Timeshare is already banned under the City’s current Timeshare ordinances.
Under any circumstance, Fractional Ownership businesses should NOT be permitted in Family Residential zones‐‐‐ To be
clear, these include R1, R1 ½, and R2 in our communities.
These are dense, family residential communities with strong ties to the community.
Fractional Ownership is not consistent with the City’s General Plan.
Allowing Fractional Ownership timeshares will have an irrevocable adverse impact on our community.
Thank you for your consideration as you develop your recommendations to the City Council.
Denys Oberman
Resident and member of the Leadership Committee to address Fractional Ownership
Regards,
Denys H. Oberman, CEO
OBERMAN Strategy and Financial Advisors
19200 Von Karman Avenue, 6th Floor
Irvine, CA 92612
Tel (949) 476-0790
Planning Commission - February 23, 2023 Item No. 6e - Additional Materials Received After Deadline Fractional Homeownership (PA2022-0202)
Fractional Homeownership
Planning Commission
February 22, 2023
Seimone Jurjis, CDD Director
Jaime Murillo, AICP, Principal Planner
Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202)
Community Development Department 2
What is Fractional
Homeownership?
Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202)
Fractional Ownership of
Real Estate
•Partial ownership of property:
•Common with commercial properties
•Emerging with single-family residential
•Vacation property (2nd or 3rd homes)
•Fractions offered for sale online
Community Development Department 3
Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202)
How it Works
•Property is purchased under a Limited Liability
Corporation (LLC)
•Shares of the property are sold:
•1/8 ownership or greater
•Operating Agreement is used to manage the
property
Community Development Department 4
Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202)
Operations
•Co-owners agree on usage (days, week)
•1/8 share = 45 days (not consecutive)
•typically less than 30 consecutive day stays
•managed through calender
•Owners pay share of property costs:
•maintenance, management, HOA, cleaning, tax,
utilities, insurance, and reserve funds costs
•Co-owners can sell their interest
Community Development Department 5
Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202)
•Function like short term rentals –non-resident vacation behaviors
•Commercialization of neighborhoods
•Impacts housing affordability –increased vacation homes and reduced housing stock
Complaints/Concerns
Community Development Department 6
Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202)
Community Development Department 7
Background and
Direction
Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202)
City Council Background
•November 16, 2021, Study Session
•4 known homes
•Directed staff to study what other cities are doing and report back
•September 13, 2022-City Council Study Session
•Sagecrest Planning+Environmental Report
•11 known homes
•Directed staff to return with proposed action items
8Community Development Department
Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202)
City Council Direction
•September 27, 2022 –Council Meeting
•Initiated Zoning Code and Local Coastal Program
Amendment
•Did not pursue moratorium
•Directed staff to work expeditiously with PlanningCommission
9Community Development Department
Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202)
Planning Commission
•October 6, 2022 –Study Session
•Staff presented comprehensive overview and options
•Due to complexity of issue, direction to form an Ad-Hoc Committee
•October 20, 2022 –Formation of Ad-Hoc Committee
•Commissioners Lowery, Rosene, and Weigand
•Total of 7 meetings
10Community Development Department
Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202)
Ad-Hoc Committee Considerations
11Community Development Department
•Regulatory process
•Location restrictions
•Development standards
•Operational standards
•Grandfathering Provisions
Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202)
Community Development Department 12
Ad-Hoc Committee
Recommendations
Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202)
1. Regulatory Process
•Create regulatory process to permit
Fractional Homeownership
•Regulate like STL in Title 5 of NBMC-Business
License and Regulations
•Require permits for both dwelling units and
property manager
•Clarify not applicable to co-owned property
not managed and facilitated by third-party
13Community Development Department
Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202)
2. Location Restrictions and Maximum Cap
•Limited in all residential zoning districts by a cap
•Seeking Planning Commission input on
appropriate cap
14Community Development Department
Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202)
3. Parking Requirements
•Parking shall conform with current standards
(size and number)
•Parking shall be free of obstructions and
available for use
15Community Development Department
4. Noise Restrictions
•Prohibition of amplified sound outside or
audible at PL from 10 pm to 10 am
•Compliance with City noise ordinance
Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202)
5. Management Plan
•Require submission of operating agreement/management plan to City
•Addresses landscape maintenance and trash collection plan
•Identify local contact person to address issues
•24 hour contact
•Located within 25 miles
•Respond within 30 minutes
16Community Development Department
Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202)
8. Prohibit Subletting andGuest Use
•Prohibit subletting of unit for rentals, including
short-term lodging
•Prohibit guest usage when owner not present
17Community Development Department
Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202)
9. Good Neighbor Policy
•Written policy posted in unit
•Owner responsibilities
•Contact person
•Parking rules
•Street sweeping
•Trash collection
•City noise restrictions
18Community Development Department
Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202)
10. Owner Acknowledgments
•Sign acknowledgement by each owner
submitted to the City
•Understanding of all rules and Good
Neighbor Policy
•Prohibition against subletting and guest use
•Enforcement and fines
19Community Development Department
Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202)
11. Grandfathering Provisions
•Needed for existing units that are
nonconforming due to parking requirements
•Difficult to retroactively regulate existing
uses or those in process
•Allow to remain as legal nonconforming uses
20Community Development Department
Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202)
Community Development Department 21
Planning
Commission
Recommendation
Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202)
Recommendation Requested
•Seeking recommendation to City Council
•March 14, 2023, City Council meeting
•Options:
•Support Ad-Hoc Committee recommendations
•Modify Ad-Hoc Committee recommendations
•No recommendation
22Community Development Department
Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202)
23Community Development Department
Requirement Ad-Hoc Committee Recommendations
Regulatory Process Title 5 permits for unit and property manager
Location Restrictions Limited in all residential zones by a maximum cap
Parking Requirements Current standards; free and clear
Noise Restrictions No amplified sound 10 pm-10 am; City standards
Management Plan Required to address landscape, trash, local contact person
Subletting Prohibit short-term lodging and guest use
Good Neighbor Policy Posted in unit outlining rules
Owner Acknowledgements Signed and submitted by each owner
Grandfathering Provisions Allows existing nonconforming units to remain
Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202)
24
Questions and Discussion
Seimone Jurjis, CDD Director
sjurjis@newportbeachca.gov
Jaime Murillo, AICP, Principal Planner
jmurillo@newportbeachca.gov
Planning Commission Study Session
February 24, 2023
Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202)