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03 - Code Amendments Related to Time Shares (PA2022-0202)
Q SEW Pp�T CITY OF z NEWPORT BEACH c�<,FORN'P City Council Staff Report May 23, 2023 Agenda Item No. 3 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Seimone Jurjis, Community Development Director - 949-644-3232, sjurjis@newportbeachca.gov PREPARED BY: Jaime Murillo, Principal Planner, jmurillo@newportbeachca.gov PHONE: 949-644-3209 TITLE: Ordinance Nos. 2023-4 and 2023-5: Code Amendments Related to Time Shares (PA2022-0202) ABSTRACT: For the City Council's consideration is the adoption of Ordinance Nos 2023-4 and 2023- 5 to amend Title 20 (Planning and Zoning) and Title 21 (Local Coastal Program Implementation Plan) of the Newport Beach Municipal Code (NBMC) modifying the definition of time share to clearly include fractional ownership units. As a time share use, fractional homeownership would be prohibited in all residential zoning districts and only allowed in certain commercial and mixed -use zoning districts subject to existing time share regulations. The attached ordinance was introduced and considered at the May 9, 2023 City Council meeting. Nx0101LhI TT I=10lm7_rIEel ki6*5 a) Find proposed amendments to Titles 20 and 21 of the NBMC are not subject to the California Environmental Quality Act (CEQA) pursuant to Section 15060(c)(2) and 15061(b)(3) of the CEQA Guidelines, because it would not result in a direct or reasonably foreseeable indirect physical change in the environment and is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Additionally, the proposed amendments to Titles 20 and 21 of the NBMC are categorically exempt pursuant to Section 15308 because the ordinances involve regulatory actions to assure protection of the environment; b) Conduct second reading and adopt Ordinance No. 2023-4, An Ordinance of the City Council of the City of Newport Beach, California, Approving an Amendment to Title 20 (Planning and Zoning) of the Newport Beach Municipal Code Related to Time Shares (PA2022-0202), and c) Conduct second reading and adopt Ordinance No. 2023-5, An Ordinance of the City Council of the City of Newport Beach, California, Approving and Authorizing Submittal of a Local Coastal Program Amendment to the California Coastal Commission Amending Title 21 (Local Coastal Program Implementation Plan) of the Newport Beach Municipal Code Related to Time Shares (PA2022-0202). 3-1 Ordinance Nos. 2023-4 and 2023-5: Code Amendments Related to Time Shares May 23, 2023 Page 2 DISCUSSION: The proposed amendments to Title 20 and Title 21 of the NBMC would modify time share related definitions (i.e., time share accommodation, time share project, time share estate, time share instrument, time share interval, time share plan, time share property, time share unit, and time share use) to clearly include fractional ownership arrangements. While the proposed amendments include minor clean-up revisions to the existing time share regulations for consistency with the modified definitions, no significant changes to the manner in which time shares are approved or development standards are proposed. Time shares uses would continue to be prohibited in all residential zoning districts and permitted in certain commercial and mixed -use zoning districts, subject to certain criteria. On May 9, 2023, the City Council introduced Ordinance Nos. 2023-4 and 2023-5, revising time share related definitions and regulations as discussed above. The attached ordinances include revisions made to draft Ordinance No. 2023-4 at the hearing related to prohibition of advertisements. California Coastal Commission Review (Title 21 Amendments) To expedite the approval of the Title 21 amendment, Ordinance No. 2023-5 adopts the Local Coastal Program (LCP) amendment and authorizes staff to submit the LCP amendment to the Coastal Commission. The Coastal Commission is the final decision -making authority on amendments to the certified LCP; however, the City retains the ability to reject an LCP amendment in its entirety if the Coastal Commission includes suggested modifications. If the Coastal Commission approves the LCP Amendment as submitted, the ordinance would immediately go into effect without the need to return for further City Council approval. Should the Coastal Commission make any suggested modifications, staff will then return to the City Council to accept any suggested modifications and adopt a new ordinance incorporating the modifications. FISCAL IMPACT: There is no fiscal impact related to this item. ENVIRONMENTAL REVIEW Staff recommends the City Council find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Section 15060(c)(2) and 15061(b)(3) of the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, Chapter 3, because the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment and is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. This code amendment would clarify that fractional ownership uses are classified as time shares, which are currently regulated by the NBMC. This amendment does not alter the manner in which time shares are regulated and therefore would not result in a physical change in the environment. Additionally, the proposed amendments to Titles 20 and 21 of the NBMC are categorically exempt pursuant to Section 15308 because the ordinances involve regulatory actions to assure protection of the environment. 3-2 Ordinance Nos. 2023-4 and 2023-5: Code Amendments Related to Time Shares May 23, 2023 Page 3 NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). ATTACHMENTS: Attachment A — Ordinance No. 2023-4: Adopting Title 20 Code Amendment Attachment B — Ordinance No. 2023-5: Adopting Title 21 LCP Amendment and Authorizing Submittal to the California Coastal Commission 3-3 ATTACHMENT A ORDINANCE NO.2023-4 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, APPROVING AN AMENDMENT TO TITLE 20 (PLANNING AND ZONING) OF THE NEWPORT BEACH MUNICIPAL CODE RELATED TO TIME SHARES (PA2022-0202) WHEREAS, Article XI Section 7 of the California Constitution authorizes cities to make and enforce within its limits all local, police, sanitary, and other ordinances and regulations not in conflict with general laws; WHEREAS, California Government Code Section 65850 et seq. authorizes a city to adopt ordinances that regulate land uses as a valid exercise of its police powers; WHEREAS, Section 200 of the City of Newport Beach ("City") Charter vests the City Council with the authority to make and enforce all laws, rules, and regulations with respect to municipal affairs subject only to the restrictions and limitations contained in the Charter and the State Constitution, and the power to exercise, or act pursuant to any and all rights, powers and privileges, or procedures granted or prescribed by any law of the State of California; WHEREAS, in 1982, the City Council adopted Ordinance No. 82-14, which is attached hereto as Exhibit 'A," and incorporated herein by reference prohibiting the development of time share projects within Newport Beach to protect against unique problems associated with transient occupancy; WHEREAS, in 1996, the City Council adopted Ordinance 96-7 which is attached hereto as Exhibit "B," and incorporated herein by reference providing a narrow exception to allow time share projects in commercial districts subject to a conditional use permit but continuing to prohibit the use of residential property for time shares; WHEREAS, the City is a popular tourist destination known for its beaches and temperate weather; WHEREAS, over the past three years, Newport Beach and cities that serve as tourist destinations, have experienced a wave of purchases of single -unit residences, which are then re -sold to persons purchasing fractional shares; WHEREAS, for example, over the past 15 months, the number of fractional - owned residences has nearly tripled with at least 12 fractionally owned homes in Newport Beach; 3-4 Ordinance No. 2023-4 Page 2 of 9 WHEREAS, under this model, the ownership of the residence is usually divided into eight shares and sold to different persons with stays ranging from two to fourteen nights in duration, with back-to-back stays prohibited, resulting in frequent turnover of the properties' occupants and its commercial management; WHEREAS, a representative of a commercial management company who manages this type of use, Pacaso, Inc. ("Pacaso"), has stated in correspondence to the California Department of Real Estate, which is attached hereto as Exhibit T," and incorporated herein by reference, that Pacaso homes are sold as time share interests as defined in Business and Professions Code Section 11212(z) ; WHEREAS, fractionally owned homes create impacts on the City's housing supply and character of residential neighborhoods by converting dwelling units from a full-time owner -occupied residence to a frequent rotation of vacation stays of less than a month; WHEREAS, public has testified that this change in the use of dwelling units results in an increase in traffic and noise in residential neighborhoods, as well a change to the fabric of the community due to the short-term nature of the stays; WHEREAS, with respect to the housing supply, Governor Gavin Newsom declared a housing crisis in the State of California and called for the development of 3.5 million new homes to be built by 2025, to meet the population's housing needs; WHEREAS, as a result, the State of California has adopted a number of housing bills such as Senate Bill Nos. 8, 9, 10, 35 and 330, and an aggressive Regional Housing Needs Assessment ("RHNA") for the 6th Cycle Housing Element covering the period 2021-2029 ("611 Cycle Housing Element"); WHEREAS, the City's RHNA for the 6th Cycle Housing Element is 4,845 new housing units, which units are intended to meet the housing needs of existing and future residents within the jurisdictional boundaries of Newport Beach; WHEREAS, according to the 6th Cycle Housing Element, which is attached hereto as Exhibit "D," and incorporated herein by reference, the median home price in the State of California was $579,770 as of 2020, the median home value of single - unit homes and condominiums in Newport Beach was $2,407,454; 3-5 Ordinance No. 2023-4 Page 3 of 9 WHEREAS, the fractional ownership of single -unit residences as a second home further exacerbates the housing supply in Newport Beach making it harder to meet housing demand; WHEREAS, in accordance with Ewing v. _Carmel -by -the -Sea, (1991) 234 Cal. App. 3d 1579, which upheld the City of Carmel-by-the-Sea's right to impose zoning restrictions on short-term rentals, the Newport Beach City Council adopted Ordinance No. 92-13 which is attached hereto as Exhibit "E," and incorporated herein by reference on May 11, 1992, establishing regulations for the operation of short-term lodging units to mitigate the impact of this use on the residents of the City; WHEREAS, on May 11, 2004, the City Council adopted Ordinance No. 2004-6, which is attached hereto as Exhibit "IF," and incorporated herein by reference, prohibiting the issuance of new short-term lodging permits after June 1, 2004, to any dwelling unit on a parcel zoned as a single -unit residence or designated for single-family residential use as part of a Planned Community Development Plan, Specific Area Plan or Planned Residential District; WHEREAS, in 2020 and 2021, the City Council adopted Ordinance Nos. 2020- 15, 2020-26, and 2021-28, which are attached hereto as Exhibits "G" — "I," and incorporated herein by reference amending the City's short-term lodging regulations based upon evidence and documentation attesting to the need to further regulate and control short-term lodging units in residential zones to ensure that, among other things, short-term lodging units are regulated in a way to maintain harmony with surrounding uses; WHEREAS, due to the proliferation of short-term rentals and their impact on neighborhoods and long-term housing, Ordinance No. 2021-28 placed a cap of 1,550 on the number of short-term lodging permits allowed in the City; WHEREAS, fractionally owned homes are a time share and operate much like short-term lodgings in that they limit occupancy by owners of a fractional interest in a property to less than 30 consecutive days; WHEREAS, on November 16, 2021, the City Council conducted a study session to address concerns raised by the public regarding impacts of fractional homeownership; 3-6 Ordinance No. 2023-4 Page 4 of 9 WHEREAS, during this study session public testimony was given that these homes operate as short-term lodging with residents expressing displeasure with the impacts that these homes were causing including an increase in the noise and traffic in the residential neighborhood; WHEREAS, on September 13, 2022, the City Council conducted a second study session, to discuss the fractional ownership uses and was presented with a report, which is attached hereto as Exhibit "J," and incorporated herein by reference that 15 of the 22 jurisdictions surveyed classify fractional ownership uses as a time share; WHEREAS, additional public testimony included concerns about increases in traffic, noise, and trash, as well as fractional ownership uses having an adverse impact on the character of the existing residential neighborhoods consistent with the impacts identified by the cities of Carmel -by -the Sea, Hermosa Beach, Palm Desert, Sonoma and St. Helena whose ordinances regulating and evidence in support of such ordinances are attached hereto and incorporated herein by reference as Exhibits "K" - "O"; WHEREAS, on September 27, 2022, the City Council adopted Resolution 2022- 61, initiating code amendments to Title 20 (Planning and Zoning) ("Zoning Code Amendment No. PA2022-0202") and Title 21 (Local Coastal Program Implementation Plan) ("Local Coastal Program Amendment No. 2020-0202") of the NBMC and directed staff to work with the Planning Commission to develop regulations related to fractional ownership uses in the best manner that would protect the character of residential neighborhoods; WHEREAS, on October 6, 2022, the Planning Commission conducted a study session to discuss fractional ownership uses and receive public testimony; WHEREAS, public testimony included fractional owners who were in favor of allowing the use and neighbors who expressed frustration with the increased impacts caused by the operation of fractional ownership homes; WHEREAS, at the conclusion of study session, the Planning Commission expressed the desire to form an ad -hoc committee to work closely with staff to formulate appropriate regulations to ensure that they were able to thoroughly investigate the appropriate approach to fractional ownership uses; 3-7 Ordinance No. 2023-4 Page 5of9 WHEREAS, on October 20, 2022, the Planning Commission formed an Ad -Hoc Committee to evaluate potential amendments to Title 20 and Title 21 of the NBMC related to fractional ownership uses within the City; WHEREAS, the Ad -Hoc Committee met a total of seven times, during which the Committee discussed potential regulatory schemes with the Community Development Department, City Attorney's Office, representatives from Pacaso and several concerned citizens to ensure the Committee members_ had a full understanding of the issue; WHEREAS, during this process, Pacaso proposed an ordinance, which is attached hereto as Exhibit "P," and incorporated herein by reference, regulating, Pacaso- managed homes by way of a regulatory permit with a cap of 500 on the number of regulatory permits the City would be required to issue to such fractionally owned homes; WHEREAS, on February 3, 2023, the Ad -Hoc Committee presented their findings to the Planning Commission making two recommendations to the City Council including the preferred recommendation which was to broaden the definition of time shares to include fractional ownership uses, and an alternative recommendation of creating a separate regulatory scheme to allow. fractional ownership uses in all zones, except the Single -Unit Residential (R-1) Zoning Districts; WHEREAS, on March 14, 2023, the City Council considered the Planning Commission's recommendations and, after receiving further public testimony, the City Council directed staff to move forward with the Planning Commission's preferred option of broadening the definition of time share; WHEREAS, the Planning Commission held a public hearing on April 20, 2023, in the City Council Chambers, located at 100 Civic Center Drive, Newport Beach, California A notice of time, place and purpose of the hearing was given in accordance with California Government Code Section 54950 of seq. ("Ralph M. Brown Act") and Chapter 20.62 (Public Hearings) of the NBMC. Evidence, both written and oral, was presented to, and considered by, the Planning Commission at this hearing; WHEREAS, at the conclusion of the hearing, the Planning Commission adopted Resolution No. PC2023-017 by a unanimous vote (6 ayes — 0 nays) recommending approval of the amendment to Title 20 of the NBMC to the City Council; WK Ordinance No. 2023-4 Page 6 of 9 WHEREAS, the City Council held a public hearing on May 9, 2023, in the City Council Chambers located at 100 Civic Center Drive, Newport Beach, California. A notice of time, place and purpose of the public hearing was given in accordance with the Ralph M. Brown Act, and Chapter 20.62 (Public Hearings) of the NBMC. Evidence, both written and oral, was presented to, and considered by, the City Council at this public hearing; and WHEREAS, the City Council and Planning Commission agenda item and supporting evidence, are attached hereto as Exhibits "Q" — "V" and incorporated herein by reference. NOW, THEREFORE, the Newport Beach City Council does hereby ordain as follows: Section 1: The City Council of the City of Newport Beach does hereby approve the Zoning Code Amendment No. PA2022-0202 to amend Title 20 (Planning and Zoning) of the Newport Beach Municipal Code related to time shares as set forth in Exhibit "W," which is attached hereto and incorporated herein by reference. This decision is made based upon the evidence in the record and is consistent with the General Plan Land Use Policies set forth in Exhibit "X," which is attached hereto and incorporated herein_ by reference. Section 2: The recitals provided in this ordinance are true and correct and are incorporated into the substantive part of this ordinance. Section 3: If any section, subsection, sentence, clause or phrase of this ordinance is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this ordinance, and each section, subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases may be declared invalid or unconstitutional. 3-9 Ordinance No. 2023-4 Page 7of9 Section 4: The City Council of the City of Newport Beach finds Zoning Code Amendment No. PA2022-0202 is not subject to environmental review under the California Environmental Quality Act ("CEQX) pursuant to Section 15060(c)(2) and 15061(b)(3) of the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, Chapter 3, which states that an activity is not subject to CEQA if the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment or will not have the potential for causing a significant effect on the environment. Time share uses are not permitted in residential zones, however, the City has seen a trend in the fractional use of residences wherein. the property is usually divided into eight shares and sold to different persons with stays ranging from two to fourteen nights in duration with back- to-back stays prohibited resulting in frequent turnover of the properties' occupants and its commercial management. This Zoning Code Amendment would not result in a direct or indirect physical change to the environment nor does it have the potential for causing a significant effect on the environment since it would simply clarify that fractional ownership uses are classified as time shares, which are currently regulated by the NBMC. This Zoning Code Amendment does not alter the manner in which time shares are regulated and therefore would not result in a physical change in the environment. Additionally, the Zoning Code Amendment is categorically exempt pursuant to Section 15308 because the ordinance involves regulatory actions to assure protection of the environment. Section 5: Except as expressly modified in this ordinance, all other sections, subsections, terms, clauses and phrases set forth in the Newport Beach Municipal Code shall remain unchanged and shall be in full force and effect. 3-10 Ordinance No. 2023-4 Page 8of9 Section 6. The Mayor shall sign, and the City Clerk shall attest to the passage of this ordinance. The City Clerk shall cause the ordinance, or a summary thereof, to be published pursuant to City Charter Section 414. This ordinance shall be effective thirty calendar days after its adoption. This code amendment will not take effect in the coastal zone until Local Coastal Program Amendment No. PA2022-0202 is approved by the California Coastal Commission and adoption, including any modifications suggested by the California Coastal Commission. This ordinance was introduced at a regular meeting of the City Council of the City of Newport Beach field on the 9th day of May, 2023, and adopted on the 23rd day of May, 2023, by the following vote, to wit: AYES: NAYS: ABSENT: NOAH BLOM, MAYOR ATTEST: LEILANI I. BROWN, CITY CLERK APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE 1 1 n-; AARQp C. HARP, CI ,ATTORNEY Attachment(s): Exhibit A - July 26, 1982, City Council Meeting Minutes and Ordinance No. 82-14 3-11 Ordinance No. 2023-4 Page 9of9 Exhibit B - March 11, 1996, City Council Meeting Minutes and Ordinance No. 96-7 Exhibit C - Correspondence from Pacaso to the California Department of Real Estate Exhibit D - 6kh Cycle Housing Element Exhibit E - April 27, 1992, City Council Meeting Minutes and Ordinance No. 92-13 Exhibit F - April 27, 2004, City Council Agenda Item No. 3 Adopting Ordinance No. 2004-6 and Supporting Material Exhibit G - June 23, 2020, City Council Agenda Item No. 19 Adopting Ordinance No. 2020-15 and Supporting Material Exhibit H - October 13, 2020, City Council Agenda Item No. 18 Adopting Ordinance No. 2020-26 and Supporting Material Exhibit I - November 30, 2021, City Council Agenda Item No. 26 Adopting Ordinance No. 2021-28 and Supporting Material Exhibit J - Sage Crest Planning + Environmental Report Exhibit K - City of Carmel -by -the Sea Time Share Ordinance and Supporting Evidence Exhibit L - City of Hermosa Beach Time Share Ordinance and Supporting Evidence Exhibit M - City of Palm Desert Time Share Ordinance and Supporting Evidence Exhibit N - City of Sonoma Time Share Ordinance and Supporting Evidence Exhibit O - City of St. Helena Time Share Ordinance and Supporting Evidence Exhibit P - Ordinance Proposed by Pacaso Adding Chapter 5.98 Exhibit Q - September 13, 2022, City Council Agenda Item No. SS2 Exhibit R - September 27, 2022, City Council Agenda Item No. 1 Exhibit S - October 6, 2022, Planning Commission Agenda Item No. SS.2 Exhibit T - October 20, 2022, Planning Commission Agenda Item No. 6 Exhibit U - February 23, 2023, Planning Commission Agenda Item No. 6 Exhibit V - March 14, 2023, City Council Agenda Item No.12 Exhibit W - Zoning Code Amendment PA2022-0202 Exhibit X - General Plan Consistency Finding in Support of Zoning Code Amendment PA2022-0202 3-12 Exhibit A July 26, 1982, City Council Meeting Minutes and Ordinance No. 82-14 hft s://ecros.new ortbeachca. ov/WEB/DocView.as x?id=21155&dbid=0&re o=CNB hft s:Hecros.new ortbeachca. ov/WEB/DocView.as x?id=35606&dbid=0&re o=CNB 3-13 Exhibit B March 11, 1996, City Council Meeting Minutes and Ordinance No. 96-7 httt sa/ecros.newportbeachca.gov/WEB/DocView.aspx?id=22280&dbid=0&repo=CNB https://ecros.newportbeachca.govNVEB/DocView.aspx?id=36439&dbid=O&repo=CNB 3-14 Exhibit C Correspondence from Pacaso to the California Department of Real Estate 3-15 Exhibit C From: Andy Sirkin <dasirkin@gmail.com> Sent: Saturday, July 24, 2021 10:19 AM To: Aiu, Joseph@DRE <Joseph.Aiu@dre.ca.9ov> Cc: Bruce, David@DRE <Dayid.Bruce@dre.ca.gov>; Neri, Chris@DRE <Chris.Neri @dre.ca.gov>; Patrick Abell <Patrick@pacaso.com>; David J. Willbrand <david@pacaso.com> Subject: Re: Pacaso (DRE No. 121-0701-006) {�AUTION: THIS EMAIL ORIGINATED OUTSIDE THE DEPARTMENT OF REAL ESTATE! DO NOT. click !inks or open attachments unless you know the content is safe. NEVER. provide credentials on websites via a clicked link in an Email. Dear Mr. Aiu, Yes, I confirm that Pacaso Homes are within that exemption. We sincerely appreciate your prompt response and attention. All the best, Andy Sirkin SirkinLaw APC + 1-415-462-5925 (US) On Jul 24, 2021, at 5:37 PM, Aiu, Joseph@DRE Closeph.Aiundre.ca.gov> wrote: Dear Mr. Sirkin, Thank you for your email response and explanation dated 7/21/21. Based on your response and explanation, we understand that your clients, Pacaso Inc. and Pacaso Homes, are selling time-share interests as defined in B&P Code section 11212(z), but are exempt from needing to file for a time-share public report since they fall below the reporting threshold of 11 or more units. Please confirm. Thank you. Sincerely, Joseph Aiu Investigations & Compliance From: Andy Sirkin <dasirkin@gmail.com> Sent. Wednesday, July 21, 2021 2:28 AM To: Aiu, Joseph@DRE <Joseph.Aiu@dre.ca.gov> Cc. Bruce, David@DRE <David.Bruce @dre.ca.gov>; Neri, Chris@DRE 3-16 <Chris.Neri@dre.ca.Rov>; Patrick Abell <patrick@pacaso.com>; David J. Willbrand <david@pacaso.com> Subject: Re: Pacaso (DRE No. 121-0701-006) CAUTION THIS EMAIL ORIGINATED OUTSIDE THE DEPARTMENT OF REAL ESTATE! ❑O NOT click lions ❑r open attadwienr,- unless you know the content is safe. NEVER pro hide crederitWon websites via a clicked link in an Email. Dear Mr. Aiu, I received an email late yesterday from David Bruce saying that, since an investigation has been initiated by the Department, all correspondence should be routed to you. He also mentioned that I was welcome to "cc" him on that correspondence, so I will continue to do SO. Although you may already have a basic understanding of Pacaso's business, I will begin with a brief explanation of the key elements. Pacaso only organizes group purchases of single- family residences. Each owner gets a 1 /8th share along with the right to use the home for 1/8th of each year indefinitely. During each owner's usage period, that owner has exclusive use of the entire house. All rentals are prohibited; only owners and their guests are permitted to use the house. Each owner pays regular assessments to fund the operating costs of the home and maintenance reserves. Once all eight ownership slots are filled, the eight owners own and control the house; Pacaso retains no ownership interest. B&P Code Section 11212(z) defines "Time -Share Plan" as any "arrangement ... 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." This description matches exactly the arrangement among owners of a Pacaso home. Specifically, each purchaser gets the right to use the home for 1/Sth of each year on a recurring basis every year for as long as he/she is an owner. However, since each Pacaso offering involves only eight interests, each home is below the threshold for needing a Time -Share public report under Section 11211.5(b)(1). B&P Code Section 11004.5(g) provides that "time-share plans ... are not "subdivisions" or "subdivided lands" subject to this chapter." Based on this language, I had always assumed that Time -Share offerings, regardless of size, did not require a subdivision public report under B&P Code Section 11000 et seq.; rather, large Time -Share offerings (more than 10 interests) require a Time -Share public report, and small Tune -Share offerings (10 or fewer interests) require no public report. Your communications suggest that Time -Share offerings too small to require a Time -Share public report instead need a subdivision public report. I am having difficulty understanding the logic of this position. As you may know, prior to 2004, California law required a Time - Share public report only for projects involving more than 12 interests. When the legislature enacted the Vacation Ownership and Time -Share Act Of 2004, it reduced the threshold from 12 to 10. This change shows that the legislature specifically considered the appropriate threshold for when a Time -Share offering needs a public report. The legislature did not choose nine, or eight, or six for the threshold; it specifically chose 10. The idea that Time -Share offerings too small to require a Time -Share public report instead need a subdivision public report seems contrary to this legislative intent. What meaning could the 10-share threshold in Section 1121 1.5(b)(I) have if an offering below the threshold still had to obtain a subdivision public report'? Moreover, when the legislature enacted the Vacation Ownership and Time -Share Act Of 2004, the legislature could have said that Time -Share offerings require a subdivision public report under B&P Code Section 11000 et seq., and that the application for a Tune -Share public report should be the same as the application for a subdivision public report. Instead, the legislature carefully specified the types of information it deemed appropriate for DRE to obtain and consider when "vetting" a proposed Time -Share offering. The application submittal for a Time -Share public report makes sense in the context of what a Time -Share offering is and what the purchasers buy. 3-17 If, as you suggest, Time -Share offerings too small to require a Time -Share public report instead need a subdivision public report, it would mean that the public report application for a small Time -Share offering would ignore the carefiilly-crafted specifics of the Time -Share law (which make perfect sense in the context of a Time -Share offering), and instead comply with the public report application requirements for a subdivision (which make no sense in the context of a Time -Share offering). To illustrate this point with just one of many examples, consider B&P Code Section 11234(c), under which a Time -Share public report requires "a description of the type of interest and usage rights the purchaser will receive" and "a representation about the percentage of useable time authorized for sale, and if that percentage is 100 percent, then a statement describing how adequate periods of time for maintenance and repair will be provided." This requirement is perfectly logical for a Time -Share public report, since the fairness and adequacy of the usage assignment structure is absolutely critical from a consumer protection standpoint. So, why would the subdivision public report you suggest is needed for a small Time -Share offering not require this critical information? Is this information suddenly less important if the offering involves 10 or fewer Time -Share interests? For all of these reasons, I respectfully suggest that Pacaso offerings do not require a Public Report. My assertion is based specifically on B&P Code Sections 11211.5(b)(1) and 11004.5(g), and on the legislative history and context of the Vacation Ownership and Time - Share Act Of 2004. To simplify your job when responding, you can ignore the other arguments made in my client's letter of.luiy 9. Cordially, Andy Sirkin SirkinLaw APC +1-415-462-5925 (US) On Jul 17, 2021, at 1:28 AM, Aiu, Joseph(a?DRE <Joseph.Aiugdre.ca.gov> wrote: Dear Mr. Sirkin, Your request for an extension to the deadline imposed in my "Notice to show cause was taken under consideration and you are granted an extension until July 23, 2021, Please note the following. The Department of Real Estate (ORE), investigates violations of the Real Estate Low (Licensees), the Subdivided Lands Act (Subdividers), the Vacation Ownership and Time Share Act (Developers), and endeavors to safeguard the public interests in real estate matters. In your initial response, your letter alluded to 11001,[a](b)(2), 11004.5(g), 11212.5(b)(1), and Pacaso Homes purchases are resales. Please be aware that your marketing concept is alsa under consideration. Sincerely, Joseph Aiu Investigations and Compliance From: Andy Sirkin <dasirkin@gmail.com> Sent: Friday, July 16, 2021 3:04 PM To: Aiu, Joseph@DRE <loseph.Aiu@dre.ca.gov> Cc: Bruce, David@DRE <David.Bruce@dre.ca.gov>; Neri, Chris@DRE <Chris.Neri@dre.ca.gov>; Patrick Abell <patrick@pacaso.corn>; David J. Willbrand <david@pacaso.com> Subject: Pacaso (DRE No. 121-0701-006) 3-18 CAUTION THIS EMAIL ORIGINATED OUTSIDE THE DEPARTMENT OF REAL ESTATE! DO NOT click links or open atrachrnents unless you know the content is safe. NEVER: provide credentials on web ites via a clicked link in an Email. Mr. Aiu, Our office has been engaged by Pacaso in connection with your inquiry. Over the past four days, I have been corresponding with David Bruce about my analysis of the situation and potential options to move forward in a manner that would be satisfactory to DRE. 1 had hoped to provide a formal response to your email by this afternoon in accordance with your deadline. However, I have not yet received Davids's response to my most recent email (sent late yesterday), and I would very much like to get that before responding to you. Might I ask your indulgence in getting a short extension so that I might complete my interchange with David? I will commit to keeping you advised on the progress of that exchange. Please be assured that resolving this matter to the satisfaction of DRE is Pacaso's highest priority. We are in no way interested in delaying a resolution; however, we want to make sure to proceed in the manner most likely to lead to a mutually acceptable outcome. Thank you in advance for your consideration. All the best, Andy Sirkin SirkinLaw APC +1-415-462-5925 (o) +1-415-350-6296 (m) ---------- Forwarded message --------- From: Aiu, JosephA?a DRE <Joseph.Aiu&dre.ca. gov> Date: Fri, Jul 9, 2021 at 11:42 AM Subject: RE: Pacaso response to DRE notice letter (DRE No. 121- 0701-006) To: Patrick Abell <patrick@2acaso.com> Cc: David Willbrand <davidPpacaso.com>, Charlie Tanner <charlie(a, Aiu, Joseph@DRE <Joseph.Aiugdre.ca.gov> Dear Mr. Abell, Thank you for your letter explaining the position of Pasea Homes as to its sales of "1/Sth undivided interests in o residential homes." The key phrase in our letter is the sale of undivided interest. Please refer to Section 11000.1 of the Code. Further, your fetter appear to allude to the "Exemption" pursuant to Subsection 11000.1(b)(2), which requires satisfactory evidence presented to DRE — this has not been done. Hence, Section 11010 is applicable. Please respond by July 16, 2021 as to whether Pacaso Homes and its affiliates will comply with applying for a Public Report, since advertising the sales must have a Preliminary Public Report. Sincerely, Joseph Aiu Statewide Subdivisions Investigations & Compliance 3-19 (213) 576-6927 Direct (213) 576-6942 Fax Department of Real Estate 320 W. 4th Street, Suite 350 Los Angeles, CA 90013 joseph.aiu(a4dre.ca.guu <image001.png> 3-20 Exhibit D 611 Cycle Housing Element hft sJleems.new ortbeachca. ov/WEB/DocView.as x?id=2833796&dbid=0&re o=CNB 3-21 Exhibit E April 27, 1992, City Council Meeting Minutes and Ordinance No. 92-13 htt s://ecros.new ortbeachca. ov/WEB/DocView.as x?id=21921&dbid=0&re o=CNB htt s://ecros.new ortbeachca. ovNVEB/DocView.as x?id=36004&dbid=0&re o=CNB 3-22 Exhibit F April 27, 2004, City Council Agenda Item No. 3 Adopting Ordinance No. 2004-6 and Supporting Material htt s://ecros.new ortbeachca. ovNVEB/DocView.as x?id=68969&dbid=0&re o=CNB htt s.Hecros.new ortbeachca. ov/WEB/DocView.as x?id=36708&dbid=0&re o=CNB 3-23 Exhibit G June 23, 2020, City Council Agenda Item No. 19 Adopting Ordinance No. 2020-15 and Supporting Material htt s://eems.new ortbeachca. ovNVEB/DocView.as x?id=2538440&dbid=0&re o=CNB Correspondence htt s://ecros.new ortbeachca. ov/WEB/DocView.as x?id=2538635&dbid=0&re o=CNB Ad Hoc Committee Recommendations PowerPoint htt s://ecros.new ortbeachca. ov/VVEB/DocView.as x?id=2538700&dbid=0&re o=CNB Corona del Mar Residents Association Short -Term Lodging Survey PowerPoint htt s://ecros.new ortbeachca. ovANEB/DocView.as x?id=2538702&dbid=0&re o=CNB Newport Island Community Association Survey Highlights PowerPoint htt s://eems.new ortbeachca. ovANEB/DocView.as x?id=2538703&dbid-0&re o=CNB Ordinance No. 2020-15 htt s://ecros.new ortbeachca. ovNVEB/DocView.as x?id=2544635&dbid=0&re o=CNB 3-24 Exhibit H October 13, 2020, City Council Agenda Item No. 18 Adopting Ordinance No. 2020-26 and Supporting Material htt s://ecros.new ortbeachca. ovNVEB/DocView.as x?id=2605151&dbid=0&re o=CNB Correspondence htt s://ecros.new ortbeachca. ov/VVEB/DocView.as x?id=2605188&dbid=0&re o=CNB Notice of Public Hearing htt s://ecros.new ortbeachca.q ovIVVEB/DocView.as x?id=2605206&dbid=0&re o=CNB Ordinance No. 2020-26 htt s://ecros.new ortbeachca. ovMEB/DocView.as x?id=2609797&dbid=0&re o=CNB 3-25 Exhibit I November 30, 2021, City Council Agenda Item No. 26 Adopting Ordinance No. 2021-28 and Supporting Material htt s://ecros.new ortbeachca. ovNVEB/DooView.as x?id=2797314&dbid=0&re o=CNB Correspondence htt s://ecros.new ortbeachca. ovANEB/DocView.as x?id=2797686&dbid=0&re o=CNB Short Term Lodging LCP Amendments PowerPoint htt s://eems.new ortbeachca. ov/WEB/DocView.as x?id=2797391&dbid=0&re o=CNB Notice of Public Hearing htt s://ecros.new ortbeachca. ov/WEB/DocView.as x?id=2797689&dbid=0&re o=CNB Ordinance No. 2021-28 htt s://ecros.new ortbeachca. ov/VVEB/DocView.as x?id=2800356&dbid=0&re o=CNB 3-26 Exhibit J Sage Crest Planning + Environmental Report 3-27 FRACTIONAL HOMEOWNERSHIP � WA°Rm. Prepared For: City of Newport Beach Community Development Department August 29, 2022 111111111111�1. IIIIIIIIIIIII lllllllllllll Table of Contents EXECUTIVESUMMARY ............ ............................................................. ........................... I ............. ................ 1 BACKGROUND...............................................................................................................................................1 Known/Suspected Properties in Newport Beach..................................................................................... 1 BENEFITS AND IMPACTS OF FRACTIONAL HOUSING....................................................................................2 Fractional Housing Benefits......................................................................................................................2 Fractional Housing Impacts ....................... COMMUNITYSURVEY...................................................................................................................................4 Cityof Beverly Hills, CA.............................................................................................................................5 Cityof Carlsbad, CA...................................................................................................................................5 Cityof Carmel by the Sea, CA.................................................................................................................... 5 Cityof Encinitas, CA ..................................... ............ ............ ........... ............... .................... I ..... ...1............. 5 Cityof Fort Lauderdale, FL........................................................................................................................ 6 Cityof Hermosa Beach, CA....................................................................................................................... 6 Cityof Indian Wells, CA............................................................................................................................. 6 Countyof Monterey, CA................................................................................................................. ... 6 Cityof Napa, CA........................................................................................................................................6 Villageof North Haven, NY.......................................................................................................................7 Cityof Oceanside, CA........................................................................................................................... Cityof Pacific Grove, CA............................................................................................................................ 7 Cityof Palm Desert, CA............................................................................................................................. 7 Cityof Palm Springs, CA............................................................................................................................ 7 Cityof Park City, UT..................................................................................................................... ........ 8 Cityof Santa Barbara, CA.......................................................................................................................... 8 Cityof Santa Cruz, CA...............................................................................................................................8 Cityof South Lake Tahoe, CA.................................................................................................................... 8 Cityof Sonoma, CA.. ...................... ................... ........................................................................ ........... — 9 Cityof St. Helena, CA................................................................................................................................9 Townof Truckee, CA................................................................................................................................. 9 Cityof Vail, CO........................................................................................................................................10 FRACTIONAL HOUSING City or i'�e 1 dort Beach 5S2.5 3-29 APPENDICES............. .................... ........... ......... .................................. .................... .................................... 10 Appendix A— Pacaso Economic Impact Analysis, prepared by EBP........................................................A1 Appendix B — City of Beverly Hills Urgency Ordinance........................................................................... B1 Appendix C— City of Carlsbad Timeshare ordinance............................................................................... C1 Appendix D—City of Carmel by the Sea Cease and Desist Order...........................................................D1 Appendix E—City of Hermosa Beach Planning Commission Resolution ................................................ E1 Appendix F — County of Monterey Cease and Desist Order................................................................... F1 Appendix G — Village of North Haven Code Amendment........................................................................ G1 Appendix H — City of Palm Desert Ordinance........................................................................................ HI Appendix I — City of Palm Springs Cease and Desist Order......................................................................11 AppendixJ — Park City Notice of Amendment.........................................................................................J1 Appendix K — City of Santa Cruz Ballot Initiative...................................................................................... K1 Appendix L — City of South Lake Tahoe Cease and Desist Order............................................................. L1 Appendix M -- City of Sonoma Ordinance..............................................................................................M1 Appendix N -City of St. Helena Ordinance..... .............. ........ I ............................. I ..... I .................... I ...... N1 Appendix0 — Pacaso Inc. v. City of St. Helena....................................................................................... 01 Appendix P —Town of Truckee Ordinance............................................................................................... P1 Cover Photo by nex Ezekiel on Unsplash FRACTIONAL. HOUSING CARY of NeWport Beach SS2-6 3-30 EXECUTIVE SUMMARY The City of Newport Beach (City) is beginning to see the rise of fractional homeownership of single-family houses. Fractional homeownership is when multiple owners purchase a property and split the allowed time at the property through a formal arrangement, as compared to multiple owners who occupy the residence full-time or have no formal arrangement for occupancy. In the fractional model, the allotted time for each owner is based on their percentage of ownership. In reviewing available data on fractional homeownership, there appears to be at least ten such properties within the City but there could be more. The City is receiving complaints from residents that these properties function similarly to short-term rental vacation homes and result in significant noise, traffic, and other impacts to residential neighborhoods. As a result of these concerns, the City asked Sagecrest PlanningfEnvironmental (Sagecrest) to investigate how other jurisdictions are dealing with fractional housing and the companies that promote them. Based on this investigation, it appears that other communities are adopting moratoriums and pursuing operators of fractional housing companies through code enforcement actions. BACKGROUND Fractional homeownership (sometimes called co -ownership) is an emerging trend in real estate where ownership of properties is equally shared among multiple owners (typically between four and 12 owners). The amount of time the owner may spend at the property correlates to the fraction of ownership (e.g., a 'Is share owner would be allotted 45 days per year). This time allotment is not typically used consecutively, but rather one or two weeks at a time. In addition to the cost to purchase their share of the home, the owners are responsible for their share of the maintenance, property management fees, HOA fees, cleaning costs, utilities, taxes, insurance, and payment into a reserve fund to cover long-term repairs, such as replacement of the roof. Fractional owners maintain an ownership interest, benefit from a change in property value due to appreciation and have the potential to generate income through short- term rentals, although the City would maintain authority on short-term rentals. It should also be noted that some fractional homeownership companies prohibit short-term rentals in their management agreement. Companies such as Pacaso, Sharetini, Ember, Equity Estates, and others facilitate the purchase of properties and provide the necessary maintenance, furnishments, property management, and cleaning services in exchange for a monthly fee. Many of these companies utilize ownership models that purchase and hold the properties under entities, such as limited liability companies, to avoid the need for a real estate transaction each time an owner sells their share. Alternatively, an ownership group could forego using a management company and self -govern the access to fractional housing. Known/Suspected Properties in Newport Beach Sagecrest reviewed the listings on various sites to identify properties in Newport Beach. Additionally, Sagecrest reviewed the City's database to find properties with mailing addresses that match the fractional home ownership companies. The following table lists the properties that are either known or suspected to be fractional ownership properties. FRACTIONAL HOUSING -1- SS2-7 3-31 117 25th Street Listed on Pacaso 121 Emerald Avenue Listed on Pacaso 305 Grand Canal Listed on Pacaso 315 East Bay Avenue Listed on Ember 506 West Oceanfront Listed on Pacaso 1703 Plaza del Sur Listed on www,compass.com 2137 Miramar Drive Listed on Ember 2628 Ocean Boulevard City database mailing address match to Pacaso 3803 Marcus Avenue City database mailing address match to Pacaso 4106 River Avenue Listed on Pacaso BENEFITS AND IMPACTS OF FRACTIONAL HOUSING Fractional Housing Benefits The primary benefit of fractional homeownership is to own a second home at a more affordable price. According to county records, the home at 506 W Oceanfront sold on March 14, 2022, for $6,800,000. A 1/g share of this house is currently being offered on Pacaso for $1,098,000. According to Equity Estates, a vacation home investment firm, the benefits of fractional housing are: l • it's more affordable - Perhaps a $4M home is out of reach, but $1M is right in your wheelhouse. Fractional ownership lets you get the home you want in the most desirable location at the price you can afford. This goes for home upkeep and maintenance, too. By sharing the costs of upkeep, fractional ownership makes long-term ownership a much more realistic possibility. • The home will get some love - No home should sit vacant 48 weeks out of the year. By sharing the ownership, the home will be opened up at regular intervals. Opening and closing windows and doors, running the water, turning on the AC and heater, and using amenities like the hot tub and pool —all of these are essential to maintaining the home. it provides an opportunity to identify issues early on and preserve the home's long-term value. • Peace of Mind - Fractional ownership also means sharing the burden of homeownership. Rather than a single point of failure (i.e., you), you essentially have a group that shares accountability, schedules maintenance, checks on the home, and divides the work and chores that would otherwise be left to a single owner. Another fractional housing company, Pacaso, claims that its model reduces demand in the housing market. Specifically, they state, "This demand on top of short supply has driven up home prices to unprecedented levels. instead of eight second home buyers buying eight separate median -priced homes, which drives up prices even further, Pacaso consolidates those eight buyers into just one luxury home, which alleviates pressure at the median -priced tier."' To address concerns that they do not provide a benefit, Pacaso commissioned an economic impact analysis (Appendix A), which found that the average fractional ownership house generates an average of $48,390 in annual spending compared with the 1 https:/leguityestatesfund.com/the-pros-and-cons-of-fractional-ownership, retrieved August 16, 2022 Z https://www.pacaso.com/blog/economic-impact-study retrieved August 16, 2022 FRACTIONAL HOUSING City of Newport Bea ss2-s 3-32 average second home. The study further found that fractional housing generates an average of $3,780 additional revenue in local and state tax dollars over the average second home. Fractional dousing Impacts Notwithstanding the aforementioned benefits, many communities have received complaints from their residents that fractional housing creates adverse impacts on the neighborhoods in which they are located and the City as a whole. Jurisdictions that have taken a proactive approach to preventing fractional housing in their communities all have expressed concerns about the following: Fractional housing adversely impacts the affordability of full-time homes in the community. As more homes are taken out of the primary housing market and converted to vacation homes, the available housing stock is reduced. Even though the fractional housing companies focus on the high -end market, any loss in available housing supply results in increase costs across the entire market. Due to the high turn -over of occupants, fractional housing could adversely impact long-term residents in the surrounding neighborhood. Given that vacations typically last for short periods of time, these properties would have similar impacts as short-term rentals, such as noise, loss of privacy, loss of community buy -in, and decline in property values. The operation of the fractional homeownership companies within residential areas would result in the commercialization of residential neighborhoods. Several communities that Sagecrest spoke with noted that the operations of these companies would require a business license as they are establishing a commercial use. Sagecrest discussed concerns with fractional housing with a major opponent to fractional housing, Stop Pacaso Now'. This organization consists of volunteers who provide resources to residents to oppose fractional housing from being established in their community. This includes providing sample yard signs, sample letters, and volunteer coordination guidance. In discussing the effectiveness of their outreach, Stop Pacaso Now stated that they have had great success in communities in which residents have organized. Stop Pacaso Now has sponsored four petitions on change,org (Sonoma§, Dry Creek Valley', St. Helena', and a nationwide petition') against fractional housing with a total of 7,411 signatures. The Mitchell Hamline Law Journal of Public Policy and Practice published a journal article$ that found that "The increasing commodification of single-family homes has had cascading effects on housing and on communities in general." Fractional housing is shared among various owners, as a result, an increase in a https://stoppacasonow.com/ https://www.change.ore/p/sonoma-county-pla nning-commission-pacaso-ti me-shares-don-t-belong-in-sonoma- neighborhoods, retrieved August 16, 2022 5 https://www.change,org/p/pacaso-time-shares-don-t-belong-in-dry-creek-valley-s-agricultural-zoning-and- farmlands, retrieved August 16, 2022 ' https://www.change.org/p/mderosa-cityofsthelena-org-gellsworth-cityofsthelena-org-stop-pacaso-from- commercializing-our-residential-neighborhoods, retrieved August 16, 2022 ' https://www.change.org/p/pacaso-stop-pacaso-s-tal<eover-of-housing, retrieved August 16, 2022 8 Markuson, Christopher (2022) "A Timeshare By Any Other Name: Fractional Homeownership and the Challenges and Effects of Commodified Single -Family Homes," Mitchell Hamline Law Journal of Public Policy and Practice: Vol. 43: Iss. 2, Article 1. Available at: https://open.mitchelihamline.edu/poIicypractice/vo143/iss2/1 FRACTIONAL HOUSING -3- SS2-9 3-33 the number of units could decrease the demand for hotel rooms. This would likely result in a reduction in the amount of transient occupancy tax accrued by the City. COMMUNITY SURVEY Sagecrest researched other communities that have fractional ownership properties to determine if there is a concern with these properties and how the community is addressing these concerns. A summary of the actions is contained in the table below, followed by a description of each community. Notes (a) Code Amendment in Process (b) City Council is split on whether or not fractional housing is a timeshare FRACTIONAL HOUSING -4- SS2-90 3-34 City of Beverly Hills, CA On July 15, 2021, the City of Beverly Hills adopted an urgency ordinance establishing a 45-day moratorium on fractional ownerships of residential and commercial properties. In the staff report, the City expressed concerns that the properties would impact the residents in the surrounding neighborhood since they would operate as vacation rental homes. The City noted these properties would likely "experience high turnover rates of occupants, and result in impacts related to their operation such as noise, loss of privacy, loss of community buy -in, and decline in property values." In addition to these impacts, the City expressed concerns that converting homes to fractional housing would remove permanent housing from the housing market. Notwithstanding this prohibition, the moratorium does allow the City Council to approve a fractional ownership dwelling if they adopt a finding that "the fractional ownership of a property will not disturb the stability of a residential neighborhood or residential building and will not adversely impact future development, redevelopment, safety, and proper maintenance of the property" during a duly noticed public hearing. The moratorium was extended for ten months and 15 days on August 17, 2021 and extended again for a second year on June 14, 2022. The moratorium is now set to expire on July 14, 2023. The moratorium intends to allow the City staff time to study the issue and any potential impacts fractional housing may have on the health, safety, and welfare of those who live in surrounding homes and on the City as a whole. A copy of the urgency ordinance and staff report is included in Appendix B. City of Carlsbad, CA The City of Carlsbad noted that the use of fractional properties constitutes a timeshare. They have an existing timeshare ordinance (Appendix C), which they would enforce if they received a complaint. The City has not had an issue with operation of the fractional homes. City of Carmel by the Sea, CA The City is aware of fractional ownership companies and their assertation that they sell and manage properties, not timeshares. The City disagrees with this position and is of the opinion that any fractional housing has the same impacts on surrounding residential areas as short-term vacation rentals. Not only is it unlawful for any fractional ownership company to commence or carry on any kind of business in the City without first procuring a business license and pay the applicable business license tax, but any such business would be in violation of the City's prohibition of timeshares. The City noted that their regulations on transient commercial use of residential property have been previously adjudicated.' Carmel by the Sea has issued a cease -and -desist order (Appendix D), ordering Pacaso to stop all advertising and sale of fractional ownership of residential properties within the City and will proceed through its code enforcement authority to obtain compliance. City of Encinitas, CA The City is aware of the fractional ownership model and that other communities are working on regulations. Since Encinitas has not had any issues with fractional homeownership, they are not working on any code updates or taking enforcement actions. 9 Ewing v. City of Carmel -by -the -Sea (1991) 234 Cal.App.3d 1579 FRACTIONAL. HOUSING -5 SS2-11 3-35 City of Fort Lauderdale, FL The City of Fort Lauderdale does not regulate fractional housing since they are considered transient lodging. Within the State of Florida, transient lodging is regulated by the State. Provided the fractional housing is within any zone which permits transient lodging, it would be allowed. City of Hermosa Beach, CA The City of Hermosa Beach classifies fractional housing as a timeshare. They are concerned that the operation of the fractional housing and timeshares could change the character of residential neighborhoods as the guest of the units may naturally stay out later, entertain more, and gather in larger numbers while on vacation. Currently, the Hermosa Beach Municipal Code does not regulate timeshares, but the City is processing a code amendment to prohibit timeshares in residential zones, If approved, the code amendment would allow timeshares in commercial zones with approval of a Conditional Use Permit. The Planning Commission conducted a public hearing on the code amendment on April 19, 2022, at which the Commission adopted a resolution (Appendix E) to recommend the City Council approve the code amendment. This amendment is currently scheduled for a public hearing before the Council on September 27, 2022. City of Indian Wells, CA The City of Indian wells does not currently regulate fractional housing but has received complaints from residents regarding impacts being created. The City Council discussed the matter on May 19, 2022, at which time the City Council was split if fractional housing constituents a timeshare or not. They expressed concerns about taking legal action on the fractional ownership companies due to the ongoing litigation in other jurisdictions. The City Council directed the City Attorney to return with options for them to consider on how to proceed. At this time, it is not known when this discussion will be taken back to the City Council. County of Monterey, CA Within areas of Monterey County that fall under the County's zoning jurisdiction, fractional ownerships are classified as timeshares. Pursuant to the Monterey County Municipal Code, timeshare projects are only allowed in zones where a hotel, motel, or similar visitor accommodation use would be permitted, and in such cases a Use Permit or a Coastal Development Permit would be required. Monterey County is aware of certain homes advertised as fractional housing that are located in the Carmel Highlands and the Del Monte Forest. Both areas are within the County`s zoning jurisdiction and are within residential zones. Monterey County has issued a cease -and -desist order (Appendix F), ordering Pacaso to stop all advertising and sale of fractional ownership of residential properties within these areas and will proceed through its code enforcement authority to obtain compliance. City of Napa, CA The City of Napa does not have an ordinance regulating fractional ownership citywide but does have a Master Development Plan (MDP) for the Stanly Ranch area. This MDP requires fractional ownership properties to pay a transient oriented tax for stays more than 14 days, but research indicates that no fractional ownership property has paid the TOT. In 2021, the City Council conducted a hearing to discuss the matter, during which residents complained of not wanting their neighborhoods to turn into a business venture for the wealthy. There has been no further discussion regarding fractional ownership. FRACTIONAL HOUSING C ty of Newport Beau 552-92 3-36 Village of North Haven, NY The Board of Trustees of the Village of North Haven enacted a prohibition on fractional ownership, timesharing, and interval uses in single-family homes in January 2022 (Appendix G). The Board found that the needs of transients are adverse to the interest that protect and preserve single-family homes. Furthermore, the prohibition was deemed necessary to prevent the unwarranted commercialization of residential areas. In a discussion with the Town staff, the ordinance would be enforced through code enforcement if they receive a complaint, but they were unable to confirm if action had been taken on any existing units. City of Oceanside, CA The City of Oceanside is not aware of any specific issues surrounding single-family homes used as fractional ownerships. The City does allow fractional ownership in their Downtown District as it pertains to traditional timeshare listings, provided a Conditional Use Permit is approved for the use. Given that most of these fractional ownership listings resemble short-term rental models, staff would consider fractional housing has short-term rentals in single-family homes, which would require the issuance of a short-term rental permit. City of Pacific Grove, CA Currently the City of Pacific Grove prohibits timeshares throughout the City. The City Council accepted public comment on fractional housing and timeshares on May 18, 2022, at the conclusion of which the Council directed staff to review the City's current timeshare ordinance and recommend changes to better effectuate the City's prohibition of timeshare projects, including fractional housing. The City anticipates having the draft ordinance to their Planning Commission in October 2022 and to the City Council by the end of year. City of Palm Desert, CA In November 2021, the City Council discussed the emergence of fractional ownership businesses within the City. In the Staff Report, the City Attorney opined that the fractional homeownership "model fits within that definition of "time- share plan" as co -owners receive ownership right's to use a property for less than a year on a recurring basis" (Appendix H). The City only allows timeshares in the Planned Residential, General Commercial, and Planned Commercial Resort zones. On May 12, 2022, the City Council adopted an ordinance updating the timeshare provisions of the Palm Desert Municipal Code. The updates include expanding the definition of timeshare that includes the shared use of any property, where the owners have the right of occupancy for less than full year during any given year. The ordinance also established enforcement procedures for violations of the timeshare ordinance. City of Palm Springs, CA The City of Palm Springs regulates where timeshares can be located within the City and taxes occupancy of timeshares. Timeshares are only permitted in zoning districts where hotel uses are permitted and with approval of a Conditional Use Permit. Notably, timeshares are not permitted in single-family zones. Furthermore, the City's business license ordinance requires any party that is transacting any business within the City to first procure a business license and pay the applicable business license tax. Although the fractional ownership companies claim that they only purchase and sell luxury homes, and therefore they do not impact the availability of affordable housing. However, the City believes the basic laws of supply and demand dictate that every home that is made unavailable to a full-time resident, FRACTIONAL HOUSING City of Newport Beach SS2-13 3-37 whether "luxury" or not, necessarily reduces the supply of homes, and therefore reduces the affordability of housing in the City. In addition to the loss of housing, fractional ownership companies who involve multiple investors will result in their guests rotating the occupancy of the dwelling throughout the year. Although the fractional owners are not technically renters, the City believes the neighbors can expect the property to have many of the same secondary impacts that are caused by vacation rentals. The City of Palm Springs has issued a cease -and -desist order (Appendix 1), ordering Pacaso to stop all advertising and sale of fractional ownership of residential properties within the City and will proceed through its code enforcement authority to obtain compliance. City of Park City, UT Park City, Utah allows fractional ownership in single-family homes provided the ownership obtains approval of a Conditional Use Permit. The areas in which the City allows fractional ownership are identified in the City's General Plan and consists of areas that support the resort economy. These are the same areas that allow timeshares and private residential clubs. The fractional ownership properties must comply with specific prohibitions such as on -street parking, nightly rentals, the outdoor display of goods and merchandise, and signage. Additionally, the fractional housing must obtain approval of a management plan that outlines a satisfactory level of management and maintenance of the fractional housing. The City is currently preparing a code amendment which would prohibit fractional ownership in most single-family zones. The amendments would allow fractional housing in zones where timeshares and private residential clubs are currently permitted. The amendment would also require a business license for fractional ownerships, submittal of a management plan, and prohibition of nightly rentals, on -street parking, outdoor display of goods, signs, and commercial uses (Appendix J). On August 30, 2022, the Planning Commission and City Council are scheduled to conduct a joint work session on the proposed amendments. City of Santa Barbara, CA The City of Santa Barbara does not have any regulation for fractional ownership. The City has received complaints regarding fractional housing in single-family residential area. The Planning Commission and City Council have conducted hearings on the matter but have not given staff direction for future research to regulate these ownerships. City of Santa Cruz, CA Even with fractional homes being offered within city limits, City staff was not aware of this type of ownership model. The City does not currently regulate fractional ownership or timeshares. Notwithstanding this, the City Council has placed a ballot initiative on the November election to establish a tax on residential properties that are occupied less than 120-days a year (Appendix K). City of South Lake Tahoe, CA The City stated that a property sale or deed that results ownership rights in or the right to use accommodations for a period of time less than full year during any given year is considered timeshare. Even though timeshares ten or fewer units are not subject to the Vacation Ownership and Timeshare Act of 200411, they are still subject to local authority. In fact, Section 11280(b) of the Business and Professions 10 California Business and Professions Code §§1121-11288 FRACTIONAL HOUSING City of New- port Beach SS2-94 3-38 Code expressly preserves the authority of local jurisdictions to regulate timeshares through "zoning, subdivision, or building code or other real estate use law, ordinance, or regulation." South Lake Tahoe has issued a cease -and -desist order (Appendix L), ordering Pacaso to stop all advertising and sale of fractional ownership of residential properties within the City until such time they comply with the City's timeshare ordinance. City of Sonoma, CA On January 19th, 2022, the Sonoma City Council voted unanimously to adopt an urgency ordinance to prohibit timeshares and fractional housing. The Council adopted the urgency ordinance due to concerns that these uses threaten to reduce the housing supply in the City by turning long-term housing in the City into vacation rentals and reducing the affordable housing stock in the City. Furthermore, there are concerns that timeshare and fractional housing interest uses increase traffic and noise impacts as they have the same character as commercial hotels, motels, and other transient occupancy uses making them inappropriate for residential zones. On June 15, 2022, the Sonoma City Council adopted an ordinance (Appendix M) to amend the code to prohibit all timeshares and fractional housing in the City. City of St. Helena, CA Within St. Helena, timeshares are only permitted in Service Commercial District and Central Business District. The City Council recently updated the timeshare ordinance to specifically prohibit co -ownership of residential properties (Appendix N). The ordinance updated the definition of a timeshare to broaden its applicability to incorporate fractional housing and limits timeshares uses to their Service Commercial and Central Business District zone. The ordinance also bolsters the City's enforcement authority by including a specific prohibition on timeshare uses in most zones, but also outlines the enforcement process and mechanisms. The enforcement provision was modeled after the City's short-term rental ordinance to which they note has been very effective. It is important to note that Pacaso filed a lawsuit against the City in federal court11 (Appendix 0). Pacaso seeks to stop the City from enforcing their timeshare ordinance against Pacaso and other fractional ownership properties because they feel the timeshare ordinance is invalid and enforcement of said ordinance violates the fractional homeowners and Pacaso's due process protection afforded by the 141n amendment to the U,S. Constitution. Pacaso had also claimed that the City's enforcement actions constituted an intentional interference with prospective economic advantage; however, the Court rejected this portion of the claim, The lawsuit remains pending. Town of Truckee, CA In May 2022 the Town of Truckee adopted a general zoning code cleanup ordinance (Appendix P). Among the various amendments included in the ordinance, the Town Council approved changes to the Town's timeshare uses. This includes outlining the application process, development standards and enforcement and violation protocols fortime-share uses; as well as clarifying that timeshare properties are only allowed within existing legal nonconforming single-family residences in the CG (General Commercial) and CN (Neighborhood Commercial) zones. tt Pacaso Inc_ v. City of St. Helena, 21-cv-02493-WHO (N.D. Cal. Jul. 15, 2021) FRACTIONAL HOUSING pity of Ne port Roach SS2-15 3-39 City of Vail, CO The City does not have regulations regarding fractional ownership. Explaining the concerns of the business model, the City Attorney would agree it resembles a timeshare model but does not see how any City ordinance would be able to regulate it since it is the ownership of a property rather than a use in a portion of a building. APPENDICES FRACTIONAL HOUSING -10- SS2-9 6 3-40 Appendix A — Pacaso Economic Impact Analysis, prepared by EBP FRACTIONAL HOUSING -Al- 3-41 Exhibit K City of Carmel -by -the Sea Time Share Ordinance and Supporting Evidence 3-42 4/27/23, 9:01 AM Coversheet ,�6`t-Tkf-SF CITY OF CARMEL-BY-THE-SEA CITY COUNCIL Zo Staff Report February 7, 2023 PUBLIC HEARINGS TO: Honorable Mayor and City Council Members SUBMITTED BY: Brandon Swanson, Community Planning & Building Director APPROVED BY: Chip Rerig, City Administrator Consider Ordinance No. 2022-007 (first reading) amending Carmel Municipal Code (CMC) Sections 17.14.040, 17.28,010, and 17.70.020, to prohibit timeshare and fractional interest uses, as well as SUBJECT: advertising and sale thereof, in a manner fully in conformity with the California Coastal Act (CA Section 30510) - Continued from December fi, 2022, and January 10, 2023 1. Request the City Attorney to read the title of Ordinance 2022-007. 2. Waive further reading and introduce draft ordinance 2022-007 amending Carmel municipal code (CMC) sections 17.14.040, 17.28,010, and 17.70.020, to prohibit timeshare and fractional interest uses, as well as advertising and sale thereof, in a manner fully in conformity with the California Coastal Act (CA section 30510). EXECUTIVE SUMMARY The Carmel -by -the -Sea Municipal Code prohibits timeshares. The proposed ordinance confirms the existing prohibition of time shares, and adds new prohibitions with respect to advertisement and sale of timeshares and fractional interest ownerships. The City's Planning Commission has recommended adoption of these amendments, with an additional recommendation for Council to have a policy level discussion in the future about whether or not timeshares should continue to be prohibited in the Village. BACKGROUND Existing provisions of the Carmel -by -the -Sea Municipal Code prohibit timeshare uses. Specifically, timeshares are prohibited in all zoning districts of the City, and are defined in Section 17.28.010 to include any land use that is a "timeshare project", "time share program," or "time share occupancy." These are defined in Section 17.70.020 as follows: Time -Share Occupancy. An occupancy related to the situation wherein a purchaser receives the right or entitlement in perpetuity, for life, or for a term of years or other extended term, to the recurrent, exclusive use or occupancy of a lot, parcel, unit, room(s), hotel or portion thereof, or segment of real property, annually or on some other seasonal or periodic basis, for a period of time that has been or will be allotted from the use or occupancy periods into which the time-share project which is involved has been divided. The right or entitlement to occupancy may attach in advance to a specific lot, parcel, unit, room(s) or portion of a hotel, or segment of real property, or may involve designation or selection of the same at a future time or times, Time -Share Prograin. Any arrangement for a project whereby the use, occupancy, or possession of real property has been made subject to a time-share estate, use, or occupancy, whereby such use, occupancy, or possession circulates among purchasers of the time-share intervals according to a fixed or floating time schedule on a periodic basis for a specific period of time during any given year, but not necessarily for consecutive years. Time -Share Project. A project in which a purchaser receives the right in perpetuity, for life, or for a term of years, to the recurrent, exclusive use or occupancy of a lot, parcel, unit, or segment of real property, annually or on some other periodic basis, for a period of time that has been or will be allotted for the use or occupancy periods into which the project has been divided. As a result of recent enforcement efforts related to timeshares, City staff have reviewed the existing city code provisions and recommend that they be revised to confirm the existing prohibition, and additionally, that new prohibitions be added with respect to advertisement and sale of timeshares and fractional interest ownerships, which are treated identically under the existing City code. On October 12th, 2022, the Planning Commission was presented these draft amendments, and received testimony from the public. Following discussion, the Commission approved a resolution recommending that the City Council adopt the ordinance as drafted by staff. The Commission also crafted an additional recital recommending that Council have a policy discussion in the near future to explore whether or not timeshares should still be prohibited in the City of Carmel -by -the -Sea. This additional recommendation arose from deliberations during the hearing, in which the Commissioners discussed the number of vacant homes in the Village and whether https:llcarmel.novusagenda.com/agendapublic/CoverSheet.aspx?ItemID=4958&Meeting[D=1340 1 /2 3-43 4127123, 9:01 AM Coversheet a form of timeshare use could present a solution to filling them. The Commission's additional recommendation is for Council to hold a separate hearing in the near future to have a policy level discussion and decide whether or not to refer an item back to the Planning Commission to remove or modify the prohibition on timeshares in Carmel -by -the -Sea. STAFF ANALYSIS The changes proposed by the ordinance include: Section 17.70.020 is modified to simplify the City's existing definitions with respect to timeshares. The City's existing definitions include definitions of time-share estate, time-share use, time-share occupancy, and time-share property, which are based on similar definitions in state law (the Vacation Ownership and Time -Share Act of 2004, as set forth in Business and Professions Code section 11210 et seq.). However, the existing definitions with respect to timeshares in 17.70.020 are multiple and reference each other, and introduce unnecessary complexity into the City's zoning regulations. While not a substantive change in the scope of the City's regulations, the proposed ordinance would simplify definitions to prohibit the use of real property under a "time-share plan." The definition of "time-share plan" would mean "any arrangement, plan, scheme, or similar device, whether established by membership agreement, sale, lease, deed, license, right to use agreement, articles of organization or incorporation, operating agreement or bylaws, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of real property or portion thereof, according to a fixed or floating time schedule, 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," The code would specify that a time share plan exists "whenever such recurring rights of exclusive use to real property are created, regardless of whether such exclusive rights of use are a result of a grant of ownership rights, possessory rights, membership rights, rights pursuant to contract, or ownership of a fractional interest or share in real property, and regardless of whether they are coupled with ownership of a real property interest such as freehold interest or an estate for years in the properly subject to the time-share plan." The code would be revised to make clear that a prohibited timeshare is created whenever any right is established for exclusive use of the property that is periodic on a recurring basis, regardless of the form. The definition of "timeshare plan" would now specifically mention that fractional ownership is one way a timeshare can be created, which is also not a substantive change. "Time-share use" and "fractional interest use" are defined to mean exactly same thing, so that it is clear to all potential violators that there is no difference between a fractional interest use and a timeshare use. 17.14.040, prohibiting timeshares in commercial zones, is modified to use the updated definitions. • 17.28.010.A, prohibiting timeshares in all city zoning districts, is updated to use the updated definitions. Additional subsections are added to this section to make advertisement of timeshares subject to criminal penalties as well as the City's administrative civil penalty process. The code also specifies that each day a violation occurs is a separate offense, for purposes of deterring violations by increasing the visibility of potential consequences. While the existing municipal code prohibits fractionalized interest ownership, as a timeshare is created based on the allocation of exclusive rights of use to real property, the proposed code amendments would clarity the prohibition and strengthen enforcement efforts. Additionally, the proposed ordinance would expressly prohibit the advertisement and sale of timeshares and fractional interest uses; this would allow for proactive enforcement by the City against those involved in the creation, advertisement, and sale of such prohibited land uses, rather than just the purchaser or owner of a timeshare or fractional interest use. The staff time associated with processing this ordinance amendment is captured in the FY2022/2023 Community Planning and Building Budget, None. Attachment 11 PC Resolution 2022-0313-PC Recommending Approval Attachment 2) Draft Ord. 2022-007 REDLINE Attachment 3) Draft Ord. 2022.007 CLEAN https:ucannel.novusagenda. coralagendapubliclCoverSheet.aspx?ltemlD=4958&MeetingID=1340 2/2 3-44 CITY OF CARM EL -BY -THE -SEA PLANNING COMMISSION RESOLUTION NO.2022-036-PC A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF CARMEL-BY-THE-SEA RECOMMENDING CITY COUNCIL ADOPT ORDINANCE AMENDING MUNICIPAL CODE SECTIONS 17.14.040, 17.28.010, AND 17.70.020, TO PROHIBIT TIMESHARE AND FRACTIONAL INTEREST USES, AS WELL AS ADVERTISING AND SALE THEREOF WHEREAS, existing provisions of the Carmel -by -the -Sea Municipal Code prohibit timeshare uses. Specifically, timeshares are prohibited in all zoning districts of the City, and regulated by Sections 17,28.010, 17.70.020 and 17.14.040; and WHEREAS, as a result of enforcement efforts, City staff have reviewed the existing city code provisions and recommend that they be revised to confirm the existing prohibition, and additionally, that new prohibitions be added with respect to advertisement and sale of timeshares and fractional interest ownerships, which are treated identically under the existing City code; and WHEREAS, notice of a public hearing of the Planning Commission was published on September 301h, 2022 in compliance with State law (California Government Code 65091); and WHEREAS, on October 12, 2022, the Planning Commission held a public hearing to consider draft Ordinance 2022-007 amending regulations pertaining to timeshares and receive public testimony, including without limitation, information provided to the Planning Commission by City staff and through public testimony; and WHEREAS, the Planning Commission found that the draft Ordinance 2022-007 was consistent with the City's General Plan, Local Coastal Plan, and all other relevant City and State codes and regulations. WHEREAS, the California Environmental Quality Act (California Public Resources Code §§ 21000, et seq., "CEQA"), together with State Guidelines (14 California Code Regulations §§ 15000, et seq., the "CEQA Guidelines") and City Environmental Regulations (CMC 17.60) require the review of certain projects for environmental impacts and preparation of environmental documents; and WHEREAS, the Planning Commission finds that pursuant to CEQA regulations, the project will have no impact on the environment and is not considered a project requiring compliance with the California Environmental Quality Act (Section 21065 of the California Public Resources Code); and WHEREAS, the facts set forth in the recitals are true and correct and are incorporated herein by reference. 3-45 NOW, THEREFORE, BE IT RESOLVED, THAT THE PLANNING COMMISSION OF THE CITY OF CARMEL-BY-THE-SEA DOES HEREBY recommend the City Council amend municipal code sections 17.14.040, 17.28.010, and 17.70.020, to prohibit timeshare and fractional interest uses, as well as advertising and sale thereof and adopt the Update in a manner fully in conformity with the Coastal Act (CA Section 30510). BE IT FURTHER RESOLVED, THAT THE PLANNING COMMISSION OF THE CITY OF CARMEL- BY-THE-SEA DOES ALSO recommend the City Council hold a separate hearing in the near future to have a policy level discussion and decide whether or not to refer an item back to the Planning Commission to remove or modify the prohibition on timeshares in Carmel -by -the -Sea. PASSED, APPROVED, AND ADOPTED BY THE PLANNING COMMISSION OF THE CITY OF CARMEL-BY-THE-SEA this 12th day of October, 2022, by the following vote: AYES: Delves, Allen, Bolton, LePage, Locke NOES: ABSENT: ABSTAIN: APPROVED: Michael LePage, Chair ATTEST: Leah Young, Planning Commission Secretary 3-46 CITY OF CARMEL-BY-THE-SEA CITY COUNCIL ORDINANCE NO, 2022-007 AN ORDINANCE AMENDING THE CARMEL-BY-THE-SEA MUNICIPAL CODE TO PROHIBIT TIMESHARE AND FRACTIONAL INTEREST USES, AS WELL AS ADVERTISING AND SALE THEREOF IN A MANNER FULLY IN CONFORMITY WITH THE COASTAL ACT (CA PUBLIC RESOURCES CODE SECTION 30510 ET SEQ.) WHEREAS, timeshares involve the division of the exclusive rights to use, possess, and occupy any real property between multiple persons, pursuant to a fixed or floating time schedule; and WHEREAS, since at least 1988, the City of Carmel -by -the -Sea has prohibited the establishment of timeshares within the City; and WHEREAS, the Housing Element of the City's General Plan specifically recognizes that the City seeks to protect the stability of residential neighborhoods by promoting year-round occupancy, and to avoid depletion of residents and associated impacts on the community, City services, Goal G3-4 of the City's Housing Element specifically requires the enforcement of the prohibitions on short-term, transient rentals and timeshares in residential dwellings; and WHEREAS the Planning Commission of the City of Carmel -by -the -Sea reviewed the ordinance, and on October 12 2022 determined the ordinance was consistent with the City's General Plan Local Coastal Plan and all other relevant City and State codes and re uiaticns, and having reviewed the Planning Commsssion's recommendations and the relevanl nrovissons of the General Plan. the Citv Council finds that the ordinance is consistent with the City's General Plan, and WHEREAS, recent increases in the development and sale of fractional interest ownerships have made it appropriate for the City to revisit its municipal code to clarify that fractional interest ownerships are prohibited timeshares and to also expressly prohibit the advertising and sale of prohibited timeshares and fractional interest uses. WHEREAS, notice of the public hearing was published on November 25, 2022 in compliance with State law (California Government Code 65091), indicating the date and time of the public hearing; and WHEREAS, on December 6, 2022, the City Council opened the a public hearing to receive public testimony regarding the draft ordinance, including without limitation, information provided by City staff and public testimony, and continued the hearing to a date certain of January 10, 2023; and WHEREAS. on January 10, 2023 the City Council re -convened the PUblic hearing to receive further public testimony regarding the draft ordinance inclucljnq without limitation information provided by City staff and public testimony; and OAK 44875-3304-401? v? 3-47 WHEREAS, this decision is made based upon evidence presented to the City Council at its December 6, 2022 and January 11 2023 hearings including, without limitation, the staff report submitted by the Community Planning and Building Department and public testimony; and WHEREAS, the City Council did hear and consider all said reports, recommendations, attachments and testimony herein above set forth and used their independent judgement to evaluate the ordinance; and WHEREAS, the proposed amendments are in full conformity with the City's Local Coastal Plan and the California Coastal Act (GA Public_ Resources Code Section 30510 ei �e NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DOES ORDAIN AS FOLLOWS: SECTION 1, CEQA Review. The City Council exercises its independent judgment and finds that this ordinance is not subject to the California Environmental Quality Act (CEQA) pursuant to the State CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, Sections. 15060(c)(2), because the proposed ordinance will not result in a direct or reasonably foreseeable indirect physical change in the environment; 15061(b)(3) because the proposed ordinance is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment; and 15308 because the proposed ordinance involves regulatory actions to assure protection of the environment. Therefore, the adoption of this ordinance is exempt from CEQA and no further environmental review is necessary. SECTION 2. Amendment to the CIVIC. 1, Subsection A of Section 17.14.040 is amended and restated as follows: 17.14.040 Additional Use Regulations. A. All Uses. 1. No new structure or modification to an existing structure shall be permitted nor shall any business license be issued that would allow the creation of publicly accessible retail space occupying fewer than 200 square feet or more than 5,000 square feet unless approved through a use permit and pursuant to the adoption of findings per CIVIC 17.64.200, Retail Space of Less Than 200 Square Feet or Greater Than 5,000 Square Feet. 2. No timeshare uses or fractional interest uses shall be established or permitted in any zone. 3. Except in restaurants, not more than five persons in any one individually licensed business shall be engaged in the production, repair or manufacturing of goods. 4. No use shall be permitted and no process, equipment, or materials shall be employed which is found by the Planning Director or by the Planning Commission to be OAK 418 75-330 4--40l _2 v? 3-48 objectionable to persons residing or working in the vicinity by reason of odor, fumes, noise, vibration, illumination, glare, unsightliness, dust, cinders, dirt, refuse, water - carried wastes or heavy truck traffic, or involve any hazard of fire or explosion. 2. Section 17.28,010 is amended and restated as follows: 17.28.010 Timeshare and Fractional Interest Uses. A. Timeshare uses and fractional interest uses are prohibited uses within all of the zoning districts within the City. B. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised, or disseminated in any way and through any medium, the availability for sale or use of real property in violation of this section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.16 (General Penalty). C. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised, or disseminated in any way and through any medium, the availability for sale or use of real property in violation of this section is subject to administrative fines and/or penalties as set forth in Chapter 18.04 (Municipal Code and Ordinance Enforcement). D. Each day a violation of this section occurs shall constitute a separate offense, and the remedies under this section are cumulative and in addition to any and all other remedies available at law and equity. 3. "Time -Share Definitions" of Section 17.70,020 is amended to repeal the definitions of "Time -Share Estate," "Time -Share Occupancy," "Time -Share Program," "Time -Share Project," and "Vacation -Time Sharing Project," and restated to enact the definitions of "Time -Share Plan," "Time -Share Use" and "Fractional Interest Use" to read as follows: 17.70.020 Definitions. The words, terms, and phrases defined in this chapter shall, for all purposes connected with this title, be construed as having the meanings respectively set forth in this chapter. Time -Share Definitions. "Time -Share Plan" means any arrangement, plan, scheme, or similar device, whether established by membership agreement, sale, lease, deed, license, right -to -use agreement, articles of organization or incorporation, operating agreement or bylaws, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of real property or portion thereof, according to a fixed or floating time schedule, 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. A timeshare plan shall be deemed to exist whenever such recurring rights of exclusive use to real property are created, regardless of whether such exclusive rights of use are OAT{ 94675-3304-4012 v2 3-49 a result of a grant of ownership rights, possessory rights, membership rights, rights pursuant to contract, or ownership of a fractional interest or share in real property, and regardless of whether they are coupled with ownership of a real property interest such as freehold interest or an estate for years in the property subject to the time-share plan. "Time -Share Use" and "Fractional Interest Use" means the use of real property or any part thereof, pursuant to a timeshare plan. SECTION 3. Severability. If any section, subsection, phrase, or clause of this ordinance is for any reason held to be unconstitutional, such a decision shall not affect the validity of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this Ordinance and each section, subsection, phrase, or clause thereof irrespective of the fact that any one or more sections, subsections, phrases, or clauses be declared unconstitutional. SECTION 4. Publication, The City Clerk shall publish or post this ordinance in the manner required by law. SECTION 5. Effective Date. This ordinance shall be effective 30 days after its adoption and after approval by the California Coastal Commission. PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE- SEA this XX day of XX 2022, by the following vote: AYES' NOES: ABSENT: ABSTAIN: APPROVE: ATTEST: Dave Potter, Mayor Nova Romero, MMC, City Clerk OAk 4 4573-3304-4U 1 v' 3-50 CITY OF CARMEL-BY-THE-SEA CITY COUNCIL ORDINANCE NO-. 2022-007 AN ORDINANCE AMENDING THE CARMEL-BY-THE-SEA MUNICIPAL CODE TO PROHIBIT TIMESHARE AND FRACTIONAL INTEREST USES, AS WELL AS ADVERTISING AND SALE THEREOF IN A MANNER FULLY IN CONFORMITY WITH THE COASTAL ACT (PUBLIC RESOURCES CODE SECTION 30510 ET SEQ.) WHEREAS, timeshares involve the division of the exclusive rights to use, possess, and occupy any real property between multiple persons, pursuant to a fixed or floating time schedule; and WHEREAS, since at least 1988, the City of Carmel -by -the -Sea has prohibited the establishment of timeshares within the City; and WHEREAS, the Housing Element of the City's General Plan specifically recognizes that the City seeks to protect the stability of residential neighborhoods by promoting year-round occupancy, and to avoid depletion of residents and associated impacts on the community, City services, Goal G3-4 of the City's Housing Element specifically requires the enforcement of the prohibitions on short-term, transient rentals and timeshares in residential dwellings; and WHEREAS, the Planning Commission of the City of Carmel -by -the -Sea reviewed the ordinance, and on October 12, 2022, determined the ordinance was consistent with the City's General Plan, Local.Coastal Plan, and all other relevant City and State codes and regulations, and having reviewed the Planning Commission's recommendations and the relevant provisions of the General Plan, the City Council finds that the ordinance is consistent with the City's General Plan; and WHEREAS, recent increases in the development and sale of fractional interest ownerships have made it appropriate for the City to revisit its municipal code to clarify that fractional interest ownerships are prohibited timeshares and to also expressly prohibit the advertising and sale of prohibited timeshares and fractional interest uses. WHEREAS, notice of the public hearing was published on November 25, 2022 in compliance with State law (California Government Code 65091), indicating the date and time of the public hearing; and WHEREAS, on December 6, 2022, the City Council opened the public hearing to receive public testimony regarding the draft ordinance, including without limitation, information provided by City staff and public testimony, and continued the hearing to a date certain of January 10, 2023; and WHEREAS, on January 10, 2023, the City Council re -convened the public hearing to receive further public testimony regarding the draft ordinance, including without limitation, information provided by City staff and public testimony; and OAK P4875-3304-4012 v2 3-51 WHEREAS, this decision is made based upon evidence presented to the City Council at its December 6, 2022 and January 10, 2023 hearings including, without limitation, the staff report submitted by the Community Planning and Building Department and public testimony; and WHEREAS, the City Council did hear and consider all said reports, recommendations, attachments and testimony herein above set forth and used their independent judgement to evaluate the ordinance; and WHEREAS, the proposed amendments are in full conformity with the City's Local Coastal Plan and the California Coastal Act (Public Resources Code Section 30510 et seq.) NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DOES ORDAIN AS FOLLOWS: SECTION 1. CEQA Review. The City Council exercises its independent judgment and finds that this ordinance is not subject to the California Environmental Quality Act (CEQA) pursuant to the State CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, Sections. 15060(c)(2), because the proposed ordinance will not result in a direct or reasonably foreseeable indirect physical change in the environment; 15061(b)(3) because the proposed ordinance is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment; and 15308 because the proposed ordinance involves regulatory actions to assure protection of the environment. Therefore, the adoption of this ordinance is exempt from CEQA and no further environmental review is necessary. SECTION 2. Amendment to the CIVIC. 1. Subsection A of Section 17.14.040 is amended and restated as follows: 17.14.040 Additional Use Regulations. 1. No new structure or modification to an existing structure shall be permitted nor shall any business license be issued that would allow the creation of publicly accessible retail space occupying fewer than 200 square feet or more than 5,000 square feet unless approved through a use permit and pursuant to the adoption of findings per CIVIC 17.64.200, Retail Space of Less Than 200 Square Feet or Greater Than 5,000 Square Feet. 2. No timeshare uses or fractional interest uses shall be established or permitted in any zone. 3. Except in restaurants, not more than five persons in any one individually licensed business shall be engaged in the production, repair or manufacturing of goods. 4. No use shall be permitted and no process, equipment, or materials shall be employed which is found by the Planning Director or by the Planning Commission to be objectionable to persons residing or working in the vicinity by reason of odor, fumes, OAK 44875-3304-4012 W2. 3-52 noise, vibration, illumination, glare, unsightliness, dust, cinders, dirt, refuse, water - carried wastes or heavy truck traffic, or involve any hazard of fire or explosion. 2. Section 17.28.010 is amended and restated as follows: 17.28.010 Timeshare and Fractional Interest Uses. A. Timeshare uses and fractional interest uses are prohibited uses within all of the zoning districts within the City. B. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised, or disseminated in any way and through any medium, the availability for sale or use of real property in violation of this section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.16 (General Penalty). C. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised, or disseminated in any way and through any medium, the availability for sale or use of real property in violation of this section is subject to administrative fines and/or penalties as set forth in Chapter 18.04 (Municipal Code and Ordinance Enforcement). D. Each day a violation of this section occurs shall constitute a separate offense, and the remedies under this section are cumulative and in addition to any and all other remedies available at law and equity. 3. "Time -Share Definitions" of Section 17.70.020 is amended to repeal the definitions of "Time -Share Estate," "Time -Share Occupancy," "Time -Share Program," "Time -Share Project," and "Vacation -Time Sharing Project," and restated to enact the definitions of "Time -Share Plan," "Time -Share Use" and "Fractional Interest Use" to read as follows: 17.70.020 Definitions. The words, terms, and phrases defined in this chapter shall, for all purposes connected with this title, be construed as having the meanings respectively set forth in this chapter. Time -Share Definitions. "Time -Share Plan" means any arrangement, plan, scheme, or similar device, whether established by membership agreement, sale, lease, deed, license, right -to -use agreement, articles of organization or incorporation, operating agreement or bylaws, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of real property or portion thereof, according to a fixed or floating time schedule, 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. A timeshare plan shall be deemed to exist whenever such recurring rights of exclusive use to real property are created, regardless of whether such exclusive rights of use are a result of a grant of ownership rights, possessory rights, membership rights, rights OAK 94875-3304-4012 v2 3-53 pursuant to contract, or ownership of a fractional interest or share in real property, and regardless of whether they are coupled with ownership of a real property interest such as freehold interest or an estate for years in the property subject to the time-share plan. "Time -Share Use" and "Fractional Interest Use" means the use of real property or any part thereof, pursuant to a timeshare plan. SECTION 3. Severability. If any section, subsection, phrase, or clause of this ordinance is for any reason held to be unconstitutional, such a decision shall not affect the validity of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this Ordinance and each section, subsection, phrase, or clause thereof irrespective of the fact that any one or more sections, subsections, phrases, or clauses be declared unconstitutional. SECTION 4. Publication. The City Clerk shall publish or post this ordinance in the manner required by law. SECTION 5. Effective Date. This ordinance shall be effective 30 days after its adoption and after approval by the California Coastal Commission. PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE- SEA this XX day of XX 2022, by the following vote: AYES: NOES: ABSENT: ABSTAIN: APPROVE: ATTEST: Dave Potter, Mayor Nova Romero, MMC, City Clerk OAK 94875-3304-4012 v2 3-54 4127123, 9:03 AM Coversheet TQ: SUBMITTED BY: APPROVED BY SUBJECT: CITY OF CARMEL-BY-THE-SEA CITY COUNCIL Staff Report March 7, 2023 ORDERS OF BUSINESS Honorable Mayor and City Council Members Brandon Swanson, Community Planning & Building Director Chip Rerig, City Administrator Second Reading and Adoption of Ordinance No. 2022-007 - Amending Carmel Municipal Code (CMC) Sections 17.14.040, 17.28.010, and 17.70.020, to prohibit timeshare and fractional interest uses, as well as advertising and sale thereof, in a manner fully in conformity with the California Coastal Act (CA Section 30510) 1. Request the City Attorney to read the title of Ordinance 2022-007. 2. Waive further reading and ADOPT ordinance 2022-007 amending Carmel municipal code (CMC) sections 17.14.040, 17.28.010, and 17.70.020, to prohibit timeshare and fractional interest uses, as well as advertising and sale thereof, in a manner fully in conformity with the California Coastal Act (CA section 30510). EXECUTIVE SUMMARY The Carmel -by -the -Sea Municipal Code prohibits timeshares. The proposed ordinance confirms the existing prohibition of time shares, and adds new prohibitions with respect to advertisement and sale of timeshares and fractional interest ownerships. The City's Planning Commission has recommended adoption of these amendments, with an additional recommendation for Council to have a policy level discussion in the future about whether or not timeshares should continue to be prohibited in the Village. BACKGROUND Existing provisions of the Carme[-by-the-Sea Municipal Code prohibit timeshare uses. Specifically, timeshares are prohibited in all zoning districts of the City, and are defined in Section 17.28.010 to include any land use that is a "timeshare project", "time share program," or "time share occupancy." These are defined in Section 17.70.020 as follows: Time -Share Occupancy. An occupancy related to the situation wherein a purchaser receives the right or entitlement in perpetuity, for life, or for a term of years or other extended term, to the recurrent, exclusive use or occupancy of a lot, parcel, unit, room(s), hotel or portion thereof, or segment of real property, annually or on some other seasonal or periodic basis, for a period of time that has been or will be allotted from the use or occupancy periods into which the time-share project which is involved has been divided. The right or entitlement to occupancy may attach in advance to a specific lot, parcel, unit, room(s) or portion of a hotel, or segment of real property, or may involve designation or selection of the same at a future time or times, Time -Shale Program. Any arrangement for a project whereby the use, occupancy, or possession of real property has been made subject to a time-share estate, use, or occupancy, whereby such use, occupancy, or possession circulates among purchasers of the time-share intervals according to a fixed or Floating time schedule on a periodic basis for a specific period of time during any given year, but not necessarily for consecutive years. Time -Share Project. A project in which a purchaser receives the right in perpetuity, for life, or for a term of years, to the recurrent, exclusive use or occupancy of a lot, parcel, unit, or segment of real property, annually or on some other periodic basis, for a period of time that has been or will be allotted for the use or occupancy periods into which the project has been divided. As a result of recent enforcement efforts related to timeshares, City staff have reviewed the existing city code provisions and recommend that they be revised to confirm the existing prohibition, and additionally, that new prohibitions be added with respect to advertisement and sale of timeshares and fractional interest ownerships, which are treated identically under the existing City code. On October 12th, 2022, the Planning Commission was presented these draft amendments, and received testimony from+ the public. Following discussion, the Commission approved a resolution recommending that the City Council adopt the ordinance as drafted by staff. The Commission also crafted an additional recital recommending that Council have a policy discussion in the near future to explore whether or not timeshares should still be prohibited in the City of Carmel -by -the -Sea. This additional recommendation arose from deliberations during the hearing, in which the Commissioners discussed the number of vacant homes in the Village and whether https:licarmel.nGvusagenda.com/agendapublic/CoverSheet.aspx?ltemlD=5020&Meetingl❑=1341 IFA 3-55 4/27/23, 9:03 AM Coversheet a form of timeshare use could present a solution to filling them. The Commission's additional recommendation is for Council to hold a separate hearing in the near future to have a policy level discussion and decide whether or not to refer an item back to the Planning Commission to remove or modify the prohibition on timeshares in Carmel -by -the -Sea. STAFF ANALYSIS The changes proposed by the ordinance include: • Section 17.70.020 is modified to simplify the City's existing definitions with respect to timeshares. The City's existing definitions include definitions of time-share estate, time-share use, time-share occupancy, and time-share property, which are based on similar definitions in state law (the Vacation Ownership and Time -Share Act of 2004, as set forth in Business and Professions Code section 11210 et seq.). However, the existing definitions with respect to timeshares in 17.70.020 are multiple and reference each other, and introduce unnecessary complexity into the City's zoning regulations. While not a substantive change in the scope of the City's regulations, the proposed ordinance would simplify definitions to prohibit the use of real property under a "time-share plan." • The definition of "time-share plan" would mean "any arrangement, plan, scheme, or similar device, whether established by membership agreement, sale, lease, deed, license, right to use agreement, articles of organization or incorporation, operating agreement or bylaws, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of real property or portion thereof, according to a fixed or floating time schedule, 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." • The code would specify that a time share plan exists "whenever such recurring rights of exclusive use to real property are created, regardless of whether such exclusive rights of use are a result of a grant of ownership rights, possessory rights, membership rights, rights pursuant to contract, or ownership of a fractional interest or share in real property, and regardless of whether they are coupled with ownership of a real property interest such as freehold interest or an estate for years in the property subject to the time-share plan." • The code would be revised to make clear that a prohibited timeshare is created whenever any right is established for exclusive use of the property that is periodic on a recurring basis, regardless of the form. The definition of "timeshare plan" would now specifically mention that fractional ownership is one way a timeshare can be created, which is also not a substantive change. "Time-share use" and "fractional interest use" are defined to mean exactly same thing, so that it is clear to all potential violators that there is no difference between a fractional interest use and a timeshare use, • 17.14.040, prohibiting timeshares in commercial zones, is modified to use the updated definitions. • 1728.010.A, prohibiting timeshares in all city zoning districts, is updated to use the updated definitions. Additional subsections are added to this section to make advertisement of timeshares subject to criminal penalties as well as the City's administrative civil penalty process. The code also specifies that each day a violation occurs is a separate offense, for purposes of deterring violations by increasing the visibility of potential consequences. While the existing municipal code prohibits fractionalized interest ownership, as a timeshare is created based on the allocation of exclusive rights of use to real property, the proposed code amendments would clarify the prohibition and strengthen enforcement efforts. Additionally, the proposed ordinance would expressly prohibit the advertisement and sale of timeshares and fractional interest uses; this would allow for proactive enforcement by the City against those involved in the creation, advertisement, and sale of such prohibited land uses, rather than just the purchaser or owner of a timeshare or fractional interest use. During the February 7, 2023 discussion on this item, the City Council directed staff to Inquire with appropriate Monterey County offices about the tax implications of a Limited Liability Corporation (LLC) owning and disposing of fractional ownership interests. Monterey County Counsel advised that reassessment of fractional ownership real property interests in an LLC does not occur until transfer of 50 percent or more of said interests occurs. Reporting of such is incumbent on the LLC tiling appropriate documentation with the Internal Revenue Service which, in turn, relays such information to a state's real property taxing authority (a County in the case of the State of California). The staff time associated with processing this ordinance amendment is captured in the FY2022/2023 Community Planning and Building Budget, Ordinance 2022-007 was introduced (first reading) on February 7, 2023 at a Regular City Council Meeting Attachment 1) PC Resolution 2 22-036-PC Recommending Approval Attachment 2) Draft Ord. 2022-007 REDLINE Attachment 3) Draft Ord. 2022.007 CLEAN https:llcarmel.novusagenda.com/agendapublic/Coversheet_aspx?ItemID=5020&MeetingID=1341 2/2 3-56 CITY OF CARMEL-BY-THE-SEA PLANNING COMMISSION RESOLUTION NO.2022-036-PC A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF CARMEL-BY-THE-SEA RECOMMENDING CITY COUNCIL ADOPT ORDINANCE AMENDING MUNICIPAL CODE SECTIONS 17.14.040, 17.28.010, AND 17.70.020, TO PROHIBIT TIMESHARE AND FRACTIONAL INTEREST USES, AS WELL AS ADVERTISING AND SALE THEREOF WHEREAS, existing provisions of the Carmel -by -the -Sea Municipal Code prohibit timeshare uses. Specifically, timeshares are prohibited in all zoning districts of the City, and regulated by Sections 17.28.010, 17.70.020 and 17.14.040; and WHEREAS, as a result of enforcement efforts, City staff have reviewed the existing city code provisions and recommend that they be revised to confirm the existing prohibition, and additionally, that new prohibitions be added with respect to advertisement and sale of timeshares and fractional interest ownerships, which are treated identically under the existing City code; and WHEREAS, notice of a public hearing of the Planning Commission was published on September 30th, 2022 in compliance with State law (California Government Code 65091); and WHEREAS, on October 12, 2022, the Planning Commission held a public hearing to consider draft Ordinance 2022-007 amending regulations pertaining to timeshares and receive public testimony, including without limitation, information provided to the Planning Commission by City staff and through public testimony; and WHEREAS, the Planning Commission found that the draft Ordinance 2022-007 was consistent with the City's General Plan, Local Coastal Plan, and all other relevant City and State codes and regulations. WHEREAS, the California Environmental Quality Act (California Public Resources Code §§ 21000, et seq., "CEQA"), together with State Guidelines (14 California Code Regulations §§ 15000, et seq., the "CEQA Guidelines") and City Environmental Regulations (CMC 17.60) require the review of certain projects for environmental impacts and preparation of environmental documents; and WHEREAS, the Planning Commission finds that pursuantto CEQA regulations, the project will have no impact on the environment and is not considered a project requiring compliance with the California Environmental Quality Act (Section 21065 of the California Public Resources Code); and WHEREAS, the facts set forth in the recitals are true and correct and are incorporated herein by reference. 3-57 NOW, THEREFORE, BE IT RESOLVED, THAT THE PLANNING COMMISSION OF THE CITY OF CARMEL-BY-THE-SEA DOES HEREBY recommend the City Council amend municipal code sections 17.14,040, 17.28.010, and 17.70.020, to prohibit timeshare and fractional interest uses, as well as advertising and sale thereof and adopt the Update in a manner fully in conformity with the Coastal Act (CA Section 30510). BE IT FURTHER RESOLVED, THAT THE PLANNING COMMISSION OF THE CITY OF CARMEL- BY-THE-SEA DOES ALSO recommend the City Council hold a separate hearing in the near future to have a policy level discussion and decide whether or not to refer an item back to the Planning Commission to remove or modify the prohibition on timeshares in Carmel -by -the -Sea. PASSED, APPROVED, AND ADOPTED BY THE PLANNING COMMISSION OF THE CITY OF CARMEL-BY-THE-SEA this 12th day of October, 2022, by the following vote: AYES: Delves, Allen, Bolton, LePage, Locke NOES: ABSENT: ABSTAIN: APPROVED: ATTEST: Michael LePage, Chair Leah Young, Planning Commission Secretary 3-58 CITY OF CARMEL-BY-THE-SEA CITY COUNCIL ORDINANCE NO. 2022-007 AN ORDINANCE AMENDING THE CARMEL-BY-THE-SEA MUNICIPAL CODE TO PROHIBIT TIMESHARE AND FRACTIONAL INTEREST USES, AS WELL AS ADVERTISING AND SALE THEREOF IN A MANNER FULLY IN CONFORMITY WITH THE COASTAL ACT (CA PUBLIC RESOURCES CODE SECTION 30510 ET SEQ.) WHEREAS, timeshares involve the division of the exclusive rights to use, possess, and occupy any real property between multiple persons, pursuant to a fixed or floating time schedule; and WHEREAS, since at least 1988, the City of Carmel -by -the -Sea has prohibited the establishment of timeshares within the City; and WHEREAS, the Housing Element of the City's General Plan specifically recognizes that the City seeks to protect the stability of residential neighborhoods by promoting year-round occupancy, and to avoid depletion of residents and associated impacts on the community, City services, Goal G3-4 of the City's Housing Element specifically requires the enforcement of the prohibitions on short-term, transient rentals and timeshares in residential dwellings; and WHEREAS, the Planning Commission of the City of Carmel -by -the -Sea reviewed the ordinance and on October 12 2022 determined the ordinance was consistent with the Cit 's General Plan Local Coastal Plan and ail other relevant City and State codes and regulations. and having reviewed the Planning Commission's recommendations and the relevant provisions of the General Plan the City Council finds that the ordinance is consistent with the Citv's General Plan and WHEREAS, recent increases in the development and sale of fractional interest ownerships have made it appropriate for the City to revisit its municipal code to clarify that fractional interest ownerships are prohibited timeshares and to also expressly prohibit the advertising and sale of prohibited timeshares and fractional interest uses. WHEREAS, notice of the public hearing was published on November 25, 2022 in compliance with State law (California Government Code 65091), indicating the date and time of the public hearing; and WHEREAS, on December 6, 2022, the City Council opened the a public hearing to receive public testimony regarding the draft ordinance, including without limitation, information provided by City staff and public testimony, and continued the hearing to a date certain of January 10. 2023; and WHEREAS on JanuarV 10, 2023 the Clty Council re -convened the jpublsc hearing to receive further public testimony reqarding the draft ordinance, including without limitation. information Provided bV City staff and public testimony; and OAK 94375-3304-4011- v7 3-59 WHEREAS, this decision is made based upon evidence presented to the City Council at its December 6, 2022 and January 10, 202,� hearings including, without limitation, the staff report submitted by the Community Planning and Building Department and public testimony; and WHEREAS, the City Council did hear and consider all said reports, recommendations, attachments and testimony herein above set forth and used their independent judgement to evaluate the ordinance; and WHEREAS, the proposed amendments are in full conformity with the City's Local Coastal Plan and the California Coastal Act (CA Public Resources Code Section 30510 et se NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DOES ORDAIN AS FOLLOWS: SECTION 1. CEQA Review. The City Council exercises its independent judgment and finds that this ordinance is not subject to the California Environmental Quality Act (CEQA) pursuant to the State CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, Sections. 15060(c)(2), because the proposed ordinance will not result in a direct or reasonably foreseeable indirect physical change in the environment- 15061(b)(3) because the proposed ordinance is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment; and 15308 because the proposed ordinance involves regulatory actions to assure protection of the environment. Therefore, the adoption of this ordinance is exempt from CEQA and no further environmental review is necessary. SECTION 2. Amendment to the CIVIC. 1. Subsection A of Section 17.14.040 is amended and restated as follows 17.14.040 Additional Use Regulations. 1= 1. No new structure or modification to an existing structure shall be permitted nor shall any business license be issued that would allow the creation of publicly accessible retail space occupying fewer than 200 square feet or more than 5,000 square feet unless approved through a use permit and pursuant to the adoption of findings per CMC 17.64.200, Retail Space of Less Than 200 Square Feet or Greater Than 5,000 Square Feet. 2. No timeshare uses or fractional interest uses shall be established or permitted in any zone. 3. Except in restaurants, not more than five persons in any one individually licensed business shall be engaged in the production, repair or manufacturing of goods. 4. No use shall be permitted and no process, equipment, or materials shall be employed which is found by the Planning Director or by the Planning Commission to be 0_-VK 4= 08-331_14-4012 ,, 3-60 objectionable to persons residing or working in the vicinity by reason of odor, fumes, noise, vibration, illumination, glare, unsightliness, dust, cinders, dirt, refuse, water - carried wastes or heavy truck traffic, or involve any hazard of fire or explosion. 2. Section 17.28.010 is amended and restated as follows: 17.28.010 Timeshare and Fractional Interest Uses. A. Timeshare uses and fractional interest uses are prohibited uses within all of the zoning districts within the City. B. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised, or disseminated in any way and through any medium, the availability for sale or use of real property in violation of this section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.16 (General Penalty). C. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised, or disseminated in any way and through any medium, the availability for sale or use of real property in violation of this section is subject to administrative fines and/or penalties as set forth in Chapter 18.04 (Municipal Code and Ordinance Enforcement). D. Each day a violation of this section occurs shall constitute a separate offense, and the remedies under this section are cumulative and in addition to any and all other remedies available at law and equity. 3. "Time -Share Definitions" of Section 17.70.020 is amended to repeal the definitions of "Time -Share Estate," "Time -Share Occupancy," "Time -Share Program," "Time -Share Project," and "Vacation -Time Sharing Project," and restated to enact the definitions of "Time -Share Plan," "Time -Share Use" and "Fractional Interest Use" to read as follows: 17.70.020 Definitions. The words, terms, and phrases defined in this chapter shall, for all purposes connected with this title, be construed as having the meanings respectively set forth in this chapter. Time -Share Definitions. "Time -Share Plan" means any arrangement, plan, scheme, or similar device, whether established by membership agreement, sale, lease, deed, license, right -to -use agreement, articles of organization or incorporation, operating agreement or bylaws, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of real property or portion thereof, according to a fixed or floating time schedule, 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. A timeshare plan shall be deemed to exist whenever such recurring rights of exclusive use to real property are created, regardless of whether such exclusive rights of use are OAK #4975-3304-4012 v2 3-61 a result of a grant of ownership rights, possessory rights, membership rights, rights pursuant to contract, or ownership of a fractional interest or share in real property, and regardless of whether they are coupled with ownership of a real property interest such as freehold interest or an estate for years in the property subject to the time-share plan. "Time -Share Use" and "Fractional Interest Use" means the use of real property or any part thereof, pursuant to a timeshare plan. SECTION 3. Severability. If any section, subsection, phrase, or clause of this ordinance is for any reason held to be unconstitutional, such a decision shall not affect the validity of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this Ordinance and each section, subsection, phrase, or clause thereof irrespective of the fact that any one or more sections, subsections, phrases, or clauses be declared unconstitutional - SECTION 4. Publication. The City Clerk shall publish or post this ordinance in the manner required by law. SECTION 5. Effective Date. This ordinance shall be effective 30 days after its adoption and after approval by the California Coastal Commission. PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE- SEA this XX day of XX 2022, by the following vote: AYES: NOES: ABSENT: ABSTAIN: APPROVE: ATTEST: Dave Potter, Mayor Nova Romero, MMC, City Clerk o,ar 94875_33u4-4012 �1_ 3-62 CITY OF CARMEL-BY-THE-SEA CITY COUNCIL ORDINANCE NO. 2022-007 AN ORDINANCE AMENDING THE CARMEL-BY-THE-SEA MUNICIPAL CODE TO PROHIBIT TIMESHARE AND FRACTIONAL INTEREST USES, AS WELL AS ADVERTISING AND SALE THEREOF IN A MANNER FULLY IN CONFORMITY WITH THE COASTAL ACT (PUBLIC RESOURCES CODE SECTION 30510 ET SEQ.) WHEREAS, timeshares involve the division of the exclusive rights to use, possess, and occupy any real property between multiple persons, pursuant to a fixed or floating time schedule; and WHEREAS, since at least 1988, the City of Carmel -by -the -Sea has prohibited the establishment of timeshares within the City; and WHEREAS, the Housing Element of the City's General Plan specifically recognizes that the City seeks to protect the stability of residential neighborhoods by promoting year-round occupancy, and to avoid depletion of residents and associated impacts on the community, City services, Goal G34 of the City's Housing Element specifically requires the enforcement of the prohibitions on short-term, transient rentals and timeshares in residential dwellings; and WHEREAS, the Planning Commission of the City of Carmel -by -the -Sea reviewed the ordinance, and on October 12, 2022, determined the ordinance was consistent with the City's General Plan, Local Coastal Plan, and ail other relevant City and State codes and regulations, and having reviewed the Planning Commission's recommendations and the relevant provisions of the General Plan, the City Council finds that the ordinance is consistent with the City's General Plan; and WHEREAS, recent increases in the development and sale of fractional interest ownerships have made it appropriate for the City to revisit its municipal code to clarify that fractional interest ownerships are prohibited timeshares and to also expressly prohibit the advertising and sale of prohibited timeshares and fractional interest uses. WHEREAS, notice of the public hearing was published on November 25, 2022 in compliance with State law (California Government Code 65091), indicating the date and time of the public hearing; and WHEREAS, on December 6, 2022, the City Council opened the public hearing to receive public testimony regarding the draft ordinance, including without limitation, information provided by City staff and public testimony, and continued the hearing to a date certain of January 10, 2023; and WHEREAS, on January 10, 2023, the City Council re -convened the public hearing to receive further public testimony regarding the draft ordinance, including without limitation, information provided by City staff and public testimony; and OAK 44875-3304-4012 v2 3-63 WHEREAS, this decision is made based upon evidence presented to the City Council at its December 6, 2022 and January 10, 2023 hearings including, without limitation, the staff report submitted by the Community Planning and Building Department and public testimony; and WHEREAS, the City Council did hear and consider all said reports, recommendations, attachments and testimony herein above set forth and used their independent judgement to evaluate the ordinance; and WHEREAS, the proposed amendments are in full conformity with the City's Local Coastal Plan and the California Coastal Act (Public Resources Code Section 30510 of seq.) NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DOES ORDAIN AS FOLLOWS: SECTION 1. CEQA Review. The City Council exercises its independent judgment and finds that this ordinance is not subject to the California Environmental Quality Act (CEQA) pursuant to the State CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, Sections. 15060(c)(2), because the proposed ordinance will not result in a direct or reasonably foreseeable indirect physical change in the environment; 15061(b)(3) because the proposed ordinance is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment; and 15308 because the proposed ordinance involves regulatory actions to assure protection of the environment. Therefore, the adoption of this ordinance is exempt from CEQA and no further environmental review is necessary. SECTION 2. Amendment to the CIVIC. 1. Subsection A of Section 17.14.040 is amended and restated as follows: 17.14.040 Additional Use Regulations. A. All Uses. 1. No new structure or modification to an existing structure shall be permitted nor shall any business license be issued that would allow the creation of publicly accessible retail space occupying fewer than 200 square feet or more than 5,000 square feet unless approved through a use permit and pursuant to the adoption of findings per CMC 17.64.200, Retail Space of Less Than 200 Square Feet or Greater Than 5,000 Square Feet. 2. No timeshare uses or fractional interest uses shall be established or permitted in any zone. 3. Except in restaurants, not more than five persons in any one individually licensed business shall be engaged in the production, repair or manufacturing of goods. 4. No use shall be permitted and no process, equipment, or materials shall be employed which is found by the Planning Director or by the Planning Commission to be objectionable to persons residing or working in the vicinity by reason of odor, fumes, OAK #4975-3304-4012 v2 3-64 noise, vibration, illumination, glare, unsightliness, dust, cinders, dirt, refuse, water - carried wastes or heavy truck traffic, or involve any hazard of fire or explosion. 2. Section 17.28.010 is amended and restated as follows: 17.28.010 Timeshare and Fractional Interest Uses. A. Timeshare uses and fractional interest uses are prohibited uses within all of the zoning districts within the City. B. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised, or disseminated in any way and through any medium, the availability for sale or use of real property in violation of this section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.16 (General Penalty). C. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised, or disseminated in any way and through any medium, the availability for sale or use of real property in violation of this section is subject to administrative fines and/or penalties as set forth in Chapter 18.04 (Municipal Code and Ordinance Enforcement). D. Each day a vioiation of this section occurs shall constitute a separate offense, and the remedies under this section are cumulative and in addition to any and all other remedies available at law and equity. 3. "Time -Share Definitions" of Section 17.70.020 is amended to repeal the definitions of "Time -Share Estate," "Time -Share Occupancy," "Time -Share Program," "Time -Share Project," and "Vacation -Time Sharing Project," and restated to enact the definitions of "Time -Share Plan." "Time -Share Use" and "Fractional Interest Use" to read as follows: 17.70.020 Definitions. The words, terms, and phrases defined in this chapter shall, for all purposes connected with this title, be construed as having the meanings respectively set forth in this chapter. Time -Share Definitions. "Time -Share Plan" means any arrangement, plan, scheme, or similar device, whether established by membership agreement, sale, lease, deed, license, right -to -use agreement, articles of organization or incorporation, operating agreement or bylaws, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of real property or portion thereof, according to a fixed or floating time schedule, 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. A timeshare plan shall be deemed to exist whenever such recurring rights of exclusive use to real property are created, regardless of whether such exclusive rights of use are a result of a grant of ownership rights, possessory rights, membership rights, rights OAK 44875-3304-4012 v2 3-65 pursuant to contract, or ownership of a fractional interest or share in real property, and regardless of whether they are coupled with ownership of a real property interest such as freehold interest or an estate for years in the property subject to the time-share plan. "Time -Share Use" and "Fractional Interest Use" means the use of real property or any part thereof, pursuant to a timeshare plan. SECTION 3. Severability. if any section, subsection, phrase, or clause of this ordinance is for any reason held to be unconstitutional, such a decision shall not affect the validity of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this Ordinance and each section, subsection, phrase, or clause thereof irrespective of the fact that any one or more sections, subsections, phrases, or clauses be declared unconstitutional. SECTION 4. Publication. The City Clerk shall publish or post this ordinance in the manner required by law. SECTION 5. Effective Date. This ordinance shall be effective 30 days after its adoption and after approval by the California Coastal Commission. PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE- SEA this XX day of XX 2022, by the following vote: AYES: NOES: ABSENT: ABSTAIN: APPROVE: ATTEST: Dave Potter, Mayor Nova Romero, MMC, City Clerk OAK 14875-3304-4012 v2 3-66 Exhibit L City of Hermosa Beach Time Share Ordinance and Supporting Evidence 3-67 4/27123, 9:17 AM City of Hermosa Beach - File #: REPORT 22-0586 Sign In CITY OF HERMOSA BEACH UK - Legislation I Calendar City Council Departments People f7 'Share IQ RSS _ }yAlarts Detalis POFStaff Report File #: REPORT 2Z-0586 Version: 1 Name: Type: Action Item Status: Public Hearing File created: 9/19/21)22 In control: gty Council On agenda: 9/28/20Z2 Final action: INTRODUCTION OF AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH, CALIFORNIA AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17,40.23D (TIMESHARE USES) TO TITLE 17 (ZONING), AND Title: AMENDING SECTION 17.26.030 TO PERMITTIMESHARE USES 1N SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (Community Development Director3eannie Naughton) Attachments: 1. 1. SUPPLEMENTAL Draft Ordinance, 2. 2. Resolution P.C. 22-07 3. 3. Link to Aonl 19, 2022 Planning Commission Staff RepJrt 4. SUPPLEMENTAL Email from Scott Hayes Re item 13. c.. 5. SUPPLEMENTAL ecomments for item 13. c Staff Report Text Honorable Mayor and Members of the Hermosa Beach City Council Regular Meeting of September 28, 2022 Title INTRODUCTION OF AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH, CALIFORNIA AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT 1S EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (Community Development Director Jeannie Naughton) Body Recommended Action. Recommendation Staff recommends City Council consider waiving full reading and introduce by title only an Ordinance of the City of Hermosa Beach, California, amending Chapter 17.40 (Conditional Use Permit and Other Permit Standards) to add Section 17.40.230 (Timeshare Uses) to Title 17 (Zoning) and amending Section 17.26.030 to permit timeshare uses in specified commercial zones pursuant to a Conditional Use Permit and determining that the project is exempt from the California Environmental Quality Act (Attachment 1). Body Executive Summary_ The City of Hermosa Beach Municipal Code (HBMC) does not currently include regulations governing the use of timeshares within the City, nor any regulations that would explicitly address these emerging businesses offering "fractional ownership" of a property in a way that operates like a timeshare. If left unregulated, these types of uses in the residential zones could limit the City's existing housing stock for use as long-term residency and impair the overall character of the City's residential areas. The proposed draft ordinance (Attachment 1) would permit timeshare uses in +e C-1 and G-2-commercial zones within the City pursuant to a Conditional Use Permit (CUP), and prohibit the use in all other zones within the City. Background: The City of Hermosa Beach is a popular tourist destination known for its scenic beachfront location, its many diverse restaurants, local retailers and popular commercial areas like its Downtown area and Pier Avenue. Maintaining the balance between the quality of life for residents, those who work in the City, and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. Like most communities throughout California, one of the key means that the City utilizes to maintain this balance is through its Zoning Ordinance. The City has commercial zones, iAefidding the G 1 and G 2 eammeFeliall zenes that provide for uses that serve both visitors and the local community. These commercial uses include: restaurants; retail shops; and visitor -serving hotels and motels. The City also has residential zones, at varying densities, that provide a diversity of housing types for those who live in the community. The City does not currently have regulations in place governing the use of timeshares within the City or other businesses/arrangements that are identical or similar to a timeshare use. At its April 18. 2022 meeting, the Planning Commission reviewed and recommended approval of the proposed ordinance to permit timeshare uses in specified commercial zones pursuant to a Conditional Use Permit by adopting Resolution P.C. 22-07 (Attachment 2). Past Planning Commission Actions https:llhormosabeach.legistar.com/LegisIat!onDetail.aspx?ID=5850234&GUID=EEC63C4B-88FE-48DO-8735-❑D895DF161 S5 113 3-68 4/27/23, 9:17 AM City of Hermosa Beach - File #: REPORT 22-0586 Meeting Hate Description pril 18, 2022 Planning Commission reviewed the proposed ordinance and adopted Resolution F.C. 22-07 City Housing The most recent U.S. Census data lists the median value of owner -occupied homes in Hermosa Beach as $1,542,900 for the 2015-2019 period, while the Zillow Home Value Index estimates median home values in Hermosa Beach to be approximately $2,174,879 as of January 31, 2022. According to the Zillow Home Value Index, home values in the City have gone up 10.1 percent over the past year In contrast, the median household income in Hermosa Beach from 2015-2019 was $136,702 and the median income for a four -person household in Los Angeles County for 2021 was approximately $80,000. The cost of homes currently in Hermosa Beach are in excess of what median income residents of Hermosa Beach can afford, and certainly over the median income residents of Los Angeles County generally. The conversion of homes in the City's residential neighborhoods to these timeshare -like uses would eliminate residential dwelling units that would otherwise be available for long-term residential use, thereby further exacerbating the lack of long-term available housing in the City. A home that is used for timeshare purposes would no longer be available for households to use as their long-term residence. Impacts to Character of the City's Residential Districts Timesharing projects have the same character as commercial hotels, motels, and other transient occupancy uses due to the multiple short- term occupancies by those participating in timesharing projects. For this reason, the activity is better suited in commercial or quasi - commercial zones. The use is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. The intensity of the activity is a significant reason why these uses can change the character of a residential neighborhood. Long-term residents, whether owners or renters, occasionally have guests and parties, but timeshare homes are used exclusively by people who are coming to the City on a short-term basis -most likely for vacation or leisure, increasing the likelihood of frequent gatherings and parties generating noise in excess of what the neighborhood normally generates. Timeshare owners and visitors will most likely stay out later, entertain more, and gather in larger numbers while on vacation. Timeshare uses can change the character of a residential neighborhood by having it serve not only as a residential area, but also a visitor lodging area and subjecting the neighborhood to the impacts that come with the more intense land use. Further, the nature of the timeshare use itself can impact the residential character of the City's residential zones because they ensure that the timeshare users can only use their property for a limited amount of time each year. Each co-owner is in the unit on a short-term basis, SG they do not have the time to participate in activities or build the relationships that create the fabric of a community. Given the City's desire to strike a balance between the demands of the City's visitor and tourist economy, and retaining its character and quality of life, the City has an interest in maintaining housing stock in its residential districts for long-term residents. Emerging Businesses Recently, certain businesses have emerged which purport to sell "co -ownership" shares in residential property. These businesses, as staff understands the business model, start by purchasing homes or entering contracts to purchase homes in tourist destinations in desirable locations like Hermosa Beach. These businesses then form a limited liability company ("LLC"), which owns title to the residential home. The "co -owners" each purchase a one -eighth share and are entitled to use the residential property for a certain number of days per year according to their share of ownership in the LLC. The one -eighth interest entities the purchaser to stay at the property for up to 45 days per year in increments of 2-14 days, including one "special day" (Fourth of July, Thanksgiving, Christmas, etc.). The stays are reserved on an app, and while each co-owner is prohibited from renting the home as a short-term rental, they are permitted to allow other guests to stay there during their allotted days. Once shares in an LLC are sold, the business continues to manage the homes, including providing landscaping and pool maintenance, furnishing the homes, and paying all expenses, which are then passed through to the co -owners of the LLC. The Ordinance The City does not currently have regulations in place governing the use of timeshares within the City or other businesses/arrangements that are identical or similar to a timeshare use. The purpose of any ordinance should be to ensure that the City is able to maintain its existing and limited housing stock for use in long-term residency, and to maintain the character of its residential zones. Completely banning "fractional ownership," joint tenancies, or ownership by business entities such as LLC is not advisable. There are numerous properties in the City's residential zones currently owned by numerous owners or by LLCs. Thus, the ordinance is geared toward the specific impacts of the at -issue uses -timeshare -like uses organized and run by third parties for a fee. The proposed ordinance (Attachment 1) does not target or single out any business or ownership structure. The proposed ordinance allows for these types of timeshare uses in the City's C-1 afd-6-2--zones, subject to a Conditions Use Permit. Timeshare uses would be prohibited in all other zones. In order to avoid an over -inclusive ordinance that prohibits joint tenancies or other type of ownership structure that do not have the same deleterious impacts. the proposed ordinance focuses on the actual use of the property, as compared to the ownership structure, and in pertinent regulates this "timeshare use" subject to a "timeshare plan." Timeshare plan is defined as: https:llhermosabeach.legistar.r-omlLegislationL)etail.aspx?ID=5850234&Gt1ID=EEC63C4B-88FE-48DO-8735-❑D895DF1 GI B5 22 3-69 4/27123, 9:17 AM City of Hermosa Beach - File #: REPORT 22-0586 "Any arrangement, plan, scheme, or similar- device, facilitated, offered, or organized by a third -party non -purchaser; whether by membership agreement, bylaws, shareholder agreement partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby purchasers, in exchange for consideration, receives the right to exclusive use of at] accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, Fora 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. " At its April 18, 2022 meeting, the Planning Commission reviewed and recommended approval of the proposed ordinance by adopting Resolution P.C. 22-07 (Attachment 2) Environmental Determination: The proposed ordinance is not subject to CEQA because the adoption of this ordinance is not a "project' pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in Lhe C-1 and G 2 commercial zones within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. General Plan Consistency, The proposed text amendment has been evaluated for consistency with the City's General Plan, Relevant Policies are listed below: Land Use and Design dement Goal 1. Create a sustainable urban form and land use patterns that support a robust economy and high qualify of life for residents. Policies: • 1.5 Balance resident and visitor needs. Ensure land uses and business provide for the needs of residents as well as visitors. • 1.7 Compatibility of uses. Ensure the placements of new uses does not create or exacerbate nuisances between different types of land uses. Goal 2. Neighborhoods provide for diverse needs of residents of all ages and abilities and are organized to support healthy and active lifestyles. Policies: • 2.4 Single density neighborhoods. Preserve and maintain the Hermosa Hills, Eastside, Valley, North End and Hermosa View neighborhoods as predominantly single-family residential neighborhoods • 2.5 Neighborhood preservation. Preserve and enhance the quality of residential neighborhoods by avoiding or abating the intrusion of disruptive, nonconforming buildings and uses. Fiscal Impact: There is no fiscal impact associated with the recommended action Attachments: 1. Draft Ordinance 2. Resolution P.C. 22-07 3. Link to April 19, 2022 Planning Commission Staff Report Respectfully Submitted by: Patrick Donegan, Assistant City Attorney Concur: Jeannie Naughton, Community Development Director Noted for Fiscal Impact: Viki Copeland, Finance Director Legal Review: Patrick Donegan, Assistant City Attorney Approved: Suja Lowenthal, City Manager Staff Retort updated on 9/27/2022 - See Track Changes https:llhermosabeach.legistar.comlLegislationDetail-as px?ID=5850234&QUID=EEC63C4B-88FE-48D0-8735-DD895DF161 B5 3f3 3-70 ORDINANCE NO. AN ORDINANCE OF THE CITY OF HERMOSA BEACH. AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT. The City of Council of the City of Hermosa Beach does hereby ordain as follows: Section 1. Findings. A. The City of Hermosa Beach ("City") is a scenic beachfront city, known for its many diverse restaurants, local retailers and popular commercial areas like its Downtown area and Pier Avenue. B. Preserving the City's costal resource and the quality and character of the City has been a focal point of the City's land use planning for decades, and remains a primary focus in the City's current General Plan. C. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. D. The City values and welcomes all visitors to the City and recognizes their contributions to the City's economy, but finds that in order to maintain the City's long term viability as a community where people not only come to visit, but also live, work and contribute to the long term betterment of the community through participation in the City's schools, local community groups, civic government and local serving businesses, the City must maintain a balance between residential land uses and visitor serving uses. E. The City's existing housing stock is significantly impacted, with demand outweighing supply, resulting in extremely high housing prices as detailed in the accompanying staff report. A limited supply of suitable vacant land, exorbitantly high land costs, and limitations in the City's existing infrastructure, among other factors, have limited the construction of additional housing in the City. F. According to the U.S. Census Bureau, the current median household income in the City is $136,702, while the estimated value of owner -occupied housing units from 2015-2019 was approximately $1,542,900 with current real estate listings 3-71 suggesting that prices are increasing significantly, meaning that homes in the City are not affordable to the median household in the City. G. The conversion of existing residential units to uses other than long-term residential use will further reduce the City's existing long-term housing supply, causing further imbalance between the demand for housing in the City and the existing supply, not only altering the character of the City's residential neighborhoods, but also presenting further challenges to the City's efforts to provide affordable housing within the community. H. The City additionally has, for many years, worked to preserve its existing housing stock for long term residential use, both to maintain the character of its residential neighborhoods and prevent residential districts from becoming visitor and tourist serving districts, and to ensure that it would not be converted to uses other than long-term residential uses. The high impact use associated with timeshares, combined with the frequent turnover and commercial management involved in timeshare properties is not consistent with the purpose and nature of residential districts in the City. Rather, they are commercial in nature, in that these timeshare uses are structured as a short-term, tourist oriented, visitor serving use of the subject properties. The use of properties as timeshares adds excessive noise and traffic to residential districts by using these properties for high impact tourist oriented uses more appropriately located in commercial districts of the City. J. The use of residential properties for timeshare uses will further reduce the availability of housing stock for long-term residential use, and create a new demand for timeshare uses of residential properties. K. This encroachment of tourist oriented, visitor serving uses in residential neighborhoods is likely to compromise the character of residential areas within the City, and further increase the costs for housing in the City, undermining the City's efforts to provide a balance of housing for all income levels in the City- L. The City's authority to enact zoning ordinances is based on the powers accorded cities and counties under the State constitution to make and enforce police regulations. This police power grants the City broad authority to regulate the development and use of real property within its jurisdiction to promote the public welfare. M. Pursuant to and in accordance with this authority, the City Council desires to prohibit timeshare uses in residential areas, and only allow them in the C-1 commercial zone within the City, pursuant to a conditional use permit. 3-72 N. The City's Planning Commission held a duly noticed public hearing on April 19, 2022, as required by law to consider all the information presented by staff, and public testimony presented in writing and at the meeting. O. On April 19, 2022, the City's Planning Commission recommended that the City Council adopt this Ordinance amending the City's Municipal Code as described herein. P. On September 28, 2022, the City Council held a duly noticed public hearing, accepting testimony from the public, and discussed the proposed amendments and staff's recommended approval of this Ordinance. Q. The proposed zoning amendments are consistent with the General Plan goals, policies and implementation programs as the Ordinance will continue to preserve the character of the City; will preserve the City's residential districts for residential uses; and will help to preserve the City's existing housing stock for long term residential uses, to avoid further exacerbating the existing impacts on the City's housing supply. Section 2. The above recitals are hereby incorporated as though set forth in this section. Section 3. Section 17.40.230 (Time Share Uses) is hereby added to Chapter 17.40 (Conditional Use Permit and Other Permit Standards) of Title 17 (Zoning) of the City of Hermosa Beach Municipal Code, to read as follows: Section 17.40.230 Timeshare Uses A. Purpose and Findings. There is a critical shortage of permanent, long-term housing in the City of Hermosa Beach ("City"). A limited supply of suitable vacant land, land values, and market demand for land for other uses, have limited the construction of additional housing in the City. The City is a popular tourist destination known for its scenic beachfront location, its many diverse restaurants, local retailers and popular commercial areas like its Downtown area and Pier Avenue. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. Timeshare uses are not an appropriate land use in the City's residential zones due to the multiple occupancy of timeshare properties, the short-term, tourist oriented use of such property and commercial management of timeshare facilities, all of which create increased traffic generation, excessive noise, disruption to residential communities through commercial -level maintenance of the timeshare facilities, and therefore are appropriately confined to commercial zones. 3-73 Conversion of permanent housing to timeshare facilities removes existing housing units from the City's existing stock and exacerbates an already severe housing shortage. It is therefore in the public interest to prohibit conversions of existing housing units into timeshare facilities, as to do so eliminates needed housing stock by diverting those units to a tourist -oriented, commercial use. B. Definitions. For purposes of this Section, the following words and phrases shall have the meaning respectively ascribed to them by this Section: "Accommodation" means any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.040. "Building" shall have the meaning ascribed to it by Section 17.04.040. "Dwelling unit" shall have the meaning ascribed to it by Section 17.04.040. "Managing entity" means the person who undertakes the duties, responsibilities and obligations of the management of a timeshare plan. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. "Timeshare instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a timeshare plan and includes the declaration dedicating accommodations to the timeshare plan. "Timeshare interest" means the right to exclusively occupy a timeshare property for a period of time on a recurring basis pursuant to a timeshare plan, regardless of whether or not such right is coupled with a property interest in the timeshare property or a specified portion thereof. "Timeshare plan" means any arrangement, plan, scheme, or similar device, facilitated, offered, or organized by a third -party non -purchaser, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby purchasers, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, 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. "Timeshare property" means one or more accommodations subject to the same timeshare instrument, together with any other property or rights to property appurtenant to those accommodations. 3-74 "Timeshare use" means the use of one or more accommodations or any part thereof, as a timeshare property pursuant to a timeshare plan. C. Timeshare Uses Restricted to C-1 Commercial Zone. Timeshare uses are conditional uses within the City's C-1 Commercial Zone, subject to approval of a conditional use permit applied for and approved in conformance with this Section. Timeshare uses are not permitted in any other Zones in the City. D. Application Process and Development Standards. A. Application Process. Approval of a conditional use permit for timeshare uses in the C-1 Commercial Zone within the City shall be required in accordance with the requirements of Chapter 17.40. In addition to the requirements contained in Chapter 17.40, an application for a timeshare use shall be accompanied by the following documents which shall be subject to the approval of the Community Development Director: 1. Management Plan. A management plan shall describe the methods employed by the applicant to guarantee the future adequacy, stability, and continuity of a satisfactory level of management and maintenance of the time share use. 2. Application Requirements. In addition to any application requirements established by this section and any other applicable requirements of this code, the following information shall be submitted as part of any application to develop or establish a timeshare use: a. Typical floor plans for each accommodation. b. The phasing of the construction of the accommodations on the timeshare property, if applicable. C. A description of any ancillary uses which are proposed in conjunction with the time share use. d. A description of the method of management of the time share use and indication of the management entity for the time-share property. e. Any restrictions on the use or occupancy of the accommodations. f. Any other information or documentation the applicant, City staff or commission deems reasonably necessary to the consideration of the timeshare use, including any required environmental documents. B. Development Standards and Operational Requirements. Notwithstanding any other provision of this Section, the following conditions must be met by any timeshare use in any conditionally permitted zone. Additional requirements may be attached to a 3-75 conditional use permit or development agreement if found to be necessary to assure that the timeshare use meets the intent of this Section: 1. Timeshare uses developed in the C-1 Commercial Zone within the City shall be limited to accommodations in upper floors in conjunction with a mixed -use project. 2. No existing residential use in the C-1 Commercial Zone within the City shall be converted to a timeshare use. 3. Development Standards, The timeshare use shall comply with all development standards for the zone in which it is located. 4. Parking. Parking shall be provided as follows: a. For accommodations of two or fewer bedrooms, one parking space shall be provided for each accommodation. b. For accommodations of three or more bedrooms, two parking spaces shall be provided for each accommodation. 5. Modification or Waiver of Standards. The Planning Commission may modify or waive one or more of the regulations contained in this Section if it determines that strict compliance is not necessary to achieve the purpose and intent of this Section. E. Violations, Enforcement and Civil Penalties. 1. Any responsible person, including but not limited to an owner of a timeshare interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this Section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this Section. Such violation shall be punishable pursuant to Section 1.04.020 of the City of Hermosa Beach Municipal Code. 2. Timeshare use, and/or advertisement for timeshare use, of an accommodation in violation of this Section is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance. Any such nuisance may be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 8.28 except that the civil penalty for a violation shall be one thousand dollars ($1,000.00). Each day the violation occurs shall constitute a separate offense 3. Any responsible person who violates this Section shall be liable and responsible for a civil penalty of one thousand dollars ($1,000.00) per violation per day such violation occurs. The City may recover such civil penalty by either civil action or administrative citation. Such penalty shall be in addition to all other costs incurred by the City, including without limitation the City's staff time, investigation expenses and attorney's fees. 3-76 a. Where the City proceeds by civil action, the court shall have discretion to reduce the civil penalty based upon evidence presented by the responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the court should consider the purpose of this Section to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the responsible person's enrichment or profit as a result of the violation of this Section. In any such civil action the City also may abate and/or enjoin any violation of this Section. b. Where the City proceeds by administrative citation, the City shall provide the responsible person notice of the right to request an administrative hearing to challenge the citation and penalty, and the time for requesting that hearing. The responsible person shall have the right to request the administrative hearing within forty-five (45) days of the issuance of the administrative citation and imposition of the civil penalty. To request such a hearing, the responsible person shall notify the City clerk in writing within forty-five (45) days of the issuance of the citation. The appeal notification shall include all specific facts, circumstances and arguments upon which the appeal is based. ii. The City Manager is hereby authorized to designate a hearing officer to hear such appeal. The City hearing officer shall conduct a hearing on the appeal within ninety (90) days of the request for the hearing unless one of the parties requests a continuance for good cause. The hearing officer shall only consider those facts, circumstances or arguments that the property owner or responsible person has presented in the appeal notification. iii. The hearing officer shall render a decision in writing within thirty (30) days of the conclusion of the hearing. The hearing officer shall have discretion to reduce the civil penalty based upon evidence presented by the property owner or responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the hearing officer should consider the purpose of this Section to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the property owner's or responsible person's enrichment or profit as a result of the violation of this Section. iv. Any aggrieved party to the hearing officer's decision on the administrative appeal may obtain review of the decision by filing a petition for writ of mandate with the Los Angeles County Superior 3-77 Court in accordance with the timelines and provisions set forth in Government Code Section 53069A. v. If, following an administrative hearing, appeal, or other final determination, the owner of the property is determined to be the responsible person for the civil penalty imposed by this section, such penalty, if unpaid within forty-five (45) days of the notice of the final determination, shall become a lien to be recorded against the property on which the violation occurred pursuant to Chapter 8.28. Such costs shall be collected in the same manner as county taxes, and thereafter the property upon which they are a lien shall be sold in the same manner as property now is sold for delinquent taxes 4. Any violation of this Section may also be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 8.28 except that the civil penalty under Chapter 8.28 for a violation shall be one thousand dollars ($1,000.00). Each day the violation of this Section occurs shall constitute a separate offense. The remedies under this Section are cumulative and in addition to any and all other remedies available at law and equity. Section 3. Section 17.26.030 of Chapter 17.26 (Cl, C2 and C3 Commercial Zones) of Title 17 (Zoning) is amended to add the following entry to the chart of land use regulations USES C1 C2 C3 See Section Timeshares U 17.40.230 Section 4. CEQA. This ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines (the Guidelines), and the environmental regulations of the City. The City Council hereby finds that this ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in the C-1 commercial zone within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. Section 5. Effective Date. Pursuant to California Government Code section 36937, this Ordinance shall take effect thirty (30) days after its final passage. Section 6. Certification. The City Clerk is directed to certify the passage and adoption of this Ordinance; cause it to be entered into the City's book of original ordinances; make a note of the passage and adoption in the records of this meeting; and, 3-78 within fifteen (15) days after the passage and adoption of this Ordinance, cause it to be published or posted in accordance with California law. PASSED, APPROVED and ADOPTED this 28th day of September, 2022. VOTE: AYES: NOES: ABSTAIN: ABSENT: Michael Detoy, Mayor PRESIDENT of the City Council and MAYOR of the City of Hermosa Beach, CA ATTEST: Myra Maravilla City Clerk APPROVED AS TO FORM: Michael Jenkins City Attorney 3-79 RESOLUTION P.C. 22-07 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF HERMOSA REACH RECOMMENDING CITY COUNCIL APPROVAL OF TEXT AMENDMENTS TO THE CITY OF HERMOSA BEACH MUNICIPAL CODE AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT. The Planning Commission of the City of Hermosa Beach does hereby resolve as follows: SECTION 1. Findings. A. The Planning Commission held a duly noticed public hearing on April 19, 2022 to consider a text amendments to the City of Hermosa Beach Municipal Code, Title 17 (Zoning), as described in the proposed ordinance attached as Exhibit A. B. The City of Hermosa Beach {"City") is a scenic beachfront city, known for its many diverse restaurants, local retailers and popular commercial areas like its downtown area and Pier Avenue. C. Preserving the City's costal resource and the quality and character of the City has been a focal point of the City's land use planning for decades, and remains a primary focus in the City's current General Plan. D. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. E. The City values and welcomes all visitors to the City and recognizes their contributions to the City's economy, but finds that in order to maintain the City's long term viability as a community where people not only come to visit, but also live, work and contribute to, the long term betterment of the community through participation in the City's schools, local community groups, civic government and local serving businesses, the City must maintain a balance between residential land uses and visitor serving uses. F. The City's existing housing stock is significantly impacted, with demand outweighing supply, resulting in extremely high housing prices as detailed in the accompanying staff report. A limited supply of suitable vacant land, exorbitantly high land costs, and limitations in the City's existing infrastructure, among other factors, have limited the construction of additional housing in the City. 3-81 G. According to the U.S. Census Bureau, the current median household income in the City is $136,702, while the estimated value of owner -occupied housing units from 2015-2019 was approximately $1,542,900 with current real estate listings suggesting that prices are increasing significantly, meaning that homes in the City are not affordable to the median household in the City. H. The conversion of existing residential units to uses other than long-term residential use will further reduce the City's existing long-term housing supply, causing further imbalance between the demand for housing in the City and the existing supply, not only altering the character of the City's residential neighborhoods, but also presenting further challenges to the City's efforts to provide affordable housing within the community. 1. The City additionally has, for many years, worked to preserve its existing housing stock for long term residential use, both to maintain the character of its residential neighborhoods and prevent residential districts from becoming visitor and tourist serving districts, and to ensure that it would not be converted to uses other than long-term residential uses. I This high impact use associated with timeshares, combined with the frequent turnover and commercial management involved in timeshare properties is not consistent with the purpose and nature of residential districts in the City. Rather, they are commercial in nature, in that these timeshare uses are structured as a short- term, tourist oriented, visitor serving use of the subject properties. The use of properties as timeshares adds excessive noise and traffic to residential districts by using these properties for high impact tourist oriented uses more appropriately located in commercial districts of the City. K. The use of residential properties for timeshare uses will further reduce the availability of housing stock for long-term residential usc, and create a new demand for timeshare uses of residential properties. L. This encroachment of tourist oriented, visitor serving uses in residential neighborhoods is likely to compromisc the character of residential areas within the City, and further increase the costs for housing in the City, undermining the City's efforts to provide a balance of housing for all income levels in the City. M. The City's authority to enact zoning ordinances is based on the powers accorded cities and counties under the State constitution to make and enforce police regulations. This police power grants the City broad authority to regulate the development and use of real property within its jurisdiction to promote the public welfare. N. Pursuant to and in accordance with this authority, the Planning Commission desires to prohibit timeshare uses in residential areas, and certain commercial zones and to 3-82 update the language of the Zoning Code to provide consistency with the terminology used to define timeshare uses in State law. Further, the City desires to provide greater clarity as to the zones which timeshare uses are permitted as conditional uses, and the standards pursuant to which they will be reviewed in those zones. O. On April 19, 2022, the Planning Commission held a duly -noticed public hearing and considered the staff report, recommendations by staff, and public testimony concerning the proposed ordinance. .SECTION 2. This ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines (the Guidelines), and the environmental regulations of the City. The City Council hereby finds that this ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in specified zones within the City pursuant to a conditional use permit, and prohibits them in all other zones, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. SECTION 3. The Planning Commission finds that the proposed amendments to the Municipal Code to permit timeshares in specified zones within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City are consistent with the General Plan goals, policies and implementation programs as the Ordinance will continue to preserve the character of the City; will preserve the City's residential districts for residential uses; and will help to preserve the City's existing housing stock for long term residential uses, to avoid further exacerbating the existing impacts on the City's housing supply. SECTION 4. Based on the entire record before the Planning Commission, and all written and oral evidence presented, the Planning Commission hereby finds that the proposed ordinance is consistent with the City's adopted General Plan and does not conflict with any of the General Plan's goals or policies. SECTION 5. The Planning Commission hereby recommends that the City Council adopt the attached proposed ordinance entitled, "AN ORDINANCE OF THE CITY OF HERMOSA BEACH. AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING 3-83 THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT. I HEREBY CERTIFY that the foregoing recommendation to the City Council was duly and regularly approved by the Planning Commission of the City of Hermosa Beach at a regular meeting of said Planning Commission held on April 19, 2022, by the following roll call vote: VOTE: AYES: 5 - Chair Pedersen, Vice Chair Izant, Commissioner Saemann, Commissioner Hoffman, and Commissioner Rice NOES: None ABSTAIN: None ABSENT: None CERTIFICATION I hereby certify that the foregoing Resolution P.C. 22-07 is a true and complete record of the action taken by the Planning Commission of the City of Hermosa Beach, California, at its regular meeting of April 19, 2022. 11�4 Dave Pedersen, Chairperson -7/),115Z Date Anadfa Crespi, Secretary 3-84 4127123. 9:22 AM City of Hermosa Beach - File #: REPORT 22-0249 Sign In CITY OF HERMOSA BEACH Legislation Calendar I City Council I Departments PeopiJl 10 13'S75hare iEtR55 yAlerts Details 'I P13F Staff Repart File *k REPORT 22-UZ49 Version: 1 Name: Type: Action Item Status: Passed File created: 4/14/2022 In control: Planning Commission On agenda: 4/19/2022 Final action: 4/19/2022 TA 22-01 ZONE TEXT AMENDMENT TO AMEND THE HERMOSA BEACH MUNICIPAL CODE CHAPTER 17.40 TO ADD SECTION 17.40.230 AND Title: AMEND SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES AND DETERMINE THAT THE PROTECT IS EXEMPT FROM THE CALIFORNIA ENVIRINMENTAL QUALITY ACT (CEQA) Attachments: 1. 1. Draft Resolution 22-07 Timeshare Ordinance. 2. 2. Hermosa Beach Draft Ordinance Staff Report Text Honorable Chairman and Members of the Hermosa Beach Planning Commission Regular Meeting of April 19, 2022 Title TA 22-01 ZONE TEXT AMENDMENT TO AMEND THE HERMOSA BEACH MUNICIPAL CODE CHAPTER 17.40 TO ADD SECTION 17.40.230 AND AMEND SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES AND DETERMINE THAT THE PROJECT 15 EXEMPT FROM THE CALIFORNIA ENVIRINMENTAL QUALITY ACT (CEQA) Recommendation Recommended Action: Staff recommends the Planning Commission adopt Resolution No. 22-07 (Attachment 1) recommending that the City Council approve Zone Text Amendment TA 22-01. thereby amending Chapter 17.40 to add section 17,40.230 and amend section 17.26.030 to permit timeshare uses in specified commercial zones and determine that the project is exempt from the California Environmental Quality Act (CEQA). Body Background: The City of Hermosa Beach ("City") does not currently have regulations in place governing the use of timeshares within the City, nor any regulations that would explicitly address these emerging businesses offering "fractional ownership" of a property in a way that operates like a timeshare. These types of uses in the City's residential zone could limit the City's existing housing stock for use as a long-term residency and impair the character of the City's residential zones. At its March 15, 2022 meeting, the Planning Commission directed staff to bring forward a zone text amendment addressing these types of uses. Analysis: The City is a popular tourist destination known for its scenic beachfront location, its many diverse restaurants, local retailers, and popular commercial areas like its Downtown area and Pier Avenue. Maintaining the balance between the quality of life for residents, those who work in the City, and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. Like most communities throughout California, one of the key means that the City utilizes to maintain this balance is through its Zoning Ordinance, The City has commercial zones including the C-1 and C-2 commercial zones that provide for uses that serve both visitors and the local community such as: restaurants; retail shops; and visitor serving hotels. The City also has residential zones that provide housing forthose who live in the community, at varying densities in order to provide a diversity of housing types. My Nou-s-og The most recent census data lists the median value of owner -occupied homes in Hermosa Beach as $1,542,900 for the period of 2015- 2019, while the Zillow Home Value Index estimates medial home values in Hermosa Beach to be approximately $2,174,879 as of January 31, 2022. According to the Zillow Home Value Index, homes values in the City have gone up 10.1 percent over the past year. In contrast, the median household income in Hermosa Beach from 2015-2019 was $136,702, and the median income for a four -person household in Los Angeles County for 2021 is approximately $80,000. The cost of homes currently in Hermosa Beach are more than what median income residents of Hermosa Beach can afford, and certainly over the median income residents of Los Angeles County generally. https:1/herinosabeach.legistar.com/LegistationDetail.aspx?ID-5557241 &GUID=8OA64A8C-E51 A-4C26-B2D2-3046537C93D5 1/3 3-85 4127123, 9:22 AM City of Hermosa Beach - File #: REPORT 22-0249 The conversion of homes in the City's residential neighborhoods to these timeshare -like uses would eliminate residential dwelling units that would otherwise be available for long-term residential use, thereby further exacerbating the lack of long-term available housing in the City. A home that is used for timeshare purposes would no longer be available for households to use as their long-term residence. Impacts to Character of the Citv's Residential Districts Timesharing projects have the same character as commercial hotels, motels, and other transient occupancy uses due to their transient nature and to the multiple short-term occupancies by those participating in timesharing projects. This use is better suited in commercial or quasi -commercial zones and is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. The intensity of this use is a significant reason that these uses can change the character of a residential neighborhood. Long-term residents, whether owners or renters, occasionally have guests or parties, but these timeshare homes are used exclusively by people who are coming to the City on a short-term basis - most likely for vacation or leisure. As a result, those users may naturally stay out later, entertain more, and gather in larger numbers while on vacation. Timeshare uses can change the character of a residential neighborhood by having it serve not only as a residential area, but also a visitor lodging area, and subjecting it to the impacts that come with that more intense land use. Further, the nature of the timeshare use itself can impact the residential character of the City's residential zones because it would ensure that the time share users can only use their property for a limited amount of time each year. Each co-owner is in the unit on a short-term basis, and without the time to participate in the types of activities or build the relationships that create the fabric of a community. Given the City's desire to strike a balance between the demands of the City's visitor and tourist economy, and retaining its character and quality of life, the City has an interest in maintaining housing stock in its residential districts for long-term residents. Emergg Businesses Recently, certain businesses have emerged which purport to sell "co -ownership shares in residential property. These businesses, as staff understands the business model, start by purchasing homes or entering into contracts to purchase homes in tourist destinations in desirable locations like the City. These businesses then form a limited liability company ("LLC"), which owns title to the residential home. The "co - owners" each purchase a one -eighth share and are entitled to use the residential property for a certain number of days per year according to their share of ownership in the LLC. The one -eighth interest entitles the purchaser to stay at the property for up to 45 days per year in increments of 2-14 days, including one "special day" (Fourth of July, Thanksgiving, Christmas, etc.). The stays are reserved on a mobile application, and while each co-owner is prohibited from renting the home as a short-term rental, they are permitted to allow other guests to stay there during their allotted days. Once shares in an LLC are sold, the business continues to manage the homes, including providing landscaping and pool maintenance, furnishing the homes, and paying all expenses, which are then passed through to the co -owners of the LLC. Time Share Ordinance As mentioned above, the City does not currently have regulations in place.governing the use of timeshares within the City or other businesses/arrangements that are identical or similar to a timeshare use. The purpose of any ordinance should be to ensure that it the City is able to maintain its existing and limited housing stock for use in long term residency and to maintain the character of its residential zones. Completely banning "fractional ownership," joint tenancies, or ownership by business entities such as LLC is not advisable. There are numerous properties in the City's residential zones currently owned by numerous owners or by LLCs. Thus, any ordinance should be geared toward the specific impacts of the at -issue uses - timeshare like uses organized and ran by third parties for a fee. The proposed ordinance (Attachment 2) does not target or single out any business or ownership structure. Environmental Determination: The proposed ordinance is not subject to CEQA because the adoptions of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in C-1 and C-2 commercial zones within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. General Plan Consistency: The proposed text amendment has been evaluated for consistency with the City's General Plan and is consistent with the following Goals and Policies of Plan Hermosa: Land Use and Design dement Goal 1 Create a sustainable urban form and land use patterns that support a robust economy and high quality of life for residents. Policies: • 1.5 Balance resident and visitor needs. Ensure land uses and business provide for the needs of residents as well as visitors. • 1.7 Compatibility of uses. Ensure the placements of new uses does not create or exacerbate nuisances between different types of land uses. Goal 2 Neighborhoods provide for diverse needs of residents of all ages and abilities, and are organized to support healthy and active lifestyles. Policies: • 2.4 Single density neighborhoods. Preserve and maintain the Hermosa Hills, Eastside, Valley, North End and Hermosa View neighborhoods as predominantly single-family residential neighborhoods https:llhermosabeach.legistar.com/LegislationL)etall.aspx?I D=5557241 &G UID=80A64A8C-E51 A-4C26-B2D2-3046637C93D5 213 3-86 4127123, 9:22 AM City of Hermosa Beach - File #: REPORT 22-0249 • 2.6 Neighborhood preservation. Preserve and enhance the quality of residential neighborhoods by avoiding or abating the intrusion of disruptive, nonconforming buildings and uses. Attachments: 1. Draft Resolution 22-07 Timeshare Ordinance 2. Hermosa Beach Draft Ordinance Respectfully Submitted by: Carlos Luis, Senior Planner Legal Review: Patrick Donegan, Deputy City Attorney Approved: Angela Crespi, Interim Community Development Director httpsi//hermosabeach.legistar.com/LogislatioiiDetaii.aspx?ID=5557241 &GUID=SOA64ABC-E51A-4C26-B2D2-3046537C93175 313 3-87 From: Scott Hayes Sent: Tuesday, September 27, 2022 3:19 PM To: City Council <citycouncil@hermosabeach.gov>; Suja Lowenthal <suja@hermosabeach.gov>; Ann Yang <anny@hermosabeach.gov> Cc: Jeannie Naughton <jaughton@hermosabeach.gov>; DG_PlanningCommission <DG_PlanningCommission@hermosabeach.gov>; Patrick Donegan <Patrick.Donegan@bbklaw.com> <Patrick.Donegan@bbklaw.com>; rachelsaccount@hotmail.com Subject: Agenda Item XIII, c (Report 22-0586) - Timeshares Mayor, Mayor Pro Tem, and Councilmembers. am writing to express my strong opposition Council Agenda Item XIII, c (Report 22-0586)_ Inadequate Noticing First, I believe that the residents adjacent to C-1 Zones should have been directly noticed about this potential change to the zoning code. As stated in the staff report, timesharing projects have increased "likelihood of frequent gatherings and parties generating noise in excess of what the neighborhood normally generates." Since staff acknowledges that there will be neighborhood impacts as a result of the proposed timeshare projects, I feel that the City should have gone over and above the minimum legal public noticing requirements. I respectfully request that this item be continued until such time that the neighbors are properly noticed. If this item is not continued please consider the following argument against the proposed zoning changes. Section 17.40.230, A of the proposed ordinance states `Timeshare uses are not an appropriate land use in the City's residential zones due to the multiple occupancy of timeshare properties, the short- term, tourist oriented use of such property and commercial management of timeshare facilities, all of which create increased traffic generation, excessive noise, disruption to residential communities." What the ordinance fails to recognize is that those exact same concerns also make timeshares unsuitable for the C-1 Neighborhood Commercial Zone. Timeshares are Hotels Timeshares are almost always vacation properties. As such, they are essentially hotels which is a disruptive use when adjacent to a residential neighborhood. Our municipal code does not allow hotels in the C-1 zone and timeshares should be excluded as well. Municipal Code Section 17.26.020, B, 1 specifically states that the purpose of the C-1 Neighborhood Commercial Zone is "to provide sites for a mix of small local businesses appropriate for, and serving the daily needs of 3-88 nearby residential neighborhoods; while establishing land us regulations that prevent significant adverse effects on abutting residential uses." I do not see how a timeshare serves the daily needs of nearby residential neighborhoods but I can easily see how these neighborhoods would suffer significant adverse effects from timeshares. Timeshares are STVRs People generally stay at timeshares for 1-2 weeks. As a result, they have nearly the same impact on neighborhoods as short term vacation rentals. Hermosa Beach only allows STVRs on commercially zoned parcels with non -conforming residential uses. Why are timeshares being treated any differently? Timeshares will have the same traffic and noise impacts as STVRs so they should be restricted to the same areas. Additionally, there is no language in the ordinance to prohibit utilizing the timeshare as a short term vacation rental. If timeshares are approved, it will only be a matter of time before we start seeing the timeshare units showing up on Airbnb and VRBO. Timeshares Take Potential Housing Stock The ordinance states that timeshares must be built above commercial space as part of a mixed use project. Why wouldn't we require that the upper floors of mixed use developments be residential space to help the City meet its housing goals? Allowing this space to be used as timeshare vacation homes makes no sense. I would much prefer to have new neighbors contributing to the community that having to deal with new transient residents every week or 2. Enforcement Challenges The City is currently unable to do anything about the quality of life issues brought about by the MANY illegal short term vacation rentals in Hermosa Beach. I am concerned that timeshares will just add to the number of quality of life issues that the City will not be able to enforce. I happen to live nearby some of these illegal STVRs and no matter how frequently I report them to the City, new renters keep showing up. A quick search of Airbnb shows that there are dozens of STVRs that are advertising for stays of less than 30 days. If the stay is increased to 30 days the number grows to over 100. The City is just not able to do anything to contain these issues and I am worried that the City will not be able to do anything about the potential problems with timeshares. Potential Solutions I believe that there are a few different ways that Council should deal with this issue: 1. Allow timeshares in locations where hotels are permitted. If timeshares are strictly considered a residential use this may not be possible until the zoning code is changed to allow residential in mixed use projects in C-2 and C-3. The Beach House is a form of timeshare but nobody minds it because it is in the C-2 zone. I think that it is worth waiting for the zoning code update to properly deal with the timeshare issue. 2. Define timeshares in the municipal code as hotels or motels. This would allow them in zones where hotel use is allowed. 3. Allow timeshares at commercially zoned parcels with non -conforming residential uses similar to legal STVRs. 4. Prohibit timeshares anywhere in Hermosa Beach. 3-89 Please do not allow timeshares to further degrade our neighborhoods the way that STVRs already have. Thank you for your consideration. Scott Hayes ■o= Hermosa Beach, CA 90254 3-90 City Council Adjourned Regular Hybrid Meeting (Closed Session - 5:00 PM Open Session - 6:00 PM 09-28-22 17:00 Agenda Name Comments auppurt c) REPORT 22-0586 INTRODUCTION OF AN ORDINANCE OF THE 2 CITY COUNCIL OF THE CITY OF HERMOSA BEACH, CALIFORNIA AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (Community Development Director Jeannie Naughton) Sentiments for All Agenda Items The following graphs display sentiments for comments that have location data. Only locations of users who have commented will be shown. Overall Sentiment In Suppaft$%f cppose(l00` ) Naulral{U%. No RasponsojO%) J Iaa Item: eComments for c) REPORT 22-0586 INTRODUCTION OF AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH, CALIFORNIA AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17,26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (Community Development Director Jeannie Naughton) Overall Sentiment �PPase; I tl0'i;,) Naulral(Q°,L} No Raspansu(0%) Scott Hayes Location: Submitted At: 3:30pm 09-27-22 1 am writing to express my strong opposition to Agenda Item Xlll, c 3-91 First, I believe that the residents adjacent to C-1 Zones should have been directly noticed about this potential change to the zoning code. As stated in the staff report, timesharing projects have increased "likelihood of frequent gatherings and parties generating noise in excess of what the neighborhood normally generates:' Since staff acknowledges that there will be neighborhood impacts as a result of the proposed timeshare projects, I feel that the City should have gone over and above the minimum legal public noticing requirements. I respectfully request that this item be continued until such time that the neighbors are properly noticed. If this item is not continued please consider the following argument against the proposed zoning changes. Section 17.40.230, A of the proposed ordinance states "Timeshare uses are not an appropriate land use in the City's residential zones due to the multiple occupancy of timeshare properties, the short-term, tourist oriented use of such property and commercial management of timeshare facilities, all of which create increased traffic generation, excessive noise, disruption to residential communities" What the ordinance fails to recognize is that those exact same concerns also make timeshares unsuitable for the C-1 Neighborhood Commercial Zone. Timeshares are almost always vacation properties. As such, they are essentially hotels which is a disruptive use when adjacent to a residential neighborhood. Our municipal code does not allow hotels in the C-1 zone and timeshares should be excluded as well. Municipal Code Section 17.26.020, B, 1 specifically states that the purpose of the C-1 Neighborhood Commercial Zone is "to provide sites for a mix of small local businesses appropriate for, and serving the daily needs of nearby residential neighborhoods; while establishing land use regulations that prevent significant adverse effects on abutting residential uses:' I do not see how a timeshare serves the daily needs of nearby residential neighborhoods but I can easily see how these neighborhoods would suffer significant adverse effects from timeshares. People generally stay at timeshares for 1-2 weeks. As a result, they have nearly the same impact on neighborhoods as short term vacation rentals. Hermosa Beach only allows STVRs on commercially zoned parcels with non -conforming residential uses. Why are timeshares being treated any differently? Timeshares will have the same traffic and noise impacts as STVRs so they should be restricted to the same areas. Additionally, there is no language in the ordinance to prohibit utilizing the timeshare as a short term vacation rental. If timeshares are approved, it will only be a matter of time before we start seeing the timeshare units showing up on Airbnb and VRBO. The ordinance states that timeshares must be built above commercial space as part of a mixed use project. Why wouldn't we require that the upper floors of mixed use developments be residential space to help the City meet its housing goals? Allowing this space to be used as timeshare vacation homes makes no sense. l would much prefer to have new neighbors contributing to the community that having to deal with new transient residents every week or 2. The City is currently unable to do anything about the quality of life issues brought about by the MANY illegal short term vacation rentals in Hermosa Beach. I am concerned that timeshares will just add to the number of quality of life issues that the City will not be able to enforce. I happen to live nearby some of these illegal STVRs and no matter how frequently I report them to the City, new renters keep showing up. A quick search of Airbnb shows that there are dozens of STVRs that are advertising for stays of less than 30 days. If the stay is increased to 30 days the number grows to over 100. The City is just not able to do anything to contain these issues and I am worried that the City will not be able to do anything about the potential problems with timeshares. I believe that there are a few different ways that Council should deal with this issue: 1. Allow timeshares in locations where hotels are permitted. If timeshares are strictly considered a residential use this may not be possible until the zoning code is changed to allow residential in mixed use projects in C-2 and C- 3. 1 think that it is worth waiting for the zoning code update to properly deal with the timeshare issue. 2. Define timeshares in the municipal code as hotels or motels. This would allow them in zones where hotel use is allowed. 3. Allow timeshares at commercially zoned parcels with non -conforming residential uses similar to legal STVRs. 4. Prohibit timeshares anywhere in Hermosa Beach. 3-92 Please do not allow timeshares to further degrade our neighborhoods the way that STVRs already have. Rachel Hayes Location: 90254-5103, Hermosa Beach Submitted At: 8:55am 09-27-22 While I am glad to see that the city is being proactive to prevent timeshare ownership of properties in the residential areas, I am not happy with the request to change the use of properties in zone C1 which is directly adjacent to residential properties. For the same reason that you don't want one in your neighborhood, we don't want one in our neighborhood. Please note that timeshares do not operate the way it was sold to the planning commission. Timeshare salesmen are very good sales people, and they have sold you a pack of lies. Think about what they are selling you. Eight families sharing one house. Eight families would get one week every other month. Who do you know who has six weeks of vacation time? And how many people want to use all six of those weeks to go to the same location? The eight families they are selling you on are "investors" in a property who will get their money back by renting the unit through the timeshare system. The way timeshares work is owners either buy a designated week at one resort/location or they buy points which they can use to book a week at any of the timeshare's properties (owned or negotiated). People who own the same week can trade that week into the timeshare pool of units for a week at any other of the timeshare's properties. The timeshare companies pool their resources with other timeshare companies in order to offer more flexibility, as it helps generate more sales. So, what you think will be the same eight families using the unit, will end up becoming a short term rental with new tenants every single week. I belong to a timeshare and they use AirBnB as a selling point — seems they are getting into the business of subleasing out AirBnB's to their owners for points. The sales people will actually say "You don't have to stay at one of our resorts, we have contracts with AirBnBs all over. You can use your points to book one of those properties". Avoidance of Taxes: Because allegedly only 'timeshare owners' will be using the unit, there will be no short term tax paid to the city for this unit. Timeshare fees are called maintenance fees (not rent), so technically they would not be subject to the short term tax like hotels or even AIrBnBS. Short Term Rentals kill neighborhoods. There is an illegal short term rental across the street from us. Every single new tenant drives the wrong way down the one-way alley. Every single one.... They don't care about our neighborhood. Sometimes they park a car in the alley blocking access to our garage. When l call the city, I am told the city will not tow. So the city is protecting the short term renters at the expense of the residents? If the city cannot help us now, imagine what it will be like when there are several places with new tenants every single week (unmanaged tenants). C1 zone: I live next to a bar. 1 have no problems with the bar. They have a CUP and they follow their CUP, so we have lived in harmony. The bar has a paid staff member on site to manage the property. This timeshare (just another name for short term rental) will not have a staff member present to manage the property. l would rather have a pot dispensary next to me than another short term rental. At least the pot dispensary will have staff on site, and it will have specific hours of operation. And the City will have the ability to correct any unwanted behaviors with the pot dispensary operators. How can the city correct behavior of tenants who change over every single week. With a timeshare owned property, once you open pandora's box, you will not be able to fix it. Please say no to timeshare properties in our city. Please say no to timeshare properties in Zone C1 as it is too close to residential properties. For the same reason that you don't want one in your neighborhood, we don't want one in our neighborhood. Rachel Hayes, resident 122 1st Street, Hermosa Beach, CA 3-93 4/27/23, 9729 AM City of Hermosa Beach - File #, REPORT 22-0643 Sign In CITY OF HERMOSA BEACH Legi�Eatfon Calendar CltyCoun16 Departments People 11 7 LIShare _IRSS IYAlerts Details PDF Staff Report File #: REPORT 22-0643 Version: 1 Name: Type: Action Item Status: Consent Calendar File created: 10/4/2022 In control: City Council On agenda: 10/11/7072 Final action: ADOPTION OF AN ORDINANCE OF THE CITY OF HERMOSA BEACH, CALIFORNIA AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT Ttle: AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT (Community Development Director Jeannie Naughton) Attachments 1. 1. Draft Ordinance. 2. 2. PC Resolution 22-07, 3. 3. Link to April 19, 2022 Planning Commission_ Staff Re op tr , 4. 4. Link to September 28, 2022 City. Council Staff Report Staff Report Text Honorable Mayor and Members of the Hermosa Beach City Council Regular Meeting of October 11, 2022 Title ADOPTION OF AN ORDINANCE OF THE CITY OF HERMOSA BEACH, CALIFORNIA AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT (Community Development Director Jeannie Naughton) Body Recommended Action: Recommendation Staff recommends City Council: 1. Waive full second reading and adopt by title an Ordinance of the City of Hermosa Beach, California, amending Chapter 17.40 (Conditional Use Permit and Other Permit Standards) to add Section 17.40.230 (Timeshare Uses) to Title 17 (Zoning) and amending Section 17.26.030 to permit timeshare uses in specified commercial zones pursuant to a Conditional Use Permit (Attachment 1); and 2. Direct staff to print and publish the summary ordinance in a newspaper of general circulation within 15 days following adoption and post it on the City's bulletin for 30 days. Body Executive Summary_ The City of Hermosa Beach Municipal Code (HBMC) does not currently include regulations governing the use of timeshares within the City, nor any regulations that would explicitly address these emerging businesses offering "fractional ownership" of a property in a way that operates like a timeshare. If left unregulated, these types of uses in the residential zones could limit the City's existing housing stock for use as long-term residency and impair the overall character of the City's residential areas. At its September 28, 2022 meeting, City Council held a public hearing and introduced and waived first reading of the ordinance with amendments to modify the authorized zone from the originally proposed C-1 (Neighborhood Commercial Zone) to the C-2 (Downtown Commercial Zone). Council further directed staff to incorporate the discussion into future Housing Element and Zoning Code update processes. The revised ordinance (Attachment 1) would permit timeshare uses in the C-2 Downtown Commercial Zone within the City pursuant to a Conditional Use Permit (CUP) and prohibit the use in all other zones within the City. Background: The City of Hermosa Beach is a popular tourist destination known for its scenic beachfront location, its many diverse restaurants, Iccal retailers and popular commercial areas like its Downtown area and Pier Avenue. Maintaining the balance between the quality of life for residents, those who work in the City, and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. Like most communities throughout California, one of the key means that the City utilizes to maintain this balance is through its Zoning Ordinance. The City has commercial zones, that provide for uses that serve both visitors and the local community. These commercial uses include: restaurants; retail shops; and visitor -serving hotels and motels. The City also has residential zones, at varying densities, that provide a diversity of housing types for those who live in the community. The City does not currently have regulations in place governing the use of timeshares within the City or other businesses/arrangements that are identical or similar to a timeshare use. At its April 18, 2022 meeting, the Planning Commission reviewed and recommended https:/lhermosabeach. legistar. comlLegislationDetail.aspx?ID=5866947&GUID=1 F32BD8F-48D8-4AE4-BC2A-F6EDOAB1146B 114 3-94 4127123. 9:29 AM City of Hermosa Beach - File #: REPORT 22-0643 approval of the proposed ordinance to permit timeshare uses in specified commercial zones pursuant to a Conditional Use Permit by adopting Resolution P.C. 22-07 (Attachment 2). At its September 28, 2022 meeting, City Council received a staff presentation of the draft ordinance. Following the public hearing, City Council introduced and waived first reading of the ordinance with the following amendments: Section 2 was revised to replace all references of C-1 (Neighborhood Commercial Zone) with C-2 (Downtown Commercial Zone); and Section 3 was revised to shift the "U" from the C-1 column, to the C-2 column, indicating that timeshare uses would be permitted pursuant to a Conditional Use Permit in the C- 2 (Downtown Commercial Zone) and prohibit the use in the C-1 (Neighborhood Commercial Zone). City Council further directed staff to incorporate this discussion into future Housing Element and Zoning Code update processes. Past Planning Commission and City Council Actions April 18, 2022 IPlanning Commission reviewed the proposed ordinance and adopted Resolution P.C. 22-07 September 28, 2022 City Council introduced and waived first reading of an Ordinance with amendments to replace all references of C-1 (Neighborhood Commercial Zone) with C-2 (Downtown Commercial Zone) in Section 2; and Section 3 was amended o shift the "U" from the C-1 column, to the C-2 column, indicating that timeshare uses would be permitted with a Conditional Use Permit in the C-2 (Downtown Commercial one) and not permitted in the C-1 (Neighborhood Commercial Zone). City Council further directed staff to incorporate this discussion into future Housing Element and Zoning Code update processes. City Housing The most recent U.S. Census data lists the median value of owner -occupied homes in Hermosa Beach as $1,542,9000) for the 2015-2019 period, while the Zillow Home Value Index estimates median home values in Hermosa Beach to be approximately $2,174,879(2) as of January 31, 2022. According to the Zillow Home Value Index, home values in the City have gone up 10.1 percent over the past year(3) In contrast, the median household income in Hermosa Beach from 2015-2019 was $136,702f4) and the median income for a four -person household in Los Angeles County for 2021 was approximately $80,000P. The cost of homes currently in Hermosa Beach are in excess of what median income residents of Hermosa Beach can afford, and certainly over the median income residents of Los Angeles County generally.. The conversion of homes in the City's residential neighborhoods to these timeshare -like uses would eliminate residential dwelling units that would otherwise be available for long-term residential use, thereby further exacerbating the lack of long-term available housing in the City. A home that is used for timeshare purposes would no longer be available for households to use as their long-term residence. Impacts to Character of the City's Residential Districts Timesharing projects have the same character as commercial hotels, motels, and other transient occupancy uses due to the multiple short- term occupancies by those participating in timesharing projects. For this reason, the activity is better suited in commercial or quasi - commercial zones. The use is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. The intensity of the activity is a significant reason why these uses can change the character of a residential neighborhood. Long-term residents, whether owners or renters, occasionally have guests and parties, but timeshare homes are used exclusively by people who are coming to the City on a short-term basis -most likely for vacation or leisure, increasing the likelihood of frequent gatherings and parties generating noise in excess of what the neighborhood normally generates. hlrrm ww census. ov ickfads fact table ttermosabeach[ ealtiornla1H5o410219 htwj llwy2 lfaw_tamlhe_rrnasa•beach calhomr voluta! https jlwwvt t111ow tomb+ermosa beachtelhome-valucsL `h[tas //.vww_census eov/cui[kfacts/fact/table/isermosaheath[itv�alilorn la/HSD4102t9. ' hr s- www_#�cd ca. av'oranu-fundin iinmme-limits state-and-re'3eral-sntame-limits dors incarne-limits-�02I. df Timeshare owners and visitors will most likely stay out later, entertain more, and gather in larger numbers while on vacation. Timeshare uses can change the character of a residential neighborhood by having it serve not only as a residential area, but also a visitor lodging area and subjecting the neighborhood to the impacts that come with the more intense land use. https:llhennos@beach.leg€star.comlLeg islationDetail.aspx?ID=5866947&GUID=1 F32B138F-48D8-4AE4-BC2A-F6EDOAB1146B 214 3-95 4127123, 9:29 AM City of Hermosa Beach - File #: REPORT 22-0643 Further, the nature of the timeshare use itself can impact the residential character of the City's residential zones because they ensure that the timeshare users can only use their property for a limited amount of time each year. Each co-owner is in the unit on a short-term basis, so they do not have the time to participate in activities or build the relationships that create the fabric of a community. Given the City's desire to strike a balance between the demands of the City's visitor and tourist economy, and retaining its character and quality of life, the City has an interest in maintaining housing stock in its residential districts for long-term residents. Emerging Businesses Recently, certain businesses have emerged which purport to sell "co -ownership" shares in residential property(6). These businesses, as staff understands the business model, start by purchasing homes or entering contracts to purchase homes in tourist destinations in desirable locations like Hermosa Beach. These businesses then form a limited liability company ("LLC"), which owns title to the residential home. The "co -owners" each purchase a one -eighth share and are entitled to use the residential property for a certain number of days per year according to their share of ownership in the LLC. The one -eighth interest entitles the purchaser to stay at the property for up to 45 days per year in increments of 2-14 days, including one "special day" (Fourth of July, Thanksgiving, Christmas, etc.). The stays are reserved on an app, and while each co-owner is prohibited from renting the home as a short-term rental, they are permitted to allow other guests to stay there during their allotted days. Once shares in an LLC are sold, the business continues to manage the homes, including providing landscaping and pool maintenance, furnishing the homes, and paying all expenses, which are then passed through to the co -owners of the LLC. The Ordinance The City does not currently have regulations in place governing the use of timeshares within the City or other businesses/arrangements that are identical or similar to a timeshare use, The purpose of any ordinance should be to ensure that it the City is able to maintain its existing and limited housing stock for use in long-term residency, and to maintain the character of its residential zones. c These types of businesses are merely used as an example. The Ordinance Is not directed at any Individual business or businesses; but rather regulate the specific use. Completely banning "fractional ownership," joint tenancies, or ownership by business entities such as LLC is not advisable. There are numerous properties in the City's residential zones currently owned by numerous owners or by LLCs. Thus, the ordinance is geared toward the specific impacts of the at -issue uses -timeshare like uses organized and run by third parties for a fee. The proposed ordinance (Attachment 1) does not target or single out any business or ownership structure. As revised, the ordinance allows for these types of timeshare uses in the City's C-2 Downtown Commercial zone, subject to a Conditions Use Permit. Timeshare uses would be prohibited in all other zones. In order to avoid an over -inclusive ordinance that prohibits joint tenancies or other type of ownership structure that do not have the same deleterious impacts, the proposed ordinance focuses on the actual use of the property, as compared to the ownership structure, and in pertinent regulates this "timeshare use" subject to a "timeshare plan." Timeshare plan is defined as: Any arrangement, plan, scheme, or similar device, facilitated, offered, or organized by a third -party non -purchaser, whether by membership agreement, bylaws, shareholder agreement partnership agreement, sale, lease, deed, license, right to use agreement or by any other means, whereby purchasers, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, 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." Environmental Determination: The proposed ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in C-2 Downtown Commercial zone within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. General Plan Consistency- htips:11hermosabeach.legislar.comiLegislationDetail.aspx?ID=5866947&GUID=1 F32BD8F-48D8-4AE4-BC2A-F6ED0AB1146B 314 3-96 4127I23, 9:29 AM City of Hermosa Beach - File #: REPORT 22-0643 This report and associated recommendation have been evaluated for their consistency with the City's General Plan, Relevant Policies are listed below: Land Use and Design Element Goal 9. Create a sustainable urban form and land use patterns that support a robust economy and high quality of life for residents. Policies: • 1.5 Balance resident and visitor needs. Ensure land uses and business provide for the needs of residents as well as visitors. • 1.7 Compatibility of uses. Ensure the placements of new uses does not create or exacerbate nuisances between different types of land uses. Goal 2. Neighborhoods provide for diverse needs of residents of all ages and abilities and are organized to support healthy and active lifestyies. Policies: • 2.4 Single density neighborhoods. Preserve and maintain the Hermosa Hills, Eastside, Valley, North End and Hermosa View neighborhoods as predominantly single-family residential neighborhoods • 2.5 Neighborhood preservation. Preserve and enhance the quality of residential neighborhoods by avoiding or abating the intrusion of disruptive, nonconforming buildings and uses. Fiscal Impact: There is no fiscal impact associated with the recommended action. Attachments: 1. Draft Ordinance 2. PC Resolution 22-07 3. Link to April 19, 2022 Planning Commission Staff Report 4, Link to September 28, 2022 City Council Staff Report Respectfully Submitted by: Patrick Donegan, Assistant City Attorney Concur: Jeannie Naughton, Community Development Director Noted for Fiscal Impact: Viki Copeland, Finance Director Legal Review: Patrick Donegan, Assistant City Attorney Approved: Suja Lowenthal, City Manager https://hermosabeach.legistar.com/LegislationDetail.aspx?ID=5866947&GUID=1F32BD8F-48D8-4AE4-BC2A-FGEDOA131i46B 414 3-97 CITY OF HERMOSA BEACH ORDINANCE NO. XX AN ORDINANCE OF THE CITY OF HERMOSA BEACH. AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT. THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH DOES HEREBY ORDAIN AS FOLLOWS: Section 1. Findings. A. The City of Hermosa Beach ("City") is a scenic beachfront city, known for its many diverse restaurants, local retailers and popular commercial areas like its Downtown area and Pier Avenue. B. Preserving the City's costal resource and the qualify and character of the City has been a focal point of the City's iand use planning for decades, and remains a primary focus in the City's current General Plan. C. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. D. The City values and welcomes all visitors to the City and recognizes their contributions to the City's economy, but finds that in order to maintain the City's long term viability as a community where people not only come to visit, but also live, work and contribute to the long term betterment of the community through participation in the City's schools, local community groups, civic government and local serving businesses, the City must maintain a balance between residential land uses and visitor serving uses. E. The City's existing housing stock is significantly impacted, with demand outweighing supply, resulting in extremely high housing prices as detailed in the accompanying staff report. A limited supply of suitable vacant land, exorbitantly high land costs, and limitations in the City's existing infrastructure, among other factors, have limited the construction of additional housing in the City. F. According to the U.S. Census Bureau, the current median household income in the City is $136,702, while the estimated value of owner - occupied housing units from 2015-2019 was approximately $1,542,900 with current real estate listings suggesting that prices are increasing significantly, meaning that homes in the City are not affordable to the median household in the City. G. The conversion of existing residential units to uses other than long-term residential use will further reduce the City's existing long-term housing supply, causing further imbalance between the demand for housing in the City and the existing supply, not only altering the character of the City's residential neighborhoods, but also presenting further challenges to the City's efforts to provide affordable housing within the community. H. The City additionally has, for many years, worked to preserve its existing housing stock for long term residential use, both to maintain the character of its residential neighborhoods and prevent residential districts from becoming visitor and tourist serving districts, and to ensure that it would not be converted to uses other than long-term residential uses. I. The high impact use associated with timeshares, combined with the frequent turnover and commercial management involved in timeshare properties is not consistent with the purpose and nature of residential districts in the City. Rather, they are commercial in nature, in that these timeshare uses are structured as a short-term, tourist oriented, visitor serving use of the subject properties. The use of properties as timeshares adds excessive noise and traffic to residential districts by using these properties for high impact tourist oriented uses more appropriately located in commercial districts of the City. J. The use of residential properties for timeshare uses will further reduce the availability of housing stock for long-term residential use, and create a new demand for timeshare uses of residential properties. K. This encroachment of tourist oriented, visitor serving uses in residential neighborhoods is likely to compromise the character of residential areas within the City, and further increase the costs for housing in the City, undermining the City's efforts to provide a balance of housing for all income levels in the City. L. The City's authority to enact zoning ordinances is based on the powers accorded cities and counties under the State constitution to make and enforce police regulations. This police power grants the City broad 3-99 authority to regulate the development and use of real property within its jurisdiction to promote the public welfare. M. Pursuant to and in accordance with this authority, the City Council desires to prohibit timeshare uses in residential areas, and only allow them in the C- 2 commercial zone within the City, pursuant to a conditional use permit. N. The City's Planning Commission held a duly noticed public hearing on April 19, 2022, as required by law to consider all the information presented by staff, and public testimony presented in writing and at the meeting. O. On April 19, 2022, the City's Planning Commission recommended that the City Council adopt this Ordinance amending the City's Municipal Code as described herein. P. On September 28, 2022, the City Council held a duly noticed public hearing, accepting testimony from the public, and discussed the proposed amendments and staff's recommended approval of this Ordinance and adopted on first reading the Ordinance. Q. On October 11, 2022, the Ordinance was brought back for a second reading and adopted by the City Council. R. The proposed zoning amendments are consistent with the General Plan goals, policies and implementation programs as the Ordinance will continue to preserve the character of the City; will preserve the City's residential districts for residential uses; and will help to preserve the City's existing housing stock for long term residential uses, to avoid further exacerbating the existing impacts on the City's housing supply. Section 2. The above recitals are hereby incorporated as though set forth in this section. Section 3. Section 17.40.230 (Time Share Uses) is hereby added to Chapter 17.40 (Conditional Use Permit and Other Permit Standards) of Title 17 (Zoning) of the City of Hermosa Beach Municipal Code, to read as follows: Section 17.40.230 Timeshare Uses A. Purpose and Findings. There is a critical shortage of permanent, long-term housing in the City of Hermosa Beach ("City"). A limited supply of suitable vacant land, land values, 3-100 and market demand for land for other uses, have limited the construction of additional housing in the City. The City is a popular tourist destination known for its scenic beachfront location, its many diverse restaurants, local retailers and popular commercial areas like its Downtown area and Pier Avenue. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. Timeshare uses are not an appropriate land use in the City's residential zones due to the multiple occupancy of timeshare properties, the short-term, tourist oriented use of such property and commercial management of timeshare facilities, all of which create increased traffic generation, excessive noise, disruption to residential communities through commercial -level maintenance of the timeshare facilities, and therefore are appropriately confined to commercial zones. Conversion of permanent housing to timeshare facilities removes existing housing units from the City's existing stock and exacerbates an already severe housing shortage. It is therefore in the public interest to prohibit conversions of existing housing units into timeshare facilities, as to do so eliminates needed housing stock by diverting those units to a Tourist -oriented, commercial use. B. Definitions. For purposes of this Section, the following words and phrases shall have the meaning respectively ascribed to them by this Section: "Accommodation" means any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single-family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.040. "Building" shall have the meaning ascribed to it by Section 17.04.040. "Dwelling unit" shall have the meaning ascribed to it by Section 17.04.040. "Managing entity" means the person who undertakes the duties, responsibilities and obligations of the management of a timeshare plan. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. 3-101 "Timeshare instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a timeshare plan and includes the declaration dedicating accommodations to the timeshare plan. "Timeshare interest" means the right to exclusively occupy a timeshare property for a period of time on a recurring basis pursuant to a timeshare plan, regardless of whether or not such right is coupled with a property interest in the timeshare property or a specified portion thereof. "Timeshare plan" means any arrangement, plan, scheme, or similar device, facilitated, offered, or organized by a third -party non -purchaser, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby purchasers, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, 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. "Timeshare property" means one or more accommodations subject to the some timeshare instrument, together with any other property or rights to property appurtenant to those accommodations. "Timeshare use" means the use of one or more accommodations or any part thereof, as a timeshare property pursuant to a timeshare plan. C. Timeshare Uses Restricted to C-2 Downtown Commercial Zone. Timeshare uses are conditional uses within the City's C-2 Downtown Commercial Zone, subject to approval of a conditional use permit applied for and approved in conformance with this Section. Timeshare uses are not permitted in any other Zones in the City. D. Application Process and Development Standards. A. Application Process. Approval of a conditional use permit for timeshare uses in the C-2 Downtown Commercial Zone within the City shall be required in accordance with the requirements of Chapter 17.40. In addition to the requirements contained in Chapter 17.40, an application for a timeshare use shall be accompanied by the following documents which shall be subject to the approval of the Community Development Director: 1. Management Flan. A management plan shall describe the methods employed by the applicant to guarantee the future adequacy, stability, and 3-102 continuity of a satisfactory level of management and maintenance of the time share use. 2. Application Requirements. In addition to any application requirements established by this section and any other applicable requirements of this code, the following information shall be submitted as part of any application to develop or establish a timeshare use: a. Typical floor plans for each accommodation. b. The phasing of the construction of the accommodations on the timeshare property, if applicable. C. A description of any ancillary uses which are proposed in conjunction with the time share use. d. A description of the method of management of the time share use and indication of the management entity for the time-share property. e. Any restrictions on the use or occupancy of the accommodations. f. Any other information or documentation the applicant, City staff or commission deems reasonably necessary to the consideration of the timeshare use, including any required environmental documents. B. Development Standards and Operational Requirements. Notwithstanding any other provision of this Section, the following conditions must be met by any timeshare use in any conditionally permitted zone. Additional requirements may be attached to a conditional use permit or development agreement if found to be necessary to assure that the timeshare use meets the intent of this Section: 1. Timeshare uses developed in the C-2 Downtown Commercial Zone within the City shall be limited to accommodations in upper floors in conjunction with a mixed -use project. 2. No existing residential use in the C-2 Downtown Commercial Zone within the City shall be converted to a timeshare use. 3. Development Standards. The timeshare use shall comply with all development standards for the zone in which it is located. 4. Parking. Parking shall be provided as follows: 3-103 a. For accommodations of two or fewer bedrooms, one parking space shall be provided for each accommodation. b. For accommodations of three or more bedrooms, two parking spaces shall be provided for each accommodation. 5. Modification or Waiver of Standards. The Planning Commission may modify or waive one or more of the regulations contained in this Section if it determines that strict compliance is not necessary to achieve the purpose and intent of this Section. E. Violations, Enforcement and Civil Penalties. 1. Any responsible person, including but not limited to an owner of a timeshare interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in anyway and through any medium, the availability for sale or use of an accommodation in violation of this Section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this Section. Such violation shall be punishable pursuant to Section 1.04.020 of the City of Hermosa Beach Municipal Code. 2. Timeshare use, and/or advertisement for timeshare use, of an accommodation in violation of this Section is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance. Any such nuisance may be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 8.28 except that the civil penalty for a violation shall be one thousand dollars ($1,000.00). Each day the violation occurs shall constitute a separate offense 3. Any responsible person who violates this Section shall be liable and responsible for a civil penalty of one thousand dollars ($1,000.00) per violation per day such violation occurs. The City may recover such civil penalty by either civil action or administrative citation. Such penalty shall be in addition to all other costs incurred by the City, including without limitation the City's staff time, investigation expenses and attorney's fees. a. Where the City proceeds by civil action, the court shall have discretion to reduce the civil penalty based upon evidence presented by the responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the court should consider the purpose of this Section to prevent and deter violations and whether the reduction 3-104 of civil penalties will frustrate that purpose by resulting in the responsible person's enrichment or profit as a result of the violation of this Section. In any such civil action the City also may abate and/or enjoin any violation of this Section. b. Where the City proceeds by administrative citation, the City shall provide the responsible person notice of the right to request an administrative hearing to challenge the citation and penalty, and the time for requesting that hearing. i. The responsible person shall have the right to request the administrative hearing within forty-five (45) days of the issuance of the administrative citation and imposition of the civil penalty. To request such a hearing, the responsible person shall notify the City cleric in writing within forty-five (45) days of the issuance of the citation. The appeal notification shall include all specific facts, circumstances and arguments upon which the appeal is based. ii. The City Manager is hereby authorized to designate a hearing officer to hear such appeal. The City hearing officer shall conduct a hearing on the appeal within ninety (90) days of the request for the hearing unless one of the parties requests a continuance for good cause. The hearing officer shall only consider those facts, circumstances or arguments that the property owner or responsible person has presented in the appeal notification. iii. The hearing officer shall render a decision in writing within thirty (30) days of the conclusion of the hearing. The hearing officer shall have discretion to reduce the civil penalty based upon evidence presented by the property owner or responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the hearing officer should consider the purpose of this Section to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the property owner's or responsible person's enrichment or profit as a result of the violation of this Section. iv. Any aggrieved party to the hearing officer's decision on the administrative appeal may obtain review of the decision by filing a petition for writ of mandate with the Los Angeles County 3-105 Superior Court in accordance with the timelines and provisions set forth in Government Code Section 53069.4, v. If, following an administrative hearing, appeal, or other final determination, the owner of the property is determined to be the responsible person for the civil penalty imposed by this section, such penalty, if unpaid within forty-five (45) days of the notice of the final determination, shall become a lien to be recorded against the property on which the violation occurred pursuant to Chapter 8.28. Such costs shall be collected in the some manner as county taxes, and thereafter the property upon which they are a lien shall be sold in the some manner as property now is sold for delinquent taxes 4. Any violation of this Section may also be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 8.28 except that the civil penalty under Chapter 8.28 for a violation shall be one thousand dollars ($1,000.00). Each day the violation of this Section occurs shall constitute a separate offense. The remedies under this Section are cumulative and in addition to any and all other remedies available at law and equity. Section 3. Section 17.26.030 of Chapter 17.26 (C], C2 and C3 Commercial Zones) of Title 17 (Zoning) is amended to add the following entry to the chart of land use regulations USES I C1 C2 C3 See Section Timeshares I U 17.40.230 Section 4. CEQA. This ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines (the Guidelines), and the environmental regulations of the City. The City Council hereby finds that this ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c) (2) and 15060(c) (3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in the C-2 Downtown Commercial zone within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b) (3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. 3-106 Section 5. Effective Date. Pursuant to California Government Code section 36937, this Ordinance shall take effect thirty (30) days after its final passage. Section 6. Certification. The City Clerk is directed to certify the passage and adoption of this Ordinance; cause it to be entered into the City's book of original ordinances; make a note of the passage and adoption in the records of this meeting; and, within fifteen (15) days after the passage and adoption of this Ordinance, cause it to be published or posted in accordance with California law. PASSED, APPROVED and ADOPTED this 11th day of October, 2022. Michael Detoy, Mayor PRESIDENT of the City Council and MAYOR of the City of Hermosa Beach, CA ATTEST: Myra Maravilla City Clerk APPROVED AS TO FORM: Michael Jenkins City Attorney 3-107 RESOLUTION P.C. 22-07 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF HERMOSA BEACH ]RECOMMENDING CITY COUNCIL APPROVAL OF TEXT AMENDMENTS TO THE CITY OF HERMOSA BEACH MUNICIPAL CODE AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT. The Planning Commission of the City of Hermosa Beach does hereby resolve as follows: SECTION 1. Findings. A. The Planning Commission held a duly noticed public hearing on April 19, 2022 to consider a text amendments to the City of Hermosa Beach Municipal Code, Title 17 (Zoning), as described in the proposed ordinance attached as Exhibit A. B. The City of Hermosa Reach ("City") is a scenic beachfront city, known for its many diverse restaurants, local retailers and popular commercial areas like its downtown area and Pier Avenue. C. Preserving the City's costal resource and the quality and character of the City has been a focal point of the City's land use planning for decades, and remains a primary focus in the City's current General Plan. D. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. E. The City values and welcomes all visitors to the City and recognizes their contributions to the City's economy, but finds that in order to maintain the City's long term viability as a community where people not only come to visit, but also live, work and contribute to the long term betterment of the community through participation in the City's schools, local community groups, civic government and local serving businesses, the City must maintain a balance between residential land uses and visitor serving uses. F. The City's existing housing stock is significantly impacted, with demand outweighing supply, resulting in extremely high housing prices as detailed in the accompanying staff report. A limited supply of suitable vacant land, exorbitantly high land costs, and limitations in the City's existing infrastructure, among other factors, have limited the construction of additional housing in the City. e �s G. According to the U.S. Census Bureau, the current median household income in the City is $136,702, while the estimated value of owner -occupied housing units from 2015-2019 was approximately $1,542,900 with current real estate listings suggesting that prices are increasing significantly, meaning that homes in the City are not affordable to the median household in the City, H. The conversion of existing residential units to uses other than long-term residential use will further reduce the City's existing long-term housing supply, causing further imbalance between the demand for housing in the City and the existing supply, not only altering the character of the City's residential neighborhoods, but also presenting further challenges to the City's efforts to provide affordable housing within the community, I. The City additionally has, for many years, worked to preserve its existing housing stock for long term residential use, both to maintain the character of its residential neighborhoods and prevent residential districts from becoming visitor and tourist serving districts, and to ensure that it would not be converted to uses other than longterm residential uses. J. This high impact use associated with timeshares, combined with the frequent turnover and commercial management involved in timeshare properties is not consistent with the purpose and nature of residential districts in the City. Rather, they are commercial in nature, in that these timeshare uses are structured as a short- term, tourist oriented, visitor serving use of the subject properties. The use of properties as timeshares adds excessive noise and traffic to residential districts by using these properties for high impact tourist oriented uses more appropriately located in commercial districts of the City, K. The use of residential properties for timeshare uses will further reduce the availability of housing stock for long-term residential use, and create a new demand for timeshare uses of residential properties. L. This encroachment of tourist oriented, visitor serving uses in residential neighborhoods is likely to compromise the character of residential areas within the City, and further increase the costs for housing in the City, undermining the City's efforts to provide a balance of housing for all income levels in the City. M. The City's authority to enact zoning ordinances is based on the powers accorded cities and counties under the State constitution to make and enforce police regulations. This police power grants the City broad authority to regulate the development and use of real property within its jurisdiction to promote the public welfare. N. Pursuant to and in accordance with this authority, the Planning Commission desires to prohibit timeshare uses in residential areas, and certain commercial zones and to 3-109 update the language of the Zoning Code to provide consistency with the terminology used to define timeshare uses in State law, Further, the City desires to provide greater clarity as to the zones which timeshare uses are permitted as conditional uses, and the standards pursuant to which they will be reviewed in those zones. O. On April 19, 2022, the Planning Commission held a duly -noticed public hearing and considered the staff report, recommendations by staff, and public testimony concerning the proposed ordinance. SECTION 2. This ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines (the Guidelines), and the environmental regulations of the City. The City Council hereby finds that this ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in specified zones within the City pursuant to a conditional use permit, and prohibits them in all other zones, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. SECTION 3. The Planning Commission finds that the proposed amendments to the Municipal Code to permit timeshares in specified zones within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City are consistent with the General Plan goals, policies and implementation programs as the Ordinance will continue to preserve the character of the City; will preserve the City's residential districts for residential uses; and will help to preserve the City's existing housing stock for long term residential uses, to avoid further exacerbating the existing impacts on the City's housing supply. SECTION 4.. Based on the entire record before the Planning Commission, and all written and oral evidence presented, the Planning Commission hereby finds that the proposed ordinance is consistent with the City's adopted General Plan and does not conflict with any of the General Plan's goals or policies. SECTIONS. The Planning Commission hereby recommends that the City Council adopt the attached proposed ordinance entitled, "AN ORDINANCE OF THE CITY OF HERMOSA BEACH. AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING 3-110 THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT. I HEREBY CERTIFY that the foregoing recommendation to the City Council was duly and regularly approved by the Planning Commission of the City of Hermosa Beach at a regular meeting of said Planning Commission held on April 19, 2022, by the following roll call vote: VOTE: AYES: 5 - Chair Pedersen, Vice Chair Izant, Commissioner Saemann, Commissioner Hoffman, and Commissioner Rice NOES: None ABSTAIN: None ABSENT: None CERTIFICATION I hereby certify that the foregoing Resolution P.C. 22-07 is a true and complete record of the action taken by the Planning Commission of the City of Hermosa Beach, California, at its regular meeting of April 19, 2022. '�)kjk �" Dave Pedersen, Chairperson 7���� Date *Angq-api, Secretary 3-111 4127/23, 9:30 AM City of Hermosa Beach - File #: REPORT 22-0249 Sign In CITY OF �b_---;--- HERMOSA REACH Legislation Calendar CityCouncl Departments People C 63 ®Share .JRSS t Alerts Details PDF Staff Report File t REPORT 22-0249 Version: 1 Name: Type: Action Item Status: Passed File created: 4/14/2022 In control: Planning Commission On agenda: 4/19/2022 Final action: 4/19/2022 TA 22-01 ZONE TEXT AMENDMENT TO AMEND THE HERMOSA BEACH MUNICIPAL CODE CHAPTER 17.40 TO ADD SECTION 17.40.230 AND Title: AMEND SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES AND DETERMINE THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRINMENTAL QUALITY ACT (CEQA) Attachments: 1. 1. Draft Resolution 22-07 Tmeshare Ordinance. 2, 2. Hermosa Beach Draft Ordinance Staff ReportText Honorable Chairman and Members of the Hermosa Beach Planning Commission Regular Meeting of April 19, 2022 Title TA 22-01 ZONE TEXT AMENDMENT TO AMEND THE HERMOSA BEACH MUNICIPAL CODE CHAPTER 17.40 TO ADD SECTION 17.40.230 AND AMEND SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES AND DETERMINE THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRINMENTAL QUALITY ACT (CEQA) Recommendation Recommended Action: Staff recommends the Planning Commission adopt Resolution No. 22-07 (Attachment 1) recommending that the City Council approve Zone Text Amendment TA 22-01, thereby amending Chapter 17.40 to add section 17.40.230 and amend section 17.26.030 to permit timeshare uses in specified commercial zones and determine that the project is exempt from the California Environmental Quality Act (CEQA). Body Background: The City of Hermosa Beach ("City") does not currently have regulations in place governing the use of timeshares within the City, nor any regulations that would explicitly address these emerging businesses offering "fractional ownership" of a property in a way that operates like a timeshare. These types of uses in the City's residential zone could limit the City's existing housing stock for use as a long-term residency and impairthe character of the City's residential zones. At its March 15, 2022 meeting, the Planning Commission directed staff to bring forward a zone text amendment addressing these types of uses. Analysis: The City is a popular tourist destination known for its scenic beachfront location, its many diverse restaurants, local retailers, and popular commercial areas like its Downtown area and Pier Avenue. Maintaining the balance between the quality of life for residents, those who work in the City, and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. Like most communities throughout California, one of the key means that the City utilizes to maintain this balance is through its Zoning Ordinance. The City has commercial zones including the C-1 and C-2 commercial zones that provide for uses that serve both visitors and the local community such as: restaurants; retail shops; and visitor serving hotels. The City also has residential zones that provide housing for those who live in the community, at varying densities in order to provide a diversity of housing types. City Housing The most recent census data lists the median value of owner -occupied homes in Hermosa Beach as $1,542,900 for the period of 2015- 2019, while the Zillow Home Value Index estimates medial home values in Hermosa Beach to be approximately $2,174,879 as of January 31, 2022. According to the Zillow Home Value Index, homes values in the City have gone up 10.1 percent over the past year. In contrast, the median household income in Hermosa Beach from 2015-2019 was $136,702, and the median income for a four -person household in Los Angeles County for 2021 is approximately $80,000. The cast of homes currently in Hermosa Beach are more than what median income residents of Hermosa Beach can afford, and certainly over the median income residents of Los Angeles County generally. https:Ithermosabeach.legistar.comlLegislationDetail.aspx?ID-5557241 &GUID=80A64A8C-E51 A-4C26-B2D2-3046537C93D5 1I3 3-112 4/27/23, 9:30 AM City of Hermosa Beach - File #: REPORT 22-0249 The conversion of homes in the City's residential neighborhoods to these timeshare -like uses would eliminate residential dwelling units that would otherwise be available for long-term residential use, thereby further exacerbating the lack of long-term available housing in the City. A home that is used for timeshare purposes would no longer be available for households to use as their long-term residence. Impacts to Character of the Gity's Residential Districts Timesharing projects have the same character as commercial hotels, motels, and other transient occupancy uses due to their transient nature and to the multiple short-term occupancies by those participating in timesharing projects. This use is better suited in commercial or quasi -commercial zones and is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. The intensity of this use is a significant reason that these uses can change the character of a residential neighborhood. Long-term residents, whether owners or renters, occasionally have guests or parties, but these timeshare homes are used exclusively by people who are coming to the City on a short-term basis - most likely for vacation or leisure. As a result, those users may naturally stay out later, entertain more, and gather in larger numbers while on vacation. Timeshare uses can change the character of a residential neighborhood by having it serve not only as a residential area, but also a visitor lodging area, and subjecting it to the impacts that come with that more intense land use. Further, the nature of the timeshare use itself can impact the residential character of the City's residential zones because it would ensure that the time share users can only use their property for a limited amount of time each year. Each co-owner is in the unit on a short-term basis, and without the time to participate in the types of activities or build the relationships that create the fabric of a community. Given the City's desire to strike a balance between the demands of the City's visitor and tourist economy, and retaining its character and quality of life, the City has an interest in maintaining housing stock in its residential districts for long-term residents. R e[ging Businesses Recently, certain businesses have emerged which purport to sell "co -ownership" shares in residential property. These businesses, as staff understands the business model, start by purchasing homes or entering into contracts to purchase homes in tourist destinations in desirable locations like the City. These businesses then form a limited liability company ("LLC"), which owns title to the residential home. The "co - owners" each purchase a one -eighth share and are entitled to use the residential property for a certain number of days per year according to their share of ownership in the LLC. The one -eighth interest entities the purchaser to stay at the property for up to 45 days per year in increments of 2-14 days, including one "special day" (Fourth of July, Thanksgiving, Christmas, etc.). The stays are reserved on a mobile application, and while each co-owner is prohibited from renting the home as a short-term rental, they are permitted to allow other guests to stay there during their allotted days. Once shares in an LLC are sold, the business continues to manage the homes, including providing landscaping and pool maintenance, furnishing the homes, and paying all expenses, which are then passed through to the co -owners of the LLC. Time Share Ordinance As mentioned above, the City does not currently have regulations in place governing the use of timeshares within the City or other businesses/arrangements that are identical or similar to a timeshare use. The purpose of any ordinance should be to ensure that it the City is able to maintain its existing and limited housing stock for use in long term residency and to maintain the character of its residential zones. Completely banning "fractional ownership," joint tenancies, or ownership by business entities such as LLC is not advisable. There are numerous properties in the City's residential zones currently owned by numerous owners or by LLCs. Thus, any ordinance should be geared toward the specific impacts of the at -issue uses - timeshare like uses organized and ran by third parties for a fee. The proposed ordinance (Attachment 2) does not target or single out any business or ownership structure. Environmental Determination: The proposed ordinance is not subject to CEQA because the adoptions of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in C-1 and C-2 commercial zones within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. General Ian Consistency_ The proposed text amendment has been evaluated for consistency with the City's General Plan and is consistent with the following Goals and Policies of Plan Hermosa: Land Use and Design Element Goal 1 Create a sustainable urban form and land use patterns that support a robust economy and high quality of life for residents. Policies: • 1.5 Balance resident and visitor needs. Ensure land uses and business provide for the needs of residents as well as visitors. • 1.7 Compatibility of uses. Ensure the placements of new uses does not create or exacerbate nuisances between different types of land uses. Goal 2 Neighborhoods provide for diverse needs of residents of all ages and abilities, and are organized to support healthy and active lifestyles. Policies, • 2.4 Single density neighborhoods. Preserve and maintain the Hermosa Hills, Eastside, Valley, North End and Hermosa View neighborhoods as predominantly single-family residential neighborhoods https:/Ihermosaboach.legistar.com/LegislationDetail.aspx? I D=555724i &GU I D=8OA64A8C-E51 A-4C26-B2D2-3046537C93D5 213 3-113 4127123, 9:30 AM City of Hermosa Beach - File #: REPORT 22-0249 • 2.5 Neighborhood preservation. Preserve and enhance the quality of residential neighborhoods by avoiding or abating the intrusion of disruptive, nonconforming buildings and uses. Attachments: 1. Draft Resolution 22-07 Timeshare Ordinance 2. Hermosa Beach Draft Ordinance Respectfully Submitted by. Carlos Luis, Senior Planner Legal Review: Patrick Donegan, Deputy City Attorney Approved: Angela Crespi, Interim Community Development Director https:llhermosabeach.legistar.comlLegis[ationDetai[.aspx?]D=5557241 &GUID=80A64A8C-E51A-4C26-B2D2-3046537C93D5 313 3-114 4127123, 9:31 AM City of Hermosa Beach - File #: REPORT 22-0586 Sign In CITY OF H HERMOSA BEACH Legislation Calendar City Council I Departments I People IM 112 'C7 Share 113 RSS e. Alerts Details 1 PDF Staff Report File #: REPORT 27-0586 Version: 1 Name: Type: Action Item Status: Public Hearing File created: 9/19/2022 In control• City Council On agenda: 9/78/2022 Final action: INTRODUCTION OF AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH, CALIFORNIA AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND Title: AMENDING SECTION 17,26,030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PR03ECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (Community Development Director Jeannie Naughton) Attachments; 1. 1. SUPPLEMENTAL Draft Ordinance 2. 2. Resolution P.C. 22-07, 3. 3. Link to A rip I I9, 2022 Planning Commission Staff Report 4. SUPPLEMENTAL Emall from Scott Hayes Re Item 13. c.. 5. SUPPLEMENTAL eCamments for Item 13. c Staff Report Text Honorable Mayor and Members of the Hermosa Beach City Council Regular Meeting of September 28, 2022 Title INTRODUCTION OF AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH, CALIFORNIA AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (Community Development Director Jeannie Naughton) Body Recommended Action: Recommendation Staff recommends City Council consider waiving full reading and introduce by title only an Ordinance of the City of Hermosa Beach, California, amending Chapter 17.40 (Conditional Use Permit and Other Permit Standards) to add Section 17.40.230 (Timeshare Uses) to Title 17 (Zoning) and amending Section 17.26.030 to permit timeshare uses in specified commercial zones pursuant to a Conditional Use Permit and determining that the project is exempt from the California Environmental Quality Act (Attachment 1). Body Executive Summary_ The City of Hermosa Beach Municipal Code (HBMC) does not currently include regulations governing the use of timeshares within the City, nor any regulations that would explicitly address these emerging businesses offering "fractional ownership" of a property in a way that operates like a timeshare. If left unregulated, these types of uses in the residential zones could limit the City's existing housing stock for use as long-term residency and impair the overall character of the City's residential areas. The proposed draft ordinance (Attachment 1) would permit timeshare uses in the C-1 and R ommercial zones within the City pursuant to a Conditional Use Permit (CUP), and prohibit the use in all other zones within the City. Background: The City of Hermosa Beach is a popular tourist destination known for its scenic beachfront location, its many diverse restaurants, local retailers and popular commercial areas like its Downtown area and Pier Avenue. Maintaining the balance between the quality of life for residents, those who work in the City, and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. Like most communities throughout California, one of the key means that the City utilizes to maintain this balance is through its Zoning Ordinance. The City has commercial zones, inelueling the G 11 and G 2 WRIFFIeFemal ZeReS, that provide for uses that serve both visitors and the local community. These commercial uses include: restaurants; retail shops; and visitor -serving hotels and motels. The City also has residential zones, at varying densities, that provide a diversity of housing types for those who live in the community. The City does not currently have regulations in place governing the use of timeshares within the City or other businesseslarmngements that are identical or similar to a timeshare use. At its April 18, 2022 meeting, the Planning Commission reviewed and recommended approval of the proposed ordinance to permit timeshare uses in specified commercial zones pursuant to a Conditional Use Permit by adopting Resolution P.C. 22-07 (Attachment 2)_ Past Planning Commission Actions https:tlhermosabeach.legistar.com/LegislationDetail.aspx?IC)=5850234$GUID=EEC63C4B-88FE-48D0-8735-DD805DF161 B5 1 /3 3-115 4127123, 9:31 AM City of Hermosa Beach - File #: REPORT 22-0586 Meeting Date IDescription Aril 18, 2022 IP12nning Commission reviewed the proposed ordinance and adopted Resolution P.C. 22-07 City Housing The most recent U.S. Census data lists the median value of owner -occupied homes in Hermosa Beach as $1,542,900 for the 2015-2019 period, while the Zillow Home Value Index estimates median home values in Hermosa Beach to be approximately $2,174,879 as of January 31, 2022. According to the Zillow Home Value Index, home values in the City have gone up 10.1 percent over the past year In contrast, the median household income in Hermosa Beach from 2015-2019 was $136,702 and the median income for a four -person household in Los Angeles County for 2021 was approximately $80,000. The cost of homes currently in Hermosa Beach are in excess of what median income residents of Hermosa Beach can afford, and certainly over the median income residents of Los Angeles County generally. The conversion of homes in the City's residential neighborhoods to these timeshare -like uses would eliminate residential dwelling units that would otherwise be available for long-term residential use, thereby further exacerbating the lack of long-term available housing in the City. A home that is used for timeshare purposes would no longer be available for households to use as their long-term residence. Impacts to Character of the City's Residential Districts Timesharing projects have the same character as commercial hotels, motels, and other transient occupancy uses due to the multiple short- term occupancies by those participating in timesharing projects. For this reason, the activity is better suited in commercial or quasi - commercial zones. The use is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. The intensity of the activity is a significant reason why these uses can change the character of a residential neighborhood. Long-term residents, whether owners or renters, occasionally have guests and parties, but timeshare homes are used exclusively by people who are coming to the City on a short-term basis -mast likely for vacation or leisure: increasing the likelihood of frequent gatherings and parties generating noise in excess of what the neighborhood normally generates. Timeshare owners and visitors will most likely stay out later, entertain more, and gather in larger numbers while on vacation. Timeshare uses can change the character of a residential neighborhood by having it serve not only as a residential area, but also a visitor lodging area and subjecting the neighborhood to the impacts that come with the more intense land use. Further, the nature of the timeshare use itself can impact the residential character of the City's residential zones because they ensure that the timeshare users can only use their property for a limited amount of time each year. Each co-owner is in the unit on a short-term basis, so they do not have the time to participate in activities or build the relationships that create the fabric of a community. Given the City's desire to strike a balance between the demands of the City's visitor and tourist economy, and retaining its character and quality of life, the City has an interest in maintaining housing stock in its residential districts for long-term residents. Emerging Businesses Recently, certain businesses have emerged which purport to sell "co -ownership" shares in residential property. These businesses, as staff understands the business model, start by purchasing homes or entering contracts to purchase homes in tourist destinations in desirable locations like Hermosa Beach. These businesses then form a limited liability company ("LLC"), which owns title to the residential home. The "co -owners" each purchase a one -eighth share and are entitled to use the residential property for a certain number of days per year according to their share of ownership in the LLC. The one -eighth interest entitles the purchaser to stay at the property for up to 45 days per year in increments of 2-14 days, including one "special day" (Fourth of July, Thanksgiving, Christmas, etc.). The stays are reserved on an app, and while each co-owner is prohibited from renting the home as a short-term rental, they are permitted to allow other guests to stay there during their allotted days. Once shares in an LLC are sold, the business continues to manage the homes, including providing landscaping and pool maintenance, furnishing the homes, and paying all expenses, which are then passed through to the co -owners of the LLC. The Ordinance The City does not currently have regulations in place governing the use of timeshares within the City or other businesseslarrangements that are identical or similar to a timeshare use. The purpose of any ordinance should be to ensure that the City is able to maintain its existing and limited housing stock for use in long-term residency, and to maintain the character of its residential zones. Completely banning "fractional ownership," joint tenancies, or ownership by business entities such as LLC is not advisable. There are numerous properties in the City's residential zones currently owned by numerous owners or by LLCs. Thus, the ordinance is geared toward the specific impacts of the at -issue uses -timeshare -like uses organized and run by third parties for a fee. The proposed ordinance (Attachment 1) does not target or single out any business or ownership structure. The proposed ordinance allows for these types of timeshare uses in the City's C-1 and-G-2-zones, subject to a Conditions Use Permit. Timeshare uses would be prohibited in all other zones. In order to avoid an over -inclusive ordinance that prohibits joint tenancies or other type of ownership structure that do not have the same deleterious impacts, the proposed ordinance focuses on the actual use of the property, as compared to the ownership structure, and in pertinent regulates this "timeshare use" subject to a "timeshare plan." Timeshare plan is defined as: httpsalhermosabeach.legistar.com/LegislationDetail.aspx?ID=5850234&GUID=FFC63C4B-88FF-48D0-8735-DD895DF161 B5 213 3-116 4/27123. 9:31 AM City of Hermosa Beach - File #: REPORT 22-0586 "Any arrangement, plan, scheme, or similar device, facilitated, offered, or organized by a third -party non -purchaser, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby purchasers, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, 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." At its April 18, 2022 meeting, the Planning Commission reviewed and recommended approval of the proposed ordinance by adopting Resolution P.C_ 22-07 (Attachment 2) Environmental Determination: The proposed ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in the C-1 and G2 commercial zones within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. General Plan Consistency_ The proposed text amendment has been evaluated for consistency with the City's General Plan. Relevant Policies are listed below Land Use and Design Element Goal 1. Create a sustainable urban form and land use patterns that support a robust economy and high quality of life for residents. Policies • 1.5 Balance resident and visitor needs. Ensure land uses and business provide for the needs of residents as well as visitors. • 1.7 Compatibility of uses. Ensure the placements of new uses does not create or exacerbate nuisances between different types of land uses. Goal 2. Neighborhoods provide for diverse needs of residents of all ages and abilities and are organized to support healthy and active lifestyles. Policies: • 2.4 Single density neighborhoods. Preserve and maintain the Hermosa Hills, Eastside, Valley, North End and Hermosa View neighborhoods as predominantly single-family residential neighborhoods • 2.5 Neighborhood preservation. Preserve and enhance the quality of residential neighborhoods by avoiding or abating the intrusion of disruptive, nonconforming buildings and uses. Fiscal Impact: There is no fiscal impact associated with the recommended action. Attachments: 1. Draft Ordinance 2. Resolution P.C. 22-07 3. Link to April 19, 2022 Planning Commission Staff Report Respectfully Submitted by: Patrick Donegan, Assistant City Attorney Concur: Jeannie Naughton, Community Development Director Noted for Fiscal Impact: Viki Copeland, Finance Director Legal Review: Patrick Donegan, Assistant City Attorney Approved: Suja Lowenthal, City Manager Staff Repari Updated on 9/27/2022 - See Track Changes https:tlhermosabear-h.legistar.com/LeyislationDLtail.aspx?ID=5850234&GUID=EEC63G4B-88FF-48DO-8735-DD895DF161 B5 313 3-117 DocuSign Envelope IQ: A34E7110-E406-434D-A977-DC81 BEQ8558E CITY OF HERMOSA BEACH ORDINANCE NO.22-1453 AN ORDINANCE OF THE CITY OF HERMOSA BEACH. AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT. THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH DOES HEREBY ORDAIN AS FOLLOWS: Section 1. Findings. A. The City of Hermosa Beach ("City") is a scenic beachfront city, known for its many diverse restaurants, local retailers and popular commercial areas like its Downtown area and Pier Avenue. B. Preserving the City's costal resource and the quality and character of the City has been a focal point of the City's land use planning for decades, and remains a primary focus in the City's current General Plan. C. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. D. The City values and welcomes all visitors to the City and recognizes their contributions to the City's economy, but finds that in order to maintain the City's long term viability as a community where people not only come to visit, but also live, work and contribute to the long term betterment of the community through participation in the City's schools, local community groups, civic government and local serving businesses, the City must maintain a balance between residential land uses and visitor serving uses. E. The City's existing housing stock is significantly impacted, with demand outweighing supply, resulting in extremely high housing prices as detailed in the accompanying staff report. A limited supply of suitable vacant land, exorbitantly high land costs, and limitations in the City's existing infrastructure, among other factors, have limited the construction of additional housing in the City. Page 1 of 10 #22-1453 3-118 DocuSign Envelope ID: A34F711O-E406-434D-A977-DC81BED8558E F. According to the U.S. Census Bureau, the current median household income in the City is $136,702, while the estimated value of owner - occupied housing units from 2015--2019 was approximately $1,542,900 with current real estate listings suggesting that prices are increasing significantly, meaning that homes in the City are not affordable to the median household in the City. G. The conversion of existing residential units to uses other than long-term residential use will further reduce the City's existing long-term housing supply, causing further imbalance between the demand for housing in the City and the existing supply, not only altering the character of the City's residential neighborhoods, but also presenting further challenges to the City's efforts to provide affordable housing within the community. H. The City additionally has, for many years, worked to preserve its existing housing stock for long term residential use, both to maintain the character of its residential neighborhoods and prevent residential districts from becoming visitor and tourist serving districts, and to ensure that it would not be converted to uses other than long-term residential uses. 1. The high impact use associated with timeshares, combined with the frequent turnover and commercial management involved in timeshare properties is not consistent with the purpose and nature of residential districts in the City. Rather, they are commercial in nature, in that these timeshare uses are structured as a short-term, tourist oriented, visitor serving use of the subject properties. The use of properties as timeshares adds excessive noise and traffic to residential districts by using these properties for high impact tourist oriented uses more appropriately located in commercial districts of the City. J. The use of residential properties for timeshare uses will further reduce the availability of housing stock for long-term residential use, and create a new demand for timeshare uses of residential properties. K. This encroachment of tourist oriented, visitor serving uses in residential neighborhoods is likely to compromise the character of residential areas within the City, and further increase the costs for housing in the City, undermining the City's efforts to provide a balance of housing for all income levels in the City. L. The City's authority to enact zoning ordinances is based on the powers accorded cities and counties under the State constitution to make and enforce police regulations. This police power grants the City broad Page 2 of 10 #22-1453 3-119 DocuSign Envelope ID: A34F7110-E406-434D-A977-DC81BED8558E authority to regulate the development and use of real property within its jurisdiction to promote the public welfare. M. Pursuant to and in accordance with this authority, the City Council desires to prohibit timeshare uses in residential areas, and only allow them in the C- 2 commercial zone within the City, pursuant to a conditional use permit. N. The City's Planning Commission held a duly noticed public hearing on April 19, 2022, as required by law to consider all the information presented by staff, and public testimony presented in writing and at the meeting. O. On April 19, 2022, the City's Planning Commission recommended that the City Council adopt this Ordinance amending the City's Municipal Code as described herein. P. On September 28, 2022, the City Council held a duly noticed public hearing, accepting testimony from the public, and discussed the proposed amendments and staff's recommended approval of this Ordinance and adopted on first reading the Ordinance. Q. On October 11, 2022, the Ordinance was brought back for a second reading and adopted by the City Council. R. The proposed zoning amendments are consistent with the General Plan goals, policies and implementation programs as the Ordinance will continue to preserve the character of the City; will preserve the City's residential districts for residential uses; and will help to preserve the City's existing housing stock for long term residential uses, to avoid further exacerbating the existing impacts on the City's housing supply. Section 2. The above recitals are hereby incorporated as though set forth in this section. Section 3. Section 17.40.230 (Time Share Uses) is hereby added to Chapter 17.40 (Conditional Use Permit and Other Permit Standards) of Title 17 (zoning) of the City of Hermosa Beach Municipal Code, to read as follows: Section 17.40.230 Timeshare Uses A. Purpose and Findings. There is a critical shortage of permanent, long-term housing in the City of Hermosa Beach ("City"). A limited supply of suitable vacant land, land values, Page 3 of 10 #22--1453 3-120 DocuSign Envelope ID: A34F7110-E406-434D-A977-❑C81BED8558E and market demand for land for other uses, have limited the construction of additional housing in the City. The City is a popular tourist destination known for its scenic beachfront location, its many diverse restaurants, local retailers and popular commercial areas like its Downtown area and Pier Avenue. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. Timeshare uses are not an appropriate land use in the City's residential zones due to the multiple occupancy of timeshare properties, the short-term, tourist oriented use of such property and commercial management of timeshare facilities, all of which create increased traffic generation, excessive noise, disruption to residential communities through commercial -level maintenance of the timeshare facilities, and therefore are appropriately confined to commercial zones. Conversion of permanent housing to timeshare facilities removes existing housing units from the City's existing stock and exacerbates an already severe housing shortage. It is therefore in the public interest to prohibit conversions of existing housing units into timeshare facilities, as to do so eliminates needed housing stock by diverting those units to a tourist -oriented, commercial use. B. Definitions. For purposes of this Section, the following words and phrases shall have the meaning respectively ascribed to them by this Section: "Accommodation" means any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single-family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.040. "Building" shall have the meaning ascribed to it by Section 17.04.040. "Dwelling unit" shall have the meaning ascribed to it by Section 17.04.040. "Managing entity" means the person who undertakes the duties, responsibilities and obligations of the management of a timeshare plan. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. Page 4 of 10 #22-1453 3-121 DocuSign Envelope ID: A34F7110-E406-434D-A977-DC8113ED8558E "Timeshare instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a timeshare plan and includes the declaration dedicating accommodations to the timeshare plan. "Timeshare interest" means the right to exclusively occupy a timeshare property for a period of time on a recurring basis pursuant to a timeshare plan, regardless of whether or not such right is coupled with a property interest in the timeshare property or a specified portion thereof. "Timeshare plan" means any arrangement, plan, scheme, or similar device, facilitated, offered, or organized by a third -party non -purchaser, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby purchasers, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, 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. "Timeshare property" means one or more accommodations subject to the same timeshare instrument, together with any other property or rights to property appurtenant to those accommodations. "Timeshare use" means the use of one or more accommodations or any part thereof, as a timeshare property pursuant to a timeshare plan. C. Timeshare Uses Restricted to C-2 Downtown Commercial Zone. Timeshare uses are conditional uses within the City's C-2 Downtown Commercial Zone, subject to approval of a conditional use permit applied for and approved in conformance with this Section. Timeshare uses are not permitted in any other Zones in the City. D. Application Process and Development Standards. A. Application Process. Approval of a conditional use permit for timeshare uses in the C-2 Downtown Commercial Zone within the City shall be required in accordance with the requirements of Chapter 17.40. In addition to the requirements contained in Chapter 17.40, an application for a timeshare use shall be accompanied by the following documents which shall be subject to the approval of the Community Development Director: 1. Management Plan. A management plan shall describe the methods employed by the applicant. to guarantee the future adequacy, stability, and Page 5 of 10 #22-1453 3-122 DocuSign Envelope ID: A34F7110-E406-434D-A977-DCBIBED8558E continuity of a satisfactory level of management and maintenance of the time share use. 2. Application Requirements. In addition to any application requirements established by this section and any other applicable requirements of this code, the following information shall be submitted as part of any application to develop or establish a timeshare use: a. Typical floor plans for each accommodation. b. The phasing of the construction of the accommodations on the timeshare property, if applicable. C. A description of any ancillary uses which are proposed in conjunction with the time share use. d. A description of the method of management of the time share use and indication of the management entity for the time-share property. e. Any restrictions on the use or occupancy of the accommodations. f. Any other information or documentation the applicant, City staff or commission deems reasonably necessary to the consideration of the timeshare use, including any required environmental documents. B. Development Standards and Operational Requirements. Notwithstanding any other provision of this Section, the following conditions must be met by any timeshare use in any conditionally permitted zone. Additional requirements may be attached to a conditional use permit or development agreement if found to be necessary to assure that the timeshare use meets the intent of this Section: 1. Timeshare uses developed in the C-2 Downtown Commercial Zone within the City shall be limited to accommodations in upper floors in conjunction with a mixed -use project. 2. No existing residential use in the C--2 Downtown Commercial Zone within the City shall be converted to a timeshare use. 3. Development Standards. The timeshare use shall comply with all development standards for the zone in which it is located. 4. Parking. Parking shall be provided as follows: Page 6 of 10 # 22-1453 3-123 DocuSign Envelope ID: A34F7110-E406-434D-A977-DC81BED8558E a. For accommodations of two or fewer bedrooms, one parking space shall be provided for each accommodation. b. For accommodations of three or more bedrooms, two parking spaces shall be provided for each accommodation. 5. Modification or Waiver of Standards. The Planning Commission may modify or waive one or more of the regulations contained in this Section if it determines that strict compliance is not necessary to achieve the purpose and intent of this Section. E. Violations, Enforcement and Civil Penalties. 1. Any responsible person, including but not limited to an owner of a timeshare interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this Section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this Section. Such violation shall be punishable pursuant to Section 1.04.020 of the City of Hermosa Beach Municipal Code. 2. Timeshare use, and/or advertisement for timeshare use, of an accommodation in violation of this Section is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance. Any such nuisance may be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 8.28 except that the civil penalty for a violation shall be one thousand dollars ($1,000.00). Each day the violation occurs shall constitute a separate offense 3. Any responsible person who violates this Section shall be liable and responsible for a civil penalty of one thousand dollars ($1,000.00) per violation per day such violation occurs. The City may recover such civil penalty by either civil action or administrative citation. Such penalty shall be in addition to all other costs incurred by the City, including without limitation the City's staff time, investigation expenses and attorney's fees. a. Where the City proceeds by civil action, the court shall have discretion to reduce the civil penalty based upon evidence presented by the responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the court should consider the purpose of this Section to prevent and deter violations and whether the reduction Page 7 of 10 #22-1453 3-124 DocuSign Envelope ID: A34F7110-E406-434D-A977-DCBIBED8558E of civil penalties will frustrate that purpose by resulting in the responsible person's enrichment or profit as a result of the violation of this Section. In any such civil action the City also may abate and/or enjoin any violation of this Section. b. Where the City proceeds by administrative citation, the City shall provide the responsible person notice of the right to request an administrative hearing to challenge the citation and penalty, and the time for requesting that hearing. i. The responsible person shall have the right to request the administrative hearing within forty-five (45) days of the issuance of the administrative citation and imposition of the civil penalty. To request such a hearing, the responsible person shall notify the City clerk in writing within forty-five (45) days of the issuance of the citation. The appeal notification shall include all specific facts, circumstances and arguments upon which the appeal is based. ii. The City Manager is hereby authorized to designate a hearing officer to hear such appeal. The City hearing officer shall conduct a hearing on the appeal within ninety (90) days of the request for the hearing unless one of the parties requests a continuance for good cause. The hearing officer shall only consider those facts, circumstances or arguments that the property owner or responsible person has presented in the appeal notification. iii. The hearing officer shall render a decision in writing within thirty (30) days of the conclusion of the hearing. The hearing officer shall have discretion to reduce the civil penalty based upon evidence presented by the property owner or responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the hearing officer should consider the purpose of this Section to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the property owner's or responsible person's enrichment or profit as a result of the violation of this Section. iv. Any aggrieved party to the hearing officer's decision on the administrative appeal may obtain review of the decision by filing a petition for writ of mandate with the Los Angeles County Page 8 of 10 #22-1453 3-125 DocuSign Envelope ID: A34F7110-E406-4346--A977-DC81BED855BE Superior Court in accordance with the timelines and provisions set forth in Government Code Section 53069.4. v. If, following an administrative hearing, appeal, or other final determination, the owner of the property is determined to be the responsible person for the civil penalty imposed by this section, such penalty, if unpaid within forty-five (45) days of the notice of the final determination, shall become a lien to be recorded against the property on which the violation occurred pursuant to Chapter 8.28. Such costs shall be collected in the same manner as county taxes, and thereafter the property upon which they are a lien shall be sold in the same manner as property now is sold for delinquent taxes 4. Any violation of this Section may also be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 8.28 except that the civil penalty under Chapter 8.28 for a violation shall be one thousand dollars ($1,000.00). Each day the violation of this Section occurs shall constitute a separate offense. The remedies under this Section are cumulative and in addition to any and all other remedies available at law and equity. Section 3. Section 17.26.030 of Chapter 17.26 (C1, C2 and C3 Commercial Zones) of Title 17 (Zoning) is amended to add the following entry to the chart of land use regulations USES I C1 C2 C3 See Section Timeshares I I U 17.40.230 Section 4. CEQA. This ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines (the Guidelines), and the environmental regulations of the City. The City Council hereby finds that this ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c) (2) and 15060(c) (3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in the C-2 Downtown Commercial zone within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b) (3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because if can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. Page 9 of 10 422-1453 3-126 DocuSign Envelope ID: A34F7110-E406-434D-A977-DC81 BED8558E Section 5. Effective Date. Pursuant to California Government Code section 36937, this Ordinance shall take effect thirty (30) days after its final passage. Section 6. Certification. The City Clerk is directed to certify the passage and adoption of this Ordinance; cause it to be entered into the City's book of original ordinances; make a note of the passage and adoption in the records of this meeting; and, within fifteen (15) days after the passage and adoption of this Ordinance, cause it to be published or posted in accordance with California law. PASSED, APPROVED and ADOPTED this 11 th day of October, 2022. AYES: Councilmembers Campbell, Massey, Mayor Pro Tem Jackson, and Mayor Detoy NOES: None. ABSTAIN: None. ABSENT: None Mayor Raymond A. Jackson PRESIDENT of the City Council and MAYOR of the City of Hermosa Beach, CA ATTEST: APPROVED AS TO FORM: -� rm#�(k VeK.t V)A, Myra Maravilla Patrick Donegan City Clerk City Attorney Page 10 of 10 #22-1453 3-127 DocuSigrn Envelope ID: A34F7110-E406-434D-A977-DC81BED8558E State of California ) County of Los Angeles ) ss City of Hermosa Beach ) December 27, 2022 Certification of Council Action ORDINANCE NO.22-1453 AN ORDINANCE OF THE CITY OF HERMOSA BEACH. AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT 1S EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT. I, Myra Maravilla, City Clerk of the City of Hermosa Beach, California, do hereby certify that the above and foregoing Ordinance No. 22-1453 was duly approved and adopted by the City Council of said City at its adjourned regular meeting thereof held via hybrid on the 1 lth day of October 2022 and passed by the following vote: AYES: Mayor Detoy, Mayor Pro Tem Jackson, Councilmembers Campbell, Armato, and Massey NOES: None ABSTAIN: None ABSENT: None • Myra Maravilla, MPA, CMC City Clerk 3-128 Exhibit M City of Palm Desert Time Share Ordinance and Supporting Evidence 3-129 CITY OF PALM DESERT DEPARTMENT OF DEVELOPMENT SERVICES CITY COUNCIL STAFF REPORT MEETING DATE: April 28, 2022 PREPARED BY: Rosie Lua, Principal Planner REQUEST: Consideration of approval to the City Council for Zoning Ordinance Amendment to modify Palm Desert Municipal Code Section 25.34.060 regarding Time -Share Projects. Recommendation Waive further reading and pass to second reading City Council Ordinance No. approving Zoning Ordinance Amendment 22-0001 to modify Palm Desert Municipal Code Section 25.34.060 regarding Time -Share Projects. Planning Commission _Recommendation On January 18, 2022, the Planning Commission considered the Zoning Ordinance Amendment (ZOA) 22-0001 to modify Palm Desert Municipal Code Section 25.34.060 regarding Time -Share Projects. Planning Commission approved Resolution No. 2805 recommending to the City Council approval by vote 5-0. City Council Meetings On February 24, 2022, the City Council opened the public hearing and approved a request from staff to continue to the meeting of March 24, 2022. On March 24, 2022, another continuance of the public hearing was granted to April 28, 2022, allowing staff to meet with the City's Short Term Rental (STR) Subcommittee and time for staff to make appropriate changes to the zoning ordinance. Strategic Plan • Land Use, Housing & Open Space — Priority 5: "Utilize progressive land use policies and standards to support ongoing and future needs." Background Analysis On November 18, 2021, the City Attorney presented a memo to City Council addressing the Pacaso business model purchasing property in tourist destinations like the City of Palm Desert targeting the second or vacation home market. Founded in 2020, the Pacaso owns title to the residential home by forming a limited liability company ("LLC"), then markets "co - ownership" interests in the homes to up to eight individuals for a certain number of days per 3-130 April 28, 2022 ---Staff Report Case No. ZOA 22-0001 Time -Share Uses - Pacaso Page 2 of 4 year as specified in their share of ownership in the LLC. The one -eighth interest entitles the purchaser to stay at the property for up to 45 days per year in increments of 2-14 days, including one "special day" (Fourth of July, Thanksgiving, Christmas, etc.). The stays are reserved through a mobile application, and while each co-owner is prohibited from renting the home as a short-term rental, they are permitted to allow other guests to stay there during their allotted days. Once shares in an LLC are sold, a Pacaso manages the homes, providing landscaping and pool maintenance, furnishing the homes, and paying all expenses, which are then passed through to the co -owners of the LLC. The City Attorney opined that the Pacaso business formation is a "timeshare" as defined in the Business and Profession Code Section 11212(z) and regulated by Section 25.34.060 (Time -Share Projects) of the Palm Desert Municipal Code (PDMC). The Pacaso's are not regulated by the state law since there are less than ten co -owners, the minimum number of co -owners required to be regulated by state law. The PDMC permits timeshare projects in planned residential zones, general commercial zone, or the planned commercial resort zone and includes a requirement for a resort hotel having 500 or more rooms and an 18-hole golf course of not less than 6,400 yards, and then only if and when a conditional use permit has been obtained from the Commission in accordance with Section 25.72.050 (Conditional Use Permit) of the code. The Pacaso type of business formation would not be permitted to operate in a single-family residential property and operate as a timeshare use since the use does not meet all the criteria of the PDMC. The purpose of this ordinance is to ensure that the City is able to maintain its existing and limited housing stock for use in long term residency, and to maintain the character of its residential zones. The conversion of homes in the city to timesharing projects would eliminate residential dwelling units that would otherwise be available for long-term residential use, thereby further exacerbating the lack of long-term available housing in the City. To Staff's knowledge, Pacaso has facilitated the purchase of and management of at least one (1) single family home and currently advertising three (3) homes for one -eighth purchase within the City of Palm Desert. No other Pacaso type entities are known to have ownership of homes within the City. Discussion Staff has studied the timeshare ordinance amendment and its intended regulations including a consultation with the Short -Term Rental (STR) subcommittee to discuss the proposed amendment and the Pacaso type business formations. The Pacaso's are not regulated by the Short -Term Rental Ordinance of the city since the business operations do not allow short term rentals as part of their structure. In addition, the subcommittee discussed the City's intent to regulate arrangements of multiple parties and its direct impact on the housing stock. In the formation of this ordinance, it is not the City's intent to regulate arrangements whereby multiple parties join in directly purchasing full ownership of an accommodation and thereafter agree upon arrangements for their shared use. For example, the city is not regulating ownership between family or friends who chose to purchase a property, form an LLC, and the manage the rental] or upkeep through a management company so long as a fractional ownership structure is not formed. 3-131 April 28, 2022 --Staff Report Case No. ZOA 22-0001 Time -Share Uses - Pacaso Page 3 of 4 The proposed ordinance amendment to Section 25.34.060 (Time -Share Project) includes a more robust definition, to refer to current California law, and to provide a broader scope to include Pacaso types of business formations. In addition, it includes a section for violations, enforcement, and civil penalties to regulate such proposed business operations. It should be noted that the ordinance in this staff report differs from the Planning Commission's recommendation, Resolution No. 2805 which was revised to provide further clarifications on the intent of the ordinance as stated in the discussion above. General Plan The General Plan promotes goals and policies to protect and enhance community value in neighborhoods and its surroundings. Land Use and Community Character Policy 1.1 (Scale of development) promotes the City's corridors to use design techniques to a moderate height and use and ensure compatible fit with surrounding development. Therefore, the proposed amendment to the timeshare ordinance supports the City's goal in meeting the intent of the General Plan. Public Input Public noticing was conducted in accordance with State law. A public hearing notice was published on February 11, 2022, in The Desert Sun. The public hearing was opened on February 11, 2022, continued to March 24, 2022, and further continued to April 28, 2022. Staff has received a half dozen phone calls from the public concerning Pacaso co - ownership within their neighborhoods and inquiring if Short-term Rental Ordinances would apply. On March 10, staff received a phone call from Marcus Schwab, a resident that lives on Bel Air Road expressing concern of business formations functioning like timeshares that affects the character of his neighborhood. Not knowing who their neighbors are was expressed as a real concern. Mr. Schwab identified the property as 72870 Bel Air Rd which is being advertised on eXp Realty's website, a home selling in his neighborhood that he says is priced high which can result in pricing out qualified homebuyers. Other residents have expressed concerned of properties on 72694 Skyward Way and 72985 Somera Rd being advertised as timeshare ownership. These particular properties are listed in the Pacaso website as well as other realtor websites including Trulia, Ziilow, Redfin, etc. The properties mentioned above have all been confirmed to be associated with Pacaso. However, since the ownership of these properties includes eight owners (118 ownership), it is difficult to track if any property has been sold full or partial ownership. Environmental Review The adoption of this ordinance has been analyzed for compliance with the California Environmental Quality Act (CEQA) pursuant to CEQA (Pub. Resources Code, § 21000 et seq.) ("CEQA") and the State CEQA Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.) it has been determined that the amendments do not meet the definition of a project because the amendments do not have the potential to cause either a direct physical change or a 3-132 April 28, 2022 —Staff Report Case No. ZOA 22-0001 Time -Share Uses - Pacaso Page 4 of 4 reasonably foreseeable indirect physical change in the environment. The proposed amendments are consistent with the General Plan goals of ensuring the quality of life for the community. Because the amendment is not a project under CEQA, they are not subject to further environmental review. Findings of Approval Findings can be made in support of the amendment and in accordance with the City's Municipal Code. Findings in support of this ZOA are contained in the Ordinance No. , attached to this staff report. LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW ASSISTANT CITY MANAGER Ma4-%ALv-cw6z. NIA -Andy Firestine Robert W. Hargreaves Martin Alvarez, Dir. of Veronica Chavez Andy Firestine City Attorney Development Services Director of Finance Assistant City Manager City Manager L. Todd Hileman: tL. -rodd WLemavi. ATTACHMENTS: 1. Draft City Council Ordinance No. 2. Exhibit A —Ordinance 3. Planning Commission Resolution No. 2805 4. Planning Commission Draft Minutes of January 18, 2022 5. City Council Public Hearing Notice 6. City Council Memo dated November 18, 2021 7. Public Comments 3-133 ORDINANCE NO. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, AMENDING PALM DESERT MUNICIPAL CODE, CHAPTER 25, MODIFYING SECTION 25.34.60 REGARDING TIME-SHARE PROJECTS CASE NO: ZOA 22-0001 WHEREAS, the Planning Commission of the City of Palm Desert, California, did on the 18th day of January 2022, hold a duly noticed public hearing to consider the request by the City of Palm Desert for approval of the above -noted, and adopted Resolution No. 2805, recommending that the City Council adopt the Zoning Ordinance Amendment (ZOA) for said projects regulating the time-share projects; and WHEREAS, the Zoning Ordinance Amendment (ZOA) modifies the Palm Desert Municipal Code (PDMC) Section 25.34.60 (Time -Share Projects) and implements a requirement for time share uses; and WHEREAS, the City Council of the City of Palm Desert, did on the 24th day of February 2022, hold a duly noticed public hearing to, the City Council opened the public hearing and approved staff's request to continue to the 24th of March 2022. On the 24th of March 2022, another continuance of the public hearing was granted to the 28th of April 2022. On the Wh of April 222, the City Council considered the request by the City of Palm Desert for approval of a ZOA determined that the time-share process is consistent with the City's General Plan; and WHEREAS, at said public hearing, upon hearing and considering all testimony and arguments, if any, of all interested persons desiring to be heard, said City Council did find the following facts and reasons exist to approve said request: SECTION 1. Adoption of Recitals. The City Council hereby adopts the foregoing recitals as its findings in support of the following regulations and further finds that the following regulations are beneficial and appropriate to protect the health, safety, and welfare of the residents and businesses of Palm Desert within the City limits. A. The City of Palm Desert, California ("City") is a municipal corporation, duly organized under the constitution and laws of the State of California; and B. The Planning and Zoning Law authorizes cities to establish by ordinance the regulations for land use and development. SECTION 2. Amendment. The City Council of the City of Palm Desert, California, approve, and adopt the PDMC amendment to Section 25.34.60 (Time -Share Projects) as shown in Exhibit A, which is attached hereto and incorporated herewith. SECTION 3. Severabili . If any section, subsection, subdivision, paragraph, sentence, clause, or phrase in this ordinance or any part thereof is for any reason held to be unconstitutional or invalid or ineffective by any court of competent jurisdiction, such decision shall not affect the validity or effectiveness of the remaining portions of this ordinance or any 3-134 ORDINANCE NO. part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause, or phrase thereof irrespective of the fact that one (1) or more subsections, subdivisions, paragraphs, sentences, clauses, or phrases be declared unconstitutional, invalid, or ineffective. SECTION 4. Publication. The City Clerk of the City of Palm Desert, California, is hereby directed to publish this ordinance in The Desert Sun, a newspaper of general circulation, published and circulated in the City of Palm Desert, California, and shall be in full force and in effect thirty (30) days after its adoption. PASSED, APPROVED, AND ADOPTED by the City Council of the City of Palm Desert, California, at its regular meeting held on the 28th day of April 2022, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: ATTEST: ANTHONY J. MEJIA, CITY CLERK CITY OF PALM DESERT, CALIFORNIA 2 JAN C. HARNIK, MAYOR 3-135 "EXHIBIT A" ZONING ORDINANCE AMENDMENT SECTION 1. Amendment to Palm Desert Municipal Code. Palm Desert Municipal Code section 25.34.060 is hereby amended as follows: "25.34.060 Time -Share PFeje SUses A. Purpose. The purpose of the special use regulations for time-share prefeets uses is to establish special location and site development standards. B. Definitions 1. "Accommodation" means any dwelling unit apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential_ use and occupancy, including but not limited to a single family dwelling, or unit within a two family dwelling, three family dwelling,multiple family dwelling, or townhouse dwelling as defined in Section 17.04.160. 2. "Developer" means person, who at any point in time owns or has an option or contract to acquire eleven or more time-share interests for purposes of sale in the ordinary_ course of business if the time-share interests were acquired or are to be acquired from. the original recipient of a public report for the time-share plan, or from a person who succeeded to the interest of the original recipient in eleven or more time-share interests in a time-share plan. 3. "Owner" means owner of a time-share interest. 4. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. 5. "Time-share instrument" means one or more documents by whatever name denominated creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. 6. "Time-share interest" means and includes either of the following: (i) A "time-share estate," which is the right to exclusively_ occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, coupled with a freehold estate or an estate for years with a future interest in a time-share property or a specified portion thereof. ii A "time-share use," which is the right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a_time-share plan, which right is neither coupled with a freehold interest nor coupled with an estate for years with a future interest, in a time-share property. 7. "Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, sale, lease, deed, license, right to use agreement, or 3-136 by any other means whereby a purchaser, in exchange for consideration receives the right to exclusive use of an accommodation or accommodations whether through the granting of ownership rights, possessory rights or otherwise fora period of time less than a full ear during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years. "Timeshare Plan" does not include arrangements whereby multi le parties loin in directly purchasingfull ownership of an accommodation and thereafter agree upon arrangements for their shared use. 8. "Time-share Property" means one or more accommodations subject to the same time-share instrument together with any other property or rights to --property appurtenant to those accommodations. 9. "Time-share use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan. 9 C. Permitted zones. A time-share nr use shall be permitted only in a planned residential zone, a general commercial zone, or a planned commercial resort zone. Any time- share nrnprvjBGt use shall be developed in conjunction with a resort hotel having 500 or more rooms and an 18-hole golf course of not less than 6,400 yards, and then only if and when a conditional use permit has been obtained from the Commission in accordance with Section 25.72.050 (Conditional Use Permit) of this code. D. Application submittal requirements. In addition to standard application submittal requirements, an applicant for a conditional use permit approval involving a time- share nr^� use shall submit in the application at least the following information: Y1. Copies of documents and information required pursuant to Article 12.2 of the California AdmonistFatove. Code of Regulations, Sections 2809.1, 2809.2, and 2809.3 wherein the requirements for a "substantially properly completed" application for a final subdivision public report are enumerated, excluding those documents so enumerated which are subject to the approval of the City and therefore otherwise available to the City. In the event such documents and information have not been filed with the California Department of Real Estate at the time an applicant applies for a conditional use permit, the applicant shall furnish such documents and information upon the submission of such documents and information to the Department of Real Estate, but in no event later than the issuance of the conditional use permit. 2. In the event an existing condominium project is proposed to be converted to a whole or partial time-share PFGj8Gt use, a verified description or statement of the number and percentage of the current condominium owners desiring or consenting to the proposed conversion of some or all of the units to a time-share basis shall be submitted. Also, in such instance there shall be submitted to the Commission prior to or during the hearing process, a verified statement of the number and percentage of owners who have received notification, either personally or by receipted certified US mail. 3. In the case of a new mixed project (i.e., time-sharing condominium/rental), a description of the means proposed to be employed to disclose the number and location of all time-share unk6 accommodations within the PFOjest time-share use shall be submitted. 3-137 4. Description of time periods, types of nits accommodations, and which wits accommodations are in the time-share program (if less than all), and the length of time each of the 4Rits accommodations are committed to the time-share PFegraM plan shall be submitted. B. E. Requirements. Notwithstanding any other provisions of this chapter, the following requirements must be met by any time-share developmeRt use in any permitted zone: 1. The time-share prejec use must be composed of -"time-share estates" 2. Ali maintenance agreements and conditions, covenants, and restrictions must be approved by the City. 3. The minimum time-share use interest exclusive occupancy period shall be for one week (seven days). 4. Prnl ense Developer of the time-share plan shall post a maintenance bond, letter of credit, or cash deposit to ensure the maintenance of any landscaping along the perimeter of the pFejeGt time-share use abutting any public right-of-way. The amount of the bond, letter of credit, or cash deposit shall be equal to 25 percent of the annual budget of the time-share use owner's association having the duty to maintain the exterior of the time- share property. pFeject which is for such landscaping expenses. The bond, letter of credit, or cash deposit shall runt to the City and shall remain in place for life of the pFejec time-share plan. 5. With respect to a time-share pFeject use, all interests created therein shall be subject to a public facilities impact mitigation fee of $150 per week share. With respect to each week share in a time-share pfejest-use, a public facilities impact fee payable under this section shall be paid on the first day of the first calendar month following the sale and conveyance of such week share by the speRser developer of a time-share deject plan to an individual consumer (excluding bulk sales from one sponsor developer to another, in which case the successor sponsor developer__ shall have the obligation to pay the public facilities impact fee described herein upon the sale and conveyance of a week share to a consumer). On the first day of each calendar month, or less frequently if required by the Council, a sponsor- developer of a time-share pFejeGt plan shall also submit a written report to the City which specifies the number of week shares in the time-share dejectt plan which have been sold and conveyed in the preceding calendar month. F. Minimum number of units. The minimum number of units in a time-share project shall be 50. G. Development standards. Time-share prejests uses shall be designed to conform to the standards for hotel developments in the event the time-share pFejeGt use is located in a planned commercial resort or general commercial zone. The time-share pFojec-t use must comply with all development standards of the zone in which it is located. With respect to time-share PFGjivsr, uses developed within a planned residential zone, the density of the time-share deject uses shall not exceed the density permitted in such zone for 3-138 residential projects; with respect to time-share PFejests uses developed in a general commercial zone or a planned commercial resort zone, the density of the time-share projeGt uses shall not exceed the density permitted in such zone for general commercial or planned commercial projects. In determining the density of a time-share PFsjsst use, upon the request of an applicant, the Director shall have the authority to transfer the density permitted in other similarly zoned property owned by an applicant to the time-share pFqest use. H. Violations Enforcement and Civil Penalties 1. Any responsible person, including but not limited to an owner of a time-share interest management entity, agent, or broker who uses or allows the use of or advertises or causes to be printed, published, advertised or disseminated in any way and through an medium the availability for sale or use of an accommodation in violation of this section is guilty of a misdemeanor for each day in which such accommodation is used allowed to be used or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.12 General Penalty). 2. Any responsible person, including by not limited to an owner of a time-share interest management entity, agent, or broker who uses or allows the use of or advertises or causes to be printed, published advertised or disseminated in any way and through any medium the availability for sale or use of an accommodation in violation of this section is subject to administrative fines as set forth in Chapter 8.81 Administrative Citations), An person issued an administrative citation pursuant to this section shall for each separate violation be submect to: 1 an administrative fine in an amount not to exceed one thousand dollars ($1 000) for the first citation 2 an administrative fine in an amount not to exceed three thousand dollars 3 000 for a second citation issued for the same offense within a twelve-month period of the date of the first offense, and 3 a fine in an amount not to exceed five thousand dollars ($5,000). 3. Time-share use, and/or advertisement for time-share use, of an accommodation in violation of this section is a threat to public health safety or welfare and is thus declared to be unlawful and a public nuisance and may be abated pursuant to Chapter 8.20 Public Nuisances Chapter 9.24 Noise Control and Chapter 9.25 (Multiple Responses to Loud or Unruly Parties Gatherings or Other Similar Events. 4 Each day the violation of this chapter occurs shall constitute a separate offense. 5. The remedies under this section are cumulative and in addition to any and all other remedies available at law and equity." 3-139 PLANNING COMMISSION RESOLUTION NO.2805 A RESOLUTION OF THE PLANNING. COMMISSION OF THE CITY OF PALM DESERT, CALIFORNIA, RECOMMENDING APPROVAL OF A ZONING ORDINANCE AMENDMENT TO MODIFY PALM DESERT MUNICIPAL CODE SECTION 25.34..60 REGARDI.NQ TIMESHARE PROJECTS CASE NO: ZOA 22-0001 WHEREAS, the Planning Commission of the City of Palm Desert, California, did on the 181h day of January 2022, hold a duly noticed public hearing to consider the request by the City of Palm Desert for approval of the above -noted; and WHEREAS, the Zoning: Ordinance Amendment (ZOA) modifies the Palm Desert Municipal Code (PDMC) Section 25.34.80 (Timeshare Projects) to update the ordinance to clarity definitions and add enforcement options; and WHEREAS, the Planning Commission of the City of Palm Desert, in reviewing all the facts and any testimony given, adopts the foll:owing.as its Findings in recommended approval of the ZOA to the City Council: SECTION 1. Findings. The Planning Commission of the City of Palm Desert hereby finds that: A. The City of Palm Desert, California ("City") is a municipal corporation, duty organized under the constitution and laws of the State of California; and B. The Planning .and Zoning Law authorizes cities to establish by ordinance the regulations for land use and development. SECTION 2. Amendment. The Planning Commission of the City of Palm Desert recommends that the City Council of the. City. of Palm Desert, California, approve and adopt the PDM'C.amendment to Section 25.34.00 (Timeshare Projects) as shown In Exhibit A, which Is attached hereto and incorporated herewith,. SECTION 3. Severability. If any section., subsection, subdivision, paragraph, sentence, clause, or phrase in this ordinance or any part.thereof is for any reason held to be. unconstitutional or invalid or Ineffective by any court of competent jurisdiction, such decision shall not affect the validity or effectiveness of the remaining portions .of this ordinance or any part thereof. The Planning Commission hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause., or phrase thereof Irrespective of the fact that one (1) or more subsections, subdivisions, paragraphs, sentences, clauses, or phrases be declared unconstitutional, invalid, or ineffective. :SECTION 4. CEQA. The City Council finds that adoption of this ordinance is not a "project," as defined in the California Environmental Quality Act (CEQA) because it does not have a potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment and concerns general policy and procedure making. 3-140 PLANNING COMMISSION RESOLUTION NO. 2805 PASSED, APPROVED, AND ADOPTED by the Planning Commission of the City of Palm Desert, California, at its regular meeting held on the 18th day of Manua_ rIL2022, by the following vote, to wit: AYES: DE LUNA, GREENWOOD, GREGORY, HOLT, and PRADETTO NOES: NONE ABSENT: NONE ABSTAIN: NONE J HN G EEN OD CHAIR ATTEST: MARTIN ALVAREZ, SECRETARY PALM DESERT PLANNING COMMISSION 1 1 3-141 E j rraaaaa..r ra.�srarraara d ar : ra.a.a a..aara I. CALL TO ORDER CITY OF PALM DESERT PALM DESERT PLANNING COMMISSION MINUTES. TUESDAY, JANUARY 18, 2022 — 6:00 P.M. ZOOM VIRTUAL MEETING Chair John Greenwood called the meeting to order at 6.01 p.m. II. ROLL CALL Prese Chair John Greenwood Vice -Chair Nancy DeLana Commissioner Ran Gregory Commissioner Lindsay Holt Commissioner Joseph Pradetto so Present: Craig Hayes, Assistant City Attorney Martin Alvarez, Director of Development Services Eric Ceja, Deputy Director of Development Services/Economic Development Rosle Lua, Principal Planner Jessica Gonzales; Senior Management Analyst Monica O'Reilly, Management Specialist Ii III. PLEDGE OF ALLEGIANCE Vice -Chair Nancy DeLuna led the Pledge of Allegiance. IV. SUMMARY OF COUNCIL ACTIONS Director of Development Services Martin Alvarez summarized pertinent City Council aetlons from the meeting of January 13, 202Z V. ORAL COMMUNICATIONS None 3-142 MINUTES PALM DESERT PLANNING COMMISSION JANUARY 18, 2021 VI. CONSENT CALENDAR A. MINUTES of the Regular Planning Commission meeting of December 21, 2021. Rec: Approve as presented. Upon a motion by Vice -Chair DeLuna, seconded by Commissioner Holt, and a 5-0 vote of the Planning Commission, the Consent Caiendar was approved as presented (AYES: DeLuna, Greenwood, Gregory, Holt, and Pradetto; NOES: None). VIL CONSENT ITEMS HELD OVER None Vill. NEW BUSINESS None IX. CONTINUED BUSINESS None X. PUBLIC HEARINGS A. REQUEST FOR CONSIDERATION to adopt a Notice of Exemption in accordance with the California Environmental Quality Act (CEQA) and approval of a Precise Plan (PP) and a Conditional Use Permit (CUP) to demolish the former Pizza Hut building and construct a new 7,500-square-foot retail and restaurant building located at 72310 Highway 111. Case No. PP/CUP 20-0002 (Nadel Architects, Inc, Los Angeles, California, Applicant). Note, the staff report(s) and Zoom video of the meeting are available on the City's website. Click on the following link to access: www.plannin_ -commission- information-center. Vice -Chair DeLuna disclosed that she works for a company that is involved with a property in the Housing Element; therefore, she recused herself. Ms. Nicole Criste, Terra Nova Planning, the City's consultant, Palm Desert, California, presented a PowerPoint presentation regarding the Housing Element update. She recommended that the Planning Commission continue this item to February 1, 2022, to allow staff to work with the Department of Housing and Community Development to finalize details of the Housing Element. She also recommended opening the public hearing, taking public testimony, and leaving the public hearing open to the February 1 meeting. Chair Greenwood declared the public hearing open and invited public testimony FAVORING or OPPOSING this matter. 2 3-143 E MINUTES PALM DESERT PLANNING COMMISSION JANUARY 18, 2021 Ms. Liliana Figueroa and Mr. Mark Stein, with CPMC Realty, Palm Desert, California, voiced their concern with the designation for affordable housing units on their client's site. Commissioner Pradetto moved to, by Minute Motion, leaving the public hearing open and continuing Case No. GPA 21-0002 to February 1, 2022. The motion was seconded by Commissioner Gregory and carried by a 4-0 vote (AYES: Greenwood, Gregory, Holt, and Pradetto, NOES: None; ASSENT: DeLuna). B. REQUEST FOR CONSIDERATION of a recommendation to the City Council for approvalof a Zoning Ordinance Amendment to modify Palm Desert Municipal Code Section 25.34.080 regarding Timeshare Projects. Case N.o. ZOA 22-0001 (City of Palm Dosed, -Palm Desert C lifornia Applicantj. Principle Planner Rosie Lua gave a PowerPoint presentation reviewing the staff report in detail and recommended approval to the City Council. At this point, staff and the City Attorney responded to questions asked by the Planning Commission. Chair Greenwood declared the public hearing open and invited public testimony FAVORING or OPPOSING this matter. With no testimony offered, Chair Greenwood declared the public hearing closed. The Planning Commission concurred with the direction that the City is taking regarding timeshare projects. Commissioner Pradetto moved to waive further reading and adopt Planning Commission Resolution No. 2B05, recommending approval to the City Council for Case No. ZOA 22-0001. The motion was seconded by Vice -Chair DeLuna and carried by a 5-0 vote (AYES: DeLuna, Greenwood, Gregory, Holt, and Pradetto; NOES: None). XI. MISCELLANEOUS None XIL COMMITTEE MEETING UPDATES A. CULTURAL ARTS COMMITTEE Commissioner Holt mentioned that she shared the San Pablo Corridor Art Plan and the details for the meeting scheduled on Monday, January 24 at 11:30 a.m. to discuss the plan. 3 3-144 MINUTES PALM DESERT PLANNING COMMISSION JANUARY 18, 2021 B. PARKS & RECREATION COMMISSION Mr. Alvarez stated that the Planning staff presented a concept plan for a park on Gerald Ford Drive and near Interstate 10. Staff hoped that the City would develop the park in two to three years. Chair Greenwood asked for the status of the Portola Avenue interchange. Mr_ Alvarez responded that currently, the project is not feasible due to needing additional funding. Staff would discuss funding during the budget process and the City Council. XI11. REPORTS AND REMARKS None XIV. ADJOURNMENT With the Planning Commission concurrence, Chair Greenwood adjourned the meeting at 7:1 g p.m. HN REEN ob D, CH ATTEST: MARTIN ALVAREZ, SECRETARY MONK 'REILLY, RECOi DING SECRETARY 1 4 3-145 CIIy 01 PRIM 01SERT 73-510 PneD WAHIYC Dnrvfi DF5ear, CAWOKNs 9z160-2578 rxw_ 76o a46—a61 X I nPa� riiyoFpa I m tt � erc, nrg CITY OF PALM DESERT LEGAL NOTICE NOTICE OF A PUBLIC HEARING BEFORE THE CITY COUNCIL OF THE CITY OF PALM DESERT TO CONSIDER APPROVAL FOR A ZONING ORDINANCE AMENDMENT TO MODIFY THE PALM DESERT MUNICIPAL CODE SECTION 25.34.060 (TIME-SHARE PROJECTS) The City of Palm Desert City Council (City), in its capacity as the Lead Agency, finds that this Ordinance is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly-, it prevents changes in the environment pending the completion of the contemplated study of impacts, Project Location/Description: Project Location: City wide Project Description: Zoning Ordinance Amendment to update the Time Share Project ordinance (Chapter 25.34.60) to consider a regulatory response to the Pacaso type businesses related to "co -ownership" shares in residential properties operating within the City. Recommendation: City Council to approve the first reading of the Time -Share uses and its regulations and pass to second reading in accordance to CEQA Guidelines. Public Hearing: The public hearing will be held before the City Council on February 24, 2022, at 4:00 p.m. via Zoom. The hearing will be conducted in accordance with the City's emergency protocols for social distancing. Options for remote participation will be listed on the Pasted Agenda for the meeting at: htt s.11www.ci of p almdesert, or lour-ci Irn ay or-and-cit -council /city -council -meeting -information -center. Comment Period: The public comment period for this project is from February 14, 2022 to February 24, 2022. Public Review: The plans and related documents are available for public review Monday through Thursday from 8:00 a.m. to 5:00 p.m. by contacting the project planner, Rosie Lua, Principal Planner. Please submit written comments to the Planning/Land Development Division. If any group challenges the action in court, issues raised may be limited to only those issues raised at the public hearing described in this notice or in written correspondence at, or prior to the City Council hearing. All comments and any questions should be directed to: Rosie Lua, Principal Planner City of Palm Desert 73-510 Fred Waring Drive Palm Desert, CA 92260 (760) 346-0611, Extension 480 rlua@cityofpalmdesert.org PUBLISH: DESERT SUN NIAMH M. ORTEGA, DEPUTY CITY CLERK FEBRUARY 10, 2022 PALM DESERT CITY COUNCIL 3-146 STAFF REPORT CITY OF PALM DESERT MEETING DATE: November 18, 2021 PREPARED BY: Robert Hargreaves, City Attorney, Best Best & Krieger LLP REQUEST: ' Update on Timeshare Ordinance Recommendation By Minute Motion, request the Planning Commission to review of the timeshare ordinance and provide City Council with any recommended amendments. Background Analysis INTRODUCTION Recently, the City has become aware that a new business model, "Pacaso", that features "co -ownership" shares in residential properties, has begun operating within the City. Given the nature of its use of residential property, it is my opinion that it is a timeshare use, as defined by California law and regulated by Section 25.34.060 of the Municipal Code. The Palm Desert timeshare ordinance (Municipal Code Section 25.34.060) has not been updated since 2013. As a preliminary matter in considering regulatory responses to the Pacaso-type businesses, we are recommending that Section 25,34.060 be updated to provide a more robust definition, to refer to current California law, and to provide a broader scope of potential regulation, should the city decide to pursue it. DISCUSSION Pacaso is a corporation that sells "co -ownership" shares in residential property. The company started by purchasing homes in tourist destinations in California, though they are rapidly expanding throughout the United States and internationally. Pacaso's business model is as follows: Pacaso will purchase or enter into a contract to purchase single family homes, then markets "co -ownership" interests in the homes to up to eight individuals. Pacaso then forms a limited liability company ("LLC"), which owns title to the residential home. The "co -owners" each purchase a one -eighth share, and are entitled to use the residential property for a certain number of days per year according to their share of ownership in the LLC. The one -eighth interest entities the purchaser to stay at the property for up to 45 days per year in increments of 2-14 days, including one "special 3-147 November 18, 2021 - Staff Report Update of Timeshare Ordinance Page 2of4 day" (Fourth of July, Thanksgiving, Christmas, etc.). The stays are reserved on an app, and while each co-owner is prohibited from renting the home as a short-term rental, they are permitted to allow other guests to stay there during their allotted days. Once shares in an LLC are sold, Pacaso continues to manage the homes, including providing landscaping and pool maintenance, furnishing the homes, and paying all expenses, which are then passed through to the co -owners. It is our understanding that there is currently at least one property in Palm Desert that is being marketed by Pacaso. Section 11212(z) of the Business and Profession Code defines the following significant terms: "Time-share plan" 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. A time-share plan may be either of the following- (1) A "single site time-share plan" that is the right to use accommodations at a single timeshare property. (2) A "multisite time-share plan" that includes either of the following: (A) A "specific timeshare interest" that is the right to use accommodations at a specific time-share property together with use rights in accommodations at one or more other component sites created by or acquired through the time-share plan's reservation system. (B) A "nonspecific time-share interest" that is the right to use accommodations at more than one component site created by or acquired through the time-share plan's reservation system, but including no specific right to use any particular accommodations. It is clear that the Pacaso model fits within that definition of "timeshare plan" as co -owners receive ownership rights to use a property for less than a year on a recurring basis. Pacaso is not currently regulated by the State, as it does not meet the State's ten -share threshold for regulation. Palm Desert Section 25.34.060 does not dwell on the definition of "time-share" and provides: "The time-share project must be composed of "time-share estates" as defined in California Business and Professions Code Section 11003.E [now section 1121]." Nor does the ordinance provide any specific enforcement provisions. WE November 18, 2021 - Staff Report Update of Timeshare Ordinance Page 3 of 4 In the attached draft ordinance, the definition of timeshare is more elaborate, and is consistent with current California statutes. It also provides enforcement options against persons that own, manage, or market illegal time-shares. At this point, the draft ordinance is before the council for discussion and direction. If the council directs that the update proceed, the ordinance will be put before the planning commission for consideration and recommendation, before it is brought back to the city council for adoption. 3-149 November 18, 2021 - Staff Report Update of Timeshare Ordinance Page 4 of 4 Fiscal Analysis There is no direct fiscal impact associated with this item. LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW ASSISTANT CITY MANAGER RWH N/A N/A Andy Firestine Robert W. Hargreaves ,Janet M. Moore Andy Firestine City Attorney Director of Finance Assistant City Manager City Manager L. Todd Hilernan: L — T-0 Hil,$iM.m% ATTACHMENTS: Draft ordinance 3-150 ORDINANCE NO. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, AMENDING PALM DESERT MUNICIPAL CODE SECTION 25.34.060 REGARDING TIME-SHARE PROJECTS THE CITY COUNCIL OF THE CITY OF PALM DESERT DOES ORDAIN AS FOLLOWS: SECTION 1. Amendment to Palm Desert Municipal Code. Palm Desert Municipal Code section 25.34.060 is hereby amended as follows: "25.34.060 Time -Share fists -Uses A. Purpose. The purpose of the special use regulations for time-share prejeets uses is to establish special location and site development standards. B. Definitions. 1. "Accommodation" means @@y dwelling unit a artment condominium or cooperative unit hotel or motel room or other structure constructed for residential use and occu anc including but not limited to a single family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling,or townhouse dwelling as defined in Section 17.04.160. 2. "Developer" means person, who at pny point in time owns or has an option or contract to acquire eleven or more time-share interests for purposes of sale in the ordinga course of business if the time-share interests were acquired or are to be acquired from the original recipient of a public report for the time-share plan, or from a person who succeeded to the interest of the original recipient in eleven or more time-share interests in a time-share plan. 3. "Owner" means owner of a time-share interest. 4. "Person" means a natural person, corporation, limited liability company_, partnership, joint venture,.association estate trust or other legal entity,or ggy combination thereof. 5. "Time-share instrument" means one or more documents, by whatever name denominated creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. 6. "Time-share interest" means and includes either of the following: (i) A "time-share estate," which is the right to exclusively occupy a time-share propertypropedy fora period of time on a recurring basis pursuant to a time-share plan, cogpled with a freehold estate or an estate for years with a future interest in a time-share property or a specified portion thereof. 3-151 ii A "time-share use," which is the right to exclusively occupy a time-share propeLty fora period of time on a recurring basis pursuant to a time-share plan, which right is neither coupled with a freehold interest nor coupled with an estate for years with a future interest in a time-share property. 7. "Time-shareplan" means gpy arrangement, lap scheme or similar device whether by membership agreement, sale lease deed license right to use agreement, or by an other means whereby a purchaser, in exchange for consideration receives the right to exclusive use of an accommodation or accommodations whether through the granting of ownership rights, possessory rights or otherwise fora period of time less than a full year during an given year, on a recurring basis for more than one year, but not necessarily for consecutive ears. 8. "Time-share property" means one or more accommodations subject to the same Lime -share instrument together with My other property or rights to property appurtenant to those accommodations. 9. "Time-share use" means the use of one or more accommodations or an part thereof, as a time-share property pursuant to a time-share plan. C. Permitted zones. A time-share prejee� use shall be permitted only in a planned residential zone, a general commercial zone, or a planned commercial resort zone. Any time- share pfejee. use shall be developed in conjunction with a resort hotel having 500 or more rooms and an 18-hole golf course of not less than 6,400 yards, and then only if and when a conditional use permit has been obtained from the Commission in accordance with Section 25.72.050 (Conditional Use Permit) of this code. D. Application submittal requirements. In addition to standard application submittal requirements, an applicant for a conditional use permit approval involving a time-share pfejee. use shall submit in the application at least the following information: 1. Copies of documents and information required pursuant to Article 12.2 of the California dFaiaist.. ive Code of Regulations, Sections 24W 2809.1, 2809.2, and 2809.3 wherein the requirements for a "substantially properly completed" application for a final subdivision public report are enumerated, excluding those docuunents so enumerated which are subject to the approval of the City and therefore otherwise available to the City. In the event such documents and information have not been filed with the California Department of Real Estate at the time an applicant applies for a conditional use permit, the applicant shall furnish such doe-uments and information upon the submission of such documents and information to the Department of Real Estate, but in no event later than the issuance of the conditional use permit. 2. In the event an existing condominium project is proposed to be converted to a whole or partial time-share project use, a verified description or statement of the number and percentage of the current condominium owners desiring or consenting to the proposed conversion of some or all of the units to a time-share basis shall be submitted. Also, in such instance there shall be submitted to the Commission prior to or during the hearing process, a verified statement of the number and percentage of owners who have received notification, either personally or by receipted certified US mail. 3-152 3. In the case of a new mixed project (i.e., time-sharing condominium/rental), a description of the means proposed to be employed to disclose the number and location of all time-share unitff accommodations within the pFajest time-share use shall be submitted. 4. Description of time periods, types of u4ts accommodations, and which efts accommodations are in the time-share program (if less than all), and the length of time each of the units accommodations are committed to the time-share pr-egr-a-m plan shall be submitted. D. E. Requirements. Notwithstanding any other provisions of this chapter, the following requirements must be met by any time-share developmen use in any permitted zone: 1. The time-share project use must be composed of "time-share e&tates�Linterests-as 2. All maintenance agreements and conditions, covenants, and restrictions must be approved by the City. 3. The minimum time-share use interest exclusive occu anc period shall be for one week (seven days). 4. Prejee -Spenser Developer of the time-share plan shall post a maintenance bond, letter of credit, or cash deposit to ensure the maintenance of any landscaping along the perimeter of the prejeet time-share use abutting any public right-of-way. The amount of the bond, letter of credit, or cash deposit shall be equal to 25 percent of the annual budget of the time-share use owner's association having the duty to maintain the exterior of the time-share proper ty-prejeet which is for such landscaping expenses. The bond, letter of credit, or cash deposit shall run to the City and shall remain in place for life of the prejest time-share plan. 5. With respect to a time-share prejeet use, all interests created therein shall be subject to a public facilities impact mitigation fee of $150 per week share. With respect to each week share in a time-share prajeet-use, a public facilities impact fee payable under this section shall be paid on the first day of the first calendar month following the sale and conveyance of such week share by the sponsor developer of a time-share prE)jec lean to an individual consumer (excluding bulk sales from one Spenser- developer to another, in which case the successor sponsor developer shall have the obligation to pay the public facilities impact fee described. herein upon the sale and conveyance of a week share to a consumer). On the first day of each calendar month, or less frequently if required by the Council, a spenser developer of a time- share prejest lean shall also submit a written report to the City which specifies the number of week shares in the time-share pr-ejeet plan which have been sold and conveyed in the preceding calendar month. & F. Minimum number of units. The minimum number of units in a time-share project shall be 50. IL- G. Development standards. Time-share projects uses shall be designed to conform to the standards for hotel developments in the event the time-share prejeet use is located in a planned commercial resort or general commercial zone. The time-share prejest use must comply with all development standards of the zone in Which it is located. With respect to time-share 3-153 prejeets uses developed within a planned residential zone, the density of the time-share pFejest uses shall not exceed the density permitted in such zone for residential projects; with respect to time-share prejeets uses developed in a general commercial zone or a planned commercial resort zone, the density of the time-share preje uses shall not exceed the density permitted in such zone for general commercial or planned commercial projects. In determining the density of a time-share prejeet use, upon the request of an applicant, the Director shall have the authority to transfer the density permitted in other similarly zoned property owned by an applicant to the time-share project use. H. Violations, Enforcement and Civil Penalties 1. Any responsible person, including but not limited to an owner of a time-share interest management entily, agent, or broker who uses or allows the use of or advertises or causes to be printed, published,advertised or disseminated in gny wa and through an medium the availabilit for sale or use of an accommodation in violation of this section is Ruilix of a misdemeanor for each day in which such accommodation is used allowed to be used or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.12 (General Penalty). 2. ADy responsible person, including by not limited to an owner of a time-share interest, management entity, gent or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised or disseminated in gny wa and through yLny medium the availability for sale or use of an accommodation in violation of this section is subject to administrative fines as set forth in Chapter 8.81 Administrative Citations). ALiy. person issued an administrative citation pursuant to this section shall for each se crate violation be subject to: 1 an administrative fine in an amount not to exceed one thousand dollars $1 000 for the first citation 2 an administrative fine in an amount not to exceed three thousand dollars $3 444 for a second citation issued for the same offense within a twelve-month period of the date of the first offense; and 3 a fine in an amount not to exceed five thousand dollars $5 000 . 3. Time-share use and/or advertisement for time-share use, of an accommodation in violation of this section is a threat to public health safe1y or welfare and is thus declared to be unlawful and a public nuisance and mqy be abated pursuant to Chapter 8.24 Public Nuisances Chapter 9.24(Noise Control and Chapter 9.25 (Multiple Responses to Loud or Unruly Parties Gatherings or Other Similar. Events. 4. Each day the violation of this chapter occurs shall constitute a separate offense. 5. The remedies under this section are cumulative and in addition to gny and all other remedies available at law and e uit ." SECTION 2. Severability. If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this Ordinance, or any part thereof, is for any reason held to be unconstitutional, such decision shall not affect the validity of the remaining portion of this Ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase thereof, irrespective of the fact that any one or more section, subsection, subdivision, paragraph, sentence, clause or phrase 3-154 be declared unconstitutional. If for any reason any portion of this Ordinance is found to be invalid by a court of competent jurisdiction, the balance of this Ordinance shall not be affected. SECTION 3. Certification and Publication. The City Clerk of the City of Palm Desert shall certify to the adoption of this Ordinance and cause publication to occur in a newspaper of general circulation and published and circulated in the City in a manner permitted under California Government Code Section 36933. SECTION 4. CEQA. The City Council finds that adoption of this Ordinance is not a "project," as defined in the California Environmental Quality Act because it does not have a potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment and concerns general policy and procedure making. PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Palm Desert on the day of , 2 02 1, by the following vote. AYES: NOES: ABSTAIN: ABSENT: Kathleen Kelly, Mayor ATTEST: Norma Alley, City Clerk APPROVED AS TO FORM: Robert Hargreaves, City Attorney 3-155 From: Kevin SwaEQ To: Rosie Lua Subject: FW: Latest Pacaso Report Date: Monday, ApO 11, 2022 7:56:25 AM FY 1. Kevin Swartz Associate Planner Ph_ 760.346.0611 Direct: 760.776.6485 kswaaz@cityofpaimde5ert.org From: Kathleen Kelly <kkelly@cityofpalmdesert.org> Sent: Friday, April 8, 2022 7:04 AM To: Robert Hargreaves <Robert.Hargreaves@bbklaw.com>; Kevin 5wart7 <kswart7@cityofpalmdesert.org> Subject: Latest Pacaso Report From Ellen Kane: Looks like Picasso bought the house at the corner of Somera and Alamo. If you google the address with Picasso after it is on their webpage and is showing as "available now". Think it just closed escrow because the for sale sign is down. That makes three Picasso's in my immediate area now (Bel Air, Skyward & Somera). Would really love neighbors not 1/8 ownerships (timeshares?) 3-156 C I I Y Of PRIM VESERI 73-9 i0 FRET) WARING DRlvr PAL,m DESERT, CALIFORNIA 922.60-2579 TES.: 760 346-o6z j Info-aCityofpalmdesert org NOTICE OF CONTINUED PUBLIC BEARING NOTICE IS HEREBY GIVEN that the following Public Hearing was continued from the City Council meeting of March 24, 2022 to the City Council meeting of April 28, 2022: Ordinance No. 1378 to approve Zoning Ordinance Amendment 22-0001 to modify Palm Desert Municipal Code Section 25.34.060 reciarding the Time - Share Projects (Continued from February 24, 2022) NOTICE IS FURTHER GIVEN that the City Council meeting of April 28, 2022 will take place virtually at 3.00 p.m. at ciityofpalmdesert.org/zoom. All interested persons are invited to attend said Public Hearing. DATED this 28th day of March, 2022. N1AMH M. ORTEG6� Deputy City Clerk 0 n'wete a. Wank. roll. 3-157 STAFF REPORT CITY OF PALM DESERT MEETING DATE: May 12, 2022 PREPARED BY: Niamh Ortega, Deputy City Clerk APPROVING AUTHORITY: City Council REQUEST: Second reading and adoption of Ordinance No. 1378 to approve Zoning Ordinance Amendment 22-0001 to modify Palm Desert Municipal Code Section 25.34.060 regarding Time -Share Projects. Recommendation: Waive the second reading of the ordinance text in its entirety and read by title only; and adopt Ordinance No. 1378 entitled, "AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, AMENDING PALM DESERT MUNICIPAL CODE, CHAPTER 25, MODIFYING SECTION 25.34.60 REGARDING TIME-SHARE PROJECTS, CASE NO. ZOA 22- 0001 ." Background/Analysis On April 28, 2022, the City Council introduced Ordinance No. 1378 for first reading, as noted below: Motion by Councilmember Kelly, second by Councilmember Quintanilla, carried 3-1-1 (with Mayor Pro Tern Jonathan voting no and Councilmember Nestande recused), to waive further reading and pass to second reading Ordinance No. 1378 approving Zoning Ordinance Amendment 22-0001 to modify Palm Desert Municipal Code Section 25.34.60 regarding Time - Share Projects. This report provides for the City Council to waive further reading and adopt the ordinance. The ordinance shall be effective 30 days from adoption. Financial Impact: There is no direct financial impact associated with this item. Attachments: 1. Ordinance No. 1378 3-158 MEETING DATE T ' 00 D CONTINUED TO 9/PASSES TO ZND READIN �. /4L ORDINANCE NO. 1378 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, AMENDING PALM DESERT MUNICIPAL CODE, CHAPTER 25, MODIFYING SECTION 25.34.60 REGARDING TIME-SHARE PROJECTS CASE NO: ZOA 22-0001 WHEREAS, the Planning Commission of the City of Palm Desert, California, did on the 18th day of January 2022, hold a duly noticed public hearing to consider the request by the City of Palm Desert for approval of the above -noted, and adopted Resolution No. 2805, recommending that the City Council adopt the Zoning Ordinance Amendment (ZOA) for said projects regulating the time-share projects; and WHEREAS, the Zoning Ordinance Amendment (ZOA) modifies the Palm Desert Municipal Code (PDMC) Section 25.34.60 (Time -Share Projects) and implements a requirement for time share uses; and WHEREAS, the City Council of the City of Palm Desert, did on the 241h day of February 2022, hold a duly noticed public hearing to, the City Council opened the public hearing and approved staff's request to continue to the 241h of March 2022. On the 241h of March 2022, another continuance of the public hearing was granted to the 281h of April 2022. On the 28th of April 222, the City Council considered the request by the City of Palm Desert for approval of a ZOA determined that the time-share process is consistent with the City's General Plan; and WHEREAS, at said public hearing, upon hearing and considering all testimony and arguments, if any, of all interested persons desiring to be heard, said City Council did find the following facts and reasons exist to approve said request: SECTION 1. Adoption of Recitals. The City Council hereby adopts the foregoing recitals as its findings in support of the following regulations and further finds that the following regulations are beneficial and appropriate to protect the health, safety, and welfare of the residents and businesses of Palm Desert within the City limits. A. The City of Palm Desert, California ("City") is a municipal corporation, duly organized under the constitution and laws of the State of California; and B. The Planning and Zoning Law authorizes cities to establish by ordinance the regulations for land use and development. SECTION 2. Amendment. The City Council of the City of Palm Desert, California, approve, and adopt the PDMC amendment to Section 25.34.60 (Time -Share Projects) as shown in Exhibit A, which is attached hereto and incorporated herewith. SECTION 3. Severability. If any section, subsection, subdivision, paragraph, sentence, clause, or phrase in this ordinance or any part thereof is for any reason held to be 3-159 ORDINANCE NO.1378 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, AMENDING PALM DESERT MUNICIPAL CODE, CHAPTER 25, MODIFYING SECTION 25.34.60 REGARDING TIME-SHARE PROJECTS CASE NO: ZOA 22-0001 WHEREAS, the Planning Commission of the City of Palm Desert, California, did on the 18th day of January 2022, hold a duly noticed public hearing to consider the request by the City of Palm Desert for approval of the above -noted, and adopted Resolution No. 2805, recommending that the City Council adopt the Zoning Ordinance Amendment (ZOA) for said projects regulating the time-share projects; and WHEREAS, the Zoning Ordinance Amendment (ZOA) modifies the Palm Desert Municipal Code (PDMC) Section 25.34.60 (Time -Share Projects) and implements a requirement for time share uses; and WHEREAS, the City Council of the City of Palm Desert, did on the 24ih day of February 2022, hold a duly noticed public hearing to, the City Council opened the public hearing and approved staffs request to continue to the 241h of March 2022. On the 24th of March 2022, another continuance of the public hearing was granted to the 281h of April 2022. On the 28th of April 222, the City Council considered the request by the City of Palm Desert for approval of a ZOA determined that the time-share process is consistent with the City's General Plan; and WHEREAS, at said public hearing, upon hearing and considering all testimony and arguments, if any, of all interested persons desiring to be heard, said City Council did find the following facts and reasons exist to approve said request: SECTION 1. Adoption of Recitals. The City Council hereby adopts the foregoing recitals as its findings in support of the following regulations and further finds that the following regulations are beneficial and appropriate to protect the health, safety, and welfare of the residents and businesses of Palm Desert within the City limits. A. The City of Palm Desert, California ("City") is a municipal corporation, duly organized under the constitution and laws of the State of California; and B. The Planning and Zoning Law authorizes cities to establish by ordinance the regulations for land use and development. SECTION 2. Amendment. The City Council of the City of Palm Desert, California, approve, and adopt the PDMC amendment to Section 25.34.60 (Time -Share Projects) as shown in Exhibit A, which is attached hereto and incorporated herewith. SECTION 3. Severability. if any section, subsection, subdivision, paragraph, sentence, clause, or phrase in this ordinance or any part thereof is for any reason held to be 3-160 ORDINANCE NO. 1378 unconstitutional or invalid or ineffective by any court of competent jurisdiction, such decision shall not affect the validity or effectiveness of the remaining portions of this ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause, or phrase thereof irrespective of the fact that one (1) or more subsections, subdivisions, paragraphs, sentences, clauses, or phrases be declared unconstitutional, invalid, or ineffective. SECTION 4. Publication. The City Clerk of the City of Palm Desert, California, is hereby directed to publish this ordinance in The Desert Sun, a newspaper of general circulation, published and circulated in the City of Palm Desert, California, and shall be in full force and in effect thirty (30) days after its adoption. PASSED, APPROVED, AND ADOPTED by the City Council of the City of Palm Desert, California, at its regular meeting held on the 12th day of May 2022, by the following vote, to wit: AYES: KELLY, QUINTANILLA AND HARNIK NOES: JONATHAN ABSENT: NESTANDE ABSTAIN: NONE J� C. HA k qIK,'VA Y0R ATTEST: IONY J. M fry C L E KK OF PALM %ESERTI CALIFORNIA 1 2 City of Palm Desert Document 3-161 ORDINANCE NO. 1378 "EXHIBIT A" ' ZONING ORDINANCE AMENDMENT SECTION 11. Amendment to Palm Desert Municipal Code. Palm Desert Municipal Code section 25.34.060 is hereby amended as follows: 25.34.060 Time -Share Uses A. Purpose. The purpose of the special use regulations for time-share uses is to establish special location and site development standards, B. Definitions. 1. "Accommodation" means any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.160. 2. "Developer' means person, who at any point in time, owns, or has an option or contract to acquire eleven or more time-share interests for purposes of sale in the ordinary course of business if the time-share interests were acquired or are to be acquired from the original recipient of a public report for the time-share plan, or from a person who succeeded to the interest of the original recipient in eleven or more time-share interests in a time-share plan. 3. "Owner' means owner of a time-share interest. 4. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. b. "Time-share instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a timeshare plan and includes the declaration dedicating accommodations to the time-share plan. 6. "Time-share interest" means and includes either of the following: (i) A "time-share estate," which Is the right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, coupled with a freehold estate or an estate for years with a future interest In a time-share property or a specified portion thereof. (ii) A "time-share use," which is the* right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time -stare plan, which right is neither coupled with a freehold interest, nor coupled with an estate for years with a future interest, in a time-share property. 7. "Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, sale, lease, deed, license, right to use agreement, or IY o � e.pie. 3-162 ORDINANCE NO. 1378 by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, 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. "Timeshare Plan" does not include. arrangements whereby multiple parties join in directly purchasing full ownership of an accommodation and thereafter agree upon arrangements for their shared use. 8. "Time-share property" means one or more accommodations subject to the same time-share instrument, together with any other property or rights to property appurtenant to those accommodations. 9. "Time-share use" means thb use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan. C. Permitted zones. A time-share use shall be permitted only in a planned residential zone, a general commercial zone, or a planned commercial resort zone. Any time-- share use shall be developed in conjunction with a resort hotel having 500 or more rooms and an 18-hole golf course of not less than 6,400 yards, and then only it and when a conditional use permit has been obtained from the Commission in accordance with Section 25.72.050 (Conditional Use Permit) of this code. D. Application submittal requirements. In addition to standard application submittal requirements, an applicant for a conditional use permit approval involving a time- share use shall submit in the application at least the following information, 1. Copies of documents and information required pursuant to Article 12.2 of the California Code of Regulations, Sections 2809.1, 2809.2, and 2809.3 wherein the requirements for a "properly completed" application for a final subdivision public report are enumerated, excluding those documents so enumerated which are subject to the approval of the City and therefore otherwise available to the City. In the event such documents and information have not been filed with the California Department of Real Estate at the time an applicant applies for a'conditional use permit, the applicant shall furnish such documents and information upon the submission of such documents and information to the Department of Real Estate, but in no event later than the issuance of the conditional use permit. 2. In the event an existing condominium project is proposed to be converted to a whole or partial time-share use, a verified description or statement of the number and percentage of the current condominium owners desiring or consenting to the proposed conversion of some or all of the units to a time-share basis shall be submitted. Also, in such instance there shall be submitted to the Commission prior to or during the hearing process, a verified statement of the number and percentage of owners who have received notification, either personally or by receipted certified US mail. 3. In the case of a new mixed project (i.e., time-sharing condominium/rental), a description of the means proposed to be employed to disclose the number and location of all time -snare accommodations within the time-share use shall be submitted. 3-163 ORDINANCE NO. 1378 4. Description of time periods, types of accommodations, and which ' accommodations are in the time-share program (if less than all), and the length of time each of the accommodations are committed to the time-share plan shall be submitted. E. Requirements. Notwithstanding any other provisions of this chapter, the following requirements must be met by any time-share use in any permitted zone: 1. The time-share use must be composed of time-share interests. 2. All maintenance agreements and conditions, covenants, and restrictions must be approved by the City. 3. The minimum time-share interest exclusive occupancy period shall be for one week (seven days). 4. Developer of the time-share plan small post a maintenance bond, letter of credit, or cash deposit to ensure the maintenance of any landscaping along the perimeter of the time-share use abutting any public right-of-way. The amount -of the bond, letter of credit, or cash deposit shall be equal to 25 percent of the annual budget of the time-share use owner's association having the duty to maintain the exterior of the time -snare property which is for such landscaping expenses. The bond, letter of credit, or cash deposit shall run to the City and shall remain in place for life of the time-share plan. 5. With respect to a time-share use, all interests created therein shall be subject to a public facilities impact mitigation fee of $150 per week share. With respect to each week share in a time-share use, a public facilities impact fee payable under this section shall be paid on the first day of the first calendar month following the sale and conveyance of such week share by the developer of a time-share plan to an individual consumer (excluding bulk sales from one developer to another, in which case the successor developer shall have the obligation to pay the public facilities impact fee described herein upon the sale and conveyance of a week share to a consumer). On the first day of each calendar month, or less frequently if required by the Council, a developer of a time-share plan shall also submit a written report to the City which specifies the number of week shares in the time-share plan which have been sold and conveyed in the preceding calendar month. F. Minimum number of units. The minimum number of units in a time-share project shall be 50. G. Development standards. Time-share uses shall be designed to conform to the standards for hotel developments in the event the time-share use is located in a planned commercial resort or general commercial zone. The time-share use must comply with all development standards of the zone in which it is located. With respect to time-share uses developed within a planned residential zone, the density of the time-share uses shall not exceed the density permitted in such zone for residential projects; with respect to time-share uses developed in a general commercial zone or a planned commercial resort zone, the density of the time-share uses shall not exceed the density permitted in such zone for general commercial or planned commercial projects. In determining the density of a time-share use, upon the request of an applicant, the Director shall have the authority to transfer the density permitted in other similarly zoned property owned by an applicant to the time-share use. 3-164 ORDINANCE NO, 1378 H. Violations, Enforcement and Civil Penalties 1. Any responsible person, including but, not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.12 (General Penalty). 2. Any responsible person, including by not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is subject to administrative fines as set forth in Chapter 8.81 (Administrative Citations). Any person issued an administrative citation pursuant to this section shall for each separate violation be subject to: (1) an administrative fine in an amount not to exceed one thousand dollars ($1,000) for the first citation; (2) an administrative fine in an amount not to exceed three thousand dollars ($3,000) for a second citation issued for the same offense within a twelve-month period of the date of the first offense; and (3) a fine in an amount not to exceed five thousand dollars ($5,000). 3. Time-share use, and/or advertisement for time-share use, of an accommodation in violation of this section is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance and may be abated pursuant to Chapter 8.20 (Public Nuisances), Chapter 9.24 (Noise Control), and Chapter 9.25 (Multiple Responses to Loud or Unruly Parties, Gatherings or Other Similar Events). 4. Each day the violation of this chapter occurs shall constitute a separate offense. 5. The remedies under this. section are cumulative and in addition to any and all other remedies available at law and equity. 1 '--% Ir - r�' Exhibit iN City of Sonoma Time Share Ordinance and Supporting Evidence 3-166 Cary of Sonoma Agenda Item Summary are Meeting: City Council - 01 Jun 2022 Department Planning and Community Services Agenda Item Title Staff Contact David A. Storer, AICP, Director Kristina Tierney, Associate Planner Discussion, Consideration, and Possible Action to Introduce an Ordinance Amending the Sonoma Municipal Code Title 19, Section 19.10.050 (Allowable Land Uses and Permit Requirements) and Adding Title 19, Section 19.50.140 (Time-shares) to the City of Sonoma Municipal Code and Finding this Action Exempt from Further Environmental Review Under the General Rule in California Environmental Quality Act (CEQA) Guidelines Section 15061(b)(3) That CEQA Only Applies to Projects that Have the Potential for Causing a Significant Effect on the Environment Summary On January 19, 2022, the Sonoma City Council unanimously adopted an Urgency Ordinance governing the use of properties as time-shares. Previously, the Municipal Code did not contain any regulation governing the use of properties as time-shares which meant that as a non - enumerated use, time-shares were prohibited throughout the City. However, due to the rise in fractional home ownership, the City Council directed staff to address potential ambiguity regarding whether fractional home ownership uses constitutes a prohibited time-share or an allowed residential use. The Urgency Ordinance was presented to the Planning Commission on January 13th, 2022, for comment and direction to staff, and the Planning Commission unanimously recommended approval to City Council. The Urgency Ordinance added Section 19.50.140 — Timeshares into Title 19 and was effective on January 19, 2022. On February 10, 2022, staff presented a draft Regular Ordinance to the Planning Commission for review. The Planning Commission unanimously recommended that the City Council introduce and adopt the attached ordinance. The ordinance is tentatively scheduled to be introduced on June 1, 2022, and could be adopted on June 15, 2022, to supersede the Urgency Ordinance; however, the Urgency Ordinance would be in effect until a regular ordinance becomes effective. The regular ordinance would go into effect 30 days after adoption - July 15, 2022. Recommended Council Action Introduce an Ordinance Amending the Sonoma Municipal Code Title 19, Section 19.10.050 (Allowable land uses and permit requirements) and Adding Title 19, Section 19.50.140 (Time- shares) to the City of Sonoma Municipal Code. Alternative Actions Council discretion. Financial Impact None. 3-167 Environmental Review Status F Environmental Impact Report L Approved/Certified I . Negative Declaration 17 No Action Required lv� Exempt 17 Action Requested Not Applicable Attachments PUBLIC COMMENT ATTACHMENT Timeshare Regular Ordinance 3-168 C[T Y PUBLIC COMMENT TO THE CITY COUNCIL OR ONE OF THE CITY'S COMMISSIONS Any Public Correspondence Received by the City Regarding an Item that Will be Considered at a Public Meeting by the City Council or One of Its Commissions Can be Found on the City 's CivicWeb Portal at the Following Link. It is Updated as New Correspondence is Received. https://sonomacity.civicweb.net/filepro/documents STAFF CONTACTS: City Council City Clerk (707) 933-2216 Planning, DRHP, CSEC Planning (707) 933-2204 3-169 Citp of bnttumlY ORDINANCE # - 2022 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SONOMA AMENDING SONOMA MUNICIPAL CODE TITLE 19, SECTION 19.10.060 (ALLOWABLE LAND USES AND PERMIT REQUIREMENTS) AND AMENDING TITLE 19, SECTION 19.50.140 (TIME-SHARES) TO THE CITY OF SONOMA MUNICIPAL CODE WHEREAS, time share and fractional interest uses have been and currently are prohibited as uses not specifically enumerated in the Sonoma development code; and WHEREAS, the City has recently become aware of time-share companies or fractional interest companies wishing to operate in the City; and WHEREAS, a severe housing crisis exists in the state with the demand for housing outpacing the supply; and WHEREAS, the City of Sonoma is particularly experiencing a housing emergency due to its relative isolation, limited housing supply, and desirable location; and WHEREAS, time-share or fractional interest uses threaten to reduce the housing supply in the City by turning long-term housing in the City into vacation rentals and reducing the affordable housing stock in the City; and WHEREAS, time-share and fractional interest uses increase traffic and noise impacts and have the same character as commercial hotels, motels, and other transient occupancy uses due to their transient nature making them inappropriate for residential zones; and WHEREAS, the development of time-share or fractional interest uses in Commercial and Mixed Use zones (which also have a "residential component" requirement) will reduce the City's ability to collect valuable property tax, sales tax, or Transient Occupancy Tax; and WHEREAS, by allowing time-share or fractional interest uses in the City, market pressure will incentivize property owners to convert their existing commercial, hotel or residential uses, thereby reducing revenue to the City in the form of commercial property taxes, sales tax, Transient Occupancy Tax, and valuable existing housing stock; and WHEREAS, allowing time-share or fractional interest uses in the Commercial and Mixed Use zones reduces the availability of suitable lands to provide housing units to meet the City's Regional Housing Needs Allocation for the 5th and 6tn Cycles; and WHEREAS, by allowing times -share or fractional interest uses in the City, developers of those uses will seek to convert underutilized commercial uses (in Commercial and Mixed Use zones), thereby reducing the City's ability to identify those sites as potential Housing Opportunity sites in the development of the City's 6tt' Cycle Housing Element; and WHEREAS, on January 19, 2022 the City Council adopted an Urgency Ordinance pursuant to Government Code Sections 36934 and 36937 to make express the City's existing prohibition on time-share and fractional ownership uses in all zones in the City; and 276349.3 3-170 WHEREAS, the City Council desires to adopt a non -urgency ordinance to supersede the urgency ordinance to ensure the City's municipal code addresses the impact that time-share and fractional ownership uses have and could have on the City's housing supply; and WHEREAS, on February 10, 2022, the Planning Commission reviewed and discussed potential changes to the Sonoma Municipal Code to address time-share and fractional ownership uses and unanimously recommended that the item be continued to March 10, 2022; and WHEREAS, on March 10, 2022, the Planning Commission held a public hearing to review and discuss potential changes to the Sonoma Municipal Code to address time-share and fractional ownership uses and unanimously recommended that the City Council introduce the attached ordinance; and WHEREAS, the City Council found this action to be exempt from the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.) ("CEQA") and the State CEQA Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.) pursuant to CEQA Guidelines section 15061(b) (3) prior to taking action; and WHEREAS, on June 1, 2022, the City Council considered amendments to the Sonoma Municipal Code, consistent with the applicable policies of the Sonoma General Plan, at a public hearing; and WHEREAS, the proposed amendments to the Sonoma Municipal Code are consistent with State Law. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SONOMA DOES ORDAIN AS FOLLOWS: SECTION 1. RECITALS. The above set forth recitals and findings are true and correct and incorporated herein by reference, as if set forth herein in full. SECTION 2. FINDINGS FOR DEVELOPMENT CODE AMENDMENTS. Pursuant to Section 19.86.070(B) of the Sonoma Municipal Code, the proposed amendments of the development code under this ordinance: A. Are consistent with the goals, policies, and actions of the General Plan because the amendments the amendments promote and preserve the use of property for vital housing; B. Would not be detrimental to the public interest, health, safety, convenience, or welfare of the city for the reasons described in the recitals above; C. Comply with the provisions of the California Environmental Quality Act (CEQA) as described in Section 4 below; and D. Are internally consistent with other applicable provisions of this development code because the amendments merely codify the existing prohibition on time-share and fractional ownership uses under the City's permissive zoning regime. 276349.3 3-171 SECTION 3. MUNICIPAL CODE AMENDMENTS, A. Tables 2-1, 2-2, 2-3 and 2-4 set forth in Sonoma Municipal Code section 19.10.050 are amended to read as set forth in Exhibit "A". B. Section 19.50.140 of the Sonoma Municipal Code is amended to read as follows: 19.50.140 Time -Shares. This section sets forth requirements for the establishment and operation of time-share uses. A. Definitions. 1. "Accommodation" means any dwelling unit, multifamily dwelling, apartment, condominium or cooperative unit, cabin, lodge, hotel or motel room, or other private or commercial structure containing toilet facilities therein that is designed and available, pursuant to appiicabie law, for use and occupancy as a residence by one or more individuals. 2. "Management entity" means the person who undertakes the duties, responsibilities, and obligations of the management of a time-share plan. 3. "Owner" means owner of a time-share interest. 4. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. 5. "Time-share instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. 6. "Time-share interest" means and includes either of the following: a. The right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, coupled with a freehold estate or an estate for years with a future interest in a time-share property or a specified portion thereof. b. The right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, which right is neither coupled with a freehold interest, nor coupled with an estate for years with a future interest, in a time-share property or a specified portion thereof. 7. "Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, sale, lease, deed, license, right to use agreement, articles of organization or incorporation, operating agreement or bylaws, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, 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. 276349.3 3-172 8. "Time-share property" means one or more accommodations subject to the same time-share instrument, together with any other property or rights to property appurtenant to those accommodations. 9. "Time-share use" and "fractional interest use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan. B. Permitted zones. None. Time share uses and fractional interest uses are prohibited throughout the City of Sonoma C. Violations, Enforcement and Civil Penalties 1. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.12 (General Penalty). 2. Any responsible person, including by not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is subject to administrative fines and/or penalties as set forth in Chapter 1.28 (Administrative Citations). 3. Time-share use, fractional interest use and/or advertisement for time-share use and/or fractional ownership use, of an accommodation in violation of this section is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance and may be abated pursuant to Chapter 1.12 (General Penalty), Chapter 1.30 (Administrative Notice and Order Proceedings), Chapter 9.56 (Noise), and any other relevant provision of this code as it may be amended from time to time. 4. Each day a violation of this chapter occurs shall constitute a separate offense. 5. The remedies under this section are cumulative and in addition to any and all other remedies available at law and equity. SECTION 4. CEQA. This Ordinance has been assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines, and the environmental regulations of the city. City Planning Staff has determined that the adoption and implementation of the Ordinance is exempt from further environmental review under the general rule in California Environmental Quality Act (CEQA) Guidelines Section 15061(b)(3) that CEQA only applies to projects that have the potential for causing a significant effect on theenvironment. As a text amendment and addition without any physical project being approved, it can be seen with certainty that there is no possibility that the Ordinance will have a significant effect on the environment. The 276349.3 3-173 proposed Ordinance is therefore exempt from the provisions of CEQA because it does not involve a commitment to any specific project that may result in a potentially significant physical impact on the environment. The City Council concurs in these findings and adopts them as its own. The City Council, therefore, directs that a Notice of Exemption be filed with the County Clerk of the County of Sonoma in accordance with CEQA Guidelines. SECTION 5. SEVERABILITY. If any section, subsection, subdivision, sentence, clause, phrase, or portion of this Ordinance for any reason is held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have adopted this Ordinance, and each section, subsection, subdivision, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases, or portions thereof be declared invalid or unconstitutional. This ordinance shall take effect thirty (30) days after passage thereof. SECTION 7. PUBLICATION. This ordinance shall be published in accordance with the provisions of Government Code section 36933, subdivision (c)(1). SECTION 8. THIS ORDINANCE PREVAILS WHERE THERE IS CONFLICT. To the extent that this Ordinance conflicts with any other provision in the Sonoma Municipal Code or city ordinance (urgency or otherwise), policy or regulation, this Ordinance will control. APPROVED: Jack Ding, Mayor ATTEST: Rebekah Barr, MMC, City Clerk 276349.3 3-174 I HEREBY CERTIFY the foregoing ordinance was duly adopted at a Regular Meeting of the City Council of the City of Sonoma held on the , 2022 by the following vote: AYES: NOES: ABSENT: ABSTAIN: Rebekah Barr, MMC, City Clerk 276349.3 3-175 �h�kcirY r citj' Of'sollonza ro Agenda Item Summary Meeting: City Council - 15 Jun 2022 Department Staff Contact Planning and Community Services Kristina Tierney, Associate Planner David A. Storer, AICP, Director Agenda Item Title Discussion, Consideration, and Possible Action to Adopt an Ordinance Amending the Sonoma Municipal Code Title 19, Section 19.10,050 (Allowable Land Uses and Permit Requirements) and Adding Title 19, Section 19.50.140 (Time-shares) to the City of Sonoma Municipal Code and Finding this Action Exempt from Further Environmental Review Under the General Rule in California Environmental Quality Act (CEQA) Guidelines Section 15061(b)(3) That CEQA Only Applies to Projects that Have the Potential for Causing a Significant Effect on the Environment Summary The attached regular ordinance prohibits timeshares and fractional interest uses in the City of Sonoma and was introduced unanimously on June 1, 2022. Upon its effective date on July 15, 2022, it repeals and replaces the Urgency Ordinance currently in place. Recommended Council Action Adopt an Ordinance Amending the Sonoma Municipal Code Title 19, Section 19.10.050 (Allowable land uses and permit requirements) and Adding Title 19, Section 19.50.140 (Time- shares) to the City of Sonoma Municipal Code. Alternative Actions Council discretion. Financial Impact None. Environmental Review Status F7 Environmental Impact Report Li Approved/Certified 0 Negative Declaration ❑ No Action Required 0V Exempt L Action Requested C Not Applicable Attachments PUBLIC COMMENT ATTACHMENT Timeshare Regular Ordinance_ Exhibit A Alignment with Council Goals: 3-176 Not Applicable Compliance with Climate Action 2020 Target Goals: CC: nla 3-177 PUBLIC COMMENT TO THE CITY COUNCIL OR ONE OF THE CITY'S COMMISSIONS Any Public Correspondence Received by the City Regarding an Item that Will be Considered at a Public Meeting by the City Council or One of Its Commissions Can be Found on the City's CivicWeb Portal at the Following Link. It is Updated as New Correspondence is Received. https://sonomacity,civicweb.net/filepro/documents STAFF CONTACTS: City Council City Clerk (707) 933-2216 Planning, DRHP, CSEC Planning (707) 933-2204 3-178 Citp of b nom a AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SONOMA AMENDING SONOMA MUNICIPAL CODE TITLE 19, SECTION 19.10.060 (ALLOWABLE LAND USES AND PERMIT REQUIREMENTS) AND AMENDING TITLE 19, SECTION 19.50.140 (TIME-SHARES) TO THE CITY OF SONOMA MUNICIPAL CODE WHEREAS, time share and fractional interest uses have been and currently are prohibited as uses not specifically enumerated in the Sonoma development code; and WHEREAS, the City has recently become aware of time-share companies or fractional interest companies wishing to operate in the City; and WHEREAS, a severe housing crisis exists in the state with the demand for housing outpacing the supply; and WHEREAS, the City of Sonoma is particularly experiencing a housing emergency due to its relative isolation, limited housing supply, and desirable location; and WHEREAS, time-share or fractional interest uses threaten to reduce the housing supply in the City by turning long-term housing in the City into vacation rentals and reducing the affordable housing stock in the City; and WHEREAS, time-share and fractional interest uses increase traffic and noise impacts and have the same character as commercial hotels, motels, and other transient occupancy uses due to their transient nature making them inappropriate for residential zones; and WHEREAS, the development of time-share or fractional interest uses in Commercial and Mixed Use zones (which also have a "residential component" requirement) will reduce the City's ability to collect valuable property tax, sales tax, or Transient Occupancy Tax; and WHEREAS, by allowing time-share or fractional interest uses in the City, market pressure will incentivize property owners to convert their existing commercial, hotel or residential uses, thereby reducing revenue to the City in the form of commercial property taxes, sales tax, Transient Occupancy Tax, and valuable existing housing stock; and WHEREAS, allowing time-share or fractional interest uses in the Commercial and Mixed Use zones reduces the availability of suitable lands to provide housing units to meet the City's Regional Housing Needs Allocation for the 5th and 61h Cycles; and WHEREAS, by allowing times -share or fractional interest uses in the City, developers of those. uses will seek to convert underutilized commercial uses (in Commercial and Mixed Use zones), thereby reducing the City's ability to identify those sites as potential Housing Opportunity sites in the development of the City's 61" Cycle Housing Element; and WHEREAS, on ,January 19, 2022 the City Council adopted an Urgency Ordinance pursuant to Government Code Sections 36934 and 36937 to make express the City's existing prohibition on time-share and fractional ownership uses in all zones in the City; and 276349.3 3-179 WHEREAS, the City Council desires to adopt a non -urgency ordinance to supersede the urgency ordinance to ensure the City's municipal code addresses the impact that time-share and fractional ownership uses have and could have on the City's housing supply; and WHEREAS, on February 10, 2022, the Planning Commission reviewed and discussed potential changes to the Sonoma Municipal Code to address time-share and fractional ownership uses and unanimously recommended that the item be continued to March 10, 2022; and WHEREAS, on March 10, 2022, the Planning Commission held a public hearing to review and discuss potential changes to the Sonoma Municipal Code to address time-share and fractional ownership uses and unanimously recommended that the City Council introduce the attached ordinance; and WHEREAS, the City Council found this action to be exempt from the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.) ("CEQA") and the State CEQA Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.) pursuant to CEQA Guidelines section 15061(b) (3) prior to taking action; and WHEREAS, on June 1, 2022, the City Council considered amendments to the Sonoma Municipal Code, consistent with the applicable policies of the Sonoma General Plan, at a public hearing; and WHEREAS, the proposed amendments to the Sonoma Municipal Code are consistent with State Law. NOW, THEREFORE, THE CITY COUNCIL. OF THE CITY OF SONOMA DOES ORDAIN AS FOLLOWS: SECTION 1. RECITALS. The above set forth recitals and findings are true and correct and incorporated herein by reference, as if set forth herein in full. SECTION 2. FINDINGS FOR DEVELOPMENT CODE AMENDMENTS. Pursuant to Section 19.86.070(B) of the Sonoma Municipal Code, the proposed amendments of the development code under this ordinance: A. Are consistent with the goals, policies, and actions of the General Plan because the amendments the amendments promote and preserve the use of property for vital housing; B. Would not be detrimental to the public interest, health, safety, convenience, or welfare of the city for the reasons described in the recitals above; C. Comply with the provisions of the California Environmental Quality Act (CEQA) as described in Section 4 below; and D. Are internally consistent with other applicable provisions of this development code because the amendments merely codify the existing prohibition on time-share and fractional ownership uses under the City's permissive zoning regime. 276349.3 3-180 SECTION 3. MUNICIPAL CODE AMENDMENTS. A. Tables 2-1, 2-2, 2-3 and 2-4 set forth in Sonoma Municipal Code section 19.10.050 are amended to read as set forth in Exhibit "A". B. Section 19.50.140 of the Sonoma Municipal Code is amended to read as follows: 19.50.140 Time -Shares. This section sets forth requirements for the establishment and operation of time-share uses. A. Definitions. 1. "Accommodation" means any dwelling unit, multifamily dwelling, apartment, condominium or cooperative unit, cabin, lodge, hotel or motel room, or other private or commercial structure containing toilet facilities therein that is designed and available, pursuant to applicable law, for use and occupancy as a residence by one or more individuals. 2. "Management entity" means the person who undertakes the duties, responsibilities, and obligations of the management of a time-share plan. 3. "Owner" means owner of a time-share interest. 4. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. 5. "Time-share instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. 6. "Time-share interest" means and includes either of the following: a. The right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, coupled with a freehold estate or an estate for years with a future interest in a time-share property or a specified portion thereof. b. The right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, which right is neither coupled with a freehold interest, nor coupled with an estate for years with a future interest, in a time-share property or a specified portion thereof. 7. "Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, sale, lease, deed, license, right to use agreement, articles of organization or incorporation, operating agreement or bylaws, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, 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. 276349.3 3-181 8. "Time-share property" means one or more accommodations subject to the same time-share instrument, together with any other property or rights to property appurtenant to those accommodations. 9. "Time-share use" and "fractional interest use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan. B. Permitted zones. None. Time share uses and fractional interest uses are prohibited throughout the City of Sonoma C. Violations, Enforcement and Civil Penalties 1. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.12 (General Penalty). 2. Any responsible person, including by not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is subject to administrative fines and/or penalties as set forth in Chapter 1.28 (Administrative Citations). 3. Time-share use, fractional interest use and/or advertisement for time-share use and/or fractional ownership use, of an accommodation in violation of this section is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance and may be abated pursuant to Chapter 1.12 (General Penalty), Chapter 1.30 (Administrative Notice and Order Proceedings), Chapter 9.56 (Noise), and any other relevant provision of this code as it may be amended from time to time. 4. Each day a violation of this chapter occurs shall constitute a separate offense. 5. The remedies under this section are cumulative and in addition to any and all other remedies available at law and equity. SECTION 4. CEQA. This Ordinance has been assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines, and the environmental regulations of the city. City Planning Staff has determined that the adoption and implementation of the Ordinance is exempt from further environmental review under the general rule in California Environmental Quality Act (CEQA) Guidelines Section 15061(b)(3) that CEQA only applies to projects that have the potential for causing a significant effect on theenvironment. As a text amendment and addition without any physical project being approved, it can be seen with certainty that there is no possibility that the Ordinance will have a significant effect on the environment. The 276349.3 3-182 proposed Ordinance is therefore exempt from the provisions of CEQA because it does not involve a commitment to any specific project that may result in a potentially significant physical impact on the environment. The City Council concurs in these findings and adopts them as its own. The City Council, therefore, directs that a Notice of Exemption be filed with the County Clerk of the County of Sonoma in accordance with CEQA Guidelines. SECTION 6. SEVERABILITY. If any section, subsection, subdivision, sentence, clause, phrase, or portion of this Ordinance for any reason is held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have adopted this Ordinance, and each section, subsection, subdivision, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases, or portions thereof be declared invalid or unconstitutional. SECTION 6. EFFECTIVE DATE. This ordinance shall take effect thirty (30) days after passage thereof. SECTION 7. PUBLICATION. This ordinance shall be published in accordance with the provisions of Government Code section 36933, subdivision (c)(1). SECTION 8. THIS ORDINANCE PREVAILS WHERE THERE IS CONFLICT. To the extent that this Ordinance conflicts with any other provision in the Sonoma Municipal Code or city ordinance (urgency or otherwise), policy or regulation, this Ordinance will control. APPROVED: Jack Ding, Mayor ATTEST: Rebekah Barr, MMC, City Clerk 276349.3 3-183 I HEREBY CERTIFY the foregoing ordinance was duly adopted at a Regular Meeting of the City Council of the City of Sonoma held on the , 2022 by the following vote: AYES: NOES: ABSENT: ABSTAIN: Rebekah Barr, MMC, City Clerk 276349.3 3-184 EXHIBIT Amendments to "Zones and Allowable Uses" (Title 19, Section 19.10.050) of the Sonoma Municipal Code. A. Table 2.1 (Residential Uses and Permit Requirements) is hereby amended as follows: Allowed Uses and Permit Permit Required by'bistrict P Use permitted Requirements for Residential (2) :' UP Use Permit Districts (1) required L. License required Use not allowed Land Use (1) R- R-R R-L R-S R-M R-H R-O R-P Specific HS Use Regulation s AGRICULTURE, RESOURCE AND OPEN,SPACEUSES Animal Keeping P P UP — - — — Chapter 8.08 SMC Crop Production P P UP — — - — and Horticulture Produce Stands P P ; UP — --- — — — SMC for On -Site 19.50.070 Production - MANUFACTURING AND PROCESSING USES Existing Uses -- — — — — — — — SMC 19.82.020 RECREATION, EDUCATION AND PUBLIC ASSEMBLY USES Equestrian UP "UP - - - - - - Facilities Parks and P P P P P P P -- Playgrounds Religious — — UP UP UP UP — — Facilities Schools -- Public — — UP UP UP UP — and Private RESIDENTIAL USES (2) Ord. Title 19 5MC 2022 Page 1 of 14 3-185 Duplex — — UP P P I UP UP -- Emergency — — — — UP UP UP — SMC Shelters 19.50.033 Home P P P P P P P P SMC Occupation 19.50.035 Live/Work — — — — UP — — — Facilities Mobile Home — — — — — — UP SMC Park 19.50.035 Multi -family — — — UP P P P — Dwelling (Four or fewer units) Multi -family — — — UP UP UP P — Dwelling (Five or more units) Personal Indoor P P P P P P P P SMC Cannabis 19.50.032. Cultivation (4) A Personal Outdoor P P P P P P P P SMC Cannabis 19.50.032. Cultivation (4) B (Prohibited if multifamily dwelling or mobile home) Residential P P P P P P P P Accessory . Structures Residential Care — P P P — — — Homes, Six or fewer clients Residential Care — — — — UP — — — Homes, Seven or more clients Single -Family P, P P P P UP — — SMC Dwellings 19,50.035 Accessory P P P P P P P P SMC Dwelling Units I I I 1 1 19.50.090 Accessory P P P P P P P P SMC Dwelling Units, 19.50.090 Junior Ord. Title 19 5MC 2022 Page 2 of 14 R :• Supportive P P PIUP PIUP PIUP PIUP — — Housing (3) Transitional P P PIUP PIUP PIUP PIUP — — Housing (3) RETAIL TRADE AND SERVICES , Art, Antique, — — — UP — — — — Collectible and Gift Sales Artisan Shops — — — UP — — — — Bed and UP UP UP — — — — — SMC Breakfast Inns 19.50.030 (B&Bs) Child Day Care — UP UP UP UP UP UP — Center Child Day Care: — UP UP UP UP UP — — Small Family Day Care Home Child Day Care: — — UP UP UP UP UP — Large Family Day Care Home General Retail — — — UP — — — — Governmental — UP UP UP UP UP UP and Public Facilities Libraries and — — — UP — — — — Museums Medical Services — — — UP UP — — - - Extended Care Offices, — — — UP — — — — Professional and Administrative Personal — — -- UP — — — — Services Restaurant — — — UP — — — — Senior — — — — UP — — — Residential Care Facilities Telecommunicati See Chapter 5.32 SMC, Telecommunications Facility and Antenna ons Facilities, Criteria Commercial Time-shares- - - - _ _ = SMC 3 Ord. Title 19 SMC 2022 Page 3 of 14 3-187 19.50.14 0 SPECIAL PURPOSE USES Public Utility — — — — — — — — Facilities Public Utility P P P P P P P P Equipment Notes: 1. See SMC 19.10.050(C) regarding uses not listed. See Division Vill for definitions of the listed land uses. 2. New residential developments subject to the City's Growth Management Ordinance (SMC 19.94). 3. Supportive and Transitional Housing shall be subject to those restrictions that apply to other residential dwellings of the same type in the same zone. For example, such housing structured as single-family is permitted in the R-HS, R-R, RL and RS residential zones, whereas Supportive and Transitional housing structured as multi -family is limited to the RM and RH residential zones and the Mixed -Use Zone. 4. Personal cultivation of cannabis (Indoor and Outdoor) only allowable in conjunction with residential use subject to SMC 19.50.032. B. Table 2-2 (Commercial Uses and Permit Requirements) is amended as follows: Allowed Uses and Permit Permit Required by District P Use permitted Requirements for Commercial (2) UP Use Permit required Zoning Districts (1) L License required — Use not allowed Land Use C CG Specific Use Regulations MANUFACTURING AND PROCESSING USES Artisans/Craft Product UP UP Manufacturing Food and Beverage UP UP Manufacturing Furniture/Fixtures UP UP Manufacturing, Cabinet Shops Recycling Facilities — Reverse UP P Vending Machines Recycling Facilities — Small UP UP Collection Facilities Research and Development UP — (R&D) Ord. Title 19 SMC 2022 Page 4 of 14 3-188 Warehousing, Wholesaling UP and Distribution RECREATION, EDUCATION, and PUBLIC ASSEMBLY USES Clubs, Lodges and Private Meeting Halls — UP Community Centers UP UP HealthlFitness Facilities P UP Indoor Amusement/Entertainment Facilities UP UP Libraries and Museums P P Nightclubs and Bars UP UP Outdoor Commercial Recreation UP UP Religious Facilities P — Schools — Specialized Education and Training UP UP Studios for Art, Dance, Music, Photography, Etc. P UP Theaters and Auditoriums UP UP RESIDENTIAL USES (4) Emergency Shelters UP UP SMC 19.50.033 LiveAAfork Facilities UP UP SMC 19.50.050 Multi -family Dwelling, (Four or UP UP fewer units) Multi -family Dwelling (Fiveor UP UP more units),, Pemonal'Indoor Cannabis P P SMC 19.50.032.A Cultivation (7) Personal' Outdoor Cannabis - P P SMC 19.50.0323 Cultivation (7) (Prohibited if multifamily dwelling or mobile home) Single Room Occupancy, ; UP — Housing Supportive Housing UP UP Transitional Housing UP UP RETAIL TRADE (3) Accessory Retail Uses P P Adult Business UP — E Ord. Title 19 5MC 2022 Page 5 of 14 3-189 Art, Antique, Collectible and Gift Sales P P Artisan Shops P UP Auto and Vehicle Sales/Rental UP - Building Material Stores UP UP Commercial Cannabis Activities (8): SMC Chapter 5.36 Manufacturing UP — Non -store front retail UP — Store -front retail UP — Testing laboratory UP — Drive -In and Drive Through Sales UP Furniture, Furnishings and Equipment Stores P P General Retail P P Grocery Store P P Music Venue L L SMC Chapter 5.34 Outdoor Retail Sales and Activities UP" UP Plant Nurseries and Garden Supply Stores P P Restaurant Up UP Second Hand Stores "= P P Shopping Center UP UP Special Event Venue (6) UP UP Wine Tasting FacilitiesNVine Bars WTUP WTUP SMC 19.50.120 Tap Rooms UP UP SMC 19.50.130 SERVICES Banks and Financial Services P P Bed and Breakfast Inns (B&Bs) UP UP SMC 19.50.030 Business Support Services P UP Child Day Care Facilities P P Drive -In and Drive -Through Services UP -- Equipment Rental UP — Governmental and Public Facilities P P Ord. Title 19 SMC 2022 Page 6 of 14 3-190 Hotel or Motel UP UP Medical Services — Clinics, UP Offices, Laboratories UP Medical Services — Hospitals UP UP Mortuaries and Funeral UP Homes — Offices, Professional and P Administrative UP Personal Services P P Storage — Outdoor UP — Storage — Personal Storage UP Facility (Mini -Storage) — Telecommunications } See Chapter 5.32 SMC, Telecommunications Facility and Facilities, Commercial I Antenna Criteria Time-shares — — SMC 19.50.140 Auto Parts Sales P — Vacation Rental — — SMC 19.50.110 Vehicle Services, Car UP — Washes Vehicle Services, Repair and UP — Maintenance Vehicle Services, Service UP — SMC 19.50.100 Station Repair Services, for P UP Consumer Products SPECIAL CIRCUMSTANCES COMMERCIAL DEVELOPMENT Commercial Development, Large UP UP Chapter 5.34 SMC Development Adjacent to a Residential Zone (4) UP UP Formula Business, Small PIUP (5) P SMC 19,50.035 Formula Business, Large UP UP SMC 19.50,035 Formula Restaurant, Large UPI— (6) UP SMC 19.50.035 Shopping Center, Reconfiguration UP UP SPECIAL PURPOSE USES Public Utility Facilities — — Public Utility Equipment P P Dotes: Ord. Title 19 SMC 2022 Page 7 of 14 3-191 1. See SMC 19.10.050(C) regarding uses not listed. See Division VIII for definitions of the listed land uses. 2. New residential developments subject to the City's Growth Management Ordinance (SMC 19.94). 3. Supportive and Transitional Housing shall be subject to those restrictions that apply to other residential dwellings of the same type in the same zone. For example, such housing structured as single-family is permitted in the R-HS, R-R, RL. and IRS residential zones, whereas Supportive and Transitional housing structured as multi -family is limited to the RM and RH residential zones and the Mixed -Use Zone. 4. Defined as new commercial construction or an addition to an existing commercial building, having an area of 1,000 square feet or greater. 5. Use Permit required within the historic overlay zone fi. Prohibited in IP Plaza Retail District. See SMC 19.50.035. 7. Personal cultivation of cannabis (indoor and outdoor) only allowable in conjunction with residential use subject to SMC 19.50.032, 8. No commercial cannabis activity may occur in these zonin-g dh§tridts unless and until a C. Table 2-3 (Mixed Uses and Permit Requirements) is amended as follows: Allowed Uses and Permit Permit Required by District P Use permitted Requirements for Mixed Use .(2) UP Use Permit required Zoning Districts (1) L License required Use not allowed Land Use MX 'Specific' Use Regulations MANUFACTURING AND PROCESSING USES'(3) Artisans/Craft Product UP. Manufacturing Food and Beverage - UP Manufacturing Furniture/Fixtures UP Manufacturing, Cabinet . Sh.9ps,/ Change''in Existing UP SMC 19.82.020 Nonconforming Uses Recycling Facilities — Small � Collection Facilifies Research and Development UP (R&D) Warehousing, Wholesaling and Distribution RECREATION, EDUCATION AND PUBLIC ASSEMBLY USES (3) Clubs, Lodges, and Private UP Meeting Halls Community Centers UP Ord. Title 19 SMC 2022 Page 8 of 14 3-192 Health/Fitness Facilities UP Indoor Amusement/Entertain ment Facilities UP Libraries and Museums UP Outdoor Commercial Recreation — Religious Facilities UP Schools — Specialized Education and Training UP Studios for Art, Dance, Music, Photography, Etc. UP Theaters and Auditoriums UP RESIDENTIAL USES (4) j Emergency Shelters UP SMC 19.50.033 Live/Work Facilities UP SMC 19.50.050 Multi -family Dwelling (Four or P fewer units) Multi -family Dwelling (Five or UP more units) Personal Indoor Cannabis P SMC 19.50.032.A Cultivation (7) Personal Outdoor Cannabis P , SMC 19.50.032.13 Cultivation (7) (Prohibited if multifamily dwelling or mobile home) Residential Care Homes, ':;, UP Seven or more clients Single -Family Dwellings., P (5) Supportive Housing, four or P fewer'.uhits Supportive Housing, five or UP more units Transitional Housing, four`or �' P fewer units Transitional Housing, 'fve or UP more units RETAIL TRADE (3) Accessory Retail Uses UP Art, Antique, Collectible and UP Gift Sales Artisan Shops UP Ord. Title 19 SMC 2022 Page 9 of 14 3-193 Auto and Vehicle Sales/Rental — Building Material Stores — Commercial Cannabis Activities (8): Manufacturing UP SMC Chapter 5.36 Non -store front retail UP SMC Chapter 5.36 Testing laboratory UP SMC Chapter 5.36 Drive -In and Drive -Through Sales UP Farmers Market UP Fueling Station UP Furniture, Furnishings and Equipment Stores UP General Retail UP .: Grocery Store UP Music Venue L Chapter 5.34 SMC Outdoor Retail Sales and Activities UP Plant Nurseries and Garden Supply Stores UP Restaurant UP Second Hand Stores UP Shopping Center UP Special Event Venue (6) UP Wine Tasting Facilities/Wine," Bars WTUP SMC 19.50.120 Tap Rooms UP SMC 19.50.130 SERVICES (3) Auto Parfs.Sales UP Banks and Financial Services', UP Bed and Breakfast Inns (B&Bs) UP Business Support Services UP Child Day Care Facilities UP Drive -In and Drive -Through Facilities UP Equipment Rental UP Governmental and Public Facilities UP 10 Ord. Title 19 SMC 2022 Page 10 of 14 3-194 Hotel or Motel UP Medical Services -- Clinics, UP Offices, Laboratories Medical Services — Hospitals — Mortuaries and Funeral UP Homes Offices, Professional and UP Administrative Personal Services UP Storage — Outdoor — SMC 19.40.100(D) Storage — Personal Storage — Facility (Mini -Storage) Telecommunications See Chapter 5.32 SMC, Telecommunications Facility and Facilities, Commercial Antenna Criteria SMC Time-shares 19.S0.140 Vacation Rental — SMC 19.50.110 Vehicle Services, Repair and UP Maintenance Vehicle Services, Service — SMC 19.50.100 Stations Repair Services for UP Consumer Products SPECIAL CIRCUMSTANCES COMMERCIAL DEVELOPMENT Formula Business, Small UP SMC 19.50.035 Formula Business, Large UP SMC 19.50.035 Formula Restaurant, Large UP SMC 19.50.035 SPECIAL PURPOSE USES Public Utility Facilities — Public Utility Equipment P Notes: 1. See SMC 19.10.050(C) regarding uses not listed. See Division VIII for definitions of the listed land uses. 2. New development in the Mixed -Use zone shall include a residential component unless waived by the planning commission through use permit review (see SMC 19.10.020(C)). 3. Uses within these categories are allowed only if the planning commission finds that the use will not result in the encroachment of incompatible commercial uses within an established residential area. 4. New residential developments subject to the city's growth management ordinance. 5. Limited to a single residence on an existing lot of record; otherwise, use permit approval is required. 6. On sites of one acre in size or larger. 7. Personal cultivation of cannabis (indoor and outdoor) only allowable in conjunction with residential use subiect to SMC 19.50.032. Ord. Title 19 SMC 2022 Page 11 of 14 3-195 8. No commercial cannabis activity may occur in these zoning districts unless and until a commercial cannabis business permit has been issued for that activity under Chapter 5.36. D. Table 2-4 (Special Purpose Uses and Permit Requirements) is hereby amended as follows: Allowed Uses and Permit Requirements for Special Purpose Zoning Districts Permit Requ"ired`'by District P Use permitted UP Use Permit required L license required Use not allowed Land Use (1) A - Pk' P W Specific Use Regulations AGRICULTURAL AND OPEN SPACE USES Crop Production and Horticulture P P' . Livestock Raising , P ; — — — SMC 19.50.020 Prescribed Grazing — UP — Produce Stands for On -Site Production P — — — SMC 19,50.070 Trails, Hitcing' and Bicycling P P P -- MAN'U"FACTURING AND'':PROCESSING USES Agricultural or Food Processing,. — — UP Wineries — — — UP Winery Accessory,Uses — — — UP SMC 19.50,020 RECREATION, EDUCATION AND PUBLIC ASSEMBLY USES Community Centers ` — — UP — Community Garden — UP UP — Equestrian Facilities UP UP — — SMC 19.50.020 Libraries and Museums — UP I UP — Parks and Playgrounds — P P — Recreational Facilities — UP P --- 12 Ord. Title 19 SMC 2022 Page 12 of 14 3-196 Schools, Public and Private — — P — Theaters and Auditoriums — UP P — RESIDENTIAL USES (2) Agricultural Employee P — — — Housing Caretaker and Employee UP UP UP UP Housing Emergency Shelters, 15 or — — P — SMC 19,50.035 fewer beds Emergency Shelters, 16 or — — UP more beds Personal Indoor Cannabis P P P P SMC 19.50.032.A Cultivation (3) Personal Outdoor Cannabis P P P P SMC 19.50.032.13 Cultivation (3) (Prohibited if multifamily dwelling or mobile home) Residential Accessory P — — — SMC 19.50.035 Structures and Uses Single -Family Dwellings P — — — SMC 19.50.035 Supportive Housing (4) — — UP -- Transitional Housing (4) — — UP — Vacation Rental — UP -- — SMC 19.50.110 SERVICES Offices —Administrative — UP UP — Cemeteries — — P — Child Day Care Facilities — — P — Corporation Yard -- — P — Farmers Market P P P — Governmental and Public Facilities — UP UP ---- Kennel — — UP — Medical Services — Hospitals - I — UP - Telecommunications Facilities, Commercial See Chapter 5.32 SMC, Telecommunications Facility and Antenna Criteria Timeshares — — — — SMC 19.50.140 SPECIAL PURPOSE USES Public Utility Facilities — Public Utility Equipment P P P P 13 Ord. Title 19 SNAC 2022 Page 13 of 14 3-197 Notes: 1. See Section 19.10.050.0 regarding uses not listed. See Division Vlll for definitions of the listed land uses. 2. New residential developments subject to the City's Growth Management Ordinance (SMC 19.94), 3. Personal cultivation of cannabis (indoor and outdoor) only allowable in conjunction with residential use subject to SMC 19.50.032. 4. Supportive and transitional housing shall be subject to those restrictions that apply to other residential dwellings of the same type in the same zone. 14 Ord. Title 19 SMC 2022 Page 14 of 14 3-198 Exhibit O City of St. Helena Time Share Ordinance and Supporting Evidence 3-199 AV Report to the City Council Regular City Council - 22 Mar 2022 Agenda Section: PUBLIC HEARINGS Subject: Ordinance Adding Chapter 17.138 "Time Share Uses" and Sections 17.138.060 to Title 17, Zoning of the St. Helena Municipal Code, amending sections 17.48.030 (Central Business) and 17.52.030 (Service Commercial) and Deleting Section 17.112.130 of the St. Helena Municipal Code CEQA Exempt Determination: Prepared By: Ethan Walsh, City Attorney Reviewed By: April Mitts, Administrative Services Director Approved By: James C. McCann, Interim City Manager BACKGROUND Over the past two years, there has been significant discussion in the community regarding Section 17.112.130 of the City's Zoning Code, which prohibits the creation of a time-share project as a means of ownership of any single-family, two-family or multiple -family dwelling or any apartment house in the City (the "Time Share Ordinance"). The City Council discussed the Time Share Ordinance at its July 14, 2020 meeting in response to concerns raised regarding a real estate listing for a fractional or partial ownership interest in a residential home in the City. The prior City Attorney discussed this issue with the City, focusing on the question of the extent to which the City Council could regulate an ownership structure through the City's zoning authority, and noted the challenges of doing so. At the conclusion of the Council's discussion of this issue, Council directed the City Attorney and staff to continue to research its options to address the concerns raised by members of the community in response to the listing of the home at issue. In the months following the July 2020 Council meeting, the company that had been marketing that original home, now known as Pacaso, began marketing other homes in the City, and the City received additional complaints from members of the community. Based on new information that was available to the City, primarily through Pacaso's marketing materials, the City Attorney's office concluded that the properties being marketed by Pacaso were 3-200 not just fractional or partial ownership structures, but were also being marketed to be used as a time share project that would be prohibited under the City's ordinance, and informed Pacaso of that conclusion. Pacaso disagreed with the City Attorney's conclusion, and initiated a lawsuit in an effort to compel the City to retract its conclusion. That litigation is ongoing. When reviewing the Time Share Ordinance in this context, the City Attorney's office found that the substance of the Time Share Ordinance has not been updated since its adoption in 1982. The City Attorney's office concluded that the Time Share Ordinance would benefit from an update to refine the definitions to more directly address the impacts of time-share uses, to clarify the means used by the City to enforce the restrictions on time share uses, and to clarify how time share uses are treated in non-residential districts. City staff initially delayed initiating any changes to the Time Share Ordinance while the litigation was ongoing. However, due to the continued marketing of time share uses within the City, staff has decided to move forward with recommending the proposed updates to the City's ordinance. On March 1, 2022, the Planning Commission voted unanimously to recommend the City Council approve the proposed ordinance. DISCUSSION The Discussion section of the Staff Report is organized as follows: First, the section provides a brief explanation for the City's conclusion that the homes that have been marketed by Pacaso constitute time share projects. While the City's conclusion does not directly affect the changes to the Zoning Code set forth in the proposed ordinance, it is helpful to understand that the Time Share Ordinance, both in its original form and as proposed to be amended, is intended to protect against the impacts that these homes and similar uses could have on the City's housing supply and the character of the City's residential districts. Second, this section discusses the legal basis for the City's Time Share Ordinance, the reasons why the City prohibited time share uses in residential properties, and why those reasons continue to apply today. Third, this section outlines the changes made in the proposed ordinance and the reasons for the proposed changes. A.Current Time Share Ordinance and Application to Pacaso Homes Section 17.112.130 of the Zoning Code prohibits the creation of a time-share project as a means of ownership of any single-family, two-family or multiple family dwelling or apartment house within the City. A time-share project is defined in that section as any real property that is subject to a time-share program. A time-share program is in turn defined in part as an arrangement whereby the use, occupancy or possession of the property circulates among purchasers according to a fixed or floating time schedule on a periodic basis for a specific period of time during any given year. Pacaso provides a significant amount of information on its website regarding the manner in which its homes are used by the purchasers of a Pacaso home. According to Pacaso's website, the single family residences marketed by Pacaso are held by a property -specific 3-201 limited liability company ("LLC"), and each co-owner purchases a 118 share in the LLC. (Pacaso.com/learn) Each 1 /8 share entities the co-owner to 44 stay nights within any 365 day window. Stays can be from 2 to 14 nights in duration for each 1 /8 share. Back-toback stays are not permitted. (Pacaso.com/faq/scheduling) Stays are booked on an app, with specific rules governing the number of "special dates" that each co-owner can book, and the number of stays that each owner can book during "peak seasons." (Id.) Each owner can book the residence to use themselves, or may allow guests to use the residence, whether or not the co-owner is present. (Id.) Between each stay, Pacaso conducts a thorough inspection and cleaning. ("5 reasons Pacaso is better than a timeshare." Pacaso.com/blog/better-than-resort-timeshare) The Pacaso model grants each 1 /8 owner the right to use the property for a specific period of time (44 days in a year) in increments of 2-14 days. The use, occupancy and possession of the property circulates among the co -owners according to a floating time schedule that gives each co-owner exclusive rights to the property for -a specific period of time each year. This use structure fits squarely in the City's definition of a time-share program, and the properties operated by Pacaso in this manner would therefore be timeshare projects under the existing Time Share Ordinance. B.Reasons for the Time Share Ordinance 1. The City's General Plan The City of St. Helena has long been defined by its rural, small town quality and agricultural character. In adopting the St. Helena General Plan Update 2040, the City noted that the defining, unifying goal of all the elements of the 1993 General Plan was: To protect the rural, small town quality and agricultural character of St. Helena. It is the General Plan's intent that the preservation of this small town character be the unifying philosophy that overlays all other stated goals and policies. (General Plan 2040, p. 1-2.) While the 2040 General Plan acknowledges that this is no longer the sole, overriding focus of the General Plan, retaining the small town character of St. Helena remains a primary focus of the City's land use planning. (Id.) A key component of retaining the City's small town character is maintaining a balance between the economic benefits that arise from visitors who come to St. Helena for its wineries, restaurants and historic downtown, and maintaining its authentic small town quality of life for the City's residents. This theme is consistent throughout the City's General Plan, and maintaining this balance is key to the City's long term viability. The General Plan notes in its Introduction that "[t]he community stands out in the Valley for its unique, historic character and its ability to attract visitors while also supporting the needs of its resident population." (General Plan p. 1-8.) The City has set goals to maintain that balance, striving to achieve an economy that "will meet the basic needs of residents, while balancing the benefits and impacts of visitors and provide better economic opportunities. (General Plan 1-15.) The City further seeks to "promote sustainable tourism practices that allow the City to enjoy the economic benefits of visitors to the region while maintaining the authentic small-town quality of life." (General Plan p. 3-9.) 3-202 St. Helena is a renowned tourist destination, bringing visitors from throughout the world to its wineries, restaurants and downtown, but it is also a functioning City and community, with residents who contribute to its social fabric. Like most communities throughout California, one of the key means that the City utilizes to maintain this balance is through its Zoning Ordinance. The City has commercial districts, like the Service Commercial district and the Central Business district, that provide for uses that serve both visitors and the local community, such as restaurants, retail shops and winery tasting rooms, among others, along with lodging where those visitors can stay. (St. Helena Municipal Code §§17.48.030, 17.52.030.) The City also has residential districts that provide housing for those who live in the community, at varying densities in order to provide a diversity of housing types. 2. Use of Zoning to Preserve Residential Areas The use of zoning to preserve the character of the residential districts of a City has been common for over a century. In the seminal case of Euclid v. Ambler the United States Supreme Court upheld the validity of comprehensive zoning that would set aside residential districts "from which business and trade of every sort, including hotels and apartment houses, are excluded." (Euclid v. Ambler Co. 272 U.S. 355, 390.) The U.S. Supreme Court upheld the Village of Euclid's zoning ordinance in that instance, noting that the inclusion of non-residential uses in residential districts may have an increasingly deleterious impact on the residential area "until, finally, the residential character of the neighborhood and its desirability as a place of detached residences are utterly destroyed." (Id. at 394.) The California Court of Appeals followed Euclid and subsequent cases in upholding the City of Carmel-by-the-Sea's zoning restriction on short-term rentals. (Ewing v. City of Carmel -By -The -Sea (1991) 234 Cal.App.3d 1579.) In that case, the Court noted that the City's chief purpose in adopting the short-term rental restriction was "to provide an appropriately zoned land area within the City for permanently single-family residential uses and structures and to enhance and maintain the residential character of the City." (Id. at 1579.) In upholding Carmel's short-term rental restriction, the Court found that short-term rentals "undoubtedly affect the essential character of a neighborhood and the stability of a community. Short-term tenants have little interest in public agencies or in the welfare of the citizenry. They do not participate in local government, coach little league, or join the hospital guild. They do not lead a scout troop, volunteer at the library, or keep an eye on an elderly neighbor. Literally, they are here today and gone tomorrow --without engaging in the sort of activities that weld and strengthen a community." (Id. at 1591.) 3.Impacts of Time Share Uses on Residential Districts Like Carmel, the City of St. Helena strives to maintain the character of its residential areas in the face of intense demand for accommodations to serve visitors to St. Helena. The 3-203 Time Share Ordinance is one of the means that the City has in place to ensure that it is able to maintain its existing and limited housing stock for use in long term residency, and to maintain the character of its residential zoning districts. When the City originally adopted the Time Share Ordinance in 1982, the City Council made specific findings based on the impact it foresaw if time share uses were to locate in the residential areas of the City. Those findings were as follows: 1. There is a critical shortage of affordable housing in the city for long-term occupancies (more than six months annually), and the availability of additional residential dwelling units is substantially restricted by the growth management system. 2. The conversion of residential dwelling units within the city to time-sharing projects eliminates residential dwelling units otherwise available for long-term occupancies (more than six months annually) in the city. 3. Time-sharing projects have the same character as commercial hotels, motels and other transient occupancy uses due to their transient nature and to the multiple shortterm (less than six months annually) occupancies by those participating in timesharing projects. 4. Such commercial or quasi -commercial like use is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. 5, The city council finds and determines that this section is necessary to protect the public health, safety and welfare of the citizens of the city. As discussed in more detail below, these findings continue to hold true in St. Helena, and continue to support the City's decision to restrict time-share uses in residential districts. i. Housing Shortages and Impacts of Time -Share Uses on Existing Housing Stock In adopting the current Time Share Ordinance, the City Council found that there was a critical shortage of affordable housing in the City for long-term occupancies. That continues to be the case, and is undoubtedly worse than was the case at the time the Time Share Ordinance was originally adopted. The most recent census data lists the median value of owner occupied homes in St. Helena at $1,112,100 for the period of 2015-2019, while the Zillow Home Value Index estimates medial home values in St. Helena to be approximately $1,870,000 as of February 2022. www.census.gov/quickfacts/sthelenacitycalifornia-, zillow.com/home-values/.) In contrast, the median household income in St. Helena from 2015-2019 was $90,031, and the median income for a four person household in Napa County for 2021 is approximately $109,200. (www.census.gov/quickfactslsthelenacitycalifornia; www.hcd.ca. ovl rantfundin /income-limits/state-and-federal-income- li m itsldocs/i n come-1 im its-2021. pd#. ) At the time of adoption of the City's Housing Element in 2015, the income necessary to purchase a median priced single family home was nearly $200,000 per year, and prices 3-204 have risen dramatically since then. (City of St. Helena Housing Element Update 2015-23, p. 3.) The cost of homes currently in St. Helena are well in excess of what median income residents of St. Helena can afford, as well as median income residents of Napa County generally. Further, as Erika Sklar observed in the St. Helena Housing Update Report that she prepared for the City in April 2018, "St. Helena has more local jobs than people in the labor force, demanding large numbers of commuters to fill local jobs. Workers commute daily into St. Helena, many because there is no local housing that is affordable at the incomes that they make. 36% of St. Helena households cannot afford market rents while 70% of St. Helena households cannot afford to purchase a home. Paramedics and preschool teachers cannot afford St. Helena's market rents. Teachers, registered nurses, winery and hospitality managers and non-profit directors cannot afford homeownership in St. Helena." (St. Helena Housing Update Report, p. 7 (April 2018).) The City has made and continues to make efforts to address the need for affordable housing in the City, including providing assistance for the Brenkle Court, Turley Flats and 963 Pope Street projects. The City has also ensured that new non-residential development will assist the City in providing adequate affordable housing, as evidenced by the significant contributions to affordable housing made by the Farmstead Lodging project through its development agreement with the City. These efforts, however, have highlighted the challenges of providing housing at all income levels, with the most significant challenge being a limited supply of existing housing stock in the City, and a limited supply of available land for new housing. Given the housing shortage already in existence, losing additional housing stock will only make this problem worse. The findings in the original Time Share Ordinance also note that the conversion of homes to time sharing projects would eliminate residential dwelling units that would otherwise be available for long term residential use. This continues to be true, as a home that is used for time share purposes will no longer be available for households to use as their long term residence. This threat to the City's existing housing stock is not insignificant. The publicity regarding Pacaso's rise as a company speaks to a pent up demand for homes that could be converted to time share use, reducing available housing stock for long term use. Pacaso's cofounder has indicated that "[t]here are tens of millions of families that aspire to own second homes but are unable to, due to reasons of cost." (Just Five Months Old, Zillow Co -founder's Pacaso Claims It's Already A Unicorn" Noah Kirsch, March 24, 2021 (www.forbes.com/sites/noahkirsch/2021 /03/24/just-five-months-old- zillowcofounders-pacaso-claims-its-alread-a-unicornl.)) In discussing Pacaso's model, Dan Wenhold of the venture capital firm Fifth Wall said "[t]hey were taking a previously illiquid asset, which was a timeshare, and making it affordable for the masses, also making it attainable for folks who wanted to own a second home but previously weren't able to." ("Pacaso, the Proptech Startup Founds by Zillow Alums, Raises $125M Series C" Sophia Kunthara (September 14, 2021) (news.crunchbase.cominewslproptech- startup-pacasoraises-125m-series-c.)) Creating a new market for these prospective buyers who otherwise would not buy second homes unquestionably increases demand for these homes by creating an incentive for timeshare companies to buy up residences to meet this market demand. Creating more demand, and reducing supply, will further 3-205 ratchet up housing costs, exacerbating the already significant housing shortage in the City. ii. Impacts to Character of the City's Residential Districts The City Council additionally found as part of the adoption of the original Time Share Ordinance that time-sharing projects have the same character as commercial hotels, motels and other transient occupancy uses due to their transient nature and to the multiple short-term occupancies by those participating in time-sharing projects. The Council concluded that this commercial or quasi -commercial like use is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. This continues to be the case, as the nature of time share uses of residential property is different than the typical long term residential uses for which the residential districts of the City are intended. The complaints that have been made by some local residents regarding the Pacaso homes are illustrative of the distinctions between time share uses and long term residential uses. A sampling of the email complaints received by the City are included in Attachment No. 2 to this Staff Report. The complaints received center on concerns over more intense traffic and parking issues, outdoor parties and conversations going late into the evening, sometimes as late as 2 A.M. One neighbor complained of outdoor lighting shining. into her daughter's room at night. They complained of traffic and inadequate parking for the visitors to these homes. Further, neighbors have noted that with each turnover from one stay to another, cleaning and landscaping crews come to clean the unit and prepare it for the next user. While this level of maintenance is appropriate for a commercial vacation property, it impacts the residential character of the surrounding area by adding parking and noise burdens in the neighborhood. Living next door to a home where the residents turnover every 2-14 days, and professional cleaning and landscaping crews come to the property between each visit is much more akin to living by a commercial lodging project than a residential home. This is not at all surprising, given that these time share homes are used by people who are on vacation. While long term residents may have an occasional party at their home, the time share model means that these residences are constantly being used by people who are on vacation, hosting parties or celebrating special occasions. These activities by their nature are more intense than typical residential use of property. The intensity of this use is a significant reason that these uses can change the character of a residential neighborhood. Long term residents, whether owners or renters, will occasionally have guests, and will occasionally have parties, but these time-share homes are used exclusively by people who are coming to the City on a short term basis for vacation or leisure. People will naturally stay out later, entertain more and gather in larger numbers while on vacation. That is the reason that these uses are more appropriate in non-residential areas that are intended to cater to the City's visitors and tourists. Time share uses can change the character of a residential neighborhood by having it serve not only as a residential area but also a visitor lodging area, and subjecting it to the impacts that come with that more intense land use. 3-206 In their marketing materials, Pacaso cites this intensity of use as a benefit, indicating that having these units filled with visitors seven days a week will benefit the local economy, since these visitors will patronize local businesses. (pacaso.comlcommunities) However, as noted above, the City strives through its General Plan to achieve a balance between benefits to the local economy and maintaining the character of the City. The City seeks to achieve this balance by promoting "sustainable tourist practices that allow the City to enjoy the economic benefits of visitors to the region while maintaining the authentic smalltown quality of life, (General Plan p. 3-9) and striving to achieve a local economy that "will meet the basic needs of residents, while balancing the benefits and impacts of visitors." (General Plan p. 1-15) Bringing more visitors into residential neighborhoods to improve the local economy does not help to achieve that balance. It instead tips the scales in favor of the local economy, at the expense of the residential character of these neighborhoods. The nature of the timeshare use itself can impact the residential character of the City's residential districts because it will ensure that the time share users can only use their property for a limited amount of time each year. In the case of Pacaso owners, each stay is limited to 2-14 days. As discussed above, in the Ewing v. City of Carmel -by -the -Sea case, the California Court of Appeal found that short term rentals would affect the essential character of a neighborhood and the stability of a community. The Court noted that "[s]hort term rentals have little interest in public agencies or in the welfare of the citizenry. They do not participate in local government, coach little league, or join the hospital guild. They do not lead a Scout troop, volunteer at the library, or keep an eye on an elderly neighbor. Literally they are here today and gone tomorrow —without engaging in the sort of activities that weld and strengthen a community." This same problem is present with time-share uses. Each co-owner is in the unit on a short-term basis, and without the time to participate in the types of activities or build the relationships that create the fabric of a community. At the April 28, 2021 council meeting several Pacaso co -owners spoke of their experiences in St. Helena. All of them spoke of their affection for the community and the traditions they had established, but these were centered on attending local events and visiting shops, restaurants and wineries. These types of transactional activities are all beneficial to the City's local economy and are what the City hopes to see from visitors to the City, but it is not the type of community involvement described in the Ewing case that binds and strengthens a residential community. Given the City's desire to strike a balance between the demands of the City's visitor and tourist economy, and retaining its small town character and quality of life, the City has an interest in maintaining housing stock in its residential districts for long-term residents who will engage in the community in the manner described by the Court in Ewing, to the betterment of the entire community. C.Proposed Amendments to the Time Share Ordinance The proposed Ordinance would make certain changes to the City's Existing Time Share Ordinance, as described below. 3-207 15indings and Establishment of New Chapter The proposed Ordinance includes detailed recitals and findings describing the policy bases for the City's regulation of time share uses. The findings are consistent with the findings made as part of the original Time Share Ordinance, but more detail has been added. The policy bases for the proposed Ordinance are discussed in the sections above, and further discussion is not necessary here. The proposed Ordinance also relocates the restrictions on time share uses to its own chapter at Chapter 17.138. The Time Share Ordinance is currently located in Chapter 17.112, General Site Design and Development Standards. City staff believes that with the added level of detail in the Proposed Ordinance, these provisions merit being located in a separate chapter, and has changed the location of the Timeshare Ordinance accordingly. 2.Definitions The Proposed Ordinance amends the definitions that are used to define time share uses, with the new definitions set forth in Section 17.138.020. The new definitions are modeled on the definitions utilized by the state to regulate time-shares in the Vacation Ownership and Time -Share Act of 2004 (Bus. & Prof. Code §§11210-11288), but are modified somewhat to better apply in the land use regulation context. The new ordinance includes a number of definitions that work in concert to define a timeshare use. The ordinance defines a "time-share use" as the use of one or more accommodations, or any part thereof, as part of a time-share property pursuant to a timeshare plan. An "accommodation" is defined in this Chapter to include a range of residential units that could potentially be used for time-share purposes. The types of residential units that can be accommodations are listed at the beginning of Section 17.138.020 in the proposed ordinance. A "time-share plan" is defined in the ordinance, and generally includes any arrangement, plan, scheme or similar device whereby a purchase receives the right to exclusive use of the accommodation, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given year. A "time-share property", in turn is defined as one or more accommodations that are subject to the same time-share plan together with any property rights that are appurtenant to the accommodations. A "time-share instrument", is the document or documents that create or govern the operation of the time-share plan. Therefore a time-share use is the use of a residential property that fits within the definition of an "accommodation" under the ordinance, pursuant to a "time-share plan", which grants each owner of the time-share property exclusive use of the property for a certain period of time each year, but not the full year. e �s It is important to note that not all properties with multiple owners or owned by business entities (such as LLCs) would constitute a time-share use under these definitions. The definitions focus on the manner in which the accommodation is used, not how it is owned. A time-share plan allows each owner exclusive use of the property for a specific period of time. This manner of use prevents the property from being used for long term residency, and leads to the continual cycling of visitors through the property and the more intense, constant vacation oriented use that the ordinance seeks to limit in residential districts of the City. A property that is owned by a group of friends or extended family members, whether through a separate business entity or otherwise, will not necessarily mandate that only one owner will be able to use the property at a time. The more formal arrangement found in time-share uses increases the intensity of use, in that each individual time-share owner cycles through the property, whereas families or friends are more likely to use the property together or in groups leading to less transition in the residential neighborhood. The more formal relationship, use of professional property managers and rights to exclusive use found in timeshare uses contributes to the commercial character of the property, with added traffic due to the more frequent turnover of visitors and more frequent cleaning and inspection between each user, which is common for a commercial vacation property, but not for a home owned by family or friends. 3.Enforcement The new ordinance additionally adopts a new enforcement structure for the City timeshare restrictions, modeled on the City's short-term rental ordinance. The ordinance prohibits both the use of accommodations for time-share use, and the advertisement of accommodations for time-share uses. This will better allow the City to prevent time-share uses in residential neighborhoods before they occur. The proposed Ordinance also outlines the process that will be used to enforce this new Chapter, again based on the City's existing short-term rental regulations. This approach has proved to be effective in enforcing the City's short-term rental regulations, and will help the City to take a more preventative approach to enforcing its time-share regulations as well. 47ime Share Uses in Service Commercial and Central Business Districts Finally, while the City's existing Time Share Ordinance did prohibit time-share projects within certain types of residential dwelling units within the City, it does not make distinctions based on the various zoning districts of the City. Given that the primary concerns and impacts of this use arise from the high intensity use of property that negatively impacts the residential character of residential districts within the City, this use may not have the same impacts in commercial districts where visitors can be closer to the amenities in the City that cater to visitors. The proposed new ordinance would allow time-share uses in the Service Commercial and Central Business Districts as conditional uses, provided that such time-share uses would be limited to accommodations in upper floors in conjunction with a mixed use project, would be required to provide at least one parking space for accommodations of two or fewer bedrooms, and at least two parking 3-209 spaces for accommodations of three or more bedrooms, and would be subject to such other conditions imposed by the City has part of the conditional use permit process. As part of the application for a time-share use, the applicant would have to provide specific information including a management plan and specific information on the accommodations and any ancillary uses. The City would then review the application process in accordance with its normal process for review of conditional uses. This would allow the City to address potential impacts associated with this use, similar to the approach that the City uses with hotels and other lodging accommodations in these districts. Consistent with this change, the proposed ordinance updates the list of conditional uses in both the Service Commercial and Central Business Districts to include time share uses as regulated by the new Chapter 17.138. The Planning Commission held a public hearing to consider the proposed ordinance at its regular meeting of March 1, 2022. Following the public hearing, the Planning Commission unanimously recommended that the City Council adopt the proposed ordinance. City staff has made minor, non -substantive edits to the proposed ordinance that went to the Planning Commission to correct typographical errors, and to add the sections amending the list of conditional uses in the Service Commercial and Central Business Districts. FISCAL IMPACT None RECOMMENDED ACTION Staff recommends that the City Council introduce by title only and waive further reading of an Ordinance Adding Chapter 17.138 "Time Share Uses" and Sections 17.138.010- 17.138.060 to Title 17, Zoning, of the St. Helena Municipal Code, amending sections 17.48 (Central Business) and 17.52 (Service Commercial) and Deleting Section 17,112.130 of the St. Helena Municipal Code. ATTACHMENTS Attachment 1-St. Helena Time Share Ordinance -Final Attachment 2-Community email comments 3-210 IN11-WK91A&'Iaa: 4>A: 4`111 ORDINANCE NO. ADDING CHAPTER 17.138 "TIME SHARE USES" AND SECTIONS 17.138.010 — 17.138.060 TO TITLE 17, ZONING, OF THE ST. HELENA MUNICIPAL CODE, AMENDING SECTIONS 17.48.030 AND 17.52.030 AND DELETING SECTION 17.112.130 OF THE ST. HELENA MUNICIPAL CODE WHEREAS, the City of St. Helena is a popular tourist destination, known for its scenic Napa Valley location, exceptional wineries and restaurants, historic Main Street and small town agricultural character; and WHEREAS, preserving the rural, small town quality and agricultural character of the City of St. Helena has been a focal point of the City's land use planning for decades, and remains a primary focus in the City's 2040 General Plan; and WHEREAS, the City of St. Helena stands out in the Napa Valley for its ability to attract visitors while also supporting the needs of its resident population. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy; and WHEREAS, the City values and welcomes all visitors to the City and recognizes their contributions to the City's economy, but finds that in order to maintain the City's long term viability as a community where people not only come to visit, but also live, work and contribute to the long term betterment of the community through participation in the City's schools, local community groups, civic government and local serving businesses, the City must maintain a balance between residential land uses and visitor serving uses; and WHEREAS, the City's existing housing stock is significantly impacted, with demand outweighing supply, resulting in extremely high housing prices as detailed in the accompanying staff report. A limited supply of suitable vacant land, exorbitantly high land costs, and limitations in the City's existing infrastructure, among other factors, have limited the construction of additional housing in the City of St. Helena; and WHEREAS, according to the U.S. Census Bureau, the current median household income in the City of St. Helena is $90,031,-while the estimated value of owner - occupied housing units from 2015-2019 was approximately $1,112,100, with current real estate listings suggesting that prices are increasing significantly, meaning that homes in the City are not affordable to the median household in the City; and WHEREAS, as noted in the St. Helena Housing Update Report prepared for the City in April 2018, "St. Helena has more local jobs than people in the labor force, demanding large numbers of commuters to fill local jobs. Workers commute daily into -1- 3-211 St. Helena, many because there is no local housing that is affordable at the incomes that they make. Thirty six percent (36%) of St. Helena households cannot afford market rents while seventy percent (70%) of St. Helena households cannot afford to purchase a home. Paramedics and preschool teachers cannot afford St. Helena's market rents. Teachers, registered nurses, winery and hospitality managers and nonprofit directors cannot afford homeownership in St. Helena"; and WHEREAS, the City has made significant efforts to address the need for housing at lower income levels, of which recent examples include providing assistance to local nonprofit Our Town St. Helena for the Brenkle Court development, a mutual self-help housing development providing homeownership opportunities to eight low income working families, as well as the acquisition of a home located at 963 Pope Street using a charitable sale strategy. The property at 963 Pope Street is being developed with an additional four units to provide a total of five new affordable rental units in the City; and WHEREAS, further, in connection with the recently approved Farmstead lodging project, the City negotiated with the developer to contribute one million dollars toward the purchase of property to be used for the development of not less than twenty units of housing that will be affordable to low and very low income households, and an additional two million two hundred thousand dollars to be used more generally toward the development of affordable housing in the City; and WHEREAS, the City additionally provided substantial financial assistance to the recently completed Turley Flats Affordable Housing development, which provides eight units of rental affordable housing in a three story building located at 1105 Pope Street; and WHEREAS, these efforts have helped to address the City's need for affordable housing, but have also highlighted the challenge of providing sufficient housing to meet demand, particularly at more affordable levels, due to the significant costs of acquiring housing or land for the development of housing in the City and the limited supply of such land; and WHEREAS, the conversion of existing residential units to uses other than long- term residential use will further reduce the City's existing long-term housing supply, causing further imbalance between the demand for housing in the City and the existing supply, not only altering the character of the City's residential neighborhoods, but also presenting further challenges to the City's efforts to provide affordable housing within the community; and WHEREAS, the City additionally has, for many years, worked to preserve its existing housing stock for long term residential use, both to maintain the character of its residential neighborhoods and prevent residential districts from becoming visitor and tourist serving districts, and to ensure that it would not be converted to uses other than long-term residential uses; and -2- 3-212 WHEREAS, to this end, in 1982 the City adopted Ordinance No. 82-07, which prohibited the creation of time-share projects as a means of ownership of any single- family, two-family or multiple -family dwelling or any apartment house within the City. This restriction was imposed because the conversion of residential dwelling units to time-sharing projects would eliminate residential dwelling units that would otherwise be available for long-term occupancies, and were inappropriate in residential areas because those uses have the same character as commercial hotels, motels and other transient occupancy uses, and would result in increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods; and WHEREAS, the City has historically not received complaints about time-sharing uses in residential neighborhoods. Commencing in 2020, however, the City began receiving complaints regarding single family homes in the City that were being sold and/or marketed as "fractional ownership" or "co -ownership" homes, wherein each buyer may acquire a one -eighth interest in a limited liability company that will own the home. Under the structure pursuant to which these dwelling units are marketed and sold, each owner gets a one -eighth share along with the right to use the home for one - eighth of each year indefinitely. During each owner's usage period, that owner has exclusive use of the entire house. All rentals are prohibited; only owners and their guests are permitted to use the house. Each owner pays regular assessments to fund the operating costs of the home and maintenance reserves; and WHEREAS, this arrangement, which provides that each purchaser is entitled to exclusive use of the property for a fixed number of days each year, is a "time-share plan" as defined in Business and Professions Code section 11212, and a "time share program" as defined in Section 17.112.130 of the City's Municipal Code; and WHEREAS, the City has received numerous complaints regarding these properties, including parking impacts from large numbers of people staying at these properties; excessive noise late into the evening due to frequent outdoor parties; traffic due to frequent visitor turnover; traffic, noise and parking concerns due to frequent visits from cleaning, landscape maintenance and pool cleaning services that come to the properties in between each stay to prepare the home for the next guest; and an inability to maintain lines of communication to set community expectations with the users of the unit, as visitors only frequent the homes for short term stays of 2 to 14 days; and WHEREAS, the complaints received by the City are reflective of the reasons that the City prohibited time-share projects within residential areas of the City. The time- share uses provide a short-term, high impact vacation oriented use of the property, where those that buy into the time-share use the home for entertaining and short term stays while visiting restaurants, wineries and other tourist oriented locations in St. Helena and the surrounding Napa Valley; and WHEREAS, this high impact use, combined with the frequent turnover and commercial management of these properties is not consistent with the residential districts in which they are located. It is commercial in nature, in that these time-share -3- 3-213 uses are structured as a short-term, tourist oriented, visitor serving use of the subject properties. The use of these properties as time-shares adds excessive noise and traffic to residential districts by using these properties for high impact tourist oriented uses more appropriately located in commercial districts of the City; and WHEREAS, expanded use of residential properties for time-share uses will further reduce the availability of housing stock for long-term residential use, and create a new demand for time-share uses of residential properties; and WHEREAS, this encroachment of tourist oriented, visitor serving uses in residential neighborhoods will not only compromise the residential character of these areas, but will also further increase the costs for housing in the City, undermining the City's efforts to provide a balance of housing for all income levels in the City; and WHEREAS, the City's authority to enact zoning ordinances is based on the powers accorded cities and counties under the State constitution to make and enforce police regulations. This police power grants the City broad authority to regulate the development and use of real property within its jurisdiction to promote the public welfare; and WHEREAS, pursuant to and in accordance with this authority, the City Council desires to reaffirm its restrictions on time-share uses in residential areas, and to update the language of the Zoning Code to provide consistency with the terminology used to define time-share uses in State law. Further, the City desires to provide greater clarity as to the zoning districts in which time-share uses are permitted as conditional uses, and the standards pursuant to which they will be reviewed in those zoning districts; and WHEREAS, the Planning Commission of the City of St. Helena held a duly noticed public hearing on March 1, 2022, as required by law to consider all the information presented by staff, and public testimony presented in writing and at the meeting; and WHEREAS, on March 1 2022, the Planning Commission of the City of St. Helena recommended that the City Council adopt this Ordinance amending the Municipal Code as described herein by a 5-0 vote; and WHEREAS, on March 22, 2022, the City Council held a duly noticed public hearing, accepting testimony from the public, and discussed the proposed amendments and staffs recommended approval of this Ordinance; and WHEREAS, the proposed zoning amendments are consistent with the General Plan goals, policies and implementation programs as the Ordinance will continue to preserve the agricultural, small town character of the City of St. Helena; will preserve the City's residential districts for residential uses; and will help to preserve the City's existing housing stock for long term residential uses, to avoid further exacerbating the existing impacts on the City's housing supply; and 3-214 Now, therefore, the City Council of the City of St. Helena does hereby ordain as follows: SECTION 1: The above recitals are hereby incorporated as though set forth in this section. SECTION 2: Chapter 17.138 and sections 17.138.010 — 17.138.060 are hereby added to Title 17 of the St. Helena Municipal Code, to read as follows: "Chapter 17.138 TIME-SHARE USES 17.138.010 Purpose and Findings 17.138.020 Definitions 17.138.030 Time-share Uses Restricted to Service Commercial (SC) and Central Business (CB) Districts 17.138.040 Application Process and Development Standards 17.138.050 Violations, Enforcement and Civil Penalties 17.138.010 Purpose and Findings A. There is a critical shortage of permanent, long-term housing in the City of St. Helena. B. A limited supply of suitable vacant land, land values, and market demand for land for other uses, including but not limited to use of property for vineyards, have limited the construction of additional housing in the City of St. Helena. C. St. Helena is a popular tourist destination known for its scenic Napa Valley location, exceptional wineries and restaurants, historic Main Street and small town agricultural character. D. The City of St. Helena stands out in the Napa Valley for its ability to attract visitors while also supporting the needs of its resident population. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. E. Time-share uses are not an appropriate land use in the City's residential districts due to the multiple occupancy of time-share properties, the short-term, tourist oriented use of such property and commercial management of time-share facilities, all of which -S- 3-215 create increased traffic generation, excessive noise, disruption to residential communities through commercial -level maintenance of the time-share facilities, and therefore are appropriately confined to commercial zoning districts. F. Conversion of permanent housing to time-share facilities removes existing housing units from the City's existing stock and exacerbates an already severe housing shortage. G. It is therefore in the public interest to prohibit conversions of existing housing units into timeshare facilities, as to do so eliminates needed housing stock by diverting those units to a tourist -oriented, commercial use. 17.138.020 Definitions For purposes of this Chapter, the following words and phrases shall have the meaning respectively ascribed to them by this Section: "Accommodation" means any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.160. "Building" shall have the meaning ascribed to it by Section 17.04.160. "Dwelling unit" shall have the meaning ascribed to it by Section 17.04.160. "Managing entity" means the person who undertakes the duties, responsibilities and obligations of the management of a time-share plan. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. "Time-share instrument' means one or more documents, by whatever name denominated, creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. "Time-share interest" means the right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, regardless of whether or not such right is coupled with a property interest in the time-share property or a specified portion thereof. "Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given _6_ 3-216 year, on a recurring basis for more than one year, but not necessarily for consecutive years. "Time-share property" means one or more accommodations subject to the same time- share plan, together with any other property or rights to property appurtenant to those accommodations. "Time-share use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan. 17.138.030 Time-share Uses Restricted to Service Commercial (SC) and Central Business (CB) Districts Time-share uses are conditional uses within the City's Service Commercial (SC) District and Central Business (CB) District, subject to approval of a conditional use permit applied for and approved in conformance with this Chapter. Timeshare uses are not permitted in ail other Zoning Districts in the City. 17.138.040 Application Process and Development Standards A. Application Process. Approval of a conditional use permit for time-share uses in the Service Commercial District or Central Business District shall be required in accordance with the requirements of Chapter 17.168. In addition to the application requirements contained in Chapter 17.168, an application for a time-share use shall be accompanied by the following documents which shall be subject to the approval of the planning director: 1. Management Plan. A management plan shall describe the methods employed by the applicant to guarantee the future adequacy, stability, and continuity of a satisfactory level of management and maintenance of the time share use. 2. Application Requirements. In addition to any application requirements established by this section and any other applicable requirements of this code, the following information shall be submitted as part of any application to develop or establish a time-share use: a. Typical floor plans for each accommodation. b. The phasing of the construction of the accommodations on the time- share property, if applicable. c. A description of any ancillary uses which are proposed in conjunction with the time share use. d. A description of the method of management of the time share use and indication of the management entity for the time-share property. e. Any restrictions on the use or occupancy of the accommodations. -7- 3-217 f. Any other information or documentation the applicant, city staff or commission deems reasonably necessary to the consideration of the time-share use, including any required environmental documents. B. Development Standards and Operational Requirements. Notwithstanding any other provision of this chapter, the following conditions must be met by any time-share use in any conditionally permitted zone. Additional requirements may be attached to a conditional use permit or development agreement if found to be necessary to assure that the time-share use meets the intent of this chapter: 1. Time-share uses developed in the Service Commercial District or Central Business District shall be limited to accommodations in upper floors in conjunction with a mixed -use project. 2. No existing residential use in the Service Commercial or Central Business District shall be converted to a time-share use. I Development Standards. The time-share use shall comply with all development standards for the zone in which it is located. 4. Parking. Parking shall be provided as follows: a. For accommodations of two or fewer bedrooms, one parking space shall be provided for each accommodation. b. For accommodations of three or more bedrooms, two parking spaces shall be provided for each accommodation. 4. Modification or Waiver of Standards. The planning commission may modify or waive one or more of the regulations contained in this section if it determines that strict compliance is not necessary to achieve the purpose and intent of this section. 17.138.O60 Violations, Enforcement and Civil Penalties A. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this chapter is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1,20. B. Time-share use, and/or advertisement for time-share use, of an accommodation in violation of this chapter is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance. Any such nuisance may be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 1.12, except that the civil penalty for a violation shall be one thousand dollars ($1,000.00). Each day the violation occurs shall constitute a separate offense. -S- 3-218 C. Any responsible person who violates this chapter shall be liable and responsible for a civil penalty of one thousand dollars ($1,000.00) per violation per day such violation occurs. The city may recover such civil penalty by either civil action or administrative citation. Such penalty shall be in addition to all other costs incurred by the city, including without limitation the city's staff time, investigation expenses and attorney's fees. 1. Where the city proceeds by civil action, the court shall have discretion to reduce the civil penalty based upon evidence presented by the responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the court should consider the purpose of this chapter to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the responsible person's enrichment or profit as a result of the violation of this chapter. In any such civil action the city also may abate and/or enjoin any violation of this chapter. 2. Where the city proceeds by administrative citation, the city shall provide the responsible person notice of the right to request an administrative hearing to challenge the citation and penalty, and the time for requesting that hearing. a. The responsible person shall have the right to request the administrative hearing within forty-five (45) days of the issuance of the administrative citation and imposition of the civil penalty. To request such a hearing, the responsible person shall notify the city clerk in writing within forty- five (45) days of the issuance of the citation. The appeal notification shall include all specific facts, circumstances and arguments upon which the appeal is based. b. The city manager is hereby authorized to designate a hearing officer to hear such appeal. The city hearing officer shall conduct a hearing on the appeal within ninety (90) days of the request for the hearing unless one of the parties requests a continuance for good cause. The hearing officer shall only consider those facts, circumstances or arguments that the property owner or responsible person has presented in the appeal notification. c. The hearing officer shall render a decision in writing within thirty (30) days of the conclusion of the hearing. The hearing officer shall have discretion to reduce the civil penalty based upon evidence presented by the property owner or responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the hearing officer should consider the purpose of this chapter to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the property owner's or responsible person's enrichment or profit as a result of the violation of this chapter. d. Any aggrieved party to the hearing officer's decision on the administrative appeal may obtain review of the decision by filing a petition for writ 3-219 of mandate with the Napa County superior court in accordance with the timelines and provisions set forth in Government Code Section 53069.4. e. If, following an administrative hearing, appeal, or other final determination, the owner of the property is determined to be the responsible person for the civil penalty imposed by this section, such penalty, if unpaid within forty-five (45) days of the notice of the final determination, shall become a lien to be recorded against the property on which the violation occurred pursuant to Chapter 1.12. Such costs shall be collected in the same manner as county taxes, and thereafter the property upon which they are a lien shall be sold in the same manner as property now is sold for delinquent taxes. D. Any violation of this chapter may also be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 1.12, except that the civil penalty under Chapter 1.12 for a violation shall be one thousand dollars ($1,000.00). E. Each day the violation of this chapter occurs shall constitute a separate offense. F. The remedies under this chapter are cumulative and in addition to any and all other remedies available at law and equity." SECTION 3: Deletion of Section 17.112.130 Section 17.112.130 is hereby deleted in its entirety. SECTION 4: Amendment of Section 17.48.030 Section 17.48.030 is hereby amended to add the following text as a separate line immediately following "Theaters, movie and legitimate;", and immediately prior to "Tobacco/smoke shop, including the sale of tobacco, tobacco and/or nicotine products and equipment for smoking;` "Time share uses, pursuant to Sections 17.138.030 and 17.138.040;" SECTION 5: Amendment of Section 17.52.030 Section 17,52.030 is hereby amended to add the following text as a separate line immediately following "Theaters, movie and legitimate;", and immediately prior to "Tobacco/smoke shop, including the sale of tobacco, tobacco and/or nicotine products and equipment for smoking;` "Time share uses, pursuant to Sections 17.138.030 and 17.138.040;" SECTION 6: CEQA - 10- 3-220 This ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines (the Guidelines), and the environmental regulations of the City. The City Council hereby finds that this ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. SECTION 6: Effective Date This ordinance shall take effect 30 days after its final adoption, and a summary of this ordinance shall be published once with the names of the members of the Council voting for and against the ordinance in the St. Helena Star, a newspaper of general circulation published in the City of St. Helena. THE FOREGOING ORDINANCE was introduced at a City Council on the day of , 2022, meeting of the St. Helena City Council on the following vote: Mayor Ellsworth: Vice Mayor Dohring: Councilmember Chouteau: Councilmember Hardy: Councilmember Hall: APPROVED: Geoff Ellsworth, Mayor ATTEST: CITY OF ST. HELENA Cindy Tzafopoulos, City Clerk -11- regular meeting of the St. Helena and was adopted at a regular day of , 2022, by the 3-221 From: Mari Jansdotter<rnjansdotterc@i7i yahoo.com> To: Anna Chouteau Sent: 6/8/2021 7:25:45 AM Subject: Re: [External] 1242 Madrona pictures Re: Pacaso Thank you, Alma, for your kind reply. Pin soriy you all have to go through this lawsuit by Pacaso and hope the judge find in your favor. I have a follow-up question. Do you know who i should address it to? The Pacas house building on Kearney across tale street from us has installed Lights under the roofline that are on all night and installed in such a way they shine straight into our house, especially my daughter's bedroonn. Are there any ordinances that I could refer to that help ine ask them to please cover / redirect those lights or at least tiun them off after 10 p,m? Thank you! Best Mari 3-222 3-224 Sent from Yahoo Mail on Android On Tue, Jun 8, 2021 at 7.12 AM, Anna Chouteau EAChouteau@cityofsthelena.org> wrote: Hi Mari, Thank you for your email. I forwarded your email to City staff about the specific permitting questions. Our planning director is out of the office this week. We are deInding ourselves in the lawsuit. Our City Attorney filed an anti-SLAPP motion that is now public information and the hearing will be coming up this sunnier. All my best, Anna Sent from my Wad On Jun 7, 2021, at 6:01 PM, Mari Jansdotter <mjansdotter@yahoo.com> wrote: To clarify, do they have permit allowing the new structure going up at 1242 Madrona? Tile rendering from original sales listing shows a trellis (see attached) but a structure looking like a live -on unit close to (and taller than) the Oak neighbour' fence is being built. See pictures from today <20210607_175202jpg> <20210607_175219jpg> Sent from Yahoo Mail on Android On Mon, Jun 7, 2021 at 5:38 PM, Mari Jansdotter <mjansdotter@yahoo.com? wrote: Thank you for doing all you. can to stop Pacaso! I ain not o.k. with Pacaso's violation of city ordinance and I support the city's legal fight. In addition to signing the petition and putting a No Pacaso sign outside my home, what else can we ou the community do to help, please? 3-225 I finally afforded my dream home after moving several times the last 1.0 years, only to a year later have 41 of these Pacaso 'tune share' like vacation LLC/cormnercially owned houses popping up in my neighborhood. I'm. devastated - this is supposed to be a residential area!! I am very worried about my family's safe & peaceful living situation, now that I'll be impacted by 4 of these houses (one across the street) - each with 8 groups of owners and/or their guests circulating in and out all year round. Many Pacaso have 4 bedrooms that easily accommodate 8+ people, and pool in the backyards with outdoor areas for gatherings/parties. It's a huge difference having your neighbor throwing an occasional party versus non-stop having a new group of people next door visiting for thiir token time of vacation / partying. Pacaso houses also come with increased parking problems as these properties tend not have garages or driveways (often transformed into addl bedroom). Specifically would you mind looking into building code the one at 1242 Madrona 1 Oak? Looks like they're adding a guest house with vary narrow set back from the oak side neighbor. Is that an approved building? Maybe they're getting around that by making it a partial garage? Add to that, the 4 Pacaso houses are all in close proximity of RLS with kids walking / biking to and from school. What are the safety concerns that this is imposing with new people circulating in and out all year round and increased car traffic? Worst case scenario there will be a liability situation that will put a stop to Pacaso. Pleasc, please stop Pacaso before we even get close to that. Respectfulty, Mari Jansdotter Sent from Yahoo Mail on Android 3-226 PACASO = PARTY HOUSES! Debbie Polverino 5/11/2021 To the members of the City Council. In the recent Napa Register article, Austin Allison agrees that short term rentals are a problem, that commercial Timeshares are a problem- that's not what Pacaso is he said. Yet, Pacaso listed the Valley View Street "Pool House" as a 1 /8 Timeshare Ownership property. After the city was notified by several concerned citizens and myself regarding "timeshares" listed for sale in residential zoned areas, Pacaso changed its online marketing from "118 Timeshare Ownership to 118 Shared Ownership. Owners who purchase still share the property in available time slots just like a timeshare. Living next door to a Pacaso home has been living next door to a full-time party housel The constant music with speakers blaring, loud conversations until 2 am and later, noise violations along with excessive vehicles parked on the street or in front of our homes. The additional noise of gardeners blowing dirt and leaves into our yard, Pool service, catering trucks, housekeeping scheduled more frequently. Open houses are held with statements made with, "this is a great place for pool parties and entertaining, it's a perfect place to bring friends and extended family." This home on Valley View Street was a weekend. getaway home for the previous owners who had loud weekend parties. It was a constant nightmare and all the homes nearby complained. Now the property has been split up to 8 owners. The Saint Helena P.D. has already been to this home at least 3 times for noise violations after 10pm. There must be a way to stop these repeated violations and offenders. Pacaso's has written policies for its owners on their website that they must adhere to. No parking on the street, no parties, no noise after 9pm to 7am, no dogs over 80 pounds. Policies have been broken several times already from each group including the Pacaso's owners. According. to Mr. Allison, Saint Helena is running a dishonest campaign against Pacaso. Pacaso claims discrimination of outside ownership which is not the case. As we all know we welcome all people the opportunity to live in our quiet small town. Pacaso selling an 1,100 square foot home which is smallest of any home on our street for $1.7M is dishonest in my opinion. This is what he says is affordable housing for second home buyers who are paying in full, plus maintenance fees? When commercial companies buy a dozen homes in Napa Valley and plans additional purchases to be split up to 8 shares it is not committed to the community or our quiet neighborhoods. Zoning is in place for a reason. Commercial companies operating in full time residential streets should adhere to the rules that are in place and only buy up in areas where other vacation homes are abundant and not a disruption. What happens should we decide to sell our home? How will people feel about buying next door to a home owned by 8 owners who don't know each other and all come at different time slots for as little as 2 days at a time? We will have to disclose this information. This put a negative mark on our property. This is something I want you to think about! Say NO to Pacaso! Thank you. 3-227 From: Amy Caldarola <amycal@comcast.net> To: Paul Dohring CC: Anna Chouteau; Lester Hardy; Eric Hall Sent: 5/23/2021 1:04:24 PM Subject: [External] Picaso Dear Council Members, This is Amy Caldarola here. I am very concerned about Picaso buying property in our residential neighborhoods under the guise of democratizing home ownership. This is not affordable housing. Picaso properties are time-shares and short-term rentals which violate municipal code provisions. The presence of these properties in residential neighborhoods is inappropriate and will degrade the quality of life. It has already done so with Picaso's property on Valley View; those neighbors are suffering with loud noise, music, and parties that go on to after midnight; even calling the police does not seem to stop them. I support the city in doing everything possible to defeat them. I also support a counter law suit against them if it makes legal sense. With that said, we are fighting for the soul of our community and this needs to be a number one priority. Picaso is in Napa, Sonoma, Healdsburg, and probably will move into Calistoga and Yountville. This is a fight worth fighting, It might be helpful for the affected counties and municipalities to join their resources together to oppose them. Please outline for me what the city is doing and what the plan is. Thank you. I really appreciate you taking the time to keep me informed on this very important and pressing issue. We must act now! Sincerely, Amy Caldarola 3-228 May 11, 2021 Good evening City Council members. My name is Clare Barr and I live in St. Helena. Tonight I would like to speak about the Pacaso Vacation Share homes. listened carefully to the public comments of Pacaso Share owners made at our last City Council meeting. They sounded sincere in their desire to be a part of the St. Helena community. The problem is they have bought into a business model that will make that nearly impossible. To be a part of a real community means forming bonds with neighbors. How can that come about with a home next door that has possibly dozens of strangers coming and going, with visits no longer than 14 days at a time, a few times a year? And with the likelihood of visits gifted by other share owners, and a cleaning crew who appears before each arrival, the number swells. With the result that a Pacaso share owner, is viewed by their neighbors as only one in a sea of unfamiliar faces. And though the intentions of some of the share buyers might be good, can we say the same for all 7 of the remaining shareowners? One of whom might gift a weekend to his brother for a blowout bachelor party? Or as was the case in Napa, a single shareowner who conducted retreats in which close to a dozen visitors would come and go within one stay. That particular shareowner was charging her guests, which is a complication on an entirely different level. Pacaso would have us believe that their sharebuyers are families who simply want a quiet, lovely getaway. But in actuality, a Pacaso home is built for partying. Their own website says of one offering "This home takes entertaining to new heights". And yet another listing says that a 3-229 particular home "has been completely re -imagined to accommodate families, friends, and large groups". Another listing offers "year round fun and adventure". Now, none of us resent the visitor who wants to have fun. Indeed, our beautiful valley is an ideal place for celebration. And we all do that on occasion. But when you realize that every single visitor owning a Pacaso share has been wooed with the promise of "fun and adventure" within a house "built for entertaining", then you have the possibility of major partying with each and every visitor, all crammed into stays that last from 2-14 days. This is transient occupancy in our residential neighborhoods that cannot possibly be regulated under the Pacaso system. There is a reason why we have ordinances in place that designate where tourists and visitors can stay. It allows us to appreciate our visitors, giving them the space and accommodations in which to party and celebrate, while we ourselves can conduct our daily lives in the sanctuary of our residential neighborhoods. Which in turn, are places where we know our neighbors so well that we trust them with our keys, our pets, and even our children. With whom we share joy and sometimes sorrow, and whom are quick to lend a hand in times of crisis. And if we have learned anything in the last few years, it is that the ability to know and rely on our neighbors is the very thing that sustains our community through thick and thin. A vacation home with a parade of visitors coming and going, does not belong in our residential neighborhoods. Please Say No to Pacaso. Clare Barr St. Helena 3-230 From: Beth Gray <bgray14@gmail.com> To: Geoff Ellsworth Sent: 5/22/2021 3:01:13 PM Subject: [Externall Pacaso Dear Mr. Mayor, I am writing to express my strong opposition against the infiltration of Pacaso and their timeshare strategy in the city of Saint Helena. As a frill -time resident here in the city (and as your neighbor), I find it atrocious that the city has not been able to stop the infiltration of this community destroying business model. This business will do nothing but destroy our community. As an example, I witnessed the dumping of water from the pool into the creekbed from a home purchased by Pacaso right on the corner of Sylvaiier/Reisling as they began to redevelop the home and expect to list it as fractional ownership. Illegal dumping of the pool water with disregard to any of the environmental consequences demonstrates their utter lack of care about the community. Similarly, hearing from the neighbors who live next to a Pacaso home on Valley View, I can only shake my head and sympathize with the poor neighbors having to deal with multiple cars showing up and loud music being played at all hours. One of the reasons I moved from San Francisco to Saint Helena was to enjoy the quiet sounds of nature, the beautiful outdoors - not to .listen to vacationers who only want to party for the two weeks that they have their time in the home. Please protect our city from these timeshares. I understand the city is being sued. I hope that we can. collectively put the necessary resources behind this lawsuit to stop Pacaso from any more timeshares in St. Helena. Respectfully, Beth Gray 3-231 `DIV Report to the City Council Regular City Council - 12 Apr 2022 HEL Agenda Section: CONSENT ITEMS Subject. Consideration of Second Reading and Proposed Adoption of a Ordinance Adding Chapter 17.138 "Time Share Uses" and Sections 17.138.060 to Title 17, Zoning of the St. Helena Municipal Code, amending sections 17.48.030 (Central Business) and 17.52.030 (Service Commercial) and Deleting Section 17.112.130 of the St. Helena Municipal Code CEQA Exempt Determination: Prepared By: Ethan Walsh, City Attorney Reviewed By: April Mitts, Administrative Services Director Approved By: James C. McCann, Interim City Manager BACKGROUND The City Council held a public hearing on the proposed ordinance on March 22, 2022, and introduced the ordinance by title only and waived reading by a unanimous vote of the City Council. Staff recommends that the Council waive second reading and adopt the ordinance. The report below mirrors that provided to the Council at the March 22, 2022 meeting. Over the past two years, there has been significant discussion in the community regarding Section 17.112.130 of the City's Zoning Code, which prohibits the creation of a time-share project as a means of ownership of any single-family, two-family or multiple -family dwelling or any apartment house in the City (the "Time Share Ordinance"). The City Council discussed the Time Share Ordinance at its July 14, 2020 meeting in response to concerns raised regarding a real estate listing for a fractional or partial ownership interest in a residential home in the City. The prior City Attorney discussed this issue with the City, focusing on the question of the extent to which the City Council could regulate an ownership structure through the City's zoning authority, and noted the challenges of doing so. At the conclusion of the Council's discussion of this issue, Council directed the City 3-232 Attorney and staff to continue to research its options to address the concerns raised by members of the community in response to the listing of the home at issue. In the months following the July 2020 Council meeting, the company that had been marketing that original home, now known as Pacaso, began marketing other homes in the City, and the City received additional complaints from members of the community. Based on new information that was available to the City, primarily through Pacaso's marketing materials, the City Attorney's office concluded that the properties being marketed by Pacaso were not just fractional or partial ownership structures, but were also being marketed to be used as a time share project that would be prohibited under the City's ordinance, and informed Pacaso of that conclusion. Pacaso disagreed with the City Attorney's conclusion, and initiated a lawsuit in an effort to compel the City to retract its conclusion. That litigation is ongoing. When reviewing the Time Share Ordinance in this context, the City Attorney's office found that the substance of the Time Share Ordinance has not been updated since its adoption in 1982. The City Attorney's office concluded that the Time Share Ordinance would benefit from an update to refine the definitions to more directly address the impacts of time-share uses, to clarify the means used by the City to enforce the restrictions on time share uses, and to clarify how time share uses are treated in non-residential districts. City staff initially delayed initiating any changes to the Time Share Ordinance while the litigation was ongoing. However, due to the continued marketing of time share uses within the City, staff has decided to move forward with recommending the proposed updates to the City's ordinance. On March 1, 2022, the Planning Commission voted unanimously to recommend the City Council approve the proposed ordinance. DISCUSSION The Discussion section of the Staff Report is organized as follows: First, the section provides a brief explanation for the City's conclusion that the homes that have been marketed by Pacaso constitute time share projects. While the City's conclusion does not directly affect the changes to the Zoning Code set forth in the proposed ordinance, it is helpful to understand that the Time Share Ordinance, both in its original form and as proposed to be amended, is intended to protect against the impacts that these homes and similar uses could have on the City's housing supply and the character of the City's residential districts. Second, this section discusses the legal basis for the City's Time Share Ordinance, the reasons why the City prohibited time share uses in residential properties, and why those reasons continue to apply today. Third, this section outlines the changes made in the proposed ordinance and the reasons for the proposed changes. A.Current Time Share Ordinance and Application to Pacaso Homes Section 17.112.130 of the Zoning Code prohibits the creation of a time-share project as a means of ownership of any single-family, two-family or multiple family dwelling or apartment house within the City. A time-share project is defined in that section as any real property that is subject to a time-share program. A time-share program is in turn defined in part as an arrangement whereby the use, occupancy or possession of the 3-233 property circulates among purchasers according to a fixed or floating time schedule on a periodic basis for a specific period of time during any given year. Pacaso provides a significant amount of information on its website regarding the manner in which its homes are used by the purchasers of a Pacaso home. According to Pacaso's website, the single family residences marketed by Pacaso are held by a property -specific limited liability company ("LLC"), and each co-owner purchases a 1/8 share in the LLC. (Pacaso.com/learn) Each 1/8 share entitles the co-owner to 44 stay nights within any 365 day window. Stays can be from 2 to 14 nights in duration for each 1/8 share. Back-toback stays are not permitted. (Pacaso.com/faq/scheduling) Stays are booked on an app, with specific rules governing the number of "special dates" that each co-owner can book, and the number of stays that each owner can book during "peak seasons." (Id.) Each owner can book the residence to use themselves, or may allow guests to use the residence, whether or not the co-owner is present. (Id.) Between each stay, Pacaso conducts a thorough inspection and cleaning. ("5 reasons Pacaso is better than a timeshare." Pacaso.com/blog/better-than-resort-timeshare) The Pacaso model grants each 1/8 owner the right to use the property for a specific period of time (44 days in a year) in increments of 2-14 days. The use, occupancy and possession of the property circulates among the co -owners according to a floating time schedule that gives each co-owner exclusive rights to the property for a specific period of time each year. This use structure fits squarely in the City's definition of a timeshare program, and the properties operated by Pacaso in this manner would therefore be timeshare projects under the existing Time Share Ordinance. B.Reasons for the Time Share Ordinance 1. The City's General Plan The City of St. Helena has long been defined by its rural, small town quality and agricultural character. In adopting the St. Helena General Plan Update 2040, the City noted that the defining, unifying goal of all the elements of the 1993 General Plan was: To protect the rural, small town quality and agricultural character of St. Helena. It is the General Plan's intent that the preservation of this small town character be the unifying philosophy that overlays all other stated goals and policies. (General Plan 2040, p. 1-2.) While the 2040 General Plan acknowledges that this is no longer the sole, overriding focus of the General Plan, retaining the small town character of St. Helena remains a primary focus of the City's land use planning. (Id.) A key component of retaining the City's small town character is maintaining a balance between the economic benefits that arise from visitors who come to St. Helena for its wineries, restaurants and historic downtown, and maintaining its authentic small town quality of life for the City's residents. This theme is consistent throughout the City's General Plan, and maintaining this balance is key to the City's long term viability. The General Plan notes in its Introduction that "[t]he community stands out in the Valley for its unique, historic character and its ability to attract visitors while also supporting the needs 3-234 of its resident population." (General Plan p. 1-8.) The City has set goals to maintain that balance, striving to achieve an economy that "will meet the basic needs of residents, while balancing the benefits and impacts of visitors and provide better economic opportunities. (General Plan 1-15.) The City further seeks to "promote sustainable tourism practices that allow the City to enjoy the economic benefits of visitors to the region while maintaining the authentic small-town quality of life." (General Plan p. 3-9.) St. Helena is a renowned tourist destination, bringing visitors from throughout the world to its wineries, restaurants and downtown, but it is also a functioning City and community, with residents who contribute to its social fabric. Like most communities throughout California, one of the key means that the City utilizes to maintain this balance is through its Zoning Ordinance. The City has commercial districts, like the Service Commercial district and the Central Business district, that provide for uses that serve both visitors and the local community, such as restaurants, retail shops and winery tasting rooms, among others, along with lodging where those visitors can stay. (St. Helena Municipal Code §§17.48.030, 17.52.030.) The City also has residential districts that provide housing for those who live in the community, at varying densities in order to provide a diversity of housing types. 2. Use of Zoning to Preserve Residential Areas The use of zoning to preserve the character of the residential districts of a City has been common for over a century. In the seminal case of Euclid v. Ambler the United States Supreme Court upheld the validity of comprehensive zoning that would set aside residential districts "from which business and trade of every sort, including hotels and apartment houses, are excluded." (Euclid v. Ambler Co. 272 U.S. 365, 390.) The U.S. Supreme Court upheld the Village of Euclid's zoning ordinance in that instance, noting that the inclusion of non-residential uses in residential districts may have an increasingly deleterious impact on the residential area "until, finally, the residential character of the neighborhood and its desirability as a place of detached residences are utterly destroyed." (Id. at 394.) The California Court of Appeals followed Euclid and subsequent cases in upholding the City of Carmel-by-the-Sea's zoning restriction on short-term rentals. (Ewing v. City of Carmel -By -The -Sea (1991) 234 Cal.App.3d 1579.) In that case, the Court noted that the City's chief purpose in adopting the short-term rental restriction was "to provide an appropriately zoned land area within the City for permanently single-family residential uses and structures and to enhance and maintain the residential character of the City." (Id. at 1579.) In upholding Carmel's short-term rental restriction, the Court found that short-term rentals "undoubtedly affect the essential character of a neighborhood and the stability of a community. Short-term tenants have little interest in public agencies or in the welfare of the citizenry. They do not participate in local government, coach little league, or join the hospital guild. They do not lead a scout troop, volunteer at the library, or keep an eye on an elderly neighbor. Literally, they are here today and gone tomorrow without engaging in the sort of activities that weld and strengthen a community." (Id. at 1591.) 3-235 3.Impacts of Time Share Uses on Residential Districts Like Carmel, the City of St. Helena strives to maintain the character of its residential areas in the face of intense demand for accommodations to serve visitors to St. Helena. The Time Share Ordinance is one of the means that the City has in place to ensure that it is able to maintain its existing and limited housing stock for use in long term residency, and to maintain the character of its residential zoning districts. When the City originally adopted the Time Share Ordinance in 1982, the City Council made specific findings based on the impact it foresaw if time share uses were to locate in the residential areas of the City. Those findings were as follows: 1. There is a critical shortage of affordable housing in the city for long-term occupancies (more than six months annually), and the availability of additional residential dwelling units is substantially restricted by the growth management system. 2. The conversion of residential dwelling units within the city to timesharing projects eliminates residential dwelling units otherwise available for long-term occupancies (more than six months annually) in the city. 3. Time-sharing projects have the same character as commercial hotels, motels and other transient occupancy uses due to their transient nature and to the multiple shortterm (less than six months annually) occupancies by those participating in timesharing projects. 4. Such commercial or quasi -commercial like use is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. 5. The city council finds and determines that this section is necessary to protect the public health, safety and welfare of the citizens of the city. As discussed in more detail below, these findings continue to hold true in St. Helena, and continue to support the City's decision to restrict time-share uses in residential districts. i. Housing Shortages and Impacts of Time -Share Uses on Existing Housing Stock In adopting the current Time Share Ordinance, the City Council found that there was a critical shortage of affordable housing in the City for long-term occupancies. That continues to be the case, and is undoubtedly worse than was the case at the time the Time Share Ordinance was originally adopted. The most recent census data lists the median value of owner occupied homes in St. Helena at $1,112,100 for the period of 2015-2019, while the Zillow Home Value Index estimates medial home values in St. Helena to be approximately $1,870,000 as of February 2022. www.census.govlquickfacts/sthelenacitycalifornia; zillow.com/home-values/.) In contrast, the median household income in St. Helena from 2015-2019 was $90,031, and the median income for a four person household in Napa County for 2021 is approximately 3-236 $109,200. (www.census.gov/quickfacts/sthelenacitycaIifornia-, www.hcd.ca. ovl rantfundin /income-limits/state-and-federal-income- Iimits/dots/incomeAmits-2021.pdf.) At the time of adoption of the City's Housing Element in 2015, the income necessary to purchase a median priced single family home was nearly $200,000 per year, and prices have risen dramatically since then. (City of St. Helena Housing Element Update 2015-23, p. 3.) The cost of homes currently in St. Helena are well in excess of what median income residents of St. Helena can afford, as well as median income residents of Napa County generally. Further, as Erika Sklar observed in the St. Helena Housing Update Report that she prepared for the City in April 2018, "St. Helena has more local jobs than people in the labor force, demanding large numbers of commuters to fill local jobs. Workers commute daily into St. Helena, many because there is no local housing that is affordable at the incomes that they make. 36% of St. Helena households cannot afford market rents while 70% of St. Helena households cannot afford to purchase a home. Paramedics and preschool teachers cannot afford St. Helena's market rents. Teachers, registered nurses, winery and hospitality managers and non-profit directors cannot afford homeownership in St. Helena." (St. Helena Housing Update Report, p. 7 (April 2018).) The City has made and continues to make efforts to address the need for affordable housing in the City, including providing assistance for the Brenkle Court, Turley Flats and 963 Pope Street projects. The City has also ensured that new non-residential development will assist the City in providing adequate affordable housing, as evidenced by the significant contributions to affordable housing made by the Farmstead Lodging project through its development agreement with the City. These efforts, however, have highlighted the challenges of providing housing at all income levels, with the most significant challenge being a limited supply of existing housing stock in the City, and a limited supply of available land for new housing. Given the housing shortage already in existence, losing additional housing stock will only make this problem worse. The findings in the original Time Share Ordinance also note that the conversion of homes to time sharing projects would eliminate residential dwelling units that would otherwise be available for long term residential use. This continues to be true, as a home that is used for time share purposes will no longer be available for households to use as their long term residence. This threat to the City's existing housing stock is not insignificant. The publicity regarding Pacaso's rise as a company speaks to a pent up demand for homes that could be converted to time share use, reducing available housing stock for long term use. Pacaso's co-founder has indicated that "[t]here are tens of millions of families that aspire to own second homes but are unable to, due to reasons of cost." (Just Five Months Old, Zillow Co -founder's Pacaso Claims It's Already A Unicorn" Noah Kirsch, March 24, 2021 (www.forbes.com/sites/noahkirsch/2021/03/24/just-five-months-old- zillowcofounders-pacaso-claims-its-alread-a-unicorn/.)) In discussing Pacaso's model, Dan Wenhold of the venture capital firm Fifth Wall said "[thhey were taking a previously illiquid asset, which was a timeshare, and making it affordable for the masses, also making it attainable for folks who wanted to own a second home but previously weren't able to." ("Pacaso, the Proptech Startup Founds by Zillow Alums, Raises $125M Series 3-237 C" Sophia Kunthara (September 14, 2021) (news.crunchbase.cominewslproptech- startup-pacasoraises-125m-series-c.)) Creating a new market for these prospective buyers who otherwise would not buy second homes unquestionably increases demand for these homes by creating an incentive for timeshare companies to buy up residences to meet this market demand. Creating more demand, and reducing supply, will further ratchet up housing costs, exacerbating the already significant housing shortage in the City. ii. Impacts to Character of the City's Residential Districts The City Council additionally found as part of the adoption of the original Time Share Ordinance that time-sharing projects have the same character as commercial hotels, motels and other transient occupancy uses due to their transient nature and to the multiple short-term occupancies by those participating in timesharing projects. The Council concluded that this commercial or quasi -commercial like use is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. This continues to be the case, as the nature of time share uses of residential property is different than the typical long term residential uses for which the residential districts of the City are intended. The complaints that have been made by some local residents regarding the Pacaso homes are illustrative of the distinctions between time share uses and long term residential uses. A sampling of the email complaints received by the City are included in Attachment No. 2 to this Staff Report. The complaints received center on concerns over more intense traffic and parking issues, outdoor parties and conversations going late into the evening, sometimes as late as 2 A.M. One neighbor complained of outdoor lighting shining into her daughter's room at night. They complained of traffic and inadequate parking for the visitors to these homes. Further, neighbors have noted that with each turnover from one stay to another, cleaning and landscaping crews come to clean the unit and prepare it for the next user. While this level of maintenance is appropriate for a commercial vacation property, it impacts the residential character of the surrounding area by adding parking and noise burdens in the neighborhood. Living next door to a home where the residents turnover every 2-14 days, and professional cleaning and landscaping crews come to the property between each visit is much more akin to living by a commercial lodging project than a residential home. This is not at all,surprising, given that these time share homes are used by people who are on vacation. While long term residents may have an occasional party at their home, the time share model means that these residences are constantly being used by people who are on vacation, hosting parties or celebrating special occasions. These activities by their nature are more intense than typical residential use of property. The intensity of this use is a significant reason that these uses can change the character of a residential neighborhood. Long term residents, whether owners or renters, will occasionally have guests, and will occasionally have parties, but these time-share homes are used exclusively by people who are coming to the City on a short term basis for vacation or leisure. People will naturally stay out later, entertain more and gather in larger 3-238 numbers while on vacation. That is the reason that these uses are more appropriate in non-residential areas that are intended to cater to the City's visitors and tourists. Time share uses can change the character of a residential neighborhood by having it serve not only as a residential area but also a visitor lodging area, and subjecting it to the impacts that come with that more intense land use. In their marketing materials, Pacaso cites this intensity of use as a benefit, indicating that having these units filled with visitors seven days a week will benefit the local economy, since these visitors will patronize local businesses. (pacaso.comlcommunities) However, as noted above, the City strives through its General Plan to achieve a balance between benefits to the local economy and maintaining the character of the City. The City seeks to achieve this balance by promoting "sustainable tourist practices that allow the City to enjoy the economic benefits of visitors to the region while maintaining the authentic smalltown quality of life, (General Plan p. 3-9) and striving to achieve a local economy that "will meet the basic needs of residents, while balancing the benefits and impacts of visitors." (General Plan p. 1-15.) Bringing more visitors into residential neighborhoods to improve the local economy does not help to achieve that balance. It instead tips the scales in favor of the local economy, at the expense of the residential character of these neighborhoods. The nature of the timeshare use itself can impact the residential character of the City's residential districts because it will ensure that the time share users can only use their property fora limited amount of time each year. In the case of Pacaso owners, each stay is limited to 2-14 days. As discussed above, in the Ewing v. City of Carmel -by -the -Sea case, the California Court of Appeal found that short term rentals would affect the essential character of a neighborhood and the stability of a community. The Court noted that "[s]hort term rentals have little interest in public agencies or in the welfare of the citizenry. They do not participate in local government, coach little league, or join the hospital guild. They do not lead a Scout troop, volunteer at the library, or keep an eye on an elderly neighbor. Literally they are here today and gone tomorrow —without engaging in the sort of activities that weld and strengthen a community." This same problem is present with time-share uses. Each co-owner is in the unit on a short-term basis, and without the time to participate in the types of activities or build the relationships that create the fabric of a community. At the April 28, 2021 council meeting several Pacaso co -owners spoke of their experiences in St. Helena. All of them spoke of their affection for the community and the traditions they had established, but these were centered on attending local events and visiting shops, restaurants and wineries. These types of transactional activities are all beneficial to the City's local economy and are what the City hopes to see from visitors to the City, but it is not the type of community involvement described in the Ewing case that binds and strengthens a residential community. Given the City's desire to strike a balance between the demands of the City's visitor and tourist economy, and retaining its small town character and quality of life, the City has an interest in maintaining housing stock in its residential districts for long-term residents who will engage in the community in the manner described by the Court in Ewing, to the betterment of the entire community. 3-239 C.Proposed Amendments to the Time Share Ordinance The proposed Ordinance would make certain changes to the City's Existing Time Share Ordinance, as described below. 15indings and Establishment of New Chapter The proposed Ordinance includes detailed recitals and findings describing the policy bases for the City's regulation of time share uses. The findings are consistent with the findings made as part of the original Time Share Ordinance, but more detail has been added. The policy bases for the proposed Ordinance are discussed in the sections above, and further discussion is not necessary here. The proposed Ordinance also relocates the restrictions on time share uses to its own chapter at Chapter 17.138. The Time Share Ordinance is currently located in Chapter 17.112, General Site Design and Development Standards. City staff believes that with the added level of detail in the Proposed Ordinance, these provisions merit being located in a separate chapter, and has changed the location of the Timeshare Ordinance accordingly. 2.Definitions The Proposed Ordinance amends the definitions that are used to define time share uses, with the new definitions set forth in Section 17.138.020. The new definitions are modeled on the definitions utilized by the state to regulate time-shares in the Vacation Ownership and Time -Share Act of 2004 (Bus. & Prof. Code §§11210-11288), but are modified somewhat to better apply in the land use regulation context. The new ordinance includes a number of definitions that work in concert to define a timeshare use. The ordinance defines a "time-share use" as the use of one or more accommodations, or any part thereof, as part of a time-share property pursuant to a timeshare plan. An "accommodation" is defined in this Chapter to include a range of residential units that could potentially be used for time-share purposes. The types of residential units that can be accommodations are listed at the beginning of Section 17.138.020 in the proposed ordinance. A "time-share plan" is defined in the ordinance, and generally includes any arrangement, plan, scheme or similar device whereby a purchase receives the right to exclusive use of the accommodation, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given year. A "time-share property", in turn is defined as one or more accommodations that are subject to the same time-share plan together with any properly rights that are appurtenant to the accommodations. A "time-share instrument", is the document or documents that create or govern the operation of the timeshare plan. 3-240 Therefore a time-share use is the use of a residential property that fits within the definition of an "accommodation" underthe ordinance, pursuant to a "time-share plan", which grants each owner of the time-share property exclusive use of the property for a certain period of time each year, but not the full year. It is important to note that not all properties with multiple owners or owned by business entities (such as LLCs) would constitute a time-share use under these definitions. The definitions focus on the manner in which the accommodation is used, not how it is owned. A timeshare plan allows each owner exclusive use of the property for a specific period of time. This manner of use prevents the property from being used for long term residency, and leads to the continual cycling of visitors through the property and the more intense, constant vacation oriented use that the ordinance seeks to limit in residential districts of the City. A property that is owned by a group of friends or extended family members, whether through a separate business entity or otherwise, will not necessarily mandate that only one owner will be able to use the property at a time. The more formal arrangement found in time-share uses increases the intensity of use, in that each individual time-share owner cycles through the property, whereas families or friends are more likely to use the property together or in groups leading to less transition in the residential neighborhood. The more formal relationship, use of professional property managers and rights to exclusive use found in timeshare uses contributes to the commercial character of the property, with added traffic due to the more frequent turnover of visitors and more frequent cleaning and inspection between each user, which is common for a commercial vacation property, but not for a home owned by family or friends. 3.Enforcement The new ordinance additionally adopts a new enforcement structure for the City timeshare restrictions, modeled on the City's short-term rental ordinance. The ordinance prohibits both the use of accommodations for time-share use, and the advertisement of accommodations for time-share uses. This will better allow the City to prevent time-share uses in residential neighborhoods before they occur. The proposed Ordinance also outlines the process that will be used to enforce this new Chapter, again based on the City's existing short-term rental regulations. This approach has proved to be effective in enforcing the City's short-term rental regulations, and will help the City to take a more preventative approach to enforcing its time-share regulations as well. 4.Time Share Uses in Service Commercial and Central Business Districts Finally, while the City's existing Time Share Ordinance did prohibit time-share projects within certain types of residential dwelling units within the City, it does not make distinctions based on the various zoning districts of the City. Given that the primary concerns and impacts of this use arise from the high intensity use of property that negatively impacts the residential character of residential districts within the City, this use may not have the same impacts in commercial districts where visitors can be closer to 3-241 the amenities in the City that cater to visitors. The proposed new ordinance would allow time-share uses in the Service Commercial and Central Business Districts as conditional uses, provided that such time-share uses would be limited to accommodations in upper floors in conjunction with a mixed use project, would be required to provide at least one parking space for accommodations of two or fewer bedrooms, and at least two parking spaces for accommodations of three or more bedrooms, and would be subject to such other conditions imposed by the City has part of the conditional use permit process. As part of the application for a time-share use, the applicant would have to provide specific information including a management plan and specific information on the accommodations and any ancillary uses. The City would then review the application process in accordance with its normal process for review of conditional uses. This would allow the City to address potential impacts associated with this use, similar to the approach that the City uses with hotels and other lodging accommodations in these districts. Consistent with this change, the proposed ordinance updates the list of conditional uses in both the Service Commercial and Central Business Districts to include time share uses as regulated by the new Chapter 17.138. The Planning Commission held a public hearing to consider the proposed ordinance at its regular meeting of March 1, 2022. Following the public hearing, the Planning Commission unanimously recommended that the City Council adopt the proposed ordinance. City staff has made minor, non -substantive edits to the proposed ordinance that went to the Planning Commission to correct typographical errors, and to add the sections amending the list of conditional uses in the Service Commercial and Central Business Districts. FISCAL IMPACT None RECOMMENDED ACTION Staff recommends that the City Council conduct the second reading by title only and waive further reading and adopt the Ordinance Adding Chapter 17.138 "Time Share Uses" and Sections 17.138.010-17.138.060 to Title 17, Zoning, of the St. Helena Municipal Code, amending sections 17.48 (Central Business) and 17.52 (Service Commercial) and Deleting Section 17.112.130 of the St. Helena Municipal Code. ATTACHMENTS Attachment 1-St. Helena Time Share Ordinance -Final Attachment 2-Community email comments 3-242 CITY OF ST. HELENA ORDINANCE NO. ADDING CHAPTER 17.138 "TIME SHARE USES" AND SECTIONS 17.138.010 — 17.138.0G0 TO TITLE 17, ZONING, OF THE ST. HELENA MUNICIPAL CODE, AMENDING SECTIONS 17.48.030 AND 17.62.030 AND DELETING SECTION 17.112.130 OF THE ST. HELENA MUNICIPAL CODE WHEREAS, the City of St. Helena is a popular tourist destination, known for its scenic Napa Valley location, exceptional wineries and restaurants, historic Main Street and small town agricultural character; and WHEREAS, preserving the rural, small town quality and agricultural character of the City of St. Helena has been a focal point of the City's land use planning for decades, and remains a primary focus in the City's 2040 General Plan; and WHEREAS, the City of St. Helena stands out in the Napa Valley for its ability to attract visitors while also supporting the needs of its resident population. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy; and WHEREAS, the City values and welcomes all visitors to the City and recognizes their contributions to the City's economy, but finds that in order to maintain the City's long term viability as a community where people not only come to visit, but also live, work and contribute to the long term betterment of the community through participation in the City's schools, local community groups, civic government and local serving businesses, the City must maintain a balance between residential land uses and visitor serving uses; and WHEREAS, the City's existing housing stock is significantly impacted, with demand outweighing supply, resulting in extremely high housing prices as detailed in the accompanying staff report. A limited supply of suitable vacant land, exorbitantly high land costs, and limitations in the City's existing infrastructure, among other factors, have limited the construction of additional housing in the City of St. Helena; and WHEREAS, according to the U.S. Census Bureau, the current median household income in the City of St. Helena is $90,031, while the estimated value of owner - occupied housing units from 2015-2019 was approximately $1,112,100, with current real estate listings suggesting that prices are increasing significantly, meaning that homes in the City are not affordable to the median household in the City; and WHEREAS, as noted in the St. Helena Housing Update Report prepared for the City in April 2018, "St. Helena has more local jobs than people in the labor force, demanding large numbers of commuters to fill local jobs. Workers commute daily into -l- 3-243 St. Helena, many because there is no local housing that is affordable at the incomes that they make. Thirty six percent (36%) of St. Helena households cannot afford market rents while seventy percent (70%) of St. Helena households cannot afford to purchase a home. Paramedics and preschool teachers cannot afford St. Helena's market rents. Teachers, registered nurses, winery and hospitality managers and nonprofit directors cannot afford homeownership in St. Helena"; and WHEREAS, the City has made significant efforts to address the need for housing at lower income levels, of which recent examples include providing assistance to local nonprofit Our Town St. Helena for the Brenkle Court development, a mutual self-help housing development providing homeownership opportunities to eight low income working families, as well as the acquisition of a home located at 963 Pope Street using a charitable sale strategy. The property at 963 Pope Street is being developed with an additional four units to provide a total of five new affordable rental units in the City; and WHEREAS, further, in connection with the recently approved Farmstead lodging project, the City negotiated with the developer to contribute one million dollars toward the purchase of property to be used for the development of not less than twenty units of housing that will be affordable to low and very low income households, and an additional two million two hundred thousand dollars to be used more generally toward the development of affordable housing in the City; and WHEREAS, the City additionally provided substantial financial assistance to the recently completed Turley Flats Affordable Housing development, which provides eight units of rental affordable housing in a three story building located at 1105 Pope Street; and WHEREAS, these efforts have helped to address the City's need for affordable housing, but have also highlighted the challenge of providing sufficient housing to meet demand, particularly at more affordable levels, due to the significant costs of acquiring housing or land for the development of housing in the City and the limited supply of such land; and WHEREAS, the conversion of existing residential units to uses other than long- term residential use will further reduce the City's existing long-term housing supply, causing further imbalance between the demand for housing in the City and the existing supply, not only altering the character of the City's residential neighborhoods, but also presenting further challenges to the City's efforts to provide affordable housing within the community; and WHEREAS, the City additionally has, for many years, worked to preserve its existing housing stock for long term residential use, both to maintain the character of its residential neighborhoods and prevent residential districts from becoming visitor and tourist serving districts, and to ensure that it would not be converted to uses other than long-term residential uses; and -2- 3-244 WHEREAS, to this end, in 1982 the City adopted Ordinance No. 82-07, which prohibited the creation of timeshare projects as a means of ownership of any single- family, two-family or multiple -family dwelling or any apartment house within the City. This restriction was imposed because the conversion of residential dwelling units to time-sharing projects would eliminate residential dwelling units that would otherwise be available for long-term occupancies, and were inappropriate in residential areas because those uses have the same character as commercial hotels, motels and other transient occupancy uses, and would result in increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods; and WHEREAS, the City has historically not received complaints about time-sharing uses in residential neighborhoods. Commencing in 2020, however, the City began receiving complaints regarding single family homes in the City that were being sold and/or marketed as "fractional ownership" or "co -ownership" homes, wherein each buyer may acquire a one -eighth interest in a limited liability company that will own the home. Under the structure pursuant to which these dwelling units are marketed and sold, each owner gets a one -eighth share along with the right to use the home for one - eighth of each year indefinitely. During each owner's usage period, that owner has exclusive use of the entire house. All rentals are prohibited; only owners and their guests are permitted to use the house. Each owner pays regular assessments to fund the operating costs of the home and maintenance reserves; and WHEREAS, this arrangement, which provides that each purchaser is entitled to exclusive use of the property for a fixed number of days each year, is a "time-share plan" as defined in Business and Professions Code section 11212, and a "time share program" as defined in Section 17.112.130 of the City's Municipal Code; and WHEREAS, the City has received numerous complaints regarding these properties, including parking impacts from large numbers of people staying at these properties; excessive noise late into the evening due to frequent outdoor parties; traffic due to frequent visitor turnover; traffic, noise and parking concerns due to frequent visits from cleaning, landscape maintenance and pool cleaning services that come to the properties in between each stay to prepare the home for the next guest; and an inability to maintain lines of communication to set community expectations with the users of the unit, as visitors only frequent the homes for short term stays of 2 to 14 days; and WHEREAS, the complaints received by the City are reflective of the reasons that the City prohibited time-share projects within residential areas of the City. The time- share uses provide a short-term, high impact vacation oriented use of the property, where those that buy into the time-share use the home for entertaining and short term stays while visiting restaurants, wineries and other tourist oriented locations in St. Helena and the surrounding Napa Valley; and WHEREAS, this high impact use, combined with the frequent turnover and commercial management of these properties is not consistent with the residential districts in which they are located. It is commercial in nature, in that these time-share -3- 3-245 uses are structured as a short-term, tourist oriented, visitor serving use of the subject properties. The use of these properties as time-shares adds excessive noise and traffic to residential districts by using these properties for high impact tourist oriented uses more appropriately located in commercial districts of the City; and WHEREAS, expanded use of residential properties for time-share uses will further reduce the availability of housing stock for long-term residential use, and create a new demand for time-share uses of residential properties; and WHEREAS, this encroachment of tourist oriented, visitor serving uses in residential neighborhoods will not only compromise the residential character of these areas, but will also further increase the costs for housing in the City, undermining the City's efforts to provide a balance of housing for all income levels in the City; and WHEREAS, the City's authority to enact zoning ordinances is based on the powers accorded cities and counties under the State constitution to make and enforce police regulations. This police power grants the City broad authority to regulate the development and use of real property within its jurisdiction to promote the public welfare; and WHEREAS, pursuant to and in accordance with this authority, the City Council desires to reaffirm its restrictions on time-share uses in residential areas, and to update the language of the Zoning Code to provide consistency with the terminology used to define time-share uses in State law. Further, the City desires to provide greater clarity as to the zoning districts in which time-share uses are permitted as conditional uses, and the standards pursuant to which they will be reviewed in those zoning districts; and WHEREAS, the Planning Commission of the City of St. Helena held a duly noticed public hearing on March 1, 2022, as required by law to consider all the information presented by staff, and public testimony presented in writing and at the meeting; and WHEREAS, on March 1 2022, the Planning Commission of the City of St. Helena recommended that the City Council adopt this Ordinance amending the Municipal Code as described herein by a 5-0 vote; and WHEREAS, on March 22, 2022, the City Council held a duly noticed public hearing, accepting testimony from the public, and discussed the proposed amendments and staffs recommended approval of this Ordinance; and WHEREAS, the proposed zoning amendments are consistent with the General Plan goals, policies and implementation programs as the Ordinance will continue to preserve the agricultural, small town character of the City of St. Helena; will preserve the City's residential districts for residential uses; and will help to preserve the City's existing housing stock for long term residential uses, to avoid further exacerbating the existing impacts on the City's housing supply; and -4- 3-246 Now, therefore, the City Council of the City of St. Helena does hereby ordain as follows: SECTION 1: The above recitals are hereby incorporated as though set forth in this section. SECTION 2: Chapter 17.138 and sections 17.138.010 — 17.138.060 are hereby added to Title 17 of the St. Helena Municipal Code, to read as follows: "Chapter 17.138 TIME-SHARE USES 17.138.010 Purpose and Findings 17.138.020 Definitions 17.138.030 Time-share Uses Restricted to Service Commercial (SC) and Central Business (CB) Districts 17.138.040 Application Process and Development Standards 17.138.050 Violations, Enforcement and Civil Penalties 17.138.010 Purpose and Findings A. There is a critical shortage of permanent, long-term housing in the City of St. Helena. B. A limited supply of suitable vacant land, land values, and market demand for land for other uses, including but not limited to use of property for vineyards, have limited the construction of additional housing in the City of St. Helena. C. St. Helena is a popular tourist destination known for its scenic Napa Valley location, exceptional wineries and restaurants, historic Main Street and small town agricultural character. D. The City of St. Helena stands out in the Napa Valley for its ability to attract visitors while also supporting the needs of its resident population. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. E. Time-share uses are not an appropriate land use in the City's residential districts due to the multiple occupancy of time-share properties, the short-term, tourist oriented use of such property and commercial management of time-share facilities, all of which -5- 3-247 create increased traffic generation, excessive noise, disruption to residential communities through commercial -level maintenance of the time-share facilities, and therefore are appropriately confined to commercial zoning districts. F. Conversion of permanent housing to time-share facilities removes existing housing units from the City's existing stock and exacerbates an already severe housing shortage. G. It is therefore in the public interest to prohibit conversions of existing housing units into time-share facilities, as to do so eliminates needed housing stock by diverting those units to a tourist -oriented, commercial use. VA38.020 Definitions For purposes of this Chapter, the following words and phrases shall have the meaning respectively ascribed to them by this Section: "Accommodation" means any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.160. "Building" shall have the meaning ascribed to it by Section 17.04.160. "Dwelling unit" shall have the meaning ascribed to it by Section 17.04.160. "Managing entity" means the person who undertakes the duties, responsibilities and obligations of the management of a time-share plan. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. "Time-share instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. "Time-share interest' means the right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, regardless of whether or not such right is coupled with a property interest in the time-share property or a specified portion thereof. "Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given -6- e �s year, on a recurring basis for more than one year, but not necessarily for consecutive years. "Time-share property" means one or more accommodations subject to the same time- share plan, together with any other property or rights to property appurtenant to those accommodations. "Time-share use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan. 17.138.030 Timeshare Uses Restricted to Service Commercial (SC) and Central Business (CB) Districts Time-share uses are conditional uses within the City's Service Commercial (SC) District and Central Business (CB) District, subject to approval of a conditional use permit applied for and approved in conformance with this Chapter. Time-share uses are not permitted in all other Zoning Districts in the City. 17.138.040 Application Process and Development Standards A. Application Process. Approval of a conditional use permit for time-share uses in the Service Commercial District or Central Business District shall be required in accordance with the requirements of Chapter 17.168. In addition to the application requirements contained in Chapter 17.168, an application for a time-share use shall be accompanied by the following documents which shall be subject to the approval of the planning director: 1. Management Plan. A management plan shall describe the methods employed by the applicant to guarantee the future adequacy, stability, and continuity of a satisfactory level of management and maintenance of the time share use. 2. Application Requirements. In addition to any application requirements established by this section and any other applicable requirements of this code, the following information shall be submitted as part of any application to develop or establish a time-share use: a. Typical floor plans for each accommodation. b. The phasing of the construction of the accommodations on the time- share property, if applicable. c. A description of any ancillary uses which are proposed in conjunction with the time share use. d. A description of the method of management of the time share use and indication of the management entity for the time-share property. e. Any restrictions on the use or occupancy of the accommodations. -7- 3-249 f. Any other information or documentation the applicant, city staff or commission deems reasonably necessary to the consideration of the time-share use, including any required environmental documents. B. Development Standards and Operational Requirements. Notwithstanding any other provision of this chapter, the following conditions must be met by any time-share use in any conditionally permitted zone. Additional requirements may be attached to a conditional use permit or development agreement if found to be necessary to assure that the time-share use meets the intent of this chapter: 1. Time-share uses developed in the Service Commercial District or Central Business District shall be limited to accommodations in upper floors in conjunction with a mixed -use project. 2. No existing residential use in the Service Commercial or Central Business District shall be converted to a time-share use_ 3. Development Standards. The time-share use shall comply with all development standards for the zone in which it is located. 4. Parking. Parking shall be provided as follows: a. For accommodations of two or fewer bedrooms, one parking space shall be provided for each accommodation. b. For accommodations of three or more bedrooms, two parking spaces shall be provided for each accommodation. 4. Modification or Waiver of Standards. The planning commission may modify or waive one or more of the regulations contained in this section if it determines that strict compliance is not necessary to achieve the purpose and intent of this section. 17.138.060 Violations, Enforcement and Civil Penalties A. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this chapter is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1 20. B. Time-share use, and/or advertisement for time-share use, of an accommodation in violation of this chapter is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance. Any such nuisance may be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 1.12, except that the civil penalty for a violation shall be one thousand dollars ($1,000.00). Each day the violation occurs shall constitute a separate offense. -S- 3-250 C. Any responsible person who violates this chapter shall be liable and responsible for a civil penalty of one thousand dollars ($1,000.00) per violation per day such violation occurs. The city may recover such civil penalty by either civil action or administrative citation. Such penalty shall be in addition to all other costs incurred by the city, including without limitation the city's staff time, investigation expenses and attorney's fees. 1. Where the city proceeds by civil action, the court shall have discretion to reduce the civil penalty based upon evidence presented by the responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the court should consider the purpose of this chapter to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the responsible person's enrichment or profit as a result of the violation of this chapter. In any such civil action the city also may abate and/or enjoin any violation of this chapter. 2. Where the city proceeds by administrative citation, the city shall provide the responsible person notice of the right to request an administrative hearing to challenge the citation and penalty, and the time for requesting that hearing. a. The responsible person shall have the right to request the administrative hearing within forty-five (45) days of the issuance of the administrative citation and imposition of the civil penalty. To request such a hearing, the responsible person shall notify the city clerk in writing within forty- five (45) days of the issuance of the citation. The appeal notification shall include all specific facts, circumstances and arguments upon which the appeal is based. b. The city manager is hereby authorized to designate a hearing officer to hear such appeal. The city hearing officer shall conduct a hearing on the appeal within ninety (90) days of the request for the hearing unless one of the parties requests a continuance for good cause. The hearing officer shall only consider those facts, circumstances or arguments that the property owner or responsible person has presented in the appeal notification. c. The hearing officer shall render a decision in writing within thirty (30) days of the conclusion of the hearing. The hearing officer shall have discretion to reduce the civil penalty based upon evidence presented by the property owner or responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the hearing officer should consider the purpose of this chapter to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the property owner's or responsible person's enrichment or profit as a result of the violation of this chapter. d. Any aggrieved party to the hearing officer's decision on the administrative appeal may obtain review of the decision by filing a petition for writ -9- 3-251 of mandate with the Napa County superior court in accordance with the timelines and provisions set forth in Government Code Section 53069.4. e. If, following an administrative hearing, appeal, or other final determination, the owner of the property is determined to be the responsible person for the civil penalty imposed by this section, such penalty, if unpaid within forty-five (45) days of the notice of the final determination, shall become a lien to be recorded against the property on which the violation occurred pursuant to Chapter 1.12. Such costs shall be collected in the same manner as county taxes, and thereafter the property upon which they are a lien shall be sold in the same manner as property now is sold for delinquent taxes. D. Any violation of this chapter may also be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 1.12, except that the civil penalty under Chapter 1.12 for a violation shall be one thousand dollars ($1,000.00). E. Each day the violation of this chapter occurs shall constitute a separate offense. F. The remedies under this chapter are cumulative and in addition to any and all other remedies available at law and equity." SECTION 3: Deletion of Section 17.112.130 Section 17.112A 30 is hereby deleted in its entirety. SECTION 4: Amendment of Section 17.48.030 Section 17.48.030 is hereby amended to add the following text as a separate line immediately following "Theaters, movie and legitimate;", and immediately prior to "Tobacco/smoke shop, including the sale of tobacco, tobacco and/or nicotine products and equipment for smoking;": "Time share uses, pursuant to Sections 17.138.030 and 17.138.040;" SECTION 5: Amendment of Section 17.52.030 Section 17.52.030 is hereby amended to add the following text as a separate line immediately following "Theaters, movie and legitimate;", and immediately prior to "Tobacco/smoke shop, including the sale of tobacco, tobacco and/or nicotine products and equipment for smoking;": "Time share uses, pursuant to Sections 17.138.030 and 17.138.040;" SECTION 6: CEQA -10- 3-252 This ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines (the Guidelines), and the environmental regulations of the City. The City Council hereby finds that this ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. SECTION 6: Effective Date This ordinance shall take effect 30 days after its final adoption, and a summary of this ordinance shall be published once with the names of the members of the Council voting for and against the ordinance in the St. Helena Star, a newspaper of general circulation published in the City of St. Helena. THE FOREGOING ORDINANCE was introduced at a regular meeting of the St. Helena City Council on the day of , 2022, and was adopted at a regular meeting of the St. Helena City Council on the day of 2022, by the following vote: Mayor Ellsworth: Vice Mayor Dohring: Councilmember Chouteau: Councilmember Hardy: Councilmember Hall: APPROVED: Geoff Ellsworth, Mayor ATTEST: CITY OF ST. HELENA Cindy Tzafopoulos, City Clerk -11- 3-253 From: Mari Jansdotter <mjansdotter@yahoo.com3 To: Anna Chouteau Sent: 6/8/2021 7:25:45 AM Subject: Re: [External] 1242 Madrona pictures Re: Pacaso Thank you, Anna, for your kind reply. I'm sorry you all have to go through this lawsuit by Pacaso and hope the judge find in your favor, I have a follow-up question. Do you know who I should address it to? The Pacas house building on Kearney across the street from us has installed lights under the rooflin.e that are on all night and installed in such a way they shine straight into our house, especially my daughter's bedroom. Are there any ordinances that I could refer to that help me ask therm to please cover / redirect those lights or at least turn them off after 10 p.m? Thank you! Best Mari 3-254 3-256 Sent from Yahoo Mail on Android On Tue, Jun 8, 2021 at 7:12 AM, Anna Chouteau <AChouteau@cityofsthelena.org> wrote: Hi Mari, Thaiilc you for your email. I forwarded your email to City staff about the specific permitting questions. Our planning director is out of the office this week. We are defending ourselves in the lawsuit. Our City Attorney filed an anti-SLAPP motion that is now public information and the hearing will be coining up this summer. All my best, Anna Sent from my Wad On Jun 7, 2021, at 6:01 PM, Mari 7ansdotter <tnjansdotter@yahoo.com> wrote: To clarify, do they have permit allowing the new structure going up at 1242 Madrona? The rendering from original sales listing shows a trellis (see attached) but a structure looking like a live -on unit close to (and teller than) the Oak neighbour' fence is being built. See pictures from today <20210607_175202jpg> <20210607_175219jpg? Sent From Yahoo Mail on Android On Mon, Jun 7, 2021 at 5:38 PM, Mari Jansdotter <mjansdotter@yahoo.com> wrote: Thank you for doing all you can to stop Paca.so! I am not o.k. with. Pacaso's violation of city ordinance and I support the city's legal fight. In addition to signing the petition and putting a No Pacaso sign outside my home, what else can we on the community do to help, please? 3-257 l finally afforded my dream home after moving several tunes the last 10 years, only to a. year later have 4! of these Pacaso'time share' like vacation L.LClcommercially owned houses popping lip in my neighborhood. I'm devastated - this is supposed to be a residential area!! I am very worried about my family's safe & peaceful living situation, now that I'll be impacted by 4 of these houses (one across the street) - each with 8 groups of owners anchor their guests circulating in and out all year round. Many Pacaso have 4 bedrooms that easily accommodate 8f people, and pool in the backyards with outdoor areas for gatherings/parties. It's a huge difference having your neighbor throwing an occasional party versus non-stop having a new group of people next door visiting for thier token time of vacation I partying. Pacaso houses also come with increased parking problems as these properties tend not have garages or driveways (often transformed into addl bedroom). Specifically would you mind looking into building code the one at 1242 Madrona I Oak? Looks like they're adding a guest house with vary narrow set back from the oak side neighbor. Is that an approved building? Maybe they're getting around that by making it a partial garage? Add to that, the 4 Pacaso houses are all in close proximity of RLS with kids walking I biking to and from school. What are the safety concerns that this is imposing with new people circulating of and out all year round and increased car traffic? Worst case scenario there will be a liability situation that will put a stop to Pacaso. Please, please stop Pacaso before we even get close to that. Respectfully, Mari Jansdotter Sent from Yahoo Mail on Android 3-258 PACASO = PARTY HOUSES! Debbie Polverino 5/11 /2021 To the members of the City Council. In the recent Napa Register article, Austin Allison agrees that short term rentals are a problem, that commercial Timeshares are a problem- that's not what Pacaso is he said. Yet, Pacaso listed the Valley View Street "Pool House" as a 118 Timeshare Ownership property. After the city was notified by several concerned citizens and myself regarding "timeshares" listed for sale in residential zoned areas, Pacaso changed its online marketing from "118 Timeshare Ownership to 118 Shared Ownership. Owners who purchase still share the property in available time slots just like a timeshare. Living next door to a Pacaso home has been living next door to a full-time party house! The constant music with speakers blaring, loud conversations until 2 am and later, noise violations along with excessive vehicles parked on the street or in front of our homes. The additional noise of gardeners blowing dirt and leaves into our yard, Pool service, catering trucks, housekeeping scheduled more frequently. Open houses are held with statements made with, "this is a great place for pool parties and entertaining, it's a perfect place to bring friends and extended family." This home on Valley View Street was a weekend getaway home for the previous owners who had loud weekend parties. It was a constant nightmare and all the homes nearby complained. Now the property has been split up to 8 owners. The Saint Helena P.D. has already been to this home at least 3 times for noise violations after 10pm. There must be a way to stop these repeated violations and offenders. Pacaso's has written policies for its owners on their website that they must adhere to. No parking on the street, no parties, no noise after 9pm to lam, no dogs over 80 pounds. Policies have been broken several times already from each group including the Pacaso's owners. According to Mr. Allison, Saint Helena is running a dishonest campaign against Pacaso. Pacaso claims discrimination of outside ownership which is not the case. As we all know we welcome all people the opportunity to live in our quiet small town. Pacaso selling an 1,100 square foot home which is smallest of any home on our street for $1.7M is dishonest in my opinion. This is what he says is affordable housing for second home buyers who are paying in full, plus maintenance fees? When commercial companies buy a dozen homes in Napa Valley and plans additional purchases to be split up to 8 shares it is not committed to the community or our quiet neighborhoods. Zoning is in place for a reason. Commercial companies operating in full time residential streets should adhere to the rules that are in place and only buy up in areas where other vacation homes are abundant and not a disruption. What happens should we decide to sell our home? How will people feel about buying next door to a home owned by 8 owners who don't know each other and all come at different time slots for as little as 2 days at a time? We will have to disclose this information. This put a negative mark on our property. This is something I want you to think about! Say NO to Pacaso! Thank you. 3-259 From: Amy Caldarola <amycal@comcast.net> To: Paul Dohring CC: Anna Chouteau; Lester Hardy; Eric Hall Sent: 5/23/2021 1:04:24 PM Subject: [.External] Picaso ❑ear Council Members, This is Amy Caldarola here. I am very concerned about Picaso buying property in our residential neighborhoods under the guise of democratizing home ownership. This is not affordable housing. Picaso properties are time-shares and short-term rentals which violate municipal code provisions. The presence of these properties in residential neighborhoods is inappropriate and will degrade the quality of life. It has already done so with Picaso's property on Valley View; those neighbors are suffering with loud noise, music, and parties that go on to after midnight; even calling the police does not seem to stop them. I support the city in doing everything possible to defeat them. I also support a counter law suit against them if it makes legal sense. With that said, we are fighting for the soul of our community and this needs to be a number one priority. Picaso is in Napa, Sonoma, Healdsburg, and probably will move into Calistoga and Yountville. This is a fight worth fighting. It might be helpful for the affected counties and municipalities to join their resources together to oppose them. Please outline for me what the city is doing and what the plan is. Thank you. I really appreciate you taking the time to keep me informed on this very important and pressing issue. We must act now! Sincerely, Amy Caldarola 3-260 May 11, 2021 Good evening City Council members. My name is Clare Barr and I live in St. Helena. Tonight I would like to speak about the Pacaso Vacation Share homes. i listened carefully to the public comments of Pacaso Share owners made at our last City Council meeting. They sounded sincere in their desire to be a part of the St. Helena community. The problem is they have bought into a business model that will make that nearly impossible. To be a part of a real community means forming bonds with neighbors. How can that come about with a home next door that has possibly dozens of strangers coming and going, with visits no longer than 14 days at a time, a few times a year? And with the likelihood of visits gifted by other share owners, and a cleaning crew who appears before each arrival, the number swells. With the result that a Pacaso share owner, is viewed by their neighbors as only one in a sea of unfamiliar faces. And though the intentions of some of the share buyers might be good, can we say the same for all 7 of the remaining shareowners? One of whom might gift a weekend to his brother for a blowout bachelor party? Or as was the case in Napa, a single shareowner who conducted retreats in which close to a dozen visitors would come and go within one stay. That particular shareowner was charging her guests, which is a complication on an entirely different level. Pacaso would have us believe that their sharebuyers are families who simply want a quiet, lovely getaway. But in actuality, a Pacaso.home is built for partying. Their own website says of one offering "This home takes entertaining to new heights". And yet another listing says that a 3-261 particular home "has been completely re -imagined to accommodate families, friends, and large groups". Another listing offers "year round fun and adventure". Now, none of us resent the visitor who wants to have fun. Indeed, our beautiful valley is an ideal place for celebration. And we all do that on occasion. But when you realize that every single visitor owning a Pacaso share has been wooed with the promise of "fun and adventure" within a house "built for entertaining", then you have the possibility of major partying with each and every visitor, all crammed into stays that last from 2-14 days. This is transient occupancy in our residential neighborhoods that cannot possibly be regulated under the Pacaso system. There is a reason why we have ordinances in place that designate where tourists and visitors can stay. It allows us to appreciate our visitors, giving them the space and accommodations in which to party and celebrate, while we ourselves can conduct our daily lives in the sanctuary of our residential neighborhoods. Which in turn, are places where we know our neighbors so well that we trust them with our keys, our pets, and even our children. With whom we share joy and sometimes sorrow, and whom are quick to lend a hand in times of crisis. And if we have learned anything in the last few years, it is that the ability to know and rely on our neighbors is the very thing that sustains our community through thick and thin. A vacation home with a parade of visitors coming and going, does not belong in our residential neighborhoods. Please Say No to Pacaso. Clare Barr St. Helena 3-262 From: Beth Gray <bgray14@gmail.com> To: Geoff Ellsworth Sent: 5/22/2021 3:01:13 PM Subject: [External] Pacaso Dear Mr. Mayor, I am writing to express my strong opposition against the infiltration of Pacaso and their timeshare strategy in the city of Saint Helena. As a full-time resident here in the city (and as your neighbor), I find it atrocious that the city has not been able to stop the infiltration of this community destroying business model. This business will do nothing but destroy our community. As an example, I witnessed the dumping of water from the pool into the creekbed from a home purchased by Pacaso right on the corner of Sylvaner/Reisling as they began to redevelop the home and expect to list it as fractional ownership. Illegal dumping of the pool water with. disregard to any of the environmental consequences demonstrates their utter lack of care about the community. Similarly, hearing from the neighbors who live next to a Pacaso home on Valley View, I can only shake my head and sympathize with the poor neighbors having to deal with multiple cars showing up and loud music being played at all hours. One of the reasons I moved from San Francisco to Saint Helena was to enjoy the quiet sounds of nature, the beautiful outdoors - not to .listen to vacationers who only want to party for the two weeks that they have their time in the home. Please protect our city from these timeshares. I understand the city is being sued. I hope that we can collectively put the necessaiy resources behind this lawsuit to stop Pacaso from any more timeshares in St. Helena. Respectfully, Beth Gray 3-263 CITY OF ST. HELENA ORDINANCE NO.2022-5 ADDING CHAPTER 17.138 "TIME SHARE USES" AND SECTIONS 17.138.010 — 17.138.060 TO TITLE 17, ZONING, OF THE ST. HELENA MUNICIPAL CODE, AMENDING SECTIONS 17.48.030 AND 17.52.030 AND DELETING SECTION 17.112.130 OF THE ST. HELENA MUNICIPAL CODE WHEREAS, the City of St. Helena is a popular tourist destination, known for its scenic Napa Valley location, exceptional wineries and restaurants, historic Main Street and small-town agricultural character; and WHEREAS, preserving the rural, small-town duality and agricultural character of the City of St. Helena has been a focal point of the City's land use planning for decades, and remains a primary focus in the City's 2040 General Plan; and WHEREAS, the City of St. Helena stands out in the Napa Valley for its ability to attract visitors while also supporting the needs of its resident population. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy; and WHEREAS, the City values and welcomes all visitors to the City and recognizes their contributions to the City's economy, but finds that in order to maintain the City's long term viability as a community where people not only come to visit, but also live, work and contribute to the long term betterment of the community through participation in the City's schools, local community groups, civic government and local serving businesses, the City must maintain a balance between residential land uses and visitor serving uses; and WHEREAS, the City's existing housing stock is significantly impacted, with demand outweighing supply, resulting in extremely high housing prices as detailed in the accompanying staff report. A limited supply of suitable vacant land, exorbitantly high land costs, and limitations in the City's existing infrastructure, among other factors, have limited the construction of additional housing in the City of St. Helena; and WHEREAS, according to the U.S. Census Bureau, the current median household income in the City of St. Helena is $90,031, while the estimated value of owner -occupied housing units from 2015-2019 was approximately $1,112,100, with current real estate listings suggesting that prices are increasing significantly, meaning that homes in the City are not affordable to the median household in the City; and WHEREAS, as noted in the St. Helena Housing Update Report prepared for the City in April 2018, "St. Helena has more local jobs than people in the labor force, demanding large numbers of commuters to fill local jobs. Workers commute daily into St. Helena, many because there is no local housing that is affordable at the incomes that 3-264 they make. Thirty six percent (36%) of St. Helena households cannot afford market rents while seventy percent (70%) of St. Helena households cannot afford to purchase a home. Paramedics and preschool teachers cannot afford St. Helena's market rents. Teachers, registered nurses, winery and hospitality managers and nonprofit directors cannot afford homeownership in St. Helena"; and WHEREAS, the City has made significant efforts to address the need for housing at lower income levels, of which recent examples include providing assistance to local nonprofit Our Town St. Helena for the Brenkle Court development, a mutual self-help housing development providing homeownership opportunities to eight low income working families, as well as the acquisition of a home located at 963 Pope Street using a charitable sale strategy. The property at 963 Pope Street is being developed with an additional four units to provide a total of five new affordable rental units in the City; and WHEREAS, further, in connection with the recently approved Farmstead lodging project, the City negotiated with the developer to contribute one million dollars toward the purchase of property to be used for the development of not less than twenty units of housing that will be affordable to low and very low-income households, and an additional two million two hundred thousand dollars to be used more generally toward the development of affordable housing in the City; and WHEREAS, the City additionally provided substantial financial assistance to the recently completed Turley Flats Affordable Housing development, which provides eight units of rental affordable housing in a three story building located at 1105 Pope Street; and WHEREAS, these efforts have helped to address the City's need for affordable housing, but have also highlighted the challenge of providing sufficient housing to meet demand, particularly at more affordable levels, due to the significant costs of acquiring housing or land for the development of housing in the City and the limited supply of such land; and WHEREAS, the conversion of existing residential units to uses other than long- term residential use will further reduce the City's existing long-term housing supply, causing further imbalance between the demand for housing in the City and the existing supply, not only altering the character of the City's residential neighborhoods, but also presenting further challenges to the City's efforts to provide affordable housing within the community; and WHEREAS, the City additionally has, for many years, worked to preserve its existing housing stock for long term residential use, both to maintain the character of its residential neighborhoods and prevent residential districts from becoming visitor and tourist serving districts, and to ensure that it would not be converted to uses other than long-term residential uses; and 3-265 WHEREAS, to this end, in 1982 the City adopted Ordinance No. 82-07, which prohibited the creation of timeshare projects as a means of ownership of any single- family, two-family or multiple -family dwelling or any apartment house within the City. This restriction was imposed because the conversion of residential dwelling units to time- sharing projects would eliminate residential dwelling units that would otherwise be available for long-term occupancies, and were inappropriate in residential areas because those uses have the same character as commercial hotels, motels and other transient occupancy uses, and would result in increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods; and WHEREAS, the City has historically not received complaints about time-sharing uses in residential neighborhoods. Commencing in 2020, however, the City began receiving complaints regarding single family homes in the City that were being sold and/or marketed as "fractional ownership" or "co -ownership" homes, wherein each buyer may acquire a one -eighth interest in a limited liability company that will own the home. Under the structure pursuant to which these dwelling units are marketed and sold, each owner gets a one -eighth share along with the right to use the home for one -eighth of each year indefinitely. During each owner's usage period, that owner has exclusive use of the entire house. All rentals are prohibited; only owners and their guests are permitted to use the house. Each owner pays regular assessments to fund the operating costs of the home and maintenance reserves; and WHEREAS, this arrangement, which provides that each purchaser is entitled to exclusive use of the property for a fixed number of days each -year, is a "time-share plan" as defined in Business and Professions Code section 11212, and a "time share program" as defined in Section 17.112.130 of the City's Municipal Code; and WHEREAS, the City has ' received numerous complaints regarding these properties, including parking impacts from large numbers of people staying at these properties; excessive noise late into the evening due to frequent outdoor parties; traffic due to frequent visitor turnover; traffic, noise and parking concerns due to frequent visits from cleaning, landscape maintenance and pool cleaning services that come to the properties in between each stay to prepare the home for the next guest; and an inability to maintain lines of communication to set community expectations with the users of the unit, as visitors only frequent the homes for short term stays of 2 to 14 days; and WHEREAS, the complaints received by the City are reflective of the reasons that the City prohibited time-share projects within residential areas of the City. The time-share uses provide a short-term, high impact vacation -oriented use of the property, where those that buy into the time-share use the home for entertaining and short term stays while visiting restaurants, wineries and other tourist -oriented locations in St. Helena and the surrounding Napa Valley; and WHEREAS, this high impact use, combined with the frequent turnover and commercial management of these properties is not consistent with the residential districts in which they are located. It is commercial in nature, in that these time-share uses are 3-266 structured as a short-term, tourist oriented, visitor serving use of the subject properties. The use of these properties as time-shares adds excessive noise and traffic to residential districts by using these properties for high impact tourist oriented uses more, app rop riately located in commercial districts of the City; and WHEREAS, expanded use of residential properties for time-share uses will further reduce the availability of housing stock for Iong-term residential use, and create a new demand for time-share uses of residential properties; and WHEREAS, this encroachment of tourist oriented, visitor serving uses in residential neighborhoods will not only compromise the residential character. of these areas, but will also further increase the costs for housing in the City, undermining the City's efforts to provide a balance of housing for all income levels in the City; and WHEREAS, the City's authority to enact zoning ordinances is based on the powers accorded cities and counties under the State constitution to make and enforce police regulations. This police power grants the City broad authority to regulate the development and use of real property within its jurisdiction to promote the public welfare; and WHEREAS, pursuant to and in accordance with this authority, the City Council desires to reaffirm its restrictions on time-share uses in residential areas, and to update the language of the Zoning Code to provide consistency with the terminology used to define time-share uses in State law. Further, the City desires to provide greater clarity as to the zoning districts in which time-share uses are permitted as conditional uses, and the standards pursuant to which they will be reviewed in those zoning districts; and WHEREAS, the Planning Commission of the City of St. Helena held a duly noticed public hearing on March 1, 2022, as required by law to consider all the information presented by staff, and public testimony presented in writing and at the meeting; and WHEREAS, on March 1, 2022, the Planning Commission of the City of St. Helena recommended that the City Council adopt this Ordinance amending the Municipal Code as described herein by a 5-0 vote; and WHEREAS, on March 22, 2022, the City Council held a duly noticed public hearing, accepting testimony from the public, and discussed the proposed amendments and staff's recommended approval of this Ordinance; and WHEREAS, the proposed zoning amendments are consistent with the General Plan goals, policies and implementation programs as the Ordinance will continue to preserve the agricultural, small town character of the City of St. Helena; will preserve the City's residential districts for residential uses; and will help to preserve the City's existing housing stock for long term residential uses, to avoid further exacerbating the existing impacts on the City's housing supply; and Now, therefore, the City Council of the City of St. Helena does hereby ordain as follows: 3-267 SECTION 1: The above recitals are hereby incorporated as though set forth in this section. SECTION 2: Chapter 17.138 and sections 17.138.010 —17.138.060 are hereby added to Title 17 of the St. Helena Municipal Code, to read as follows: "Chapter 17.138 TIME-SHARE USES 17.138.010 Purpose and Findings 17.138.020 Definitions 17.138.030 Time-share Uses Restricted to Service Commercial (SC) and Central Business (CB) Districts 17.138.040 Application Process and Development Standards 117.138.050 Violations, Enforcement and Civil Penalties 17.138.010 Purpose and Findings A. There is a critical shortage of permanent, long-term housing in the City of St. Helena. B. A limited supply of suitable vacant land, land values, and market demand for land for other uses, including but not limited to use of property for vineyards, have limited the construction of additional housing in the City of St. Helena. C. St. Helena is a popular tourist destination known for its scenic Napa Valley location, exceptional wineries and restaurants, historic Main Street and small-town agricultural character. D. The City of St. Helena stands out in the Napa Valley for its ability to attract visitors while also supporting the needs of its resident population. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. E. Time-share uses are not an appropriate land use in the City's residential districts due to the multiple occupancy of time-share properties, the short-term, tourist -oriented use of such property and commercial management of time-share facilities, all of which create increased traffic generation, excessive noise, disruption to residential communities 3-268 through commorcial-level maintenance of the time-share facilities, and therefore are appropriately confined to commercial zoning districts. F. Conversion of permanent housing to time-share facilities removes existing housing units from the City's existing stock and exacerbates an already severe housing shortage. G. It is therefore in the public interest to prohibit conversions of existing housing units into time-share facilities, as to do so eliminates needed housing stock by diverting those units to a tourist -oriented, commercial use. 17.138.020 Definitions For purposes of this Chapter, the following words and phrases shall have the meaning respectively ascribed to them by this Section: "Accommodation" means any dwelling unit, apartment, condominium or cooperative unit,. hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single-family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.160. "Building" shall have the meaning ascribed to it by Section 17.04.160. "Dwelling unit" shall have the meaning ascribed to it by Section 17.04.160. "Managing entity" means the person who undertakes the duties, responsibilities and obligations of the management of a time-share plan. "Person" means a.natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. "Time-share instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. "Time-share interest" means the right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, regardless of whether or not such right is coupled with a property interest in the time-share property or a specified portion thereof. "Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, 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. 3-269 "Time-share property" means one or more accommodations subject to the same time- share plan, together with any other property or rights to property appurtenant to those accommodations. "Time-share use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan. 17.138.030 Time-share Uses Restricted to Service Commercial (SC) and Central Business (CB) Districts Time-share uses are conditional uses within the City's Service Commercial (SC) District and Central Business (CB) District, subject to approval of a conditional use permit applied for and approved in conformance with this Chapter. Time-share uses are not permitted in all other Zoning Districts in the City. 17.138.040 Application Process and Development Standards A. Application Process. Approval of a conditional use permit for time-share uses in the Service Commercial District or Central Business District shall be required in accordance with the requirements of Chapter 17.168. In addition to the application requirements contained in Chapter 17.168, an application for a time-share use shall be accompanied by the following documents which shall be subject to the approval of the planning director: 1. Management Plan. A management plan shall describe the methods employed by the applicant to guarantee the future adequacy, stability, and continuity of a satisfactory level of management and maintenance of the time share use. 2. Application Requirements. In addition to any application requirements established by this section and any other applicable requirements of this code, the following information shall be submitted as part of any application to develop or establish a time-share use: a. Typical floor plans for each accommodation. b. The phasing of the construction of the accommodations on the time- share property, if applicable. c. A description of any ancillary uses which are proposed in conjunction with the time share use. d. A description of the method of management of the time share use and indication of the management entity for the time-share property. e. Any restrictions on the use or occupancy of the accommodations. 3-270 f. Any other information or documentation the applicant, city staff or commission deems reasonably 'necessary to the consideration of the time-share use, including any required environmental documents. B. Development Standards and Operational Requirements. Notwithstanding any other provision of this chapter, the following conditions must be met by any time-share use in any conditionally permitted zone. Additional requirements may be attached to a conditional use permit or development agreement if found to be necessary to assure that the time-share use meets the intent of this chapter: 1. Time-share uses developed in the Service Commercial District or Central Business District shall be limited to accommodations in upper floors in conjunction with a mixed -use project. 2. No existing residential use in the Service Commercial or Central Business District shall be converted to a time-share use. 3. Development Standards. The timeshare use shall comply with all development standards for the zone in which it is located. 4. Parking. Parking shall be provided as follows: a. For accommodations of two or fewer bedrooms, one parking space shall be provided for each accommodation. b. For accommodations of three or more bedrooms, two parking spaces shall be provided for each accommodation. 4. Modification or Waiver of Standards. The planning commission may modify or waive one or more of the regulations contained in this section if it determines that strict compliance is not necessary to achieve the purpose and intent of this section. 17.138.060 Violations, Enforcement and Civil Penalties A. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this chapter is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.20. B. Time-share use, arld/or advertisement for time-share use, of an accommodation in violation of this chapter is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance. Any such nuisance may be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 1.12, except that the civil penalty for a violation shall be one thousand dollars ($1,000.00). Each day the violation occurs shall constitute a separate offense. 3-271 C. Any responsible person who violates this chapter shall be liable and responsible for a civil penalty of one thousand dollars ($1,000.00) per violation per day such violation occurs. The city may recover such civil penalty by either civil action or administrative citation. Such penalty shall be in addition to all other costs incurred by the city, including without limitation the city's staff time, investigation expenses and attorney's fees. 1. Where the city proceeds by civil action, the court shall have discretion to reduce the civil penalty based upon evidence presented by the responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the court should consider the purpose of this chapter to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the responsible person's enrichment or profit as a result of the violation of this chapter. In any such civil action the city also may abate and/or enjoin any violation of this chapter. 2. Where the city proceeds by administrative citation, the city shall provide the responsible person notice of the right to request an administrative hearing to challenge the citation and penalty, and the time for requesting that hearing. a. The responsible person shall have the right to request the administrative hearing within forty-five (45) days of the issuance of the administrative citation and imposition of the civil penalty. To request such a hearing, the responsible person shall notify the city clerk in writing within forty-five (45) days of the issuance of the citation. The appeal notification shall include all specific facts, circumstances and arguments upon which the appeal is based. b. The city manager is hereby authorized to designate a hearing officer to hear such appeal. The city hearing officer shall conduct a hearing on the appeal within ninety (90) days of the request for the hearing unless one of the parties requests a continuance for good cause. The hearing officer shall only consider those facts, circumstances or arguments that the property owner or responsible person has presented in the appeal notification. c. The hearing officer shall render a'decision in writing within thirty (30) days of the conclusion of the hearing. The hearing officer shall have discretion to reduce the civil penalty based upon evidence presented by the property owner or responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the hearing officer should consider the purpose of this chapter to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the property owner's or respohsible person's enrichment or profit as a result of tH6 violation of this chapter. d. Any aggrieved party to the hearing officer's decision on the administrative appeal may obtain review of the decision by filing a petition for writ of mandate with the Napa County superior court in accordance with the timelines and provisions set forth in Government Code Section 53069.4. 3-272 e. If, following an administrative hearing, appeal, or other final determination, the owner of the property is determined to be the responsible person for the civil penalty imposed by this section, such penalty, if unpaid within forty-five (45) days of the notice of the final determination, shall become a lien to be recorded against the property on which the violation occurred pursuant to Chapter 1.12. Such costs shall be collected in the same manner as county taxes, and thereafter the property upon which they are a lien shall be sold in the same manner as property now is sold for delinquent taxes. D. Any violation of this chapter may also be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 1.12, except that the civil penalty under Chapter 1.12 for a violation shall be one thousand dollars ($1,000.00). E. Each day the violation of this chapter occurs shall constitute a separate offense. F. The remedies under this chapter are cumulative and in addition to any and all other remedies available at law and equity." SECTION 3: Deletion of Section 17.112.130 Section 17.112.130 is hereby deleted in its entirety. SECTION 4: Amendment of Section 17.48.030 Section 17.48.030 is hereby amended to add the following text as a separate line immediately following "Theaters, movie and legitimate;", and immediately prior to "Tobacco/smoke shop, including the sale of tobacco, tobacco and/or nicotine products and equipment for smoking;": "Time share uses, pursuant to Sections 17.13B.030 and 17.138.040;" SECTION 5: Amendment of Section 17.52.030 Section 17.52.030 is hereby amended to add the following text as a separate line immediately following "Theaters, movie and legitimate;", and immediately prior to "Tobacco/smoke shop, including the sale of tobacco, tobacco and/or nicotine products and equipment for smoking;": "Time share uses, pursuant to Sections 17.138.030 and 17.138.040;" dECTION 6: CEQA This ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines (the Guidelines), and the environmental regulations of the City. The City Council hereby finds that this ordinance is not subject to CEQA because the adoption of 3-273 this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Moreover, under Section 15661(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. SECTION 6: Effective Date This ordinance shall take effect 30 days after its final adoption, and a summary of this ordinance shall be published once with the names of the members of the Council voting for and against the ordinance in the St. Helena Star, a newspaper of general circulation published in the City of St. Helena. THE FOREGOING ORDINANCE was introduced at a regular meeting of the St. Helena City Council on the 22nd day of March 20221 and was adopted at a regular meeting of the St. Helena City Council on the 12th day of April 2022, by the following vote: Mayor Geoff Ellsworth: Yes Vice Mayor Paul Dohring: Yes Council Member Anna Chouteau: Yes Council Member Lester Hardy: Yes Council Member Eric Hall: Yes APPROVED: U�-� C U\--,- Geoff Ellsworth, Mayor I, CINDY TZAFOPOULOS, CITY CLERK of the City of St. Helena, California, do hereby certify that the foregoing Or�inance was regularly introduced and placed upon its first reading at a regular meeting of the City Council on the 22nd day of March 2022. That thereafter said Ordinance was duly adopted and passed at a regular meeting of the City Council on the 12th day of April 2022, by the following vote: 3-274 Mayor Geoff Ellsworth: Yes. Vice Mayor Paul Dohring: Yes i Council Member Anna Chouteau: Yes Council Member Lester Hardy: Yes Council Member Eric Hall: Yes ATTEST: I C � v Cindy Tzafo$oulos, CYy Cork %;0 3-275 Exhibit P Ordinance Proposed by Pacaso Adding Chapter 5.98 3-276 DRAFT ORDINANCE Chapter 5.98 CO -OWNERSHIP PROPERTY MANAGEMENT 5.98.005 Purpose and Findings. The City Council of the City of Newport Beach finds and declares as follows: A. The City has a long and storied history of being a vacation destination welcoming families and visitors from all over the world to second homes within our shared community. B. Unlike short term lodging units that are primarily used during the summer months when parking and other demands for City services are at their highest, second homes are utilized by their owners throughout the year. C. An increasing trend in second home ownership in the City and other communities throughout the nation is co -ownership whereby a number of persons jointly contribute towards the purchase and shared use of a second home. D. A portion of these co -owned homes are managed by third -party management companies. E. The restrictions of this chapter are necessary to ensure the growth of co -ownership homes that are managed by a third -party management company is done in an orderly fashion that does not negatively impact the surrounding community. 5.98.010 Definitions. For the purpose of this chapter, the following definitions shall apply: A. "Authorized Guests" shall mean any guests of an owner of a Co -owned Housing Unit who have not provided compensation to an owner for dwelling, lodging, and sleeping purposes and are present in the Co -owned Housing unit while the owner is on -site and in the home. B. "City" shall mean the City of Newport Beach. C. "Community Development Department" or "Department" shall mean the Community Development Department of the City. D. "Community Development Director" or "Director" shall mean the Community Development Director of the City or his or her designee. Aj of, chi ,0(u, C-AfiY Of N1 emr"m i 12-7 3-277 E. "Co -owned Housing Unit" shall mean a residential dwelling unit, managed by a Go - owned Property Manager, and utilized for occupancy for dwelling, lodging, or sleeping purposes by up to eight (8) Owners or eight (8) members of a Limited Liability Company, that owns the residential dwelling unit, along with authorized guests. The term "Co -owned Housing Unit" is not a time-share project, as defined in this Code, and usage of a Co - owned Housing Unit is not a time-share use. F. "Co -owned Housing Unit Permit" shall mean a permit granted by the City to a Co - owned Property Manager for each Co -owned Housing Unit under management. G. "Co -owned Property Manager" shall mean a person or Limited Liability Company that manages a Co -owned Housing Unit, on behalf of the Owners of the Co -Owned Housing Unit. H. "Co -owned Property Management Permit" shall mean the annual permit issued by the City allowing a Co -owned Property Manager to manage a Co -owned Housing Unit(s). I. "Good Neighbor Policy" shall mean a written policy that governs the operation of a Co -owned Housing Unit and summarizes general rules of conduct, occupancy limits, consideration, and respect for neighbors and the community, including without limitation provisions of this Chapter applicable to the Owner and guests. J. "Limited Liability Company" shall mean a limited liability company or other form of business entity, including, but not limited to, all domestic and foreign corporations, associations, syndicates, joint stock corporations, partnerships of every kind, clubs, business or common law trusts, or societies. K. "Local Contact Person" shall mean an individual(s) who is available twenty-four (24) hours per day, seven (7) days per week for the purpose of responding within twenty- four (24) hours to complaints regarding the condition, operation, or conduct of occupants of the Co -owned Housing Unit, or any agent of an owner authorized by the owner to take remedial action and who responds to any violation of this Code.. L. "Owner" shall mean the person(s) that hold legal and/or equitable title to the Co - owned Housing Unit. M. "R-1 Zoning District" shall have the same meaning provided in Section 20.18.010(B) and Section 21.18.010(B), or any successor sections. 5.98.015 Co -owned Property Management Permit Required. A. A Co -owned Property Manager shall not manage a Co -owned Housing Unit without obtaining a Co -owned Property Management Permit from the City. 2 '\'� 1] A�� ` 1 0 ach QW[� OrA A 1, - tay 0% e 12-8 3-278 B. A Co -owned Property Manager shall obtain a permit by submitting an application to the Community Development Director, in a form provided by the Department, signed by the applicant. An application for a new permit, renewal permit, the reinstatement of a permit or the transfer of a permit shall contain the following information: I. The name, address, and telephone number of the applicant; 2. The name, address, and telephone number of the Local Contact for the Co - owned Property Manager; 3. A current list of every property that the applicant manages in the City; 4. Evidence of a valid business license issued by the City for the separate business of operating Co -owned Housing Units or submission of evidence or information indicating that the Owner is exempt or otherwise not covered by Chapter 5.04 for such activity. 5. A copy of the Good Neighbor Policy that governs each Co -owned Housing Unit. C. The Co -owned Property Management Permit shall be renewed annually pursuant to procedures provided by the Community Development Department. D. An application for the renewal of a Co -owned Property Management Permit shall be filed within thirty (30) calendar days of the Co -owned Property Management Permit expiration, or the Co -owned Property Management Permit shall be deemed abandoned. E. An application for the reinstatement of a Co -owned Property Management Permit closed by the Director pursuant to Section 5.98,070 shall be filed within thirty (30) calendar days of the date the permit was closed by the Director, or the Co -owned Property Management Permit shall be deemed abandoned. F. An application for the reinstatement of a previously suspended Co -owned Property Management Permit shall be filed within thirty (30) calendar days of the end of the suspension period, or the Co -owned Property Management Permit shall be deemed abandoned. G. If any application is deemed incomplete, which shall be determined in the sole discretion of the Director, the application shall be completed within thirty (30) calendar days of the service of notice that the application is incomplete, which shall be served in accordance with Section 1.08.080, or the application and any associated permit shall be deemed abandoned. 3 Ne%wPorl, � cam. c 12-9 3-279 H. If good causes exist, as determined in the sole discretion of the Director, the Director may extend the deadlines set forth in this section. 5.98.020 Co -owned Housing Unit Permit Required. A. A Co -owned Property Manager shall obtain a permit for each Co -owned Housing Unit in the City prior to the unit's use as a Co -owned Housing Unit. Q. A Co -owned Properly Manager shall obtain a permit by submitting an application to the Community Development Director, in a form provided by the Department, signed by the applicant. An application for a new permit, renewal permit, the reinstatement of a permit or the transfer of a permit shall contain the following information: The address of the Co -owned Housing Unit; 2. The name, address, and telephone number of the applicant; 3. The name, address, and telephone number of the local contact for the Co - owned Housing Unit; 4. A copy of the Good Neighbor Policy that governs the operation of the Co - owned Housing Unit; 5. If applicable, evidence that a Co -owned Housing Unit would not violate the permissible use for housing within a Homeowners Association in accordance with the Homeowners Association's Declaration of Covenants, Conditions, and Restrictions. C. The Co -owned Housing Unit Permit shall be renewed annually pursuant to procedures provided by the Community Development Department. D. An application for the renewal of a Co -owned Housing Unit Permit shall be filed within thirty (30) calendar days of the Co -owned Housing Unit Permit's expiration, or the Co -owned Housing Unit Permit shall be deemed abandoned. E. An application for the reinstatement of a Co -owned Housing Unit Permit closed by the Director pursuant to Section 5.98.070 shall be filed within thirty (30) calendar days of the date the permit was closed by the Director, or the Co -owned Housing Unit Permit shall be deemed abandoned. F. An application for the reinstatement of a previously suspended Co -owned Housing 4 gay - N(,ru%wport 12-10 3-280 Unit Permit shall be filed within thirty (30) calendar days of the end of the suspension period, or the Co -owned Housing Unit Permit shall be deemed abandoned. G. If any application Is deemed incomplete, which shall be determined In the sole discretion of the Director, the application shall be completed within thirty (30) calendar days of the service of notice that the application is incomplete, which shall be served in accordance with Section 1.08,080, or the application and any associated permit shall be deemed abandoned. H. if good causes exist, as determined in the sole discretion of the Director, the Director may extend the deadlines set forth in this section. I. For purposes of calculating the maximum number of permits under Subsection 5.98.035(A), a Co -awned Housing Unit Permit shall be deemed valid until the applicable permit has been deemed abandoned. 5.98.025 Denial of Permit. If Co -owned Housing Unit Permits are available for issuance, no timely application filed by Co -owned Property Manager for an annual permit, renewal of a permit, reinstatement of a permit or transfer of a permit for a unit eligible to be used as a Co -owned Housing Unit, as provided for in this Chapter and this Code, shall be denied unless: the Co -owned Property Manager does not have a current valid business license; or the Co -owned Housing Unit Permit for the same unit and issued to the same Co -owned Property Manager has been suspended. 5.98,030 Filing Fee. An application for a new annual permit, the renewal of an existing permit, the reinstatement of a permit, or the transfer of a permit shall be accompanied by a fee established by resolution of the City Council; provided, however, the fee shall be no greater than necessary to defer the cost incurred by the City in administering the provisions of this chapter. 5.98.035 Maximum Number of Co -owned Housing Unit Permits in the R-1 Zoning District. A. The maximum number of Co -owned Housing Unit Permits in the R-1 Zoning District shall be limited to five hundred (500) permits at any time. For purposes of calculating the maximum number of permits available, a permit shall be deemed valid and unavailable until it is abandoned in accordance with Sections 5,98,020(D) through (G). B. An Co -owned Property Manager who has a Co -owned Housing Unit Permit, or a Co - owned Property Manager seeking to reinstate a Co -owned Housing Unit Permit that has 5 r1h 3�3 12-11 3-281 not been abandoned in accordance with Sections 5.98.020(D) through (G), shall have priority to renew or reinstate the permit over anyone on the waiting list, as described in subsection (D) of this section. C. A Co -owned Property Manager seeking to transfer a valid Co -Owned Housing Unit Permit under Section 6,98,040 shall have priority to transfer the permit over anyone on the waiting list, as described in subsection (D) of this section. D. If the City has issued the maximum number of Co -owned Housing Unit Permits available in the R-1 Zoning District, the City shall maintain a waiting list. An application for placement on the waiting list shall be submitted to the Director, on a form approved by the Director, and shall be accompanied by a fee established by resolution of the City Council. In the event a Co -owned Housing Unit Permit becomes available, the Director shall notify the person or persons next in order on the waiting list. The notice shall specify that applications will be accepted for ten (10) calendar days after the date of the notice, and that failure to apply within the ten (10) calendar -day period shall result in removal of the person or persons receiving notice from the waiting list. Notice shall be deemed given when deposited in the United States mail, with the first-class postage prepaid, and addressed as specified by the person or persons on the waiting list. The City shall not be liable for a failure to notify any person or persons on the waiting list since placement on the list does not create any property right in any person or persons on the list nor any contractual obligation on the part of the City. 5.98.040 Transfer of Permit. A Co -owned Housing Unit Permits permit that is valid, and has not been abandoned in accordance with Sections 5,98,020(D) through (G), may be transferred by the Co -owned Property Manager to another Co -owned Property Manager that is permitted under this chapter. 5.98.046 Conditions for Co -owned Housing Unit hermits. A. All Co -owned Housing Unit Permits issued pursuant to this chapter are subject to the following standard conditions: 1. The Co -owned Property Manager shall prohibit the Owners) from renting the Co -owned Housing Unit to a transient user for short term lodging. 2. The Co -owned Property Manager shall ensure that the Owner(s) limits the overnight occupancy of the Co -owned Housing Unit to the maximum permitted by the building code and fire code. 3. The Co -owned Property Manager shall use best efforts to ensure that the occupants and/or guests of the Co -owned Housing Unit do not create unreasonable noise or disturbances, engage in disorderly conduct, or violate provisions of this Code or any state or federal law pertaining to noise, disorderly 8 F"e - - h -y evvpaowt Lt �rw 92-12 3-282 conduct, the consumption of alcohol, or the use of illegal drugs. 4. The Co -owned Property Manager shall, upon notification that any Owner and/or guest of a Co -owned Housing Unit has created unreasonable noise or disturbances, engaged in disorderly conduct or committed violations of this Code or any state or federal law pertaining to noise, disorderly conduct, the consumption of alcohol or the use of illegal drugs, promptly use best efforts to prevent a recurrence of such conduct by any Owner or guest. 5. The Co -owned Property Manager shall provide the Owner(s) with a copy of the Good Neighbor Policy. 5. With respect to any Co -owned Housing Unit that is located in any safety enhancement zone, the Co -owned Property Manager shall tape immediate action during the period that the safety enhancement zone is in effect to prevent any Owner or guest from engaging in disorderly conduct or committing violations of this Code or state or federal law pertaining to noise, disorderly conduct, the consumption of alcohol or the use of illegal drugs. 7. The Co -owned Property Manager shall provide the City with the name and twenty-four (24) hour phone number of a local Contact Person(s) (who resides within twenty-five (25) miles of the property) who shall respond to any call related to the Co -awned Housing Unit within thirty (30) minutes, and ensure compliance with this chapter in a timely manner. The Co -owned Property Manager must provide a new local Contact Person and his or her phone number within five (5) business days, if there is a change in the local Contact Person(s). 8. The Co -owned Property Manager shall ensure that all available parking spaces on site, which may include garage, carport, and driveway spaces as well as tandem parking, are available for the Owner and/or guest of the Co -owned Housing Unit. The Co -owned Property Manager shall disclose the number of parking spaces available on site and shall inform the Owner and/or guest that street parking may not be available. g. The Co -owned Property Manager shall maintain a valid Go -owned Housing Unit Permit for each Co -owned Housing Unit under management. 10. The Co -owned Property Manager shall include the City issued Co -owned Housing Unit Permit number on all advertisements for the sale of the Co -owned Housing Unit. 11. The Co -owned Property Manager shall ensure that a permitted Co -owned Housing Units is only used for residential purposes and not used for nonresidential uses, including, but not limited to, large commercial or non-commercial gatherings, commercial filming and/or nonowner wedding receptions. 7 n[y ofi, Newr'.'�VR 92-13 3-283 12. The Co -owned Property Manager shall ensure that no amplified sound or reproduced sound Is used outside or audible from the property line between the hours of 10:00 p.m. and 10:00 a.m. 13. The Co -owned Property Manager shall provide the City with a copy of the Good Neighbor Policy, within seven (7) calendar days after the City serves the Co - owned Property Manager with a notice of request for the Good Neighbor Policy in accordance with Section 1.08.080. 14. The Co -owned Property Manager shall require every Owner and/or guest to comply with all State and local laws that regulate parking while staying at or visiting the Co -owned Housing Unit; 15. The Co -owned Property Manager shall ensure that any Owner and/or guest complies with all State and local laws that regulate parking while the Owner and/or guest is staying at or visiting the Co -Owned Housing Unit. B, The Director shall have the authority to impose additional conditions on any permit in the event of any violation of the conditions to the permit or the provisions of this chapter subject to compliance with the procedures specified in Section 5.98,060. 5.98.050 Violations of Permit Conditions. A. In addition to other provisions of this Code, it shall be unlawful for any Owner or guest of Co -owned Housing Unit to: 1. Exceed the overnight occupancy limit designated for the Co -owned Housing Unit. 2. Use street parking prior to utilizing all available on -site parking space(s) for the Co -owned Housing Unit. 3. Place trash for collection in violation of this Code's rules and regulations concerning: a. The timing, storage or placement of trash containers; or b. Recycling requirements. 4, Amplify or reproduce sound between the hours of 10:00 p.m. and 10:00 a.m.: a. Outside of the Co -owned Housing Unit; or 8 kCA"ty o__ I'l 12-14 3-284 b. That is audible from the property line for the Co -owned Housing Unit, 5. Use the Co -owned Housing Unit for any nonresidential purpose, including, but not limited to, large commercial or noncommercial gatherings, commercial filming and/or nonowner wedding receptions. 6. Rent a Co -owned Housing Unit to any person for a short term. 7. Allow guests to use a Co -owned Housing Unit when the Owner(s) is not present. 5.98.055 Violations, Penalties, and Enforcement. A. It shall be unlawful for any person to violate any provisions or to fall to comply with any of the requirements of this chapter. B. In addition to, or separate from, the foregoing criminal penalties, any person violating any of the provisions or failing to comply with any of the requirements of this chapter is subject to the issuance of an administrative citation pursuant to the provisions of Section 1.04.010(E) and Chapter 1.05, 5.98.060 Suspensions. In addition to any fine or penalty that may be imposed pursuant to any provision of this Code including, but not limited to, Section 5.98.055, a Co -owned Housing Unit Permit may be suspended as provided in this section. A. Suspension of Co -owned Property Manager Permit. 1. Except as otherwise provided in this subsection, if any person violates any Co -owned Housing Unit hermit condition four (4) or more times in any six (6) month period or any other provision of this Code, state law or federal law, four (4) or more times in any six (6) month period, and the violation relates in any way to the Co -owned Housing Unit Permit, the Co -owned Property Manager Permit for the unit may be suspended for a period of up to six (6) months in accordance with subsection (E) of this section. 2. If a Co -owned Housing Unit that is subject to a Co -owned Housing Unit Permit has been the location of four (4) or more loud or unruly gatherings, as defined in Chapter 10.66, within any twelve (12) month period, the Co -owned Property Manager Permit may be suspended for a period of up to six (6) months. A loud or unruly gathering that occurred prior to the passage of fourteen (14) calendar days from the mailing of notice to the Co -owned Property Manager in 9 N��/Ky 01" N\4evyplu"Xf". 12-15 3-285 compliance with Section 10.66.030(D) shall not be included within the calculation of the four (4) or more loud or unruly gatherings required to suspend a Co -owned Property Manager Permit. B. Co -owned Property Manager Permits shall be suspended only in the manner provided in this section. 1. The director shall investigate whenever he or she has reason to believe that a Co -owned Property Manager has submitted an application that contains false information or committed a violation of a permit condition, this Code, state or federal law related to a Co -owned Housing Unit. Such investigation may include, but is not limited to, on -site property inspections. Should the investigation reveal substantial evidence to support a finding that warrants a suspension of the Co - owned Property Manager Permit, the Director shall issue written notice of intention to suspend the Co -awned Property Manager Permit. The written notice shall be served on the Co -owned Property Manager in accordance with Section 1.08.080, and shall specify the facts which, in the opinion of the Director constitute substantial evidence to establish grounds for imposition of the suspension, and specify the proposed time the Co -owned Property Manager Permit shall be suspended within thirty (30) calendar days from the date the notice is given, unless the Co -owned Property Manager files with the Director, before the suspension becomes effective, a request for hearing before a hearing officer, who shall be retained by the City, and pays the fee for the hearing established by resolution of the City Council, 2. If the Co -owned Property Manager requests a hearing and pays the hearing fee, established by resolution of the City Council, within the time specified in subsection (13)(1) of this section, the Director shall serve written notice on the Co -owned Property Manager, pursuant to Section 1.08.080, setting forth the date, time and place for the hearing. The hearing shall be scheduled not less than fifteen (15) calendar days, nor more than sixty (60) calendar days, from the date on which notice of the hearing is served by the Director. The hearing shall be conducted according to the rules normally applicable to administrative hearings. At the hearing, the hearing officer will preside over the hearing, take evidence and then submit proposed findings and recommendations to the City Manager. The City Manager may suspend the Co -owned Property Manager Permit only upon a finding that a violation has been proven by a preponderance of the evidence, and that the suspension is consistent with the provisions of this section. The City Manager shall render a decision within thirty (30) calendar days of the hearing and the decision shall be final. C. If a Co -owned Property Manager Permit is suspended, it shall be the Co -owned Property Manager's responsibility to transfer management of the Co -owned Housing 10 I(I re Fa�)�,,; c h 12 1 3-286 Unit(s) to another Co -owned Property Manager that is permitted under this chapter. D. After any suspension, the Co -owned Property Manager may reapply for reinstatement of the Co -owned Property Manager Permit which shall be processed in accordance with this chapter, provided the owner has paid the City all amounts owed the City in accordance with this chapter. 5.98.065 Permits and Pees Not Exclusive. Permits and fees required by this chapter shall be in addition to any license, permit or fee required under any other chapter of this Code. The issuance of any permit pursuant to this chapter shall not relieve the Co -owned Property Manager of the obligation to comply with all other provisions of this Code. 5.98.070 Permit Closure. Any Co -owned Property Manager that has ceased operating a Co -owned Housing Unit shall inform the Director in writing of the date of the last management day, and having done such, the Co -owned Property Manager Permit for that Co -owned Housing Unit shall be closed as to the specific Co -owned Property Manager. 11 C--.Alfyt � ..J" Fm 12-17 3-287 Exhibit Q September 13, 2022, City Council Agenda Item No. SS2 Fractional Homeownership Update htt sl/ecros.new ortbeachca. ov/WEB/DocView.as x?id=2833800&dbid=0&re o=CNB Fractional Homeownership Update — Correspondence htt s://ecros.new ortbeachca. ov/WEB/DocView,as x?id=2833864&dbid=0&re o=CNB Fractional Homeownership Update — PowerPoint htt s://ecros.new ortbeachca. ovIWEB/DocView.as x?id=2833866&dbid=0&re o=CNB 3-288 Exhibit R September 27, 2022, City Council Agenda Item No. 1 htt s:llecros.new ortbeachca. ovANEBIDocView.as x?id=2835823&dbid=0&re o=CNB Correspondence https:llecros.newportbeachca.govNVEB/DocView.aspx?id=2835861 &dbid=0&repo=CNB 3-289 Exhibit S October 6, 2022, Planning Commission Agenda Item No. SS.2 htt s://ecros.new ortbeachca. ovMEB/DocView.as x?id=2836766&dbid=0&re o=CNB htt s://ecros.new ortbeachca. ov/WEB/DocView.as x?id=2836767&dbid=0&re o=CNB 3-290 Exhibit T October 20, 2022, Planning Commission Agenda Item No. 6 htt s://ecros.new ortbeachca. ovANEB/DocView.as x?id=2837565&dbid=0&re o=CNB 3-291 Exhibit U February 23, 2023, Planning Commission Agenda Item No. 6 htt s://ecros.newportbeachca.gov/WEB/DocView. asx?id=2859668&dbid=0&re o=CNB Staff Presentation htt s://ecros.new ortbeachca. ov/WEB/DocView.as x?id=2859669&dbid=0&re o=CNB 3-292 Exhibit V March 14, 2023, City Council Agenda Item No.12 https://ecms,newportbeachca.gov/WEB/DocView. asx?id=2863026&dbid=0&re o=CNB Correspondence htt s://ecros.new ortbeachca. ov/WEB/DocView.as x?id=2863125&dbid=0&re o=CNB htt s://ecros.new ortbeachca. ov[WEB/DocView.as x?id=2863126&dbid=0&re o=CNB PowerPoint https:Hecms.newr)ortbeachca.gov/WEB/DocView.aspx?id=2863131 &dbid=O&reo=CNB Staff Memo htt s://ecros.new ortbeachca. ovNVEB/DocView.as x?id=2863127&dbid=0&re o=CNB Week in Review htt s://ecros.new ortbeachca. ovfWEB/DocView.as x?id=2863128&dbid=0&re o=CNB 3-293 EXHIBIT W ZONING CODE AMENDMENT NO. PA2022-0202 Section 1: The row entitled "Time Share Facilities" in Table 2-5 of Section 20.20.020 (Commercial Zoning Districts Land Uses and Permit Requirements) of the Newport Beach Municipal Code is amended to read as follows: Commercial Retail Zoning Districts Permit Requirements P Permitted by Right TABLE 2-5 ALLOWED USES AND PERMIT CUP Conditional Use Permit (Section 20.52.020) REQUIREMENTS MUP Minor Use Permit (Section 20.52.020) LTP Limited Term Permit (Section 20.52.040) — Not allowed Land Use See Part 7 of this title for land use Specific definitions. CC CG CM CN CV CV-LV Use See Chapter Regulations 20.12 for unlisted uses. Visitor Accommodations Time Shares — CUP — — CUP — Section 20.48.220 Section 2: The title of Section 20.48.220 (Time Share Facilities) of the Newport Beach Municipal Code is hereby amended to read as follows: 20.48.220 Time Share Uses. Section 3: The provisions set forth in Section 20.48.220 (Time Share Facilities) of the Newport Beach Municipal Code is amended in its entirety to read as follows: Section 20.48.220 Time Share Uses. A. No time share use or time share unit shall be established or permitted in any zoning district except as authorized in this Code. Unless authorized by this Code, no responsible person including, but not limited to, an owner of a time share unit, an agent, or broker shall: 3-294 1. Develop or establish a timeshare use in the City; 2. Convert a property or unit in the City to a time share use or time share unit; 3. Advertise or cause to be printed, published, or disseminated in any way and through any medium, the availability for sale, in its entirety or a fraction thereof: (a) any property or unit in the City that is used for a time share use or as a time share unit; or (b) any entity where the ownership thereof, in whole or in part, entitles the owner thereof to use a property or unit in the City for a time share use, if the responsible person receives or will receive an economic benefit from the sale; and/or 4. Manage a unit or property in the City that is being used for a time share use or as a time share unit. This subsection shall not apply to any time share use that was lawfully established prior to the effective date of Ordinance No. 2023-4. B. This subsection provides regulations for time share uses authorized in this Code. 1. Development Standards. a. Property Development Standards. A time share use shall comply with the standards for the zoning district in which it is located. b. Minimum Number of Units. Each time share property shall have a minimum of one hundred (100) time share units. Time share properties consisting of less than one hundred (100) units, but developed or converted in conjunction with a resort hotel complex of three hundred (300) or more units, shall be considered to be in compliance with this requirement. 2. Required Amenities. Time share uses shall be developed with substantial recreational amenities (e.g., golf courses, tennis courts, swimming pools, etc.). 3. Permit and Review Requirements. a. Plan Submittals. In addition to the application requirements in Section 20.52.020 (Conditional Use Permits and Minor Use Permits), an application for a time share use shall include the following documents: A sales plan shall address the times, areas and methods that will be used to sell the time share property. Factors to be defined in the plan shall include the location, length, and marketing methods that will be used, distinguishing on -site and off -site marketing and signage; and an estimate of the potential numbers of individuals and automobiles expected during various stages of the sales effort. The plan also shall 3-295 describe measures that will be implemented to reduce traffic during peak hours. An operating plan shall address the terms of the time share plan, the types of private unit and common amenities, and the general financing, maintenance, and management arrangements of the resort that benefit the unit owners. iii. A management plan shall describe the methods employed by the applicant to guarantee the future adequacy, stability, and continuity of a satisfactory level of management and maintenance of a time share property. iv. A contingency plan shall address the actions to be taken by the applicant if the time share project is an economic failure or fails to sell fifty (50) percent of the time share intervals within two years of receiving a permit to occupy the first unit. b. Development Agreement. The City and the time share use operator shall enter into a development agreement in compliance with Chapter 15.45 (Development Agreements). c. Modification or Waiver. The review authority may modify or waive any of the standards contained in this section if strict compliance with the standards is determined to be unnecessary to achieve the purpose and intent of this section. Section 4: The definition of "Time Share Facility (Land Use)" within Section 20.70.020 (Definitions of Specialized Terms and Phrases) of the Newport Beach Municipal Code is amended to read as follows: Time Share (Land Use). See "Visitor accommodations." Section 5: The definition of "Visitor Serving Accommodations (Land Use)" within Section 20.70.020 (Definitions of Specialized Terms and Phrases) of the Newport Beach Municipal Code is amended to read as follows: Visitor Accommodations (Land Use) "Time share accommodation(s)" shall have a separate meaning from "visitor accommodation(s)." "Time share accommodation(s)" as used in the definition of "time share instrument," "time share interval," "time share property," and "time share use" shall mean any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including, but not limited to, a single -unit dwelling, two -unit dwelling, or multi -unit dwelling. 3-296 1. "Bed and breakfast inn" means a dwelling unit that offers guest rooms or suites for a fee for less than thirty (30) days, with incidental eating and drinking service provided from a single kitchen for guests only. 2. "Hotel' means an establishment that provides guest rooms or suites for a fee to transient guests for sleeping purposes. Access to units is primarily from interior lobbies, courts, or halls. Related accessory uses may include conference and meeting rooms, restaurants, bars, and recreational facilities. Guest rooms may or may not contain kitchen facilities for food preparation (i.e., refrigerators, sinks, stoves, and ovens). Hotels with kitchen facilities are commonly known as extended stay hotels. A hotel operates subject to taxation under Revenue and Taxation Code Section 7280. 3. "Motel' means an establishment that provides guest rooms for a fee to transient guests for sleeping purposes. Guest rooms do not contain kitchen facilities. A motel is distinguished from a hotel primarily by direct independent access to, and adjoining parking for, each guest room. A motel operates subject to taxation under Revenue and Taxation Code Section 7280. 4. 'Recreational vehicle (RV) park" means a lot upon which two or more recreational vehicle sites are located, established, or maintained for occupancy for a rental fee by recreational vehicles of the general public as temporary living quarters for recreation or vacation purposes. 5. "Short-term lodging" means a dwelling unit that is rented or leased as a single housekeeping unit (see "Single housekeeping unit") for a period of less than thirty (30) days, subject to the requirements of Chapter 5.95 (Short Term Lodging Permits) and any additional standards required by the City Manager. 6. "Single room occupancy, residential hotels (SRO)" means buildings with six or more guest rooms without kitchen facilities in individual rooms, or kitchen facilities for the exclusive use of guests, and which are also the primary residences of the hotel guests. 7. "Time share instrument" means one or more documents, by whatever name denominated, creating a time share plan or governing the operation of a time share plan, and includes the declaration dedicating time share accommodations to the time share plan. 8. "Time share interval' means the period or periods of time when the purchaser in a time share plan is afforded the opportunity to use the time share accommodations of a time share plan. 9. "Time share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of real property, or any portion thereof, whether through the granting of ownership rights, 3-297 Possessory rights or otherwise, 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. A time share plan shall be deemed to exist whenever such recurring rights of exclusive use to the real property, or portion thereof, are created, regardless of whether such exclusive rights of use are a result of a grant of ownership rights, possessory rights, membership rights, rights pursuant to contract, or ownership of a fractional interest or share in the real property, or portion thereof, and regardless of whether they are coupled with ownership of a real property interest such as freehold Interest or an estate for years in the property subject to the time share plan. 10. "Time share property" means one or more time share accommodations subject to the same time share instrument, together with any other property or rights to property appurtenant to those time share accommodations. 11. "Time share unit" means the time share property or portion of a time share property in which a time share interval exists and that is designated for separate use. 12. "Time share use" means the use of one or more time share accommodations or any part thereof, as a time share property. 3-298 EXHIBIT X FINDINGS OF CONSISTENCY WITH THE GENERAL PLAN IN SUPPORT OF ZONING CODE AMENDMENT NO. PA2022-0202 1. Neither Title 20 nor State Planning Law set for any required findings for either approval or denial of such amendments. Notwithstanding the foregoing, Zoning Code Amendment No. PA2022-0202 is consistent with the City's General Plan and would serve to implement the following goals and policies: Land Use Element Policy LU 2.6, which states, "Visitor Serving Uses Provide uses that serve visitors to Newport Beach's ocean, harbor, open spaces, and other recreational assets, while integrating them to protect neighborhoods and residents." The proposed amendment would continue to allow time share uses, which is a visitor serving use in some commercial zones, while clarifying that time share uses are not permitted in residential zones areas. This would prevent additional commercialization of the residential neighborhoods and protect them from impacts created by increased traffic and noise. Land Use Element Goal LU 4, which states, "Management of growth and change to protect and enhance the livability of neighborhoods and achieve distinct and economically vital business and employment districts, which are correlated with supporting infrastructure and public services and sustain Newport Beach's natural setting." Clarifying that the fractional ownership use of a home is a time shares is consistent with Pacaso's representations to the California Department of Real Estate that Pacaso is selling time share interests, this Zoning Code Amendment continues to allow the business within certain commercial zones. This clarification would also help preserve the long-term housing stock by eliminating the conversion of existing and new housing developments into time share uses, and further ensure that the commercial businesses would not encroach into residential areas and impact the livability of said neighborhoods. Housinq Element Goal #4, which states, "Housing opportunities for as many renter - and owner -occupied households as possible in response to the market demand and RHNA obligations for housing in the City." Conversion of residential dwelling units into time shares removes the dwelling units from the market, thus making them no longer available for occupancy of full-time residences. The Zoning Code Amendment would serve to prevent single -unit residences from being taken off the market, thus protecting these housing opportunities for renters and owner -occupied households alike. Housinq Element Goal #5, which states, "Preservation of the City's housing stock for extremely low-, very low-, low-, and moderate -income households." Removing market -rate dwelling units from the City's housing stock impacts the affordability of housing across all income levels. As fewer dwelling units become available for rent or sale, the price increases. These price increases reduce the opportunities to 3-299 provide affordable housing to extremely low-, very low-, low-, and moderate -income households. The proposed amendment would prevent conversion of single -unit residences into a visitor serving accommodation, thus preserving the number of units in the City's housing stock, which would help minimize increases to housing costs. 2. The operation of time share uses is increasing noise and traffic in residential neighborhoods. This is creating a change to the character of the neighborhoods in a manner that negatively impacts the public health, safety, and welfare. 3. As the number of time share uses increases in the City, the number of dwelling units for long-term occupancy can decrease. This decrease impacts the ability for the City to comply with the 6th and future cycle RHNA allocation. 4. A Local Coastal Program Amendment is also underway to ensure the regulations within the Coastal Zone are consistent with this amendment. 3-300 ATTACHMENT B ORDINANCE NO.2023-5 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, APPROVING AND AUTHORIZING SUBMITTAL OF A LOCAL COASTAL PROGRAM AMENDMENT TO THE CALIFORNIA COASTAL COMMISSION AMENDING TITLE 21 (LOCAL COASTAL PROGRAM IMPLEMENTATION PLAN) OF THE NEWPORT BEACH MUNICIPAL CODE RELATED TO TIME SHARES (PA2022-0202) WHEREAS, Article XI Section 7 of the California Constitution authorizes cities to make and enforce within its limits all local, police, sanitary, and other ordinances and regulations not in conflict with general laws; WHEREAS, California Government Code Section 65850 et seq. authorizes a city to adopt ordinances that regulate land uses as a valid use of its police powers; WHEREAS, Section 200 of the City of Newport Beach ("City") Charter vests the City Council with the authority to make and enforce all laws, rules, and regulations with respect to municipal affairs subject only to the restrictions and limitations contained in the Charter and the State Constitution, and the power to exercise, or act pursuant to any and all rights, powers and privileges, or procedures granted or prescribed by any law of the State of California; WHEREAS, in 1982, the City Council adopted Ordinance No. 82-14 which is attached hereto as Exhibit 'A," and incorporated herein by reference prohibiting the development of time share projects within Newport Beach to protect against unique problems associated with transient occupancy; WHEREAS, in 1996, the City Council adopted Ordinance 96-7 which is attached hereto as Exhibit "B," and incorporated herein by reference providing a narrow exception to allow time share projects in commercial districts subject to a conditional use permit but continuing to prohibit the use of residential property for time shares; WHEREAS, the City is a popular tourist destination known for its beaches and temperate weather; WHEREAS, over the past three years, Newport Beach and cities that serve as tourist destinations, have experienced a wave of purchases of single -unit residences, which are then re -sold to {persons purchasing fractional shares; 3-301 Ordinance No. 2023-5 Page 2 of 10 WHEREAS, for example, over the past 15 months, the number of fractional - owned residences has nearly tripled with at least 12 fractionally owned homes in Newport Beach; WHEREAS, under this new model, the ownership of the residence is usually divided into eight shares and sold to different persons with stays ranging from two to fourteen nights in duration with back-to-back stays prohibited resulting in frequent turnover of the properties' occupants and its commercial management; WHEREAS, a representative of a commercial management company who manages this type of use, Pacaso, Inc. ("Pacaso") has stated in correspondence to the California Department of Real Estate, which is attached hereto as Exhibit "C," and incorporated herein by reference, that Pacaso homes are sold as time share interests as defined in Business and Professions Code Section 11212(z); WHEREAS, fractionally owned homes create impacts on the City's housing supply and character of residential neighborhoods by converting dwelling units from a full-time owner -occupied residence to a frequent rotation of vacation stays of less than a month; WHEREAS, public testimony indicates that this change in the use of dwelling units results in an increase in traffic and noise in residential neighborhoods, as well a change to the fabric of the community due to the short-term nature of the stays; WHEREAS, with respect to the housing supply, Governor Gavin Newsom declared a housing crisis in the State of California and called for the development of 3.5 million new homes to be built by 2025, to meet the population's housing needs, WHEREAS, as a result, the State of California has adopted a number of housing bills such as Senate Bill Nos. 8, 9, 10, 35 and 330, and an aggressive Regional Housing Needs Assessment ("RHNA") for the 6th Cycle Housing Element covering the period 2021-2029 ("6th Cycle Housing Element"); WHEREAS, the City's RHNA for the 6th Cycle Housing Element is 4,845 new housing units, which units are intended to meet the housing needs of existing and future residents within the jurisdictional boundaries of Newport Beach; 3-302 Ordinance No. 2023-5 Page 3of10 WHEREAS, according to the 6th Cycle Housing Element, which is attached hereto as Exhibit T," and incorporated herein by reference, whereas the median home price in the State of California was $579,770 as of 2020, the median home value of single -unit homes and condominiums in Newport Beach was $2,407,454; WHEREAS, the fractional ownership of single -unit residences as a second home further exacerbates the housing supply in Newport Beach making it harder to meet housing demand; WHEREAS, in accordance with Ewing v. Carmel -by -the -Sea, (1991) 234 Cal. App. 3d 1579, which upheld the City of Carmel-by-the-Sea's right to impose zoning restrictions on short-term rentals, the Newport Beach City Council adopted Ordinance No. 92-13, which is attached hereto as Exhibit T," and incorporated herein by reference on May 11, 1992, establishing regulations for the operation of short-term lodging units to mitigate the impact of this use on the residents of the City; WHEREAS, on May 11, 2004, the City Council adopted Ordinance No. 2004-6, which is attached hereto as Exhibit T," and incorporated herein by reference prohibiting the issuance of new short-term lodging permits after June 1, 2004, to any dwelling unit on a parcel zoned as a single -unit residence or designated for single-family residential use as part of a Planned Community Development Plan, Specific Area Plan or Planned Residential District; WHEREAS, in 2020 and 2021, the City Council adopted Ordinance Nos. 2020- 15, 2020-26, and 2021-28, which are attached hereto as Exhibits "G" — "I," and incorporated herein by reference amending the City's short-term lodging regulations based upon evidence and documentation attesting to the need to further regulate and control short-term lodging units in residential zones to ensure that, among other things, short-term lodging units are regulated in a way to maintain harmony with surrounding uses; WHEREAS, due to the proliferation of short-term rentals and their impact on neighborhoods and long-term housing, Ordinance No. 2021-28 placed a cap of 1,550 on the number of short-term lodging permits allowed in the City; WHEREAS, fractionally owned homes are a time share and operate much like short-term lodgings in that they limit occupancy by owners of a fractional interest in a property to less than 30 consecutive days; 3-303 Ordinance No. 2023-5 Page 4 of 10 WHEREAS, Section 30500 of the California Public Resources Code requires each county and city to prepare a Local Coastal Program ("LCP") for that portion of the coastal zone within its jurisdiction; WHEREAS, in 2005, the City adopted the City of Newport Beach Local Coastal Program Coastal Land Use Plan as amended from time to time; WHEREAS, the California Coastal Commission effectively certified the City's Local Coastal Program Implementation Plan on January 13, 2017, and the City added Title 21 (Local Coastal Program Implementation Plan) ("Title 21 ") to the City of Newport Beach Municipal Code ("NBMC") whereby the City assumed coastal development permit - issuing authority on January 30, 2017; WHEREAS, on November 16, 2021, the City Council conducted a study session to address concerns raised by the public regarding impacts of fractional homeownership; WHEREAS, during this study session public testimony was given that these homes operate as short-term lodging with residents expressing displeasure with the impacts that these homes were causing including an increase in the noise and traffic in the residential neighborhood; WHEREAS, on September 13, 2022, the City Council conducted a second study session to discuss the fractional ownership uses a report on haw other jurisdictions were addressing fractional ownership uses and was presented with a report, which is attached hereto as Exhibit "J," and incorporated herein by reference that 15 of the 22 jurisdictions surveyed classify fractional ownership as a time share; WHEREAS, additional public testimony included concerns about increases in traffic, noise, and trash, as well as fractional ownership uses having an adverse impact on the character of the existing residential neighborhoods consistent with the impacts identified by the cities of Carmel -by -the Sea, Hermosa Beach, Palm Desert, Sonoma and St. Helena whose ordinances and evidence in support of such ordinances are attached hereto and incorporated herein by reference as Exhibits "K" - "O"; 3-304 Ordinance No. 2023-5 Page 5 of 10 WHEREAS, on September 27, 2022, the City Council adopted Resolution 2022- 61, initiating code amendments to Title 20 (Planning and Zoning) ("Zoning Code Amendment No. PA2022-0202") and Title 21 (Local . Coastal Program Implementation Plan) ("Local Coastal Program Amendment No. 2020-0202") of the NBMC and directed staff to work with the Planning Commission to develop regulations related to fractional ownership uses in the best manner that would protect the character of residential neighborhoods; WHEREAS, on October 6, 2022, the Planning Commission conducted a study session to discuss fractional ownership uses and receive public testimony; WHEREAS, public testimony included fractional owners in favor of allowing the use, and neighbors who expressed frustration with the increased impacts caused by the operation, of fractional ownership homes; WHEREAS, at the conclusion of study session, the Planning Commission expressed the desire to form an ad -hoc committee to work closely with staff to formulate appropriate regulations to ensure that they were able to thoroughly investigate the appropriate approach to fractional ownership uses; WHEREAS, on October 20, 2022, the Planning Commission formed an Ad -Hoc Committee to evaluate potential amendments to Title 20 and Title 21 of the NBMC related to fractional ownership uses within the City; WHEREAS, the Ad -Hoc Committee met a total of seven times, during which the Committee discussed potential regulatory schemes with the Community Development Department, City Attorney's Office, representatives from Pacaso and several concerned citizens to ensure the Committee members had a full understanding of the issue; WHEREAS, during this process, Pacaso proposed an ordinance, which is attached hereto as Exhibit "P," and incorporated herein by reference, regulating, Pacaso- managed homes by way of a regulatory permit with a cap of 500 on the number of regulatory permits the City would be required to issue to such fractionally owned homes; 3-305 Ordinance No. 2023-5 Page 6 of 10 WHEREAS, on February 3, 2023, the Ad -Hoc Committee presented their findings to the Planning Commission with the Planning Commission making two recommendations to the City Council including the preferred recommendation which was to broaden the definition of time shares to include fractional ownership uses, and an alternative recommendation of creating a separate regulatory scheme to allow fractional ownership uses in all zones, except the Single -Unit Residential (R-1) Zoning Districts; WHEREAS, on March 14, 2023, the City Council considered the Planning Commission's recommendations and, after receiving further public testimony, the City Council directed staff to move forward with the Planning Commission's preferred option of broadening the definition of time share; WHEREAS, the Planning Commission held a public hearing on April 20, 2023, in the City Council Chambers, located at 100 Civic Center Drive, Newport Beach, California. A notice of time, place and purpose of the hearing was given in accordance with California Government Code Section 54950 of seq. ("Ralph M. Brown Act") and Chapter 21.62 (Public Hearings) of the NBMC. Evidence, both written and oral, was presented to, and considered by, the Planning Commission at this hearing; WHEREAS, at the conclusion of the hearing, the Planning Commission adopted Resolution No. PC2023-018 by a unanimous vote (6 ayes - 0 nays) recommending the City Council authorize submittal of the amendment to Title 21. of the NBMC to the California Coastal Commission; WHEREAS, pursuant to Title 14 of the California Code of Regulations ("CCR") Section 13515 (Public Participation), drafts of the Local Coastal Program Amendment were made available and a Notice of Availability was distributed at least six weeks prior to the final action date; WHEREAS, the City Council held a public hearing on May 9, 2023, in the City Council Chambers located at 100 Civic Center Drive, Newport Beach, California. Notice of time, place and purpose of the public hearing was given in accordance with the Ralph M. Brown Act, Chapter 21.62 (Public Hearings) of the NBMC, and 14 CCR Section 13515. Evidence, both written and oral, was presented to, and considered by, the City Council at this public hearing; and WHEREAS, the City Council and Planning Commission agenda item and supporting evidence, attached hereto as Exhibits "Q" — "V" and incorporated herein by reference. 3-306 Ordinance No. 2023-5 Page 7 of 10 NOW, THEREFORE, the Newport Beach City Council does hereby ordain as follows: Section 1:. The City Council of the City of Newport Beach does hereby authorize City staff to submit the Local Coastal Program Amendment No. PA2022-0202 to the California Coastal Commission to amend Title 21 (Local Coastal Program Implementation Plan) of the Newport Beach Municipal Code related to time shares as set forth in Exhibit ' W," which is attached hereto and incorporated herein by reference. This decision is made based upon the evidence in the record and is consistent with the General Plan and Coastal Land Use Plan Policies set forth in Exhibit "X," which is attached hereto and incorporated herein by reference. Section 2: The Local Coastal Program Amendment No. PA2022-0202 shall not become effective until approval by the California Coastal Commission and adoption, including any modifications suggested by the California Coastal Commission, by resolution and/or ordinance of the City Council of the City of Newport Beach. Findings that Local Coastal Program Amendment No. PA2022-0202 is de minimis are attached hereto as Exhibit "Y," and incorporated herein by reference. Section 3: The LCP, including this Local Coastal Program Amendment No. PA2022-0202, will be carried out in full conformity with the California Coastal Act. Section 4: The recitals provided in this ordinance are true and correct and are incorporated into the substantive part of this ordinance. 3-307 Ordinance No. 2023-5 Page 8 of 10 Section 5: The City Council of the City of Newport Beach finds the Local Coastal Program Amendment No. PA2022-0202 is not subject to environmental review under the California Environmental Quality Act ("CEQK) pursuant to Section 15060(c)(2) of the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, Chapter 3, which states that an activity is not subject to CEQA if the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment or will not have the potential for causing a significant effect on the environment. Time share uses are not permitted in residential zones, however, the City has seen a trend in the fractional use of residences wherein the property is usually divided into eight shares and sold to different persons with stays ranging from two to fourteen nights in duration with back- to-back stays prohibited resulting in frequent turnover of the properties' occupants and its commercial management. This Local Coastal Program Amendment will not result in a direct or indirect physical change to the environment nor does it have the potential for causing a significant effect on the environment since it would simply clarify definitions related to time share uses. This Local Coastal Program Amendment does not alter the manner in which time shares are regulated and therefore would not result in a physical change in the environment. Additionally, the Local Coastal Program Amendment is categorically exempt pursuant to Section 15308 because the ordinances involve regulatory actions to assure protection of the environment. Section 6: If any section,' subsection, sentence, clause or phrase of this ordinance is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this ordinance, and each section, subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases may be declared invalid or unconstitutional. Section 7: Except as expressly modified in this ordinance, all other sections, subsections, terms, clauses and phrases set forth in the Newport Beach Municipal Code shall remain unchanged and shall be in full force�and effect. Ordinance No. 2023-5 Page 9 of 10 Section 8: The Mayor shall sign, and the City Clerk shall attest to the passage of this ordinance. The City Clerk shall cause the ordinance, or a summary thereof, to be published pursuant to City Charter Section 414. This ordinance shall be effective thirty calendar days after its adoption and approval by the California Coastal Commission. This ordinance was introduced at a regular meeting of the City Council of the City of Newport Beach held on the 9th day of May, 2023, and adopted on the 231d day of May, 2023, by the following vote, to wit: AYES: NAYS: ABSENT: ATTEST: LEILANI I. BROWN, CITY CLERK APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE AARON 1�. HARP, CITY)ATTORNEY Attachment(s): NOAH BLOM, MAYOR Exhibit A - July 26, 1982, City Council Meeting Minutes and Ordinance No. 82-14 3-309 Ordinance No. 2023-5 Page 10 of 10 Exhibit B - March 11, 1996, City Council Meeting Minutes and Ordinance No. 96-7 Exhibit C - Correspondence from Pacaso to the California Department of Real Estate Exhibit D - 61h Cycle Housing Element Exhibit E - April 27, 1992, City Council Meeting Minutes and Ordinance No. 92-13 Exhibit F - April 27, 2004, City Council Agenda Item No. 3 Adopting Ordinance No. 2004-6 and Supporting Material Exhibit G - June 23, 2020, City Council Agenda Item No. 19 Adopting Ordinance No. 2020-15 and Supporting Material Exhibit H - October 13, 2020, City Council Agenda Item No. 18 Adopting Ordinance No. 2020-26 and Supporting Material Exhibit I - November 30, 2021, City Council Agenda Item No. 26 Adopting Ordinance No. 2021-28 and Supporting Material Exhibit J - Sage Crest Planning + Environmental Report Exhibit K - City of Carmel -by -the Sea Time Share Ordinance and Supporting Evidence Exhibit L - City of Hermosa Beach Time Share Ordinance and Supporting Evidence Exhibit M - City of Palm Desert Time Share Ordinance and Supporting Evidence Exhibit N - City of Sonoma Time Share Ordinance and Supporting Evidence Exhibit O - City of St. Helena Time Share Ordinance and Supporting Evidence Exhibit P - Ordinance Proposed by Pacaso Adding Chapter 5.98 Exhibit Q -- September 13, 2022, City Council Agenda Item No. SS2 Exhibit R - September 27, 2022, City Council Agenda Item No. 1 Exhibit S - October 6, 2022, Planning Commission Agenda Item . No. SS.2 Exhibit T - October 20, 2022, Planning Commission Agenda Item No. 6 Exhibit U - February 23, 2023, Planning Commission Agenda Item No. 6 Exhibit V - March 14, 2023, City Council Agenda Item No.12 Exhibit W - Local Coastal Program Amendment No. PA2022-0202 Exhibit X - Findings of Local Coastal Program Amendment No. PA2022-0202 Consistency with the General Plan and Coastal Land Use Plan Exhibit Y - Local Coastal Program Amendment No. PA2022-0202 De Minimis Findings 3-310 Exhibit A July 26, 1982, City Council Meeting Minutes and Ordinance No. 82-14 https:llecros.newportbeachca.govANEBIDocView.aspx?id=21155&dbid =0&repo=CNB htt s://ecros.new ortbeachca. ovIWEB/DocView.as x?id=35606&dbid=0&re o=CNB 3-311 Exhibit B March 11, 1996, City Council Meeting Minutes and Ordinance No. 96-7 htt s:Hecros.new ortbeachca. ovNVEB/DocView.as x?id=22280&dbid=0&re o=CNB htt s://ecros.new ortbeachca. ovA/VEB/DocView.as x?id=36439&dbid=0&re o=CNB 3-312 Exhibit C Correspondence from Pacaso to the California Department of Real Estate 3-313 Exhibit C From: Andy Sirkin <dasirkin@gmaj(com> Sent: Saturday, July 24, 2021 10:19 AM To: Aiu, Joseph@DRE <Jose h.Aiu dre.ca. ov> Cc: Bruce, David@DRE <David.Bruce @dre.ca.gov>; Neri, Chris@DRE <Chris.Neh@dre.ca.gov>; Patrick Abell <patrick@pacaso.com>; David J. Willbrand <david pacaso.com> Subject: Re: Pacaso (DRE No. 121-0701-006) CAUTION. THIS EMAIL ORIGINATED OUTSIDE THE DEPARTMENT OF REAL ESTATE! 00 NOT click links or open attachment unless you know the content is safe. NEVER. provide credentials on websites via a clicked link in an Email. Dear Mr. Aiu, Yes, l confirm that Pacaso Homes are within that exemption. We sincerely appreciate your prompt response and attention. All the best, Andy Sirkin SirkinLaw APC +1-415-462-5925 (US) On Jul 24, 2021, at 5:37 PM, Aiu, Joseph@DRE <Joseph.Aiugdre.ca.gov> wrote: Dear Mr. Sirkin, Thank you for your email response and explanation dated 7/21/21. Based on your response and explanation, we understand that your clients, Pacaso Inc. and Pacaso Homes, are selling time-share interests as defined in B&P Code section 11212(z), but are exempt from needing to file for a time-share public report since they fall below the reporting threshold of 11 or more units. Please confirm. Thank you. Sincerely, Joseph Aiu Investigations & Compliance From: Andy Sirkin <dasirkin@Rmail.com> Sent: Wednesday, July 21, 2021 2:28 AM To: Aiu, Joseph@DRE <Joseph.Aiu@dre.ca.gov> Cc: Bruce, David@DRE <David.Bruce@dre.ca.Bov>; Neri, Chris@DRE 3-314 <Chris.Neri@dre,ca.gov>; Patrick Abell <patrick@pacaso.com>; David J. Willbrand <david@ pacaso, corn> Subject: Re: Pacaso (DRE No. 121-0701-006) CAUTION THIS EMAIL ORIGINATED OUTSIDE THE DEPARTMENT OF REAL ESTATE] DO NOT click links or r iiadir -, i .- unless you know the content is safe. NEVER: provide creneritial_ or webstt via a clicked link in an Email. Dear Mr. Aiu, I received an email late yesterday from David Bruce saying that. since an investigation has been initiated by the Department, all correspondence should be routed to you. He also mentioned that I was welcome to "cc" him on that correspondence, so I will continue to do so. Although you may already have a basic understanding of Pacaso's business, 1 will begin with a brief explanation of the key elements. Pacaso only organizes group purchases of single- family residences. Each owner gets a 1 /8th share along with the right to use the home for 1/8th of each year indefinitely. During each owner's usage period, that owner has exclusive use of the entire house. All rentals are prohibited; only owners and their guests are permitted to use the house. Each owner pays regular assessments to fund the operating costs of the home and maintenance reserves. Once all eight ownership slots are filled, the eight owners own and control the house; Pacaso retains no ownership interest. B&P Code Section 112121W defiles `Tune -Share Plan" as any "arrangement ... 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." This description matches exactly the arrangement among owners of a Pacaso home. Specifically, each purchaser gets the right to use the home for 1/8th of each year on a recurring basis every year for as long as he/she is an owner. However, since each Pacaso offering involves only eight interests, each home is below the threshold for needing a Tirne-Share public report under Section 1121 t.5(b)(1). B&P Code Section 11004.5(g) provides that "time-share plans ... are not "subdivisions" or "subdivided lands" subject to this chapter." Based on this language, l had always assumed that Time-Sbare offerings, regardless of size, did not require a subdivision public report under B&P Code Section 11000 et seq.; rather, large Time -Share offerings (more than 10 interests) require a Time -Share public report, and small Time -Share offerings (10 or fewer interests) require no public report. Your communications suggest that Timc-Share offerings too small to require a Tune -Share public report instead need a subdivision public report. I am having difficulty understanding the logic of this position. As you may know, prior to 2004, California law required a Tine - Share public report only for projects involving more than 12 interests. When the legislature enacted the Vacation Ownership and Time -Share Act Of 2004, it reduced the threshold from 12 to 10. This change shows that the legislature specifically considered the appropriate threshold for when a Time -Share offering needs a public report. The legislature did not choose nine, or eight, or six for the threshold; it specifically chose 10. The idea that Time -Share offerings too small to require a Tune -Share public report instead need a subdivision public report seems contrary to this legislative intent. What meaning could the 10-share threshold in Section 1121 1.5(b)(I) have if an offering below the threshold still had to obtain a subdivision public report? Moreover, when the legislature enacted the Vacation Ownership and Time -Share Act Of 2004- the legislature could have said that Time -Share offerings require a subdivision public report under B&P Code Section 11000 et seq., and that the application for a Time -Share public report should be the swine as the application for a subdivision public report. Instead. the legislature carefully specified the types of information it deemed appropriate for DR_E to obtain and consider when -vetting" a proposed Tune -Share offering, The application submittal for a Time -Share public report makes sense in the context of what a Time -Share offering is and what the purchasers buy. 3-315 If as you suggest, Time -Share offerings too small to require a Time -Share public report instead need a subdivision public report, it would mean that the public report application for a small Time -Share offering would ignore the carefully -crafted specifics of the Time -Share Iaw (which make perfect sense in the context of a Time -Share offering), and instead comply with the public report application requirements for a subdivision (which make no sense in the context of a Time -Share offering). To illustrate this point with just one of many examples, consider B&P Code Section 11234(c), under which a Tune -Share public report requires "a description of the type of interest and usage rights the purchaser will receive" and "a representation about the percentage of useable time authorized for sale, and if that percentage is 100 percent, then a statement describing how adequate periods of time for maintenance and repair will be provided." This requirement is perfectly logical for a Time -Share public report, since the fairness and adequacy of the usage assignment structure is absolutely critical from a consumer protection standpoint. So, why would the subdivision public report you suggest is needed for a small Time -Share offering not require this critical information? Is this information suddenly less important if the offering involves 10 or fewer Time -Share interests? For all of these reasons, I respectfully suggest that Pacaso offerings do not require a Public Report. My assertion is based specifically on B&P Code Sections 1 1211.5(b)(1) and 1 I004.5(g), and on the legislative history and context of the Vacation Ownership and Time - Share Act Of2004. To simplify your job when responding, you can ignore the other arguments made in my client's letter of July 9. Cordially, Andy Sirkin SirkinLaw APC +1-415-462-5925 (JS) On Jul 17, 2021, at 1:28 AM, Aiu, Joseph@DRE <Jose h.Aiu dre.ca. ov> wrote; Dear Mr. Sirkin, Your request for an extension to the deadline imposed in my "Notice to show cause was taken under consideration and you are granted an extension until July 23, 2021. Please note the following. The Department of Real Estate (ORE), investigates violations of the Neal Estate Law (Licensees), the Subdivided Lands Act (Subdividers), the Vocation Ownership and Time Share Act (Developers), and endeavors to safeguard the public interests in real estate matters. In your initial response, your letter alluded to 11001,[al(b)(2), 11004.5(g), 112123(b)(1), and Pacaso Homes purchases are resales. Please be aware that your marketing concept is also under consideration. Sincerely, Joseph Aiu Investigations and Compliance From: Andy Sirkin <dasirkin@gmaii.com> Sent: Friday, July 16, 2021 3:04 PM To: Aiu, Joseph@DRE <Joseph.Aiu@dre.ca.gov> Cc. Bruce, David@DRE <David.Bruce@dre.ca.goy>; Neri, Chris@DRE <Chris.Nen@dre.ca.gov>; Patrick Abell < atrick acaso.com>; David 1. Willbrand <david@pacaso.com> Subject: Pacaso (DRE No. 121-0701-006) 3-316 CAUTION. THIS EMAIL ORIGINATED OUTSIDE THE DEPARTMENT OF REAL ESTATEI DO NOT deck links or open attachment; unless you know the content is safe, NEVER: provide credentials on websites via a clicked link in an Email. Mr. Aiu, Our office has been engaged by Pacaso in connection with your inquiry. Over the past four days, 1 have been corresponding with David Bruce about my analysis of the situation and potential options to move forward in a manner that would be satisfactory to DRE. I had hoped to provide a formal response to your email by this afternoon in accordance with your deadline. However, I have not yet received Davids's response to my most recent email (sent late yesterday), and I would very much like to get that before responding to you. Might I ask your indulgence in getting a short extension so that I might complete my interchange with David? I will commit to keeping you advised on the progress of that exchange. Please be assured that resolving this matter to the satisfaction of DRE is Pacaso's highest priority. We are in no way interested in delaying a resolution; however, we want to make sure to proceed in the manner most likely to lead to a mutually acceptable outcome. Thank you in advance for your consideration. All the best, Andy Sirkin SirkinLaw APC +1-415-462-5925 (o) +1-415-350-6296 (m) ---------- Forwarded message --------- From: Aiu, Joseph@DRE <]oseph.Aiugdre.ca.gov> Date: Fri, 1u19, 2021 at 11:42 AM Subject: RE: Pacaso response to DRE notice letter (DRE No. 121- 0701-006) To: Patrick Abell <patrickgpacaso.com> Cc: David Willbrand <davidgpacaso.com>, Charlie Tanner <charlie(dl,,brokerzoo.com>, Aiu, loseph@DRE <Jose h.Aiu(a,dre.ca.g-o_v> Dear Mr. Abell, Thank you for your letter explaining the position of Paseo Homes as to its sales of "1/0' undivided interests in o residential homes." The key phrase in our letter is the sale of undivided interest. Please refer to Section 11000.1 of the Code. Further, your letter appear to allude to the "Exemption" pursuant to Subsection 11000.1(b)(2), which requires satisfactory evidence presented to DRE — this has not been done. Hence, Section 11010 is applicable. Please respond by July 16, 2021 as to whether Pacaso Homes and its affiliates will comply with applying for a Public Report, since advertising the sales must have a Preliminary Public Report. Sincerely, Joseph Aiu Statewide Subdivisions Investigations & Compliance 3-317 (213) 576-6927 Direct (213) 576-6942 Fax Department of Real Estate 320 W. 0' Street, Suite 350 Los Angeles, CA 90013 joscyh.aiuAdre.ca.gov <image001.png> 3-318 Exhibit D 611 Cycle Housing Element htt salecros.new ortbeachea. ovNVEB/DocView.as x?id=2833796&dbid=O&re o=CNB 3-319 Exhibit E April 27, 1992, City Council Meeting Minutes and Ordinance No. 92-13 htt s:Hecros.new ortbeachca. g ovIWEBIDocView.as x?id=21921&dbid=4&re o=CNB htt s://ecros.new ortbeachca. ovANEB/DocView.as x?id=36004&dbid=0&re o=CNB 3-320 Exhibit F April 27, 2004, City Council Agenda Item No. 3 Adopting Ordinance No. 2004-6 and Supporting Material hft s:Hecros.new ortbeachca. ov/WEB/DocView.as x?id=68969&dbid=0&re o=CNB htt s://ecros.new ortbeachca. ov/WEB/DocView.as x?id=36708&dbid=0&re o=CNB 3-321 Exhibit G June 23, 2020, City Council Agenda Item No. 19 Adopting Ordinance No. 2020-15 and Supporting Material htt s://ecros.new ortbeachca. ovNVEB/DocView.as x?id=2538440&dbid=0&re o=CNB Correspondence htt s:llecros.new ortbeachca, ovIWEBIDocView.as x?id=2538635&dbid=0&re o=CNB Ad Hoc Committee Recommendations PowerPoint htt s://ecros.new ortbeachca. ov/WEB/DocView.as x?id=2538700&dbid=0&re o=CNB Corona del Mar Residents Association Short -Term Lodging Survey PowerPoint htt s://ecros.new ortbeachca. ovNVEB/DocView.as x?id=2538702&dbid=0&re o=CNB Newport Island Community Association Survey Highlights PowerPoint htt salecros.new ortbeachca. ov/WEB/DocView.as x?id=2538703&dbid=0&re o=CNB Ordinance No. 2020-15 htt s:Hecros.new ortbeachca. ovANEB/DocView.as x?id=2544635&dbid=0&re o=CNB 3-322 Exhibit H October 13, 2020, City Council Agenda Item No. 18 Adopting Ordinance No. 2020-26 and Supporting Material htt s://ecros.new ortbeachca. ovIWEB/DocView.as x?id=2605151&dbid=0&re o=CNB Correspondence htt s:Hecros.new ortbeachca, ovNVEB/DocView.as x?id=2605188&dbid=0&re o=CNB Notice of Public Hearing htt s://ecros.new ortbeachca. ovNVEB/DocView.as x?id=2605206&dbid=0&re o=CNB Ordinance No. 2020-26 htt s:Hecros.new ortbeachca. ovMEB/DocView,as x?id=2609797&dbid=0&re o=CNB 3-323 Exhibit I November 30, 2021, City Council Agenda Item No. 26 Adopting Ordinance No. 2021-28 and Supporting Material htt s://ecros.new ortbeachca. ovNVEB/DocView,as x?id=2797314&dbid=0&re o=CNB Correspondence htt s:llecros.new ortbeachca. ovNVEBIDocView.as x?id=2797686&dbid=0&re o=CNB Short Term Lodging LCP Amendments PowerPoint htt s://ecros.new ortbeachca. ovNVEB/DocView.as x?id=2797391&dbid=0&re o=CNB Notice of Public Hearing httpsi//ecros.newportbeachca.govNVEB/DocView.aspx?id=2797689&dbid=0&repo=CNB Ordinance No. 2021-28 htt s://ecros.new ortbeachca. ov/WEB/DocView.as x?id=2800356&dbid=0&re o=CNB 3-324 Exhibit J Sage Crest Planning + Environmental Report 3-325 FRACTIONAL HOMEOWNERSHIP PoR� Prepared For: n u r City of Newport Beach °"tIFOR�* Community Development Department August 29, 2022 27128 Paseo Espada, Suite 1524 San Juan Capistrano, CA 92675 Tabie of Contents EXECUTIVE SUMMARY.................................................................................................................................. 1 BACKGROUND.............................................................................................................................................. 1 Known/Suspected Properties in Newport Beach..................................................................................... 1 BENEFITS AND IMPACTS OF FRACTIONAL HOUSING.................................................................................... 2 FractionalHousing Benefits...................................................................................................................... 2 Fractional Housing Impacts....................................................................................................................... 3 COMMUNITYSURVEY...................................................................................................................................4 Cityof Beverly Hills, CA............................................................................................................................. 5 Cityof Carlsbad, CA................................................................................................................................... S Cityof Carmel by the Sea, CA.................................................................................................................... 5 Cityof Encinitas, CA.................................................................................................................................. 5 Cityof Fort Lauderdale, FL........................................................................................................................ 6 Cityof Hermosa Beach, CA....................................................................................................................... 6 Cityof Indian Wells, CA. ............................................................................... ............................................ 6 Countyof Monterey, CA..................................................................................................... ....................................................... Cityof Napa, CA........................................................................................................................................6 Villageof North Haven, NY....................................................................................................................... 7 Cityof Oceanside, CA................................................................................................................................ 7 Cityof Pacific Grove, CA.......................................................................................................... ......... 7 Cityof Palm desert, CA............................................................................................................................. 7 Cityof Palm Spr+ngs, CA............................................................................................................................7 Cityof Park City, UT..................................................................................................................................8 Cityof Santa Barbara, CA.......................................................................................................................... 8 Cityof Santa Cruz, CA................................................................................................................................8 Cityof South Lake Tahoe, CA.................................................................................................................... 8 Cityof Sonoma, CA....................................................................................................................................9 Cityof St. Helena, CA................................................................................................................................ 9 Townof Truckee, CA.................................................................................................................................9 Cityof Vail, CO........................................................................................................................................10 FRACTIONAL HOUSING City 0i be- ach 3-327 APPENDICES......................................... ................................................................................................ .... ...10 Appendix A- Pacaso Economic Impact Analysis, prepared by EBP........................................................Al Appendix B - City of Beverly Hills Urgency Ordinance...........................................................................I31 Appendix C-- City of Carlsbad Timeshare ordinance............................................................................... C1 Appendix D - City of Carmel by the Sea Cease and Desist Order...........................................................D1 Appendix E - City of Hermosa Beach Planning Commission Resolution ................................................ E1 Appendix F - County of Monterey Cease and Desist Order................................................................... F1 Appendix G --Village of North Haven Code Amendment...................................................................... G1 Appendix H - City of Palm Desert Ordinance........................................................................................ H1 Appendix I - City of Palm Springs Cease and Desist Order......................................................................11 Appendix J - Park City Notice of Amendment.........................................................................................J1 Appendix K - City of Santa Cruz Ballot Initiative..................................................................................... K1 Appendix L _ City of South Lake Tahoe Cease and Desist Order............................................................ Ll Appendix M -City of Sonoma Ordinance..............................................................................................MZ AppendixN - City of St. Helena Ordinance........................................................................................... N1 Appendix 0 - Pacaso Inc. v. City of St. Helena....................................................................................... 01 Appendix P -Town of Truckee Ordinance.............................................................................................. P1 Cover Photo by Ilex Ezekiel on Unsplash FRACTIONAL MOUSING ss2-6 3-328 EXECUTIVE SUMMARY The City of Newport Beach (City) is beginning to see the rise of fractional homeownership of single-family houses. Fractional homeownership is when multiple owners purchase a property and split the allowed time at the property through a formal arrangement, as compared to multiple owners who occupy the residence full-time or have no formal arrangement for occupancy. In the fractional model, the allotted time for each owner is based on their percentage of ownership. In reviewing available data on fractional homeownership, there appears to be at least ten such properties within the City but there could be more. The City is receiving complaints from residents that these properties function similarly to short-term rental vacation homes and result in significant noise, traffic, and other impacts to residential neighborhoods. As a result of these concerns, the City asked Sagecrest Planning+Environmental (Sagecrest) to investigate how other jurisdictions are dealing with fractional housing and the companies that promote them_ Based on this investigation, it appears that other communities are adopting moratoriums and pursuing operators of fractional housing companies through code enforcement actions. BACKGROUND Fractional homeownership (sometimes called co -ownership) is an emerging trend in real estate where ownership of properties is equally shared among multiple owners (typically between four and 12 owners). The amount of time the owner may spend at the property correlates to the fraction of ownership (e.g., a 1/8 share owner would be allotted 45 days per year). This time allotment is not typically used consecutively, but rather one or two weeks at a time. In addition to the cost to purchase their share of the home, the owners are responsible for their share of the maintenance, property management fees, HOA fees, cleaning costs, utilities, taxes, insurance, and payment into a reserve fund to cover long-term repairs, such as replacement of the roof. Fractional owners maintain an ownership interest, benefit from a change in property value due to appreciation and have the potential to generate income through short- term rentals, although the City would maintain authority on short-term rentals. it should also be noted that some fractional homeownership companies prohibit short-term rentals in their management agreement. Companies such as Pacaso, Sharetini, Ember, Equity Estates, and others facilitate the purchase of properties and provide the necessary maintenance, furnishments, property management, and cleaning services in exchange for a monthly fee. Many of these companies utilize ownership models that purchase and hold the properties under entities, such as limited liability companies, to avoid the need for a real estate transaction each time an owner sells their share. Alternatively, an ownership group could forego using a management company and self -govern the access to fractional housing. Known/Suspected Properties in Newport Beach Sagecrest reviewed the listings on various sites to identify properties in Newport Beach. Additionally, Sagecrest reviewed the city's database to find properties with mailing addresses that match the fractional home ownership companies. The following table lists the properties that are either known or suspected to be fractional ownership properties. FRACTIONAL HOUSING City ot �1�.,�;�ort Beach 552- 7 3-329 117 25`' Street Listed on Pacaso 121 Emerald Avenue Listed on Pacaso 305 Grand Canal Listed on Pacaso 315 East Bay Avenue Listed on Ember 506 West Oceanfront Listed on Pacaso 1703 Plaza del Sur Listed on www.compass.com 2137 Miramar Drive _Listed on Ember 2628 Ocean Boulevard City database mailing address match to Pacaso 3803 Marcus Avenue City database mailing address match to Pacaso 4106 River Avenue Listed on Pacaso BENEFITS AND IMPACTS OF FRACTIONAL HOUSING Fractional Housing Benefits The primary benefit of fractional homeownership is to own a second home at a more affordable price. According to county records, the home at 505 W Oceanfront sold on March 14, 2022, for $6,800,000. A 'Is share of this house is currently being offered on Pacaso for $1,098,000. According to Equity Estates, a vacation home investment firm, the benefits of fractional housing are: 1 • It's more affordable - Perhaps a $4M home is out of reach, but $1M is right in your wheelhouse. Fractional ownership lets you get the home you want in the most desirable location at the price you can afford. This goes far home upkeep and maintenance, too. By sharing the costs of upkeep, fractional ownership makes long-term ownership a much more realistic possibility. • The home will get some love - No home should sit vacant 48 weeks out of the year. By sharing the ownership, the home will be opened up at regular intervals. Opening and closing windows and doors, running the water, turning on the AC and heater, and using amenities like the hot tub and pool —all of these are essential to maintaining the home. It provides on opportunity to identify issues early on and preserve the home's long-term value. + Peace of Mind - Fractional ownership also means sharing the burden of homeownership. Rather than a single point of failure (i.e., you), you essentially have a group that shares accountability, schedules maintenance, checks on the home, and divides the work and chores that would otherwise be left to a single owner. Another fractional housing company, Pacaso, claims that its model reduces demand in the housing market. Specifically, they state, "This demand on top of short supply has driven up home prices to unprecedented levels. Instead of eight second home buyers buying eight separate median -priced homes, which drives up prices even further, Pocaso consolidates those eight buyers into just one luxury home, which alleviates pressure at the median -priced tier."' To address concerns that they do not provide a benefit, Pacaso commissioned an economic impact analysis (Appendix A), which found that the average fractional ownership house generates an average of $48,390 in annual spending compared with the 1 https://eguityestatesfund.com/the-pros-and-cons-of-fractional-ownership, retrieved August 16, 2022 https://www.pacaso.com/bloe/economic-impact-study, retrieved August 16, 2022 FRACTIONAL HOUSING -2 SS2-8 3-330 average second home. The study further found that fractional housing generates an average of $3,780 additional revenue in local and state tax dollars over the average second home. Fractionai Housing Impacts Notwithstanding the aforementioned benefits, many communities have received complaints from their residents that fractional housing creates adverse impacts on the neighborhoods in which they are located and the City as a whole. Jurisdictions that have taken a proactive approach to preventing fractional housing in their communities all have expressed concerns about the following: • Fractional housing adversely impacts the affordability of full-time homes in the community, As more homes are taken out of the primary housing market and converted to vacation homes, the available housing stock is reduced. Even though the fractional housing companies focus on the high -end market, any loss in available housing supply results in increase costs across the entire market. • Due to the high turn -over of occupants, fractional housing could adversely impact long-term residents in the surrounding neighborhood. Given that vacations typically last for short periods of time, these properties would have similar impacts as short-term rentals, such as noise, loss of privacy, loss of community buy -in, and decline in property values. * The operation of the fractional homeownership companies within residential areas would result in the commercialization of residential neighborhoods. Several communities that Sagecrest spoke with noted that the operations of these companies would require a business license as they are establishing a commercial use. Sagecrest discussed concerns with fractional housing with a major opponent to fractional housing, Stop Pacaso Now'. This organization consists of volunteers who provide resources to residents to oppose fractional housing from being established in their community. This includes providing sample yard signs, sample letters, and volunteer coordination guidance. In discussing the effectiveness of their outreach, Stop Pacaso Now stated that they have had great success in communities in which residents have organized. Stop Pacaso Now has sponsored four petitions on change.org (Sonoma 4, Dry Creek Valleys, St. Helena', and a nationwide petition') against fractional housing with a total of 7,411 signatures. The Mitchell Hamline Law Journal of Public Policy and Practice published a journal article' that found that "The increasing commodification of single-family homes has had cascading effects on housing and on communities in general." Fractional housing is shared among various owners, as a result, an increase in I https://stoppacasonow.com/ 4 https://www,change.org/p/sonama-county-planning-commission-pacaso-time-shares-don-t-belong-in-sonoma- neighborhoods, retrieved August 16, 2022 s https://www.change.org/p/pacaso-time-shares-don-t--belong-in-dry-creek-valley-s-agricultural-zoning-and- farmlands, retrieved August 16, 2022 ' https://www,change.org/p/mderosa-cityofsthelena-org-gellsworth-cityofsthelena-org-stop-pacaso-from- commercializing-our-residential-neighborhoods, retrieved August 16, 2022 ' https://www.change.org/p/pacaso-stop-pacaso-s-takeover-of-housing, retrieved August 16, 2022 a Markuson, Christopher (2022) "A Timeshare By Any Other Name: Fractional Homeownership and the Challenges and Effects of Commodified Single -Family Homes," Mitchell Hamline Law Journal of Public Policy and Practice: Vol. 43: Iss. 2, Article 1. Available at: http5-jlopen.mitchellh@mline.edu/policypractice/vol43/iss2/1 11.Te[�1USUIFT10:C0111101M0 l p ity of N&,-.�ort peach SS2-9 3-331 the number of units could decrease the demand for hotel rooms. This would likely result in a reduction in the amount of transient occupancy tax accrued by the City. COMMUNITY SURVEY 5agecrest researched other communities that have fractional ownership properties to determine if there is a concern with these properties and how the community is addressing these concerns. A summary of the actions is contained in the table below, followed by a description of each community. Notes (a) Code Amendment in Process (b) City Council is split on whether or not fractional housing is a timeshare FRACTIONAL HOUSING SS2-10 3-332 City of Beverly Hills, CA On July 15, 2021, the City of Beverly Hills adopted an urgency ordinance establishing a 45-day moratorium on fractional ownerships of residential and commercial properties. In the staff report, the City expressed concerns that the properties would impact the residents in the surrounding neighborhood since they would operate as vacation rental homes. The City noted these properties would likely "experience high turnover rates of occupants, and result in impacts related to their operation such as noise, loss of privacy, loss of community buy -in, and decline in property values." In addition to these impacts, the City expressed concerns that converting homes to fractional housing would remove permanent housing from the housing market. Notwithstanding this prohibition, the moratorium does allow the City Council to approve a fractional ownership dwelling if they adopt a finding that "the fractional ownership of a property will not disturb the stability of a residential neighborhood or residential building and will not adversely impact future development, redevelopment, safety, and proper maintenance of the property" during a duly noticed public hearing. The moratorium was extended for ten months and 15 days on August 17, 2021 and extended again for a second year on June 14, 2022. The moratorium is now set to expire on July 14, 2023. The moratorium intends to allow the City staff time to study the issue and any potential impacts fractional housing may have on the health, safety, and welfare of those who live in surrounding homes and on the City as a whole. A copy of the urgency ordinance and staff report is included in Appendix B. City of Carlsbad, CA The City of Carlsbad noted that the use of fractional properties constitutes a timeshare. They have an existing timeshare ordinance (Appendix Q which they would enforce if they received a complaint. The City has not had an issue with operation of the fractional homes. City of Carmel by the Sea, CA The City is aware of fractional ownership companies and their assertation that they sell and manage properties, not timeshares. The City disagrees with this position and is of the opinion that any fractional housing has the same impacts on surrounding residential areas as short-term vacation rentals. Not only is it unlawful for any fractional ownership company to commence or carry on any kind of business in the City without first procuring a business license and pay the applicable business license tax, but any such business would be in violation of the City's prohibition of timeshares. The City noted that their regulations on transient commercial use of residential property have been previously adjudicated.' Carmel by the Sea has issued a cease -and -desist order (Appendix D), ordering Pacaso to stop all advertising and sale of fractional ownership of residential properties within the City and will proceed through its code enforcement authority to obtain compliance. City of Encinitas, CA The City is aware of the fractional ownership model and that other communities are working on regulations. Since Encinitas has not had any issues with fractional homeownership, they are not working on any code updates or taking enforcement actions. 9 Ewing v. City of Carmel -by -the -Sea (1991) 234 Cal.App.3d 1579 FRACTIONAL HOUSING City ot rs4ew,port beach SS2-19 3-333 City of Fort Lauderdale, FL The City of Fort Lauderdale does not regulate fractional housing since they are considered transient lodging. Within the State of Florida, transient lodging is regulated by the State. Provided the fractional housing is within any zone which permits transient lodging, it would be allowed. City of Hermosa Beach, CA The City of Hermosa Beach classifies fractional housing as a timeshare. They are concerned that the operation of the fractional housing and timeshares could change the character of residential neighborhoods as the guest of the units may naturally stay out later, entertain more, and gather in larger numbers while on vacation. Currently, the Hermosa Beach Municipal Code does not regulate timeshares, but the City is processing a code amendment to prohibit timeshares in residential zones. If approved, the code amendment would allow timeshares in commercial zones with approval of a Conditional Use Permit. The Planning Commission conducted a public hearing on the code amendment on April 19, 2022, at which the Commission adopted a resolution (Appendix E) to recommend the City Council approve the code amendment. This amendment is currently scheduled for a public hearing before the Council on September 27, 2022. City of Indian Wells, CA The City of Indian wells does not currently regulate fractional housing but has received complaints from residents regarding impacts being created. The City Council discussed the matter on May 19, 2022, at which time the City Council was split if fractional housing constituents a timeshare or not. They expressed concerns about taking legal action on the fractional ownership companies due to the ongoing litigation in other jurisdictions. The City Council directed the City Attorney to return with options for them to consider on how to proceed. At this time, it is not known when this discussion will be taken back to the City Council. County of Monterey, CA Within areas of Monterey County that fall under the County's zoning jurisdiction, fractional ownerships are classified as timeshares. Pursuant to the Monterey County Municipal Code, timeshare projects are only allowed in zones where a hotel, motel, or similar visitor accommodation use would be permitted, and in such cases a Use Permit or a Coastal Development Permit would be required. Monterey County is aware of certain homes advertised as fractional housing that are located in the Carmel Highlands and the Del Monte Forest. Both areas are within the County's zoning jurisdiction and are within residential zones. Monterey County has issued a cease -and -desist order (Appendix F), ordering Pacaso to stop all advertising and sale of fractional ownership of residential properties within these areas and will proceed through its code enforcement authority to obtain compliance. City of Napa, CA The City of Napa does not have an ordinance regulating fractional ownership citywide but does have a Master Development Plan (MDP) for the Stanly Ranch area. This MDP requires fractional ownership properties to pay a transient oriented tax for stays more than 14 days, but research indicates that no fractional ownership property has paid the TOT. In 2021, the City Council conducted a hearing to discuss the matter, during which residents complained of not wanting their neighborhoods to turn into a business venture for the wealthy. There has been no further discussion regarding fractional ownership. FRACTIONAL HOUSING ity of 1,s4&1..'-.'port Beach SS2-92 3-334 Village of North Haven, NY The Board of Trustees of the Village of North Haven enacted a prohibition on fractional ownership, timesharing, and interval uses in single-family homes in January 2022 (Appendix G). The Board found that the needs of transients are adverse to the interest that protect and preserve single-family homes. Furthermore, the prohibition was deemed necessary to prevent the unwarranted commercialization of residential areas. In a discussion with the Town staff, the ordinance would be enforced through code enforcement if they receive a complaint, but they were unable to confirm if action had been taken on any existing units. City of Oceanside, CA The City of Oceanside is not aware of any specific issues surrounding single-family homes used as fractional ownerships. The City does allow fractional ownership in their Downtown District as it pertains to traditional timeshare listings, provided a Conditional Use Permit is approved for the use. Given that most of these fractional ownership listings resemble short-term rental models, staff would consider fractional housing has short-term rentals in single-family homes, which would require the issuance of a short-term rental permit. City of Pacific Grove, CA Currently the City of Pacific Grove prohibits timeshares throughout the City. The City Council accepted public comment on fractional housing and timeshares on May 18, 2022, at the conclusion of which the Council directed staff to review the City's current timeshare ordinance and recommend changes to better effectuate the City's prohibition of timeshare projects, including fractional housing. The City anticipates having the draft ordinance to their Planning Commission in October 2022 and to the City Council by the end of year. City of Palm Desert, CA In November 2021, the City Council discussed the emergence of fractional ownership businesses within the City. In the Staff Report, the City Attorney opined that the fractional homeownership "modelfits within that definition of "time- share plan" as co -owners receive ownership rights to use a property for less than a year on a recurring basis" (Appendix H). The City only allows timeshares in the Planned Residential, General Commercial, and Planned Commercial Resort zones. On May 12, 2022, the City Council adopted an ordinance updating the timeshare provisions of the Palm Desert Municipal Code. The updates include expanding the definition of timeshare that includes the shared use of any property, where the owners have the right of occupancy for less than full year during any given year. The ordinance also established enforcement procedures for violations of the timeshare ordinance. City of Palm Springs, CA The City of Palm Springs regulates where timeshares can be located within the City and taxes occupancy of timeshares. Timeshares are only permitted in zoning districts where hotel uses are permitted and with approval of a Conditional Use Permit. Notably, timeshares are not permitted in single-family zones. Furthermore, the City's business license ordinance requires any party that is transacting any business within the City to first procure a business license and pay the applicable business license tax. Although the fractional ownership companies claim that they only purchase and sell luxury homes, and therefore they do not impact the availability of affordable housing. However, the City believes the basic laws of supply and demand dictate that every home that is made unavailable to a full-time resident, FRACTIONAL HOUSING -11ty of Newport beach SS2-13 3-335 whether "luxury" or not, necessarily reduces the supply of homes, and therefore reduces the affordability of housing in the City. In addition to the loss of housing, fractional ownership companies who involve multiple investors will result in their guests rotating the occupancy of the dwelling throughout the year. Although the fractional owners are not technically renters, the City believes the neighbors can expect the property to have many of the same secondary impacts that are caused by vacation rentals. The City of Palm Springs has issued a cease -and -desist order (Appendix I), ordering Pacaso to stop all advertising and sale of fractional ownership of residential properties within the City and will proceed through its code enforcement authority to obtain compliance. City of Park City, UT Park City, Utah allows fractional ownership in single-family homes provided the ownership obtains approval of a Conditional Use Permit. The areas in which the City allows fractional ownership are identified in the City's General Plan and consists of areas that support the resort economy. These are the same areas that allow timeshares and private residential clubs. The fractional ownership properties must comply with specific prohibitions such as on -street parking, nightly rentals, the outdoor display of goods and merchandise, and signage. Additionally, the fractional housing must obtain approval of a management plan that outlines a satisfactory level of management and maintenance of the fractional housing. The City is currently preparing a code amendment which would prohibit fractional ownership in most single-family zones, The amendments would allow fractional housing in zones where timeshares and private residential clubs are currently permitted. The amendment would also require a business license for fractional ownerships, submittal of a management plan, and prohibition of nightly rentals, on -street parking, outdoor display of goods, signs, and commercial uses (Appendix J). On August 30, 2022, the Planning Commission and City Council are scheduled to conduct a joint work session on the proposed amendments. City of Santa Barbara, CA The City of Santa Barbara does not have any regulation for fractional ownership. The City has received complaints regarding fractional housing in single-family residential area. The Planning Commission and City Council have conducted hearings on the matter but have not given staff direction for future research to regulate these ownerships. City of Santa Cruz, CA Even with fractional homes being offered within city limits, City staff was not aware of this type of ownership model. The City does not currently regulate fractional ownership or timeshares. Notwithstanding this, the City Council has placed a ballot initiative on the November election to establish a tax on residential properties that are occupied less than 120-days a year (Appendix K). City of South Lake Tahoe, CA The City stated that a property sale or deed that results ownership rights in or the right to use accommodations for a period of time less than full year during any given year is considered timeshare. Even though timeshares ten or fewer units are not subject to the Vacation Ownership and Timeshare Act of 20041°, they are still subject to local authority. In fact, Section 11280(b) of the Business and Professions 10 California Business and Professions Code §§1121-11288 FRACTIONAL HOUSING '�' City of eWpo�PBeach SS2-14 3-336 Code expressly preserves the authority of local jurisdictions to regulate timeshares through "zoning, subdivision, or building code or other real estate use law, ordinance, or regulation." South Lake Tahoe has issued a cease -and -desist order (Appendix L), ordering Pacaso to stop all advertising and sale of fractional ownership of residential properties within the City until such time they comply with the City's timeshare ordinance. City of Sonoma, CA On January 19th, 2022, the Sonoma City Council voted unanimously to adopt an urgency ordinance to prohibit timeshares and fractional housing. The Council adopted the urgency ordinance due to concerns that these uses threaten to reduce the housing supply in the City by turning long-term housing in the City into vacation rentals and reducing the affordable housing stock in the City. Furthermore, there are concerns that timeshare and fractional housing interest uses increase traffic and noise impacts as they have the same character as commercial hotels, motels, and other transient occupancy uses making them inappropriate for residential zones. On June 15, 2022, the Sonoma City Council adopted an ordinance (Appendix M) to amend the code to prohibit all timeshares and fractional housing in the City. City of St. Helena, CA Within St. Helena, timeshares are only permitted in Service Commercial District and Central Business District. The City Council recently updated the timeshare ordinance to specifically prohibit co -ownership of residential properties (Appendix N). The ordinance updated the definition of a timeshare to broaden its applicability to incorporate fractional housing and limits timeshares uses to their Service Commercial and Central Business District zone. The ordinance also bolsters the City's enforcement authority by including a specific prohibition on timeshare uses in most zones, but also outlines the enforcement process and mechanisms. The enforcement provision was modeled after the City's short-term rental ordinance to which they note has been very effective. It is important to note that Pacaso filed a lawsuit against the City in federal court" (Appendix 0). Pacaso seeks to stop the City from enforcing their timeshare ordinance against Pacaso and other fractional ownership properties because they feel the timeshare ordinance is invalid and enforcement of said ordinance violates the fractional homeowners and Pacaso's due process protection afforded by the 141h amendment to the U.S. Constitution. Pacaso had also claimed that the City's enforcement actions constituted an intentional interference with prospective economic advantage; however, the Court rejected this portion of the claim. The lawsuit remains pending. Town of Truckee, CA In May 2022 the Town of Truckee adopted a general zoning code cleanup ordinance (Appendix P). Among the various amendments included in the ordinance, the Town Council approved changes to the Town's timeshare uses. This includes outlining the application process, development standards and enforcement and violation protocols fortime-share uses; as well as clarifying that timeshare properties are only allowed within existing legal nonconforming single-family residences in the CG (General Commercial) and CN (Neighborhood Commercial) zones, " Pacaso Inc. v. City of 5t. Helena, 2-1-cv-02493-WHO (N.D. Cal. Jul. 15, 2021) FRACTIONAL HOUSING l`�ty of N e dort Bea-:h SS245 3-337 City of Vail, CO The City does not have regulations regarding fractional ownership. Explaining the concerns of the business model, the City Attorney would agree it resembles a timeshare model but does not see how any City ordinance would be able to regulate it since it is the ownership of a property rather than a use in a portion of a building. APPENDICES FRACTIONAL HOUSING - d0rl 0 � SS2-96 3-338 Appendix A — Pacaso Economic Impact Analysis, prepared by EBP FRACTIONAL HOUSING -A1- 3-339 Exhibit K City of Carmel -by -the Sea Time Share Ordinance and Supporting Evidence 3-340 4/27/23, 9:01 AM Coversheel q CITY OF CARMEL-BY-THE-SEA a, CITY COUNCIL C3 '.� Staff Report a2 February 7, 2023 PUBLIC HEARINGS TO: Honorable Mayor and City Council Members SUBMITTED BY: Brandon Swanson, Community Planning & Building Director APPROVED BY: Chip Rerig, City Administrator Consider Ordinance No. 2022-007 (first reading) amending Carmel Municipal Code (CMC) Sections SUBJECT: 17.14.040, 17.28.010, and 17.70.020, to prohibit timeshare and fractional interest uses, as well as advertising and sale thereof, in a manner fully in conformity with the California Coastal Act (CA Section 30510) - Continued from December 6, 2022, and January 10, 2023 1. Request the City Attorney to read the title of Ordinance 2022-007. 2. Waive further reading and introduce draft ordinance 2022-007 amending Carmel municipal code (CMC) sections 17.14.040, 17.28.010, and 17.70.020, to prohibit timeshare and fractional interest uses, as well as advertising and sale thereof, in a manner fully in conformity with the California Coastal Act (CA section 30510). EXECUTIVE SUMMARY The Carmel -by -the -Sea Municipal Code prohibits timeshares. The proposed ordinance confirms the existing prohibition of time shares, and adds new prohibitions with respect to advertisement and sale of timeshares and fractional interest ownerships. The City's Planning Commission has recommended adoption of these amendments, with an additional recommendation for Council to have a policy level discussion in the future about whether or not timeshares should continue to be prohibited in the Village. BACKGROUND Existing provisions of the Carmel -by -the -Sea Municipal Code prohibit timeshare uses. Specifically, timeshares are prohibited In all zoning districts of the City, and are defined in Section 17.28.010 to include any land use that is a "timeshare project", "time share program," or "time share occupancy." These are defined in Section 17.70,020 as follows - Time -Share Occupancy. An occupancy related to the situation wherein a purchaser receives the right or entitlement in perpetuity, for life, or for a term of years or other extended term, to the recurrent, exclusive use or occupancy of a lot, parcel, unit, room(s), hotel or portion thereof, or segment of real property, annually or on some other seasonal or periodic basis, for a period of time that has been or will be allotted from the use or occupancy periods into which the time-share project which is involved has been divided. The right or entitlement to occupancy may attach in advance to a specific lot, parcel, unit, room(s) or portion of a hotel, or segment of real property, or may involve designation or selection of the same at a future time or times. Time -Share Program. Any arrangement for a project whereby the use, occupancy. or possession of real property has been made subject to a time-share estate, use, or occupancy, whereby such use, occupancy, or possession circulates among purchasers of the time-share intervals according to a fixed or floating time schedule on a periodic basis for a specific period of time during any given year, but not necessarily for consecutive years. Time -Share Project. A project in which a purchaser receives the right in perpetuity, for life, or for a term of years, to the recurrent, exclusive use or occupancy of a lot, parcel, unit, or segment of real property, annually or on some other periodic basis, for a period of time that has been or will be allotted for the use or occupancy periods into which the project has been divided. As a result of recent enforcement efforts related to timeshares, City staff have reviewed the existing city code provisions and recommend that they be revised to confirm the existing prohibition, and additionally, that new prohibitions be added with respect to advertisement and sale of timeshares and fractional interest ownerships, which are treated identically under the existing City code. On October 12th. 2022, the Planning Commission was presented these draft amendments, and received testimony from the public. Fallowing discussion, the Commission approved a resolution recommending that the City Council adopt the ordinance as drafted by staff. The Commission also crafted an additional recital recommending that Council have a policy discussion in the near future to explore whether or not timeshares should still be prohibited in the City of Carmel -by -the -Sea. This additional recommendation arose from deliberations during the hearing, in which the Commissioners discussed the number of vacant homes in the Village and whether https:llcarmel.navusagenda.comlagendapuhliclCoverSheet.aspx?ltemlD=4958&MeetingID=1340 112 3-341 4/27/23, 9:D1 AM Coversheet a form of timeshare use could present a solution to filling them. The Commission's additional recommendation is for Council to hold a separate hearing in the near future to have a policy level discussion and decide whether or not to refer an item back to the Planning Commission to remove or modify the prohibition on timeshares in Carmel -by -the -Sea. STAFF ANALYSIS The changes proposed by the ordinance include: Section 17.70.020 is modified to simplify the City's existing definitions with respect to timeshares. The City's existing definitions include definitions of time-share estate, time-share use, time-share occupancy, and time-share property, which are based on similar definitions in state law (the Vacation Ownership and Time -Share Act of 2004, as set forth in Business and Professions Code section 11210 et seq.). However, the existing definitions with respect to timeshares in 17.70.020 are multiple and reference each other, and introduce unnecessary complexity into the City's zoning regulations. While not a substantive change in the scope of the City's regulations, the proposed ordinance would simplify definitions to prohibit the use of real property under a "time-share plan." The definition of "time-share plan" would mean "any arrangement, plan, scheme, or similar device, whether established by membership agreement, sale, lease, deed, license, right to use agreement, articles of organization or incorporation, operating agreement or bylaws, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of real property or portion thereof, according to a fixed or floating time schedule, 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." The code would specify that a time share plan exists "whenever such recurring rights of exclusive use to real property are created, regardless of whether such exclusive rights of use are a result of a grant of ownership rights, possessory rights, membership rights, rights pursuant to contract, or ownership of a fractional interest or share in real property, and regardless of whether they are coupled with ownership of a real property interest such as freehold interest or an estate for years in the property subject to the time-share plan." The code would be revised to make clear that a prohibited timeshare is created whenever any right is established for exclusive use of the property that is periodic on a recurring basis, regardless of the form. The definition of "timeshare plan" would now specifically mention that fractional ownership is one way a timeshare can be created, which is also not a substantive change. "Time-share use" and "fractional interest use" are defined to mean exactly same thing, so that it is clear to all potential violators that there is no difference between a fractional interest use and a timeshare use. • 17.14.040, prohibiting timeshares in commercial zones, is modified to use the updated definitions. • 17.28.010.A, prohibiting timeshares in all city zoning districts, is updated to use the updated definitions. Additional subsections are added to this section to make advertisement of timeshares subject to criminal penalties as well as the City's administrative civil penalty process. The code also specifies that each day a violation occurs is a separate offense, for purposes of deterring violations by increasing the visibility of potential consequences. While the existing municipal code prohibits fractionalized interest ownership, as a timeshare is created based on the allocation of exclusive rights of use to real property, the proposed code amendments would clarify the prohibition and strengthen enforcement efforts. Additionally, the proposed ordinance would expressly prohibit the advertisement and sale of timeshares and fractional interest uses; this would allow for proactive enforcement by the City against those involved in the creation, advertisement, and sale of such prohibited land uses, rather than just the purchaser or owner of a timeshare or fractional interest use. The staff time associated with processing this ordinance amendment is captured in the FY2022/2023 Community Planning and Building Budget. None, Attachment 1} PC Resolution 2022-036-PC Recommendin9Approval Attachment 2) Draft Ord_ 2022-007 REDLINE Attachment 3) Draft Ord, 2022.007 CLEAN https://carmel.novusagenda.comiagendapublic/CoverSheet.aspx?ItemID-4958&MeetingID=1340 212 3-342 CITY OF CARMEL-BY-THE-SEA PLANNING COMMISSION RESOLUTION NO.2022-036-PC A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF CARMEL-BY-THE-SEA RECOMMENDING CITY COUNCIL ADOPT ORDINANCE AMENDING MUNICIPAL CODE SECTIONS 17.14.040, 17.28.010, AND 17.70.020, TO PROHIBIT TIMESHARE AND FRACTIONAL INTEREST USES, AS WELL AS ADVERTISING AND SALE THEREOF WHEREAS, existing provisions of the Carmel -by -the -Sea Municipal Code prohibit timeshare uses. Specifically, timeshares are prohibited in all zoning districts of the City, and regulated by Sections 17.28.010, 17.70.020 and 17.14.040; and WHEREAS, as a result of enforcement efforts, City staff have reviewed the existing city code provisions and recommend that they be revised to confirm the existing prohibition, and additionally, that new prohibitions be added with respect to advertisement and sale of timeshares and fractional interest ownerships, which are treated identically under the existing City code; and WHEREAS, notice of a public hearing of the Planning Commission was published on September 30'h, 2022 in compliance with State law (California Government Code 65091); and WHEREAS, on October 12, 2022, the Planning Commission held a public hearing to consider draft Ordinance 2022-007 amending regulations pertaining to timeshares and receive public testimony, including without limitation, information provided to the Planning Commission by City staff and through public testimony; and WHEREAS, the Planning Commission found that the draft Ordinance 2022-007 was consistent with the City's General Plan, Local Coastal Plan, and all other relevant City and State codes and regulations. WHEREAS, the California Environmental Quality Act (California Public Resources Code §§ 21000, et seq., "CEQA"), together with State Guidelines (14 California Code Regulations §§ 15000, et seq., the "CEQA Guidelines") and City Environmental Regulations (CMC 17.60) require the review of certain projects for environmental impacts and preparation of environmental documents; and WHEREAS, the Planning Commission finds that pursuant to CEQA regulations, the project will have no impact on the environment and is not considered a project requiring compliance with the California Environmental Quality Act (Section 21065 of the California Public Resources Code); and WHEREAS, the facts set forth in the recitals are true and correct and are incorporated herein by reference. 3-343 NOW, THEREFORE, BE IT RESOLVED, THAT THE PLANNING COMMISSION OF THE CITY OF CARMEL-BY-THE-SEA DOES HEREBY recommend the City Council amend municipal code sections 17.14.040, 17.28.010, and 17.70.020, to prohibit timeshare and fractional interest uses, as well as advertising and sale thereof and adopt the Update in a manner fully in conformity with the Coastal Act (CA Section 30510). BE IT FURTHER RESOLVED, THAT THE PLANNING COMMISSION OF THE CITY OF CARMEL- BY-THE-SEA DOES ALSO recommend the City Council hold a separate hearing in the near future to have a policy level discussion and decide whether or not to refer an item back to the Planning Commission to remove or modify the prohibition on timeshares in Carmel -by -the -Sea. PASSED, APPROVED, AND ADOPTED BY THE PLANNING COMMISSION OF THE CITY OF CARMEL-BY-THE-SEA this 12th day of October, 2022, by the following vote: AYES: Delves, Allen, Bolton, LePage, Locke NOES: ABSENT: ABSTAIN: APPROVED: ATTEST: Michael LePage, Chair Leah Young, Planning Commission Secretary 3-344 CITY OF CARMEL-BY-THE-SEA CITY COUNCIL ORDINANCE NO. 2022-007 AN ORDINANCE AMENDING THE CARMEL-BY-THE-SEA MUNICIPAL CODE TO PROHIBIT TIMESHARE AND FRACTIONAL INTEREST USES, AS WELL AS ADVERTISING AND SALE THEREOF IN A MANNER FULLY IN CONFORMITY WITH THE COASTAL ACT (CA PUBLIC RESOURCES CODE SECTION 30510 ET SEQJ WHEREAS, timeshares involve the division of the exclusive rights to use, possess, and occupy any real property between multiple persons, pursuant to a fixed or floating time schedule; and WHEREAS, since at least 1988, the City of Carmel -by -the -Sea has prohibited the establishment of timeshares within the City; and WHEREAS, the Housing Element of the City's General Plan specifically recognizes that the City seeks to protect the stability of residential neighborhoods by promoting year-round occupancy, and to avoid depletion of residents and associated impacts on the community, City services, Goal G3-4 of the City's Housing Element specifically requires the enforcement of the prohibitions on short-term, transient rentals and timeshares in residential dwellings; and WHEREAS the Planning Commission of the CJy of Carmel -by -the -Sea reviewed the ordinance, and on October 12, 2022, determined the ordinance was consistent with the City's General Plan Local Coastal Plan, and all other relevant City and State codes and regulations, and having reviewed the Planning Commission's recommendations and the relevant provisions of the General Pian the Citv Council finds that the ordinance is consistent with the City's General Plan, and WHEREAS, recent increases in the development and sale of fractional interest ownerships have made it appropriate for the City to revisit its municipal code to clarify that fractional interest ownerships are prohibited timeshares and to also expressly prohibit the advertising and sale of prohibited timeshares and fractional interest uses. WHEREAS, notice of the public hearing was published on November 25, 2022 in compliance with State law (California Government Code 65091), indicating the date and time of the public hearing; and WHEREAS, on December 6, 2022, the City Council opened the a public hearing to receive public testimony regarding the draft ordinance, including without limitation, information provided by City staff and public testimony. and 001)t1nued the hearing to a date certain of January 10, 2023; and WHEREAS, on January 10, 2023, the City Council re -conversed the public hearing to receive further public testimony reqardinq the draft ordinance. includin without limitation. information Drovided by City staff and public testimonv: and 0A-h #4875-3304-4012 v2 3-345 WHEREAS, this decision is made based upon evidence presented to the City Council at its December 6, 2022 :,,1 id la-i,an; I_i, ),-_127, hearings including, without limitation, the staff report submitted by the Community Planning and Building Department and public testimony; and WHEREAS, the City Council did hear and consider all said reports, recommendations, attachments and testimony herein above set forth and used their independent judgement to evaluate the ordinance; and WHEREAS, the proposed amendments are in full conformity with the City's Local Coastal Plan and the California Coastal Act (GA Pubk: Resources Cage Section 30510 el secs} NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DOES ORDAIN AS FOLLOWS: SECTION 1. CEQA Review. The City Council exercises its independent judgment and finds that this ordinance is not subject to the California Environmental Quality Act (CEQA) pursuant to the State CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, Sections. 15060(c)(2), because the proposed ordinance will not result in a direct or reasonably foreseeable indirect physical change in the environment; 15061(b)(3) because the proposed ordinance is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment; and 15308 because the proposed ordinance involves regulatory actions to assure protection of the environment. Therefore, the adoption of this ordinance is exempt from CEQA and no further environmental review is necessary. SECTION 2. Amendment to the CMC 1. Subsection A of Section 17.14.040 is amended and restated as follows: 17.14.040 Additional Use Regulations. A. All Uses. 1. No new structure or modification to an existing structure shall be permitted nor shall any business license be issued that would allow the creation of publicly accessible retail space occupying fewer than 200 square feet or more than 5,000 square feet unless approved through a use permit and pursuant to the adoption of findings per CMC 17.64.200, Retail Space of Less Than 200 Square Feet or Greater Than 5,000 Square Feet. 2. No timeshare uses or fractional interest uses shall be established or permitted in any zone. 3. Except in restaurants, not more than five persons in any one individually licensed business shall be engaged in the production, repair or manufacturing of goods. 4. No use shall be permitted and no process, equipment, or materials shall be employed which is found by the Planning Director or by the Planning Commission to be (1_VK 414F,75-3364-4012 j 1 3-346 objectionable to persons residing or working in the vicinity by reason of odor, fumes, noise, vibration, illumination, glare, unsightliness, dust, cinders, dirt, refuse, water - carried wastes or heavy truck traffic, or involve any hazard of fire or explosion. 2. Section 17.28.010 is amended and restated as follows: 17.28.010 Timeshare and Fractional Interest Uses. A. Timeshare uses and fractional interest uses are prohibited uses within all of the zoning districts within the City. B. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised, or disseminated in any way and through any medium, the availability for sale or use of real property in violation of this section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.16 (General Penalty). C. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised, or disseminated in any way and through any medium, the availability for sale or use of real property in violation of this section is subject to administrative fines and/or penalties as set forth in Chapter 18.04 (Municipal Code and Ordinance Enforcement). D. Each day a violation of this section occurs shall constitute a separate offense, and the remedies under this section are cumulative and in addition to any and all other remedies available at law and equity. 3. "Time -Share Definitions" of Section 17.70.020 is amended to repeal the definitions of "Time -Share Estate," "Time -Share Occupancy," "Time -Share Program," "Time -Share Project," and "Vacation -Time Sharing Project," and restated to enact the definitions of "Time -Share Plan," "Time -Share Use" and "Fractional Interest Use" to read as follows: 17.70.020 Definitions. The words, terms, and phrases defined in this chapter shall, for all purposes connected with this title, be construed as having the meanings respectively set forth in this chapter. Time -Share Definitions. "Time -Share Plan" means any arrangement, plan, scheme, or similar device, whether established by membership agreement, sale, lease, deed, license, right -to -use agreement, articles of organization or incorporation, operating agreement or bylaws, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of real property or portion thereof, according to a fixed or floating time schedule, 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. A timeshare plan shall be deemed to exist whenever such recurring rights of exclusive use to real property are created, regardless of whether such exclusive rights of use are OAK 44875-3304-4012 v1 3-347 a result of a grant of ownership rights, possessory rights, membership rights, rights pursuant to contract, or ownership of a fractional interest or share in real property, and regardless of whether they are coupled with ownership of a real property interest such as freehold interest or an estate for years in the property subject to the time-share plan. "Time -Share Use" and "Fractional Interest Use" means the use of real property or any part thereof, pursuant to a timeshare plan. SECTION 3. Severability. If any section, subsection, phrase, or clause of this ordinance is for any reason held to be unconstitutional, such a decision shall not affect the validity of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this Ordinance and each section, subsection, phrase, or clause thereof irrespective of the fact that any one or more sections, subsections, phrases, or clauses be declared unconstitutional. SECTION 4. Publication, The City Clerk shall publish or post this ordinance in the manner required by law. SECTION 5. Effective Date. This ordinance shall be effective 30 days after its adoption and after approval by the California Coastal Commission. PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE- SEA this XX day of XX 2022, by the following vote: AYES: NOES: ABSENT: ABSTAIN: APPROVE: ATTEST: Dave Potter, Mayor Nova Romero, MMC, City Clerk ().AK r -4875-,,04-401' v' 3-348 CITY OF CARMEL-BY-THE-SEA CITY COUNCIL ORDINANCE NO. 2022-007 AN ORDINANCE AMENDING THE CARMEL-BY-THE-SEA MUNICIPAL CODE TO PROHIBIT TIMESHARE AND FRACTIONAL INTEREST USES, AS WELL AS ADVERTISING AND SALE THEREOF IN A MANNER FULLY IN CONFORMITY WITH THE COASTAL ACT (PUBLIC RESOURCES CODE SECTION 30610 ETSM) WHEREAS, timeshares involve the division of the exclusive rights to use, possess, and occupy any real property between multiple persons, pursuant to a fixed or floating time schedule; and WHEREAS, since at least 1988, the City of Carmel -by -the -Sea has prohibited the establishment of timeshares within the City; and WHEREAS, the Housing Element of the City's General Plan specifically recognizes that the City seeks to protect the stability of residential neighborhoods by promoting year-round occupancy, and to avoid depletion of residents and associated impacts on the community, City services, Goal G34 of the City's Housing Element specifically requires the enforcement of the prohibitions on short-term, transient rentals and timeshares in residential dwellings; and WHEREAS, the Planning Commission of the City of Carmel -by -the -Sea reviewed the ordinance, and on October 12, 2022, determined the ordinance was consistent with the City's General Plan, Local Coastal Plan, and all other relevant City and State codes and regulations, and having reviewed the Planning Commission's recommendations and the relevant provisions of the General Plan, the City Council finds that the ordinance is consistent with the City's General Plan; and WHEREAS, recent increases in the development and sale of fractional interest ownerships have made it appropriate for the City to revisit its municipal code to clarify that fractional interest ownerships are prohibited timeshares and to also expressly prohibit the advertising and sale of prohibited timeshares and fractional interest uses. WHEREAS, notice of the public hearing was published on November 25, 2022 in compliance with State law (California Government Code 65091), indicating the date and time of the public hearing; and WHEREAS, on December 6, 2022, the City Council opened the public hearing to receive public testimony regarding the draft ordinance, including without limitation, information provided by City staff and public testimony, and continued the hearing to a date certain of January 10, 2023; and WHEREAS, on January 10, 2023, the City Council re -convened the public hearing to receive further public testimony regarding the draft ordinance, including without limitation, information provided by City staff and public testimony; and OAK #4875-3304-40 f2 v2 3-349 WHEREAS, this decision is made based upon evidence presented to the City Council at its December 6, 2022 and January 10, 2023 hearings including, without limitation, the staff report submitted by the Community Planning and Building Department and public testimony; and WHEREAS, the City Council did hear and consider all said reports, recommendations, attachments and testimony herein above set forth and used their independent judgement to evaluate the ordinance; and WHEREAS, the proposed amendments are in full conformity with the City's Local Coastal Plan and the California Coastal Act (Public Resources Code Section 30510 of seg.) NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DOES ORDAIN AS FOLLOWS: SECTION 1. CEQA Review. The City Council exercises its independent judgment and finds that this ordinance is not subject to the California Environmental Quality Act (CEQA) pursuant to the State CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, Sections. 15060(c)(2), because the proposed ordinance will not result in a direct or reasonably foreseeable indirect physical change in the environment; 15061(b)(3) because the proposed ordinance is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment; and 1530E because the proposed ordinance involves regulatory actions to assure protection of the environment. Therefore, the adoption of this ordinance is exempt from CEQA and no further environmental review is necessary. SECTION 2. Amendment to the CIVIC. 1. Subsection A of Section 17.14.040 is amended and restated as follows: 17.14.040 Additional Use Regulations. A. All Uses. 1. No new structure or modification to an existing structure shall be permitted nor shall any business license be issued that would allow the creation of publicly accessible retail space occupying fewer than 200 square feet or more than 5,000 square feet unless approved through a use permit and pursuant to the adoption of findings per CIVIC 17.64.200, Retail Space of Less Than 200 Square Feet or Greater Than 5,000 Square Feet. 2. No timeshare uses or fractional interest uses shall be established or permitted in any zone. 3. Except in restaurants, not more than five persons in any one individually licensed business shall be engaged in the production, repair or manufacturing of goods. 4. No use shall be permitted and no process, equipment, or materials shall be employed which is found by the Planning Director or by the Planning Commission to be objectionable to persons residing or working in the vicinity by reason of odor, fumes, OAK *4875-3304-4012 d2 3-350 noise, vibration, illumination, glare, unsightliness, dust, cinders, dirt, refuse, water - carried wastes or heavy truck traffic, or involve any hazard of fire or explosion. 2. Section 17.28.010 is amended and restated as follows: 17.28.010 Timeshare and Fractional Interest Uses. A. Timeshare uses and fractional interest uses are prohibited uses within all of the zoning districts within the City. B. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised, or disseminated in any way and through any medium, the availability for sale or use of real property in violation of this section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.16 (General Penalty). C. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised, or disseminated in any way and through any medium, the availability for sale or use of real property in violation of this section is subject to administrative fines and/or penalties as set forth in Chapter 18.04 (Municipal Code and Ordinance Enforcement). D. Each day a violation of this section occurs shall constitute a separate offense, and the remedies under this section are cumulative and in addition to any and all other remedies-avaiiable at law and equity. 3. "Time -Share Definitions" of Section 17.70.020 is amended to repeal the definitions of "Time -Share Estate," "Time -Share Occupancy," `Time -Share Program," "Time -Share Project," and "Vacation -Time Sharing Project," and restated to enact the definitions of "Time -Share Plan," "Time -Share Use" and "Fractional Interest Use" to read as follows: 17.70.020 Definitions. The words, terms, and phrases defined in this chapter shall, for all purposes connected with this title, be construed as having the meanings respectively set forth in this chapter. Time -Share Definitions. "Time -Share Plan" means any arrangement, plan, scheme, or similar device, whether established by membership agreement, sale, lease, deed, license, right -to -use agreement, articles of organization or incorporation, operating agreement or bylaws, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of real property or portion thereof, according to a fixed or floating time schedule, 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. A timeshare plan shall be deemed to exist whenever such recurring rights of exclusive use to real property are created, regardless of whether such exclusive rights of use are a result of a grant of ownership rights, possessory rights, membership rights, rights OATS 44a75-3304-4012 v2 3-351 pursuant to contract, or ownership of a fractional interest or share in real property, and regardless of whether they are coupled with ownership of a real property interest such as freehold interest or an estate for years in the property subject to the time-share plan. "Time -Share Use" and "Fractional Interest Use" means the use of real property or any part thereof, pursuant to a timeshare plan. SECTION 3. Severability. If any section, subsection, phrase, or clause of this ordinance is for any reason held to be unconstitutional, such a decision shall not affect the validity of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this Ordinance and each section, subsection, phrase, or clause thereof irrespective of the fact that any one or more sections, subsections, phrases, or clauses be declared unconstitutional. SECTION 4. Publication. The City Clerk shall publish or post this ordinance in the manner required by law. SECTION 5. Effective Date. This ordinance shall be effective 30 days after its adoption and after approval by the California Coastal Commission. PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE- SEA this XX day of XX 2022, by the following vote: AYES: NOES: ABSENT: ABSTAIN: APPROVE: ATTEST: Dave Potter, Mayor Nova Romero, MMC, City Clerk OAK iM875-3304-4012 t2. 3-352 4127123, g:03 AM Caversheet TO: SUBMITTED BY: APPROVED BY: CITY OF CARMEL-BY-THE-SEA CITY COUNCIL Staff Report Honorable Mayor and City Council Members Brandon Swanson, Community Planning & Building Director Chip Rerig, City Administrator March 7, 2023 ORDERS OF BUSINESS Second Reading and Adoption of Ordinance No. 2022-007 -Amending Carmel Municipal Code (CMC) SUBJECT: Sections 17.14.040, 17.28.010, and 17.70.020, to prohibit timeshare and fractional interest uses, as well as advertising and sale thereof, in a manner fully in conformity with the California Coastal Act (CA Section 30510) 1. Request the City Attorney to read the title of Ordinance 2022-007. 2. Waive further reading and ADOPT ordinance 2022-007 amending Carmel municipal code (CMC) sections 17.14.040, 17.28.010, and 17.70.020, to prohibit timeshare and fractional interest uses, as well as advertising and sale thereof, in a manner fully in conformity with the California Coastal Act (CA section 30510). EXECUTIVE SUMMARY The Carmel -by -the -Sea Municipal Code prohibits timeshares. The proposed ordinance confirms the existing prohibition of time shares, and adds new prohibitions with respect to advertisement and sale of timeshares and fractional interest ownerships. The City's Planning Commission has recommended adoption of these amendments, with an additional recommendation for Council to have a policy level discussion in the future about whether or not timeshares should continue to be prohibited in the Village. BACKGROUND Existing provisions of the Carmel -by -the -Sea Municipal Code prohibit timeshare uses. Specifically, timeshares are prohibited in all zoning districts of the City, and are defined in Section 17.28.010 to include any land use that is a "timeshare project", "time share program," or "time share occupancy." These are defined in Section 17.70.020 as follows: Time -Share Occupancy. An occupancy related to the situation wherein a purchaser receives the right or entitlement in perpetuity, for life, or for a term of years or other extended term, to the recurrent, exclusive use or occupancy of a lot, parcel, unit, room(s), hotel or portion thereof, or segment of real property, annually or on some other seasonal or periodic basis, for a period of time that has been or will be allotted from the use or occupancy periods into which the time-share project which is involved has been divided. The right or entitlement to occupancy may attach in advance to a specific lot, parcel, unit, room(s) or portion of a hotel, or segment of real property, or may involve designation or selection of the same at a future time or times. Time -Share Program. Any arrangement for a project whereby the use, occupancy, or possession of real property has been made subject to a time-share estate, use, or occupancy, whereby such use, occupancy, or possession circulates among purchasers of the time-share intervals according to a fixed or floating time schedule on a periodic basis for a specific period of time during any given year, but not necessarily for consecutive years. Time -Share Project. A project in which a purchaser receives the right in perpetuity, for life, or for a term of years, to the recurrent, exclusive use or occupancy of a lot, parcel, unit, or segment of real property, annually or on some other periodic basis, for a period of time that has been or will be allotted for the use or occupancy periods into which the project has been divided. As a result of recent enforcement efforts related to timeshares, City staff have reviewed the existing city code provisions and recommend that they be revised to confirm the existing prohibition, and additionally, that new prohibitions be added with respect to advertisement and sale of timeshares and fractional interest ownerships, which are treated identically under the existing City code. On October 12th, 2022, the Planning Commission was presented these draft amendments, and received testimony from the public. Following discussion, the Commission approved a resolution recommending that the City Council adopt the ordinance as drafted by staff. The Commission also crafted an additional recital recommending that Council have a policy discussion in the near future to explore whether or not timeshares should still be prohibited in the City of Carmel -by -the -Sea. This additional recommendation arose from deliberations during the hearing, in which the Commissioners discussed the number of vacant homes in the Village and whether https:11carmetnovusagenda.comlagendapubliclCoverSheet.aspx?IternID=5020&MeetingID=1341 112 3-353 4/27/23, 9:03 AM Coversheet a form of timeshare use could present a solution to filling them. The Commission's additional recommendation is for Council to hold a separate hearing in the near future to have a policy level discussion and decide whether or not to refer an item back to the Planning Commission to remove or modify the prohibition on timeshares in Carmel -by -the -Sea. STAFF ANALYSIS The changes proposed by the ordinance include: • Section 17.70.020 is modified to simplify the City's existing definitions with respect to timeshares. The City's existing definitions include definitions of time-share estate, time-share use, time-share occupancy, and time-share property, which are based on similar definitions in state law (the Vacation Ownership and Time -Share Act of 2004, as set forth in Business and Professions Code section 11210 et seq.), However, the existing definitions with respect to timeshares in 17.70.020 are multiple and reference each other, and introduce unnecessary complexity into the City's zoning regulations. While not a substantive change in the scope of the City's regulations, the proposed ordinance would simplify definitions to prohibit the use of real property under a "time-share plan." • The definition of "time-share plan" would mean "any arrangement, plan, scheme, or similar device, whether established by membership agreement, sale, lease, deed, license, right to use agreement, articles of organization or incorporation. operating agreement or bylaws, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of real property or portion thereof, according to a fixed or floating time schedule, 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." - The code would specify that a time share plan exists "whenever such recurring rights of exclusive use to real property are created, regardless of whether such exclusive rights of use are a result of a grant of ownership rights, possessory rights, membership rights, rights pursuant to contract, or ownership of a fractional interest or share in real property, and regardless of whether they are coupled with ownership of a real property interest such as freehold interest or an estate for years in the property subject to the time-share plan." • The code would be revised to make clear that a prohibited timeshare Is created whenever any right is established for exclusive use of the property that is periodic on a recurring basis, regardless of the form. The definition of "timeshare plan" would now specifically mention that fractional ownership is one way a timeshare can be created, which is also not a substantive change. "Time-share use" and "fractional interest use" are defined to mean exactly same thing, so that it is clear to all potential violators that there is no difference between a fractional interest use and a timeshare use. • 17.14.040, prohibiting timeshares in commercial zones, is modified to use the updated definitions. • 17.28.010.A, prohibiting timeshares in all city zoning districts, is updated to use the updated definitions. Additional subsections are added to this section to make advertisement of timeshares subject to criminal penalties as well as the City's administrative civil penalty process. The code also specifies that each day a violation occurs is a separate offense, for purposes of deterring violations by increasing the visibility of potential consequences. While the existing municipal code prohibits fractionalized interest ownership, as a timeshare is created based on the allocation of exclusive rights of use to real property, the proposed code amendments would clarify the prohibition and strengthen enforcement efforts. Additionally, the proposed ordinance would expressly prohibit the advertisement and sale of timeshares and fractional interest uses; this would allow for proactive enforcement by the City against those involved in the creation, advertisement, and sale of such prohibited land uses, rather than just the purchaser or owner of a timeshare or fractional interest use. During the February 7, 2023 discussion on this item, the City Council directed staff to inquire with appropriate Monterey County offices about the tax implications of a Limited Liability Corporation (LLC) owning and disposing of fractional ownership interests. Monterey County Counsel advised that reassessment of fractional ownership real property interests in an LLC does not occur until transfer of 50 percent or more of said interests occurs. Reporting of such is incumbent on the LLC filing appropriate documentation with the Internal Revenue Service which, in turn, relays such information to a state's real property taxing authority (a County in the case of the State of California). The staff time asso6aced with processing this ordinance amendment is captured in the FY2022/2023 Community Planning and Building Budget. Ordinance 2022-007 was introduced (first reading) on February 7, 2023 at a Regular City Council Meeting Attachment 1) PC Resolution 2022-036-PC Recommending Approval Attachment 2) Draft Ord. 2022-007 REDLINE Attachment 3) Draft Ord. 2022.007 CLEAN https://carmel.novusagenda.com/agendapubiictCoverSheet.aspx?ItemiD-5020&MeetingID-1341 212 3-354 CITY OF CARMEL-BY-THE-SEA PLANNING COMMISSION RESOLUTION NO.2022-036-PC A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF CARMEL-BY-THE-SEA RECOMMENDING CITY COUNCIL ADOPT ORDINANCE AMENDING MUNICIPAL CODE SECTIONS 17.14.040, 17.28.010, AND 17.70.020, TO PROHIBIT TIMESHARE AND FRACTIONAL INTEREST USES, AS WELL AS ADVERTISING AND SALE THEREOF WHEREAS, existing provisions of the Carmel -by -the -Sea Municipal Code prohibit timeshare uses. Specifically, timeshares are prohibited in all zoning districts of the City, and regulated by Sections 17.28.010, 17.70.020 and 17.14.040; and WHEREAS, as a result of enforcement efforts, City staff have reviewed the existing city code provisions and recommend that they be revised to confirm the existing prohibition, and additionally, that new prohibitions be added with respect to advertisement and sale of timeshares and fractional interest ownerships, which are treated identically under the existing City code; and WHEREAS, notice of a public hearing of the Planning Commission was published on September 30t", 2022 in compliance with State law (California Government Code 65091); and WHEREAS, on October 12, 2022, the Planning Commission held a public hearing to consider draft Ordinance 2022-007 amending regulations pertaining to timeshares and receive public testimony, including without limitation, information provided to the Planning Commission by City staff and through public testimony; and WHEREAS, the Planning Commission found that the draft Ordinance 2022-007 was consistent with the City's General Plan, Local Coastal Plan, and all other relevant City and State codes and regulations. WHEREAS, the California Environmental Quality Act (California Public Resources Code §§ 21000, et seq., "CEQA"), together with State Guidelines (14 California Code Regulations §§ 15000, et seq., the "CEQA Guidelines") and City Environmental Regulations (CMC 17.60) require the review of certain projects for environmental impacts and preparation of environmental documents; and WHEREAS, the Planning Commission finds that pursuant to CEQA regulations, the project will have no impact on the environment and is not considered a project requiring compliance with the California Environmental Quality Act (Section 21065 of the California Public Resources Code); and WHEREAS, the facts set forth in the recitals are true and correct and are incorporated herein by reference. 3-355 NOW, THEREFORE, BE IT RESOLVED, THAT THE PLANNING COMMISSION OF THE CITY OF CARMEL-BY-THE-SEA DOES HEREBY recommend the City Council amend municipal code sections 17.14.040, 17.28.010, and 17.70.020, to prohibit timeshare and fractional interest uses, as well as advertising and sale thereof and adopt the Update in a manner fully in conformity with the Coastal Act (CA Section 30510). BE IT FURTHER RESOLVED, THAT THE PLANNING COMMISSION OF THE CITY OF CARMEL- BY-THE-SEA DOES ALSO recommend the City Council hold a separate hearing in the near future to have a policy level discussion and decide whether or not to refer an item back to the Planning Commission to remove or modify the prohibition on timeshares in Carmel -by -the -Sea. PASSED, APPROVED, AND ADOPTED BY THE PLANNING COMMISSION OF THE CITY OF CARMEL-BY-THE-SEA this 12th day of October, 2022, by the following vote: AYES: Delves, Allen, Bolton, LePage, Locke NOES: ABSENT: ABSTAIN: APPROVED: ATTEST: Michael LePage, Chair Leah Young, Planning Commission Secretary 3-356 CITY OF CARMEL-BY-THE-SEA CITY COUNCIL ORDINANCE NO. 2022-007 AN ORDINANCE AMENDING THE CARMEL-BY-THE-SEA MUNICIPAL CODE TO PROHIBIT TIMESHARE AND FRACTIONAL INTEREST USES, AS WELL AS ADVERTISING AND SALE THEREOF IN A MANNER FULLY IN CONFORMITY WITH THE COASTAL ACT (CA PUBLIC RESOURCES CODE SECTION 30510 ET SEQ.) WHEREAS, timeshares involve the division of the exclusive rights to use, possess, and occupy any real property between multiple persons, pursuant to a fixed or floating time schedule; and WHEREAS, since at least 1985, the City of Carmel -by -the -Sea has prohibited the establishment of timeshares within the City; and WHEREAS, the Housing Element of the City's General Plan specifically recognizes that the City seeks to protect the stability of residential neighborhoods by promoting year-round occupancy, and to avoid depletion of residents and associated impacts on the community, City services, Goal G3-4 of the City's Housing Element specifically requires the enforcement of the prohibitions on short-term, transient rentals and timeshares in residential dwellings; and ined the ordinance was consistent with the Citv's General Plan, Local Coastal Plan, and all other relevant City and State codes and regulations_ and _having reviewed the Planning Commission's recommendations and the relevant provisions of the General Plan, the City Council finds that the ordinance is consistent with the City's General Plan, and WHEREAS, recent increases in the development and sale of fractional interest ownerships have made it appropriate for the City to revisit its municipal code to clarify that fractional interest ownerships are prohibited timeshares and to also expressly prohibit the advertising and sale of prohibited timeshares and fractional interest uses. WHEREAS, notice of the public hearing was published on November 25, 2022 in compliance with State law (California Government Code 65091), indicating the date and time of the public hearing; and WHEREAS, on December 6, 2022, the City Council opened the a public hearing to receive public testimony regarding the draft ordinance, including without limitation, information provided by City staff and public testimony. and continued the hearing to a date ceilain, of January 10. 2021 and WHEREAS, on January 10 2023, the City Council re -convened the public hearing to receive further public testimony regarding the draft ordinance, including without limitation. information provided by City staff and public testimony; and OAK 44875-3 304-40 11 v. 3-357 WHEREAS, this decision is made based upon evidence presented to the City Council at its December 6, 2022 ar-id Janl,,:iF,; 1 FJ' 1-J_., hearings including, without limitation, the staff report submitted by the Community Planning and Building Department and public testimony; and WHEREAS, the City Council did hear and consider all said reports, recommendations, attachments and testimony herein above set forth and used their independent judgement to evaluate the ordinance; and WHEREAS, the proposed amendments are in full conformity with the City's Local Coastal Plan and the California Coastal Act (GA Pi-ibiic P scurc,_�s i Section 30510 NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DOES ORDAIN AS FOLLOWS: SECTION 1. CEQA Review. The City Council exercises its independent judgment and finds that this ordinance is not subject to the California Environmental Quality Act (CEQA) pursuant to the State CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, Sections. 15060(c)(2), because the proposed ordinance will not result in a direct or reasonably foreseeable indirect physical change in the environment; 15061(b)(3) because the proposed ordinance is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment; and 15308 because the proposed ordinance involves regulatory actions to assure protection of the environment. Therefore, the adoption of this ordinance is exempt from CEQA and no further environmental review is necessary. SECTION 2. Amendment to the CIVIC. 1. Subsection A of Section 17.14.040 is amended and restated as follows: 17.14.040 Additional Use Regulations. A. All Uses. 1. No new structure or modification to an existing structure shall be permitted nor shall any business license be issued that would allow the creation of publicly accessible retail space occupying fewer than 200 square feet or more than 5,000 square feet unless approved through a use permit and pursuant to the adoption of findings per CIVIC 17.64.200, Retail Space of Less Than 200 Square Feet or Greater Than 5,000 Square Feet. 2. No timeshare uses or fractional interest uses shall be established or permitted in any zone. 3. Except in restaurants, not more than five persons in any one individually licensed business shall be engaged in the production, repair or manufacturing of goods. 4. No use shall be permitted and no process, equipment, or materials shall be employed which is found by the Planning Director or by the Planning Commission to be OAK 0487�-3104-4012 v2 3-358 objectionable to persons residing or working in the vicinity by reason of odor, fumes, noise, vibration, illumination, glare, unsightliness, dust, cinders, dirt, refuse, water - carried wastes or heavy truck traffic, or involve any hazard of fire or explosion. 2. Section 17.28.010 is amended and restated as follows: 17.28.010 Timeshare and Fractional Interest Uses. A. Timeshare uses and fractional interest uses are prohibited uses within all of the zoning districts within the City. B. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised, or disseminated in any way and through any medium, the availability for sale or use of real property in violation of this section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.16 (General Penalty). C. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised, or disseminated in any way and through any medium, the availability for sale or use of real property in violation of this section is subject to administrative fines and/or penalties as set forth in Chapter 18.04 (Municipal Code and Ordinance Enforcement). D. Each day a violation of this section occurs shall constitute a separate offense, and the remedies under this section are cumulative and in addition to any and all other remedies available at law and equity. 3. "Time -Share Definitions" of Section 17.70.020 is amended to repeal the definitions of "Time -Share Estate," "Time -Share Occupancy," "Time -Share Program," "Time -Share Project," and "Vacation -Time Sharing Project," and restated to enact the definitions of "Time -Share Plan," "Time -Share Use" and "Fractional Interest Use" to read as follows: 17.70.020 Definitions. The words, terms, and phrases defined in this chapter shall, for all purposes connected with this title, be construed as having the meanings respectively set forth in this chapter. Time -Share Definitions. "Time -Share Plan" means any arrangement, plan, scheme, or similar device, whether established by membership agreement, sale, lease, deed, license, right -to -use agreement, articles of organization or incorporation, operating agreement or bylaws, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of real property or portion thereof, according to a fixed or floating time schedule, 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. A timeshare plan shall be deemed to exist whenever such recurring rights of exclusive use to real property are created, regardless of whether such exclusive rights of use are OAK #4875-3304-4012 v2 3-359 a result of a grant of ownership rights, possessory rights, membership rights, rights pursuant to contract, or ownership of a fractional interest or share in real property, and regardless of whether they are coupled with ownership of a real property interest such as freehold interest or an estate for years in the property subject to the time-share plan. "Time -Share Use" and "Fractional Interest Use" means the use of real property or any part thereof, pursuant to a timeshare plan. SECTION 3. Severability. If any section, subsection, phrase, or clause of this ordinance is for any reason held to be unconstitutional, such a decision shall not affect the validity of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this Ordinance and each section, subsection, phrase, or clause thereof irrespective of the fact that any one or more sections, subsections, phrases, or clauses be declared unconstitutional. SECTION 4. Publication. The City Clerk shall publish or post this ordinance in the manner required by law. SECTION 5. Effective Date. This ordinance shall be effective 30 days after its adoption and after approval by the California Coastal Commission. PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE- SEA this XX day of XX 2022, by the following vote: AYES: NOES: ABSENT: ABSTAI N: APPROVE: ATTEST: Dave Potter, Mayor Nova Romero, MMC, City Clerk OAK #4975-3304-401' v, 3-360 CITY OF CARMEL-BY-THE-SEA CITY COUNCIL ORDINANCE NO. 2022-007 AN ORDINANCE AMENDING THE CARMEL-BY-THE-SEA MUNICIPAL CODE TO PROHIBIT TIMESHARE AND FRACTIONAL INTEREST USES, AS WELL AS ADVERTISING AND SALE THEREOF IN A MANNER FULLY IN CONFORMITY WITH THE COASTAL ACT (PUBLIC RESOURCES CODE SECTION 30510 ETSEQ.) WHEREAS, timeshares involve the division of the exclusive rights to use, possess, and occupy any real property between multiple persons, pursuant to a fixed or floating time schedule; and WHEREAS, since at least 1988, the City of Carmel -by -the -Sea has prohibited the establishment of timeshares within the City; and WHEREAS, the Housing Element of the City's General Plan specifically recognizes that the City seeks to protect the stability of residential neighborhoods by promoting year-round occupancy, and to avoid depletion of residents and associated impacts on the community, City services, Goal G34 of the City's Housing Element specifically requires the enforcement of the prohibitions on short-term, transient rentals and timeshares in residential dwellings; and WHEREAS, the Planning Commission of the City of Carmel -by -the -Sea reviewed the ordinance, and on October 12, 2022, determined the ordinance was consistent with the City's General Plan, Local Coastal Plan, and all other relevant City and State codes and regulations, and having reviewed the Planning Commission's recommendations and the relevant provisions of the General Plan, the City Council finds that the ordinance is consistent with the City's General Plan; and WHEREAS, recent increases in the development and sale of fractional interest ownerships have made it appropriate for the City to revisit its municipal code to clarify that fractional interest ownerships are prohibited timeshares and to also expressly prohibit the advertising and sale of prohibited timeshares and fractional interest uses. WHEREAS, notice of the public hearing was published on November 25, 2022 in compliance with State law (California Government Code 65091), indicating the date and time of the public hearing; and WHEREAS, on December 6, 2022, the City Council opened the public hearing to receive public testimony regarding the draft ordinance, including without limitation, information provided by City staff and public testimony, and continued the hearing to a date certain of January 10, 2023; and WHEREAS, on January 10, 2623, the City Council re -convened the public hearing to receive further public testimony regarding the draft ordinance, including without limitation, information provided by City staff and public testimony; and OAK 44875-3304-4012 v2 3-361 WHEREAS, this decision is made based upon evidence presented to the City Council at its December 6, 2022 and January 10, 2023 hearings including, without limitation, the staff report submitted by the Community Planning and Building Department and public testimony; and WHEREAS, the City Council did hear and consider all said reports, recommendations, attachments and testimony herein above set forth and used their independent judgement to evaluate the ordinance; and WHEREAS, the proposed amendments are in full conformity with the City's Local Coastal Plan and the California Coastal Act (Public Resources Code Section 30510 et seq.) NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DOES ORDAIN AS FOLLOWS: SECTION 1. CEQA Review. The City Council exercises its independent judgment and finds that this ordinance is not subject to the California Environmental Quality Act (CEQA) pursuant to the State CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, Sections. 15060(c)(2), because the proposed ordinance will not result in a direct or reasonably foreseeable indirect physical change in the environment; 15061(b)(3) because the proposed ordinance is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment; and 15308 because the proposed ordinance involves regulatory actions to assure protection of the environment. Therefore, the adoption of this ordinance is exempt from CEQA and no further environmental review is necessary. SECTION 2. Amendment to the CIVIC. 1. Subsection A of Section 17.14.040 is amended and restated as follows: 17.14.040 Additional Use Regulations. A. All Uses. 1. No new structure or modification to an existing structure shall be permitted nor shall any business license be issued that would allow the creation of publicly accessible retail space occupying fewer than 200 square feet or more than 5,000 square feet unless approved through a use permit and pursuant to the adoption of findings per CIVIC 17.64.200, Retail Space of Less Than 200 Square Feet or Greater Than 5,000 Square Feet. 2. No timeshare uses or fractional interest uses shall be established or permitted in any zone. 3. Except in restaurants, not more than five persons in any one individually licensed business shall be engaged in the production, repair or manufacturing of goods. 4. No use shall be permitted and no process, equipment, or materials shall be employed which is found by the Planning Director or by the Planning Commission to be objectionable to persons residing or working in the vicinity by reason of odor, fumes, OAK #4875-3304-4012 v2 3-362 noise, vibration, illumination, glare, unsightliness, dust, cinders, dirt, refuse, water - carried wastes or heavy truck traffic, or involve any hazard of fire or explosion. 2. Section 17.28,010 is amended and restated as follows: 17.28.010 Timeshare and Fractional Interest Uses. A. Timeshare uses and fractional interest uses are prohibited uses within all of the zoning districts within the City. B. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised, or disseminated in any way and through any medium, the availability for sale or use of real property in violation of this section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.16 (General Penalty). C. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised, or disseminated in any way and through any medium, the availability for sale or use of real property in violation of this section is subject to administrative fines and/or penalties as set forth in Chapter 18.04 (Municipal Code and Ordinance Enforcement). D. Each day a violation of this section occurs shall constitute a separate offense, and the remedies under this section are cumulative and in addition to any and all other remedies available at law and equity. 3. "Time -Share Definitions" of Section 17.70.020 is amended to repeal the definitions of "Time -Share Estate," "Time -Share Occupancy," "Time -Share Program," "Time -Share Project," and "Vacation -Time Sharing Project," and restated to enact the definitions of "Time -Share Plan," "Time -Share Use" and "Fractional Interest Use' to read as follows: 17.70.020 Definitions. The words, terms, and phrases defined in this chapter shall, for all purposes connected with this title, be construed as having the meanings respectively set forth in this chapter. Time -Share Definitions. "Time -Share Plan" means any arrangement, plan, scheme, or similar device, whether established by membership agreement, sale, lease, deed, license, right -to -use agreement, articles of organization or incorporation, operating agreement or bylaws, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of real property or portion thereof, according to a fixed or floating time schedule, 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. A timeshare plan shall be deemed to exist whenever such recurring rights of exclusive use to real property are created, regardless of whether such exclusive rights of use are a result of a grant of ownership rights, possessory rights, membership rights, rights OAK M75-3304-4012 v2 3-363 pursuant to contract, or ownership of a fractional interest or share in real property, and regardless of whether they are coupled with ownership of a real property interest such as freehold interest or an estate for years in the property subject to the time-share plan. "Time -Share Use" and "Fractional Interest Use" means the use of real property or any part thereof, pursuant to a timeshare plan. SECTION 3. Severability. If any section, subsection, phrase, or clause of this ordinance is for any reason held to be unconstitutional, such a decision shall not affect the validity of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this Ordinance and each section, subsection, phrase, or clause thereof irrespective of the fact that any one or more sections, subsections, phrases, or clauses be declared unconstitutional. SECTION 4. Publication. The City Clerk shall publish or post this ordinance in the manner required by law. SECTION 5. Effective Date. This ordinance shall be effective 30 days after its adoption and after approval by the California Coastal Commission. PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE- SEA this XX day of XX 2022, by the following vote: AYES: NO ES: ABSENT: ABSTAIN: APPROVE: ATTEST: Dave Potter, Mayor Nova Romero, MMC, City Clerk OAK 44875-3304-4012 v2 3-364 Exhibit L City of Hermosa Beach Time Share Ordinance and Supporting Evidence 3-365 4127123, 9:17 AM City of Hermosa Beach - File #: REPORT 22-0586 Sign In CITY OF - �b HERMOSA BEACH IMMM Legislation Calendar City Council fiepartments People '© © ®Share URSS Alerts Details PI]F 5taff Report File #' REPORT22-0586 Version: 1 Name: Type: Action Item Status: PuhLc Hearing File created: 9/19/2022 In control' City Council On agenda: 9/28/2022 Final action: INTRODUCTION OF AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH, CALIFORNIA AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND Title_ AMENDING SECTION 17.26,030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANTTO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROTECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (Community Development Director 3eannie Naughton) Attachments; 1. 1. SUPPLEMENTAL Draft Ordinance, 2. 2. Resoluton P.C. 22-07. 3. 3. Link to April 19, 2022 Planning Commission StaffReport 4. SUPPLEMENTAL Email from Scott Hayes Re Item 13. c. 5, SUPPLEMENTAL eCommen s for Item 13. c Staff Report Text Honorable Mayor and Members of the Hermosa Beach City Council Regular Meeting of September 28, 2022 Title INTRODUCTION OF AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH, CALIFORNIA AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMITAND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (Community Development Director Jeannie Naughton) Body Recommended Action: Recommendation Staff recommends City Council consider waiving full reading and introduce by title only an Ordinance of the City of Hermosa Beach, California, amending Chapter 17.40 (Conditional Use Permit and Other Permit Standards) to add Section 17.40.230 (Timeshare Uses) to Title 17 (Zoning) and amending Section 17.26.030 to permit timeshare uses in specified commercial zones pursuant to a Conditional Use Permit and determining that the project is exempt from the California Environmental Quality Act (Attachment 1). Body Executive Summary_ The City of Hermosa Beach Municipal Code (HBMC) does not currently include regulations governing the use of timeshares within the City, nor any regulations that would explicitly address these emerging businesses offering "fractional ownership" of a property in a way that operates like a timeshare. If left unregulated, these types of uses in the residential zones could limit the City's existing housing stock for use as long-term residency and impair the overall character of the City's residential areas. The proposed draft ordinance (Attachment 1) would permit timeshare uses in hide C-1 amd-6,42 commercial zones within the City pursuant to a Conditional Use Permit (CUP), and prohibit the use in all other zones within the City. Background: The City of Hermosa Beach is a popular tourist destination known for its scenic beachfront location, its many diverse restaurants, local retailers and popular commercial areas like its Downtown area and Pier Avenue. Maintaining the balance between the quality of life for residents, those who work in the City, and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. Like most communities throughout California, one of the key means that the City utilizes to maintain this balance is through its Zoning Ordinance, The City has commercial zones, , that provide for uses that serve both visitors and the local community. These commercial uses include. restaurants; retail shops; and visitor -serving hotels and motels, The City also has residential zones, at varying densities, that provide a diversity of housing types for those who live in the community. The City does not currently have regulations in place governing the use of timeshares within the City or other businesses/arrangements that are identical or similar to a timeshare use, At its April 18, 2022 meeting, the Planning Commission reviewed and recommended approval of the proposed ordinance to permit timeshare uses in specified commercial zones pursuant to a Conditional Use Permit by adopting Resolution P.C. 22-07 (Attachment 2)_ Past Planning Commission Actions hops:!/hermosabeach.legistar.romlLegislationDetail.aspx?lD=5850234&GUID=EEC63C4B-88FE-48DO-8735-DD895DF161 B5 1/3 3-366 4/27123, 9:17 AM City of Hermosa Beach - File #: REPORT 22-0586 Meeting Date Description pril 18, 2022 Planning Commission reviewed the proposed ordinance and adopted Resolution P.C. 22-07 C� ausing. The most recent U.S. Census data lists the median value of owner -occupied homes in Hermosa Beach as $1,542,900 for the 2015-2019 period, while the Zillow Home Value Index estimates median home values in Hermosa Beach to be approximately $2,174,879 as of January 31, 2022, According to the Zillow Home Value Index, home values in the City have gone up 10.1 percent over the past year In contrast, the median household income in Hermosa Beach from 2015-2019 was $136,702. and the median income for a four -person household in Los Angeles County for 2021 was approximately $80,000. The cost of homes currently in Hermosa Beach are in excess of what median income residents of Hermosa Beach can afford, and certainly over the median income residents of Los Angeles County generally. The conversion of homes in the City's residential neighborhoods to these timeshare -like uses would eliminate residential dwelling units that would otherwise be available for long-term residential use, thereby further exacerbating the lack of long-term available housing in the City. A home that is used for timeshare purposes would no longer be available for households to use as their long-term residence. Impacts to Character of the City's Residential Districts Timesharing projects have the same character as commercial hotels, motels, and other transient occupancy uses due to the multiple short- term occupancies by those participating in timesharing projects. For this reason, the activity is better suited in commercial or quasi - commercial zones. The use is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. The intensity of the activity is a significant reason why these uses can change the character of a residential neighborhood. Long-term residents, whether owners or renters, occasionally have guests and parties, but timeshare homes are used exclusively by people who are coming to the City on a short-term basis -most likely for vacation or leisure, increasing the likelihood of frequent gatherings and parties generating noise in excess of what the neighborhood normally generates. Timeshare owners and visitors will most likely stay out later, entertain more, and gather in larger numbers while on vacation. Timeshare uses can change the character of a residential neighborhood by having it serve not only as a residential area, but also a visitor lodging area and subjecting the neighborhood to the impacts that come with the more intense land use. Further, the nature of the timeshare use itself can impact the residential character of the City's residential zones because they ensure that the timeshare users can only use their property for a limited amount of time each year. Each co-owner is in the unit on a short-term basis, so they do not have the time to participate in activities or build the relationships that create the fabric of a community. Given the City's desire to strike a balance between the demands of the City's visitor and tourist economy, and retaining its character and quality of life, the City has an interest in maintaining housing stock in its residential districts for long-term residents. i=merging Businesses Recently, certain businesses have emerged which purport to sell "co -ownership" shares in residential property. These businesses, as staff understands the business model, start by purchasing homes or entering contracts to purchase homes in tourist destinations in desirable locations like Hermosa Beach. These businesses then form a limited liability company ("LLC"), which owns title to the residential home. The "co -owners" each purchase a one -eighth share and are entitled to use the residential property for a certain number of days per year according to their share of ownership in the LLC. The one -eighth interest entitles the purchaser to stay at the property for up to 45 days per year in increments of 2-14 days, including one "special day" (Fourth of July, Thanksgiving, Christmas, etc.). The stays are reserved on an app, and while each co-owner is prohibited from renting the home as a short-term rental, they are permitted to allow other guests to stay there during their allotted days. Once shares in an LLC are sold, the business continues to manage the homes, including providing landscaping and pool maintenance, furnishing the homes, and paying all expenses, which are then passed through to the co -owners of the LLC. The Ordinance The City does not currently have regulations in place governing the use of timeshares within the City or other bus inesseslarrangements that are identical or similar to a timeshare use. The purpose of any ordinance should be to ensure that the City is able to maintain its existing and limited housing stock for use in long-term residency, and to maintain the character of its residential zones. Completely banning "fractional ownership," joint tenancies, or ownership by business entities such as LLC is not advisable. There are numerous properties in the City's residential zones currently owned by numerous owners or by LLCs. Thus, the ordinance is geared toward the specific impacts of the at -issue uses -timeshare -like uses organized and run by third parties for a fee. The proposed ordinance (Attachment 1) does not target or single out any business or ownership structure. The proposed ordinance allows for these types of timeshare uses in the City's C-1 rand-G=zones, subject to a Conditions Use Permit. Timeshare uses would be prohibited in all other zones. In order to avoid an over -inclusive ordinance that prohibits joint tenancies or other type of ownership structure that do not have the same deleterious impacts, the proposed ordinance focuses on the actual use of the property, as compared to the ownership structure, and in pertinent regulates this "timeshare use" subject to a "timeshare plan." Timeshare plan is defined as: https://hermosabeach.legistar.comlLegislationDetaiI.aspx?ID=5850234&GUID=FEC63C4B-88FF--48DO-8735-DD895DV161 B5 213 3-367 4/27/23. 9:17 AM City of Hermosa Beach - File #: REPORT 22-0586 "Any arrangement. plan, scheme, or similar device, facilitated, offered, or organized by a third -party non -purchaser, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby purchasers, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights. possessory rights or otherwise, 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. " At its April 18. 2022 meeting, the Planning Commission reviewed and recommended approval of the proposed ordinance by adopting Resolution P.C. 22-07 (Attachment 2) Environmental Determination: The proposed ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in the C-1 Wid-G 2 commercial zones within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. General Plan Consistency_ The proposed text amendment has been evaluated for consistency with the City's General Plan, Relevant Policies are listed below: Land Use and Design Element Goal 1. Create a sustainable urban form and land use patterns that support a robust economy and high quality of life for residents. Policies: • 1.5 Balance resident and visitor needs. Ensure land uses and business provide for the needs of residents as well as visitors. • 1-7 Compatibility of uses. Ensure the placements of new uses does not create or exacerbate nuisances between different types of land uses. Goal 2. Neighborhoods provide for diverse needs of residents of all ages and abilities and are organized to support healthy and active lifestyles. Policies: • 2A Single density neighborhoods. Preserve and maintain the Hermosa Hills, Eastside, Valley, North End and Hermosa View neighborhoods as predominantly single-family residential neighborhoods • 2.5 Neighborhood preservation. Preserve and enhance the quality of residential neighborhoods by avoiding or abating the intrusion of disruptive, nonconforming buildings and uses. Fiscal Impact: There is no fiscal impact associated with the recommended action. Attachments: 1. Draft Ordinance 2. Resolution P.C. 22-07 3. Link to April 19, 2022 Planning Commission Staff Report Respectfully Submitted by: Patrick Donegan, Assistant City Attorney Concur: Jeannie Naughton, Community Development Director Noted for Fiscal Impact: Viki Copeland, Finance Director Legal Review: Patrick Donegan, Assistant City Attorney Approved: Suja Lowenthal, City Manager Staff Report Updated on 9/2712022 - See Track Changes https:llhermosabeach.legistar.com/LegisialionDetail.aspx?ID=5850234&GUID=EEC63C4B-88FE-48DO-8735-DD895DF161 B5 313 3-368 ORDINANCE NO. AN ORDINANCE OF THE CITY OF HERMOSA BEACH. AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT. The City of Council of the City of Hermosa Beach does hereby ordain as follows: Section 1. Findings. A. The City of Hermosa Beach ("City") is a scenic beachfront city, known for its many diverse restaurants, local retailers and popular commercial areas like its Downtown area and Pier Avenue. B. Preserving the City's costal resource and the quality and character of the City has been a focal point of the City's land use planning for decades, and remains a primary focus in the City's current General Plan. C. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. D. The City values and welcomes all visitors to the City and recognizes their contributions to the City's economy, but finds that in order to maintain the City's long term viability as a community where people not only come to visit, but also live, work and contribute to the long term betterment of the community through participation in the City's schools, local community groups, civic government and local serving businesses, the City must maintain a balance between residential land uses and visitor serving uses. E. The City's existing housing stock is significantly impacted, with demand outweighing supply, resulting in extremely high housing prices as detailed in the accompanying staff report. A limited supply of suitable vacant land, exorbitantly high land costs, and limitations in the City's existing infrastructure, among other factors, have limited the construction of additional housing in the City. F. According to the U.S. Census Bureau, the current median household income in the City is $136,702, while the estimated value of owner -occupied housing units from 2015-2019 was approximately $1,542,900 with current real estate listings 3-369 suggesting that prices are increasing significantly, meaning that homes in the City are not affordable to the median household in the City. G. The conversion of existing residential units to uses other than long-term residential use will further reduce the City's existing long-term housing supply, causing further imbalance between the demand for housing in the City and the existing supply, not only altering the character of the City's residential neighborhoods, but also presenting further challenges to the City's efforts to provide affordable housing within the community. H. The City additionally has, for many years, worked to preserve its existing housing stock for long term residential use, both to maintain the character of its residential neighborhoods and prevent residential districts from becoming visitor and tourist serving districts, and to ensure that it would not be converted to uses other than long-term residential uses. The high impact use associated with timeshares, combined with the frequent turnover and commercial management involved in timeshare properties is not consistent with the purpose and nature of residential districts in the City. Rather, they are commercial in nature, in that these timeshare uses are structured as a short-term, tourist oriented, visitor serving use of the subject properties. The use of properties as timeshares adds excessive noise and traffic to residential districts by using these properties for high impact tourist oriented uses more appropriately located in commercial districts of the City. J. The use of residential properties for timeshare uses will further reduce the availability of housing stock for long-term residential use, and create a new demand for timeshare uses of residential properties. K. This encroachment of tourist oriented, visitor serving uses in residential neighborhoods is likely to compromise the character of residential areas within the City, and further increase the costs for housing in the City, undermining the City's efforts to provide a balance of housing for all income levels in the City. L. The City's authority to enact zoning ordinances is based on the powers accorded cities and counties under the State constitution to make and enforce police regulations. This police power grants the City broad authority to regulate the development and use of real property within its jurisdiction to promote the public welfare. M. Pursuant to and in accordance with this authority, the City Council desires to prohibit timeshare uses in residential areas, and only allow them in the C-1 commercial zone within the City, pursuant to a conditional use permit. 3-370 N. The City's Planning Commission held a duly noticed public hearing on April 19, 2022, as required by law to consider all the information presented by staff, and public testimony presented in writing and at the meeting. O. On April 19, 2022, the City's Planning Commission recommended that the City Council adopt this Ordinance amending the City's Municipal Code as described herein. P. On September 28, 2022, the City Council held a duly noticed public hearing, accepting testimony from the public, and discussed the proposed amendments and staffs recommended approval of this Ordinance. Q. The proposed zoning amendments are consistent with the General Plan goals, policies and implementation programs as the Ordinance will continue to preserve the character of the City; will preserve the City's residential districts for residential uses; and will help to preserve the City's existing housing stock for long term residential uses, to avoid further exacerbating the existing impacts on the City's housing supply. Section 2. The above recitals are hereby incorporated as though set forth in this section. Section 3. Section 17.40.230 (Time Share Uses) is hereby added to Chapter 17.40 (Conditional Use Permit and Other Permit Standards) of Title 17 (Zoning) of the City of Hermosa Beach Municipal Code, to read as follows: Section 17.40.230 Timeshare Uses A. Purpose and Findings. There is a critical shortage of permanent, long-term housing in the City of Hermosa Beach ("City"). A limited supply of suitable vacant land, land values, and market demand for land for other uses, have limited the construction of additional housing in the City. The City is a popular tourist destination known for its scenic beachfront location, its many diverse restaurants, local retailers and popular commercial areas like its Downtown area and Pier Avenue. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. Timeshare uses are not an appropriate land use in the City's residential zones due to the multiple occupancy of timeshare properties, the short-term, tourist oriented use of such property and commercial management of timeshare facilities, all of which create increased traffic generation, excessive noise, disruption to residential communities through commercial -level maintenance of the timeshare facilities, and therefore are appropriately confined to commercial zones. 3-371 Conversion of permanent housing to timeshare facilities removes existing housing units from the City's existing stock and exacerbates an already severe housing shortage. It is therefore in the public interest to prohibit conversions of existing housing units into timeshare facilities, as to do so eliminates needed housing stock by diverting those units to a tourist -oriented, commercial use. B. Definitions. For purposes of this Section, the following words and phrases shall have the meaning respectively ascribed to them by this Section: "Accommodation" means any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.040. "Building" shall have the meaning ascribed to it by Section 17.04.040. "Dwelling unit" shall have the meaning ascribed to it by Section 17.04.040. "Managing entity" means the person who undertakes the duties, responsibilities and obligations of the management of a timeshare plan. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. "Timeshare instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a timeshare plan and includes the declaration dedicating accommodations to the timeshare plan. "Timeshare interest" means the right to exclusively occupy a timeshare property for a period of time on a recurring basis pursuant to a timeshare plan, regardless of whether or not such right is coupled with a property interest in the timeshare property or a specified portion thereof. "Timeshare plan" means any arrangement, plan, scheme, or similar device, facilitated, offered, or organized by a third -party non -purchaser, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby purchasers, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, 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. "Timeshare property" means one or more accommodations subject to the same timeshare instrument, together with any other property or rights to property appurtenant to those accommodations. 3-372 "Timeshare use" means the use of one or more accommodations or any part thereof, as a timeshare property pursuant to a timeshare plan. C. Timeshare Uses Restricted to C-1 Commercial Zone: Timeshare uses are conditional uses within the City's C-1 Commercial Zone, subject to approval of a conditional use permit applied for and approved in conformance with this Section. Timeshare uses are not permitted in any other Zones in the City. D. Application Process and Development Standards. A. Application Process. Approval of a conditional use permit for timeshare uses in the C-1 Commercial Zone within the City shall be required in accordance with the requirements of Chapter 17.40. In addition to the requirements contained in Chapter 17.40, an application for a timeshare use shall be accompanied by the following documents which shall be subject to the approval of the Community Development Director: 1. Management Plan. A management plan shall describe the methods employed by the applicant to guarantee the future adequacy, stability, and continuity of a satisfactory level of management and maintenance of the time share use. 2. Application Requirements. In addition to any application requirements established by this section and any other applicable requirements of this code, the following information shall be submitted as part of any application to develop or establish a timeshare use: a. Typical floor plans for each accommodation. b. The phasing of the construction of the accommodations on the timeshare property, if applicable. C. A description of any ancillary uses which are proposed in conjunction with the time share use. d. A description of the method of management of the time share use and indication of the management entity for the time-share property. e. Any restrictions on the use or occupancy of the accommodations. f. Any other information or documentation the applicant, City staff or commission deems reasonably necessary to the consideration of the timeshare use, including any required environmental documents. B. Development Standards and Operational Requirements. Notwithstanding any other provision of this Section, the following conditions must be met by any timeshare use in any conditionally permitted zone. Additional requirements may be attached to a 3-373 conditional use permit or development agreement if found to be necessary to assure that the timeshare use meets the intent of this Section: 1. Timeshare uses developed in the C-1 Commercial Zone within the City shall be limited to accommodations in upper floors in conjunction with a mixed -use project. 2. No existing residential use in the C-1 Commercial Zone within the City shall be converted to a timeshare use. 3. Development Standards. The timeshare use shall comply with all development standards for the zone in which it is located. 4. Parking. Parking shall be provided as follows: a. For accommodations of two or fewer bedrooms, one parking space shall be provided for each accommodation. b. For accommodations of three or more bedrooms, two parking spaces shall be provided for each accommodation. 5. Modification or Waiver of Standards. The Planning Commission may modify or waive one or more of the regulations contained in this Section if it determines that strict compliance is not necessary to achieve the purpose and intent of this Section. E. Violations, Enforcement and Civil Penalties. 1. Any responsible person, including but not limited to an owner of a timeshare interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this Section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this Section. Such violation shall be punishable pursuant to Section 1.04.020 of the City of Hermosa Beach Municipal Code. 2. Timeshare use, and/or advertisement for timeshare use, of an accommodation in violation of this Section is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance. Any such nuisance may be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 8.28 except that the civil penalty for a violation shall be one thousand dollars ($1,000.00). Each day the violation occurs shall constitute a separate offense 3. Any responsible person who violates this Section shall be liable and responsible for a civil penalty of one thousand dollars ($1,000.00) per violation per day such violation occurs. The City may recover such civil penalty by either civil action or administrative citation. Such penalty shall be in addition to all other costs incurred by the City, including without limitation the City's staff time, investigation expenses and attorney's fees. 3-374 a. Where the City proceeds by civil action, the court shall have discretion to reduce the civil penalty based upon evidence presented by the responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the court should consider the purpose of this Section to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the responsible person's enrichment or profit as a result of the violation of this Section. In any such civil action the City also may abate and/or enjoin any violation of this Section. b. Where the City proceeds by administrative citation, the City shall provide the responsible person notice of the right to request an administrative hearing to challenge the citation and penalty, and the time for requesting that hearing. i. The responsible person shall have the right to request the administrative hearing within forty-five (45) days of the issuance of the administrative citation and imposition of the civil penalty. To request such a hearing, the responsible person shall notify the City clerk in writing within forty-five (45) days of the issuance of the citation. The appeal notification shall include all specific facts, circumstances and arguments upon which the appeal is based. ii. The City Manager is hereby authorized to designate a hearing officer to hear such appeal. The City hearing officer shall conduct a hearing on the appeal within ninety (90) days of the request for the hearing unless one of the parties requests a continuance for good cause. The hearing officer shall only consider those facts, circumstances or arguments that the property owner or responsible person has presented in the appeal notification. iii. The hearing officer shall render a decision in writing within thirty (30) days of the conclusion of the hearing. The hearing officer shall have discretion to reduce the civil penalty based upon evidence presented by the property owner or responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the hearing officer should consider the purpose of this Section to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the property owner's or responsible person's enrichment or profit as a result of the violation of this Section. iv. Any aggrieved party to the hearing officer's decision on the administrative appeal may obtain review of the decision by filing a petition for writ of mandate with the Los Angeles County Superior 3-375 Court in accordance with the timelines and provisions set forth in Government Code Section 53069A. v. If, following an administrative hearing, appeal, or other final determination, the owner of the property is determined to be the responsible person for the civil penalty imposed by this section, such penalty, if unpaid within forty-five (45) days of the notice of the final determination, shall become a lien to be recorded against the property on which the violation occurred pursuant to Chapter 8.28. Such costs shall be collected in the same manner as county taxes, and thereafter the property upon which they are a lien shall be sold in the same manner as property now is sold for delinquent taxes 4. Any violation of this Section may also be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 8.28 except that the civil penalty under Chapter 8.28 for a violation shall be one thousand dollars ($1,000.00). Each day the violation of this Section occurs shall constitute a separate offense. The remedies under this Section are cumulative and in addition to any and ail other remedies available at law and equity. Section 3. Section 17.26.030 of Chapter 17.26 (C1, C2 and C3 Commercial Zones) of Title 17 (Zoning) is amended to add the following entry to the chart of land use regulations USES C1 C2 C3 See Section Timeshares U 1 17.40.230 Section 4. CEQA. This ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines (the Guidelines), and the environmental regulations of the City. The City Council hereby finds that this ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in the C-1 commercial zone within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. Section 5. Effective Date. Pursuant to California Government Code section 36937, this Ordinance shall take effect thirty (30) days after its final passage. Section 6. Certification. The City Clerk is directed to certify the passage and adoption of this Ordinance; cause it to be entered into the City's book of original ordinances; make a note of the passage and adoption in the records of this meeting; and, 3-376 within fifteen (15) days after the passage and adoption of this Ordinance, cause it to be published or posted in accordance with California law. PASSED, APPROVED and ADOPTED this 28th day of September, 2022. VOTE: AYES: NOES: ABSTAIN: ABSENT: Michael Detoy, Mayor PRESIDENT of the City Council and MAYOR of the City of Hermosa Beach, CA ATTEST: Myra Maravilla City Clerk APPROVED AS TO FORM: Michael Jenkins City Attorney 3-377 RESOLUTION P.C. 22-07 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF HERMOSA BEACH. RECOMMENDING CITY COUNCIL APPROVAL, OF TEXT AMENDMENTS TO THE CITY OF HERMOSA BEACH MUNICIPAL CODE AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT. The Planning Commission of the City of Hermosa Beach does hereby resolve as follows: SECTION 1. Findings. A. The Planning Commission held a duly noticed public hearing on April 19, 2022 to consider a text amendments to the City of Hermosa Beach Municipal Code, Title 17 (Zoning), as described in the proposed ordinance attached as Exhibit A. B. The City of Hermosa Beach {"City") is a scenic beachfront city, known for its many diverse restaurants, local retailers and popular commercial areas like its downtown area and Pier Avenue. C. Preserving the City's costal resource and the quality and character of the City has been a focal point of the City's land use planning for decades, and remains a primary focus in the City's current General Plan. D. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. E. The City values and welcomes all visitors to the City and recognizes their contributions to the City's economy, but finds that in order to maintain the City's long term viability as a community where people not only come to visit, but also live, work and contribute to the long term betterment of the community through participation in the City's schools, local community groups, civic government and local serving businesses, the City must maintain a balance between residential land uses and visitor serving uses. F. The City's existing housing stock is significantly impacted, with demand outweighing supply, resulting in extremely high housing prices as detailed in the accompanying staff report. A limited supply of suitable vacant land, exorbitantly high land costs, and limitations in the City's existing infrastructure, among other factors, have limited the construction of additional housing in the City. 3-378 G. According to the U.S. Census Bureau, the current median household income in the City is $136,702, while the estimated value of owner -occupied housing units from 2015-2019 was approximately $1,542,900 with current real estate listings suggesting that prices are increasing significantly, meaning that homes in the City are not affordable to the median household in the City. H. The conversion of existing residential units to uses other than long-term residential use will further reduce the City's existing long-term housing supply, causing further imbalance between the demand for housing in the City and the existing supply, not only altering the character of the City's residential neighborhoods, but also presenting further challenges to the City's efforts to provide affordable housing within the community, I. The City additionally has, for many years, worked to preserve its existing housing stock for long term residential use, both to maintain the character of its residential neighborhoods and prevent residential districts from becoming visitor and tourist serving districts, and to ensure that it would not be converted to uses other than long-term residential uses. I This high impact use associated with timeshares, combined with the frequent turnover and commercial management involved in timeshare properties is not consistent with the purpose and nature of residential districts in the City. Rather, they are commercial in nature, in that these timeshare uses are structured as a short- term, tourist oriented, visitor serving use of the subject properties. The use of properties as timeshares adds excessive noise and traffic to residential districts by using these properties for high impact tourist oriented uses more appropriately located in commercial districts of the City, K. The use of residential properties for timeshare uses will further reduce the availability of housing stock for long-term residential use, and create a new demand for timeshare uses of residential properties. L. This encroachment of tourist oriented, visitor serving uses in residential neighborhoods is likely to compromise the character of residential areas within the City, and further increase the costs for housing in the City, undermining the City's efforts to provide a balance of housing for all income levels in the City. M. The City's authority to enact zoning ordinances is based on the powers accorded cities and counties under the State constitution to make and enforce police regulations. This police power grants the City broad authority to regulate the development and use of real property within its jurisdiction to promote the public welfare. N. Pursuant to and in accordance with this authority, the Planning Commission desires to prohibit timeshare uses in residential areas, and certain commercial zones and to 3-379 update the language of the Zoning Code to provide consistency with the terminology used to define timeshare uses in State law, Further, the City desires to provide greater clarity as to the zones which timeshare uses are permitted as conditional uses, and the standards pursuant to which they will be reviewed in those zones, O. On April 19, 2022, the Planning Commission held a duly -noticed public hearing and considered the staff report, recommendations by staff, and public testimony concerning the proposed ordinance. SECTION 2. This ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines (the Guidelines), and the environmental regulations of the City. The City Council hereby finds that this ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in specified zones within the City pursuant to a conditional use permit, and prohibits them in all other zones, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. SECTION 3. The Planning Commission finds that the proposed amendments to the Municipal Code to permit timeshares in specified zones within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City are consistent with the General Plan goals, policies and implementation programs as the Ordinance will continue to preserve the character of the City; will preserve the City's residential districts for residential uses; and will help to preserve the City's existing housing stock for long term residential uses, to avoid further exacerbating the existing impacts on the City's housing supply. SECTION 44. Based on the entire record before the Planning Commission, and all written and oral evidence presented, the Planning Commission hereby finds that the proposed ordinance is consistent with the City's adopted General Plan and does not conflict with any of the General Plan's goals or policies. SECTION 5. The Planning Commission hereby recommends that the City Council adopt the attached proposed ordinance entitled, "AN ORDINANCE OF THE CITY OF HERMOSA BEACH. AMENDING CHA13TER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL, USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL[, QUALITY ACT. I HEREBY CERTIFY that the foregoing recommendation to the City Council was duly and regularly approved by the Planning Commission of the City of Hermosa Beach at a regular meeting of said Planning Commission held on April 19, 2022, by the following roll call vote: VOTE; AYES: 5 - Chair Pedersen, Vice Chair Izant, Commissioner Saemann, Commissioner Hoffman, and Commissioner Rice NOES: None ABSTAIN: None ABSENT: None CERTIFICATION I hereby certify that the foregoing Resolution P.C. 22-07 is a true and complete record of the action taken by the Planning Commission of the City of Hermosa Beach, California, at its regular meeting of April 19, 2022. QI �4"D 62(�' Dave Pedersen, Chairperson -7/�>/2 - Date *Angapi, Secretary 3-381 4127123, 9:22 AM City of Hermosa Beach - File #: REPORT 22-0249 Sign In CITY OF b HERMOSA BEACH Legislation Calendar I City Council I Departments I People E ZI ClShare `JRSS Alerts Details I PDF Staff Report File #: REPORT22-0249 Version: 1 Name: Type: Action Item Status: Passed Fie created: 4/14/2022 In control: Panning Commission On agenda: 4/19/2022 Final action: 4/19/2022 TA 22--01 ZONE TEXT AMENDMENT TO AMEND THE HERMOSA BEACH MUNICIPAL CODE CHAPTER 17.40 TO ADD SECTION 17.40.230 AND Title: AMEND SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES AND DETERMINE THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIPJNMENTAL QUALITY ACT (CEQA) Attachmcnts: 1. 1, Draft_ Resolution 2--07 Timeshare Ordinance, 2. 2. Hermosa Beach Draft Ordinance Staff Report Text Honorable Chairman and Members of the Hermosa Beach Planning Commission Regular Meeting of April 19, 2022 Title TA 22-01 ZONE TEXT AMENDMENT TO AMEND THE HERMOSA BEACH MUNICIPAL CODE CHAPTER 17.40 TO ADD SECTION 17.40.230 AND AMEND SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES AND DETERMINE THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRINMENTAL QUALITY ACT (CEQA) Recommendation Recommended Action: Staff recommends the Planning Commission adopt Resolution No. 22-07 (Attachment 1) recommending that the City Council approve Zone Text Amendment TA 22-01, thereby amending Chapter 17.40 to add section 17.40.230 and amend section 17.26.030 to permit timeshare uses in specified commercial zones and determine that the project is exempt from the California Environmental Quality Act (CEQA). Body Background: The City of Hermosa Beach ("City") does not currently have regulations in place governing the use of timeshares within the City, nor any regulations that would explicitly address these emerging businesses offering "fractional ownership" of a property in a way that operates like a timeshare. These types of uses in the City's residential zone could limit the City's existing housing stock for use as a long-term residency and impair the character of the City's residential zones. At its March 15, 2022 meeting, the Planning Commission directed staff to bring forward a zone text amendment addressing these types of uses. Analysis: The City is a popular tourist destination known for its scenic beachfront location, its many diverse restaurants, local retailers, and popular commercial areas like its Downtown area and Pier Avenue. Maintaining the balance between the quality of life for residents, those who work in the City, and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. Like most communities throughout California, one of the key means that the City utilizes to maintain this balance is through its Zoning Ordinance. The City has commercial zones including the C-1 and C-2 commercial zones that provide for uses that serve both visitors and the local community such as: restaurants; retail shops; and visitor serving hotels. The City also has residential zones that provide housing for those who live in the community, at varying densities in order to provide a diversity of housing types. City Noosing The most recent census data lists the median value of owner -occupied homes in Hermosa Beach as $1,542,900 for the period of 2015- 2019, while the Zillow Home Value Index estimates medial home values in Hermosa Beach to be approximately $2,174,879 as of January 31, 2022. According to the Zillow Home Value Index, homes values in the City have gone up 10.1 percent over the past year. In contrast, the median household income in Hermosa Beach from 2015-2019 was $136,702, and the median income for a four -person household in Los Angeles County for 2021 is approximately $80,000. The cost of homes currently in Hermosa Beach are more than what median income residents of Hermosa Beach can afford, and certainly over the median income residents of Los Angeles County generally. https:lthermosabeach.legistar.com/LegislationDetail.aspx?I D=5557241 &QUID=80A64A8C-E51 A-4C2G-B2D2-304G537C93D5 1 /3 3-382 4/27123, 9:22 AM City of Hermosa Beach - File #: REPORT 22-0249 The conversion of homes in the City's residential neighborhoods to these timeshare -like uses would eliminate residential dwelling units that would otherwise be available for long-term residential use, thereby further exacerbating the lack of long-term available housing in the City. A home that is used for timeshare purposes would no longer be available for households to use as their long-term residence. Impacts to Character of the City's Residential Districts Timesharing projects have the same character as commercial hotels, motels, and other transient occupancy uses due to their transient nature and to the multiple short-term occupancies by those participating in timesharing projects, This use is better suited in commercial or quasi -commercial zones and is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. The intensity of this use is a significant reason that these uses can change the character of a residential neighborhood. Long-term residents, whether owners or renters, occasionally have guests or parties, but these timeshare homes are used exclusively by people who are coming to the City on a short-term basis - most likely for vacation or leisure. As a result, those users may naturally stay out later, entertain more, and gather in larger numbers while on vacation. Timeshare uses can change the character of a residential neighborhood by having it serve not only as a residential area, but also a visitor lodging area, and subjecting it to the impacts that come with that more intense land use. Further, the nature of the timeshare use itself can impact the residential character of the City's residential zones because it would ensure that the time share users can only use their property for a limited amount of time each year. Each co-owner is in the unit on a short-term basis, and without the time to participate in the types of activities or build the relationships that create the fabric of a community. Given the City's desire to strike a balance between the demands of the City's visitor and tourist economy, and retaining its character and quality of life, the City has an interest in maintaining housing stock in its residential districts for long-term residents. merg,�Qg Businesses Recently, certain businesses have emerged which purport to sell "co -ownership" shares in residential property. These businesses, as staff understands the business model, start by purchasing homes or entering into contracts to purchase homes in tourist destinations in desirable locations like the City. These businesses then form a limited liability company ("LLC"), which owns title to the residential home, The "co - owners" each purchase a one -eighth share and are entitled to use the residential property for a certain number of days per year according to their share of ownership in the LLC. The one -eighth interest entitles the purchaser to stay at the property for up to 45 days per year in increments of 2-14 days, including one "special day" (Fourth of July, Thanksgiving, Christmas, etc.). The stays are reserved on a mobile application, and while each co-owner is prohibited from renting the home as a short-term rental, they are permitted to allow other guests to stay there during their allotted days. Once shares in an LLC are sold, the business continues to manage the homes, including providing landscaping and pool maintenance, furnishing the homes, and paying all expenses, which are then passed through to the co -owners of the LLC. Time Share Ordinance As mentioned above, the City does not currently have regulations in place governing the use of timeshares within the City or other businesses/arrangements that are identical or similar to a timeshare use. The purpose of any ordinance should be to ensure that it the City is able to maintain its existing and limited housing stock for use in long term residency and to maintain the character of its residential zones. Completely banning "fractional ownership," joint tenancies, or ownership by business entities such as LLC is not advisable. There are numerous properties in the City's residential zones currently owned by numerous owners or by LLCs. Thus, any ordinance should be geared toward the specific impacts of the at -issue uses - timeshare like uses organized and ran by third parties for a fee. The proposed ordinance (Attachment 2) does not target or single out any business or ownership structure. Environmental Determination: The proposed ordinance is not subject to CEQA because the adoptions of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in C-1 and C-2 commercial zones within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b)(3) of the State CEQAGuidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. General Plan Consistency_ The proposed text amendment has been evaluated for consistency with the City's General Plan and is consistent with the following Goals and Policies of Plan Hermosa: Land Use and Design Element Goal 1 Create a sustainable urban form and land use patterns that support a robust economy and high quality of life for residents. Policies: • 1.5 Balance resident and visitor needs. Ensure land uses and business provide for the needs of residents as well as visitors. • 1.7 Compatibility of uses. Ensure the placements of new uses does not create or exacerbate nuisances between different types of land uses. Goal 2 Neighborhoods provide for diverse needs of residents of all ages and abilities, and are organized to support healthy and active lifestyles. Policies: • 2.4 Single density neighborhoods. Preserve and maintain the Hermosa Hills, Eastside, Valley, North End and Hermosa View neighborhoods as predominantly single-family residential neighborhoods https:lihermosabeach.legistar.com/LegislationDetail.aspx?I D=5557241 &GUID=8OA64A8C-E51 A-4C26-B2D2-3046537C93D5 213 3-383 4/27/23, 9:22 AM City of Hermosa Beach - Fife #: REPORT 22-0249 • 2.5 Neighborhood preservation. Preserve and enhance the quality of residential neighborhoods by avoiding or abating the intrusion of disruptive, nonconforming buildings and uses. Attachments: 1. Draft Resolution 22-07 Timeshare Ordinance 2. Hermosa Beach Draft Ordinance Respectfully Submitted by: Carlos Luis, Senior Planner Legal Review: Patrick Donegan, Deputy City Attorney Approved: Angela Crespi, Interim Community Development Director hit ps:/lhermosabeach.leg istar.com[Leg islationDetail.aspx?ID=5557241 &GU I D=BOA64ABC-E51 A-4C26-t32D2-3046537C93D5 313 3-384 From: Scott Hayes Sent: Tuesday, September 27, 2022 3:19 PM To: City Council <citycouncil@hermosabeach.gov>; Suja Lowenthal <suja@hermosabeach.gov>; Ann Yang <anny@hermosabeach.gov> Cc: Jeannie Naughton <jnaughton@hermosabeach.gov>; DG_PlanningCommission <DG_PlanningCommission@hermosabeach.gov>; Patrick Donegan <Patrick.Donegan@bbklaw_com> <Patrick.Donegan@bbklaw.com>; rachelsaccount@hotmail.com Subject: Agenda Item XIII, c (Report 22-0586) -Timeshares Mayor, Mayor Pro Tem, and Councilmembers. am writing to express my strong opposition Council Agenda Item XIII, c (Report 22-0586). Inadequate Noticing First, I believe that the residents adjacent to C-1 Zones should have been directly noticed about this potential change to the zoning code. As stated in the staff report, timesharing projects have increased "likelihood of frequent gatherings and parties generating noise in excess of what the neighborhood normally generates." Since staff acknowledges that there will be neighborhood impacts as a result of the proposed timeshare projects, I feel that the City should have gone over and above the minimum legal public noticing requirements. I respectfully request that this item be continued until such time that the neighbors are properly noticed. If this item is not continued please consider the following argument against the proposed zoning changes. Section 17.40.230, A of the proposed ordinance states 'Timeshare uses are not an appropriate land use in the City's residential zones due to the multiple occupancy of timeshare properties, the short- term, tourist oriented use of such property and commercial management of timeshare facilities, all of which create increased traffic generation, excessive noise, disruption to residential communities." What the ordinance fails to recognize is that those exact same concerns also make timeshares unsuitable for the C-1 Neighborhood Commercial Zone_ Timeshares are Hotels Timeshares are almost always vacation properties. As such, they are essentially hotels which is a disruptive use when adjacent to a residential neighborhood. Our municipal code does not allow hotels in the C-1 zone and timeshares should be excluded as well. Municipal Code Section 17.26.020, B, 1 specifically states that the purpose of the C-1 Neighborhood Commercial Zone is "to provide sites for a mix of small local businesses appropriate for, and serving the daily needs of 3-385 nearby residential neighborhoods; while establishing land use regulations that prevent significant adverse effects on abutting residential uses." I do not see how a timeshare serves the daily needs of nearby residential neighborhoods but I can easily see how these neighborhoods would suffer significant adverse effects from timeshares. Timeshares are STVRs People generally stay at timeshares for 1-2 weeks. As a result, they have nearly the same impact on neighborhoods as short term vacation rentals. Hermosa Beach only allows STVRs on commercially zoned parcels with non -conforming residential uses. Why are timeshares being treated any differently? Timeshares will have the same traffic and noise impacts as STVRs so they should be restricted to the same areas. Additionally, there is no language in the ordinance to prohibit utilizing the timeshare as a short term vacation rental. If timeshares are approved, it will only be a matter of time before we start seeing the timeshare units showing up on Airbnb and VRBQ. Timeshares Take Potential Housing Stock The ordinance states that timeshares must be built above commercial space as part of a mixed use project, Why wouldn't we require that the upper floors of mixed use developments be residential space to help the City meet its housing goals? Allowing this space to be used as timeshare vacation homes makes no sense. I would much prefer to have new neighbors contributing to the community that having to deal with new transient residents every week or 2. Enforcement Challenges The City is currently unable to do anything about the quality of life issues brought about by the MANY illegal short term vacation rentals in Hermosa Beach. I am concerned that timeshares will just add to the number of quality of life issues that the City will not be able to enforce. I happen to live nearby some of these illegal STVRs and no matter how frequently I report them to the City, new renters keep showing up. A quick search of Airbnb shows that there are dozens of STVRs that are advertising for stays of less than 30 days. If the stay is increased to 30 days the number grows to over 100. The City is just not able to do anything to contain these issues and I am worried that the City will not be able to do anything about the potential problems with timeshares. Potential Solutions I believe that there are a few different ways that Council should deal with this issue: 1. Allow timeshares in locations where hotels are permitted. If timeshares are strictly considered a residential use this may not be possible until the zoning code is changed to allow residential in mixed use projects in C-2 and C-3. The Beach House is a form of timeshare but nobody minds it because it is in the C-2 zone. I think that it is worth waiting for the zoning code update to properly deal with the timeshare issue. 2. Define timeshares in the municipal code as hotels or motels. This would allow them in zones where hotel use is allowed. 3. Allow timeshares at commercially zoned parcels with non -conforming residential uses similar to legal STVRs. 4. Prohibit timeshares anywhere in Hermosa Beach. 3-386 Please do not allow timeshares to further degrade our neighborhoods the way that STVRs already have. Thank you for your consideration. Scott Hayes ■om Hermosa Beach, CA 90254 3-387 City Council Adjourned Regular Hybrid Meeting (Closed Session - 5:00 PM Open Session - 6:00 PM 09-28-22 17:00 Agenda Name Comments Support c) REPORT 22-0586 INTRODUCTION OF AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH, CALIFORNIA AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (Community Development Director Jeannie Naughton) Sentiments for All Agenda Items The following graphs display sentiments for comments that have location data. Only locations of users who have commented will be shown. Overall Sentiment ■ SupparValw ■ oppose{ I tl0`i�i ■ Pleutral(0';el Nfl ResFansQfOY 1 Agenda Item: eComments for c) REPORT 22-0586 INTRODUCTION OF AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH. CALIFORNIA AMENDING CHAPTER 17,40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26 030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (Community Development Director Jeannie Naughton) Overall Sentiment ■ supparttuy,�l ■ opposes I Dal,) ■ NeuSralf69Sl Na Fespanso{Q°si Scott Hayes Location: Submitted At: 3:30pm 09-27-22 am writing to express my strong opposition to Agenda Item XIII, c 3-388 First, I believe that the residents adjacent to C-1 Zones should have been directly noticed about this potential change to the zoning code. As stated in the staff report, timesharing projects have increased "likelihood of frequent gatherings and parties generating noise in excess of what the neighborhood normally generates:' Since staff acknowledges that there will be neighborhood impacts as a result of the proposed timeshare projects, l feel that the City should have gone over and above the minimum legal public noticing requirements. l respectfully request that this item be continued until such time that the neighbors are properly noticed. If this item is not continued please consider the following argument against the proposed zoning changes. Section 17.40.230, A of the proposed ordinance states "Timeshare uses are not an appropriate land use in the City's residential zones due to the multiple occupancy of timeshare properties, the short-term, tourist oriented use of such property and commercial management of timeshare facilities, all of which create increased traffic generation, excessive noise, disruption to residential communities" What the ordinance fails to recognize is that those exact same concerns also make timeshares unsuitable for the C-1 Neighborhood Commercial Zone. Timeshares are almost always vacation properties. As such, they are essentially hotels which is a disruptive use when adjacent to a residential neighborhood. Our municipal code does not allow hotels in the C-1 zone and timeshares should be excluded as well. Municipal Code Section 17.26.020, B, 1 specifically states that the purpose of the C-1 Neighborhood Commercial Zone is "to provide sites for a mix of small local businesses appropriate for, and serving the daily needs of nearby residential neighborhoods; while establishing land use regulations that prevent significant adverse effects on abutting residential uses." I do not see how a timeshare serves the daily needs of nearby residential neighborhoods but I can easily see how these neighborhoods would suffer significant adverse effects from timeshares. People generally stay at timeshares for 1-2 weeks. As a result, they have nearly the same impact on neighborhoods as short term vacation rentals. Hermosa Beach only allows STVRs on commercially zoned parcels with non -conforming residential uses. Why are timeshares being treated any differently? Timeshares will have the same traffic and noise impacts as STVRs so they should be restricted to the same areas. Additionally, there is no language in the ordinance to prohibit utilizing the timeshare as a short term vacation rental. If timeshares are approved, it will only be a matter of time before we start seeing the timeshare units showing up on Airbnb and VRBO. The ordinance states that timeshares must be built above commercial space as part of a mixed use project. Why wouldn't we require that the upper floors of mixed use developments be residential space to help the City meet its housing goals? Allowing this space to be used as timeshare vacation homes makes no sense. I would much prefer to have new neighbors contributing to the community that having to deal with new transient residents every week or 2. The City is currently unable to do anything about the quality of life issues brought about by the MANY illegal short term vacation rentals in Hermosa Beach. I am concerned that timeshares will just add to the number of quality of life issues that the City will not be able to enforce. I happen to live nearby some of these illegal STVRs and no matter how frequently I report them to the City, new renters keep showing up. A quick search of Airbnb shows that there are dozens of STVRs that are advertising for stays of less than 30 days. If the stay is increased to 30 days the number grows to over 100. The City is just not able to do anything to contain these issues and 1 am worried that the City will not be able to do anything about the potential problems with timeshares. I believe that there are a few different ways that Council should deal with this issue: 1. Allow timeshares in locations where hotels are permitted. If timeshares are strictly considered a residential use this may not be possible until the zoning code is changed to allow residential in mixed use projects in C-2 and C- 3. 1 think that it is worth waiting for the zoning code update to properly deal with the timeshare issue. 2. Define timeshares in the municipal code as hotels or motels. This would allow them in zones where hotel use is allowed. 3. Allow timeshares at commercially zoned parcels with non -conforming residential uses similar to legal STVRs. 4. Prohibit timeshares anywhere in Hermosa Beach. 3-389 Please do not allow timeshares to further degrade our neighborhoods the way that STVRs already have. Rachel Hayes Location: 90254-5103, Hermosa Beach Submitted At: 8:55am 09-27-22 While I am glad to see that the city is being proactive to prevent timeshare ownership of properties in the residential areas, I am not happy with the request to change the use of properties in zone C1 which is directly adjacent to residential properties. For the same reason that you don't want one in your neighborhood, we don't want one in our neighborhood. Please note that timeshares do not operate the way it was sold to the planning commission. Timeshare salesmen are very good sales people, and they have sold you a pack of lies. Think about what they are selling you. Eight families sharing one house. Eight families would get one week every other month. Who do you know who has six weeks of vacation time? And how many people want to use all six of those weeks to go to the same location? The eight families they are selling you on are "investors" in a property who will get their money back by renting the unit through the timeshare system. The way timeshares work is owners either buy a designated week at one resort/location or they buy points which they can use to book a week at any of the timeshare's properties (owned or negotiated). People who own the same week can trade that week into the timeshare pool of units for a week at any other of the timeshare's properties. The timeshare companies pool their resources with other timeshare companies in order to offer more flexibility, as it helps generate more sales. So, what you think will be the same eight families using the unit, will end up becoming a short term rental with new tenants every single week. I belong to a timeshare and they use AirBnB as a selling point — seems they are getting into the business of subleasing out AirBnB's to their owners for points. The sales people will actually say "You don't have to stay at one of our resorts, we have contracts with AirBnBs all over. You can use your points to book one of those properties". Avoidance of Taxes: Because allegedly only 'timeshare owners' will be using the unit, there will be no short term tax paid to the city for this unit. Timeshare fees are called maintenance fees (not rent), so technically they would not be subject to the short term tax like hotels or even AirBnBs. Short Term Rentals kill neighborhoods. There is an illegal short term rental across the street from us. Every single new tenant drives the wrong way down the one-way alley. Every single one.... They don't care about our neighborhood. Sometimes they park a car in the alley blocking access to our garage. When l call the city, I am told the city will not tow. So the city is protecting the short term renters at the expense of the residents? If the city cannot help us now, imagine what it will be like when there are several places with new tenants every single week (unmanaged tenants). C1 zone: I live next to a bar. I have no problems with the bar. They have a CUP and they follow their CUP, so we have lived in harmony. The bar has a paid staff member on site to manage the property. This timeshare Oust another name for short term rental) will not have a staff member present to manage the property. I would rather have a pot dispensary next to me than another short term rental. At least the pot dispensary will have staff on site, and it will have specific hours of operation. And the City will have the ability to correct any unwanted behaviors with the pot dispensary operators. How can the city correct behavior of tenants who change over every single week. With a timeshare owned property, once you open pandora's box, you will not be able to fix it. Please say no to timeshare properties in our city. Please say no to timeshare properties in Zone C1 as it is too close to residential properties. For the same reason that you don't want one in your neighborhood, we don't want one in our neighborhood. Rachel Hayes, resident 122 1st Street, Hermosa Beach, CA 3-390 4127123, 9:29 AM City of Hermosa Beach - File #: REPORT 22-0643 Sign In CITY OF HERMOSA BEACH Logislation I Calendar City Council I Departmersts People E 13 Q Share O RS5 a: Alerts Details I PDF Staff Repart File #: REPORT 22-0643 Version: 1 Name: Type: Action Item Status: Consent Calendar Fle created: 10/4/2022 In control: City Co n On agenda: 10/11/2022 Final action: ADOPTION OF AN ORDINANCE OF THE CITY OF HERMOSA BEACH, CALIFORNIA AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT Title: AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TTTLF 17 (70NING)r AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT (Community Development Director Jeannie Naughton) Attachments: 1. 1. Draft Ordinance, 2. 2. PC Resolution 22-07, 3. 3. Link to April 19, 2022 Planning Commission Staff Report, 4. 4. Link to September 28, 2022 C v Council Staff Report Staff Report Text Honorable Mayor and Members of the Hermosa Beach City Council Regular Meeting of October 11, 2022 Title ADOPTION OF AN ORDINANCE OF THE CITY OF HERMOSA BEACH, CALIFORNIA AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT (Community Development Director Jeannie Naughton) Body Recommended Action_ Recommendation Staff recommends City Council: 1. Waive full second reading and adopt by title an Ordinance of the City of Hermosa Beach, California, amending Chapter 17.40 (Conditional Use Permit and Other Permit Standards) to add Section 17.40.230 (Timeshare Uses) to Title 17 (Zoning) and amending Section 17.26.030 to permit timeshare uses in specified commercial zones pursuant to a Conditional Use Permit (Attachment 1); and 2, Direct staff to print and publish the summary ordinance in a newspaper of general circulation within 15 days fallowing adoption and post it on the City's bulletin for 30 days, Body Executive Summary_ The City of Hen-nosa Beach Municipal Code (HBMC) does not currently include regulations governing the use of timeshares within the City, nor any regulations that would explicitly address these emerging businesses offering "fractional ownership" of a property in a way that operates like a timeshare. If left unregulated, these types of uses in the residential zones could limit the City's existing housing stock for use as long-term residency and impair the overall character of the City's residential areas. At its September 28, 2022 meeting, City Council held a public hearing and introduced and waived first reading of the ordinance with amendments to modify the authorized zone from the originally proposed C-1 (Neighborhood Commercial Zone) to the C-2 (Downtown Commercial Zone). Council further directed staff to incorporate the discussion into future Housing Element and Zoning Cade update processes. The revised ordinance (Attachment 1) would permit timeshare uses in the C-2 Downtown Commercial Zone within the City pursuant to a Conditional Use Permit (CUP) and prohibit the use in all other zones within the City. Background: The City of Hermosa Beach is a popular tourist destination known for its scenic beachfront location. its many diverse restaurants, local retailers and popular commercial areas like its Downtown area and Pier Avenue. Maintaining the balance between the quality of life for residents, those who work in the City, and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. Like most communities throughout California, one of the key means that the City utilizes to maintain this balance is through its Zoning Ordinance. The City has commercial zones, that provide for uses that serve both visitors and the local community. These commercial uses include: restaurants; retail shops; and visitor -serving hotels and motels. The City also has residential zones, at varying densities, that provide a diversity of housing types for those who live in the community. The City does not currently have regulations in place governing the use of timeshares within the City or other businesses/arrangements that are identical or similar to a timeshare use. At its April 18, 2022 meeting, the Planning Commission reviewed and recommended https:Ilhermosabeach. leg istar.camlLegislationDeta"tl.aspx?ID=5866947&GUID=1 F32BD8F-48D8-4AE4-BC2A-F6EDOAB1146B 1 /4 3-391 4/27123. 9:29 AM City of Hermosa Beach - File #: REPORT 22-0643 approval of the proposed ordinance to permit timeshare uses in specified commercial zones pursuant to a Conditional Use Permit by adopting Resolution P.C. 22-07 (Attachment 2), At its September 28, 2022 meeting, City Council received a staff presentation of the draft ordinance. Following the public hearing, City Council introduced and waived first reading of the ordinance with the following amendments: Section 2 was revised to replace all references of C-1 (Neighborhood Commercial Zone) with C-2 (Downtown Commercial Zone); and Section 3 was revised to shift the "Ll" from the C-1 column, to the C-2 column, indicating that timeshare uses would be permitted pursuant to a Conditional Use Permit in the C- 2 (Downtown Commercial Zone) and prohibit the use in the C-1 (Neighborhood Commercial Zone). City Council further directed staff to incorporate this discussion into future Housing Element and Zoning Code update processes. Past Planning Commission and City Council Actions April 18, 2022 Planning Commission reviewed the proposed ordinance and adopted Resolution P.C. 22-07 September 28, 2022 City Council introduced and waived first reading of an Ordinance with amendments to replace all references of C-1 (Neighborhood Commercial Zone) with C-2 (Downtown Commercial Zone) in Section 2; and Section 3 was amended o shift the "U" from the C-1 column, to the C-2 column, indicating that timeshare uses would be permitted with a Conditional Use Permit in the C-2 (Downtown Commercial one and not permitted in the C-1 (Neighborhood Commercial Zone). City Council further directed staff to incorporate this discussion into future Housing Element and Zoning Code update processes. C� Housing The most recent U.S, Census data lists the median value of owner -occupied homes in Hermosa Beach as $1,542,9001fi for the 2015-2-019 period, while the Zillow Home Value Index estimates median home values in Hermosa Beach to be approximately $2,174,879(2) as of January 31, 2022. According to the Zillow Home Value Index, home values in the City have gone up 10.1 percent over the past year(3) In contrast, the median household income in Hermosa Beach from 2015-2019 was $136,702{4) and the median income for a four -person household in Los Angeles County for 2021 was approximately $80,000(5). The cost of homes currently in Hermosa Beach are in excess of what median income residents of Hermosa Beach can afford, and certainly over the median income residents of Los Angeles County generally. The conversion of homes in the City's residential neighborhoods to these timeshare -like uses would eliminate residential dwelling units that would otherwise be available for long-term residential use, thereby further exacerbating the lack of long-term available housing in the City. A home that is used for timeshare purposes would no longer be available for households to use as their long-term residence. Impacts to Character of the City's Residential Districts Timesharing projects have the same character as commercial hotels, motels, and other transient occupancy uses due to the multiple short- term occupancies by those participating in timesharing protects. For this reason, the activity is better suited in commercial or quasi - commercial zones. The use is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. The intensity of the activity is a significant reason why these uses can change the character of a residential neighborhood. Long-term residents, whether owners or renters, occasionally have guests and parties, but timeshare homes are used exclusively by people who are coming to the City on a short-term basis -most likely for vacation or leisure, increasing the likelihood of frequent gatherings and parties generating noise in excess of what the neighborhood normally generates. ImRs,//aysvw tcnsus soulQUIGkfacts/fiactltablelherrnasabeachutvcahiurnlalttSD31DZl9 htlw I/Www aHlow comlhsrmnss•bcarh cal ame•valyty hops l/www :+flow_ comlhermosa-beach-ca(home•values/ ' httus.11www-census-ecvlUudckfacSs/Fact/ta3�le/+eemosaheachcitvcahfcmia/H5041O319 ' httos ir+wwsci_ca_soultents-iund7Relincame-limi�isrtt-and etleral-income-limi`u7docslEnGame-limns-2q?1_eds Timeshare owners and visitors will most likely stay out later, entertain more, and gather in larger numbers while on vacation. Timeshare uses can change the character of a residential neighborhood by having it serve not only as a residential area, but also a visitor lodging area and subjecting the neighborhood to the impacts that come with the more intense land use. https:llhermosabeach. leg istar.comlLegislationDetail.aspx?ID=5866947&GUID=1 F32BDBF-48D8-4AE4-BC2A-F6EDDAB1146B 2/4 3-392 4/27123, 9:29 AM City of Hermosa Beach - File #: REPORT 22-0643 Further, the nature of the timeshare use itself can impact the residential character of the City's residential zones because they ensure that the timeshare users can only use their properly for a limited amount of time each year. Each co-owner is in the unit on a short-term basis, so they do not have the time to participate in activities or build the relationships that create the fabric of a community. Given the City's desire to strike a balance between the demands of the City's visitor and tourist economy, and retaining its character and quality of life, the City has an interest in maintaining housing stock in its residential districts for long-term residents. Emerging Businesses Recently, certain businesses have emerged which purport to sell "co -ownership" shares in residential property(s). These businesses, as staff understands the business model, start by purchasing homes or entering contracts to purchase homes in tourist destinations in desirable locations like Hermosa Beach. These businesses then form a limited liability company ("LLC"), which owns title to the residential home. The "co -owners" each purchase a one -eighth share and are entitled to use the residential property for a certain number of days per year according to their share of ownership in the LLC. The one -eighth interest entitles the purchaser to stay at the property for up to 45 days per year in increments of 2-14 days, including one "special day" (Fourth of July, Thanksgiving, Christmas, etc.). The stays are reserved on an app, and while each co-owner is prohibited from renting the home as a short-term rental, they are permitted to allow other guests to stay there during their allotted days. Once shares in an LLC are sold, the business continues to manage the homes, including providing landscaping and pool maintenance, furnishing the homes, and paying all expenses, which are then passed through to the co -owners of the LLC. The Ordinance The City does not currently have regulations in place governing the use of timeshares within the City or other bus inesseslarrangements that are identical or similar to a timeshare use. The purpose of any ordinance should be to ensure that it the City is able to maintain its existing and limited housing stock for use in long-term residency, and to maintain the character of its residential zones. a These types of businesses are merely used as an eKample. The ordinance is not directed at any individual business or businesses; but rather regulate the specific use. Completely banning "fractional ownership," joint tenancies, or ownership by business entities such as LLC is not advisable. There are numerous properties in the City's residential zones currently owned by numerous owners or by LLCs. Thus, the ordinance is geared toward the specific impacts of the at -issue uses -timeshare like uses organized and run by third parties for a fee. The proposed ordinance (Attachment i) does not target or single out any business or ownership structure. As revised, the ordinance allows for these types of timeshare uses in the City's C-2 Downtown Commercial zone, subject to a Conditions Use Permit. Timeshare uses would be prohibited in all other zones. In order to avoid an over -inclusive ordinance that prohibits joint tenancies or other type of ownership structure that do not have the same deleterious impacts, the proposed ordinance focuses on the actual use of the property, as compared to the ownership structure, and in pertinent regulates this "timeshare use" subject to a "timeshare plan." Timeshare plan is defined as: 'Any arrangement plan, scheme, or similar device, facilitated, offered, or organized by a third -party non -purchaser, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement or by any other means, whereby purchasers, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, 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." Environmental Determination: The proposed ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in C-2 Downtown Commercial zone within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. General Plan Consistency- https:l/herrnosabeach.legistar.comlLegislationDetail.aspx?ID=5866947&GUID=1 F32BDSF-481)8-4AE4-BC2A-F6Eg0AB1146B 314 3-393 4127123, 9:29 AM City of Hermosa Beach - File #: REPORT 22-0643 This report and associated recommendation have been evaluated For their consistency with the City's General Plan. Relevant Policies are listed below: Land Use and Design Element Goal 1. Create a sustainable urban form and land use patterns that support a robust economy and high qualify of life for residents. Policies: • 1.5 Balance resident and visitor needs. Ensure land uses and business provide for the needs of residents as well as visitors. • 1.7 Compatibility of uses. Ensure the placements of new uses does not create or exacerbate nuisances between different types of land uses. Goal 2. Neighborhoods provide for diverse needs of residents of all ages and abilities and are organized to support healthy and active lifestyles. Policies: • 2A Single density neighborhoods. Preserve and maintain the Hermosa Hills, Eastside, Valley, North End and Hermosa View neighborhoods as predominantly single-family residential neighborhoods • 2.5 Neighborhood preservation. Preserve and enhance the quality of residential neighborhoods by avoiding or abating the intrusion of disruptive, nonconforming buildings and uses. Fiscal Impact: There is no fiscal impact associated with the recommended action. Attachments: 1. Draft Ordinance 2. PC Resolution 22-07 3. Link to April 19, 2022 Planning Commission Staff Report 4, Link to September 28, 2022 City Council Staff Report Respectfully Submitted by: Patrick Donegan, Assistant City Attorney Concur: Jeannie Naughton, Community Development Director Noted for Fiscal Impact: Viki Copeland, Finance Director Legal Review: Patrick Donegan, Assistant City Attorney Approved: Suja Lowenthal, City Manager https:llhermosabeach.legistar.comlLegislationDetail.aspx?ID=5866947&QUID=1 F32BD8F-48D8-4AE4-BC2A-FGEDOAB1146B 414 3-394 CITY OF HERMOSA BEACH ORDINANCE NO. XX AN ORDINANCE OF THE CITY OF HERMOSA BEACH. AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT. THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH DOES HEREBY ORDAIN AS FOLLOWS: Section 1. Findings. A. The City of Hermosa Beach ("City") is a scenic beachfront city, known for its many diverse restaurants, local retailers and popular commercial areas like its Downtown area and Pier Avenue. B. Preserving the City's costal resource and the quality and character of the City has been a focal point of the City's land use planning for decades, and remains a primary focus in the City's current General Plan. C. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. D. The City values and welcomes all visitors to the City and recognizes their contributions to the City's economy, but finds that in order to maintain the City's long term viability as a community where people not only come to visit, but also live, work and contribute to the long term betterment of the community through participation in the City's schools, local community groups, civic government and local serving businesses, the City must maintain a balance between residential land uses and visitor serving uses. E. The City's existing housing stock is significantly impacted, with demand outweighing supply, resulting in extremely high housing prices as detailed in the accompanying staff report. A limited supply of suitable vacant land, exorbitantly high land costs, and limitations in the City's existing infrastructure, among other factors, have limited the construction of additional housing in the City. 3-395 F. According to the U.S. Census Bureau, the current median household income in the City is $136,702, while the estimated value of owner - occupied housing units from 2015-2019 was approximately $1,542,900 with current real estate listings suggesting that prices are increasing significantly, meaning that homes in the City are not affordable to the median household in the City. G. The conversion of existing residential units to uses other than long-term residential use will further reduce the City's existing long-term housing supply, causing further imbalance between the demand for housing in the City and the existing supply, not only altering the character of the City's residential neighborhoods, but also presenting further challenges to the City's efforts to provide affordable housing within the community. H. The City additionally has, for many years, worked to preserve its existing housing stock for long term residential use, both to maintain the character of its residential neighborhoods and prevent residential districts from becoming visitor and tourist serving districts, and to ensure that it would not be converted to uses other than long-term residential uses. The high impact use associated with timeshares, combined with the frequent turnover and commercial management involved in timeshare properties is not consistent with the purpose and nature of residential districts in the City. Rather, they are commercial in nature, in that these timeshare uses are structured as a short-term, tourist oriented, visitor serving use of the subject properties. The use of properties as timeshares adds excessive noise and traffic to residential districts by using these properties for high impact tourist oriented uses more appropriately located in commercial districts of the City. J. The use of residential properties for timeshare uses will further reduce the availability of housing stock for long-term residential use, and create a new demand for timeshare uses of residential properties. K. This encroachment of tourist oriented, visitor serving uses in residential neighborhoods is likely to compromise the character of residential areas within the City, and further increase the costs for housing in the City, undermining the City's efforts to provide a balance of housing for all income levels in the City. L. The City's authority to enact zoning ordinances is based on the powers accorded cities and counties under the State constitution to make and enforce police regulations. This police power grants the City broad 3-396 authority to regulate the development and use of real property within its jurisdiction to promote the public welfare. M. Pursuant to and in accordance with this authority, the City Council desires to prohibit timeshare uses in residential areas, and only allow them in the C- 2 commercial zone within the City, pursuant to a conditional use permit. N. The City's Planning Commission held a duly noticed public hearing on April 19, 2022, as required by law to consider all the information presented by staff, and public testimony presented in writing and at the meeting. O. On April 19, 2022, the City's Planning Commission recommended that the City Council adopt this Ordinance amending the City's Municipal Code as described herein. P. On September 28, 2022, the City Council held a duly noticed public hearing, accepting testimony from the public, and discussed the proposed amendments and staff's recommended approval of this Ordinance and adopted on first reading the Ordinance. Q. On October 11, 2022, the Ordinance was brought back for a second reading and adopted by the City. Council. R. The proposed zoning amendments are consistent with the General Plan goals, policies and implementation programs as the Ordinance will continue to preserve the character of the City; will preserve the City's residential districts for residential uses; and will help to preserve the City's existing housing stock for long term residential uses, to avoid further exacerbating the existing impacts on the City's housing supply. Section 2. The above recitals are hereby incorporated as though set forth in this section. Section 3. Section 17.40.230 (Time Share Uses) is hereby added to Chapter 17.40 (Conditional Use Permit and Other Permit Standards) of Title 17 (Zoning) of the City of Hermosa Beach Municipal Code, to read as follows: Section 17.40.230 Timeshare Uses A. Purpose and findings. There is a critical shortage of permanent, long-term housing in the City of Hermosa Beach ("City"). A limited supply of suitable vacant land, land values, 3-397 and market demand for land for other uses, have limited the construction of additional housing in the City. The City is a popular tourist destination known for its scenic beachfront location, its many diverse restaurants, local retailers and popular commercial areas like its Downtown area and Pier Avenue. Maintaining the balance between the qualify of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. Timeshare uses are not an appropriate land use in the City's residential zones due to the multiple occupancy of timeshare properties, the short-term, tourist oriented use of such property and commercial management of timeshare facilities, all of which create increased traffic generation, excessive noise, disruption to residential communities through commercial -level maintenance of the timeshare facilities, and therefore are appropriately confined to commercial zones. Conversion of permanent housing to timeshare facilities removes existing housing units from the City's existing stock and exacerbates an already severe housing shortage. It is therefore in the public interest to prohibit conversions of existing housing units into timeshare facilities, as to do so eliminates needed housing stock by diverting those units to a tourist -oriented, commercial use. B. Definitions. For purposes of this Section, the following words and phrases shall have the meaning respectively ascribed to them by this Section: "Accommodation" means any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single-family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.040. "Building" shall have the meaning ascribed to it by Section 17.04.040. "Dwelling unit" shall have the meaning ascribed to it by Section 17.04.040. "Managing entity" means the person who undertakes the duties, responsibilities and obligations of the management of a timeshare plan. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. "Timeshare instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a timeshare plan and includes the declaration dedicating accommodations to the timeshare plan. "Timeshare interest" means the right to exclusively occupy a timeshare property for a period of time on a recurring basis pursuant to a timeshare plan, regardless of whether or not such right is coupled with a property interest in the timeshare property or a specified portion thereof. "Timeshare plan" means any arrangement, plan, scheme, or similar device, facilitated, offered, or organized by a third -party non -purchaser, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby purchasers, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, fora 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. "Timeshare property" means one or more accommodations subject to the same timeshare instrument, together with any other property or rights to property appurtenant to those accommodations. "Timeshare use" means the use of one or more accommodations or any part thereof, as a timeshare property pursuant to a timeshare plan. C. Timeshare Uses Restricted to C-2 Downtown Commercial Zone. Timeshare uses are conditional uses within the City's C-2 Downtown Commercial Zone, subject to approval of a conditional use permit applied for and approved in conformance with this Section. Timeshare uses are not permitted in any other Zones in the City. D. Application Process and Development Standards. A. Application Process. Approval of a conditional use permit for timeshare uses in the C-2 Downtown Commercial Zone within the City shall be required in accordance with the requirements of Chapter 17.40. In addition to the requirements contained in Chapter 17.40, an application for a timeshare use shall be accompanied by the following documents which shall be subject to the approval of the Community Development Director: l . Management Plan. A management plan shall describe the methods employed by the applicant to guarantee the future adequacy, stability, and 3-399 continuity of a satisfactory level of management and maintenance of the time share use. 2. Application Requirements. In addition to any application requirements established by this section and any other applicable requirements of this code, the following information shall be submitted as part of any application to develop or establish a timeshare use: a. Typical floor plans for each accommodation. b. The phasing of the construction of the accommodations on the timeshare property, if applicable. C. A description of any ancillary uses which are proposed in conjunction with the time share use. d. A description of the method of management of the time share use and indication of the management entity for the time-share property. e. Any restrictions on the use or occupancy of the accommodations. f. Any other information or documentation the applicant, City staff or commission deems reasonably necessary to the consideration of the timeshare use, including any required environmental documents. B. Development Standards and Operational Requirements. Notwithstanding any other provision of this Section, the following conditions must be met by any timeshare use in any conditionally permitted zone. Additional requirements may be attached to a conditional use permit or development agreement if found to be necessary to assure that the timeshare use meets the intent of this Section: i . Timeshare uses developed in the C-2 Downtown Commercial Zone within the City shall be limited to accommodations in upper floors in conjunction with a mixed -use project. 2. No existing residential use in the C-2 Downtown Commercial Zone within the City shall be converted to a timeshare use. 3. Development Standards. The timeshare use shall comply with all development standards for the zone in which it is located. .4. Parking. Parking shall be provided as follows: a. For accommodations of two or fewer bedrooms, one parking space shall be provided for each accommodation. b. For accommodations of three or more bedrooms, two parking spaces shall be provided for each accommodation. 5. Modification or Waiver of Standards. The Planning Commission may modify or waive one or more of the regulations contained in this Section if it determines that strict compliance is not necessary to achieve the purpose and intent of this Section. E. Violations, Enforcement and Civil Penalties. 1. Any responsible person, including but not limited to an owner of a timeshare interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in anyway and through any medium, the availability for sale or use of an accommodation in violation of this Section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this Section. Such violation shall be punishable pursuant to Section 1.0.4.020 of the City of Hermosa Beach Municipal Code. 2. Timeshare use, and/or advertisement for timeshare use, of an accommodation in violation of this Section is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance. Any such nuisance may be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 8.28 except that the civil penalty for a violation shall be one thousand dollars ($1,000.00). Each day the violation occurs shall constitute a separate offense 3. Any responsible person who violates this Section shall be liable and responsible for a civil penalty of one thousand dollars ($1,000.00) per violation per day such violation occurs. The City may recover such civil penalty by either civil action or administrative citation. Such penalty shall be in addition to all other costs incurred by the City, including without limitation the City's staff time, investigation expenses and attorney's fees. a. Where the City proceeds by civil action, the court shall have discretion to reduce the civil penalty based upon evidence presented by the responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the court should consider the purpose of this Section to prevent and deter violations and whether the reduction 3-401 of civil penalties will frustrate that purpose by resulting in the responsible person's enrichment or profit as a result of the violation of this Section. In any such civil action the City also may abate and/or enjoin any violation of this Section. b. Where the City proceeds by administrative citation, the City shall provide the responsible person notice of the right to request an administrative hearing to challenge the citation and penalty, and the time for requesting that hearing. i. The responsible person shall have the right to request the administrative hearing within forty --five (45) days of the issuance of the administrative citation and imposition of the civil penalty. To request such a hearing, the responsible person shall notify the City clerk in writing within forty-five (45) days of the issuance of the citation. The appeal notification shall include all specific facts, circumstances and arguments upon which the appeal is based. ii. The City Manager is hereby authorized to designate a hearing officer to hear such appeal. The City hearing officer shall conduct a hearing on the appeal within ninety (90) days of the request for the hearing unless one of the parties requests a continuance for good cause. The hearing officer shall only consider those facts, circumstances or arguments that the property owner or responsible person has presented in the appeal notification. iii. The hearing officer shall render a decision in writing within thirty (30) days of the conclusion of the hearing. The hearing officer shall have discretion to reduce the civil penalty based upon evidence presented by the property owner or responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the hearing officer should consider the purpose of this Section to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the property owner's or responsible person's enrichment or profit as a result of the violation of this Section. iv. Any aggrieved party to the hearing officer's decision on the administrative appeal may obtain review of the decision by filing a petition forwrit of mandate with the Los Angeles County 3-402 Superior Court in accordance with the timelines and provisions set forth in Government Code Section 53069.4. v. If, following an administrative hearing, appeal, or other final determination, the owner of the property is defermined to be the responsible person for the civil penalty imposed by this section, such penalty, if unpaid within forty-five (45) days of the notice of the final determination, shall become a lien to be recorded against the property on which the violation occurred pursuant to Chapter 8.28. Such costs shall be collected in the some manner as county taxes, and thereafter the property upon which they are a lien shall be sold in the same manner as property now is sold for delinquent taxes 4. Any violation of this Section may also be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 8.28 except that the civil penalty under Chapter 8.28 for a violation shall be one thousand dollars ($1,000.00). Each day the violation of this Section occurs shall constitute a separate offense. The remedies under this Section are cumulative and in addition to any and all other remedies available at law and equity. Section 3. Section 17.26.030 of Chapter 17.26 (Cl, C2 and C3 Commercial Zones) of Title 17 (Zoning) is amended to add the following entry to the chart of land use regulations USES C1 C2 C3 See Secfion Timeshares I U 17.40.230 Section 4. CEQA. This ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines (the Guidelines), and the environmental regulations of the City. The City Council hereby finds that this ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c) (2) and 15060(c) (3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in the C-2 Downtown Commercial zone within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b) (3) of the State CEQA Guidelines, fhis ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. 3-403 Section 5. Effective Date. Pursuant to California Government Code section 36937, this Ordinance shall take effect thirty (30) days after its final passage. Section 6. Certification. The City Clerk is directed to certify the passage and adoption of this Ordinance; cause it to be entered info the City's book of original ordinances, make a note of the passage and adoption in the records of this meeting; and, within fifteen (1 5) days after the passage and adoption of this Ordinance, cause it to be published or posted in accordance with California law. PASSED, APPROVED and ADOPTED this 11 th day of October, 2022. Michael Defoy, Mayor PRESIDENT of the City Council and MAYOR of the City of Hermosa Beach, CA ATTEST; Myra Maravilla City Clerk l�1 "Zt0],F14 � Xit to] Lei 211'A,9 Michael Jenkins City Attorney 3-404 RESOLUTION P.C. 22-07 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF HERMOSA BEACH RECOMMENDING CITY COUNCIL APPROVAL OF TEXT AMENDMENTS TO THE CITY OF HERMOSA BEACH MUNICIPAL CODE AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PELT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONIDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT. The Planning Commission of the City of Hermosa Beach does hereby resolve as follows; SECTION 1. Findings. A. The Planning Commission held a duly noticed public hearing on April 19, 2022 to consider a text .amendments to the City of Hermosa Beach Municipal Code, Title 17 (Zoning), as described in the proposed ordinance attached as Exhibit A. B. The City of Hermosa Beach ("City") is a scenic beachfront city, known for its many diverse restaurants, local retailers and popular commercial areas like its downtown area and Pier Avenue. C. Preserving the City's costal resource and the quality and character of the City has becn a focal point of the City's land use planning for decades, and remains a primary focus in the City's current General Plan. D. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. E. The City values and welcomes all visitors to the City and recognizes their contributions to the City's economy, but finds that in order to maintain the City's long term viability as a community where people not only come to visit, but also live, work and contribute to the long term betterment of the community through participation in the City's schools, local community groups, civic government and local serving businesses, the City must maintain a balance between residential land uses and visitor serving uses. F. The City's existing housing stock is significantly impacted, with demand outweighing supply, resulting in extremely high housing prices as detailed in the accompanying staff report. A limited supply of suitable vacant laud, exorbitantly high land costs, and limitations in the City's existing infrastructure, among other factors, have limited the construction of additional housing in the City. 3-405 G. According to the U.S. Census Bureau, the current median household income in the City is $136,702, while the estimated value of owner -occupied housing units from 2015-2019 was approximately $1,542,900 with current real estate 'listings suggesting that prices are increasing significantly, meaning that homes in the City are not affordable to the median household in the City. H. The conversion of existing residential units to uses other than long-term residential use will further reduce the City's existing long-term housing supply, causing further imbalance between the demand for housing in the City and the existing supply, not only altering the character of the City's residential neighborhoods, but also presenting further challenges to the City's efforts to provide affordable housing within the community. I. The City additionally has, for many years, worked to preserve its existing housing stock for long term residential use, both to maintain the character of its residential neighborhoods and prevent residential districts from becoming visitor and tourist serving districts, and to ensure that it would not be converted to uses other than long-term residential uses. J. This high impact use associated with timeshares, combined with the frequent turnover and commercial management involved in timeshare properties is not consistent with the purpose and nature of residential districts in the City. Rather, they are commercial in nature, in that these timeshare uses are structured as a short- term, tourist oriented, visitor serving use of the subject properties, The use of properties as timeshares adds excessive noise and traffic to residential districts by using these properties for high impact tourist oriented uses more appropriately located in commercial districts of the City. K.. The use of residential properties for timeshare uses will further reduce the availability of housing stock for long-term residential use, and create a new demand for timeshare uses of residential properties. L. This encroachment of tourist oriented, visitor serving uses in residential neighborhoods is likely to compromise the character of residential areas within the City, and further increase the costs for housing in the City, undermining the City's efforts to provide a balance of housing for all income levels in the City. M. The City's authority to enact zoning ordinances is based on the powers accorded cities and counties under the State constitution to make and enforce police regulations. This police power grants the City broad authority to regulate the development and use of real property within its jurisdiction to promote the public welfare. N. Pursuant to and in accordance with this authority, the Planning Commission desires to prohibit timeshare uses in residential areas, and certain commercial zones and to update the language of the Zoning Code to provide consistency with the terminology used to define timeshare uses in State law. Further, the City desires to provide greater clarity as to the zones which timeshare uses are permitted as conditional uses, and the standards pursuant to which they will be reviewed in those zones. O. On April 19, 2022, the Planning Commission held a duly -noticed public hearing and considered the staff report, recommendations by staff, and public testimony concerning the proposed ordinance. SECTION 2. This ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines (the Guidelines), and the environmental regulations of the City. The City Council hereby finds that this ordinance is not subject to CEQA because the adoption of this ordinance is not a "prgiect" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in specified zones within the City pursuant to a conditional use permit, and prohibits them in all other zones, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. SECTION 3. The Planning Commission finds that the proposed amendments to the Municipal Code to permit timeshares in specified zones within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City are consistent with the General Plan goals, policies and implementation programs as the Ordinance will continue to preserve the character of the City; will preserve the City's residential districts for residential uses; and will help to preserve the City's existing housing stock for long term residential uses, to avoid further exacerbating the existing impacts on the City's housing supply. SECTION 4. Based on the entire record before the Planning Commission, and all written and oral evidence presented, the Planning Commission hereby finds that the proposed ordinance is consistent with the City's adopted General Plan and does not conflict with any of the General Plan's goals or policies. SECTION 5. The Planning Commission hereby recommends that the City Council adopt the attached proposed ordinance entitled, "AN ORDINANCE OF THE CITY OF HERMOSA BEACH. AMENDING CHAPTER 17.40 (CONIDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17,26.030 TO PERMIT TIMESHARE USES IN SPECIFIER COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING 3-407 THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT, I HEREBY CERTIFY that the foregoing recommendation to the City Council was duly and regularly approved by the Planning Commission of the City of Hermosa Beach at a regular meeting of said Planning Commission held on April 1.9, 2022, by the following roll call vote: VOTE: AYES: 5 - Chair Pedersen, Vice Chair Izant, Commissioner Saemann, Commissioner Hoffman, and Commissioner Rice NOES: None ABSTAIN; None ABSENT: None CERTIFICATION I hereby certify that the foregoing Resolution P.C. 22-07 is a true and complete record of the action taken by the Planning Commission of the City of Hermosa Beach, California, at its regular meeting of April 19, 2022. Dave Pedersen, Chairperson i L15 / I Date *Angapi, Secretary 3-408 4127123, 9:30 AM City of Hermosa Beach - File # REPORT 22-0249 Sign In CITY OF 1-1,b HERMOSA BEACH Legiskation Calendar City Council Departments People i 91 0 ©Share rRSS vAlerta Details PDF Staff Report File #: REPORT 22-0249 Version: 1 Name: Type: Action Item Status: Passed File created: 4/14/ZD22 In control: Planning Commission On agenda: 4/19/2022 Final action: 4/19/20Z2 TA 22-01 ZONE TEXT AMENDMENT TO AMEND THE HERMOSA BEACH MUNICIPAL CODE CHAPTER 17.40 TO ADD SECTION 17.40.230 AND Title: AMEND SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES AND DETERMINE THAT THE PR03ECT IS EXEMPT FROM THE CALIFORNIA ENVIRINMENTAL QUALITY ACT (CEQA) Attachments: 1. 1. Draft Resolution 22-07 Timeshare Ordinance. 2. 2. Hermosa Beach Draft Ordinance Staff Report7ert Honorable Chairman and Members of the Hermosa Beach Planning Commission Regular Meeting of April 19, 2022 Title TA 22-01 ZONE TEXT AMENDMENT TO AMEND THE HERMOSA BEACH MUNICIPAL CODE CHAPTER 17.40 TO ADD SECTION 17.40.230 AND AMEND SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES AND DETERMINE THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRINMENTAL QUALITY ACT (CEQA) Recommendation Recommended Action: Staff recommends the Planning Commission adopt Resolution No. 22-07 (Attachment 1) recommending that the City Council approve Zone Text Amendment TA 22-01, thereby amending Chapter 17.40 to add section 17.40,230 and amend section 17,26.030 to permit timeshare uses in specified commercial zones and determine that the project is exempt from the California Environmental Quality Act (CEQA). Body Background: The City of Hermosa Beach ("City") does not currently have regulations in place governing the use of timeshares within the City, nor any regulations that would explicitly address these emerging businesses offering "fractional ownership" of a property in a way that operates like a timeshare. These types of uses in the City's residential zone could limit the City's existing housing stock for use as a long-term residency and impair the character of the City's residential zones. At its March 15, 2022 meeting, the Planning Commission directed staff to bring forward a zone text amendment addressing these types of uses. Analysis: The City is a popular tourist destination known for its scenic beachfront location, its many diverse restaurants, local retailers, and popular commercial areas like its Downtown area and Pier Avenue. Maintaining the balance between the quality of life for residents, those who work in the City, and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. Like most communities throughout California, one of the key means that the City utilizes to maintain this balance is through its Zoning Ordinance. The City has commercial zones including the C-1 and C-2 commercial zones that provide for uses that serve both visitors and the local community such as: restaurants; retail shops; and visitor serving hotels. The City also has residential zones that provide housing for those who live in the community, at varying densities in order to provide a diversity of housing types. Cify Nausing The most recent census data lists the median value of owner -occupied homes in Hermosa Beach as $1,542,900 for the period of 2015- 2019, while the Zillow Home Value Index estimates medial home values in Hermosa Beach to be approximately $2,174,879 as of January 31, 2022. According to the Zillow Home Value Index, homes values in the City have gone up 10.1 percent over the past year. In contrast, the median household income in Hermosa Beach from 2015-2019 was $136,702, and the median income for a four -person household in Los Angeles County for 2021 is approximately $80,000. The cost of homes currently in Hermosa Beach are more than what median income residents of Hermosa Beach can afford, and certainly over the median income residents of Los Angeles County generally, https:llhermosaheach.legistar.com/LegislationDetail.aspx?ID=5557241&GUID=BOA64ABC-E51A-4C26-B2D2-3046537C93D5 113 3-409 4/27123, 9:30 AM City of Hermosa Beach - File #: REPORT 22-0249 The conversion of homes in the City's residential neighborhoods to these timeshare -like uses would eliminate residential dwelling units that would otherwise be available for long-term residential use, thereby further exacerbating the lack of long-term available housing in the City. A home that is used for timeshare purposes would no longer be available for households to use as their long-term residence, Impacts to Character of the City s Residential Districts Timesharing projects have the same character as commercial hotels, motels, and other transient occupancy uses due to their transient nature and to the multiple short-term occupancies by those participating in timesharing projects. This use is better suited in commercial or quasi -commercial zones and is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. The intensity of this use is a significant reason that these uses can change the character of a residential neighborhood. Long-term residents, whether owners or renters, occasionally have guests or parties, but these timeshare homes are used exclusively by people who are coming to the City on a short-term basis - most likely for vacation or leisure. As a result, those users may naturally stay out later, entertain more, and gather in larger numbers while on vacation. Timeshare uses can change the character of a residential neighborhood by having it serve not only as a residential area, but also a visitor lodging area, and subjecting it to the impacts that come with that more intense land use. Further, the nature of the timeshare use itself can impact the residential character of the City's residential zones because it would ensure that the time share users can only use their property for a limited amount of time each year. Each co-owner is in the unit on a short-term basis, and without the time to participate in the types of activities or build the relationships that create the fabric of a community. Given the City's desire to strike a balance between the demands of the City's visitor and tourist economy, and retaining its character and quality of life, the City has an interest in maintaining housing stock in its residential districts for long-term residents. Emerging Businesses Recently, certain businesses have emerged which purport to sell "co -ownership" shares in residential property. These businesses, as staff understands the business model, stark by purchasing homes or entering into contracts to purchase homes in tourist destinations in desirable locations like the City. These businesses then form a limited liability company ("LLC"), which owns title to the residential home. The "co - owners" each purchase a one -eighth share and are entitled to use the residential property for a certain number of days per year according to their share of ownership in the LLC. The one -eighth interest entitles the purchaser to stay at the property for up to 45 days per year in increments of 2-14 days, including one "special day" (Fourth of July, Thanksgiving, Christmas, etc.). The stays are reserved on a mobile application, and while each co-owner is prohibited from renting the home as a short-term rental, they are permitted to allow other guests to stay there during their allotted days. Once shares in an LLC are sold, the business continues to manage the homes, including providing landscaping and pool maintenance, furnishing the homes, and paying all expenses, which are then passed through to the co -owners of the LLC. Time Share Ordinance As mentioned above, the City does not currently have regulations in place governing the use of timeshares within the City or other bus inesseslarrangements that are identical or similar to a timeshare use. The purpose of any ordinance should be to ensure that it the City is able to maintain its existing and limited housing stock for use in long term residency and to maintain the character of its residential zones. Completely banning "fractional ownership," joint tenancies, or ownership by business entities such as LLC is not advisable. There are numerous properties in the City's residential zones currently owned by numerous owners or by LLCs. Thus, any ordinance should be geared toward the specific impacts of the at -issue uses - timeshare like uses organized and ran by third parties for a fee. The proposed ordinance (Attachment 2) does not target or single out any business or ownership structure. Environmental Determination: The proposed ordinance is not subject to CEQA because the adoptions of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in C-1 and C-2 commercial zones within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. General Plan Consistency_ The proposed text amendment has been evaluated for consistency with the City's General Plan and is consistent with the following Goals and Policies of Plan Hermosa: Land Use and Design Element Goal 1 Create a sustainable urban form and land use patterns that support a robust economy and high quality of life for residents. Policies: • 1.5 Balance resident and visitor needs. Ensure land uses and business provide for the needs of residents as well as visitors. • 1.7 Compatibility of uses. Ensure the placements of new uses does not create or exacerbate nuisances between different types of land uses. Goal 2 Neighborhoods provide for diverse needs of residents of all ages and abilities, and are organized to support healthy and active lifestyles. Policies: • 2.4 Single density neighborhoods. Preserve and maintain the Hermosa Hills, Eastside, Valley, North End and Hermosa View neighborhoods as predominantly single-family residential neighborhoods https:llhermosabeach.Iegistar.comlLegislationDetail.aspx?ID=5557241&GUID=80A64A8C-E51A-4C26-B2D2-3046537C93D5 213 3-410 4/27123, 9:30 AM City of Hermosa Beach - File #: REPORT 22-0249 • 2.5 Neighborhood preservation. Preserve and enhance the quality of residential neighborhoods by avoiding or abating the intrusion of disruptive, nonconforming buildings and uses. Attachments: 1, Draft Resolution 22-07 Timeshare Ordinance 2. Hermosa Beach Draft Ordinance Respectfully Submitted by: Carlos Luis, Senior Planner Legal Review: Patrick Donegan, Deputy City Attorney Approved: Angela Crespi, Interim Community Development Director https:llhermosabeach.logistar.comlLegislationDetail.aspx?ID=5557241&GUID=BOA64ABC-E51A-4C26-B2D2-3046537C93D5 313 3-411 4/2P23, 9:31 AM City of Hermosa Beach - File #- RFPORT 22-0586 Sign In CITY OF HERMOSA BEACH Legislation ` Calendar I City Council + Departments People M © ©Share 13RSS vAlerts Details PDrStaffRepoa File #: REPORT 22-0586 Version: 1 Name: Type: Action Item Status: Public Hearing File created: 9/19/2022 In control: City Council On agenda: 9/28/2022 Final action: INTRODUCTION OF AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH, CALIFORNIA AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17,40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND Title: AMENDING SECTION 17,26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANTTO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (Community Development Director Jeannie Naughton) Attachments: 1. 1. SUPPLEMENTAL Draft Ordinance, 2. 2. Resolution P.C. 22-07. 3. 3. Link to April 19, 2022 Planning Commission Staff Report 4. SUPPLEMENTAL Email from Scott Hayes Re Item 13. c., 5. SUPPLEMENTAL eComments for Item 13. c Staff Report Text Honorable Mayor and Members of the Hermosa Beach City Council Regular Meeting of September 28, 2022 Title INTRODUCTION OF AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH, CALIFORNIA AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (Community Development Director Jeannie Naughton) Body Recommended Action. Recommendation Staff recommends City Council consider waiving full reading and introduce by title only an Ordinance of the City of Hermosa Beach, California, amending Chapter 17.40 (Conditional Use Permit and Other Permit Standards) to add Section 17.40.230 (Timeshare Uses) to Title 17 (Zoning) and amending Section 17.26.030 to permit timeshare uses in specified commercial zones pursuant to a Conditional Use Permit and determining that the project is exempt from the California Environmental Quality Act (Attachment 1). Body Executive Summary The City of Hermosa Beach Municipal Code (HBMC) does not currently include regulations governing the use of timeshares within the City, nor any regulations that would explicitly address these emerging businesses offering "fractional ownership" of a property in a way that operates like a timeshare. If left unregulated, these types of uses in the residential zones could limit the City's existing housing stock for use as long-term residency and impair the overall character of the City's residential areas. The proposed draft ordinance (Attachment 1) would permit timeshare uses in the C-1 ;and G-2ommercial zones within the City pursuant to a Conditional Use Permit (CUP), and prohibit the use in all other zones within the City. Background: The City of Hermosa Beach is a popular tourist destination known for its scenic beachfront location, its many diverse restaurants, local retailers and popular commercial areas like its Downtown area and Pier Avenue. Maintaining the balance between the quality of life for residents, those who work in the City, and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. Like most communities throughout California, one of the key means that the City utilizes to maintain this balance is through its Zoning Ordinance. The City has commercial zones, , that provide for uses that serve both visitors and the local community. These commercial uses include: restaurants; retail shops, and visitor -serving hotels and motels. The City also has residential zones, at varying densities, that provide a diversity of housing types for those who live fn the community. The City does not currently have regulations in place governing the use of timeshares within the City or other businesses/arrangements that are identical or similar to a timeshare use. At its April 18, 2022 meeting, the Planning Commission reviewed and recommended approval of the proposed ordinance to permit timeshare uses in specified commercial zones pursuant to a Conditional Use Permit by adopting Resolution P.C. 22-07 (Attachment 2) Past Planning Commission Actions httpsJlhermosabeach.legistar.com/LogislationDetail.aspx?ID=5850234&GUID=EEC63C4B-88FE-48DD-8735-DD895DFl61 B5 1/3 3-412 4127123, 9:31 AM City of Hermosa Beach - File #: REPORT 22-0586 Meeting Date IDescription April 18, 2022 Planning Commission reviewed the proposed ordinance and ado ted Resolution P.C. 22-07 Housing The most recent U.S. Census data lists the median value of owner -occupied homes in Hermosa Beach as $1,542,900 for the 2015-2019 period, while the Zillow Home Value Index estimates median home values in Hermosa Beach to be approximately $2,174,879 as of January 31, 2022. According to the Zillow Home Value Index, home values in the City have gone up 10.1 percent over the past year In contrast, the median household income in Hermosa Beach from 2016-2019 was $136,702, and the median income for a four -person household in Los Angeles County for 2021 was approximately $80,000. The cost of homes currently in Hermosa Beach are in excess of what median income residents of Hermosa Beach can afford, and certainly over the median income residents of Los Angeles County generally. The conversion of homes in the City's residential neighborhoods to these timeshare -like uses would eliminate residential dwelling units that would otherwise be available for long-term residential use, thereby further exacerbating the lack of long-term available housing in the City. A home that is used for timeshare purposes would no longer be available for households to use as their long-term residence. Impacts to ChsWgter of the City's F2es1dential Districts Timesharing projects have the same character as commercial hotels, motels, and other transient occupancy uses due to the multiple short- term occupancies by those participating in timesharing projects. For this reason, the activity is better suited in commercial or quasi - commercial zones. The use is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. The intensity of the activity is a significant reason why these uses can change the character of a residential neighborhood. Long-term residents, whether owners or renters, occasionally have guests and parties, but timeshare homes are used exclusively by people who are coming to the City on a short-term basis -most likely for vacation or leisure, increasing the likelihood of frequent gatherings and parties generating noise in excess of what the neighborhood normally generates. Timeshare owners and visitors will most likely stay out later, entertain more, and gather in larger numbers while on vacation. Timeshare uses can change the character of a residential neighborhood by having it serve not only as a residential area, but also a visitor lodging area and subjecting the neighborhood to the impacts that come with the more intense land use, Further, the nature of the timeshare use itself can impact the residential character of the City's residential zones because they ensure that the timeshare users can only use their property for a limited amount of time each year. Each co-owner is in the unit on a short-term basis, so they do not have the time to participate in activities or build the relationships that create the fabric of a community. Given the City's desire to strike a balance between the demands of the City's visitor and tourist economy, and retaining its character and quality of life, the City has an interest in maintaining housing stock in its residential districts for long-term residents. Emerging Businesses Recently, certain businesses have emerged which purport to sell "co -ownership" shares in residential property. These businesses, as staff understands the business model, start by purchasing homes or entering contracts to purchase homes in tourist destinations in desirable locations like Hermosa Reach. These businesses then form a limited liability company ("LLC"), which owns title to the residential home. The "co -owners" each purchase a one -eighth share and are entitled to use the residential property for a certain number of days per year according to their share of ownership in the LLC. The one -eighth interest entitles the purchaser to stay at the property for up to 45 days per year in increments of 2-14 days, including one "special day" (Fourth of July, Thanksgiving, Christmas, etc.). The stays are reserved on an app, and while each co-owner is prohibited from renting the home as a short-term rental, they are permitted to allow other guests to stay there during their allotted days. Once shares in an LLC are sold, the business continues to manage the homes, including providing landscaping and pool maintenance, furnishing the homes, and paying all expenses, which are then passed through to the co -owners of the LLC, The Ordinance The City does not currently have regulations in place governing the use of timeshares within the City or other businesseslarrangements that are identical or similar to a timeshare use. The purpose of any ordinance should be to ensure that the City is able to maintain its existing and limited housing stock for use in long-term residency, and to maintain the character of its residential zones. Completely banning "fractional ownership," joint tenancies, or ownership by business entities such as LLC is not advisable. There are numerous properties in the City's residential zones currently owned by numerous owners or by LLCs. Thus, the ordinance is geared toward the specific impacts of the at -issue uses -timeshare -like uses organized and run by third parties for a fee. The proposed ordinance (Attachment 1) does not target or single out any business or ownership structure. The proposed ordinance allows for these types of timeshare uses in the City's C-1afod-G-2-zonee, subject to a Conditions Use Permit. Timeshare uses would be prohibited in all other zones. In order to avoid an over -inclusive ordinance that prohibits joint tenancies or other type of ownership structure that do not have the same deleterious impacts, the proposed ordinance focuses on the actual use of the property, as compared to the ownership structure, and in pertinent regulates this "timeshare use" subject to a "timeshare plan." Timeshare plan is defined as: https:llhermosabeach.legistar.com/LegislationDetail.aspx?ID=5850234&GUID=EEC63C46-88FE-48DO-8735-DD895DFi6l65 213 3-413 4/27123, 9:31 AM City of Hermosa Beach - File #: REPORT 22-0586 "Any arrangement plan, scheme, or similar device, facilitated, offered, or organized by a third -party non -purchaser, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby purchasers, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, 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. " At its April 18, 2022 meeting, the Planning Commission reviewed and recommended approval of the proposed ordinance by adopting Resolution P.C. 22-07 (Attachment 2) Environmental Determination: The proposed ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in the C-1 8196 G 2 commercial zones within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. General Plan Consistency_ The proposed text amendment has been evaluated for consistency with the City's General Plan. Relevant Policies are listed below; Land Use and Design Element Goal 1. Create a sustainable urban form and land use patterns that support a robust economy and high quality of life for residents. Policies: 1.5 Balance resident and visitor needs. Ensure land uses and business provide for the needs of residents as well as visitors. • 1.7 Compatibility of uses. Ensure the placements of new uses does not create or exacerbate nuisances between different types of land uses. Goal 2. Neighborhoods provide for diverse needs of residents of all ages and abilities and are organized to support healthy and active lifestyles. Policies, • 2.4 Single density neighborhoods. Preserve and maintain the Hermosa Hills, Eastside, Valley, North End and Hermosa View neighborhoods as predominantly single-family residential neighborhoods • 2.5 Neighborhood preservation. Preserve and enhance the quality of residential neighborhoods by avoiding or abating the intrusion of disruptive, nonconforming buildings and uses. Fiscal Impact: There is no fiscal impact associated with the recommended action. Attachments: 1, Draft Ordinance 2. Resolution P.C. 22-07 3. Link to April 19, 2022 Planning Commission Staff Report Respectfully Submitted by: Patrick Donegan, Assistant City Attorney Concur Jeannie Naughton, Community Development Director Noted for Fiscal Impact: Viki Copeland, Finance Director Legal Review: Patrick Donegan, Assistant City Attorney Approved: Suja Lowenthal, City Manager Staff Report Updated on 9/27/2022 - See Track Changes https:llhermosabeach.legistar.comlLegislatioriDetail.aspx?ID=5850234$GUID=EECG3C4B-88FE-48D0-8735-DD895DF151 B5 313 3-414 DocuSign Envolope ID: A34F7110-E406-434D-A977-DC81BED8558E CITY OF HERMOSA BEACH ORDINANCE NO. 22-1453 AN ORDINANCE OF THE CITY OF HERMOSA BEACH. AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT. THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH DOES HEREBY ORDAIN AS FOLLOWS: Section 1. Findings. A. The City of Hermosa Beach ("City") is a scenic beachfront city, known for its many diverse restaurants, local retailers and popular commercial areas like its Downtown area and Pier Avenue. B. Preserving the City's costal resource and the quality and character of the City has been a focal point of the City's land use planning for decades, and remains a primary focus in the City's current General Plan. C. Maintaining the balance between the qualify of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. D. The City values and welcomes all visitors to the City and recognizes their contributions to the City's economy, but finds that in order to maintain the City's long term viability as a community where people not only come to visit, but also live, work and contribute to the long term betterment of the community through participation in the City's schools, local community groups, civic government and local serving businesses, the City must maintain a balance between residential land uses and visitor serving uses. E. The City's existing housing stock is significantly impacted, with demand outweighing supply, resulting in extremely high housing prices as detailed in the accompanying staff report. A limited supply of suitable vacant land, exorbitantly high land costs, and limitations in the City's existing infrastructure, among other factors, have limited the construction of additional housing in the City. Page 1 of 10 #22-1453 3-415 DocuSip Envelope ID: A34F7110-F406-434D-A977-DC81BED8558F F. According to the U.S. Census Bureau, the current median household income in the City is $136,702, while the estimated value of owner - occupied housing units from 2015-2019 was approximately $1,542,900 with current real estate listings suggesting that prices are increasing significantly, meaning that homes in the City are not affordable to the median household in the City. G. The conversion of existing residential units to uses other than long-term residential use will further reduce the City's existing long-term housing supply, causing further imbalance between the demand for housing in the City and the existing supply, not only altering the character of the City's residential neighborhoods, but also presenting further challenges to the City's efforts to provide affordable housing within the community. H. The City additionally has, for many years, worked to preserve its existing housing stock for long term residential use, both to maintain the character of its residential neighborhoods and prevent residential districts from becoming visitor and tourist serving districts, and to ensure that if would not be converted to uses other than long-term residential uses. The high impact use associated with timeshares, combined with the frequent turnover and commercial management involved in timeshare properties is not consistent with the purpose and nature of residential districts in the City. Rather, they are commercial in nature, in that these timeshare uses are structured as a short-term, tourist oriented, visitor serving use of the subject properties. The use of properties as timeshares adds excessive noise and traffic to residential districts by using these properties for high impact tourist oriented uses more appropriately located in commercial districts of the City. J. The use of residential properties for timeshare uses will further reduce the availability of housing stock for long-term residential use, and create a new demand for timeshare uses of residential properties. K. This encroachment of tourist oriented, visitor serving uses in residential neighborhoods is likely to compromise the character of residential areas within the City, and further increase the costs for housing in the City, undermining the City's efforts to provide a balance of housing for all income levels in the City. L. The City's authority to enact zoning ordinances is based on the powers accorded cities and counties under the State constitution to make and enforce police regulations. This police power grants the City broad Page 2 of 10 #22-1453 3-416 DocuSign Envelope ID: A34F7110-E406-434D-A977-DC81BED8558E authority to regulate the development and use of real property within its jurisdiction to promote the public welfare. M. Pursuant to and in accordance with this authority, the City Council desires to prohibit timeshare uses in residential areas, and only allow them in the C- 2 commercial zone within the City, pursuant to a conditional use permit. N. The City's Planning Commission held a duly noticed public hearing on April 19, 2022, as required by law to consider all the information presented by staff, and public testimony presented in writing and at the meeting. O. On April 19, 2022, the City's Planning Commission recommended that the City Council adopt this Ordinance amending the City's Municipal Code as described herein. P. On September 28, 2022, the City Council held a duly noticed public hearing, accepting testimony from the public, and discussed the proposed amendments and staff's recommended approval of this Ordinance and adopted on first reading the Ordinance. Q. On October 11, 2022, the Ordinance was brought back for a second reading and adopted by the City Council. R. The proposed zoning amendments are consistent with the General Plan goals, policies and implementation programs as the Ordinance will continue to preserve the character of the City; will preserve the City's residential districts for residential uses; and will help to preserve the City's existing housing stock for long term residential uses, to avoid further exacerbating the existing impacts on the City's housing supply. Section 2. The above recitals are hereby incorporated as though set forth in this section. Section 3. Section 17.40.230 (Time Share Uses) is hereby added to Chapter 17.40 (Conditional Use Permit and Of her Permit Standards) of Title 17 (.Zoning) of the City of Hermosa Beach Municipal Code, to read as follows: Section 17.40.230 Timeshare Uses A. Purpose and Findings. There is a critical shortage of permanent, long-term housing in the City of Hermosa Beach ("City"). A limited supply of suitable vacant land, land values, Page 3 of 10 #22-1453 3-417 DocuSign Envelope ID: A34E71IO-E406-434D-A977-DC81BED8558E and market demand for land for other uses, have limited the construction of additional housing in the City. The City is a popular tourist destination known for its scenic beachfront location, its many diverse restaurants, local retailers and popular commercial areas like its Downtown area and Pier Avenue. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. Timeshare uses are not an appropriate land use in the City's residential zones due to the multiple occupancy of timeshare properties, the short-term, tourist oriented use of such property and commercial management of timeshare facilities, all of which create increased traffic generation, excessive noise, disruption to residential communities through commercial -level maintenance of the timeshare facilities, and therefore are appropriately confined to commercial zones. Conversion of permanent housing to timeshare facilities removes existing housing units from the City's existing stock and exacerbates an already severe housing shortage. It is therefore in the public interest to prohibit conversions of existing housing units into timeshare facilities, as to do so eliminates needed housing stock by diverting those units to a tourist -oriented, commercial use. B. Definitions. For purposes of this Section, the following words and phrases shall have the meaning respectively ascribed to them by this Section: "Accommodation" means any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single-family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.040. "Building" shall have the meaning ascribed to it by Section 17.04.040. "Dwelling unit" shall have the meaning ascribed to it by Section 17.04.040. "Managing entity" means the person who undertakes the duties, responsibilities and obligations of the management of a timeshare plan. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. Page 4 of 10 #22-1453 DoauSign Envelope ID: A34F7110-E406-434D-A977-DC81 BED8558E "Timeshare instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a timeshare plan and includes the declaration dedicating accommodations to the timeshare plan. "Timeshare interest" means the right to exclusively occupy a timeshare property for a period of time on a recurring basis pursuant to a timeshare plan, regardless of whether or not such right is coupled with a property interest in the timeshare property or a specified portion thereof. "Timeshare plan" means any arrangement, plan, scheme, or similar device, facilitated, offered, or organized by a third -party non -purchaser, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby purchasers, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, 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. "Timeshare property" means one or more accommodations subject to the same timeshare instrument, together with any other property or rights to property appurtenant to those accommodations. "Timeshare use" means the use of one or more accommodations or any part thereof, as a timeshare property pursuant to a timeshare plan. C. Timeshare Uses Restricted to C-2 Downtown Commercial Zone. Timeshare uses are conditional uses within the City's C-2 Downtown Commercial Zone, subject to approval of a conditional use permit applied for and approved in conformance with this Section. Timeshare uses are not permitted in any other Zones in the City. D. Application Process and Development Standards. A. Application Process. Approval of a conditional use permit for timeshare uses in the C-2 Downtown Commercial Zone within the City shall be required in accordance with the requirements of Chapter 17.40, In addition to the requirements contained in Chapter 17.40, an application for a timeshare use shall be accompanied by the following documents which shall be subject to the approval of the Community Development Director: 1. Management Plan. A management plan shall describe the methods employed by the applicant to guarantee the future adequacy, stability, and Page 5 of 10 #22-1453 3-419 DocuSign Envelope ID: A34F7110-E406-434D-A977-DC81 BED855SE continuity of a satisfactory level of management and maintenance of the time share use. 2. Application Requirements. In addition to any application requirements established by this section and any other applicable requirements of this code, the following information shall be submitted as part of any application to develop or establish a timeshare use: a. Typical floor plans for each accommodation. b. The phasing of the construction of the accommodations on the timeshare property, if applicable. C. A description of any ancillary uses which are proposed in conjunction with the time share use. d. A description of the method of management of the time share use and indication of the management entity for the time-share property. e. Any restrictions on the use or occupancy of the accommodations. f. Any other information or documentation the applicant, City staff or commission deems reasonably necessary to the consideration of the timeshare use, including any required environmental documents. B. Development Standards and Operational Requirements. Notwithstanding any other provision of this Section, the following conditions must be met by any timeshare use in any conditionally permitted zone. Additional requirements may be attached to a conditional use permit or development agreement if found to be necessary to assure that the timeshare use meets the intent of this Section: 1. Timeshare uses developed in the C-2 Downtown Commercial Zone within the City shall be limited to accommodations in upper floors in conjunction with a mixed -use project. 2. No existing residential use in the C-2 Downtown Commercial Zone within the City shall be converted to a timeshare use. 3. Development Standards. The timeshare use shall comply with all development standards for the zone in which it is located. 4. Parking. Parking shall be provided as follows: Page 5 of 10 #22-1453 3-420 DocuSign Envelope ID: A34F7110-E406-434D-A977-DC81BED8558E a. For accommodations of two or fewer bedrooms, one parking space shall be provided for each accommodation. b. For accommodations of three or more bedrooms, two parking spaces shall be provided for each accommodation. 5. Modification or Waiver of Standards. The Planning Commission may modify or waive one or more of the regulations contained in this Section if it determines that strict compliance is not necessary to achieve the purpose and intent of this Section. E. Violations, Enforcement and Civil Penalties. 1. Any responsible person, including but not limited to an owner of a timeshare interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this Section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this Section. Such violation shall be punishable pursuant to Section 1.04.020 of the City of Hermosa Beach Municipal Code. 2. Timeshare use, and/or advertisement for timeshare use, of an accommodation in violation of this Section is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance. Any such nuisance may be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 8.28 except that the civil penalty for a violation shall be one thousand dollars ($1,000.00). Each day the violation occurs shall constitute a separate offense 3. Any responsible person who violates this Section shall be liable and responsible for a civil penalty of one thousand dollars ($1,000.00) per violation per day such violation occurs. The City may recover such civil penalty by either civil action or administrative citation. Such penalty shall be in addition to all other costs incurred by the City, including without limitation the City's staff time, investigation expenses and attorney's fees. a. Where the City proceeds by civil action, the court shall have discretion to reduce the civil penalty based upon evidence presented by the responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the court should consider the purpose of this Section to prevent and deter violations and whether the reduction Page 7 of 10 #22-1453 3-421 DocuSign Envelope ID: A34F7110-E406-434D-A977-DC81 BED8558E of civil penalties will frustrate that purpose by resulting in the responsible person's enrichment or profit as a result of the violation of this Section. In any such civil action the City also may abate and/or enjoin any violation of this Section. b. Where the City proceeds by administrative citation, the City shall provide the responsible person notice of the right to request an administrative hearing to challenge the citation and penalty, and the time for requesting that hearing. i. The responsible person shall have the right to request the administrative hearing within forty-five (45) days of the issuance of the administrative citation and imposition of the civil penalty. To request such a hearing, the responsible person shall notify the City clerk in writing within forty-five (45) days of the issuance of the citation. The appeal notification shall include all specific facts, circumstances and arguments upon which the appeal is based. ii. The City Manager is hereby authorized to designate a hearing officer to hear such appeal. The City hearing officer shall conduct a hearing on the appeal within ninety (90) days of the request for the hearing unless one of the parties requests a continuance for good cause. The hearing officer shall only consider those facts, circumstances or arguments that the property owner or responsible person has presented in the appeal notification. iii. The hearing officer shall render a decision in writing within thirty (30) days of the conclusion of the hearing. The hearing officer shall have discretion to reduce the civil penalty based upon evidence presented by the property owner or responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the hearing officer should consider the purpose of this Section to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the property owner's or responsible person's enrichment or profit as a result of the violation of this Section. iv. Any aggrieved party to the hearing officer's decision on the administrative appeal may obtain review of the decision by filing a petition for writ of mandate with the Los Angeles County Page 8 of 10 #22--1453 3-422 ❑ocu5ign Fnvelope ID; A34F7110-F406-434o-Ag77-DC81 BFD8558E Superior Court in accordance with the timelines and provisions set forth in Government Code Section 53069.4. v. If, following an administrative hearing, appeal, or other final determination, the owner of the property is determined to be the responsible person for the civil penalty imposed by this section, such penalty, if unpaid within forty-five (45) days of the notice of the final determination, shall become a lien to be recorded against the property on which the violation occurred pursuant to Chapter 8.28. Such costs shall be collected in the some manner as county taxes, and thereafter the property upon which they are a lien shall be sold in the some manner as property now is sold for delinquent taxes 4. Any violation of this Section may also be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 8.28 except that the civil penalty under Chapter 8.28 for a violation shall be one thousand dollars ($1,000.00). Each day the violation of this Section occurs shall constitute a separate offense. The remedies under this Section are cumulative and in addition to any and all other remedies available at law and equity. Section 3. Section 17.26.030 of Chapter 17.26 (C 1, C2 and C3 Commercial Zones) of Title 17 (Zoning) is amended to add the following entry to the chart of land use regulations USES I C 1 C2 C3 See Section Timeshares I U 17.40.230 Section 4. CEQA. This ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines (the Guidelines), and the environmental regulations of the City. The City Council hereby finds that this ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c) (2) and 15060(c) (3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in the C-2 Downtown Commercial zone within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b) (3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. Page 9 of ]D #22-1453 3-423 DocuSign Envelope ID; A34F7110-r=406-434D-A977-DC81Br=D8558E Section 5. Effective Date. Pursuant to California Government Code section 36937, this Ordinance shall take effect thirty (30) days after its final passage. Section 6. Certification. The City Clerk is directed to certify the passage and adoption of this Ordinance; cause it to be entered into the City's book of original ordinances; make a note of the passage and adoption in the records of this meeting; and, within fifteen (15) days after the passage and adoption of this Ordinance, cause it to be published or posted in accordance with California law. PASSED, APPROVED and ADOPTED this I Ith day of October, 2022. AYES: Councilmembers Campbell, Massey, Mayor Pro Tem Jackson, and Mayor Detoy NOES: None. ABSTAIN: None. ABSENT: None Mayor Raymond A. Jackson PRESIDENT of the City Council and MAYOR of the City of Hermosa Beach, CA ATTEST: Myra Maravilla City Clerk APPROVED AS TO FORM: l du & pDmfv, Patrick Donegan City Attorney Page 10 of 10 #k 22-1453 3-424 Docu5ign Envelope ID: A34F7110-F406-434D-A977-DC81BED8558E State of California ) County of Los Angeles ) ss City of Hermosa Beach ) December 27, 2022 Certification of Council Action ORDINANCE NO.22.1453 AN ORDINANCE OF THE CITY OF HERMOSA BEACH. AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT. 1, Myra Maravilla, City Clerk of the City of Hermosa Beach, California, do hereby certify that the above and foregoing Ordinance No. 22-1453 was duly approved and adopted by the City Council of said City at its adjourned regular meeting thereof held via hybrid on the I Ith day of October 2022 and passed by the following vote: AYES: Mayor Detoy, Mayor Pro Tem Jackson, Councilmembers Campbell, Armato, and Massey NOES: None ABSTAIN: None ABSENT: None . - I Myra Maravilla, MPA, CMC City Clerk 3-425 Exhibit M City of Palm Desert Time Share Ordinance and Supporting Evidence 3-426 CITY OF PALM DESERT DEPARTMENT OF DEVELOPMENT SERVICES CITY COUNCIL STAFF REPORT MEETING DATE: April 28, 2022 PREPARED BY: Rosie Lua, Principal Planner REQUEST: Consideration of approval to the City Council for Zoning Ordinance Amendment to modify Palm Desert Municipal Code Section 25.34.060 regarding Time -Share Projects. Recommendation Waive further reading and pass to second reading City Council Ordinance No. approving Zoning Ordinance Amendment 22-0001 to modify Palm Desert Municipal Code Section 25.34.060 regarding Time -Share Projects. Plannina Commission Recommendation On January 18, 2022, the Planning Commission considered the Zoning Ordinance Amendment (ZOA) 22-0001 to modify Palm Desert Municipal Code Section 25.34.060 regarding Time -Share Projects. Planning Commission approved Resolution No. 2805 recommending to the City Council approval by vote 5-0. City Council Meetings On February 24, 2022, the City Council opened the public hearing and approved a request from staff to continue to the meeting of March 24, 2022. On March 24, 2022, another continuance of the public hearing was granted to April 28, 2022, allowing staff to meet with the City's Short Term Rental (STR) Subcommittee and time for staff to make appropriate changes to the zoning ordinance. Strategic Plan Land Use, Housing & Open Space -- Priority 5: "Utilize progressive land use policies and standards to support ongoing and future needs." Background Analysis On November 18, 2021, the City Attorney presented a memo to City Council addressing the Pacaso business model purchasing property in tourist destinations like the City of Palm Desert targeting the second or vacation home market. Founded in 2020, the Pacaso owns title to the residential home by forming a limited liability company ("LLC"), then markets "co - ownership" interests in the homes to up to eight individuals for a certain number of days per 3-427 April 28, 2022 —Staff Report Case No. ZOA 22-0001 Time -Share Uses - Pacaso Page 2 of 4 year as specified in their share of ownership in the LLC. The one -eighth interest entities the purchaser to stay at the property for up to 45 days per year in increments of 2-14 days, including one "special day" (Fourth of July, Thanksgiving, Christmas, etc.). The stays are reserved through a mobile application, and while each co-owner is prohibited from renting the home as a short-term rental, they are permitted to allow other guests to stay there during their allotted days. Once shares in an LLC are sold, a Pacaso manages the homes, providing landscaping and pool maintenance, furnishing the homes, and paying all expenses, which are then passed through to the co -owners of the LLC. The City Attorney opined that the Pacaso business formation is a "timeshare" as defined in the Business and Profession Code Section 11212(z) and regulated by Section 25.34.060 (Time -Share Projects) of the Palm Desert Municipal Code (PDMC). The Pacaso's are not regulated by the state law since there are less than ten co -owners, the minimum number of co -owners required to be regulated by state law. The PDMC permits timeshare projects in planned residential zones, general commercial zone, or the planned commercial resort zone and includes a requirement for a resort hotel having 500 or more rooms and an 18-hole golf course of not less than 6,400 yards, and then only if and when a conditional use permit has been obtained from the Commission in accordance with Section 25.72.050 (Conditional Use Permit) of the code. The Pacaso type of business formation would not be permitted to operate in a single-family residential property and operate as a timeshare use since the use does not meet all the criteria of the PDMC. The purpose of this ordinance is to ensure that the City is able to maintain its existing and limited housing stock for use in long term residency, and to maintain the character of its residential zones. The conversion of homes in the city to timesharing projects would eliminate residential dwelling units that would otherwise be available for long-term residential use, thereby further exacerbating the lack of long-term available housing in the City. To Staffs knowledge, Pacaso has facilitated the purchase of and management of at least one (1) single family home and currently advertising three (3) homes for one -eighth purchase within the City of Palm Desert. No other Pacaso type entities are known to have ownership of homes within the City. Discussion Staff has studied the timeshare ordinance amendment and its intended regulations including a consultation with the Short -Term Rental (STR) subcommittee to discuss the proposed amendment and the Pacaso type business formations. The Pacaso's are not regulated by the Short -Term Rental Ordinance of the city since the business operations do not allow short term rentals as part of their structure. In addition, the subcommittee discussed the City's intent to regulate arrangements of multiple parties and its direct impact on the housing stock. In the formation of this ordinance, it is not the City's intent to regulate arrangements whereby multiple parties join in directly purchasing full ownership of an accommodation and thereafter agree upon arrangements for their shared use. For example, the city is not regulating ownership between family or friends who chose to purchase a ,property, form an LLC, and the manage the rental or upkeep through a management company so long as a fractional ownership structure is not formed. N s April 28, 2022 —Staff Report Case No. ZOA 22-0001 Time -Share Uses - Pacaso Page 3 of 4 The proposed ordinance amendment to Section 25.34.060 (Time -Share Project) includes a more robust definition, to refer to current California law, and to provide a broader scope to include Pacaso types of business formations. In addition, it includes a section for violations, enforcement, and civil penalties to regulate such proposed business operations. It should be noted that the ordinance in this staff report differs from the Planning Commission's recommendation, Resolution No. 2805 which was revised to provide further clarifications on the intent of the ordinance as stated in the discussion above. General Plan The General Plan promotes goals and policies to protect and enhance community value in neighborhoods and its surroundings. Land Use and Community Character Policy 1.1 (Scale of development) promotes the City's corridors to use design techniques to a moderate height and use and ensure compatible fit with surrounding development. Therefore, the proposed amendment to the timeshare ordinance supports the City's goal in meeting the intent of the General Plan. Public Input Public noticing was conducted in accordance with State law. A public hearing notice was published on February 11, 2022, in The Desert Sun. The public hearing was opened on February 11, 2022, continued to March 24, 2022, and further continued to April 28, 2022. Staff has received a half dozen phone calls from the public concerning Pacaso co - ownership within their neighborhoods and inquiring if Short-term Rental Ordinances would apply. On March 10, staff received a phone call from Marcus Schwab, a resident that lives on Bel Air Road expressing concern of business formations functioning like timeshares that affects the character of his neighborhood. Not knowing who their neighbors are was expressed as a real concern. Mr. Schwab identified the property as 72870 Bel Air Rd which is being advertised on eXp Realty's website, a home selling in his neighborhood that he says is priced high which can result in pricing out qualified homebuyers. Other residents have expressed concerned of properties on 72694 Skyward Way and 72985 Somera Rd being advertised as timeshare ownership. These particular properties are listed in the Pacaso website as well as other realtor websites including Trulia, Ziilow, Redfin, etc. The properties mentioned above have all been confirmed to be associated with Pacaso. However, since the ownership of these properties includes eight owners (118 ownership), it is difficult to track if any property has been sold full or partial ownership. Environmental Review The adoption of this ordinance has been analyzed for compliance with the California Environmental Quality Act (CEQA) pursuant to CEQA (Pub. Resources Code, § 21000 et seq.) ("CEQA") and the State CEQA Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.) it has been determined that the amendments do not meet the definition of a project because the amendments do not have the potential to cause either a direct physical change or a 3-429 April 28, 2022 —Staff Report Case No. ZOA 22-0001 Time -Share Uses - Pacaso Page 4 of 4 reasonably foreseeable indirect physical change in the environment. The proposed amendments are consistent with the General Plan goals of ensuring the quality of life for the community. Because the amendment is not a project under CEQA, they are not subject to further environmental review. Findings of Approval Findings can be made in support of the amendment and in accordance with the City's Municipal Code. Findings in support of this ZOA are contained in the Ordinance No. attached to this staff report. LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW ASS{STANT CITY MANAGER Mao h,w ALva.ve z NIA -Andy-0restine Robert W. Hargreaves Martin Aivarez, Dir, of Veronica Chavez Andy Firestine City Attorney Development Services Director of Finance Assistant City Manager City Manager L. Todd Hileman: L. T-odd Wbtemaw ATTACHMENTS: 1. Draft City Council Ordinance No, 2. Exhibit A —Ordinance 3. Planning Commission Resolution No. 2805 4. Planning Commission Draft Minutes of January 18, 2022 5. City Council Public Hearing Notice 6. City Council Memo dated November 18, 2021 7. Public Comments 3-430 ORDINANCE NO. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, AMENDING PALM DESERT MUNICIPAL CODE, CHAPTER 25, MODIFYING SECTION 25,34.60 REGARDING TIME-SHARE PROJECTS CASE NO: ZOA 22-0001 WHEREAS, the Planning Commission of the City of Palm Desert, California, did on the 18th day of January 2022, hold a duly noticed public hearing to consider the request by the City of Palm Desert for approval of the above -noted, and adopted Resolution No. 2805, recommending that the City Council adopt the Zoning Ordinance Amendment (ZOA) for said projects regulating the time-share projects; and WHEREAS, the Zoning Ordinance Amendment (ZOA) modifies the Palm Desert Municipal Code (PDMC) Section 25.34.60 (Time -Share Projects) and implements a requirement for time share uses; and WHEREAS, the City Council of the City of Palm Desert, did on the 241h day of February 2022, hold a duly noticed public hearing to, the City Council opened the public hearing and approved staffs request to continue to the 24th of March 2022. On the 24th of March 2022, another continuance of the public hearing was granted to the 28th of April 2022. On the 28th of April 222, the City Council considered the request by the City of Palm Desert for approval of a ZOA determined that the time-share process is consistent with the City's General Plan; and WHEREAS, at said public hearing, upon hearing and considering all testimony and arguments, if any, of all interested persons desiring to be heard, said City Council did find the following facts and reasons exist to approve said request: SECTION 1. Adoption of Recitals. The City Council hereby adopts the foregoing recitals as its findings in support of the following regulations and further finds that the following regulations are beneficial and appropriate to protect the health, safety, and welfare of the residents and businesses of Palm Desert within the City limits. A. The City of Palm Desert, California ("City") is a municipal corporation, duly organized under the constitution and laws of the State of California; and B. The Planning and Zoning Law authorizes cities to establish by ordinance the regulations for land use and development. SECTION 2. Amendment. The City Council of the City of Palm Desert, California, approve, and adopt the PDMC amendment to Section 25.34.60 (Time -Share Projects) as shown in Exhibit A, which is attached hereto and incorporated herewith. SECTION 3. Severability. If any section, subsection, subdivision, paragraph, sentence, clause, or phrase in this ordinance or any part thereof is for any reason held to be unconstitutional or invalid or ineffective by any court of competent jurisdiction, such decision shall not affect the validity or effectiveness of the remaining portions of this ordinance or any 3-431 :�I:1011►fe1Lill] :1 183 part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause, or phrase thereof irrespective of the fact that one (1) or more subsections, subdivisions, paragraphs, sentences, clauses, or phrases be declared unconstitutional, invalid, or ineffective. SECTION 4. Publication. The City Clerk of the City of Palm Desert, California, is hereby directed to publish this ordinance in The Desert Sun, a newspaper of general circulation, published and circulated in the City of Palm Desert, California, and shall be in full force and in effect thirty (30) days after its adoption. PASSED, APPROVED, AND ADOPTED by the City Council of the City of Palm Desert, California, at its regular meeting held on the 28th day of April 2022, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: ATTEST: ANTHONY J. MEJIA, CITY CLERK CITY OF PALM DESERT, CALIFORNIA JAN C. HARNIK, MAYOR 2 3-432 "EXHIBIT A" ZONING ORDINANCE AMENDMENT . SECTION 1. Amendment to Palm Desert Municipal Code. Palm Desert Municipal Code section 25.34.060 is hereby amended as follows: "25.34.060 Time -Share Proje A. Purpose. The purpose of the special use regulations for time-share {are�este uses is to establish special location and site development standards. B. Definitions. 1. "Accommodation" means any dwelling unit apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.160. 2. "Develo er" means person, who at any point in time owns or has an option or contract to acquire eleven or more time-share interests for purposes of sale in the ordinary course of business if the time-share interests were acquired or are to be acquired from the original recipient of a public report for the time-share plan, or from a person who succeeded to the interest of the original recipient in eleven or more time-share interests in a time-share plan. 3. "Owner" means owner of a time-share interest. 4. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. 5. "Time-share instrument" means one or more documents, by whatever name denominated creatinq or qoverninq the -operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. 6. "Time-share interest" means and includes either of the following: (i) A "time-share estate," which is the right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to_a time-share plan, coupled with a freehold estate or an estate for years with a future interest in a time-share propeLty or a specified portion thereof. (ii) A "time-share use," which is the right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, which right is neither coupled with a freehold interest, nor coupled with an estate for years with a future interest, in a time-share property. 7. "Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, sale, lease, deed, license, right to use agreement, or 3-433 by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, 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 far consecutive years. "Timeshare Plan" does not include arrangements whereby multiple parties join in directly purchasing full ownership of an accommodation and thereafter agree upon arrangements for their shared use. 8. "Time-share property" means one or more accommodations subject to the same time-share instrument, together with any other property or rights to property appurtenant to those accommodations. 9. "Time-share use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to_a time-share plan. 8, C. Permitted zones. A time-share pFBjest use shall be permitted only in a planned residential zone, a general commercial zone, or a planned commercial resort zone. Any time- share pFejeGt use shall be developed in conjunction with a resort hotel having 500 or more rooms and an 18-hole golf course of not less than 6,400 yards, and then only if and when a conditional use permit has been obtained from the Commission in accordance with Section 25.72.050 (Conditional Use Permit) of this code. G D. Application submittal requirements. In addition to standard application submittal requirements, an applicant for a conditional use permit approval involving a time- share pFejeGt use shall submit in the application at least the following information: 1. Copies of documents and information required pursuant to Article 12.2 of the California Adrnim'rtr;;W Code of Regulations, Sections B 2809.1, 2809.2, and 2809_3 wherein the requirements for a "substaRt-ially properly completed" application for a final subdivision public report are enumerated, excluding those documents so enumerated which are subject to the approval of the City and therefore otherwise available to the City. In the event such documents and information have not been filed with the California Department of Real Estate at the time an applicant applies for a conditional use permit, the applicant shall furnish such documents and information upon the submission of such documents and information to the Department of Real Estate, but in no event later than the issuance of the conditional use permit. 2. In the event an existing condominium project is proposed to be converted to a whole or partial time-share PF9j8Gtuse, a verified description or statement of the number and percentage of the current condominium owners desiring or consenting to the proposed conversion of some or all of the units to a timeshare basis shall be submitted. Also, in such instance there shall be submitted to the Commission prior to or during the hearing process, a verified statement of the number and percentage of owners who have received notification, either personally or by receipted certified US mail. 3. In the case of a new mixed project (i.e., time-sharing condominium/rental), a description of the means proposed to be employed to disclose the number and location of all time-share units accommodations within the pFejeGt time-share use shall be submitted. 3-434 4. Description of time periods, types of u4t6 accommodations, and which Un#S accommodations are in the timeshare program (if less than all), and the length of time each of the unit& accommodations are committed to the time-share pFegFarn plan shall be submitted. P. E. Requirements. Notwithstanding any other provisions of this chapter, the following requirements must be met by any time-share development use in any permitted zone: 1. The time-share pFejest use must be composed of "time-share P-sstates" as defined in Gainfemia Ru soness and Dfoosieno merle Confirm 11003.5. 2. All maintenance agreements and conditions, covenants, and restrictions must be approved by the City. 3. The minimum time-share use interest exclusive occupancy period shall be for one week (seven days). 4. PFgjest-spencer Developer of the time-share plan shall post a maintenance bond, letter of credit, or cash deposit to ensure the maintenance of any landscaping along the perimeter of the pFejest time-share use abutting any public right-of-way. The amount of the bond, letter of credit, or cash deposit shall be equal to 25 percent of the annual budget of the timeshare use owner's association having the duty to maintain the exterior of the time- share property project which is for such landscaping expenses. The bond, letter of credit, or cash deposit shall run to the City and shall remain in place for life of the pFeje time-share plan. 5. With respect to a time-share PFGje use, all interests created therein shall be subject to a public facilities impact mitigation fee of $150 per week share. With respect to each week share in a time-share pf j&ct-use, a public facilities impact fee payable under this section shall be paid on the first day of the first calendar month following the sale and conveyance of such week share by the spenseF develop_er_of a time-share PFGje plan to an individual consumer (excluding bulk sales from one sponsor developer to another, in which case the successor sponsor developer shall have the obligation to pay the public facilities impact fee described herein upon the sale and conveyance of a week share to a consumer). On the first day of each calendar month, or less frequently if required by the Council, a sponsor- developer of a time-share PFGjeGt plan shall also submit a written report to the City which specifies the number of week shares in the time-share prejeet plan which have been sold and conveyed in the preceding calendar month. l F. Minimum number of units. The minimum number of units in a time-share project shall be 50. G. Development standards. Time-share projects uses shall be designed to conform to the standards for hotel developments in the event the time-share pFsject use is located in a planned commercial resort or general commercial zone. The time-share -RFeje6t use must comply with all development standards of the zone in which it is located. With respect to time-share pmjeGts uses developed within a planned residential zone, the density of the time-share pFejest uses shall not exceed the density permitted in such zone for 3-435 residential projects; with respect to time-share prsjeGte uses developed in a general commercial zone or a planned commercial resort zone, the density of the time-share nprejeGt uses shall not exceed the density permitted in such zone for general commercial or planned commercial projects. In determining the density of a time-share nr use, upon the request of an applicant, the Director shall have the authority to transfer the density permitted in other similarly zoned property owned by an applicant to the time-share prejest use. H. Violations, Enforcement and Civil Penalties 1. Any responsible person, including but not limited to an owner of a_time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way_ and through any medium, the availability for sale or use of an accommodation in violation of this section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.12 (General Penalty). 2. Any responsible person, including by not limited to an owner of a time-share interest management entity, agent, or broker who uses or allows the use of or advertises or causes to be printed, published advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is subject to administrative fines as set forth in Chapter 8.81 (Administrative Citations). Any person issued an administrative citation pursuant to this section shall for each separate violation be subject to: (1) an administrative fine in an amount not to exceed one thousand dollars ($1,000) for the first citation; (2) an administrative fine in an amount not to exceed three thousand dollars ($3,000) for a second citation issued for the same offense within a twelve-month period of the date of the first offense; and (3) a fine in an amount not to exceed five thousand dollars ($5,O00). 3. Time-share use, and/or advertisement for time-share use, of an accommodation in violation of this section is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance and may be abated pursuant to Chapter 8.20 (Public Nuisances), Chapter 9,24 (Noise Control), and Chapter _9.25__(Multiple Responses to Loud or Unruly Parties, Gatherings or Other Similar Events.) 4. Each day the violation of this chapter occurs shall constitute a separate offense. 5. The remedies under this section are cumulative and in addition to any and all other remedies available at law and equity. 3-436 PLANNING COMMISSION RESOLUTION NO.2805 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF PALM DESERT, CALIFORNIA, RECOMMENDING APPROVAL OF A ZONING ORDINANCE AMENDMENT TO MODIFY PALM DESERT MUNICIPAL CODE SECTION 26.34.60 REGARDING TIMESHARE PROJECTS CASE NO., ZOA 22.0001 WHEREAS, the Planning Commission of the City of Palm Desert, California, did on the lath day of January 2022, hold a duly noticed public, hearing to consider the request by the City of Palm Desert for approval of the above -noted; and WHEREAS, the Zoning Ordinance Amendment (ZOA) modifies the Palm Desert Municipal Code (PDMC) Section 25.34.60 (Timeshare Projects) to update the ordinance to clarify definitions and add enforcement options; and WHEREAS, the Planning Commission of the City of Palm Desert, in reviewing all the facts and any testimony given, adopts the following as its Findings in recommended approval of the ZOA to the City Council: SECTION 1. Findings. The Planning Commission of the City of Palm Desert hereby finds that: A. The City of Palm Desert, California ("City") is a municlpal corporation, duly organized under the constitution and laws of the State of California; and B. The Planning and Zoning Law authorizes cities to establish by ordinance the regulations for land use and development. SECTION 2. Amendment. The Planning Commission of the City of Palm Desert recommends that the City Council of the City of Palm Desert, California, approve and adopt the PDMC amendment to Section 25.34.60 (Timeshare Projects) as shown in Exhibit A, which is attached hereto and incorporated herewith. SEGT,QN, 3. Severabillity. If any section, subsection, subdivision, paragraph,. sentence, clause, or phrase in this ordinance or any part thereof is for any reason held to be unconstitutional or invalid or ineffective by any court of competent jurisdiction, such decision shall not affect the validity or effectiveness of the remaining portions of this ordinance or any part thereof. The Planning Commission hereby declares that It would have passed each section, subsection, subdivision, paragraph, sentence, clause, or phrase thereof irrespective of the fact that one (1) or more subsections, subdivisions; paragraphs., sentences, clauses, or phrases be declared unconstitutional, invalid, or ineffective. SECTION 4. CEQA. The City Council finds that adoption of this ordinance is not a "project," as defined in the California Environmental Quality Act (CEQA) because it does not have a potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment and concerns general policy and procedure making. 3-437 PLANNING COMMISSION RESOLUTION NO. 2805 PASSED, APPROVED, AND ADOPTED by the Planning Commission of the City of Palm Desert, California, at its regular meeting held on the 18th day of January 2022, by the following vote, to wit: AYES: DE LUNA, GREENWOOD, GREGORY, HOLT, and PRADETTO NOES. NONE ABSENT: NONE ABSTAIN: NONE J HN G EEN OD CHAIR ATTEST: MARTIN ALVAREZ, SECRETARY PALM DESERT PLANNING COMMISSION 1 1 3-438 L� CITY OF PALM DESERT PALM DESERT PLANNING COMMISSION MINUTES TUESDAY, JANUARY 18, 2022 — 6.0.0 P.M. ZOOM VIRTUAL MEETING I. CALL TO ORDER Chair John Greenwood called the meeting to order at 6;01 p.m. il. ROLL CALL E!rgggnt; Chair John Greenwood Vice -Chair Nancy DeLuna Oommissioner Ron Gregory Commissioner Lindsay Holt Commissioner Joseph Pradetto Also Present; Craig Hayes, Assistant City Attorney Martfn Alvarez, Director of Development Services Eric Ceja, Deputy Director of Development Services./Economic Development Rosie Lua, Principal Planner Jessica Gonzales, Senior Management Analyst Monica O'Reilly, Management Specialist li III. FLEDGE OF ALLEGIANCE Vice -Chair Nancy DeLuna led the Pledge of Allegiance. IV. SUMMARY OF COUNCIL ACTIONS Director of Development Services Martin Alvarez summarized pertinent City Cauncil actions from the meeting of January 13, 2022. V. ORAL COMMUNICATIONS None 3-439 MINUTES PALM DESERT PLANNING COMMISSION JANUARY 18, 2021 VI. CONSENT CALENDAR A. MINUTES of the Regular Planning Commission meeting of December 21, 2021. Rec: Approve as presented. Upon a motion by Vice -Chair DeLuna, seconded by Commissioner Holt, and a 5-0 vote of the Planning Commission, the Consent Calendar was approved as presented (AYES: DeLuna, Greenwood, Gregory, Holt, and Pradetto; NOES: None). VII. CONSENT ITEMS HELD OVER None VIII. NEW BUSINESS None IX. CONTINUED BUSINESS None X. PUBLIC HEARINGS A. REQUEST FOR CONSIDERATION to adopt a Notice of Exemption in accordance with the California Environmental Quality Act (CEQA) and approval of a Precise Plan (PP) and a Conditional Use Permit (CUP) to demolish the former Pizza Hut building and construct a new 7,500-square-foot retail and restaurant building located at 72310 Highway 111. Case No. PP/CUP 20-0002 (Nadel Architects, Inc, Los Angeles, California, Applicant). Note, the staff report(s) and Zoom video of the meeting are available on the City's website. Click on the following link to access: www.planninq-commission- information-center. Vice -Chair DeLuna disclosed that she works for a company that is involved with a property in the Housing Element; therefore, she recused herself. Ms. Nicole Criste, Terra Nova Planning, the City's consultant, Palm Desert, California, presented a PowerPoint presentation regarding the Housing Element update. She recommended that the Planning Commission continue this item to February 1, 2022, to allow staff to work with the Department of Housing and Community Development to finalize details of the Housing Element. She also recommended opening the public hearing, taking public testimony, and leaving the public hearing open to the February 1 meeting. Chair Greenwood declared the public hearing open and invited public testimony FAVORING or OPPOSING this matter. 2 3-440 F MINUTES PALM DESERT PLANNING COMMISSION JANUARY 18, 2021 Ms. Lili'ana Figueroa and Mr. Mark Stein, with CPMC Realty, Palm Desert, California, voiced their concern with the designation for affordable housing units on their client's site. Commissioner Pradetto moved to, by Minute Motion, leaving the public hearing open and continuing Case No. GPA 21-0002 to February 1, 2022. The motion was seconded by Commissioner Gregory and carried by a 4-0 vote (AYES: Greenwood, Gregory, Holt, and Pradetto; NOES: None; ABSENT: DeLuna). B. REQUEST FOR CONSIDERATION of a recommendation to the City Council for approval of a Zoning Ordinance Amendment to modify Palm Desert Municipal Code Section 25.34.060 regarding Timeshare Projects. Case No. ZOA 22-0001 (Cl_y of Palm Desert, Palm Desert California,. Applicant). Principle Planner Rosle Lua gave a PowerPoint presentation reviewing the staff report in detail and recommended approval to the City Council. At this point, staff and the City Attorney responded to questions asked by the Planning Commission. Chair Greenwood declared the public hearing open and invited public testimony FAVORING or OPPOSING this matter. With no testimony offered, Chair Greenwood declared the public nearing closed. The Planning Commission concurred with the direction that the City is taking regarding timeshare projects. Commissioner Pradetto moved to waive further reading and adopt Planning Commission Resolution No. 2805, recommending approval to the City Council for Case No. 7_OA 22-0001. The motion was seconded by Vice -Chair DeLuna and carried by a 5-0 vote (AYES: DeLuna, Greenwood, Gregory, Holt, and Pradetto; NOES: None). XI. MISCELLANIIOUS None XII. COMMITTEE MEETING UPDATES. A. CULTURAL ARTS COMMITTEE Commissioner Holt mentioned that she shared the San Pablo Corridor Art Plan and the details for the meeting scheduled on Monday, January 24 at 11:30 a.m. to discuss the plan. 3 3-441 MINUTES PALM DESERT PLANNING COMMISSION JANUARY 18, 2021 B_ PARKS & RECREATION COMMISSION Mr. Alvarez stated that the Planning staff presented a concept plan for a park on Gerald Ford Drive and near Interstate 10. Staff hoped that the City would develop the park in two to three years. Chair Greenwood asked for the status of the Portola Avenue interchange. Mr. Alvarez responded that currently, the project is not feasible due to needing additional funding. Staff would discuss funding during the budget process and the City Council. XIIII. REPORTS AND REMARKS None XIV. ADJOURNMENT With the Planning Commission concurrence, Chair Greenwood adjourned the meeting at 7:19 p.m. HN REEN O D, CH ATTEST: MARTIN ALVAREZ, SECRETARY Y MONIC 'REILLY, RECORDING SECRETARY 1 W 3-442 71-5 io FRED WNOYG DRJIB VALNi OFsuE7, CAL100A IA gi160-1571 'PL; 760 346—a6 r i i ,t ,4ynrpvilndcxert.uM CITY OF PALM DESERT LEGAL NOTICE NOTICE OF A PUBLIC HEARING BEFORE THE CITY COUNCIL OF THE CITY OF PALM DESERT TO CONSIDER APPROVAL FOR A ZONING ORDINANCE AMENDMENT TO MODIFY THE PALM DESERT MUNICIPAL CODE SECTION 25.34.060 (TIME-SHARE PROJECTS) The City of Palm Desert City Council (City), in its capacity as the Lead Agency, finds that this Ordinance is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly; it prevents changes in the environment pending the completion of the contemplated study of impacts. Project LocationlDescription: Project Location: City wide Proiect Description: Zoning Ordinance Amendment to update the Time Share Project ordinance (Chapter 25.34.60) to consider a regulatory response to the Pacaso type businesses related to "co -ownership" shares in residential properties operating within the City. Recommendation: City Council to approve the first reading of the Time -Share uses and its regulations and pass to second reading in accordance to CEQA Guidelines, Public Hearing: The public hearing will be held before the City Council on February 24, 2022, at 4,00 p.m. via Zoom. The hearing will be conducted in accordance with the City's emergency protocols for social distancing. Options for remote participation will be listed on the Posted Agenda for the meeting at: httus Ilwww cityofpaimdesert.odour-c+tyln ayror•as�d-city-cout�ctl- /dtv-ccLmcil-mt- _-iq-information-center Comment Period: The public comment period for this project is from February 14, 2022 to February 24, 2022, Public Review: The plans and related documents are available for public review Monday through Thursday from 8:00 a.m. to 5:00 p.m, by contacting the project planner, Rosie Lua, Principal Planner_ Please submit written comments to the Planning/Land Development Division. If any group challenges the action in court, issues raised may be limited to only those issues raised atthe public hearing described in this notice or in written correspondence at, or prior to the City Council hearing. All comments and any questions should be directed to: Rosie Lua, Principal Planner City of Palm Desert 73-510 Fred Waring Drive Palm Desert, CA 92260 (760) 346-0611, Extension 480 rlua@cityofpalmdesert.org PUBLISH: DESERT SUN NIAMH M. ORTEGA, DEPUTY CITY CLERK FEBRUARY 10. 2022 PALM DESERT CITY COUNCIL 3-443 STAFF REPORT CITY OF PALM DESERT MEETING DATE: November 18, 2021 PREPARED BY: Robert Hargreaves, City Attorney, Best Best & Krieger LLP REQUEST: Update on Timeshare Ordinance Recommendation By Minute Motion, request the Planning Commission to review of the timeshare ordinance and provide City Council with any recommended amendments. Background Analysis INTRODUCTION Recently, the City has become aware that a new business model, "Pacaso", that features "co -ownership" shares in residential properties, has begun operating within the City. Given the nature of its use of residential property, it is my opinion that it is a timeshare use, as defined by California law and regulated by Section 25.34.060 of the Municipal Code. The Palm Desert timeshare ordinance (Municipal Code Section 25.34.060) has not been updated since 2013. As a preliminary matter in considering regulatory responses to the Pacaso-type businesses, we are recommending that Section 25.34.060 be updated to provide a more robust definition, to refer to current California law, and to provide a broader scope of potential regulation, should the city decide to pursue it. DISCUSSION Pacaso is a corporation that sells "co -ownership" shares in residential property. The company started by purchasing homes in tourist destinations in California, though they are rapidly expanding throughout the United States and internationally. Pacaso's business model is as follows: Pacaso will purchase or enter into a contract to purchase single family homes, then markets "co -ownership" interests in the homes to up to eight individuals. Pacaso then forms a limited liability company ("LLC"), which owns title to the residential home. The "co -owners" each purchase a one -eighth share, and are entitled to use the residential property for a certain number of days per year according to their share of ownership in the LLC. The one -eighth interest entities the purchaser to stay at the property for up to 45 days per year in increments of 2-14 days, including one "special November 18, 2021 - Staff Report Update of Timeshare Ordinance Page 2 of 4 day" (Fourth of July, Thanksgiving, Christmas, etc.). The stays are reserved on an app, and while each co-owner is prohibited from renting the home as a short-term rental, they are permitted to allow other guests to stay there during their allotted days. Once shares in an LLC are sold, Pacaso continues to manage the homes, including providing landscaping and pool maintenance, furnishing the homes, and paying all expenses, which are then passed through to the co -owners. It is our understanding that there is currently at least one property in Palm Desert that is being marketed by Pacaso. Section 11212(z) of the Business and Profession Code defines the following significant terms: "Time-share plan" 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. A time-share plan may be either of the following: (1) A "single site time-share plan" that is the right to use accommodations at a single time-share property. (2) A "multisite time-share plan" that includes either of the following: (A) A "specific timeshare interest" that is the right to use accommodations at a specific timeshare property together with use rights in accommodations at one or more other component sites created by or acquired through the time-share plan's reservation system. (B) A "nonspecific time-share interest" that is the right to use accommodations at more than one component site created by or acquired through the time-share plan's reservation system, but including no specific right to use any particular accommodations. It is clear that the Pacaso model fits within that definition of "time-share plan" as co -owners receive ownership rights to use a property for less than a year on a recurring basis. Pacaso is not currently regulated by the State, as it does not meet the State's ten -share threshold for regulation. Palm Desert Section 25.34.060 does not dwell on the definition of "time-share" and provides: "The time-share project must be composed of "time-share estates" as defined in California Business and Professions Code Section 11003.5 [now section 1121 ]." Nor does the ordinance provide any specific enforcement provisions. 3-445 November 18, 2021 - Staff Report Update of Timeshare Ordinance Page 3 of 4 In the attached draft ordinance, the definition of time-share is more elaborate, and is consistent with current California statutes. It also provides enforcement options against persons that own, manage, or market illegal time-shares. At this point, the draft ordinance is before the council for discussion and direction. If the council directs that the update proceed, the ordinance will be put before the planning commission for consideration and recommendation, before it is brought back to the city council for adoption. 3,446 November 18, 2021 - Staff Report Update of Timeshare Ordinance Page 4 of 4 Fiscal Analysis There is no direct fiscal impact associated with this item. LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW ASSISTANT CITY MANAGER RWH N/A N/A Andy _T-irestine Robert W. Hargreaves Janet M, Moore Andy Firestine City Attorney Director of Finance Assistant City Manager City Manager L. Todd Hileman: [_. Todd i-KLemuvw ATTACHMENTS: , Draft ordinance 3-447 ORDINANCE NO. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, AMENDING PALM DESERT MUNICIPAL CODE SECTION 25.34.060 REGARDING TIME-SHARE PROJECTS THE CITY COUNCIL OF THE CITY OF PALM DESERT DOES ORDAIN AS FOLLOWS: SECTION 1. Amendment to Palm Desert Municipal Code. Palm Desert Municipal Code section 25.34.060 is hereby amended as follows: "25.34.060 Time -Share Pr-ejeets-Uses A. Purpose. The purpose of the special use regulations for time-share preje4s uses is to establish special location and site development standards. B. Definitions. 1. "Accommodation" means any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.160. 2. "Developer" means person, who at any point in time, owns, or has an option or contract to acquire eleven or more time-share interests for purposes of sale in the ordinary course of business if the time-share interests were acquired or are to be acquired from the original recipient of a public report for the time-share plan, or from a person who succeeded to the e interest of the original recipient in eleven or more time-share interests in a time-share plan. 3. "Owner" means owner of a time-share interest. 4. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legaly, or any combination thereof. "Time-share instrument" means one or more documents. by whatever name denominated, creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. 6. "Time-share interest" means and includes either of the following: i A "time-share estate," which is the ri ht to exclusivel ocep a time-share property for a period of time on a recurring basis pursuant to a time-share plan, coupled with a freehold estate or an estate for years with a fitture interest in a time-share property or a specified_ portion thereof. e (ii) A "time-share use," which is the right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan,_ _which right is neither coupled with a freehold interest, nor coupled with an estate for years with a future interest, in a time-share property. 7. "Time-share plan" means any arrangement, plan, scheme, or similar device, 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 the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a Reriod of time less than a full year during py given year, on a recurring basis for more than one year, but not necessarily for consecutive years. 8. "Time-share ro ert " means one or more accommodations subject to the same time-share instrument, together with any other property rights appurtenant to those accommodations. 9. "Time-share use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan. C. Permitted zones. A time-share project use shall be permitted only in a planned residential zone, a general commercial zone, or a planned commercial resort zone. Any time- share prat use shall be developed in conjunction with a resort hotel having 500 or more rooms and an 18-hole golf course of not less than 6,400 yards, and then only if and when a conditional use permit has been obtained from the Commission in accordance with Section 25.72.050 (Conditional Use Permit) of this code. G D. Application submittal requirements. In addition to standard application submittal requirements, an applicant for a conditional use permit approval involving a time-share prejeet use shall submit in the application at least the following information: 1. Copies of documents and information required pursuant to Article 12.2 of the California AdministFative Code of Regulations, Sections 2814 2809.1, 2809.2, and 2809.3 wherein the requirements for a "s„i..�� properly completed" application for a final subdivision public report are enumerated, excluding those documents so enumerated which are subject to the approval of the City and therefore otherwise available to the City. In the event such documents and information have not been filed with the California Department of Real Estate at the time an applicant applies for a conditional use permit, the applicant shall furnish such documents and information upon the submission of such documents and information to the Department of Real Estate, but in no event later than the issuance of the conditional use permit. 2. In the event an existing condominium project is proposed to be converted to a whole or partial time-share prejec use, a verified description or statement of the number and percentage of the current condominium owners desiring or consenting to the proposed conversion of some or all of the units to a time-share basis shall be submitted. Also, in such instance there shall be submittedto the Commission prior to or during the hearing process, a verified statement of the number and percentage of owners who have received notification, either personally or by receiped certified US mail. 3. In the case of a new mixed project (i.e., time-sharing condominium/rental), a description of the means proposed to be employed to disclose the number and location of all time-share traits accommodations within the prejeet time-share use shall be submitted. 4. Description of time periods, types of units accommodations, and which units accommodations are in the time-share program (if less than all), and the length of time each of the tHrtks accommodations are committed to the time-share pregr lean shall be submitted. P. E. Requirements. Notwithstanding any other provisions of this chapter, the following requirements must be met by any time-share develepmext use in any permitted zone: 1. The time-share prejeet use must be composed of "time-share estates" interests as 2. All maintenance agreements and conditions, covenants, and restrictions must be approved by the City. 3. The minimum time-share trse interest exclusive occupanMperiod shall be for one week (seven days). 4. Developer of the time-share plan shall post a maintenance bond, letter of credit, or cash deposit to ensure the maintenance of any landscaping along the perimeter of the prejeetime-share use abutting any public right-of-way. The amount of the bond, letter of credit, or cash deposit shall be equal to 25 percent of the annual budget of the time-share use owner's association having the duty to maintain the exterior of the time-share property prejeet which is for such landscaping expenses. The bond, letter of credit, or cash deposit shall run to the City and shall remain in place for life of the prejeet time-share plan. 5. With respect to a time-share prejeet use, all interests created therein shall be subject to a public facilities impact mitigation fee of $150 per week share. With respect to each week share in a time-share project -use, a public facilities impact fee payable under this section shall be paid on the first day of the first calendar month following the sale and conveyance of such week share by the sponsor dev_eloper_of a time-share project plan to an individual consumer (excluding bulk sales from one sperm developer to another, in which case the successor sponsor developer shall have the obligation to pay the public facilities impact fee described herein upon the sale and conveyance of a week share to a consumer). On the first day of each calendar month, or less frequently if required by the Council, a sponsor developer of a time- share preje plan shall also submit a written report to the City which specifies the number of week shares in the time-share pFejeet plan which have been sold and conveyed in the preceding calendar month. EL F. Minimum number of units. The minimum number of units in a time-share project shall be 50. FL G. Development standards. Time-share projects uses shall be designed to conform to the standards for hotel developments in the event the time-share projee use is located in a planned commercial resort or general commercial zone. The time-share prejeeuse must comply with all development standards of the zone in which it is located. With respect to time-share 3-450 pFejec s uses developed within a planned residential zone, the density of the time-share pFejest uses shall not exceed the density permitted in such zone for residential projects; with respect to time-share pFejectS uses developed in a general commercial zone or a planned commercial resort zone, the density of the time-share projeet uses shall not exceed the density permitted in such zone for general commercial or planned commercial projects. In determining the density of a time-share prejee use, upon the request of an applicant, the Director shall have the authority to transfer the density permitted in other similarly zoned property owned by an applicant to the time-share project use. H. Violations, Enforcement and Civil Penalties 1, Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is guihy.of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.12 (General Penalty). 2. Any responsible person, including by not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is subject to administrative fines as set forth in Chanter 8.81 (Administrative Citations). AW person issued an administrative citation pursuant to this section shall for each separate violation be subject to: (1) an administrative fine in an amount not to exceed one thousand dollars ($1,000) for the first citation; (2) an administrative fine in an amount not to exceed three thousand dollars ($3,000)for a second citation issued for the swine offense within a twelve-month eriod of the date of the first offense_; and (3) a fine in an amount not to exceed five thousand dollars ($5,000). 3. Time-share use, and/or advertisement for time-share use, of an accommodation in violation of this section is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance and may be abated pursuant to Chapter 8.20 (Public Nuisances), Chapter 9.24 (Noise Control), and Chapter 9.25 (Multiple Responses to Loud or Unruly Parties, Gatherings or Other Similar Events.) 4. Each day -the violation of this cha ter occurs shall constitute a separate offense. 5. The remedies under this section are cumulative and in addition to M and all other remedies available at law and uit ." SECTION 2. Severability. if any section, subsection, subdivision, paragraph, sentence, clause or phrase of this Ordinance, or any part thereof, is for any reason held to be unconstitutional, such decision shall not affect the validity of the remaining portion of this Ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase thereof, irrespective of the fact that any one or more section, subsection, subdivision, paragraph, sentence, clause or phrase 3-451 be declared unconstitutional. If for any reason any portion of this Ordinance is found to be invalid by a court of competent jurisdiction, the balance of this Ordinance shall not be affected. SECTION 3. Certification and Publication. The City Clerk of the City of Palm Desert shall certify to the adoption of this Ordinance and cause publication to occur in a newspaper of general circulation and published and circulated in the City in a manner permitted under California Government Code Section 36933. SECTION 4. CEQA. The City Council finds that adoption of this Ordinance is not a "project," as defined in the California Environmental Quality Act because it does not have a potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment and concerns general policy and procedure making. PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Palm Desert on the day of , 2021, by the following vote. AYES: NOES: ABSTAIN: ABSENT: Kathleen Kelly, Mayor ATTEST: Norma Alley, City Clerk APPROVED AS TO FORM: Robert Hargreaves, City Attorney 3-452 From: Kevin Swam To: Rosie Lua Subject: FW: Latest Paca5o Report Date: Monday, April 11, 2022 T56:25 AM FYI, Kevin Swartz Associate Planner Ph:760.346.0611 Direct:760.776.6485 k,,wartz@cityofQa1md_ sert.org From: Kathleen Kelly <kkelly@cityofpalmdesert.org> Sent: Friday, April 8, 2022 7:04 AM To: Robert Hargreaves <Robert.Hargreaves@bbklaw.com>; Kevin Swartz <kswartz@cityofpalmdesert.org> Subject: Latest Pacaso Report From Ellen Kane: Looks like Picasso bought the house at the corner of Somera and Alamo. If you google the address with Picasso after it is on their webpage and is showing as "available now". Think it just closed escrow because the for sale sign is down. That makes three Picasso's in my immediate area now (Bel Air, Skyward & Somera). Would really love neighbors not 118 ownerships (timeshares?) 3-453 73--510 FRE❑ WARING DmvL Ki.m Dxs> Ri-, CALIFORNIA 9226o_2578 TEL: 76o 346—o6iI info u cit yo Fpa l mdescrt org NOTICE OF CONTINUED PUBLIC HEARING NOTICE IS HEREBY GIVEN that the following Public Hearing was continued from the City Council meeting of March 24, 2022 to the City Council meeting of April 28, 2022: Ordinance No. 1378 to approve Zoning Ordinance Amendment 22-0001 to modify Palm Desert Municipal Code Section 25.34.060 renardinq the Time - Share Proiects (Continued from February 24, 2022) NOTICE IS FURTHER GIVEN that the City Council meeting of April 28, 2022 wiil take place virtually at 3:00 p.m. at cityofpalmdesert.org/zoom. All interested persons are invited to attend said Public Hearing. DATED this 28th day of March, 2022. N1AMH M. ORTEGA Deputy City Clerk 3-454 STAFF REPORT CITY OF PALM DESERT MEETING DATE: May 12, 2022 PREPARED BY: Niamh Ortega, Deputy City Clerk APPROVING AUTHORITY: City Council REQUEST: Second reading and adoption of Ordinance No. 1378 to approve Zoning Ordinance Amendment 22-0001 to modify Palm Desert Municipal Code Section 25,34.060 regarding Time -Share Projects. Recommendation: Waive the second reading of the ordinance text in its entirety and read by title only; and adopt Ordinance No. 1378 entitled, "AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, AMENDING PALM DESERT MUNICIPAL CODE, CHAPTER 25, MODIFYING SECTION 25.34.60 REGARDING TIME-SHARE PROJECTS, CASE NO. ZOA 22- 0001." Background/Analysis: On April 28, 2022, the City Council introduced Ordinance No. 1378 for first reading, as noted below: Motion by Councilmember Kelly, second by Councilmember Quintanilla, carried 3-1-1 (with Mayor Pro Tern Jonathan voting no and Councilmember Nestande recused), to waive further reading and pass to second reading Ordinance No. 1378 approving Zoning Ordinance Amendment 22-0001 to modify Palm Desert Municipal Code Section 25.34.60 regarding Time - Share Projects. This report provides for the City Council to waive further reading and adopt the ordinance. The ordinance shall be effective 30 days from adoption. Financial Impact: There is no direct financial impact associated with this item. Attachments: 1. Ordinance No. 1378 3-455 MEETING DATEy " l ' 0 ' (�9L �-a ❑ //CONTINUED TO IVP'ASSESTO2ND READING d ' /aq ORDINANCE NO. 1378 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, AMENDING PALM DESERT MUNICIPAL CODE, CHAPTER 25, MODIFYING SECTION 25.34.60 REGARDING TIME-SHARE PROJECTS CASE NO: ZOA 22-0001 WHEREAS, the Planning Commission of the City of Palm Desert, California, did on the 18th day of January 2022, hold a duly noticed public hearing to consider the request by the City of Palm Desert for approval of the above -noted, and adopted Resolution No. 2805, recommending that the City Council adopt the Zoning Ordinance Amendment (ZOA) for said projects regulating the time-share projects; and WHEREAS, the Zoning Ordinance Amendment (ZOA) modifies the Palm Desert Municipal Code (PDMC) Section 25.34.60 (Time -Share Projects) and implements a requirement for time share uses; and WHEREAS, the City Council of the City of Palm Desert, did on the 241h day of February 2022, hold a duly noticed public hearing to, the City Council opened the public hearing and approved staff's request to continue to the 24th of March 2022. On the 24th of March 2022, another continuance of the public hearing was granted to the 28th of April 2022. On the 28th of April 222, the City Council considered the request by the City of Palm desert for approval of a ZOA determined that the time-share process is consistent with the City's General Plan; and WHEREAS, at said public hearing, upon hearing and considering all testimony and arguments, if any, of all interested persons desiring to be heard, said City Council did find the following facts and reasons exist to approve said request: SECTION 1. Adoption of Recitals. The City Council hereby adopts the foregoing recitals as its findings in support of the following regulations and further finds that the following regulations are beneficial and appropriate to protect the health, safety, and welfare of the residents and businesses of Palm Desert within the City limits. A. The City of Palm Desert, California ("City") is a municipal corporation, duly organized under the constitution and laws of the State of California; and B. The Planning and Zoning Law authorizes cities to establish by ordinance the regulations for land use and development. SECTION 2. Amendment. The City Council of the City of Palm Desert, California, approve, and adopt the PDMC amendment to Section 25.34.60 (Time -Share Projects) as shown in Exhibit A, which is attached hereto and incorporated herewith. SECTION 3. Severability. If any section, subsection, subdivision, paragraph, sentence, clause, or phrase in this ordinance or any part thereof is for any reason held to be 3-456 1 101:1 a] 10E-1LI+3 41,11LON u4i-] AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, AMENDING PALM DESERT MUNICIPAL CODE, CHAPTER 25, MODIFYING SECTION 25.34.60 REGARDING TIME-SHARE PROJECTS CASE NO: ZOA 22-0001 WHEREAS, the Planning Commission of the City of Palm Desert, California, did on the 10th day of January 2022, hold a duly noticed public hearing to consider the request by the City of Palm Desert for approval of the alcove -noted, and adopted Resolution No. 2605, recommending that the City Council adopt the Zoning Ordinance Amendment (ZOA) for said projects regulating the time-share projects; and WHEREAS, the Zoning Ordinance Amendment (ZOA) modifies the Palm Desert Municipal Code (PDMC) Section 25.34.60 (Time -Share Projects) and implements a requirement for time share uses; and WHEREAS, the City Council of the City of Palm Desert, did on the 241h day of February 2022, hold a duly noticed public hearing to, the City Council opened the public hearing and approved staffs request to continue to the 241h of March 2022. On the 24th of March 2022, another continuance of the public hearing was granted to the 2Bth of April 2022. On the 28th of April 222, the City Council considered the request by the City of Palm Desert for approval of a ZOA determined that the time-share process is consistent with the City's General Plan; and WHEREAS, at said public hearing, upon hearing and considering all testimony and arguments, if any, of all interested persons desiring to be heard, said City Council did find the following facts and reasons exist to approve said request: SECTION !!on of Recitals. The City Council hereby adopts the foregoing recitals as its findings in support of the following regulations and further finds that the following regulations are beneficial and appropriate to protect the health, safety, and welfare of the residents and businesses of Palm Desert within the City limits. A. The City of Palm Desert, California ("City") is a municipal corporation, duly organized under the constitution and laws of the State of California; and B. The Planning and Zoning Law authorizes cities to establish by ordinance the regulations for land use and development. SECTION 2. Amendment. The City Council of the City of Palm Desert, California, approve, and adopt the PDMC amendment to Section 25.34.60 (Time -Share Projects) as shown in Exhibit A, which is attached hereto and incorporated herewith. SECTION 3.Seyerability, If any section, subsection, subdivision, paragraph, sentence, clause, or phrase in this ordinance or any part thereof is for any reason held to be City a' '° DesertDocunrient 3-457 ORDINANCE NO. 1378 unconstitutional or invalid or ineffective by any court of competent jurisdiction, such decision shall not affect the validity or effectiveness of the remaining portions of this ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause, or phrase thereof irrespective of the fact that one (1) or more subsections, subdivisions, paragraphs, sentences, clauses, or phrases be declared unconstitutional, invalid, or ineffective, SECTION 4. Publication. The City Clerk of the City of Palm Desert, California, is hereby directed to publish this ordinance in The Desert Sun, a newspaper of general circulation, published and circulated in the City of Palm Desert, California, and shall be in full force and in effect thirty (30) days after its adoption. PASSED, APPROVED, AND ADOPTED by the City Council of the City of Palm Desert, California, at its regular meeting held on the 12th day of May 2022, by the following vote, to wit: ATT AYES: KELLY, QUINTANILLA AND HARNIK NOES: JONATHAN ABSENT: NESTANDE ABSTAIN: NONE �C. HA IK,'MAYOR t- IONY J. t� M 1 CLE KK OF PALM [DESERT) CALIFORNIA 1 2 City of Palm Desert Document 3-458 ORDINANCE NO. 1378 "EXHIBIT A" ' ZONING ORDINANCE AMENDMENT SECTION 1. Amendment to Palm Desert, Municipal Code. Palm Desert Municipal Code section 25,34,060 is hereby amended as follows: 25.34,060 Time -Share Uses A. Purpose. The purpose of the special use regulations for time-share uses is to establish special location and site development standards. S. Definitions. 1. "Accommodation" means any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.160. 2. "Developer" means person, who at any point in time, owns, or has an option or contract to acquire eleven or more time-share interests for purposes of sale in the ordinary course of business if the time-share interests were acquired or are to be acquired from the original recipient of a public report for the time -snare plan, or from a person who succeeded to the interest of the original recipient in eleven or more time-share interests In a time-share plan. 3. "Owner" means owner of a time-share interest. 4. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. 5. "Time-share instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. 6. "Time-share interest" means and includes either of the following: (i) A "time-share estate," which is the right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, coupled with a freehold estate or an estate for years with a future interest in a time-share property or a specified portion thereof. (1i) A "time-share use," which is the, right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-s re plan, which right is neither coupled with a freehold interest, nor coupled with an estateor years with a future interest, in a time-share property. 7. "Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, sale, lease, deed:, license, right to use agreement, or CAry of Palm Desert Document 3-459 ORDINANCE NO. 137E by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, 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. "Timeshare Plan" does not include, arrangements whereby multiple parties join in directly purchasing full ownership of an accommodation and thereafter agree upon arrangements for their shared use. 8. "Time-share property" means one or more accommodations subject to the same time-share instrument, together with any other property or rights to property appurtenant to those accommodations. 9. "Time-share use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan. C. Permitted zones. A time-share use shall be permitted only in a planned residential zone, a general commercial zone, or a planned commercial resort zone. Any time- share use shall be developed in conjunction with a resort hotel having 500 or more rooms and an 18-hole golf course of not less than 6,400 yards, and then only if and when a conditional use permit has been obtained from the Commission in accordance with Section 28.72.050 (Conditional Use Permit) of this code. D. Application submittal requirements. In addition to standard application submittal requirements, an applicant for a conditional use permit approval involving a time- share use shall submit in the application at least the following information: 1. Copies of documents and information required pursuant to Article 12.2 of the California Code of Regulations, Sections 2809.1, 2809.2, and 2809.3 wherein the requirements for a "properly completed" application for a final subdivision public report are enumerated, excluding those documents so enumerated which are subject to the approval of the City and therefore otherwise available to the City. In the event such documents and information have not been filed with the California Department of Real Estate at the time an applicant applies for a conditional use permit, the applicant shall furnish such documents and information upon the submission of such documents and information to the Department of Real Estate, but in no event later than the issuance of the conditional use permit. 2. In the event an existing condominium project is proposed to be converted to a whole or partial time-share use, a verified description or statement of the number and percentage of the current condominium owners desiring or consenting to the proposed conversion of some or all of the units to a time-share basis shall be submitted. Also, in such instance there shall be submitted to the Commission prior to or during the hearing process, a verified statement of the number and percentage of owners who have received notification, either personally or by recelpted certified US mail. 3. In the case of a new mixed project (i.e., time-sharing condo min iumlrental), a description of the means proposed to be employed to disclose the number and location of all timeshare accommodations within the time-share use shall be submitted. 3-460 ORDINANCE NO. 1378 4, Description of time periods, types of accommodations, and which accommodations are in the time-share program (if less than all), and the length of time each of the accommodations are committed to the time-share plan shall be submitted. E. Requirements. Notwithstanding any other provisions of this chapter, the following requirements must be met by any time-share use in any permitted zone: 1. The time-share use must be composed of time-share interests. 2. All maintenance agreements and conditions, covenants, and restrictions must be approved by the City. 3. The minimum time-share interest exclusive occupancy period shall be for one week (seven days). 4. Developer of the time-share plan shall post a maintenance bond, letter of credit, or cash deposit to ensure the maintenance of any landscaping along the perimeter of the timeshare use abutting any public right-of-way. The amount -of the bond, letter of credit, or cash deposit shall be equal to 26 percent of the annual budget of the time-share use owner's association having the duty to maintain the exterior of the time-share property which is for such landscaping expenses. The bond, letter of credit, or cash deposit shall run to the City and shall remain in place for life of the time-share plan. 5. With respect to a time-share use, all interests created therein shall be subject to a public facilities impact mitigation fee of $160 per week share. Vlfith respect to each week share in a time-share use, a public facilities impact fee payable under this section shall be paid on the first day of the first calendar month following the sale and conveyance of such week share by the developer of a time-share plan to an individual consumer (excluding bulk sales from one developer to another, in which case the successor developer shall have the obligation to pay the public facilities impact fee described herein upon the sale and conveyance of a week share to a consumer). On the first day of each calendar month, or less frequently if required by the Council, a developer of a time-share plan shall also submit a written report to the City which specifies the number of week shares in the time-share plan which have been sold and conveyed in the preceding calendar month. F. Minimum number of units. The minimum number of units in a time-share project shall be 50. G. Development standards. Time-share uses shall be designed to conform to the standards for hotel developments in the event the time-share use is located in a planned commercial resort or general commercial zone. The time-share use must comply with all development standards of the zone in which it is located. Nth respect to time-share uses developed within a planned residential zone, the density of the time-share uses shall not exceed the density permitted in such zone for residential projects; with respect to time-share uses developed in a general commercial zone or a planned commercial resort zone, the density of the time-share uses shall not exceed the density permitted in such zone for general commercial or planned commercial projects. In determining the density of a time-share use, upon the request of an applicant, the Director shall have the authority to transfer the density permitted in other similarly zoned property owned by an applicant to the time-share use. ,Ay of Pairn 'Desert E."Mcurnent 3-461 ORDINANCE NO. 1378 H. Violations, Enforcement and Civil Penalties 1. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.12 (General penalty). 2. Any responsible person, including by not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is subject to administrative fines as set forth in Chapter 8.81 (Administrative Citations). Any person issued an administrative citation pursuant to this section shall for each separate violation be subject to: (1) an administrative fine in an amount not to exceed one thousand dollars ($1,000) for the first citation; (2) an administrative fine in an amount not to exceed three thousand dollars ($3,000) for a second citation issued for the same offense within a twelve-month period of the date of the first offense; and (3) a fine in an amount not to exceed five thousand dollars ($5,000). 3. Time-share use, and/or advertisement for time-share use, of an accommodation in violation of this section is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance and may be abated pursuant to Chapter 8.20 (public Nuisances), Chapter 9.24 (Noise Control), and Chapter 9.25 (Multiple Responses to Loud or Unruly Parties, Gatherings or Other Similar Events). 4. Each day the violation of this chapter occurs shall constitute a separate offense. 5. The remedies under this section are cumulative and in addition to any and all other remedies available at law and equity. E 3-462 Exhibit N City of Sonoma Time Share Ordinance and Supporting Evidence 3-463 City of'sonoma Agenda Item Summary rt«;�¢' Meeting: City Council - 01 Jun 2022 Department Planning and Community Services Agenda Item Title Staff Contact David A. Storer, AICP, Director Kristina Tierney, Associate Planner Discussion, Consideration, and Possible Action to Introduce an Ordinance Amending the Sonoma Municipal Code Title 19, Section 19.10.050 (Allowable Land Uses and Permit Requirements) and Adding Title 19, Section 19.50.140 (Time-shares) to the City of Sonoma Municipal Code and Finding this Action Exempt from Further Environmental Review Under the General Rule in California Environmental Quality Act (CEQA) Guidelines Section 15061(b)(3) That CEQA Only Applies to Projects that Have the Potential for Causing a Significant Effect on the Environment Summary On January 19, 2022, the Sonoma City Council unanimously adopted an Urgency Ordinance governing the use of properties as time-shares. Previously, the Municipal Code did not contain any regulation governing the use of properties as time-shares which meant that as a non - enumerated use, time-shares were prohibited throughout the City. However, due to the rise in fractional home ownership, the City Council directed staff to address potential ambiguity regarding whether fractional home ownership uses constitutes a prohibited time-share or an allowed residential use. The Urgency Ordinance was presented to the Planning Commission on January 13th, 2022, for comment and direction to staff, and the Planning Commission unanimously recommended approval to City Council. The Urgency Ordinance added Section 19.50,140 — Timeshares into Title 19 and was effective on January 19, 2022. On February 10, 2022, staff presented a draft Regular Ordinance to the Planning Commission for review. The Planning Commission unanimously recommended that the City Council introduce and adopt the attached ordinance. The ordinance is tentatively scheduled to be introduced on June 1, 2022, and could be adopted on June 15, 2022, to supersede the Urgency Ordinance; however, the Urgency Ordinance would be in effect until a regular ordinance becomes effective. The regular ordinance would go into effect 30 days after adoption - July 15, 2022, Recommended Council Action Introduce an Ordinance Amending the Sonoma Municipal Code Title 19, Section 19.10.050 (Allowable land uses and permit requirements) and Adding Title 19, Section 19.50.140 (Time- shares) to the City of Sonoma Municipal Code. Alternative Actions Council discretion. Financial Impact None. e em" Environmental Review Status [I Environmental Impact Report L Approved/Certified Negative Declaration No Action Required Exempt ❑ Action Requested 17 Not Applicable Attachments PUBLIC COMMENT ATTACHMENT Timeshare Regular Ordinance 3-465 �C1Ty [FOIL PUBLIC COMMENT TO THE CITY COUNCIL OR ONE OF THE CITY'S COMMISSIONS Any Public Correspondence Received by the City Regarding an Item that Will be Considered at a Public Meeting by the City Council or One of Its Commissions Can be Found on the City's CivicWeb Portal at the Following Link. It is Updated as New Correspondence is Received. https://sonomacity.civicweb, net/f i lepro/docu rents STAFF CONTACTS: City Council City Clerk (707) 933-2216 Planning, DRHP, CSEC Planning (707) 933-2204 3-466 (Titp at &Onomal ORDINANCE # - 2022 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SONOMA AMENDING SONOMA MUNICIPAL CODE TITLE 19, SECTION 19.10.060 (ALLOWABLE LAND USES AND PERMIT REQUIREMENTS) AND AMENDING TITLE 19, SECTION 19.50.140 (TIME-SHARES) TO THE . CITY OF SONOMA MUNICIPAL CODE WHEREAS, time share and fractional interest uses have been and currently are prohibited as uses not specifically enumerated in the Sonoma development code; and WHEREAS, the City has recently become aware of time-share companies or fractional interest companies wishing to operate in the City; and WHEREAS, a severe housing crisis exists in the state with the demand for housing outpacing the supply; and WHEREAS, the City of Sonoma is particularly experiencing a housing emergency due to its relative isolation, limited housing supply, and desirable location; and WHEREAS, time-share or fractional interest uses threaten to reduce the housing supply in the City by turning long-term housing in the City into vacation rentals and reducing the affordable housing stock in the City; and WHEREAS, time-share and fractional interest uses increase traffic and noise impacts and have the same character as commercial hotels, motels, and other transient occupancy uses due to their transient nature making them inappropriate for residential zones; and WHEREAS, the development of time-share or fractional interest uses in Commercial and Mixed Use zones (which also have a "residential component" requirement) will reduce the City's ability to collect valuable property tax, sales tax, or Transient Occupancy Tax; and WHEREAS, by allowing time-share or fractional interest uses in the City, market pressure will incentivize property owners to convert their existing commercial, hotel or residential uses, thereby reducing revenue to the City in the form of commercial property taxes, sales tax, Transient Occupancy Tax, and valuable existing housing stock; and WHEREAS, allowing time-share or fractional interest uses in the Commercial and Mixed Use zones reduces the availability of suitable lands to provide housing units to meet the City's Regional Housing Needs Allocation for the 5t" and 611, Cycles; and WHEREAS, by allowing times -share or fractional interest uses in the City, developers of those uses will seek to convert underutilized commercial uses (in Commercial and Mixed Use zones), thereby reducing the City's ability to identify those sites as potential Housing Opportunity sites in the development of the City's 6tn Cycle Housing Element; and WHEREAS, on January 19, 2022 the City Council adopted an Urgency Ordinance pursuant to Government Code Sections 36934 and 36937 to make express the City's existing prohibition on time-share and fractional ownership uses in all zones in the City; and 276349.3 3-467 r WHEREAS, the City Council desires to adopt a non -urgency ordinance to supersede the urgency ordinance to ensure the City's municipal code addresses the impact that time-share and fractional ownership uses have and could have on the City's housing supply; and WHEREAS, on February 10, 2022, the Planning Commission reviewed and discussed potential changes to the Sonoma Municipal Code to address timeshare and fractional ownership uses and unanimously recommended that the item be continued to March 10, 2022; and WHEREAS, on March 10, 2022, the Planning Commission held a public hearing to review and discuss potential changes to the Sonoma Municipal Code to address time-share and fractional ownership uses and unanimously recommended that the City Council introduce the attached ordinance; and WHEREAS, the City Council found this action to be exempt from the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.) ("CEQA") and the State CEQA Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.) pursuant to CEQA Guidelines section 15061(b) (3) prior to taking action; and WHEREAS, on June 1, 2022, the City Council considered amendments to the Sonoma Municipal Code, consistent with the applicable policies of the Sonoma General Plan, at a public hearing; and WHEREAS, the proposed amendments to the Sonoma Municipal Code are consistent with State Law. NOW, THEREFORE, THE CITY COUNCIL. OF THE CITY OF SONOMA DOES ORDAIN AS FOLLOWS: SECTION 1. RECITALS. The above set forth recitals and findings are true and correct and incorporated herein by reference, as if set forth herein in full. SECTION 2. FINDINGS FOR DEVELOPMENT CODE AMENDMENTS. Pursuant to Section 19.86.070(8) of the Sonoma Municipal Code, the proposed amendments of the development code under this ordinance: A. Are consistent with the goals, policies, and actions of the General Plan because the amendments the amendments promote and preserve the use of property for vital housing; B. Would not be detrimental to the public interest, health, safety, convenience, or welfare of the city for the reasons described in the recitals above; C. Comply with the provisions of the California Environmental Quality Act (CEQA) as described in Section 4 below; and D. Are internally consistent with other applicable provisions of this development code because the amendments merely codify the existing prohibition on time-share and fractional ownership uses under the City's permissive zoning regime. 276349.3 SECTION 3. MUNICIPAL CODE AMENDMENTS. A. Tables 2-1, 2-2, 2-3 and 2-4 set forth in Sonoma Municipal Code section 19.10.050 are amended to read as set forth in Exhibit "A". B. Section 19.50.140 of the Sonoma Municipal Code is amended to read as follows: 19.50.140 Time -Shares. This section sets forth requirements for the establishment and operation of time-share uses. A. Definitions. 1. "Accommodation" means any dwelling unit, multifamily dwelling, apartment, condominium or cooperative unit, cabin, lodge, hotel or motel room, or other private or commercial structure containing toilet facilities therein that is designed and available, pursuant to applicable law, for use and occupancy as a residence by one or more individuals. 2. "Management entity" means the person who undertakes the duties, responsibilities, and obligations of the management of a time-share plan. 3. "Owner" means owner of a time-share interest. 4. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. 5. "Time-share instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. 6. "Time-share interest" means and includes either of the following: a. The right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, coupled with a freehold estate or an estate for years with a future interest in a time-share property or a specified portion thereof. b. The right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, which right is neither coupled with a freehold interest, nor coupled with an estate for years with a future interest, in a time-share property or a specified portion thereof. 7. "Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, sale, lease, deed, license, right to use agreement, articles of organization or incorporation, operating agreement or bylaws, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, 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. 276349.3 B. "Time-share property" means one or more accommodations subject to the same time-share instrument, together with any other property or rights to property appurtenant to those accommodations. 9. "Time-share use" and "fractional interest use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan. B. Permitted zones. None. Time share uses and fractional interest uses are prohibited throughout the City of Sonoma C. Violations, Enforcement and Civil Penalties 1. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.12 (General Penalty). 2. Any responsible person, including by not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is subject to administrative fines and/or penalties as set forth in Chapter 1.28 (Administrative Citations). 3. Time-share use, fractional interest use and/or advertisement for time-share use and/or fractional ownership use, of an accommodation in violation of this section is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance and may be abated pursuant to Chapter 1.12 (General Penalty), Chapter 1.30 (Administrative Notice and Order Proceedings), Chapter 9.56 (Noise), and any other relevant provision of this code as it may be amended from time to time. 4. Each day a violation of this chapter occurs shall constitute a separate offense. 5. The remedies under this section are cumulative and in addition to any and all other remedies available at law and equity. SECTION 4. CEQA. This Ordinance has been assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines, and the environmental regulations of the city. City Planning Staff has determined that the adoption and implementation of the Ordinance is exempt from further environmental review under the general rule in California Environmental Quality Act (CEQA) Guidelines Section 15061(b)(3) that CEQA only applies to projects that have the potential for causing a significant effect on theenvironment. As a text amendment and addition without any physical project being approved, it can be seen with certainty that there is no possibility that the Ordinance will have a significant effect on the environment. The M349.3 3-470 proposed Ordinance is therefore exempt from the provisions of CEQA because it does not involve a commitment to any specific project that may result in a potentially significant physical impact on the environment. The City Council concurs in these findings and adopts them as its own. The City Council, therefore, directs that a Notice of Exemption be filed with the County Clerk of the County of Sonoma in accordance with CEQA Guidelines. SECTION 5. SEVERABILITY If any section, subsection, subdivision, sentence, clause, phrase, or portion of this Ordinance for any reason is held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have adopted this Ordinance, and each section, subsection, subdivision, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases, or portions thereof be declared invalid or unconstitutional. SECTION 6. EFFECTIVE DATE. This ordinance shall take effect thirty (30) days after passage thereof. SECTION 7. PUBLICATION. This ordinance shall be published in accordance with the provisions of Government Code section 36933, subdivision (c)(1). SECTION 8. THIS ORDINANCE PREVAILS WHERE THERE IS CONFLICT. To the extent that this Ordinance conflicts with any other provision in the Sonoma Municipal Code or city ordinance (urgency or otherwise), policy or regulation, this Ordinance will control. APPROVED: Jack Ding, Mayor ATTEST: Rebekah Barr, MMC, City Cleric 276349.3 3-471 I HEREBY CERTIFY the foregoing ordinance was duly adopted at a Regular Meeting of the City Council of the City of Sonoma held on the , 2022 by the following vote: AYES: NOES: ABSENT: ABSTAIN: Rebekah Barr, MMC, City Clerk 276349.3 3-472 k i _ 00, of Sonoma r� Agenda Item Summary Meeting: City Council - 15 Jun 2022 Department Staff Contact Planning and Community Services Kristina Tierney, Associate Planner David A. Storer, AICP, Director Agenda Item Title Discussion, Consideration, and Possible Action to Adopt an Ordinance Amending the Sonoma Municipal Code Title 19, Section 19.10.050 (Allowable Land Uses and Permit Requirements) and Adding Title 19, Section 19.50.140 (Time-shares) to the City of Sonoma Municipal Code and Finding this Action Exempt from Further Environmental Review Under the General Rule in California Environmental Quality Act (CEQA) Guidelines Section 15061(b)(3) That CEQA Only Applies to Projects that Have the Potential for Causing a Significant Effect on the Environment Summary The attached regular ordinance prohibits timeshares and fractional interest uses in the City of Sonoma and was introduced unanimously on June 1, 2022. Upon its effective date on July 15, 2022, it repeals and replaces the Urgency Ordinance currently in place. Recommended Council Action Adopt an Ordinance Amending the Sonoma Municipal Code Title 19, Section 19.10.050 (Allowable land uses and permit requirements) and Adding Title 19, Section 19,50.140 (Time- shares) to the City of Sonoma Municipal Code. Alternative Actions Council discretion. Financial Impact None. Environmental Review Status l Environmental Impact Report h Approved/Certified 1= Negative Declaration No Action Required IVI Exempt Action Requested L Not Applicable Attachments PUBLIC COMMENT ATTACHMENT Timeshare Regular Ordinance Exhibit A Alignment with Council Goals: 3-4 73 Not Applicable Compliance with Climate Action 2020 Target Goals: CC: n/a 3-474 crry Al PUBLIC COMMENT TO THE CITY COUNCIL OR ONE OF THE CITY'S COMMISSIONS Any Public Correspondence Received by the City Regarding an Item that Will be Considered at a Public Meeting by the City Council or One of Its Commissions Can be Found on the City's CivicWeb Portal at the Following Link. It is Updated as New Correspondence is Received. htt s: sonomacit .civicweb.net f i leg ro documents STAFF CONTACTS: City Council City Clerk (707) 933-2216 Planning, DRHP, CSEC Planning (707) 933-2204 3-475 cite of 60tr ama AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SONOMA AMENDING SONOMA MUNICIPAL CODE TITLE 19, SECTION 19.10.060 (ALLOWABLE LAND USES AND PERMIT REQUIREMENTS) AND AMENDING TITLE 19, SECTION 19.60.140 (TIME-SHARES) TO THE CITY OF SONOMA MUNICIPAL CODE WHEREAS, time share and fractional interest uses have been and currently are prohibited as uses not specifically enumerated in the Sonoma development code; and WHEREAS, the City has recently become aware of time-share companies or fractional interest companies wishing to operate in the City; and WHEREAS, a severe housing crisis exists in the state with the demand for housing outpacing the supply; and WHEREAS, the City of Sonoma is particularly experiencing a housing emergency due to its relative isolation, limited housing supply, and desirable location; and WHEREAS, time-share or fractional interest uses threaten to reduce the housing supply in the City by turning long-term housing in the City into vacation rentals and reducing the affordable housing stock in the City; and WHEREAS, time-share and fractional interest uses increase traffic and noise impacts and have the same character as commercial hotels, motels, and other transient occupancy uses due to their transient nature making them inappropriate for residential zones; and WHEREAS, the development of time-share or fractional interest uses in Commercial and Mixed Use zones (which also have a "residential component" requirement) will reduce the City's ability to collect valuable property tax, sales tax, or Transient Occupancy Tax; and WHEREAS, by allowing time-share or fractional interest uses in the City, market pressure will incentivize property owners to convert their existing commercial, hotel or residential uses, thereby reducing revenue to the City in the form of commercial property taxes, sales tax, Transient Occupancy Tax, and valuable existing housing stock; and WHEREAS, allowing time-share or fractional interest uses in the Commercial and Mixed Use zones reduces the availability of suitable lands to provide housing units to meet the City's Regional Housing Needs Allocation for the 5tn and 6t` Cycles; and WHEREAS, by allowing times -share or fractional interest uses in the City, developers of those uses will seek to convert underutilized commercial uses (in Commercial and Mixed Use zones), thereby reducing the City's ability to identify those sites as potential Housing Opportunity sites in the development of the City's 6th Cycle Housing Element; and WHEREAS, on January 19, 2022 the City Council adopted an Urgency Ordinance pursuant to Government Code Sections 36934 and 36937 to make express the City's existing prohibition on time-share and fractional ownership uses in all zones in the City; and 276349.3 3-476 WHEREAS, the City Council desires to adopt a non -urgency ordinance to supersede the urgency ordinance to ensure the City's municipal code addresses the impact that time-share and fractional ownership uses have and could have on the City's housing supply; and WHEREAS, on February 10, 2022, the Planning Commission reviewed and discussed potential changes to the Sonoma Municipal Code to address time-share and fractional ownership uses and unanimously recommended that the item be continued to March 10, 2022; and WHEREAS, on March 10, 2022, the Planning Commission held a public hearing to review and discuss potential changes to the Sonoma Municipal Code to address time-share and fractional ownership uses and unanimously recommended that the City Council introduce the attached ordinance; and WHEREAS, the City Council found this action to be exempt from the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.) ("CEQA") and the State CEQA Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.) pursuant to CEQA Guidelines section 15061(b) (3) prior to taking action; and WHEREAS, on June 1, 2022, the City Council considered amendments to the Sonoma Municipal Code, consistent with the applicable policies of the Sonoma General Plan, at a public hearing; and WHEREAS, the proposed amendments to the Sonoma Municipal Code are consistent with State Law. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SONOMA DOES ORDAIN AS FOLLOWS: SECTION 1. RECITALS. The above set forth recitals and findings are true and correct and incorporated herein by reference, as if set forth herein in full. SECTION 2. FINDINGS FOR DEVELOPMENT CODE AMENDMENTS. Pursuantto Section 19.86.070(B) of the Sonoma Municipal Code, the proposed amendments of the development code under this ordinance: A. Are consistent with the goals, policies, and actions of the General Plan because the amendments the amendments promote and preserve the use of property for vital housing; B. Would not be detrimental to the public interest, health, safety, convenience, or welfare of the city for the reasons described in the recitals above; C. Comply with the provisions of the California Environmental Quality Act (CEQA) as described in Section 4 below; and D. Are internally consistent with other applicable provisions of this development code because the amendments merely codify the existing prohibition on time-share and fractional ownership uses under the City's permissive zoning regime. 276349.3 3-477 SECTION 3. MUNICIPAL CODE AMENDMENTS. A. Tables 2-1, 2-2, 2-3 and 2-4 set forth in Sonoma Municipal Code section 19.10.050 are amended to read as set forth in Exhibit "A". B. Section 19.50.140 of the Sonoma Municipal Code is amended to read as follows: 19.50.140 Time -Shares. This section sets forth requirements for the establishment and operation of time-share uses. A. Definitions. 1. "Accommodation" means any dwelling unit, multifamily dwelling, apartment, condominium or cooperative unit, cabin, lodge, hotel or motel room, or other private or commercial structure containing toilet facilities therein that is designed and available, pursuant to applicable law, for use and occupancy as a residence by one or more individuals. 2. "Management entity" means the person who undertakes the duties, responsibilities, and obligations of the management of a time-share plan. 3. "Owner" means owner of a time-share interest. 4. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. 5. "Time-share instrument' means one or more documents, by whatever name denominated, creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. 6. "Time-share interest" means and includes either of the following: a. The right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, coupled with a freehold estate or an estate for years with a future interest in a time-share property or a specified portion thereof. b. The right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, which right is neither coupled with a freehold interest, nor coupled with an estate for years with a future interest, in a time-share property or a specified portion thereof. 7. "Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, sale, lease, deed, license, right to use agreement, articles of organization or incorporation, operating agreement or bylaws, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, 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. 276349.3 3-4 78 8. "Time-share property" means one or more accommodations subject to the same time-share instrument, together with any other property or rights to property appurtenant to those accommodations. 9. "Time-share use" and "fractional interest use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan. B. Permitted zones. None. Time share uses and fractional interest uses are prohibited throughout the City of Sonoma C. Violations, Enforcement and Civil Penalties 1. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.12 (General Penalty). 2. Any responsible person, including by not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is subject to administrative fines and/or penalties as set forth in Chapter 1.28 (Administrative Citations). 3. Time-share use, fractional interest use and/or advertisement for time-share use and/or fractional ownership use, of an accommodation in violation of this section is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance and may be abated pursuant to Chapter 1.12 (General Penalty), Chapter 1.30 (Administrative Notice and Order Proceedings), Chapter 9.56 (Noise), and any other relevant provision of this code as it may be amended from time to time. 4. Each day a violation of this chapter occurs shall constitute a separate offense. 5. The remedies under this section are cumulative and in addition to any and all other remedies available at law and equity. SECTION 4. CEQA. This Ordinance has been assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines, and the environmental regulations of the city. City Planning Staff has determined that the adoption and implementation of the Ordinance is exempt from further environmental review under the general rule in California Environmental Quality Act (CEQA) Guidelines Section 15061(b)(3) that CEQA only applies to projects that have the potential for causing a significant effect on theenvironment. As a text amendment and addition without any physical project being approved, it can be seen with certainty that there is no possibility that the Ordinance will have a significant effect on the environment. The 276349.3 3-479 proposed Ordinance is therefore exempt from the provisions of CEQA because it does not involve a commitment to any specific project that may result in a potentially significant physical impact on the environment. The City Council concurs in these findings and adopts them as its own. The City Council, therefore, directs that a Notice of Exemption be filed with the County Clerk of the County of Sonoma in accordance with CEQA Guidelines. SECTION 6. SEVERABILITY: If any section, subsection, subdivision, sentence, clause, phrase, or portion of this Ordinance for any reason is held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have adopted this Ordinance, and each section, subsection, subdivision, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases, or portions thereof be declared invalid or unconstitutional. SECTION 6. EFFECTIVE DATE. This ordinance shall take effect thirty (30) days after passage thereof. SECTION 7. PUBLICATION. This ordinance shall be published in accordance with the provisions of Government Code section 36933, subdivision (c)(1). SECTION 8. THIS ORDINANCE PREVAILS WHERE THERE IS CONFLICT. To the extent that this Ordinance conflicts with any other provision in the Sonoma Municipal Code or city ordinance (urgency or otherwise), policy or regulation, this Ordinance will control. APPROVED: Jack Ding, Mayor ATTEST: Rebekah Barr, MMC, City Clerk 276349.3 3-480 l HEREBY CERTIFY the foregoing ordinance was duly adopted at a Regular Meeting of the City Council of the City of Sonoma held on the , 2022 by the following vote: AYES: NOES: ABSENT: ABSTAIN: Rebekah Barr, MMC, City Clerk 276349.3 3-481 EXHIBIT A Amendments to "Zones and Allowable Uses" (Title 19, Section 19.10.060) of the Sonoma Municipal Code. A. Table 2-1 (Residential Uses and Permit Requirements) is hereby amended as follows: Allowed Uses and Permit Permit Requiredby District P Use permitted Requirements for Residential (2) , UP Use Permit Districts (1) required L License'required Use not allowed Land Use (1) R- R-R R. L R-S R-M ^ `R-H R-O R-P Specific HS Use Regulation s AGRICULTURE, RESOURCE AND OPEN SPACE USES Animal Keeping P P ' UP — — — — — Chapter 8.08 SMC Crop Production ' : P P UP — — — and Horticulture Produce Stands P P UP, — — — -- SMC for On -Site 19.50.070 Production MANUFACTURING AND PROCESSING USES Existing Uses — — — — — — — SMC 19.82.020 RECREATION, EDUCATION.AND PUBLIC ASSEMBLY USES Equestrian UP UP — — — — — — Facilities ' Parks and P P P P P P P — Playgrounds Religious — — UP UP UP UP — — Facilities Schools — Public — — UP UP UP UP — and Private RESIDENTIAL USES (2) Ord. 141 19 SMC 2022 Page 1 of 14 3-482 Duplex — - UP P P UP UP — Emergency — — — — UP UP UP — SMC Shelters 19.50.033 Home P P P P P P P P SMC Occupation 19.50.035 LiveNVork — — — — UP — — — Facilities Mobile Home — — — — - - - UP SMC Park 19.50.035 Multi -family — — — UP P P P — Dwelling (Four or fewer units) Multi -family — — — UP UP UP P Dwelling (Five or more units) Personal Indoor P P P P P P P P SMC Cannabis 19.50.032. Cultivation (4) A Personal Outdoor P P P P P P P P SMC Cannabis 19.50.032. Cultivation (4) B (Prohibited if multifamily dwelling or mobile home) Residential P P P p :- P P P P Accessory Structures' Residential Care — - P P P — — — Homes,'Six or fewer clients Residential Care — — — — UP — — — Homes, Seveni o'r ,, more clients Single -Family P '' P P P P UP — — SMC Dwellings 19.50,035 Accessory P P P P P P P P SMC Dwelling Units 1 19.50.090 Accessory P P P P P P P P 5MC Dwelling Units, 19.50.090 Junior Ord. Title 19 5MC 2022 Page 2 of 14 3-483 Supportive P P P/UP P/UP PIUP PIUP — — Housing (3) Transitional P P PIUP PIUP PIUP PIUP — — Housing (3) RETAIL TRADE AND SERVICES Art, Antique, — — — UP — — — — Collectible and Gift Sales Artisan Shops — — — UP — — — — Bed and UP UP UP — - — - -- SMC Breakfast Inns 19.50.030 (B&Bs) Child Day Care — UP UP UP UP UP UP — Center Child Day Care: — UP UP UP UP UP -- - Small Family Day Care Home Child Day Care: — — UP UP UP UP UP — Large Family Day Care Home General Retail — — — UP — — — — Governmental — UP UP UP UP UP UP and Public Facilities Libraries and — — — UP — — — — Museums Medical Services — — — UP UP — — - - Extended Care Offices, — — — UP — — — — Professional and Administrative Personal — — — UP — — — — Services Restaurant — — — UP — — — — Senior — — — — UP — — — Residential Care Facilities Telecommunicati See Chapter 5.32 SMC, Telecommunications Facility and Antenna ons Facilities, Criteria Commercial Time-shares - - - - _ _ _ _ SMC Ord. Title 19 SMC 2022 Page 3 of 14 3-484 19.50.14 0 SPECIAL PURPOSE USES Public Utility — — — — — — — — Facilities Public Utility P P P P P P P P Equipment Notes: 1. See SMC 19.10.050(C) regarding uses not listed. See Division VIII for definitions of the listed land uses. 2. New residential developments subject to the City's Growth Management Ordinance (SMC 19.94). 3. Supportive and Transitional Housing shall be subject to those restrictions that apply to other residential dwellings of the same type in the same zone. For example, such housing structured as single-family is permitted in the R-HS, R-R, RL and IRS residential zones, whereas Supportive and Transitional housing structured as multi -family is limited to the RM and RH residential zones and the Mixed -Use Zone, 4. Personal cultivation of cannabis (Indoor and Outdoor) only allowable in conjunction with residential use subject to SMC 19.50.032. B. Table 2-2 (Commercial Uses and Permit Requirements) is amended as follows: Allowed Uses and Permit Permit Required by District P Use permitted Requirements for Commercial (2) UP Use Permit required Zoning Districts (1) L License required — Use not allowed Land Use C CG Specific Use Regulations MANUFACTURING AND PROCESSING USES Artisans/Craft Product UP UP Manufacturing Food and Beverage UP UP Manufacturing Furniture/Fixtures UP UP Manufacturing, Cabinet Shops Recycling Facilities — Reverse UP P Vending Machines Recycling Facilities — Small UP UP Collection Facilities Research and Development UP — (R&D) Ord. Title 19 SMC 2022 Page 4 of 14 3-485 Warehousing, Wholesaling UP and Distribution RECREATION, EDUCATION, and PUBLIC ASSEMBLY USES Clubs, Lodges and Private Meeting Halls — UP Community Centers UP UP Health/Fitness Facilities P UP Indoor Amusement/Entertainment Facilities UP UP Libraries and Museums P P Nightclubs and Bars UP UP': Outdoor Commercial Recreation UP UP Religious Facilities P -- Schools — Specialized Education and Training UP UP Studios for Art, Dance, Music, Photography, Etc. P UP Theaters and Auditoriums UP ` , UP. RESIDENTIAL USES (4) Emergency Shelters UP UP SMC 19.50.033 Live/Work Facilities: UP UP SMC 19.50,050 Multi -family Dwelling (Four or fewer units) UP UP Multi -family Dwelling (Five. or more units) .' UP UP Personal' Indoor Cannabis CultwAton (7) P P SMC 19.50.032.A Personal'Qutdoor Cannabis'` Cultivation(7) `P P SMC 19.50.032.13 (Prohibited if multifamily dwelling or mobile home) Single Room Occupancy Housing UP — Supportive Housing' "' UP UP Transitional Housing UP UP RETAIL TRADE (3) Accessory Retail Uses P P Adult Business UP — Ord. Tifle 19 SMC 2022 Page 5 of 14 3-486 Art, Antique, Collectible and Gift Sales P P Artisan Shops P UP Auto and Vehicle Sales/Rental UP — Building Material Stores UP UP Commercial Cannabis Activities (8): SMC Chapter 5.36 Manufacturing UP --- Non-store front retail UP — Store -front retail UP -- Testing laboratory UP — Drive -In and Drive Through Sales UP Furniture, Furnishings and Equipment Stores P P General Retail P P. Grocery Store P P Music Venue L SMC Chapter 5.34 Outdoor Retail Sales and Activities UP UP Plant Nurseries and Garden Supply Stores P " P Restaurant UP UP Second Hand Stores P P Shopping Center UP UP Special Event Venue (6) UP UP Wine Tasting FacilitiesNVine Bars WTUP WTUP SMC 19.50.120 Tap Rooms UP UP SMC 19.50,130 SERVICES Banks and Financial Services P P Bed and Breakfast Inns (B&Bs) UP UP SMC 19.50.030 Business Support Services P UP Child Day Care Facilities P P Drive -In and Drive -Through Services UP — Equipment Rental UP — Governmental and Public Facilities P P Ord. Title 19 SMC 2022 Page 6 of 14 R �: Hotel or Motel UP UP Medical Services - Clinics, Offices, Laboratories UP UP Medical Services - Hospitals UP UP Mortuaries and Funeral Homes UP — Offices, Professional and Administrative P UP Personal Services P P Storage - Outdoor UP — Storage - Personal Storage Facility (Mini -Storage) UP — Telecommunications Facilities, Commercial See Chapter 5.32 SMC, Telecommunications Facility and Antenna Criteria Time-shares — — SMC 19.50.140 Auto Parts Sales P — Vacation Rental — — SMC 19.50.110 Vehicle Services, Car Washes UP — Vehicle Services, Repair and Maintenance UP — Vehicle Services, Service Station UP — SMC 19.50.100 Repair Services, for Consumer Products P UP SPECIAL CIRCUMSTANCES COMMERCIAL DEVELOPMENT Commercial Development, Large UP UP Chapter 5.34 SMC Development Adjacent to a Residential Zone (4) UP UP Formula Business, Small P/UP (5) P SMC 19.50.035 Formula Business, Large UP UP SMC 19.50.035 Formula Restaurant, Large UPI- (6) UP SMC 19.50.035 Shopping Center, Reconfiguration UP UP SPECIAL PURPOSE USES Public Utility Facilities — — Public Utility Equipment P P Notes: Ord. Title 19 SMC 2022 Page 7 of 14 3-488 1. See SMC 19.10.050(C) regarding uses not listed. See Division VIII for definitions of the listed land uses. 2. New residential developments subject to the City's Growth Management Ordinance (SMC 19.94). 3. Supportive and Transitional Housing shall be subject to those restrictions that apply to other residential dwellings of the same type in the same zone. For example, such housing structured as single-family is permitted in the R-HS, R-R, RL and RS residential zones, whereas Supportive and Transitional housing structured as multi -family is limited to the RM and RH residential zones and the Mixed -Use Zone. 4. Defined as new commercial construction or an addition to an existing commercial building, having an area of 1,000 square feet or greater. 5. Use Permit required within the historic overlay zone 6. Prohibited in /P Plaza Retail District. See SMC 19.50.035. 7. Personal cultivation of cannabis (indoor and outdoor) only allowable in conjunction with residential use subject to SMC 19.50.032. 8. No commercial cannabis activity may occur in these zoning districts unless and until a C. Table 2.3 (Mixed Uses and Permit Requirements) is amended as follows: Allowed Uses and Permit Permit Required by District P Use permitted Requirements for Mixed Use .(2) UP Use Permit required Zoning Districts (1) L License required Use not allowed Land Use MX 'Specific Use Regulations MANUFACTURING AND PROCESSING USES (3)' Artisans/Craft Product UP Manufacturing Food and Beverage UP Manufacturing - FurniturelFixtures UP Manufacturing, Cabinet . Shops " Chang6'iq Existing UP SMC 19.82.020 Nonconforming Uses Recycling Facilities — Smal! — Collection Facilities Research and Developmenf UP (R&D) Warehousing, Wholesaling and Distribution RECREATION, EDUCATION AND PUBLIC ASSEMBLY USES (3) Clubs, Lodges, and Private UP Meeting Halls Community Centers UP Ord. Title 19 SMG 2022 Page 8 of 14 3-489 Health/Fitness Facilities UP Indoor Amusement/Entertainment Facilities UP Libraries and Museums UP Outdoor Commercial Recreation — Religious Facilities UP Schools — Specialized Education and Training UP Studios for Art, Dance, Music, Photography, Etc. UP Theaters and Auditoriums UP RESIDENTIAL USES (4) Emergency Shelters UP SMC 19.50.033 LiveNVork Facilities UP SMC 19.50.050 Multi -family Dwelling (Four or fewer units) P Multi -family Dwelling (Five or more units) UP' Personal Indoor Cannabis- , : Cultivation (7) `. P SMC 19.50.032.A Personal Outdoor Cannabis Cultivation (7) P SMC 19.50.032.13 (Prohibited if multifamily dwelling or mobile home) Residential Care Homes, Seven or more .clients UP Single -Family Dwellings. P (5) Supportive Housing, fouror fewer.uhits P Supportive Housing, five or ``, more units UP Transitional Housing, four or," fewer units P Transitional Housing; five or more units UP RETAIL TRADE (3) Accessory Retail Uses UP Art, Antique, Collectible and Gift Sales UP Artisan Shops UP Ord. Title 19 SMC 2022 Page 9 of 14 Auto and Vehicle Sales/Rental Building Material Stores -- Commercial Cannabis Activities (8): Manufacturing UP SMC Chapter 5.36 Non -store front retail UP SMC Chapter 5.36 Testing laboratory UP SMC Chapter 5.36 Drive -In and Drive -Through Sales UP Farmers Market UP Fueling Station UP Furniture, Furnishings and Equipment Stores UP General Retail UP Grocery Store UP Music Venue L Chapter 5.34 SMC Outdoor Retail Sales and Activities UP Plant Nurseries and Garden Supply Stores UP Restaurant 'UP Second Hand Stores UP" Shopping Center UP' Special Event Venue (6), UP Wine Tasting Facilities/Wir a Bars WTUP' SMC 19.50.120 Tap I'oorris UP SMC 19.50.130 SERVI' ES (3). Auto Rarfs,Sales UP Banks and Financial Services; UP Bed and Breakiast Inns (B&Bs) UP Business Support Services UP Child Day Care Facilities UP Drive -In and Drive -Through Facilities UP Equipment Rental UP Governmental and Public Facilities UP 10 Ord, Title 19 SMC 2022 Page 10 of 14 3-491 Hotel or Motel UP ` Medical Services — Clinics, UP Offices, Laboratories Medical Services — Hospitals — Mortuaries and Funeral UP Homes Offices, Professional and UP Administrative Personal Services UP Storage — Outdoor — SMC 19.40.100(D) Storage — Personal Storage — Facility (Mini -Storage) Telecommunications See Chapter 5.32 SMC, Telecommunications Facility and Facilities, Commercial Antenna Criteria SMC Time-shares _ 19.50.140 Vacation Rental — SMC 19.50A 10 Vehicle Services, Repair and UP Maintenance Vehicle Services, Service — SMC 19.50.100 Stations Repair Services for UP Consumer Products SPECIAL CIRCUMSTANCES COMMERCIAL DEVELOPMENT Formula Business, Small UP SMC 19.50.035 Formula Business, Large UP SMC 19.50.035 Formula Restaurant, Large UP SMC 19.50.035 SPECIAL PURPOSE USES Public Utility Facilities — Public Utility Equipment P Notes: 1. See SMC 19.10.050(C) regarding uses not listed. See Division Vlll for definitions of the listed land uses. 2. New development in the Mixed -Use zone shall include a residential component unless waived by the planning commission through use permit review (see SMC 19.10.020(C)). 3. Uses within these categories are allowed only if the planning commission finds that the use will not result in the encroachment of incompatible commercial uses within an established residential area. 4. New residential developments subject to the city's growth management ordinance. 5. Limited to a single residence on an existing lot of record; otherwise, use permit approval is required. 6. On sites of one acre in size or larger. 7. Personal cultivation of cannabis (indoor and outdoor) only allowable in conjunction with residential use subject to SMC 19.50.032. Ord. Title 19 SMC 2022 Page 11 of 14 3-492 8. No commercial cannabis activity may occur in these zoning districts unless and until a commercial cannabis business permit has been issued for that activity under Chapter 5.36. D. Table 2-4 (Special Purpose Uses and Permit Req irements) is hereby amended as follows: Allowed Uses and Permit Requirements for Special Purpose zoning Districts Permit Required -by District 'P Use permitted UP Use Permit required L License required — Use not allowed Land Use (1) A Pk P W ' Specific Use Regulations AGRICULTURAL AND OPEN SPACE USES Crop Production and Horticulture P — P Livestock Raising P'', — — SMC 19.50.020 Prescribed Grazing — UP — — Produce Stands for On -Site Production P — SMC 19.50.070 Trails,. Hiking and Bicycling P P P --- IV14 UFACTURING AND; -PROCESSING USES Agric4ltural or Food Processing, — — UP Wineries — — — UP Winery Accessory.,Uses, :,' _�° -- -- - - UP SMC 19.50.020 RECREATION, EDUCATION AND PUBLIC ASSEMBLY USES Community Centers UP — Community Garden — UP UP — Equestrian Facilities UP UP — — SMC 19.50.020 Libraries and Museums — UP UP — Parks and Playgrounds — P P — Recreational Facilities — UP P -- 12 Ord. Title 19 5MC 2022 Page 12 of 14 3-493 Schools, Public and Private — — P — Theaters and Auditoriums — UP P — RESIDENTIAL USES (2) Agricultural Employee Housing P — — — Caretaker and Employee Housing UP UP UP UP Emergency Shelters, 15 or fewer beds — — P — SMC 19.50.035 Emergency Shelters, 16 or more beds — — UP — Personal Indoor Cannabis Cultivation (3) P P P P SMC 19.50.032.A Personal Outdoor Cannabis Cultivation (3) P P P P SMC 19.50.032.13 (Prohibited if multifamily dwelling or mobile home) Residential Accessory Structures and Uses P — — — SMC 19.50.035 Single -Family Dwellings P — — — SMC 19.50.035 Supportive Housing (4) -- — UP — Transitional Housing (4) — — UP — Vacation Rental -- UP — --- SMC 19.50.110 SERVICES Offices — Administrative — UP UP — Cemeteries — — P — Child Day Care Facilities — — P — Corporation Yard — — P — Farmers Market P P P — Governmental and Public Facilities — UP UP — Kennel — — UP — Medical Services — Hospitals — — UP — Telecommunications Facilities, Commercial See Chapter 5.32 SMC, Telecommunications Facility and Antenna Criteria Timeshares — --- -- --- SMC 19.50.140 SPECIAL PURPOSE USES Public Utility Facilities — -- UP --- Public Utility Equipment P P P P 13 Ord. Title 19 SMC 2022 Page 13 of 14 3-494 Notes: 1. See Section 19.10.050.0 regarding uses not listed. See Division VilI for definitions of the listed land uses. 2. New residential developments subject to the City's Growth Management Ordinance (SMC 19.94). 3. Personal cultivation of cannabis (indoor and outdoor) only allowable in conjunction with residential use subject to SMC 19,50.032. 4. Supportive and transitional housing shall be subject to those restrictions that apply to other residential dwellings of the same type in the same zone. 14 Ord. Title 19 SMC 2022 Page 14of14 3-495 Exhibit O City of St. Helena Time Share Ordinance and Supporting Evidence Agenda Section: Report to the City Council Regular City Council - 22 Mar 2022 PUBLIC HEARINGS Subject: Ordinance Adding Chapter W.138 "Time Share Uses" and Sections 17.138.060 to Title 17, Zoning of the St. Helena Municipal Code, amending sections 17.48.030 (Central Business) and 17.52.030 (Service Commercial) and Deleting Section 17.112.130 of the St. Helena Municipal Code CEQA Exempt Determination: Prepared By: Ethan Walsh, City Attorney Reviewed By: April Mitts, Administrative Services Director Approved By: James C. McCann, Interim City Manager BACKGROUND Over the past two years, there has been significant discussion in the community regarding Section 17.112.130 of the City's Zoning Code, which prohibits the creation of a time-share project as a means of ownership of any single-family, two-family or multiple -family dwelling or any apartment house in the City (the "Time Share Ordinance"). The City Council discussed the Time Share Ordinance at its July 14, 2020 meeting in response to concerns raised regarding a real estate listing for a fractional or partial ownership interest in a residential home in the City. The prior City Attorney discussed this issue with the City, focusing on the question of the extent to which the City Council could regulate an ownership structure through the City's zoning authority, and noted the challenges of doing so. At the conclusion of the Council's discussion of this issue, Council directed the City Attorney and staff to continue to research its options to address the concerns raised by members of the community in response to the listing of the home at issue. In the months following the July 2020 Council meeting, the company that had been marketing that original home, now known as Pacaso, began marketing other homes in the City, and the City received additional complaints from members of the community. Based on new information that was available to the City, primarily through Pacaso's marketing materials, the City Attorney's office concluded that the properties being marketed by Pacaso were 3-497 not just fractional or partial ownership structures, but were also being marketed to be used as a time share project that would be prohibited under the City's ordinance, and informed Pacaso of that conclusion. Pacaso disagreed with the City Attorney's conclusion, and initiated a lawsuit in an effort to compel the City to retract its conclusion. That litigation is ongoing. When reviewing the Time Share Ordinance in this context, the City Attorney's office found that the substance of the Time Share Ordinance has not been updated since its adoption in 1982. The City Attorney's office concluded that the Time Share Ordinance would benefit from an update to refine the definitions to more directly address the impacts of time-share uses, to clarify the means used by the City to enforce the restrictions on time share uses, and to clarify how time share uses are treated in non-residential districts. City staff initially delayed initiating any changes to the Time Share Ordinance while the litigation was ongoing. However, due to the continued marketing of time share uses within the City, staff has decided to move forward with recommending the proposed updates to the City's ordinance. On March 1, 2022, the Planning Commission voted unanimously to recommend the City Council approve the proposed ordinance. DISCUSSION The Discussion section of the Staff Report is organized as follows: First, the section provides a brief explanation for the City's conclusion that the homes that have been marketed by Pacaso constitute time share projects. While the City's conclusion does not directly affect the changes to the Zoning Code set forth in the proposed ordinance, it is helpful to understand that the Time Share Ordinance, both in its original form and as proposed to be amended, is intended to protect against the impacts that these homes and similar uses could have on the City's housing supply and the character of the City's residential districts. Second, this section discusses the legal basis for the City's Time Share Ordinance, the reasons why the City prohibited time share uses in residential properties, and why those reasons continue to apply today. Third, this section outlines the changes made in the proposed ordinance and the reasons for the proposed changes. A.Current Time Share Ordinance and Application to Pacaso Homes Section 17.112.130 of the Zoning Code prohibits the creation of a time-share project as a means of ownership of any single-family, two-family or multiple family dwelling or apartment house within the City. A time-share project is defined in that section as any real property that is subject to a time-share program. A time-share program is in turn defined in part as an arrangement whereby the use, occupancy or possession of the property circulates among purchasers according to a fixed or floating time schedule on a periodic basis for a specific period of time during any given year. Pacaso provides a significant amount of information on its website regarding the manner in which its homes are used by the purchasers of a Pacaso home. According to Pacaso's website, the single family residences marketed by Pacaso are held by a property -specific limited liability company ("LLC"), and each co-owner purchases a 1/8 share in the LLC. (Pacaso.com/learn) Each 1/8 share entitles the co-owner to 44 stay nights within any 365 day window. Stays can be from 2 to 14 nights in duration for each 1/8 share. Back-toback stays are not permitted. (Pacaso.com/faq/scheduling) Stays are booked on an app, with specific rules governing the number of "special dates" that each co-owner can book, and the number of stays that each owner can book during "peak seasons." (Id.) Each owner can book the residence to use themselves, or may allow guests to use the residence, whether or not the co-owner is present. (Id.) Between each stay, Pacaso conducts a thorough inspection and cleaning. ("5 reasons Pacaso is better than a timeshare." Pacaso.com/blog/better-than-resort-timeshare) The Pacaso model grants each 1/8 owner the right to use the property for a specific period of time (44 days in a year) in increments of 2-14 days. The use, occupancy and possession of the property circulates among the co -owners according to a floating time schedule that gives each co-owner exclusive rights to the property for a specific period of time each year. This use structure fits squarely in the City's definition of a time-share program, and the properties operated by Pacaso in this manner would therefore be timeshare projects under the existing Time Share Ordinance. B.Reasons for the Time Share Ordinance 1. The City's General Plan The City of St. Helena has long been defined by its rural, small town quality and agricultural character. In adopting the St. Helena General Plan Update 2040, the City noted that the defining, unifying goal of all the elements of the 1993 General Plan was: To protect the rural, small town quality and agricultural character of St. Helena. It is the General Plan's intent that the preservation of this small town character be the unifying philosophy that overlays all other stated goals and policies. (General Plan 2040, p. 1-2.) While the 2040 General Plan acknowledges that this is no longer the sole, overriding focus of the General Plan, retaining the small town character of St. Helena remains a primary focus of the City's land use planning. (Id.) A key component of retaining the City's small town character is maintaining a balance between the economic benefits that arise from visitors who come to St. Helena for its wineries, restaurants and historic downtown, and maintaining its authentic small town quality of life for the City's residents. This theme is consistent throughout the City's General Plan, and maintaining this balance is key to the City's long term viability. The General Plan notes in its Introduction that "[t]he community stands out in the Valley for its unique, historic character and its ability to attract visitors while also supporting the needs of its resident population." (General Plan p. 1-8.) The City has set goals to maintain that balance, striving to achieve an economy that "will meet the basic needs of residents, while balancing the benefits and impacts of visitors and provide better economic opportunities. (General Plan 1-15.) The City further seeks to "promote sustainable tourism practices that allow the City to enjoy the economic benefits of visitors to the region while maintaining the authentic small-town quality of life." (General Plan p. 3-9.) St. Helena is a renowned tourist destination, bringing visitors from throughout the world to its wineries, restaurants and downtown, but it is also a functioning City and community, with residents who contribute to its social fabric. Like most communities throughout California, one of the key means that the City utilizes to maintain this balance is through its Zoning Ordinance. The City has commercial districts, like the Service Commercial district and the Central Business district, that provide for uses that serve both visitors and the local community, such as restaurants, retail shops and winery tasting rooms, among others, along with lodging where those visitors can stay. (St. Helena Municipal Code §§17.48.030, 17.52.030.) The City also has residential districts that provide housing for those who live in the community, at varying densities in order to provide a diversity of housing types. 2. Use of Zoning to Preserve Residential Areas The use of zoning to preserve the character of the residential districts of a City has been common for over a century. In the seminal case of Euclid v. Ambler the United States Supreme Court upheld the validity of comprehensive zoning that would set aside residential districts "from which business and trade of every sort, including hotels and apartment houses, are excluded." (Euclid v. Ambler Co. 272 U.S. 355, 390.) The U.S. Supreme Court upheld the Village of Euclid's zoning ordinance in that instance, noting that the inclusion of non-residential uses in residential districts may have an increasingly deleterious impact on the residential area "until, finally, the residential character of the neighborhood and its desirability as a place of detached residences are utterly destroyed." (Id. at 394.) The California Court of Appeals followed Euclid and subsequent cases in upholding the City of Carmel-by-the-Sea's zoning restriction on short-term rentals. (Ewing v. City of Carmel -By -The -Sea (1991) 234 Cal.App.3d 1579.) In that case, the Court noted that the City's chief purpose in adopting the short-term rental restriction was "to provide an appropriately zoned land area within the City for permanently single-family residential uses and structures and to enhance and maintain the residential character of the City." (Id. at 1579.) In upholding Carmel's short-term rental restriction, the Court found that short-term rentals "undoubtedly affect the essential character of a neighborhood and the stability of a community. Short-term tenants have little interest in public agencies or in the welfare of the citizenry. They do not participate in local government, coach little league, or join the hospital guild. They do not lead a scout troop, volunteer at the library, or keep an eye on an elderly neighbor. Literally, they are here today and gone tomorrow —without engaging in the sort of activities that weld and strengthen a community." (Id. at 1591.) 3,Impacts of Time Share Uses on Residential Districts Like Carmel, the City of St. Helena strives to maintain the character of its residential areas in the face of intense demand for accommodations to serve visitors to St. Helena. The 3-500 Time Share Ordinance is one of the means that the City has in place to ensure that it is able to maintain its existing and limited housing stock for use in long term residency, and to maintain the character of its residential zoning districts. When the City originally adopted the Time Share Ordinance in 1982, the City Council made specific findings based on the impact it foresaw if time share uses were to locate in the residential areas of the City_ Those findings were as follows: 1. There is a critical shortage of affordable housing in the city for long-term occupancies (more than six months annually), and the availability of additional residential dwelling units is substantially restricted by the growth management system. 2. The conversion of residential dwelling units within the city to time-sharing projects eliminates residential dwelling units otherwise available for long-term occupancies (more than six months annually) in the city. 3. Time-sharing projects have the same character as commercial hotels, motels and other transient occupancy uses due to their transient nature and to the multiple shortterm (less than six months annually) occupancies by those participating in timesharing projects. 4. Such commercial or quasi -commercial like use is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. 5. The city council finds and determines that this section is necessary to protect the public health, safety and welfare of the citizens of the city. As discussed in more detail below, these findings continue to hold true in St. Helena, and continue to support the City's decision to restrict time-share uses in residential districts. i. Housing Shortages and Impacts of Time -Share Uses on Existing Housing Stock In adopting the current Time Share Ordinance, the City Council found that there was a critical shortage of affordable housing in the City for long-term occupancies. That continues to be the case, and is undoubtedly worse than was the case at the time the Time Share Ordinance was originally adopted_ The most recent census data lists the median value of owner occupied homes in St. Helena at $1,112,100 for the period of 2015-2019, while the Zillow Home Value Index estimates medial home values in St. Helena to be approximately $1,870,000 as of February 2022. www.census.gov/quickfactslsthelenacitycalifornia; zillow.com/home-values/.) In contrast, the median household income in St. Helena from 2015-2019 was $90,031, and the median income for a four person household in Napa County for 2021 is approximately $109,200. (www.census.gov/quickfactslsthelenacitycalifornia; www.hcd.ca.gov/grantfunding/income-limits/state-and-federal-income- 1 im itsld ocslin come -I im its-2021. pdf. ) At the time of adoption of the City's Housing Element in 2015, the income necessary to purchase a median priced single family home was nearly $200,000 per year, and prices 3-501 have risen dramatically since then. (City of St. Helena Housing Element Update 2015-23, p. 3.) The cost of homes currently in St. Helena are well in excess of what median income residents of St. Helena can afford, as well as median income residents of Napa County generally. Further, as Erika Sklar observed in the St. Helena Housing Update Report that she prepared for the City in April 2018, "St. Helena has more local jobs than people in the labor force, demanding large numbers of commuters to fill local jobs. Workers commute daily into St. Helena, many because there is no local housing that is affordable at the incomes that they make. 36% of St. Helena households cannot afford market rents while 70% of St. Helena households cannot afford to purchase a home. Paramedics and preschool teachers cannot afford St. Helena's market rents. Teachers, registered nurses, winery and hospitality managers and non-profit directors cannot afford homeownership in St. Helena." (St. Helena Housing Update Report, p. 7 (April 2018).) The City has made and continues to make efforts to address the need for affordable housing in the City, including providing assistance for the Brenkle Court, Turley Flats and 963 Pope Street projects. The City has also ensured that new nonresidential development will assist the City in providing adequate affordable housing, as evidenced by the significant contributions to affordable housing made by the Farmstead Lodging project through its development agreement with the City. These efforts, however, have highlighted the challenges of providing housing at all income levels, with the most significant challenge being a limited supply of existing housing stock in the City, and a limited supply of available land for new housing. Given the housing shortage already in existence, losing additional housing stock will only make this problem worse. The findings in the original Time Share Ordinance also note that the conversion of homes to time sharing projects would eliminate residential dwelling units that would otherwise be available for long term residential use. This continues to be true, as a home that is used for time share purposes will no longer be available for households to use as their long term residence. This threat to the City's existing housing stock is not insignificant. The publicity regarding Pacaso's rise as a company speaks to a pent up demand for homes that could be converted to time share use, reducing available housing stock for long term use. Pacaso's co-founder has indicated that "[t]here are tens of millions of families that aspire to own second homes but are unable to, due to reasons of cost." (Just Five Months Old, Zillow Co -founder's Pacaso Claims It's Already A Unicorn" Noah Kirsch, March 24, 2021 (www.forbes.com/sites/noah kirsch/2021 /03/24/just-five-months-old- zillowcofounders-pacaso-claims-its-alread-a-unicorn/.)) In discussing Pacaso's model, Dan Wenhold of the venture capital firm Fifth Wall said "[t]hey were taking a previously illiquid asset, which was a timeshare, and making it affordable for the masses, also making it attainable for folks who wanted to own a second home but previously weren't able to." ("Pacaso, the Proptech Startup Founds by Zillow Alums, Raises $125M Series C" Sophia Kunthara (September 14, 2021) (news.crunchbase.com/news/proptech- startup-pacasoraises-125m-series-c.)) Creating a new market for these prospective buyers who otherwise would not buy second homes unquestionably increases demand for these homes by creating an incentive for timeshare companies to buy up residences to meet this market demand. Creating more demand, and reducing supply, will further 3-502 ratchet up housing costs, exacerbating the already significant housing shortage in the City. ii. Impacts to Character of the City's Residential Districts The City Council additionally found as part of the adoption of the original Time Share Ordinance that time-sharing projects have the same character as commercial hotels, motels and other transient occupancy uses due to their transient nature and to the multiple short-term occupancies by those participating in time-sharing projects. The Council concluded that this commercial or quasi -commercial like use is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. This continues to be the case, as the nature of time share uses of residential property is different than the typical long term residential uses for which the residential districts of the City are intended. The complaints that have been made by some local residents regarding the Pacaso homes are illustrative of the distinctions between time share uses and long term residential uses. A sampling of the email complaints received by the City are included in Attachment No. 2 to this Staff Report. The complaints received center on concerns over more intense traffic and parking issues, outdoor parties and conversations going late into the evening, sometimes as late as 2 A.M. One neighbor complained of outdoor lighting shining into her daughter's room at night. They complained of traffic and inadequate parking for the visitors to these homes. Further, neighbors have noted that with each turnover from one stay to another, cleaning and landscaping crews come to clean the unit and prepare it for the next user. While this level of maintenance is appropriate for a commercial vacation property, it impacts the residential character of the surrounding area by adding parking and noise burdens in the neighborhood. Living next door to a home where the residents turnover every 2-14 days, and professional cleaning and landscaping crews come to the property between each visit is much more akin to living by a commercial lodging project than a residential home. This is not at all surprising, given that these time share homes are used by people who are on vacation. While long term residents may have an occasional party at their home, the time share model means that these residences are constantly being used by people who are on vacation, hosting parties or celebrating special occasions. These activities by their nature are more intense than typical residential use of property. The intensity of this use is a significant reason that these uses can change the character of a residential neighborhood. Long term residents, whether owners or renters, will occasionally have guests, and will occasionally have parties, but these time-share homes are used exclusively by people who are coming to the City on a short term basis for vacation or leisure. People will naturally stay out later, entertain more and gather in larger numbers while on vacation. That is the reason that these uses are more appropriate in non-residential areas that are intended to cater to the City's visitors and tourists. Time share uses can change the character of a residential neighborhood by having it serve not only as a residential area but also a visitor lodging area, and subjecting it to the impacts that come with that more intense land use. 3-503 In their marketing materials, Pacaso cites this intensity of use as a benefit, indicating that having these units filled with visitors seven days a week will benefit the local economy, since these visitors will patronize local businesses. (pacaso.comlcommunities) However, as noted above, the City strives through its General Plan to achieve a balance between benefits to the local economy and maintaining the character of the City. The City seeks to achieve this balance by promoting "sustainable tourist practices that allow the City to enjoy the economic benefits of visitors to the region while maintaining the authentic smalltown quality of life, (General Plan p. 3-9) and striving to achieve a local economy that "will meet the basic needs of residents, while balancing the benefits and impacts of visitors." (General Plan p. 1-15.) Bringing more visitors into residential neighborhoods to improve the local economy does not help to achieve that balance. It instead tips the scales in favor of the local economy, at the expense of the residential character of these neighborhoods. The nature of the timeshare use itself can impact the residential character of the City's residential districts because it will ensure that the time share users can only use their property for a limited amount of time each year. In the case of Pacaso owners, each stay is limited to 2-14 days. As discussed above, in the Ewing v. City of Carmel -by -the -Sea case, the California Court of Appeal found that short term rentals would affect the essential character of a neighborhood and the stability of a community. The Court noted that "[s]hort term rentals have little interest in public agencies or in the welfare of the citizenry. They do not participate in local government, coach little league, or join the hospital guild. They do not lead a Scout troop, volunteer at the library, or keep an eye on an elderly neighbor. Literally they are here today and gone tomorrow —without engaging in the sort of activities that weld and strengthen a community." This same problem is present with time-share uses. Each co-owner is in the unit on a short-term basis, and without the time to participate in the types of activities or build the relationships that create the fabric of a community. At the April 28, 2021 council meeting several Pacaso co -owners spoke of their experiences in St. Helena. All of them spoke of their affection for the community and the traditions they had established, but these were centered on attending local events and visiting shops, restaurants and wineries. These types of transactional activities are all beneficial to the City's local economy and are what the City hopes to see from visitors to the City, but it is not the type of community involvement described in the Ewing case that binds and strengthens a residential community. Given the City's desire to strike a balance between the demands of the City's visitor and tourist economy, and retaining its small town character and quality of life, the City has an interest in maintaining housing stock in its residential districts for long-term residents who will engage in the community in the manner described by the Court in Ewing, to the betterment of the entire community. C.Proposed Amendments to the Time Share Ordinance The proposed Ordinance would make certain changes to the City's Existing Time Share Ordinance, as described below. 3-504 Uindings and Establishment of New Chapter The proposed Ordinance includes detailed recitals and findings describing the policy bases for the City's regulation of time share uses. The findings are consistent with the findings made as part of the original Time Share Ordinance, but more detail has been added. The policy bases for the proposed Ordinance are discussed in the sections above, and further discussion is not necessary here. The proposed Ordinance also relocates the restrictions on time share uses to its own chapter at Chapter 17.138. The Time Share Ordinance is currently located in Chapter 17.112, General Site Design and Development Standards. City staff believes that with the added level of detail in the Proposed Ordinance, these provisions merit being located in a separate chapter, and has changed the location of the Timeshare Ordinance accordingly. 2.Definitions The Proposed Ordinance amends the definitions that are used to define time share uses, with the new definitions set forth in Section 17.138.020. The new definitions are modeled on the definitions utilized by the state to regulate time-shares in the Vacation Ownership and Time -Share Act of 2004 (Bus. & Prof. Code §§11210-11288), but are modified somewhat to better apply in the land use regulation context. The new ordinance includes a number of definitions that work in concert to define a timeshare use. The ordinance defines a "time-share use" as the use of one or more accommodations, or any part thereof, as part of a time-share property pursuant to a timeshare plan. An "accommodation" is defined in this Chapter to include a range of residential units that could potentially be used for timeshare purposes. The types of residential units that can be accommodations are listed at the beginning of Section 17.138.020 in the proposed ordinance. A "time-share plan" is defined in the ordinance, and generally includes any arrangement, plan, scheme or similar device whereby a purchase receives the right to exclusive use of the accommodation, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given year. A "time --share property", in turn is defined as one or more accommodations that are subject to the same time-share plan together with any property rights that are appurtenant to the accommodations. A "time-share instrument", is the document or documents that create or govern the operation of the time-share plan. Therefore a time-share use is the use of a residential property that fits within the definition of an "accommodation" under the ordinance, pursuant to a "time-share plan", which grants each owner of the time-share property exclusive use of the property for a certain period of time each year, but not the full year. 3-505 It is important to note that not all properties with multiple owners or owned by business entities (such as LLCs) would constitute a time-share use under these definitions. The definitions focus on the manner in which the accommodation is used, not how it is owned. A time-share plan allows each owner exclusive use of the property for a specific period of time. This manner of use prevents the property from being used for long term residency, and leads to the continual cycling of visitors through the property and the more intense, constant vacation oriented use that the ordinance seeks to limit in residential districts of the City. A property that is owned by a group of friends or extended family members, whether through a separate business entity or otherwise, will not necessarily mandate that only one owner will be able to use the property at a time. The more formal arrangement found in time-share uses increases the intensity of use, in that each individual time-share owner cycles through the property, whereas families or friends are more likely to use the property together or in groups leading to less transition in the residential neighborhood. The more formal relationship, use of professional property managers and rights to exclusive use found in timeshare uses contributes to the commercial character of the property, with added traffic due to the more frequent turnover of visitors and more frequent cleaning and inspection between each user, which is common for a commercial vacation property, but not for a home owned by family or friends. 3.Enforcement The new ordinance additionally adopts a new enforcement structure for the City timeshare restrictions, modeled on the City's short-term rental ordinance. The ordinance prohibits both the use of accommodations for time-share use, and the advertisement of accommodations for time-share uses. This will better allow the City to prevent time-share uses in residential neighborhoods before they occur. The proposed Ordinance also outlines the process that will be used to enforce this new Chapter, again based on the City's existing short-term rental regulations. This approach has proved to be effective in enforcing the City's short-term rental regulations, and will help the City to take a more preventative approach to enforcing its time-share regulations as well. 4.Time Share Uses in Service Commercial and Central Business Districts Finally, while the City's existing Time Share Ordinance did prohibit time-share projects within certain types of residential dwelling units within the City, it does not make distinctions based on the various zoning districts of the City. Given that the primary concerns and impacts of this use arise from the high intensity use of property that negatively impacts the residential character of residential districts within the City, this use may not have the same impacts in commercial districts where visitors can be closer to the amenities in the City that cater to visitors. The proposed new ordinance would allow time-share uses in the Service Commercial and Central Business Districts as conditional uses, provided that such time-share uses would be limited to accommodations in upper floors in conjunction with a mixed use project, would be required to provide at least one parking space for accommodations of two or fewer bedrooms, and at least two parking 3-506 spaces for accommodations of three or more bedrooms, and would be subject to such other conditions imposed by the City has part of the conditional use permit process. As part of the application for a time-share use, the applicant would have to provide specific information including a management plan and specific information on the accommodations and any ancillary uses. The City would then review the application process in accordance with its normal process for review of conditional uses. This would allow the City to address potential impacts associated with this use, similar to the approach that the City uses with hotels and other lodging accommodations in these districts. Consistent with this change, the proposed ordinance updates the list of conditional uses in both the Service Commercial and Central Business Districts to include time share uses as regulated by the new Chapter 17.138_ The Planning Commission held a public hearing to consider the proposed ordinance at its regular meeting of March 1, 2022. Following the public hearing, the Planning Commission unanimously recommended that the City Council adopt the proposed ordinance. City staff has made minor, non -substantive edits to the proposed ordinance that went to the Planning Commission to correct typographical errors, and to add the sections amending the list of conditional uses in the Service Commercial and Central Business Districts. FISCAL IMPACT None RECOMMENDED ACTION Staff recommends that the City Council introduce by title only and waive further reading of an Ordinance Adding Chapter 17.138 "Time Share Uses" and Sections 17.138.010- 17.138.060 to Title 17, Zoning, of the St. Helena Municipal Code, amending sections 17.48 (Central Business) and 17.52 (Service Commercial) and Deleting Section 17.112.130 of the St. Helena Municipal Code. ATTACHMENTS Attachment 1-St, Helena Time Share Ordinance -Final Attachment 2-Community email comments 3-507 +31t—VK6] a &A-01111:I 44 4 k F-1 ORDINANCE NO. ADDING CHAPTER 17.138 "TIME SHARE USES" AND SECTIONS 17.138.010 — 17.138.060 TO TITLE 17, ZONING, OF THE ST. HELENA MUNICIPAL CODE, AMENDING SECTIONS 17.48.030 AND 17.52.030 AND DELETING SECTION 17.112.130 OF THE ST. HELENA MUNICIPAL CODE WHEREAS, the City of St. Helena is a popular tourist destination, known for its scenic Napa Valley location, exceptional wineries and restaurants, historic Main Street and small town agricultural character; and WHEREAS, preserving the rural, small town quality and agricultural character of the City of St. Helena has been a focal point of the City's land use planning for decades, and remains a primary focus in the City's 2040 General Plan; and WHEREAS, the City of St. Helena stands out. in the Napa Valley for its ability to attract visitors while also supporting the needs of its resident population. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy; and WHEREAS, the City values and welcomes all visitors to the City and recognizes their contributions to the City's economy, but finds that in order to maintain the City's long term viability as a community where people not only come to visit, but also live, work and contribute to the long term betterment of the community through participation in the City's schools, local community groups, civic government and local serving businesses, the City must maintain a balance between residential land uses and visitor serving uses; and WHEREAS, the City's existing housing stock is significantly impacted, with demand outweighing supply, resulting in extremely high housing prices as detailed in the accompanying staff report. A limited supply of suitable vacant land, exorbitantly high land costs, and limitations in the City's existing infrastructure, among other factors, have limited the construction of additional housing in the City of St. Helena; and WHEREAS, according to the U.S. Census Bureau, the current median household income in the City of St. Helena is $90,031, while the estimated value of owner - occupied housing units from 2015-2019 was approximately $1,112,100, with current real estate listings suggesting that prices are increasing significantly, meaning that homes in the City are not affordable to the median household in the City; and WHEREAS, as noted in the St. Helena Housing Update Report prepared for the City in April 2018, "St. Helena has more local jobs than people in the labor force, demanding large numbers of commuters to fill local jobs. Workers commute daily into -1- e �s St. Helena, many because there is no local housing that is affordable at the incomes that they make. Thirty six percent (36%) of St. Helena households cannot afford market rents while seventy percent (70%) of St. Helena households cannot afford to purchase a home. Paramedics and preschool teachers cannot afford St. Helena's market rents. Teachers, registered nurses, winery and hospitality managers and nonprofit directors cannot afford homeownership in St. Helena"; and WHEREAS, the City has made significant efforts to address the need for housing at lower income levels, of which recent examples include providing assistance to local nonprofit Our Town St. Helena for the Brenkle Court development, a mutual self-help housing development providing homeownership opportunities to eight low income working families, as well as the acquisition of a home located at 963 Pope Street using a charitable sale strategy. The property at 963 Pope Street is being developed with an additional four units to provide a total of five new affordable rental units in the City; and WHEREAS, further, in connection with the recently approved Farmstead lodging project, the City negotiated with the developer to contribute one million dollars toward the purchase of property to be used for the development of not less than twenty units of housing that will be affordable to low and very low income households, and an additional two million two hundred thousand dollars to be used more generally toward the development of affordable housing in the City; and WHEREAS, the City additionally provided substantial financial assistance to the recently completed Turley Flats Affordable Housing development, which provides eight units of rental affordable housing in a three story building located at 1106 Pope Street; and WHEREAS, these efforts have helped to address the City's need for affordable housing, but have also highlighted the challenge of providing sufficient housing to meet demand, particularly at more affordable levels, due to the significant costs of acquiring housing or land for the development of housing in the City and the limited supply of such land; and WHEREAS, the conversion of existing residential units to uses other than long- term residential use will further reduce the City's existing long-term housing supply, causing further imbalance between the demand for housing in the City and the existing supply, not only altering the character of the City's residential neighborhoods, but also presenting further challenges to the City's efforts to provide affordable housing within the community; and WHEREAS, the City additionally has, for many years, worked to preserve its existing housing stock for long term residential use, both to maintain the character of its residential neighborhoods and prevent residential districts from becoming visitor and tourist serving districts, and to ensure that it would not be converted to uses other than long-term residential uses; and 3-509 WHEREAS, to this end, in 1982 the City adopted Ordinance No. 82-07, which prohibited the creation of time-share projects as a means of ownership of any single- family, two-family or multiple -family dwelling or any apartment house within the City. This restriction was imposed because the conversion of residential dwelling units to time-sharing projects would eliminate residential dwelling units that would otherwise be available for long-term occupancies, and were inappropriate in residential areas because those uses have the same character as commercial hotels, motels and other transient occupancy uses, and would result in increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods; and WHEREAS, the City has historically not received complaints about time-sharing uses in residential neighborhoods. Commencing in 2020, however, the City began receiving complaints regarding single family homes in the City that were being sold and/or marketed as "fractional ownership" or "co -ownership" homes, wherein each buyer may acquire a one -eighth interest in a limited liability company that will own the home. Under the structure pursuant to which these dwelling units are marketed and sold, each owner gets a one -eighth share along with the right to use the home for one - eighth of each year indefinitely. During each owner's usage period, that owner has exclusive use of the entire house. All rentals are prohibited; only owners and their guests are permitted to use the house. Each owner pays regular assessments to fund the operating costs of the home and maintenance reserves; and WHEREAS, this arrangement, which provides that each purchaser is entitled to exclusive use of the property for a fixed number of days each year, is a "time-share plan" as defined in Business and Professions Code section 11212, and a "time share program" as defined in Section 17.112.130 of the City's Municipal Code; and WHEREAS, the City has received numerous complaints regarding these properties, including parking impacts from large numbers of people staying at these properties; excessive noise late into the evening due to frequent outdoor parties; traffic due to frequent visitor turnover; traffic, noise and parking concerns due to frequent visits from cleaning, landscape maintenance and pool cleaning services that come to the properties in between each stay to prepare the home for the next guest; and an inability to maintain lines of communication to set community expectations with the users of the unit, as visitors only frequent the homes for short term stays of 2 to 14 days; and WHEREAS, the complaints received by the City are reflective of the reasons that the City prohibited time-share projects within residential areas of the City. The time- share uses provide a short-term, high impact vacation oriented use of the property, where those that buy into the time-share use the home for entertaining and short term stays while visiting restaurants, wineries and other tourist oriented locations in St. Helena and the surrounding Napa Valley; and WHEREAS, this high impact use, combined with the frequent turnover and commercial management of these properties is not consistent with the residential districts in which they are located. It is commercial in nature, in that these time-share -3- 3-510 uses are structured as a short-term, tourist oriented, visitor serving use of the subject properties. The use of these properties as time-shares adds excessive noise and traffic to residential districts by using these properties for high impact tourist oriented uses more appropriately located in commercial districts of the City; and WHEREAS, expanded use of residential properties for time-share uses will further reduce the availability of housing stock for long-term residential use, and create a new demand for timeshare uses of residential properties; and WHEREAS, this encroachment of tourist oriented, visitor serving uses in residential neighborhoods will not only compromise the residential character of these areas, but will also further increase the costs for housing in the City, undermining the City's efforts to provide a balance of housing for all income levels in the City; and WHEREAS, the City's authority to enact zoning ordinances is based on the powers accorded cities and counties under the State constitution to make and enforce police regulations. This police power grants the City broad authority to regulate the development and use of real property within its jurisdiction to promote the public welfare; and WHEREAS, pursuant to and in accordance with this authority, the City Council desires to reaffirm its restrictions on time-share uses in residential areas, and to update the language of the Zoning Code to provide consistency with the terminology used to define time-share uses in State law. Further, the City desires to provide greater clarity as to the zoning districts in which time-share uses are permitted as conditional uses, and the standards pursuant to which they will be reviewed in those zoning districts; and WHEREAS, the Planning Commission of the City of St. Helena held a duly noticed public hearing on March 1, 2022, as required by law to consider all the information presented by staff, and public testimony presented in writing and at the meeting; and WHEREAS, on March 1 2022, the Planning Commission of the City of St. Helena recommended that the City Council adopt this Ordinance amending the Municipal Code as described herein by a 5-0 vote; and WHEREAS, on March 22, 2022, the City Council held a duly noticed public hearing, accepting testimony from the public, and discussed the proposed amendments and staffs recommended approval of this Ordinance; and WHEREAS, the proposed zoning amendments are consistent with the General Plan goals, policies and implementation programs as the Ordinance will continue to preserve the agricultural, small town character of the City of St. Helena; will preserve the City's residential districts for residential uses; and will help to preserve the City's existing housing stock for long term residential uses, to avoid further exacerbating the existing impacts on the City's housing supply; and 3-511 Now, therefore, the City Council of the City of St. Helena does hereby ordain as follows: SECTION 1: The above recitals are hereby incorporated as though set forth in this section. SECTION 2: Chapter 17.138 and sections 17.138.010 — 17.138.060 are hereby added to Title 17 of the St. Helena Municipal Code, to read as follows: "Chapter 17.138 TIMESHARE USES 17.138.010 Purpose and Findings 17.138.020 Definitions 17.138.030 Time-share Uses Restricted to Service Commercial (SC) and Central Business (CB) Districts 17.138.040 Application Process and Development Standards 17.138.050 Violations, Enforcement and Civil Penalties 17.138.010 Purpose and Findings A. There is a critical shortage of permanent, long-term housing in the City of St. Helena. B. A limited supply of suitable vacant land, land values, and market demand for land for other uses, including but not limited to use of property for vineyards, have limited the construction of additional housing in the City of St. Helena. C. St. Helena is a popular tourist destination known for its scenic Napa Valley location, exceptional wineries and restaurants, historic Main Street and small town agricultural character. D. The City of St. Helena stands out in the Napa Valley for its ability to attract visitors while also supporting the needs of its resident population. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. E. Time-share uses are not an appropriate land use in the City's residential districts due to the multiple occupancy of timeshare properties, the short-term, tourist oriented use of such property and commercial management of time-share facilities, ail of which -5- 3-512 create increased traffic generation, excessive noise, disruption to residential communities through commercial -level maintenance of the timeshare facilities, and therefore are appropriately confined to commercial zoning districts. F. Conversion of permanent housing to time-share facilities removes existing housing units from the City's existing stock and exacerbates an already severe housing shortage. G. It is therefore in the public interest to prohibit conversions of existing housing units into time-share facilities, as to do so eliminates needed housing stock by diverting those units to a tourist -oriented, commercial use. 17.138.020 Definitions For purposes of this Chapter, the following words and phrases shall have the meaning respectively ascribed to them by this Section: "Accommodation" means any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.160. "Building" shall have the meaning ascribed to it by Section 17.04.160. "Dwelling unit" shall have the meaning ascribed to it by Section 17.04.160. "Managing entity" means the person who undertakes the duties, responsibilities and obligations of the management of a time --share plan. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. "Time-share instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. "Time-share interest" means the right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, regardless of whether or not such right is coupled with a property interest in the timeshare property or a specified portion thereof. "Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given -6- 3-513 year, on a recurring basis for more than one year, but not necessarily for consecutive years. "Time-share property" means one or more accommodations subject to the same time- share plan, together with any other property or rights to property appurtenant to those accommodations. "Time-share use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan. 17.138.030 Time-share Uses Restricted to Service Commercial (SC) and Central Business (CB) Districts Time-share uses are conditional uses within the City's Service Commercial (SC) District and Central Business (CB) District, subject to approval of a conditional use permit applied for and approved in conformance with this Chapter. Timeshare uses are not permitted in all other Zoning Districts in the City. 17.138.040 Application Process and Development Standards A. Application Process. Approval of a conditional use permit for time-share uses in the Service Commercial District or Central Business District shall be required in accordance with the requirements of Chapter 17.168. In addition to the application requirements contained in Chapter 17.168, an application for a time-share use shall be accompanied by the following documents which shall be subject to the approval of the planning director: 1. Management Plan. A management plan shall describe the methods employed by the applicant to guarantee the future adequacy, stability, and continuity of a satisfactory level of management and maintenance of the time share use. 2. Application Requirements. In addition to any application requirements established by this section and any other applicable requirements of this code, the following information shall be submitted as part of any application to develop or establish a time-share use: a. Typical floor plans for each accommodation. b. The phasing of the construction of the accommodations on the time- share property, if applicable. c. A description of any ancillary uses which are proposed in conjunction with the time share use. d. A description of the method of management of the time share use and indication of the management entity for the time-share property. e. Any restrictions on the use or occupancy of the accommodations. -7- 3-514 f. Any other information or documentation the applicant, city staff or commission deems reasonably necessary to the consideration of the time-share use, including any required environmental documents. B. Development Standards and Operational Requirements. Notwithstanding any other provision of this chapter, the following conditions must be met by any time-share use in any conditionally permitted zone. Additional requirements may be attached to a conditional use permit or development agreement if found to be necessary to assure that the time-share use meets the intent of this chapter: 1. Time-share uses developed in the Service Commercial District or Central Business District shall be limited to accommodations in upper floors in conjunction with a mixed -use project. 2. No existing residential use in the Service Commercial or Central Business District shall be converted to a time-share use. 3. Development Standards. The time-share use shall comply with all development standards for the zone in which it is located. 4. Parking. Parking shall be provided as follows: a. For accommodations of two or fewer bedrooms, one parking space shall be provided for each accommodation. b. For accommodations of three or more bedrooms, two parking spaces shall be provided for each accommodation. 4. Modification or Waiver of Standards. The planning commission may modify or waive one or more of the regulations contained in this section if it determines that strict compliance is not necessary to achieve the purpose and intent of this section. 17.138.060 Violations, Enforcement and Civil Penalties A. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this chapter is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1 20. B. Time-share use, and/or advertisement for time-share use, of an accommodation in violation of this chapter is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance. Any such nuisance may be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 1 12, except that the civil penalty for a violation shall be one thousand dollars ($1,000.00). Each day the violation occurs shall constitute a separate offense. -&- 3-515 C. Any responsible person who violates this chapter shall be liable and responsible for a civil penalty of one thousand dollars ($1,000.00) per violation per day such violation occurs. The city may recover such civil penalty by either civil action or administrative citation. Such penalty shall be in addition to all other costs incurred by the city, including without limitation the city's staff time, investigation expenses and attorney's fees. 1. Where the city proceeds by civil action, the court shall have discretion to reduce the civil penalty based upon evidence presented by the responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay, Provided, however, that in exercising its discretion the court should consider the purpose of this chapter to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the responsible person's enrichment or profit as a result of the violation of this chapter. In any such civil action the city also may abate and/or enjoin any violation of this chapter. 2. Where the city proceeds by administrative citation, the city shall provide the responsible person notice of the right to request an administrative hearing to challenge the citation and penalty, and the time for requesting that hearing. a. The responsible person shall have the right to request the administrative hearing within forty-five (45) days of the issuance of the administrative citation and imposition of the civil penalty. To request such a hearing, the responsible person shall notify the city clerk in writing within forty- five (45) days of the issuance of the citation. The appeal notification shall include all specific facts, circumstances and arguments upon which the appeal is based. b. The city manager is hereby authorized to designate a hearing officer to hear such appeal. The city hearing officer shall conduct a hearing on the appeal within ninety (90) days of the request for the hearing unless one of the parties requests a continuance for good cause. The hearing officer shall only consider those facts, circumstances or arguments that the property owner or responsible person has presented in the appeal notification. c. The hearing officer shall render a decision in writing within thirty (30) days of the conclusion of the hearing. The hearing officer shall have discretion to reduce the civil penalty based upon evidence presented by the property owner or responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the hearing officer should consider the purpose of this chapter to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the property owner's or responsible person's enrichment or profit as a result of the violation of this chapter. d. Any aggrieved party to the hearing officer's decision on the administrative appeal may obtain review of the decision by filing a petition for writ 3-516 of mandate with the Napa County superior court in accordance with the timelines and provisions set forth in Government Code Section 53069 4. e. If, following an administrative hearing, appeal, or other final determination, the owner of the property is determined to be the responsible person for the civil penalty imposed by this section, such penalty, if unpaid within forty-five (45) days of the notice of the final determination, shall become a lien to be recorded against the property on which the violation occurred pursuant to Chapter 1.12. Such costs shall be collected in the same manner as county taxes, and thereafter the property upon which they are a lien shall be sold in the same manner as property now is sold for delinquent taxes. D. Any violation of this chapter may also be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 1 12, except that the civil penalty under Chapter 1.12 for a violation shall be one thousand dollars ($1,000.00). E. Each day the violation of this chapter occurs shall constitute a separate offense. F. The remedies under this chapter are cumulative and in addition to any and all other remedies available at law and equity." SECTION 3: Deletion of Section 17.112.130 Section 17.112.130 is hereby deleted in its entirety. SECTION 4: Amendment of Section 17,48.030 Section 17.48.030 is hereby amended to add the following text as a separate line immediately following "Theaters, movie and legitimate;", and immediately prior to "Tobacco/smoke shop, including the sale of tobacco, tobacco and/or nicotine products and equipment for smoking, "Time share uses, pursuant to Sections 17.138.030 and 17.138.040;" SECTION 5: Amendment of Section 17.52.030 Section 17.52.030 is hereby amended to add the following text as a separate line immediately following "Theaters, movie and legitimate;", and immediately prior to "Tobacco/smoke shop, including the sale of tobacco, tobacco and/or nicotine products and equipment for smoking;": "Time share uses, pursuant to Sections 17.138.030 and 17.138.040;° SECTION 6: CEQA -l0- 3-517 This ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines (the Guidelines), and the environmental regulations of the City. The City Council hereby finds that this ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. SECTION 6: Effective Date This ordinance shall -take effect 30 days after its final adoption, and a summary of this ordinance shall be published once with the names of the members of the Council voting for and against the ordinance in the St. Helena Star, a newspaper of general circulation published in the City of St. Helena. THE FOREGOING ORDINANCE was introduced at a regular meeting of the St. Helena City Council on the day of , 2022, and was adopted at a regular meeting of the St. Helena City Council on the day of 2022, by the following vote: Mayor Ellsworth: Vice Mayor Dohring: Councilmember Chouteau: Councilmember Hardy: Councilmember Hall: APPROVED: Geoff Ellsworth, Mayor I'Gra041 i CITY OF ST. HELENA Cindy Tzafopoulos, City Clerk -11- 3-518 From: Mari Jansdotter <mjansdotter a yahoo,com> To: Anna Chouteau Sent: 6/8/2021 7:25:45 AM Subject: Re: [External] 1242 Madrona pictures Re: Pacaso Thar you, Anna, for your kind reply. I'm sorry you all have to go through this lawsuit by Pacaso and hope the judge find in your favor. I have a follow-up question. Do you know who I should address it to? The Pacas house building on Kearney across the street from us has installed lights under the rooflin.e that are on all Might and installed in such a way they shine straight into our house, especially my daughter's bedroom. Are there any ordinances that I could refer to that help me ask them to please cover 1 redirect those lights or at least turn them off after 14 p,m? Thank yonl Best Mari 3-519 r t f MIT E1 Nis - r 3-521 Sent from Yahoo Mail on Android On Tue, Jun 8, 2021 at 7:12 AM, Anna Chouteau EAChouteau@cityofsthelena.org> wrote: Hi Mari, Thank you for your email. I forwarded your email to City staff about the specific permitting questions. Our planning director is out of the office this week. We are defending ourselves in the lawsuit. Our City Attorney filed an anti-SLAPP motion that is now public information and the hearing will be coming up this summer. All my best, Anna Sent from my Wad On Jan 7, 2021, at 6:01 PM, Mari Jansdotter <mjansdotter@yahoo.com> wrote: To clarify, do they have permit allowing the new structure going Lip at 1242 Madrona? The rendering from original sales listing shows a trellis (see attached) but a structure looking like a live -on unit close to (and taller than) the Oak neighbour' fence is being built. See pictures from today <20210607_175202jpg> <2021.0607_175219.jpg> Sent from Yahoo Mail on Android On Mon, Jun 7, 2021 at 5:38 PM, Mari Jansdotter Emjansdotter@yahoo.com> wrote: Thank you for doing all you can to stop Pacaso! I ain not o.k. with Pacaso's violation of city ordinance and. I support the city's legal fight. In addition to signing the petition and putting a No Pacaso sign outside my home, what else can we on the community do to Help, please? 3-522 I finally afforded any dream home after moving several threes the last 10 years, only to a year later have 4! of these Pacaso 'time share' like vacation LLC/commercially owned houses popping up in my neighborhood. I'm devastated - this is supposed to be a residential area!! I ain very worried about my family's safe & peaceful living situation, now that I'll be impacted by 4 of these houses (one across the street) - each with S groups of owners and/or their guests circulating in and out all year round. Many Pacaso have 4 bedrooms that easily accommodate S+ people, and pool in the backyards with outdoor areas for gatherings/parties. It's a huge difference having your neighbor throwing an occasional party versus non-stop having a new group of people next door visiting for thier token time of vacation / partying. Pacaso houses also come with increased parking problems as these properties tend not have garages or driveways (often transformed into addl bedroom). Specifically would you mind looking into building code the one at 1242 Madrona / Oak? Looks like they're adding a guest house with vary narrow set back from the oak side neighbor. Is that an approved building? Maybe they're getting around that by making it a partial garage? Add to that, the 4 Pacaso houses are all in close proximity of RLS with kids walking / biking to and from school. What are the safety concerns that this is imposing with new people circulating in and out all year round and increased. car traffic? Worst case scenario there will be a liability situation that will. put a stop to Pacaso. Please, please stop Pacaso before we even get close to that. Respectfully, Mari Jansdotter Sent from Yahoo Mail on Android 3-523 PACASO = PARTY HOUSES! Debbie Polverino 5/11/2021 To the members of the City Council. In the recent Napa Register article, Austin Allison agrees that short term rentals are a problem, that commercial Timeshares are a problem- that's not what Pacaso is he said. Yet, Pacaso listed the Valley View Street "Pool House" as a 118 Timeshare Ownership property. After the city was notified by several concerned citizens and myself regarding "timeshares" listed for sale in residential zoned areas, Pacaso changed its online marketing from "118 Timeshare Ownership to 118 Shared Ownership. Owners who purchase still share the property in available time slots just like a timeshare. Living next door to a Pacaso home has been living next door to a full-time party house! The constant music with speakers blaring, loud conversations until 2 am and later, noise violations along with excessive vehicles parked on the street or in front of our homes. The additional noise of gardeners blowing dirt and leaves into our yard, Pool service, catering trucks, housekeeping scheduled more frequently. Open houses are held with statements made with, "this is a great place for pool parties and entertaining, it's a perfect place to bring friends and extended family." This home on Valley View Street was a weekend getaway home for the previous owners who had loud weekend parties. It was a constant nightmare and all the homes nearby complained. Now the property has been split up to 8 owners. The Saint Helena P.D. has already been to this home at least 3 times for noise violations after 10pm. There must be a way to stop these repeated violations and offenders. Pacaso's has written policies for its owners on their website that they must adhere to. No parking on the street, no parties, no noise after 9pm to lam, no dogs over 80 pounds. Policies have been broken several times already from each group including the Pacaso's owners. According to Mr. Allison, Saint Helena is running a dishonest campaign against Pacaso. Pacaso claims discrimination of outside ownership which is not the case. As we all know we welcome all people the opportunity to live in our quiet small town. Pacaso selling an 1,100 square foot home which is smallest of any home on our street for $1.7M is dishonest in my opinion. This is what he says is affordable housing for second home buyers who are paying in full, plus maintenance fees? When commercial companies buy a dozen homes in Napa Valley and plans additional purchases to be split up to 8 shares it is not committed to the community or our quiet neighborhoods. Zoning is in place for a reason. Commercial companies operating in full time residential streets should adhere to the rules that are in place and only buy up in areas where other vacation homes are abundant and not a disruption. What happens should we decide to sell our home? How will people feel about buying next door to a home owned by 8 owners who don't know each other and all come at different time slots for as little as 2 days at a time? We will have to disclose this information. This put a negative mark on our property. This is something I want you to think about! Say NO to Pacaso! Thank you. 3-524 From: Amy Caldarola <amycal@comcast.net> To: Paul Dohring CC: Anna Chouteau; Lester Hardy; Eric Hall Sant: 5/23/2021 1:04:24 PM Subject: [External] Picaso Dear Council Members, This is Amy Caldarola here. I am very concerned about Picaso buying property in our residential neighborhoods under the guise of democratizing home ownership. This is not affordable housing. Picaso properties are time-shares and short-term rentals which violate municipal code provisions. The presence of these properties in residential neighborhoods is inappropriate and will degrade the quality of life. It has already done so with Picaso's property on Valley View; those neighbors are suffering with loud noise, music, and parties that go on to after midnight; even calling the police does not seem to stop them. I support the city in doing everything possible to defeat them. I also support a counter law suit against them if it makes legal sense. With that said, we are fighting for the soul of our community and this needs to be a number one priority. Picaso is in Napa, Sonoma, Realdsburg, and probably will move into Calistoga and Yountville. This is a fight worth fighting. It might be helpful for the affected counties and municipalities to join their resources together to oppose them. Please outline for me what the city is doing and what the plan is. Thank you. I really appreciate you taking the time to keep me informed on this very important and pressing issue. We must act now! Sincerely, Amy Caldarola 3-525 May 11, 2021 Good evening City Council members. My name is Clare Barr and I live in St. Helena. Tonight I would like to speak about the Pacaso Vacation Share homes. listened carefully to the public comments of Pacaso Share owners made at our last City Council meeting. They sounded sincere in their desire to be a part of the St. Helena community. The problem is they have bought into a business model that will make that nearly impossible. To be a part of a real community means forming bonds with neighbors. How can that come about with a home next door that has possibly dozens of strangers coming and going, with visits no longer than 14 days at a time, a few times a year? And with the likelihood of visits gifted by other share owners, and a cleaning crew who appears before each arrival, the number swells. With the result that a Pacaso share owner, is viewed by their neighbors as only one in a sea of unfamiliar faces. And though the intentions of some of the share buyers might be good, can we say the same for all 7 of the remaining shareowners? One of whom might gift a weekend to his brother for a blowout bachelor party? Or as was the case in Napa, a single shareowner who conducted retreats in which close to a dozen visitors would come and go within one stay. That particular shareowner was charging her guests, which is a complication on an entirely different level. Pacaso would have us believe that their sharebuyers are families who simply want a quiet, lovely getaway. But in actuality, a Pacaso home is built for partying. Their own website says of one offering "This home takes entertaining to new heights". And yet another listing says that a 3-526 particular home "has been completely re --imagined to accommodate families, friends, and large groups". Another listing offers "year round fun and adventure". Now, none of us resent the visitor who wants to have fun. Indeed, our beautiful valley is an ideal place for celebration. And we all do that on occasion. But when you realize that every single visitor owning a Pacaso share has been wooed with the promise of "fun and adventure" within a house "built for entertaining", then you have the possibility of major partying with each and every visitor, all crammed into stays that last from 2-14 days. This is transient occupancy in our residential neighborhoods that cannot possibly be regulated under the Pacaso system. There is a reason why we have ordinances in place that designate where tourists and visitors can stay. It allows us to appreciate our visitors, giving them the space and accommodations in which to party and celebrate, while we ourselves can conduct our daily lives in the sanctuary of our residential neighborhoods. Which in turn, are places where we know our neighbors so well that we trust them with our keys, our pets, and even our children. With whom we share joy and sometimes sorrow, and whom are quick to lend a hand in times of crisis. And if we have learned anything in the last few years, it is that the ability to know and rely on our neighbors is the very thing that sustains our community through thick and thin. A vacation home with a parade of visitors coming and going, does not belong in our residential neighborhoods. Please Say No to Pacaso. Clare Barr St. Helena 3-527 From, Beth Gray <bgray14@gmail.com� To: Geoff Ellsworth Sent: 5/22/2021 3:01:13 PM Subject: [External] Pacaso Dear Mr. Mayor, I am writing to express my strong opposition against the infiltration of Pacaso and their timeshare strategy in the city of Saint Helena. As a full -tinge resident here in the city (and. as your neighbor), I find it atrocious that the city has not been able to stop the infiltration of this community destroying business model. This business will do .nothing but destroy our community. As an example, I witnessed the dumping of water from the pool into the creekbed fionn a home purchased by Pacaso right on the corner of Sylvaner/Reisling as they began to redevelop the hone and expect to list it as fractional ownership. Illegal dumping of the pool water with disregard to any of the environmental consequences demonstrates their utter lack of care about the community. Similarly, hearing from the neighbors who live next to a Pacaso home on Valley View, I can only shake my head and sympathize with the poor neighbors having to deal with multiple cars showing up and loud. music being played at all hours. One of the reasons I moved from San Francisco to Saint Helena was to enjoy the quiet sounds of nature, the beautifiil outdoors - not to listen to vacationers who only want to party for the two weeks that they have their time in the home. Please protect our city from these timeshares. I understand the city is being sued. I hope that we can collectively put the necessary resources behind this lawsuit to stop Pacaso from any more timeshares in St. Helena, Respectfully, Beth Gray 3-528 Report to the City Council Regular City Council - 12 Apr 2022 Agenda Section: CONSENT ITEMS Subject: Consideration of Second Reading and Proposed Adoption of a Ordinance Adding Chapter 17.138 "Time Share Uses" and Sections 17.138.060 to Title 17, Zoning of the St. Helena Municipal Code, amending sections 17.48.030 (Central Business) and 17.52.030 (Service Commercial) and Deleting Section 17.112.130 of the St. Helena Municipal Code CEQA Exempt Determination: Prepared By: Ethan Walsh, City Attorney Reviewed By: April Mitts, Administrative Services Director Approved By: James C. McCann, Interim City Manager BACKGROUND The City Council held a public hearing on the proposed ordinance on March 22, 2022, and introduced the ordinance by title only and waived reading by a unanimous vote of the City Council. Staff recommends that the Council waive second reading and adopt the ordinance. The report below mirrors that provided to the Council at the March 22, 2022 meeting. Over the past two years, there has been significant discussion in the community regarding Section 17.112.130 of the City's Zoning Code, which prohibits the creation of a time-share project as a means of ownership of any single-family, two-family or multiple -family dwelling or any apartment house in the City (the "Time Share Ordinance"). The City Council discussed the Time Share Ordinance at its July 14, 2020 meeting in response to concerns raised regarding a real estate listing for a fractional or partial ownership interest in a residential home in the City. The prior City Attorney discussed this issue with the City, focusing on the question of the extent to which the City Council could regulate an ownership structure through the City's zoning authority, and noted the challenges of doing so. At the conclusion of the Council's discussion of this issue, Council directed the City 3-529 Attorney and staff to continue to research its options to address the concerns raised by members of the community in response to the listing of the home at issue. In the months following the July 2020 Council meeting, the company that had been marketing that original home, now known as Pacaso, began marketing other homes in the City, and the City received additional complaints from members of the community. Based on new information that was available to the City, primarily through Pacaso's marketing materials, the City Attorney's office concluded that the properties being marketed by Pacaso were not just fractional or partial ownership structures, but were also being marketed to be used as a time share project that would be prohibited under the City's ordinance, and informed Pacaso of that conclusion. Pacaso disagreed with the City Attorney's conclusion, and initiated a lawsuit in an effort to compel the City to retract its conclusion. That litigation is ongoing. When reviewing the Time Share Ordinance in this context, the City Attorney's office found that the substance of the Time Share Ordinance has not been updated since its adoption in 1982. The City Attorney's office concluded that the Time Share Ordinance would benefit from an update to refine the definitions to more directly address the impacts of time-share uses, to clarify the means used by the City to enforce the restrictions on time share uses, and to clarify how time share uses are treated in non-residential districts. City staff initially delayed initiating any changes to the Time Share Ordinance while the litigation was ongoing. However, due to the continued marketing of time share uses within the City, staff has decided to move forward with recommending the proposed updates to the City's ordinance. On March 1, 2022, the Planning Commission voted unanimously to recommend the City Council approve the proposed ordinance. DISCUSSION The Discussion section of the Staff Report is organized as follows: First, the section provides a brief explanation for the City's conclusion that the homes that have been marketed by Pacaso constitute time share projects. While the City's conclusion does not directly affect the changes to the Zoning Code set forth in the proposed ordinance, it is helpful to understand that the Time Share Ordinance, both in its original form and as proposed to be amended, is intended to protect against the impacts that these homes and similar uses could have on the City's housing supply and the character of the City's residential districts. Second, this section discusses the legal basis for the City's Time Share Ordinance, the reasons why the City prohibited time share uses in residential properties, and why those reasons continue to apply today. Third, this section outlines the changes made in the proposed ordinance and the reasons for the proposed changes. A.Current Time Share Ordinance and Application to Pacaso Homes Section 17.112.130 of the Zoning Code prohibits the creation of a time-share project as a means of ownership of any single-family, two-family or multiple family dwelling or apartment house within the City. A time-share project is defined in that section as any real property that is subject to a time-share program. A time-share program is in turn defined in part as an arrangement whereby the use, occupancy or possession of the 3-530 property circulates among purchasers according to a fixed or floating time schedule on a periodic basis for a specific period of time during any given year. Pacaso provides a significant amount of information on its website regarding the manner in which its homes are used by the purchasers of a Pacaso home, According to Pacaso's website, the single family residences marketed by Pacaso are held by a property -specific limited liability company ("LLC"), and each co-owner purchases a 118 share in the LLC. (Pacaso.comllearn) Each 1/8 share entitles the co-owner to 44 stay nights within any 365 day window. Stays can be from 2 to 14 nights in duration for each 118 share. Back-toback stays are not permitted. (Pacaso.com/faq/scheduling) Stays are booked on an app, with specific rules governing the number of "special dates" that each co-owner can book, and the number of stays that each owner can book during "peak seasons." (Id.) Each owner can book the residence to use themselves, or may allow guests to use the residence, whether or not the co-owner is present. (Id.) Between each stay, Pacaso conducts a thorough inspection and cleaning. ("5 reasons Pacaso is better than a timeshare." Pacaso.com/blog/better-than-resort-timeshare) The Pacaso model grants each 1 /8 owner the right to use the property for a specific period of time (44 days in a year) in increments of 2-14 days. The use, occupancy and possession of the property circulates among the co -owners according to a floating time schedule that gives each co-owner exclusive rights to the property for a specific period of time each year. This use structure fits squarely in the City's definition of a time-share program, and the properties operated by Pacaso in this manner would therefore be timeshare projects under the existing Time Share Ordinance. B.Reasons for the Time Share Ordinance 1. The City's General Plan The City of St. Helena has long been defined by its rural, small town quality and agricultural character. In adopting the St. Helena General Plan Update 2040, the City noted that the defining, unifying goal of all the elements of the 1993 General Plan was: To protect the rural, small town quality and agricultural character of St. Helena. It is the General Plan's intent that the preservation of this small town character be the unifying philosophy that overlays all other stated goals and policies.(General Plan 2040, p. 1-2.) While the 2040 General Plan acknowledges that this is no longer the sole, overriding focus of the General Plan, retaining the small town character of St. Helena remains a primary focus of the City's land use planning. (Id.) A key component of retaining the City's small town character is maintaining a balance between the economic benefits that arise from visitors who come to St. Helena for its wineries, restaurants and historic downtown, and maintaining its authentic small town quality of life for the City's residents. This theme is consistent throughout the City's General Plan, and maintaining this balance is key to the City's long term viability. The General Plan notes in its Introduction that "[t]he community stands out in the Valley for its unique, historic character and its ability to attract visitors while also supporting the needs 3-531 of its resident population." (General Plan p. 1-8.) The City has set goals to maintain that balance, striving to achieve an economy that "will meet the basic needs of residents, while balancing the benefits and impacts of visitors and provide better economic opportunities. (General Plan 1-15.) The City further seeks to "promote sustainable tourism practices that allow the City to enjoy the economic benefits of visitors to the region while maintaining the authentic small-town quality of life." (General Plan p. 3-9.) St. Helena is a renowned tourist destination, bringing visitors from throughout the world to its wineries, restaurants and downtown, but it is also a functioning City and community, with residents who contribute to its social fabric. Like most communities throughout California, one of the key means that the City utilizes to maintain this balance is through its Zoning Ordinance. The City has commercial districts, like the Service Commercial district and the Central Business district, that provide for uses that serve both visitors and the local community, such as restaurants, retail shops and winery tasting rooms, among others, along with lodging where those visitors can stay. (St. Helena Municipal Code §§17.48.030, 17.52.030.) The City also has residential districts that provide housing for those who live in the community, at varying densities in order to provide a diversity of housing types. 2. Use of Zoning to Preserve Residential Areas The use of zoning to preserve the character of the residential districts of a City has been common for over a century. In the seminal case of Euclid v. Ambler the United States Supreme Court upheld the validity of comprehensive zoning that would set aside residential districts "from which business and trade of every sort, including hotels and apartment houses, are excluded_" (Euclid v. Ambler Co. 272 U.S. 365, 390.) The U.S. Supreme Court upheld the Village of Euclid's zoning ordinance in that instance, noting that the inclusion of non-residential uses in residential districts may have an increasingly deleterious impact on the residential area "until, finally, the residential character of the neighborhood and its desirability as a place of detached residences are utterly destroyed." (Id. at 394.) The California Court of Appeals followed Euclid and subsequent cases in upholding the City of Carmel-by-the-Sea's zoning restriction on short-term rentals. (Ewing v. City of Carmel -By -The -Sea (1991) 234 Cal.App.3d 1579.) In that case, the Court noted that the City's chief purpose in adopting the short-term rental restriction was "to provide an appropriately zoned land area within the City for permanently single-family residential uses and structures and to enhance and maintain the residential character of the City." (Id. at 1579.) In upholding Carmel's short-term rental restriction, the Court found that short-term rentals "undoubtedly affect the essential character of a neighborhood and the stability of a community. Short-term tenants have little interest in public agencies or in the welfare of the citizenry. They do not participate in local government, coach little league, or join the hospital guild. They do not lead a scout troop, volunteer at the library, or keep an eye on an elderly neighbor. Literally, they are here today and gone tomorrow —without engaging in the sort of activities that weld and strengthen a community." (Id. at 1591.) 3-532 3.Impacts of Time Share Uses on Residential Districts Like Carmel, the City of St. Helena strives to maintain the character of its residential areas in the face of intense demand for accommodations to serve visitors to St. Helena. The Time Share Ordinance is one of the means that the City has in place to ensure that it is able to maintain its existing and limited housing stock for use in long term residency, and to maintain the character of its residential zoning districts. When the City originally adopted the Time Share Ordinance in 1982, the City Council made specific findings based on the impact it foresaw if time share uses were to locate in the residential areas of the City. Those findings were as follows: 1. There is a critical shortage of affordable housing in the city for long-term occupancies (more than six months annually), and the availability of additional residential dwelling units is substantially restricted by the growth management system. 2. The conversion of residential dwelling units within the city to time-sharing projects eliminates residential dwelling units otherwise available for long-term occupancies (more than six months annually) in the city. 3. Time-sharing projects have the same character as commercial hotels, motels and other transient occupancy uses due to their transient nature and to the multiple shortterm (less than six months annually) occupancies by those participating in timesharing projects. 4. Such commercial or quasi -commercial like use is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. 5. The city council finds and determines that this section is necessary to protect the public health, safety and welfare of the citizens of the city. As discussed in more detail below, these findings continue to hold true in St. Helena, and continue to support the City's decision to restrict time-share uses in residential districts. i. Housing Shortages and Impacts of Time -Share Uses on Existing Housing Stock In adopting the current Time Share Ordinance, the City Council found that there was a critical shortage of affordable housing in the City for long-term occupancies. That continues to be the case, and is undoubtedly worse than was the case at the time the Time Share Ordinance was originally adopted. The most recent census data lists the median value of owner occupied homes in St. Helena at $1,112,100 for the period of 2015-2019, while the Zillow Home Value Index estimates medial home values in St. Helena to be approximately $1,870,000 as of February 2022. www.census.govlquickfacts/sthelenacitycalifornia; zillow.com/home-values/.) In contrast, the median household income in St. Helena from 2015-2019 was $90,031, and the median income for a four person household in Napa County for 2021 is approximately 3-533 $109,200. (www.census.gov/quickfacts/sthelenacitycalifornia; www. hcd .ca..qov/grantfund ing/income-Iim its/state-and-federa 1-income- limitsldocslincome-limits-2021.pdf.) At the time of adoption of the City's Housing Element in 2015, the income necessary to purchase a median priced single family home was nearly $200,000 per year, and prices have risen dramatically since then. (City of St. Helena Housing Element Update 2015-23, p. 3.) The cost of homes currently in St. Helena are well in excess of what median income residents of St. Helena can afford, as well as median income residents of Napa County generally. Further, as Erika Sklar observed in the St. Helena Housing Update Report that she prepared for the City in April 2018, "St. Helena has more local jobs than people in the labor force, demanding large numbers of commuters to fill local jobs. Workers commute daily into St. Helena, many because there is no local housing that is affordable at the incomes that they make. 36% of St. Helena households cannot afford market rents while 70% of St_ Helena households cannot afford to purchase a home. Paramedics and preschool teachers cannot afford St. Helena's market rents. Teachers, registered nurses, winery and hospitality managers and non-profit directors cannot afford homeownership in St. Helena." (St. Helena Housing Update Report, p. 7 (April 2018).) The City has made and continues to make efforts to address the need for affordable housing in the City, including providing assistance for the Brenkle Court, Turley Flats and 963 Pope Street projects. The City has also ensured that new non-residential development will assist the City in providing adequate affordable housing, as evidenced by the significant contributions to affordable housing made by the Farmstead Lodging project through its development agreement with the City. These efforts, however, have highlighted the challenges of providing housing at all income levels, with the most significant challenge being a limited supply of existing housing stock in the City, and a limited supply of available land for new housing. Given the housing shortage already in existence, losing additional housing stock will only make this problem worse. The findings in the original Time Share Ordinance also note that the conversion of homes to time sharing projects would eliminate residential dwelling units that would otherwise be available for long term residential use. This continues to be true, as a home that is used for time share purposes will no longer be available for households to use as their long term residence. This threat to the City's existing housing stock is not insignificant. The publicity regarding Pacaso's rise as a company speaks to a pent up demand for homes that could be converted to time share use, reducing available housing stock for long term use. Pacaso's co-founder has indicated that "[t]here are tens of millions of families that aspire to own second homes but are unable to, due to reasons of cost." (Just Five Months Old, Zillow Co -founder's Pacaso Claims It's Already A Unicorn" Noah Kirsch, March 24, 2021 (www.forbes.comlsiteslnoahkirsch/2021/03124/just-five-month s-old- zillowcofounders-pacaso-claims-its-alread-a-unicorn/.)) In discussing Pacaso's model, Dan Wenhold of the venture capital firm Fifth Wall said "[t]hey were taking a previously illiquid asset, which was a timeshare, and making it affordable for the masses, also making it attainable for folks who wanted to own a second home but previously weren't able to." ("Pacaso, the Proptech Startup Founds by Zillow Alums, Raises $125M Series 3-534 U Sophia Kunthara (September 14, 2021) (news.crunchbase.cominewslproptech- startup-pacasoraises- 125m-series-c.)) Creating a new market for these prospective buyers who otherwise would not buy second homes unquestionably increases demand for these homes by creating an incentive for timeshare companies to buy up residences to meet this market demand. Creating more demand, and reducing supply, will further ratchet up housing costs, exacerbating the already significant housing shortage in the City. ii. Impacts to Character of the City's Residential Districts The City Council additionally found as part of the adoption of the original Time Share Ordinance that time-sharing projects have the same character as commercial hotels, motels and other transient occupancy uses due to their transient nature and to the multiple short-term occupancies by those participating in time-sharing projects. The Council concluded that this commercial or quasi -commercial like use is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. This continues to be the case, as the nature of time share uses of residential property is different than the typical long term residential uses for which the residential districts of the City are intended. The complaints that have been made by some local residents regarding the Pacaso homes are illustrative of the distinctions between time share uses and long term residential uses. A sampling of the email complaints received by the City are included in Attachment No. 2 to this Staff Report. The complaints received center on concerns over more intense traffic and parking issues, outdoor parties and conversations going late into the evening, sometimes as late as 2 A.M. One neighbor complained of outdoor lighting shining into her daughter's room at night. They complained of traffic and inadequate parking for the visitors to these homes. Further, neighbors have noted that with each turnover from one stay to another, cleaning and landscaping crews come to clean the unit and prepare it for the next user. While this level of maintenance is appropriate for a commercial vacation property, it impacts the residential character of the surrounding area by adding parking and noise burdens in the neighborhood. Living next door to a home where the residents turnover every 2-14 days, and professional cleaning and landscaping crews come to the property between each visit is much more akin to living by a commercial lodging project than a residential home. This is not at all surprising, given that these time share homes are used by people who are on vacation. While long term residents may have an occasional party at their home, the time share model means that these residences are constantly being used by people who are on vacation, hosting parties or celebrating special occasions. These activities by their nature are more intense than typical residential use of property. The intensity of this use is a significant reason that these uses can change the character of a residential neighborhood. Long term residents, whether owners or renters, will occasionally have guests, and will occasionally have parties, but these time-share homes are used exclusively by people who are coming to the City on a short term basis for vacation or leisure. People will naturally stay out later, entertain more and gather in larger 3-535 numbers while on vacation. That is the reason that these uses are more appropriate in nonresidential areas that are intended to cater to the City's visitors and tourists. Time share uses can change the character of a residential neighborhood by having it serve not only as a residential area but also a visitor lodging area, and subjecting it to the impacts that come with that more intense land use. In their marketing materials, Pacaso cites this intensity of use as a benefit, indicating that having these units filled with visitors seven days a week will benefit the local economy, since these visitors will patronize focal businesses. (pacaso.comlcommunities) However, as noted above, the City strives through its General Plan to achieve a balance between benefits to the local economy and maintaining the character of the City. The City seeks to achieve this balance by promoting "sustainable tourist practices that allow the City to enjoy the economic benefits of visitors to the region while maintaining the authentic smalltown quality of life, (General Plan p. 3-9) and striving to achieve a local economy that "will meet the basic needs of residents, while balancing the benefits and impacts of visitors." (General Plan p. 1-15.) Bringing more visitors into residential neighborhoods to improve the local economy does not help to achieve that balance. It instead tips the scales in favor of the local economy, at the expense of the residential character of these neighborhoods. The nature of the timeshare use itself can impact the residential character of the City's residential districts because it will ensure that the time share users can only use their property for a limited amount of time each year. In the case of Pacaso owners, each stay is limited to 2-14 days. As discussed above, in the Ewing v. City of Carmel -by -the -Sea case, the California Court of Appeal found that short term rentals would affect the essential character of a neighborhood and the stability of a community. The Court noted that "[s]hort term rentals have little interest in public agencies or in the welfare of the citizenry. They do not participate in local government, coach little league, or join the hospital guild. They do not lead a Scout troop, volunteer at the library, or keep an eye on an elderly neighbor. Literally they are here today and gone tomorrow —without engaging in the sort of activities that weld and strengthen a community." This same problem is present with time-share uses. Each co-owner is in the unit on a short-term basis, and without the time to participate in the types of activities or build the relationships that create the fabric of a community. At the April 28, 2021 council meeting several Pacaso co -owners spoke of their experiences in St. Helena. All of them spoke of their affection for the community and the traditions they had established, but these were centered on attending local events and visiting shops, restaurants and wineries. These types of transactional activities are all beneficial to the City's local economy and are what the City hopes to see from visitors to the City, but it is not the type of community involvement described in the Ewing case that binds and strengthens a residential community. Given the City's desire to strike a balance between the demands of the City's visitor and tourist economy, and retaining its small town character and quality of life, the City has an interest in maintaining housing stock in its residential districts for long-term residents who will engage in the community in the manner described by the Court in Ewing, to the betterment of the entire community. 3-536 C.Proposed Amendments to the Time Share Ordinance The proposed Ordinance would make certain changes to the City's Existing Time Share Ordinance, as described below. 1.Findings and Establishment of New Chapter The proposed Ordinance includes detailed recitals and findings describing the policy bases for the City's regulation of time share uses. The findings are consistent with the findings made as part of the original Time Share Ordinance, but more detail has been added. The policy bases for the proposed Ordinance are discussed in the sections above, and further discussion is not necessary here. The proposed Ordinance also relocates the restrictions on time share uses to its own chapter at Chapter 17.138. The Time Share Ordinance is currently located in Chapter 17.112, General Site Design and Development Standards. City staff believes that with the added level of detail in the Proposed Ordinance, these provisions merit being located in a separate chapter, and has changed the location of the Timeshare Ordinance accordingly. 2.Definitions The Proposed Ordinance amends the definitions that are used to define time share uses, with the new definitions set forth in Section 17.138.020. The new definitions are modeled on the definitions utilized by the state to regulate time-shares in the Vacation Ownership and Time -Share Act of 2004 (Bus. & Prof. Code §§11210-11288), but are modified somewhat to better apply in the land use regulation context. The new ordinance includes a number of definitions that work in concert to define a timeshare use. The ordinance defines a "time-share use" as the use of one or more accommodations, or any part thereof, as part of a time-share property pursuant to a timeshare plan. An "accommodation" is defined in this Chapter to include a range of residential units that could potentially be used for time-share purposes. The types of residential units that can be accommodations are listed at the beginning of Section 17.138.020 in the proposed ordinance. A "time-share plan" is defined in the ordinance, and generally includes any arrangement, plan, scheme or similar device whereby a purchase receives the right to exclusive use of the accommodation, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given year. A "time-share property", in turn is defined as one or more accommodations that are subject to the same time-share plan together with any property rights that are appurtenant to the accommodations. A "time-share instrument", is the document or documents that create or govern the operation of the time-share plan. 3-537 Therefore a timeshare use is the use of a residential property that fits within the definition of an "accommodation" under the ordinance, pursuant to a "time-share plan", which grants each owner of the time-share property exclusive use of the property for a certain period of time each year, but not the full year. It is important to note that not all properties with multiple owners or owned by business entities (such as LLCs) would constitute a time-share use under these definitions. The definitions focus on the manner in which the accommodation is used, not how it is owned. A time-share plan allows each owner exclusive use of the property for a specific period of time. This manner of use prevents the property from being used for long term residency, and leads to the continual cycling of visitors through the property and the more intense, constant vacation oriented use that the ordinance seeks to limit in residential districts of the City. A property that is owned by a group of friends or extended family members, whether through a separate business entity or otherwise, will not necessarily mandate that only one owner will be able to use the property at a time. The more formal arrangement found in time-share uses increases the intensity of use, in that each individual time-share owner cycles through the property, whereas families or friends are more likely to use the property together or in groups leading to less transition in the residential neighborhood. The more formal relationship, use of professional property managers and rights to exclusive use found in timeshare uses contributes to the commercial character of the property, with added traffic due to the more frequent turnover of visitors and more frequent cleaning and inspection between each user, which is common for a commercial vacation property, but not for a home owned by family or friends. 3.Enforcement The new ordinance additionally adopts a new enforcement structure for the City timeshare restrictions, modeled on the City's short-term rental ordinance. The ordinance prohibits both the use of accommodations for time-share use, and the advertisement of accommodations for time-share uses. This will better allow the City to prevent time-share uses in residential neighborhoods before they occur. The proposed Ordinance also outlines the process that will be used to enforce this new Chapter, again based on the City's existing short-term rental regulations. This approach has proved to be effective in enforcing the City's short-term rental regulations, and will help the City to take a more preventative approach to enforcing its time-share regulations as well. 4.Time Share Uses in Service Commercial and Central Business Districts Finally, while the City's existing Time Share Ordinance did prohibit time-share projects within certain types of residential dwelling units within the City, it does not make distinctions based on the various zoning districts of the City. Given that the primary concerns and impacts of this use arise from the high intensity use of property that negatively impacts the residential character of residential districts within the City, this use may not have the same impacts in commercial districts where visitors can be closer to 3-538 the amenities in the City that cater to visitors. The proposed new ordinance would allow time-share uses in the Service Commercial and Central Business Districts as conditional uses, provided that such time-share uses would be limited to accommodations in upper floors in conjunction with a mixed use project, would be required to provide at least one parking space for accommodations of two or fewer bedrooms, and at least two parking spaces for accommodations of three or more bedrooms, and would be subject to such other conditions imposed by the City has part of the conditional use permit process. As part of the application for a time-share use, the applicant would have to provide specific information including a management plan and specific information on the accommodations and any ancillary uses. The City would then review the application process in accordance with its normal process for review of conditional uses. This would allow the City to address potential impacts associated with this use, similar to the approach that the City uses with hotels and other lodging accommodations in these districts. Consistent with this change, the proposed ordinance updates the list of conditional uses in both the Service Commercial and Central Business Districts to include time share uses as regulated by the new Chapter 17.138. The Planning Commission held a public hearing to consider the proposed ordinance at its regular meeting of March 1, 2022. Following the public hearing, the Planning Commission unanimously recommended that the City Council adopt the proposed ordinance. City staff has made minor, non -substantive edits to the proposed ordinance that went to the Planning Commission to correct typographical errors, and to add the sections amending the list of conditional uses in the Service Commercial and Central Business Districts. FISCAL IMPACT None RECOMMENDED ACTION Staff recommends that the City Council conduct the second reading by title only and waive further reading and adopt the Ordinance Adding Chapter 17.138 "Time Share Uses" and Sections 17.138.010-17.138.060 to Title 17, Zoning, of the St. Helena Municipal Code, amending sections 17.48 (Central Business) and 17.52 (Service Commercial) and Deleting Section 17.112.130 of the St. Helena Municipal Code. ATTACHMENTS Attachment 1-St. Helena Time Share Ordinance -Final Attachment 2-Community email comments 3-539 CITY OF ST. HELENA ORDINANCE NO. ADDING CHAPTER 17.138 "TIME SHARE USES" AND SECTIONS 17.138.010 — 17.138.060 TO TITLE 17, ZONING, OF THE ST. HELENA MUNICIPAL CODE, AMENDING SECTIONS 17.48.030 AND 17.52.030 AND DELETING SECTION 17.112.130 OF THE ST. HELENA MUNICIPAL CODE WHEREAS, the City of St. Helena is a popular tourist destination, known for its scenic Napa Valley location, exceptional wineries and restaurants, historic Main Street and small town agricultural character; and WHEREAS, preserving the rural, small town quality and agricultural character of the City of St. Helena has been a focal point of the City's land use planning for decades, and remains a primary focus in the City's 2040 General Plan; and WHEREAS, the City of St. Helena stands out in the Napa Valley for its ability to attract visitors while also supporting the needs of its resident population. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy; and WHEREAS, the City values and welcomes all visitors to the City and recognizes their contributions to the City's economy, but finds that in order to maintain the City's long term viability as a community where people not only come to visit, but also live, work and contribute to the long term betterment of the community through participation in the City's schools, local community groups, civic government and local serving businesses, the City must maintain a balance between residential land uses and visitor serving uses; and WHEREAS, the City's existing housing stock is significantly impacted, with demand outweighing supply, resulting in extremely high housing prices as detailed in the accompanying staff report. A limited supply of suitable vacant land, exorbitantly high land costs, and limitations in the City's existing infrastructure, among other factors, have limited the construction of additional housing in the City of St. Helena; and WHEREAS, according to the U.S. Census Bureau, the current median household income in the City of St. Helena is $90,031, while the estimated value of owner - occupied housing units from 2015-2019 was approximately $1,112,100, with current real estate listings suggesting that prices are increasing significantly, meaning that homes in the City are not affordable to the median household in the City; and WHEREAS, as noted in the St. Helena Housing Update Report prepared for the City in April 2018, "St. Helena has more local jobs than people in the labor force, demanding large numbers of commuters to fill local jobs. Workers commute daily into -1- 3-540 St. Helena, many because there is no local housing that is affordable at the incomes that they make. Thirty six percent (36%) of St. Helena households cannot afford market rents while seventy percent (70%) of St. Helena households cannot afford to purchase a home. Paramedics and preschool teachers cannot afford St. Helena's market rents. Teachers, registered nurses, winery and hospitality managers and nonprofit directors cannot afford homeownership in St. Helena"; and WHEREAS, the City has made significant efforts to address the need for housing at lower income levels, of which recent examples include providing assistance to local nonprofit Our Town St. Helena for the Brenkle Court development, a mutual self-help housing development providing homeownership opportunities to eight low income working families, as well as the acquisition of a home located at 963 Pope Street using a charitable sale strategy. The property at 963 Pope Street is being developed with an additional four units to provide a total of five new affordable rental units in the City; and WHEREAS, further, in connection with the recently approved Farmstead lodging project, the City negotiated with the developer to contribute one million dollars toward the purchase of property to be used for the development of not less than twenty units of housing that will be affordable to low and very low income households, and an additional two million two hundred thousand dollars to be used more generally toward the development of affordable housing in the City; and WHEREAS, the City additionally provided substantial financial assistance to the recently completed Turley Flats Affordable Housing development, which provides eight units of rental affordable housing in a three story building located at 1105 Pope Street; and WHEREAS, these efforts have helped to address the City's need for affordable housing, but have also highlighted the challenge of providing sufficient housing to meet demand, particularly at more affordable levels, due to the significant costs of acquiring housing or land for the development of housing in the City and the limited supply of such land; and WHEREAS, the conversion of existing residential units to uses other than long- term residential use will further reduce the City's existing longterm housing supply, causing further imbalance between the demand for housing in the City and the existing supply, not only altering the character of the City's residential neighborhoods, but also presenting further challenges to the City's efforts to provide affordable housing within the community; and WHEREAS, the City additionally has, for many years, worked to preserve its existing housing stock for long term residential use, both to maintain the character of its residential neighborhoods and prevent residential districts from becoming visitor and tourist serving districts, and to ensure that it would not be converted to uses other than long-term residential uses; and -2- 3-541 WHEREAS, to this end, in 1982 the City adopted Ordinance No. 82-07, which prohibited the creation of time-share projects as a means of ownership of any single- family, two-family or multiple -family dwelling or any apartment house within the City. This restriction was imposed because the conversion of residential dwelling units to time-sharing projects would eliminate residential dwelling units that would otherwise be available for long-term occupancies, and were inappropriate in residential areas because those uses have the same character as commercial hotels, motels and other transient occupancy uses, and would result in increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods; and WHEREAS, the City has historically not received complaints about time-sharing uses in residential neighborhoods. Commencing in 2020, however, the City began receiving complaints regarding single family homes in the City that were being sold and/or marketed as "fractional ownership" or "co -ownership" homes, wherein each buyer may acquire a one -eighth interest in a limited liability company that will own the home. Under the structure pursuant to which these dwelling units are marketed and sold, each owner gets a one -eighth share along with the right to use the home for one - eighth of each year indefinitely. During each owner's usage period, that owner has exclusive use of the entire house. All rentals are prohibited; only owners and their guests are permitted to use the house. Each owner pays regular assessments to fund the operating costs of the home and maintenance reserves; and WHEREAS, this arrangement, which provides that each purchaser is entitled to exclusive use of the property for a fixed number of days each year, is a "time-share plan" as defined in Business and Professions Code section 11212, and a "time share program" as defined in Section 17.112.130 of the City's Municipal Code; and WHEREAS, the City has received numerous complaints regarding these properties, including parking impacts from large numbers of people staying at these properties; excessive noise late into the evening due to frequent outdoor parties; traffic due to frequent visitor turnover; traffic, noise and parking concerns due to frequent visits from cleaning, landscape maintenance and pool cleaning services that come to the properties in between each stay to prepare the home for the next guest; and an inability to maintain lines of communication to set community expectations with the users of the unit, as visitors only frequent the homes for short term stays of 2 to 14 days; and WHEREAS, the complaints received by the City are reflective of the reasons that the City prohibited time-share projects within residential areas of the City. The time- share uses provide a short-term, high impact vacation oriented use of the property, where those that buy into the time-share use the home for entertaining and short term stays while visiting restaurants, wineries and other tourist oriented locations in St. Helena and the surrounding Napa Valley; and WHEREAS, this high impact use, combined commercial management of these properties is not districts in which they are located. It is commercial in -3- with the frequent turnover and consistent with the residential nature, in that these time-share 3-542 uses are structured as a short-term, tourist oriented, visitor serving use of the subject properties. The use of these properties as time-shares adds excessive noise and traffic to residential districts by using these properties for high impact tourist oriented uses more appropriately located in commercial districts of the City; and WHEREAS, expanded use of residential properties for time-share uses will further reduce the availability of housing stock for long-term residential use, and create a new demand for time-share uses of residential properties; and WHEREAS, this encroachment of tourist oriented, visitor serving uses in residential neighborhoods will not only compromise the residential character of these areas, but will also further increase the costs for housing in the City, undermining the City's efforts to provide a balance of housing for all income levels in the City; and WHEREAS, the City's authority to enact zoning ordinances is based on the powers accorded cities and counties under the State constitution to make and enforce police regulations. This police power grants the City broad authority to regulate the development and use of real property within its jurisdiction to promote the public welfare; and WHEREAS, pursuant to and in accordance with this authority, the City Council desires to reaffirm its restrictions on time-share uses in residential areas, and to update the language of the Zoning Code to provide consistency with the terminology used to define time-share uses in State law. Further, the City desires to provide greater clarity as to the zoning districts in which time-share uses are permitted as conditional uses, and the standards pursuant to which they will be reviewed in those zoning districts; and WHEREAS, the Planning Commission of the City of St. Helena held a duly noticed public hearing on March 1, 2022, as required by law to consider all the information presented by staff, and public testimony presented in writing and at the meeting; and WHEREAS, on March 1 2022, the Planning Commission of the City of St. Helena recommended that the City Council adopt this Ordinance amending the Municipal Code as described herein by a 5-0 vote; and WHEREAS, on March 22, 2022, the City Council held a duly noticed public hearing, accepting testimony from the public, and discussed the proposed amendments and staff's recommended approval of this Ordinance; and WHEREAS, the proposed zoning amendments are consistent with the General Plan goals, policies and implementation programs as the Ordinance will continue to preserve the agricultural, small town character of the City of St. Helena; will preserve the City's residential districts for residential uses; and will help to preserve the City's existing housing stock for long term residential uses, to avoid further exacerbating the existing impacts on the City's housing supply; and 3-543 Now, therefore, the City Council of the City of St. Helena does hereby ordain as follows: SECTION 1: The above recitals are hereby incorporated as though set forth in this section. SECTION 2: Chapter 17.138 and sections 17.138.010 -- 17.138.060 are hereby added to Title 17 of the St. Helena Municipal Code, to read as follows: "Chapter 17.138 TIMESHARE USES 17.138.010 Purpose and Findings 17.138.020 Definitions 17.138.030 Timeshare Uses Restricted to Service Commercial (SC) and Central Business (CB) Districts 17.138.040 Application Process and Development Standards 17.138.050 Violations, Enforcement and Civil Penalties 17.138.010 Purpose and Findings A. There is a critical shortage of permanent, long-term housing in the City of St. Helena. B. A limited supply of suitable vacant land, land values, and market demand for land for other uses, including but not limited to use of property for vineyards, have limited the construction of additional housing in the City of St. Helena. C. St. Helena is a popular tourist destination known for its scenic Napa Valley location, exceptional wineries and restaurants, historic Main Street and small town agricultural character. D. The City of St. Helena stands out in the Napa Valley for its ability to attract visitors while also supporting the needs of its resident population. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. E. Time-share uses are not an appropriate land use in the City's residential districts due to the multiple occupancy of time-share properties, the short-term, tourist oriented use of such property and commercial management of time-share facilities, all of which -5- 3-544 create increased traffic generation, excessive noise, disruption to residential communities through commercial -level maintenance of the time-share facilities, and therefore are appropriately confined to commercial zoning districts. F. Conversion of permanent housing to time-share facilities removes existing housing units from the City's existing stock and exacerbates an already severe housing shortage. G. It is therefore in the public interest to prohibit conversions of existing housing units into time-share facilities, as to do so eliminates needed housing stock by diverting those units to a tourist -oriented, commercial use. 17.138.020 Definitions For purposes of this Chapter, the following words and phrases shall have the meaning respectively ascribed to them by this Section: "Accommodation" means any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.160. "Building" shall have the meaning ascribed to it by Section 17.04.160. "Dwelling unit" shall have the meaning ascribed to it by Section 17.04.160. "Managing entity" means the person who undertakes the duties, responsibilities and obligations of the management of a time-share plan. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. "Time-share instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. "Time-share interest" means the right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, regardless of whether or not such right is coupled with a property interest in the time-share property or a specified portion thereof. "Timeshare plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given -6- 3-545 year, on a recurring basis for more than one year, but not necessarily for consecutive years. "Time-share property" means one or more accommodations subject to the same time- share plan, together with any other property or rights to property appurtenant to those accommodations. "Time-share use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan. 17.138.030 Time-share Uses Restricted to Service Commercial (SC) and Central Business (CB) Districts Time-share uses are conditional uses within the City's Service Commercial (SC) District and Central Business (CB) District, subject to approval of a conditional use permit applied for and approved in conformance with this Chapter. Time-share uses are not permitted in all other Zoning Districts in the City. 17.138.040 Application Process and Development Standards A. Application Process. Approval of a conditional use permit for time-share uses in the Service Commercial District or Central Business District shall be required in accordance with the requirements of Chapter 17.168. In addition to the application requirements contained in Chapter 17.168, an application for a time-share use shall be accompanied by the following documents which shall be subject to the approval of the planning director: 1. Management Plan. A management plan shall describe the methods employed by the applicant to guarantee the future adequacy, stability, and continuity of a satisfactory level of management and maintenance of the time share use. 2. Application Requirements. In addition to any application requirements established by this section and any other applicable requirements of this code, the following information shall be submitted as part of any application to develop or establish a time-share use: a. Typical floor plans for each accommodation. b. The phasing of the construction of the accommodations on the time- share property, if applicable. c. A description of any ancillary uses which are proposed in conjunction with the time share use. d. A description of the method of management of the time share use and indication of the management entity for the time-share property. e. Any restrictions on the use or occupancy of the accommodations. 3-546 f. Any other information or documentation the applicant, city staff or commission deems reasonably necessary to the consideration of the time-share use, including any required environmental documents. B. Development Standards and Operational Requirements. Notwithstanding any other provision of this chapter, the following conditions must be met by any time-share use in any conditionally permitted zone. Additional requirements may be attached to a conditional use permit or development agreement if found to be necessary to assure that the time-share use meets the intent of this chapter: 1. Time-share uses developed in the Service Commercial District or Central Business District shall be limited to accommodations in upper floors in conjunction with a mixed -use project. 2. No existing residential use in the Service Commercial or Central Business District shall be converted to a time-share use. 3. Development Standards. The time-share use shall comply with all development standards for the zone in which it is located. 4. Parking. Parking shall be provided as follows: a. For accommodations of two or fewer bedrooms, one parking space shall be provided for each accommodation. b. For accommodations of three or more bedrooms, two parking spaces shall be provided for each accommodation. 4. Modification or Waiver of Standards. The planning commission may modify or waive one or more of the regulations contained in this section if it determines that strict compliance is not necessary to achieve the purpose and intent of this section. 17.138.060 Violations, Enforcement and Civil Penalties A. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this chapter is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1 20. B. Time-share use, and/or advertisement for time-share use, of an accommodation in violation of this chapter is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance. Any such nuisance may be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 1 1-0, except that the civil penalty for a violation shall be one thousand dollars ($1,000.00). Each day the violation occurs shall constitute a separate offense. -8- 3-547 C. Any responsible person who violates this chapter shall be liable and responsible for a civil penalty of one thousand dollars ($1,000.00) per violation per day such violation occurs. The city may recover such civil penalty by either civil action or administrative citation. Such penalty shall be in addition to all other costs incurred by the city, including without limitation the city's staff time, investigation expenses and attorney's fees. 1. Where the city proceeds by civil action, the court shall have discretion to reduce the civil penalty based upon evidence presented by the responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the court should consider the purpose of this chapter to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the responsible person's enrichment or profit as a result of the violation of this chapter. In any such civil action the city also may abate and/or enjoin any violation of this chapter. 2. Where the city proceeds by administrative citation, the city shall provide the responsible person notice of the right to request an administrative hearing to challenge the citation and penalty, and the time for requesting that hearing. a. The responsible person shall have the right to request the administrative hearing within forty-five (45) days of the issuance of the administrative citation and imposition of the civil penalty. To request such a hearing, the responsible person shall notify the city clerk in writing within forty- five (45) days of the issuance of the citation. The appeal notification shall include all specific facts, circumstances and arguments upon which the appeal is based. b. The city manager is hereby authorized to designate a hearing officer to hear such appeal. The city hearing officer shall conduct a hearing on the appeal within ninety (90) days of the request for the hearing unless one of the parties requests a continuance for good cause. The hearing officer shall only consider those facts, circumstances or arguments that the property owner or responsible person has presented in the appeal notification. c. The hearing officer shall render a decision in writing within thirty (30) days of the conclusion of the hearing. The hearing officer shall have discretion to reduce the civil penalty based upon evidence presented by the property owner or responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the hearing officer should consider the purpose of this chapter to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the property owner's or responsible person's enrichment or profit as a result of the violation of this chapter. d. Any aggrieved party to the hearing officer's decision on the administrative appeal may obtain review of the decision by filing a petition for writ e �s of mandate with the Napa County superior court in accordance with the timelines and provisions set forth in Government Code Section 53069 4. e. If, following an administrative hearing, appeal, or other final determination, the owner of the property is determined to be the responsible person for the civil penalty imposed by this section, such penalty, if unpaid within forty-five (45) days of the notice of the final determination, shall become a lien to be recorded against the property on which the violation occurred pursuant to Chapter 1. 12. Such costs shall be collected in the same manner as county taxes, and thereafter the property upon which they are a lien shall be sold in the same manner as property now is sold for delinquent taxes. D. Any violation of this chapter may also be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 1.12, except that the civil penalty under Chapter 1 12 for a violation shall be one thousand dollars ($1,000.00). E. Each day the violation of this chapter occurs shall constitute a separate offense. F. The remedies under this chapter are cumulative and in addition to any and all other remedies available at law and equity." SECTION 3: Deletion of Section 17.112.130 Section 17.112.130 is hereby deleted in its entirety. SECTION 4: Amendment of Section 17.48.030 Section 17.48.030 is hereby amended to add the following text as a separate line immediately following "Theaters, movie and legitimate;", and immediately prior to "Tobacco/smoke shop, including the sale of tobacco, tobacco and/or nicotine products and equipment for smoking;": "Time share uses, pursuant to Sections 17.138.030 and 17.138.040;" SECTION 5: Amendment of Section 17.52.030 Section 17.52.030 is hereby amended to add the following text as a separate line immediately following "Theaters, movie and legitimate;", and immediately prior to "Tobacco/smoke shop, including the sale of tobacco, tobacco and/or nicotine products and equipment for smoking;": "Time share uses, pursuant to Sections 17.138.030 and 17.138.040;" SECTION 6: CEQA -10- 3-549 This ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines (the Guidelines), and the environmental regulations of the City. The City Council hereby finds that this ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. SECTION 6: Effective Date This ordinance shall take effect 30 days after its final adoption, and a summary of this ordinance shall be published once with the names of the members of the Council voting for and against the ordinance in the St. Helena Star, a newspaper of general circulation published in the City of St. Helena. THE FOREGOING ORDINANCE was introduced at a regular meeting of the St. Helena City Council on the day of , 2022, and was adopted at a regular meeting of the St. Helena City Council on the day of 2022, by the following vote: Mayor Ellsworth: Vice Mayor Dohring: Councilmember Chouteau: Councilmember Hardy: Councilmember Hall: APPROVED: Geoff Ellsworth, Mayor ATTEST: CITY OF ST. HELENA Cindy Tzafopoulos, City Clerk -11- 3-550 From: Mari Jansdotter -emjansdotter c@yahoo.com3 To: Anna Chouteau Sent: 6/8/2021 7:25:45 AM Subject: Re: [External] 1242 Madrona pictures Re: Pacaso Thank you, Anna, for your kind reply. I`m sorty you all have to go through this lawsuit by Pacaso and hope the judge find in your favor. 1 have a follow-up question. Do you know who I should address it to? The Pacas house building on Kearney across the street from us has installed lights under the roofl.in.e that are on all night and installed in such a way they shine straight into our house, especially my daughter's bedroom. Are there any ordinances that 1 could refer to that help me ask them to please cover / redirect those lights or at least rLun them off after 10 p.m? Thank you! Best Mari 3-551 3-553 Sent from Yahoo Mail on Android On Tue, Jun 8, 2021 at 7:12 AM, Anna Chouteau EAChouteau@cityofsthelena.org> wrote: Hi Mari, Thank you for your email. I forwarded your email to City staff about the specific permitting questions. Our planning director is out of the office this week. We are defending ourselves in the lawsuit. Our City Attorney filed an anti-SLAPP motion that is now public information and the bearing will be coining up this summer. All my best, Anna Sent from my Wad On Jun 7, 2021, at 6:01 PM, Mari Jansdotter <mjansdottei' cr,yahoo.com> wrote: To clarify, do they have permit allowing the new structure going up at 1242 Ma.drona? The rendering from original sales listing shows a trellis (see attached) but a structure looking like a live -on unit close to (and taller th:m) the Oak neighbour' fence is being built. See pictures from today <20210607 175202jpg> <20210607 175219jpg> Sent from Yahoo Mail on Android On Mon, Jun 7, 2021 at 5:38 PM, Mari Jansdotter tmjansdotter@yahoo.com> wrote: Thank you for doing all you can. to stop Pacaso? I ani not o.k. with Pacaso's violation of city ordinance and I support the city's legal fight. In addition to signing the petition and putting a No Pacaso sign outside my home, what else can we on the cominnnity do to help, please? 3-554 I finally afforded 1-ny dream home after moving several times the last 10 years, only to a year later have 41 of these Pacaso 'time share' like vacation LLC/commercially owned houses popping up in my neighborhood. I'm devastated - this is supposed to be a residential area.? I am very worried about my family's saf-& peaceful living situation, now that I'll be impacted by 4 of these houses (one across the street) - each with 8 groups of owners and/or their guests circulating in and out all year round. Many Pacaso have 4 bedrooms that easily accommodate 8+ people, and pool in the backyards with outdoor areas for gatherings/parties. It's a huge difference having your neighbor throwing an occasional party versus non-stop having a new group of people next door visiting for thier token time of vacation / partying. Pacaso houses also come with increased parking problems as these properties tend not have garages or driveways (often transformed into addl bedroom). Specifically would you mind looking into building code the one at 1242 Madrona I Oak? Looks like they're adding a guest house with vary narrow set back from the oak side neighbor. Is that an approved building? Mayne they're getting around that by making it a partial garage? Add to that, the 4 Pacaso houses are all in close proximity of RLS with kids walking / biking to and front school. What are the safety concerns that this is imposing with new people circulating in and out all year round and increased car traffic? Worst case scenario there will be a liability situation that will put a stop to Pacaso. Please, please stop Pacaso before we even get close to that. Respectfully, Mari ansdotter Sent from Yahoo Mail on Android 3-555 PACASO = PARTY HOUSES! Debbie Polverino 5/11/2021 To the members of the City Council. In the recent Napa Register article, Austin Allison agrees that short term rentals are a problem, that commercial Timeshares are a problem- that's not what Pacaso is he said. Yet, Pacaso listed the Valley View Street "Pool House" as a 118 Timeshare Ownership property. After the city was notified by several concerned citizens and myself regarding "timeshares" listed for sale in residential zoned areas, Pacaso changed its online marketing from 118 Timeshare Ownership to 118 Shared Ownership. Owners who purchase still share the property in available time slots just like a timeshare. Living next door to a Pacaso home has been living next door to a full-time party house! The constant music with speakers blaring, loud conversations until 2 am and later, noise violations along with excessive vehicles parked on the street or in front of our homes. The additional noise of gardeners blowing dirt and leaves into our yard, Pool service, catering trucks, housekeeping scheduled more frequently. Open houses are held with statements made with, "this is a great place for pool parties and entertaining, it's a perfect place to bring friends and extended family." This home on Valley View Street was a weekend getaway home for the previous owners who had loud weekend parties. It was a constant nightmare and all the homes nearby complained. Now the property has been split up to 8 owners. The Saint Helena P.D. has already been to this home at least 3 times for noise violations after 1 opm. There must be a way to stop these repeated violations and offenders. Pacaso's has written policies for its owners on their website that they must adhere to. No parking on the street, no parties, no noise after 9pm to 7am, no dogs over 80 pounds. Policies have been broken several times already from each group including the Pacaso's owners. According to Mr. Allison, Saint Helena is running a dishonest campaign against Pacaso. Pacaso claims discrimination of outside ownership which is not the case. As we all know we welcome all people the opportunity to live in our quiet small town. Pacaso selling an 1,100 square foot home which is smallest of any home on our street for $1.7M is dishonest in my opinion. This is what he says is affordable housing for second home buyers who are paying in full, plus maintenance fees? When commercial companies buy a dozen homes in Napa Valley and plans additional purchases to be split up to 8 shares it is not committed to the community or our quiet neighborhoods. Zoning is in place for a reason. Commercial companies operating in full time residential streets should adhere to the rules that are in place and only buy up in areas where other vacation homes are abundant and not a disruption. What happens should we decide to sell our home? How will people feel about buying next door to a home owned by 8 owners who don't know each other and all come at different time slots for as little as 2 days at a time? We will have to disclose this information. This put a negative mark on our property. This is something I want you to think about! Say NO to Pacaso! Thank you. 3-556 From: Amy Caldarola <amycal@comcast.net> To: Paul Dohring CC: Anna Chouteau; Lester Hardy; Eric Hall Sent: 5/23/2021 1:04:24 PM Subject: [External] Picaso Dear Council Members, This is Amy Caldarola here. I am very concerned about Picaso buying property in our residential neighborhoods under the guise of democratizing home ownership. This is not affordable housing. Picaso properties are time-shares and short-term rentals which violate municipal code provisions. The presence of these properties in residential neighborhoods is inappropriate and will degrade the quality of life. It has already done so with Picaso's property on Valley View; those neighbors are suffering with loud noise, music, and parties that go on to after midnight; even calling the police does not seem to stop them. I support the city in doing everything possible to defeat. them. I also support a counter law suit against them if it makes legal sense. With that said, we are fighting for the soul of our community and this needs to be a number one priority. Picaso is in Napa, Sonoma, Healdsburg, and probably will move into Calistoga and Yountville. This is a fight worth fighting. It might be helpful for the affected counties and municipalities to join their resources together to oppose them. Please outline for me what the city is doing and what the plan is. Thank you. I really appreciate you talting the time to keep me informed on this very important and pressing issue. We must act now! Sincerely, Amy Caldarola 3-557 May 11, 2021 Good evening City Council members. My name is Clare Barr and I live in St. Helena. Tonight I would like to speak about the Pacaso Vacation Share homes. listened carefully to the public comments of Pacaso Share owners made at our last City Council meeting. They sounded sincere in their desire to be a part of the St. Helena community. The problem is they have bought into a business model that will make that nearly impossible. To be a part of a real community means forming bonds with neighbors. How can that come about with a home next door that has possibly dozens of strangers coming and going, with visits no longer than 14 days at a time, a few times a year? And with the likelihood of visits gifted by other share owners, and a cleaning crew who appears before each arrival, the number swells. With the result that a Pacaso share owner, is viewed by their neighbors as only one in a sea of unfamiliar faces. And though the intentions of some of the share buyers might be good, can we say the same for all 7 of the remaining shareowners? One of whom might gift a weekend to his brother for a blowout bachelor party? Or as was the case in Napa, a single shareowner who conducted retreats in which close to a dozen visitors would come and go within one stay. That particular shareowner was charging her guests, which is a complication on an entirely different level. Pacaso would have us believe that their sharebuyers are families who simply want a quiet, lovely getaway. But in actuality, a Pacaso home is built for partying. Their own website says of one offering "This home takes entertaining to new heights". And yet another listing says that a 3-558 particular home "has been completely re -imagined to accommodate families, friends, and large groups". Another listing offers "year round fun and adventure". Now, none of us resent the visitor who wants to have fun. Indeed, our beautiful valley is an ideal place for celebration. And we all do that on occasion. But when you realize that every single visitor owning a Pacaso share has been wooed with the promise of "fun and adventure" within a house "built for entertaining", then you have the possibility of major partying with each and every visitor, all crammed into stays that last from 2--14 days. This is transient occupancy in our residential neighborhoods that cannot possibly be regulated under the Pacaso system. There is a reason why we have ordinances in place that designate where tourists and visitors can stay. It allows us to appreciate our visitors, giving them the space and accommodations in which to party and celebrate, while we ourselves can conduct our daily lives in the sanctuary of our residential neighborhoods. Which in turn, are places where we know our neighbors so well that we trust them with our keys, our pets, and even our children. With whom we share joy and sometimes sorrow, and whom are quick to lend a hand in times of crisis. And if we have learned anything in the last few years, it is that the ability to know and rely on our neighbors is the very thing that sustains our community through thick and thin. A vacation home with a parade of visitors coming and going, does not belong in our residential neighborhoods. Please Say No to Pacaso. Clare Barr St. Helena 3-559 From: Beth Gray <bgray14@gmail.com> To: Geoff Ellsworth Sent: 5/22/2021 3:01:13 PM Subject: [External] Pacaso Dear Mr. Mayor, I am writing to express my strong opposition against the infiltration of Pacaso and their timeshare strategy in the city of Saint Helena. As a full-time resident here in the city (and as your neighbor), I find it atrocious that the city has not been able to stop the .infiltration of this community destroying business model. This business will do nothing but destroy our community. As an example, I witnessed the dumping of water from the pool into the creekbed from a home purchased by Pacaso right on the corner of Sylvaner/Reisling as they began to redevelop the home and expect to list it as fractional ownership. Illegal dumping of the pool water with disregard to any of the environmental consequences demonstrates their utter lack of care about the community. Similarly, hearing from the neighbors who live next to a Pacaso borne on Valley View, I can only shake my head and sympathize with the poor neighbors having to deal with multiple cars showing up and loud music being played at all hours. One of the reasons I moved from San Francisco to Saint Helena was to enjoy the quiet sounds of nature, the beautiful outdoors - not to .listen to vacationers who only want to party for the two weeks that they have their time in the home. Please protect our city from these timeshares. I tmderstand the city is being sued. I hope that we can collectively put the necessary resources behind this lawsuit to stop Pacaso from any more timeshares in St. Helena. Respectfully, Beth Gray 3-560 CITY OF ST. HELENA ORDINANCE NO.2022-5 ADDING CHAPTER 17.138 "TIME SHARE USES" AND SECTIONS 17.138.010 — 17.138.060 TO TITLE 17, ZONING, OF THE ST. HELENA MUNICIPAL CODE, AMENDING SECTIONS 17.48.030 AND 17.52.030 AND DELETING SECTION 17.112.130 OF THE ST. HELENA MUNICIPAL CODE WHEREAS, the City of St. Helena is a popular tourist destination, known for its scenic Napa Valley location, exceptional wineries and restaurants, historic Main Street and small-town agricultural character; and WHEREAS, preserving the rural, small-town quality and agricultural character of the City of St. Helena has been a focal point of the City's land use planning for decades, and remains a primary focus in the City's 2040 General Plan; and WHEREAS, the City of St. Helena stands out in the Napa Valley for its ability to attract visitors while also supporting the needs of its resident population. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy; and WHEREAS, the City values and welcomes all visitors to the City and recognizes their contributions to the City's economy, but finds that in order to maintain the City's long term viability as a community where people not only come to visit, but also live, work and contribute to the long term betterment of the community through participation in the City's schools, local community groups, civic government and local serving businesses, the City must maintain a balance between residential land uses and visitor serving uses; and WHEREAS, the City's existing housing stock is significantly impacted, with demand outweighing supply, resulting in extremely high housing prices as detailed in the accompanying staff report. A limited supply of suitable vacant land, exorbitantly high land costs, and limitations in the City's existing infrastructure, among other factors, have limited the construction of additional housing in the City of St. Helena; and WHEREAS, according to the U.S. Census Bureau, the current median household income in the City of St. Helena is $90,031, while the estimated value of owner -occupied housing units from 2015-2019 was approximately $1,112,100, with current real estate listings suggesting that prices are increasing significantly, meaning that homes in the City are not affordable to the median household in the City; and WHEREAS, as noted in the St. Helena Housing Update Report prepared for the City in April 2018, "St. Helena has more local jobs than people in the labor force, demanding large numbers of commuters to fill local jobs. Workers commute daily into St. Helena, many because there is no local housing that is affordable at the incomes that 3-561 they make. Thirty six percent (36%) of St. Helena households cannot afford market rents while seventy percent (70%) of St. Helena households cannot afford to purchase a home. Paramedics and preschool teachers cannot afford St. Helena's market rents. Teachers, registered nurses, winery and hospitality managers and nonprofit directors cannot afford homeownership in St. Helena'; and WHEREAS, the City has made significant efforts to address the need for housing at lower income levels, of which recent examples include providing assistance to local nonprofit Our Town St. Helena for the Brenkle Court development, a mutual self-help housing development providing homeownership opportunities to eight low income working families, as well as the acquisition of a home located at 963 Pope Street using a charitable sale strategy. The property at 963 Pope Street is being developed with an additional four units to provide a total of five new affordable rental units in the City; and WHEREAS, further, in connection with the recently approved Farmstead lodging project, the City negotiated with the developer to contribute one million dollars toward the purchase of property to be used for the development of not less than twenty units of housing that will be affordable to low and very low-income households, and an additional two million two hundred thousand dollars to be used more generally toward the development of affordable housing in the City; and WHEREAS, the City additionally provided substantial financial assistance to the recently completed Turley Flats Affordable Housing development, which provides eight units of rental affordable housing in a three story building located at 1105 Pope Street; and WHEREAS, those efforts have helped to address the City's need for affordable housing, but have also highlighted the challenge of providing sufficient housing to meet demand, particularly at more affordable levels, due to the significant costs of acquiring housing or land for the development of housing in the City and the limited supply of such land; and WHEREAS, the conversion of existing residential units to uses other than long- term residential use will further reduce the City's existing long-term housing supply, causing further imbalance between the demand for housing in the City and the existing supply, not only altering the character of the City's residential neighborhoods, but also presenting further challenges to the City's efforts to provide affordable housing within the community; and WHEREAS, the City additionally has, for many years, worked to preserve its existing housing stock for long term residential use, both to maintain the character of its residential neighborhoods and prevent residential districts from becoming visitor and tourist serving districts, and to ensure that it would not be converted to uses other than long-term residential uses; and 3-562 WHEREAS, to this end, in 1982 the City adopted Ordinance No. 82-07, which prohibited the creation of time-share projects as a means of ownership of any single- family, two-family or multiple-fami[y dwelling or any apartment house within the City. This restriction was imposed because the conversion of residential dwelling units to time- sharing projects would eliminate residential dwelling units that would otherwise be available for long-term occupancies, and were inappropriate in residential areas because those uses have the same character as commercial hotels, motels and other transient occupancy uses, and would result in increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods; and WHEREAS, the City has historically not received complaints about time-sharing uses in residential neighborhoods. Commencing in 2020, however, the City began receiving complaints regarding single family homes in the City that were being sold and/or marketed as "fractional ownership" or "co -ownership" homes, wherein each buyer may acquire a one -eighth interest in a limited liability company that will own the home. Under the structure pursuant to which these dwelling units are marketed and sold, each owner gets a one -eighth share along with the right to use the home for one -eighth of each year indefinitely. During each owner's usage period, that owner has exclusive use of the entire house. All rentals are prohibited; only owners and their guests are permitted to use the house. Each owner pays regular assessments to fund the operating costs of the home and maintenance reserves; and WHEREAS, this arrangement, which provides that each purchaser is entitled to exclusive use of the property for a fixed number of days each year, is a "time-share plan" as defined in Business and Professions Code section 11212, and a "time share program" as defined in Section 17.112.130 of the City's Municipal Code; and WHEREAS, the City has received numerous complaints regarding these properties, including parking impacts from large numbers of people staying at these properties; excessive noise late into the evening due to frequent outdoor parties; traffic due to frequent visitor turnover; traffic, noise and parking concerns due to frequent visits from cleaning, landscape maintenance and pool cleaning services that come to the properties in between each stay to prepare the home for the next guest; and an inability to maintain lines of communication to set community expectations with the users of the unit, as visitors only frequent the homes for short term stays of 2 to 14 days; and WHEREAS, the complaints received by the City are reflective of the reasons that the City prohibited time-share projects within residential areas of the City. The time-share uses provide a short-term, high impact vacation -oriented use of the property, where those that buy into the time-share use the home for entertaining and short term stays while visiting restaurants, wineries and other tourist -oriented locations in St. Helena and the surrounding Napa Valley; and WHEREAS, this high impact use, combined with the frequent turnover and commercial management of these properties is not consistent with the residential districts in which they are located. It is commercial in nature, in that these time-share uses are 3-563 structured as a short-term, tourist oriented, visitor serving use of the subject properties. The use of these properties as time-shares adds excessive noise and traffic to residential districts by using these properties for high impact tourist oriented uses more.appropriately located in commercial districts of the City; and WHEREAS, expanded use of residential properties for time-share uses will further reduce the availability of housing stock for long-term residential use, and create a new demand for time-share uses of residential properties; and WHEREAS, this encroachment of tourist oriented, visitor serving uses in residential neighborhoods will not only compromise the residential character. of these areas, but will also further increase the costs for housing in the City, undermining the City's efforts to provide a balance of housing for all income levels in the City; and WHEREAS, the City's authority to enact zoning ordinances is based on the powers accorded cities and counties under the State constitution to make and enforce police regulations. This police power grants the City broad authority to regulate the development and use of real property within its jurisdiction to promote the public welfare; and WHEREAS, pursuant to and in accordance with this authority, the City Council desires to reaffirm its restrictions on time-share uses in residential areas, and to update the language of the Zoning Code to provide consistency with the terminology used to define time-share uses in State law. Further, the City desires to provide greater clarity as to the zoning districts in which time-share uses are permitted as conditional uses, and the standards pursuant to which they will be reviewed in those zoning districts; and WHEREAS, the Planning Commission of the City of St. Helena held a duly noticed public hearing on March 1, 2022, as required by law to consider all the information presented by staff, and public testimony presented in writing and at the meeting; and WHEREAS, on March 1, 2022, the Planning Commission of the City of St. Helena recommended that the City Council adopt this Ordinance amending the Municipal Code as described herein by a 5-0 vote; and WHEREAS, on March 22, 2022, the City Council held a duly noticed public hearing, accepting testimony from the public, and discussed the proposed amendments and staff's recommended approval of this Ordinance; and WHEREAS, the proposed zoning amendments are consistent with the General Plan goals, policies and implementation programs as the Ordinance will continue to preserve the agricultural, small town character of the City of St. Helena; will preserve the City's residential districts for residential uses; and will help to preserve the City's existing housing stock for long term residential uses, to avoid further exacerbating the existing impacts on the City's housing supply; and Now, therefore, the City Council of the City of St. Helena does hereby ordain as follows: 3-564 SECTION 1: The above recitals are hereby incorporated as though set forth in this section. SECTION 2: Chapter 17.138 and sections 17.138.010—17.138.060 are hereby added to Title 17 of the St. Helena Municipal Code, to read as follows: "Chapter 17.138 TIME-SHARE USES 17.138.010 Purpose and Findings 17.138.020 Definitions 17.138.030 Time-share Uses Restricted to Service Commercial (SC) and Central Business (CB) Districts 17.138.040 Application Process and Development Standards 17.138.050 Violations, Enforcement and Civil Penalties 17.138.010 Purpose and Findings A. There is a critical shortage of permanent, long-term housing in the City of St. Helena. B. A limited supply of suitable vacant land, land values, and market demand for land for other uses, including but not limited to use of property for vineyards, have limited the construction of additional housing in the City of St. Helena. C. St. Helena is a popular tourist destination known for its scenic Napa Valley location, exceptional wineries and restaurants, historic Main Street and small-town agricultural character. D. The City of St. Helena stands out in the Napa Valley for its ability to attract visitors while also supporting the needs of its resident population. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. E. Time-share uses are not an appropriate land use in the City's residential districts due to the multiple occupancy of time-share properties, the short-term, tourist -oriented use of such property and commercial management of time-share facilities, all of which create increased traffic generation, excessive noise, disruption to residential communities 3-565 through commercial -level maintenance of the time-share facilities, and therefore are appropriately confined to commercial zoning districts. F. Conversion of permanent housing to time-share facilities removes existing housing units from the City's existing stock and exacerbates an already severe housing shortage. G. It is therefore in the public interest to prohibit conversions of existing housing units into time-share facilities, as to do so eliminates needed housing stock by diverting those units to a tourist -oriented, commercial use. 17.138,020 Definitions For purposes of this Chapter, the following words and phrases shall have the meaning respectively ascribed to them by this Section: "Accommodation" means any dwelling unit, apartment, condominium or cooperative unit, . hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single-family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.160. "Building" shall have the meaning ascribed to it by Section 17.04,160. "Dwelling unit' shall have the meaning ascribed to it by Section 17.04.160. "Managing entity" means the person who undertakes the duties, responsibilities and obligations of the management of a time-share plan. "Person" means a.natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. "Time-share instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. "Time-share interest" means the right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, regardless of whether or not such right is coupled with a property interest in the time-share property or a specified portion thereof. "Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, 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. 3-566 "Time-share property" means one or more accommodations subject to the same time- share plan, together with any other property or rights to property appurtenant to those accommodations. "Time-share use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan. 17.138.030 Time-share Uses Restricted to Service Commercial (SC) and Central Business (CB) Districts Timeshare uses are conditional uses within the City's Service Commercial (SC) District and Central Business (CB) District, subject to approval of a conditional use permit applied for and approved in conformance with this Chapter. Time-share uses are not permitted in all other Zoning Districts in the City. 17.138.040 Application Process and Development Standards A. Application Process. Approval of a conditional use permit for time-share uses in the Service Commercial District or Central Business District shall be required in accordance with the requirements of Chapter 17.168. In addition to the application requirements contained in Chapter 17.168, an application for a time-share use shall be accompanied by the following documents which shall be subject to the approval of the planning director: 1. Management Plan. A management plan shall describe the methods employed by the applicant to guarantee the future adequacy, stability, and continuity of a satisfactory level of management and maintenance of the time share use. 2. Application Requirements. In addition to any application requirements established by this section and any other applicable requirements of this code, the following information shall be submitted as part of any application to develop or establish a time-share use: a. Typical floor plans for each accommodation. b. The phasing of the construction of the accommodations on the time- share property, if applicable. c. A description of any ancillary uses which are proposed in conjunction with the time share use. d. A description of the method of management of the time share use and indication of the management entity for the time-share property. e. Any restrictions on the use or occupancy of the accommodations. 3-567 f. Any other information or documentation the applicant, city staff or commission deems reasonably necessary to the consideration of the time-share use, including any required environmental documents. B, Development Standards and Operational Requirements. Notwithstanding any other provision of this chapter, the following conditions must be met by any time-share use in any conditionally permitted zone. Additional requirements may be attached to a conditional use permit or development agreement if found to be necessary to assure that the time-share use meets the intent of this chapter: 1. Time-share uses developed in the Service Commercial District or Central Business District shall be limited to accommodations in upper floors in conjunction with a mixed -use project. 2. No existing residential use in the Service Commercial or Central Business District shall be converted to a time-share use. 3. Development Standards. The time-share use shall comply with all development standards for the zone in which it is located. 4. Parking. Parking shall be provided as follows: a. For accommodations of two or fewer bedrooms, one parking space shall be provided for each accommodation. b. For accommodations of three or more bedrooms, two parking spaces shall be provided for each accommodation. 4. Modification or Waiver of Standards. The planning commission may modify or waive one or more of the regulations contained in this section if it determines that strict compliance is not necessary to achieve the purpose and intent of this section. 17.138.060 Violations, Enforcement and Civil Penalties A. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this chapter is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.20. B. Time-share use, and/or advertisement for time-share use, of an accommodation in violation of this chapter is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance. Any such nuisance may be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 1.12, except that the civil penalty for a violation shall be one thousand dollars ($1,000.00). Each day the violation occurs shall constitute a separate offense. 3-568 C. Any responsible person who violates this chapter shall be liable and responsible for a civil penalty of one thousand dollars ($1,000.00) per violation per day such violation occurs. The city may recover such civil penalty by either civil action or administrative citation. Such penalty shall be in addition to all other costs incurred by the city, including without limitation the city's staff time, investigation expenses and attorney's fees. 1. Where the city proceeds by civil action, the court shall have discretion to reduce the civil penalty based upon evidence presented by the responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the court should consider the purpose of this chapter to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the responsible person's enrichment or profit as a result of the violation of this chapter. In any such civil action the city also may abate and/or enjoin any violation of this chapter. 2. Where the city proceeds by administrative citation, the city shall provide the responsible person notice of the right to request an administrative hearing to challenge the citation and penalty, and the time for requesting that hearing. a. The responsible person shall have the right to request the administrative hearing within forty-five (45) days of the issuance of the administrative citation and imposition of the civil penalty. To request such a hearing, the responsible person shall notify the city clerk in writing within forty-five (45) days of the issuance of the citation. The appeal notification shall include all specific facts, circumstances and arguments upon which the appeal is based. b. The city manager is hereby authorized to designate a hearing officer to hear such appeal. The city hearing officer shall conduct a hearing on the appeal within ninety (90) days of the request for the hearing unless one of the parties requests a continuance for good cause. The hearing officer shall only consider those facts, circumstances or arguments that the property owner or responsible person has presented in the appeal notification. c. The hearing officer shall render a decision in writing within thirty (30) days of the conclusion of the hearing. The hearing officer shall have discretion to reduce the civil penalty based upon evidence presented by the property owner or responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the hearing officer should consider the purpose of this chapter to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the property owner's or respohsible person's enrichment or profit as a result of tH6 violation of this chapter. d. Any aggrieved party to the hearing officer's decision on the administrative appeal may obtain review of the decision by filing a petition for writ of mandate with the Napa County superior court in accordance with the timelines and provisions set forth in Government Code Section 53069.4. 3-569 e. If, following an administrative hearing, appeal, or other final determination, the owner of the property is determined to be the responsible person for the civil penalty imposed by this section, such penalty, if unpaid within forty-five (45) days of the notice of the final determination, shall become a lien to be recorded against the property on which the violation occurred pursuant to Chapter 1.12. Such costs shall be collected in the same manner as county taxes, and thereafter the property upon which they are a lien shall be sold in the same manner as property now is sold for delinquent taxes. D. Any violation of this chapter may also be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 1.12, except that the civil penalty under Chapter 1.12 for a violation shall be one thousand dollars ($1,000.00). E. Each day the violation of this chapter occurs shall constitute a separate offense. F. The remedies under this chapter are cumulative and in addition to any and all other remedies available at law and equity." SECTION 3: Deletion of Section 17.112.130 Section 17.112.130 is hereby deleted in its entirety. SECTION 4: Amendment of Section 17.48.030 Section 17.48.030 is hereby amended to add the following text as a separate line immediately following "Theaters, movie and legitimate;", and immediately prior to "Tobacco/smoke shop, including the sale of tobacco, tobacco and/or nicotine products and equipment for smoking;": "Time share uses, pursuant to Sections 17.138.030 and 17.138.040;" SECTION 5: Amendment of Section 17.52.030 Section '17.52.030 is hereby amended to add the following text as a separate line immediately following "Theaters, movie and legitimate;", and immediately prior to, "Tobacco/smoke shop, including the sale of tobacco, tobacco and/or nicotine products and equipment for smoking;": "Time share uses, pursuant to Sections 17.138.030 and 17.138.040;" §ECTION 6: CEQA This ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines (the Guidelines), and the environmental regulations of the City. The City Council hereby finds that this ordinance is not subject to CEQA because the adoption of 3-570 this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Moreover, under Section 15661(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. SECTION 6: Effective Date This ordinance shall take effect 30 days after its final adoption, and a summary of this ordinance shall be published once with the names of the members of the Council voting for and against the ordinance in the St. Helena Star, a newspaper of general circulation published in the City of St. Helena. THE FOREGOING ORDINANCE was introduced at a regular meeting of the St. Helena City Council on the 22" d day of March 2022, and was adopted at a regular meeting of the St. Helena City Council on the 12th day of April 2022, by the following vote: Mayor Geoff Ellsworth: Yes Vice Mayor Paul Dohring: Yes Council Member Anna Chouteau: Yes Council Member Lester Hardy: Yes Council Member Eric Hall: Yes APPROVED: OqN C, �� Geoff Ellsworth, Mayor I, CINDY TZAFOPOULOS, CITY CLERK of the City of St. Helena, California, do hereby certify that the foregoing Ord inance was regularly introduced and placed upon its first reading at a regular meeting of the City Council on the 22" d day of March 2022. That thereafter said Ordinance was duly adopted and passed at a regular meeting of the City Council on the 12th day of April 2022, by the following vote: 3-571 Mayor Geoff Ellsworth: Yes Vice Mayor Paul Dohring: Yes Council Member Anna Chouteau: Yes Council Member Lester Hardy: Yes Council Member Eric Hall: Yes ATTEST: c �J Cindy Tzaf oulos, C lerk kOrated s 3-572 Exhibit P Ordinance Proposed by Pacaso Adding Chapter 5.98 3-573 DRAFT ORDINANCE Chapter 5.98 CO -OWNERSHIP PROPERTY MANAGEMENT 5.98.005 Purpose and Findings, The City Council of the City of Newport Beach finds and declares as follows: A. The City has a long and storied history of being a vacation destination welcoming families and visitors from all over the world to second homes within our shared community. B. Unlike short term lodging units that are primarily used during the summer months when parking and other demands for City services are at their highest, second homes are utilized by their owners throughout the year, C. An increasing trend in second home ownership in the City and other communities throughout the nation is co -ownership whereby a number of persons jointly contribute towards the purchase and shared use of a second home. D. A portion of these co -owned homes are managed by third -party management companies. E. The restrictions of this chapter are necessary to ensure the growth of co -ownership homes that are managed by a third -party management company is done in an orderly fashion that does not negatively impact the surrounding community. 5.98.010 Definitions. For the purpose of this chapter, the following definitions shall apply. A. "Authorized Guests" shall mean any guests of an owner of a Co -owned Housing Unit who have not provided compensation to an owner for dwelling, lodging, and sleeping purposes and are present in the Co -owned Housing unit while the owner is on -site and in the home. B. "City" shall mean the City of Newport Beach. C. "Community Development Department" or "Department" shall mean the Community Development Department of the City. D. "Community Development Director" or "Director" shall mean the Community Development Director of the City or his or her designee. C'Ry of Newport ��e�awLh 12-7 3-574 E. "Co -owned Housing Unit" shall mean a residential dwelling unit, managed by a Co - owned Property Manager, and utilized for occupancy for dwelling, lodging, or sleeping purposes by up to eight (8) Owners or eight (8) members of a Limited Liability Company, that owns the residential dwelling unit, along with authorized guests, The term "Co -owned Housing Unit' is not a time-share project, as defined in this Code, and usage of a Co - owned Housing Unit is not a time-share use, F. "Co -owned Housing Unit Permit" shall mean a permit granted by the City to a Co - owned Property Manager for each Co -owned Housing Unit under management. G. "Co -owned Property Manager" shall mean a person -or Limited Liability Company that manages a Co -owned Housing Unit, on behalf of the Owners of the Co -Owned Housing Unit. H. "Co -owned Property Management Permit" shall mean the annual permit issued by the City allowing a Co -awned Property Manager to manage a Co -owned Housing Unit(s). I. "Good Neighbor Policy" shall mean a written policy that governs the operation of a Co -owned Housing Unit and summarizes general rules of conduct, occupancy limits, consideration, and respect for neighbors and the community, including without limitation provisions of this Chapter applicable to the Owner and guests. J. "Limited Liability Company" shall mean a limited liability company or other form of business entity, including, but not limited to, all domestic and foreign corporations, associations, syndicates, joint stock corporations, partnerships of every kind, clubs, business or common law trusts, or societies. K. "Local Contact Person" shall mean an individual(s) who is available twenty-four (24) hours per day, seven (7) days per week for the purpose of responding within twenty- four (24) hours to complaints regarding the condition, operation, or conduct of occupants of the Co -awned Housing Unit, or any agent of an owner authorized by the owner to take remedial action and who responds to any violation of this Cade. L. "Owner" shall mean the person(s) that hold legal and/or equitable title to the Co - owned Housing Unit. M. "R-1 Zoning District" shall have the same meaning provided in Section 20.18.010(B) and Section 21.18.010(B), or any successor sections. 5.98,015 Co -awned Property Management Permit Required. A. A Co -owned Property Manager shall not manage a Co -owned Housing Unit without obtaining a Co -owned Property Management Permit from the City. 2 Goay df Newpon"., 12-8 3-575 B. A Co -owned Property Manager shall obtain a permit by submitting an application to the Community Development Director, in a form provided by the Department, signed by the applicant. An application for a new permit, renewal permit, the reinstatement of a permit or the transfer of a permit shall contain the following information: 1. The name, address, and telephone number of the applicant, 2. The name, address, and telephone number of the Local Contact for the Co - owned Property Manager; 3. A current list of every property that the applicant manages in the City; 4. Evidence of a valid business license issued by the City for the separate business of operating Co -owned Housing Units or submission of evidence or information indicating that the Owner is exempt or otherwise not covered by Chapter 5.04 for such activity. 5. A copy of the Good Neighbor Policy that governs each Co -owned Housing Unit. C. The Co -owned Property Management Permit shall be renewed annually pursuant to procedures provided by the Community Development Department. D. An application for the renewal of a Co -owned Property Management Permit shall be filed within thirty (30) calendar days of the Co -owned Property Management Permit expiration, or the Co -owned Property Management Permit shall be deemed abandoned. E. An application for the reinstatement of a Co -owned Property Management Permit closed by the Director pursuant to Section 5.98.070 shall be filed within thirty (30) calendar days of the date the permit was closed by the Director, or the Co -owned Property Management Permit shall be deemed abandoned. F. An application for the reinstatement of a previously suspended Co -owned Property Management Permit shall be filed within thirty (30) calendar days of the end of the suspension period, or the Co -owned Property Management Permit shall be deemed abandoned. G. If any application is deemed incomplete, which shall be determined in the sole discretion of the Director, the application shall be completed within thirty (30) calendar days of the service of notice that the application is incomplete, which shall be served In accordance with Section 1.08.080, or the application and any associated permit shall be deemed abandoned. 3 r in G�fjry o' New P- E.-.3aa- 92-9 3-576 H. If good causes exist, as determined in the sole discretion of the Director, the Director may extend the deadlines set forth in this section. 5.98.020 Co -owned Housing Unit. Permit Required. A. A Co -owned Property Manager shall obtain a permit for each Co -owned Housing Unit in the City prior to the unit's use as a Co -owned Housing Unit. B. A Co -owned Property Manager shall obtain a permit by submitting an application to the Community Development Director, in a form provided by the Department, signed by the applicant. An application for a new permit, renewal permit, the reinstatement of a permit or the transfer of a permit shall contain the following information: 1. The address of the Co -owned Housing Unit; 2. The name, address, and telephone number of the applicant; 3. The name, address, and telephone number of the local contact for the Co - owned Housing Unit; 4. A copy of the Good Neighbor Policy that governs the operation of the Co - owned Housing Unit; 5. If applicable, evidence that a Co -owned Housing Unit would not violate the permissible use for housing within a Homeowners Association in accordance with the Homeowners Association's Declaration of Covenants, Conditions, and Restrictions. C. The Co -owned Housing Unit Permit shall be renewed annually pursuant to procedures provided by -the Community Development Department. D. An application for the renewal of a Co -owned Housing Unit Permit shall be filed within thirty (30) calendar days of the Co -owned Housing Unit Permit's expiration, or the Co -owned Housing Unit Permit shall be deemed abandoned. B. An application for the reinstatement of a Co -owned Housing Unit Permit closed by the Director pursuant to Section 5.98.070 shall be filed within thirty (30) calendar days of the date the permit was closed by the Director, or the Co -owned Housing Unit Permit shall be deemed abandoned. F. An application for the reinstatement of a previously suspended Co -owned Housing 4 Uty of NewBeach 92-10 3-577 Unit Permit shall be filed within thirty (30) calendar days of the end of the suspension period, or the Co -owned Housing Unit Permit shall be deemed abandoned. G. If any application is deemed incomplete, which shall be determined in the sole discretion of the Director, the application shall be completed within thirty (30) calendar days of the service of notice that the application is incomplete, which shall be served in accordance with Section 1.08.080, or the application and any associated permit shall be deemed abandoned. H. If good causes exist, as determined in the sole discretion of the Director, the Director may extend the deadlines set forth in this section. 1. For purposes of calculating the maximum number of permits under Subsection 5.98.035(A)., a Co -owned Housing Unit Permit shall be deemed valid until the applicable permit has been deemed abandoned. 5.98.025 Denial of Permit. If Co -owned Housing Unit Permits are available for issuance, no timely application filed by a Co -owned Property Manager for an annual permit, renewal of a permit, reinstatement of a permit or transfer of a permit for a unit eligible to be used as a Co -owned Housing Unit, as provided for in this Chapter and this Code, shall be denied unless: the Co -owned Property Manager does not have a current valid business license; or the Co -owned Housing Unit Permit for the same unit and issued to the same Co -owned Property Manager has been suspended. 5.98.030 Filing Fee. An application for a new annual permit, the renewal of an existing permit, the reinstatement of a permit, or the transfer of a permit shall be accompanied by a fee established by resolution of the City Council; provided, however, the fee shall be no greater than necessary to defer the cost incurred by the City in administering the provisions of this chapter. 5.98.035 Maximum Number of Co -owned Housing Unit Permits in the R-1 Zoning District. A. The maximum number of Co -owned Housing Unit Permits in the R-1 Zoning District shall be limited to five hundred (500) permits at any time. For purposes of calculating the maximum number of permits available, a permit shall be deemed valid and unavailable until it is abandoned in accordance with Sections 5.98.020(D) through (G). B. An Co -owned Property Manager who has a Co -owned Housing Unit Permit, or a Go - owned Property Manager seeking to reinstate a Co -owned Housing Unit Permit that has 5 Owport G�'cy o" V-\,de 17:1)each 12-11 3-578 not been abandoned in accordance with Sections 5.98.020(D) through (G), shall have priority to renew or reinstate the permit over anyone on the waiting list, as described in subsection (D) of this section. C. A Co -owned Property Manager seeking to transfer a valid Co -Owned Housing Unit Permit under Section 5.98.040 shall have priority to transfer the permit over anyone on the waiting list, as described in subsection (D) of this section. D. If the City has issued the maximum number of Co -owned Housing Unit Permits available in the R-1 Zoning District, the City shall maintain a waiting list. An application for placement on the waiting list shall be submitted to the Director, on a form approved by the Director, and shall be accompanied by a fee established by resolution of the City Council. In the event a Co -owned !-lousing Unit Permit becomes available, the Director shall notify the person or persons next in order on the waiting list. The notice shall specify that applications will be accepted for ten (10) calendar days after the date of the notice, and that failure to apply within the ten (10) calendar -day period shall result in removal of the person or persons receiving notice from the waiting list. Notice shall be deemed given when deposited in the United States mail, with the first-class postage prepaid, and addressed as specified by the person or persons on the waiting list. The City shall not be liable for a failure to notify any person or persons on the waiting list since placement on the list does not create any property right in any person or persons on the list nor any contractual obligation on the part of the City. 5.98.040 Transfer of Permit. A Co -owned Housing Unit Permits permit that is valid, and has not been abandoned in accordance with Sections 5.98.020(D) through (G), may be transferred by the Co -owned Property Manager to another Co -owned Property Manager that is permitted under this chapter. 5.98.045 Conditions for Co -owned Housing Unit Permits. A. All Co -owned Housing Unit Permits issued pursuant to this chapter are subject to the following standard conditions: 1. The Co -owned Property Manager shall prohibit the Owner(s) from renting the Co -owned Housing Unit to a transient user for short term lodging. 2. The Co -owned Property Manager shall ensure that the Owners) limits the overnight occupancy of the Co -owned Housing Unit to the maximum permitted by the building code and fire code. 3. The Co -owned Property Manager shall use best efforts to ensure that the occupants and/or guests of the- Co -owned Housing Unit do not create unreasonable noise or disturbances, engage in disorderly conduct, or violate provisions of this Code or any state or federal law pertaining to noise, disorderly �C" (�_Aiy"`r? E 12-12 3-579 conduct, the consumption of alcohol, or the use of illegal drugs. 4. The Co -owned Property Manager shall, upon notification that any Owner and/or guest of a Co -owned Housing Unit has created unreasonable noise or disturbances, engaged in disorderly conduct or committed violations of this Code or any state or federal law pertaining to noise, disorderly conduct, the consumption of alcohol or the use of illegal drugs, promptly use best efforts to prevent a recurrence of such conduct by any Owner or guest. 5. The Co -owned Property Manager shall provide the Owner(s) with a copy of the Good Neighbor Policy. 6. With respect to any Co -owned Housing Unit that is located in any safety enhancement zone, the Co -owned Property Manager shall take immediate action during the period that the safety enhancement zone is in effect to prevent any Owner or guest from engaging in disorderly conduct or committing violations of this Code or state or federal law pertaining to noise, disorderly conduct, the consumption of alcohol or the use of illegal drugs. 7. The Co -owned Property Manager shall provide the City with the name and twenty-four (24) hour phone number of a Local Contact Person(s) (who resides within twenty-five (25) miles of the property) who shall respond to any call related to the Co -owned Housing Unit within thirty (30) minutes, and ensure compliance with this chapter in a timely manner. The Co -owned Property Manager must provide a new Local Contact Person and his or her phone number within five (5) business days, if there is a change in the Local Contact Person(s). 8. The Co -owned Property Manager shall ensure that all available parking spaces on site, which may include garage, carport, and driveway spaces as well as tandem parking, are available for the Owner and/or guest of the Co -owned Housing Unit. The Co -owned Property Manager shall disclose the number of parking spaces available on site and shall inform the Owner and/or guest that street parking may not be available. 9. The Co -owned Property Manager shall maintain a valid Co -owned Housing Unit Permit for each Co -owned Housing Unit under management. 10. The Co -owned Property Manager shall include the City issued Co -owned Housing Unit Permit number on all advertisements for the sale of the Co -owned Housing Unit. 11. The Co -owned Property Manager shall ensure that a permitted Co -owned Housing Units is only used for residential purposes and not used for nonresidential uses, including, but not limited to, large commercial or non-commercial gatherings, commercial filming and/or nonowner wedding receptions. 12-13 3-580 12. The Co -owned Property Manager shall ensure that no amplified sound or reproduced sound is used outside or audible from the property line between the hours of 10:00 p.m. and 10:00 a.m. 13. The Co -owned Property Manager shall provide the City with a copy of the Good Neighbor Policy, within seven (7) calendar days after the City serves the Co - owned Property Manager with a notice of request for the Good Neighbor Policy in accordance with Section 1.08.080. 14. The Co -owned Property Manager shall require every Owner and/or guest to comply with all State and local laws that regulate parking while staying at or visiting the Co -owned Housing Unit; 15. The Co -owned Property Manager shall ensure that any Owner and/or guest complies with all State and local laws that regulate parking while the Owner and/or guest is staying at or visiting the Co -Owned dousing Unit. B. The Director shall have the authority to impose additional conditions on any permit in the event of any violation of the conditions to the permit or the provisions of this chapter subject to compliance with the procedures specified in Section 5.98.060, 5.98.050 Violations of Permit Conditions. A. In addition to other provisions of this Code, it shall be unlawful for any Owner or guest of Co -owned Housing Unit to: 1. Exceed the overnight occupancy limit designated for the Co -owned Housing Unit. 2. Use street parking prior to utilizing all available on -site parking space(s) for the Co -owned Housing Unit. 3. Place trash for collection in violation of this Code's rules and regulations concerning: a. The timing, storage or placement of trash containers; or b. Recycling requirements. 4. Amplify or reproduce sound between the hours of 10:00 p.m. and 10:00 a.m.: a. Outside of the Co -owned Housing Unit; or t Y 0 N e, w12-14 8 P 01 f4 3-581 b. That is audible from the property line for the Co -owned Housing Unit. 5. Use the Co -owned Housing Unit for any nonresidential purpose, including, but not limited to, large commercial or noncommercial gatherings, commercial filming and/or nonowner wedding receptions. 6. Rent a Co -owned Housing Unit to any person for a short term. 7. Allow guests to use a Co -owned Housing Unit when the Owner(s) is not present. 5.98.055 Violations, Penalties, and Enforcement. A. It shall be unlawful for any person to violate any provisions or to fall to comply with any of the requirements of this chapter. B. In addition to, or separate from, the foregoing criminal penalties, any person violating any of the provisions or failing to comply with any of the requirements of this chapter is subject to the issuance of an administrative citation pursuant to the provisions of Section 1.04.010(E) and Chapter 1.05. 5.98.060 Suspensions. In addition to any fine or penalty that may be imposed pursuant to any provision of this Code including, but not limited to, Section 5.98,055, a Co -owned Housing Unit Permit may be suspended as provided in this section. A. Suspension of Co -owned Property Manager Permit, 1. Except as otherwise provided in this subsection, if any person violates any Co -owned Housing Unit Permit condition four (4) or more times in any six (6) month period or any other provision of this Code, state law or federal law, four (4) or more times in any six (6) month period, and the violation relates in any way to the Co -owned Housing Unit Permit, the Co -owned Property Manager Permit for the unit may be suspended for a period of up to six (6) months in accordance with subsection (B) of this section. 2. If a Co -owned Housing Unit that is subject to a Co -owned Housing Unit Permit has been the location of four (4) or more loud or unruly gatherings, as defined in Chapter 10.66, within any twelve (12) month period, the Co -owned Property Manager Permit may be suspended for a period of up to six (6) months. A loud or unruly gathering that occurred prior to the passage of fourteen (14) calendar days from the mailing of notice to the Co -owned Property Manager in 9 CD i(y o �1 N e w p.) o irt 12-15 3-582 compliance with Section 10.66.030(D) shall not be included within the calculation of the four (4) or more loud or unruly gatherings required to suspend a Co -owned Property Manager Permit. B. Co -owned Property Manager Permits shall be suspended only in the manner provided in this section. 1. The Director shall investigate whenever he or she has reason to believe that a Co -owned Property Manager has submitted an application that contains false information or committed a violation of a permit condition, this Code, state or federal law related to a Co -owned Housing Unit. Such investigation may include, but is not limited to, on -site property inspections. Should the investigation reveal substantial evidence to support a finding that warrants a suspension of the Co - owned Property Manager Permit, the Director shall issue written notice of intention to suspend the Co -owned Property Manager Permit. The written notice shall be served on the Co -owned Property Manager in accordance with Section 1,08.080, and shall specify the facts which, in the opinion of the Director constitute substantial evidence to establish grounds for imposition of the suspension, and specify the proposed time the Co -owned Property Manager Permit shall be suspended within thirty (30) calendar days from the date the notice is given, unless the Co -owned Property Manager files with the Director, before the suspension becomes effective, a request for hearing before a hearing officer, who shall be retained by the City, and pays the fee for the hearing established by resolution of the City Council. 2. If the Co -owned Property Manager requests a hearing and pays the hearing fee, established by resolution of the City Council, within the time specified in subsection (13)(1) of this section, the Director shall serve written notice on the Co -owned Property Manager, pursuant to Section 1.08.080, setting forth the date, time and place for the hearing. The hearing shall be scheduled not less than fifteen (15) calendar days, nor more than sixty (60) calendar days, from the date on which notice of the hearing is served by the Director. The hearing shall be conducted according to the rules normally applicable to administrative hearings. At the hearing, the hearing officer will preside over the hearing, take evidence and then submit proposed findings and recommendations to the City Manager. The City Manager may suspend the Co -owned Property Manager Permit only upon a finding that a violation has been proven by a preponderance of the evidence, and that the suspension is consistent with the provisions of this section. The City Manager shall render a decision within thirty (30) calendar days of the hearing and the decision shall be final. C. If a Co -owned Property Manager Permit is suspended, it shall be the Co -owned Property Manager's responsibility to transfer management of the Co -owned Housing 10 G'ItY of Nr:,hmuod� 12-16 3-583 Unit(s) to another Co -owned Property Manager that is permitted under this chapter. D. After any suspension, the Co -owned Property Manager may reapply for reinstatement of the Co -owned Property Manager Permit which shall be processed in accordance with this chapter, provided the owner has paid tho City all amounts owed the City in accordance with this chapter. 5.98.065 Permits and Fees Not Exclusive, Permits and fees required by this chapter shall be in addition to any license, permit or fee required under any other chapter of this Code. The issuance of any permit pursuant to this chapter shall not relieve the Co -owned Property Manager of the obligation to comply with all other provisions of this Code. 5.98.070 permit Closure. Any Co -owned Property Manager that has ceased operating a Co -owned Housing Unit shall inform the Director in writing of the date of the last management day, and having done such, the Co -owned Property Manager Permit for that Co -owned Housing Unit shall be closed as to the specific Co -owned Property Manager. �1 G,.=;4 P vy o"f INkowpo.-L 1.1 92-17 3-584 Exhibit Q September 13, 2022, City Council Agenda Item No. SS2 Fractional Homeownership Update htt s://ecros.new ortbeachca. ovMEB/DocView.as x?id=2833800&dbid=0&re o=CNB Fractional Homeownership Update — Correspondence htt s:Hecros.new ortbeachca. ovNVEB/DocView.as x?id=2833864&dbid=0&re o=CNB Fractional Homeownership Update — PowerPoint htt s://ecros.new ortbeachca. ovM1EB/DocView.as x?id=2833866&dbid=0&re o=CNB 3-585 Exhibit R September 27, 2022, City Council Agenda Item No. 1 hft s://ecros.new ortbeachca. ovMEB/DocView.as x?id=2835823&dbid=0&re o=CNB Correspondence hft s:/Iecros.new ortbeachca. ovIWEB/DocView.as x?id=2835861 &dbid=0&re o=CNB 3-586 Exhibit S October 6, 2022, Planning Commission Agenda Item No. SS.2 https:llecros.newportbeachca.aov/WEB/DocView.aspx?id=2836766&dbid=O&repo=CNB htt s:llecros.newportbeachca.gov/WEB/DocView.aspx?id=2836767&dbid=O&repo=CN B 3-587 Exhibit T October 20, 2022, Planning Commission Agenda Item No. 6 https://ecros. newportbeachca.gov/WEB/DocView.asox?id=2837565&d bid=0&repo=C N B 3-588 Exhibit U February 23, 2023, Planning Commission Agenda Item No. 6 htt s://ecros.new ortbeachca. ovANEB/DocView.as x?id=2859668&dbid=0&re o=CNB Staff Presentation https://ecros.newportbeachca.govANEB/DocView.aspx?id=2859669&dbid=0&repo=CNB 3-589 Exhibit V March 14, 2023, City Council Agenda Item No.12 https://ecros.newportbeachca.gov/WEB/DocView.aspx?id=2863026&dbid=0&repo=CNB Correspondence htt sJ/ecros.new ortbeachca. ovA/VEB/DocView.as x?id=2863125&dbid=0&re o=CNB htt s://ecros.new ortbeachca. ov/WEB/DocView.as x?id=2863126&dbid=0&re o=CNB PowerPoint httpsi//ecms.newportbeachoa.gov/VVEB/DocView.aspx?id=2863131 &dbid=O&reo=CNB Staff Memo https://ecros. newportbeachca.g ovANEB/DocView. aspx?id=2863127&d bid=0&repo=CN B Week in Review htt s://ecros.new ortbeachca. ov/WEB/DocView.as x?id=2863128&dbid=0&re o=CNB 3-590 Exhibit W Local Coastal Program Amendment No. PA2022-0202 3-591 EXHIBIT W LOCAL COSTAL PLAN AMENDMENT NO. PA2022-0202 Section 1: The row entitled "Time Share Facilities" in Table 21.20-1 of Section 21.20.020 (Commercial Coastal Zoning Districts Land Uses) of the Newport Beach Municipal Code is amended to read as follows: Commercial Coastal Zoning Districts TABLE 21.20-1 A Allowed ALLOWED USES — Not Allowed* Land Use See Part 7 of this Specific implementation Plan for CC CG CM CN CV CV- OG Use land use definitions. (3) (3) LV (3) Regulations See Chapter 21.12 for unlisted uses. Visitor Accommodations Time Shares — A — — A -- - Section 21.48.025 Section 2: Section 21.48.025(A) (Applicability) of the Newport Beach Municipal Code is amended to read as follows: A. Applicability. The provisions of this section shall apply to applications involving the development or creation of new visitor accommodations or the expansion, reduction, redevelopment, demolition, conversion, closure, or cessation of existing visitor accommodations. The conversion of property that was not used as a visitor accommodation into a time share accommodation shall constitute the development or creation of a new visitor accommodation. As used herein, "time share accommodation(s)" shall have a separate meaning from visitor accommodation(s)." For purposes of this section, "time share accommodation(s)" shall mean any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including, but not limited to, a single -unit dwelling, two -unit dwelling, or multi -unit dwelling. Section 3: Section 21.48.025(C)(5) (Mitigation) of the Newport Beach Municipal Code is amended to read as follows: 5. Mitigation. If the review authority determines that the development will impact existing lower cost visitor -serving accommodations, or provide only high or moderate 3-592 cost visitor accommodations or limited use overnight visitor accommodations such as time share uses and condominium -hotels, then mitigation commensurate with the impact shall be provided by one of more of the following: a. Replacement of low cost rooms lost shall be provided at a one-to-one ratio either on site or a suitable off -site location within the City; b. Payment of an in -lieu fee commensurate with the impact shall be required; c. Programmatic components that provide low cost overnight visitor accommodations; or d. Other form of mitigation addressing cost of stay. The review authority may authorize deviations from development standards that provide economic incentives to the development to maintain affordability. Section 4: Section 21.48.025(E) (Tsunami Information and Evacuation Plans) of the Newport Beach Municipal Code is retitled and amended to read as follows: E. Conversion of Existing Dwelling Units Prohibited. The conversion of existing residential dwelling units into a time share use shall be prohibited. Section 5: Section 21.48.025(F) (Tsunami Information and Evacuation Plans) of the Newport Beach Municipal Code is added to read as follows: F. Tsunami Information and Evacuation Plans. Visitor -serving accommodations in areas identified as susceptible to tsunami inundation shall be required to provide guests with information on tsunami information and evacuation plans. Section 6: The definition of "Limited use overnight visitor accommodations (LUOVA)" within Section 21.70.020 (Definitions of Specialized Terms and Phrases) of the Newport Beach Municipal Code is amended to read as follows: Limited use overnight visitor accommodations (LUOVA). See "Time share use." Section 7: The definition of "LUOVA" within Section 21.70,020 (Definitions of Specialized Terms and Phrases) of the Newport Beach Municipal Code is deleted. Section 8: The definition of "Time Share Facility (Land Use)" within Section 21.70.020 (Definitions of Specialized Terms and Phrases) of the Newport Beach Municipal Code is amended to read as follows: Time Share (Land Use). See "Visitor accommodations." 3-593 Section 9: The definition of "Visitor Accommodations (Land Use)" within Section 21.70.020 (Definitions of Specialized Terms and Phrases) of the Newport Beach Municipal Code is amended to read as follows: Visitor Accommodations (Land Use) "Time share accommodations" shall have a separate meaning from "visitor accommodation(s)." "Time share accommodations" as used in the definition of "time share instrument," "time share interval," "time share property," and "time share use" shall mean any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including, but not limited to, a single -unit dwelling, two -unit dwelling, or multi -unit dwelling. 1. "Bed and breakfast inn" means a dwelling unit that offers guest rooms or suites for a fee for less than thirty (30) days, with incidental eating and drinking service provided from a single kitchen for guests only. 2. "Campground" means a lot upon which one or more sites are located, established, or maintained for rent as an overnight tenting or camping area for recreation or vacation purposes. 3. "Hostel" means establishments offering supervised. overnight sleeping accommodations, primarily for travelers who use nonmotorized transportation or commercial or public transportation. Such sleeping accommodations are designed, intended to be used and are used, rented or hired out as temporary or overnight accommodations for guests in which daily services of linen change, towel change, soap change and general cleanup are provided by the management. If kitchen or eating facilities are provided, they are communal in nature. 4. "Hotel" means an establishment that provides guest rooms or suites for a fee to transient guests for sleeping purposes. Access to units is primarily from interior lobbies, courts, or halls. Related accessory uses may include conference and meeting rooms, restaurants, bars, and recreational facilities. Guest rooms may or may not contain kitchen facilities for food preparation (i.e., refrigerators, sinks, stoves, and ovens). Hotels with kitchen facilities are commonly known as extended stay hotels. A hotel operates subject to taxation under Revenue and Taxation Code Section 7280. 5. "Motel' means an establishment that provides guest rooms for a fee to transient guests for sleeping purposes. Guest rooms do not contain kitchen facilities. A motel is distinguished from a hotel primarily by direct independent access to, and adjoining parking for, each guest room. A motel operates subject to taxation under Revenue and Taxation Code Section 7280. 3-594 6. "Recreational vehicle (RV) park" means a lot upon which two or more recreational vehicle sites are located, established, or maintained for occupancy for a rental fee by recreational vehicles of the general public as temporary living quarters for recreation or vacation purposes. 7. "Short-term lodging" means a dwelling unit that is rented or leased as a single housekeeping unit (see "Single housekeeping unit") for a period of less than thirty (30) days. 8. "Single room occupancy, residential hotels (SRO)" means buildings with six or more guest rooms without kitchen facilities in individual rooms, or kitchen facilities for the exclusive use of guests, and which are also the primary residences of the hotel guests. 9. "Time share instrument" means one or more documents, by whatever name denominated, creating a time share plan or governing the operation of a time share plan, and includes the declaration dedicating time share accommodations to the time share plan. 10. "Time share interval' means the period or periods of time when the purchaser in a time share plan is afforded the opportunity to use the time share accommodations of a time share plan. 11. "Time share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of real property, or any portion thereof, whether through the granting of ownership rights, possessory rights or otherwise, 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. A time share plan shall be deemed to exist whenever such recurring rights of exclusive use to the real property, or portion thereof, are created, regardless of whether such exclusive rights of use are a result of a grant of ownership rights, possessory rights, membership rights, rights pursuant to contract, or ownership of a fractional interest or share in the real property, or portion thereof, and regardless of whether they are coupled with ownership of a real property interest such as freehold interest or an estate for years in the property subject to the time share plan. 12. "Time share property" means one or more time share accommodations subject to the same time share instrument, together with any other property or rights to property appurtenant to those time share accommodations. 13."Time share unit" means the time share property or portion of a time share property in which a time share interval exists and that is designated for separate use. 3-595 14."Time share use" means the use of one or more time share accommodations or any part thereof, as a time share property. 3-596 EXHIBIT X FINDINGS OF LOCAL COASTAL PROGRAM AMENDMENT NO. PA2022-0202 CONSISTENCY WITH THE GENERAL PLAN AND COASTAL LAND USE PLAN 1. The Local Coastal Program Amendment No. PA2022-0202 is consistent with the City's General Plan. It would serve to implement the following goals and policies of the General Plan: Land Use Element Policy LU 2.6, which states, "Visitor Serving Uses Provide uses that serve visitors to Newport Beach's ocean, harbor, open spaces, and other recreational assets, while integrating them to protect neighborhoods and residents." Local Coastal Program Amendment No. 2022-0202 would continue to allow time share uses, which is a visitor serving use in some commercial zones, while clarifying that fractional ownership uses are a time share as confirmed by a representative of Pacaso and not permitted in residential zones areas. This would prevent additional commercialization of the residential neighborhoods and protect them from impacts created by increased traffic and noise. Land Use Element Goal LU 4, which states, "Management of growth and change to protect and enhance the livability of neighborhoods and achieve distinct and economically vital business and employment districts, which are correlated with supporting infrastructure and public services and sustain Newport Beach's natural setting." Classifying fractional ownership uses as time shares continues to allow the business within certain commercial zones. This clarification would also help preserve the long-term housing stock by eliminating the conversion of existing and new housing developments into time share uses, and further ensure that the commercial businesses would not encroach into residential areas and impact the livability of said neighborhoods. Housing Element Goal #4, which states, "Housing opportunities for as many renter- and owner -occupied households as possible in response to the market demand and RHNA obligations for housing in the City." Conversion of residential dwelling units into time shares removes the dwelling units from the market, thus making them no longer available for occupancy of full-time residences. The proposed amendment would serve to prevent single -unit residences from being taken off the market, thus protecting these housing opportunities for renters and owner -occupied households alike. Housing Element Goal_#5, which states, "Preservation of the City's housing stock for extremely low-, very low-, low-, and moderate -income households." Removing market - rate dwelling units from the City's housing stock impacts the affordability of housing across all income levels. As fewer dwelling units become available for rent or sale, the price increases. These price increases reduce the opportunities to provide affordable housing to extremely low-, very low-, low-, and moderate -income households. The proposed amendment would prevent conversion of single -unit residences into a visitor 3-597 serving accommodation, thus preserving the number of units in the City's housing stock, which would help minimize increases to housing costs. 2. Local Coastal Program Amendment No. 2022-0202 serves to implement Coastal Land Use Plan (CLUP) Table 2.1.1-1 (Land Use Plan Categories) of the LCP, which establishes the type, density, and intensity of land uses within the coastal zone, including residential land use categories that are intended for residential dwellings. The amendment clarifies that time share use of residential property is prohibited in order to maintain the residential character of communities. Local Coastal Program Amendment No. 2022-0202 would continue to allow time shares in other areas where visitor serving uses are currently permitted. This includes the CM, CV, MU-H, and MU- W Coastal Land Use Designations, which are identified in CLUP Table 2.1.1-1 to provide visitor serving uses. 3. While CLUP Policy 2.3.3-6 authorizes the short-term rental of dwelling units as a means of providing lower -cost overnight visitor accommodations, the maximum number of short-term rentals are capped at a maximum of 1,550 permits to prevent adverse impacts to residential areas and preserve housing stock within the coastal zone. Unlike short term rentals, time share use of coastal residential properties is a high -cost option to visit the coast on a limited basis, but have similar negative impacts to housing supply and neighborhood disturbances that short term rentals create. Therefore, it is appropriate to prohibit this type of visitor -serving commercial use in residential neighborhoods. Furthermore, Local Coastal Program Amendment No. 2022-0202 will not impact the City's ability to support the wide variety of visitor accommodations that are currently provided, including 4,086 hotel/motel rooms hotels and motels, a cap of 1,550 short term lodging units, and approximately 471 campground and RV sites. 4. The operation of time share use of residential property increases noise and traffic in residential neighborhoods that changes the character of the neighborhoods in a manner that negatively impacts the public health, safety, and welfare. 5. As the number of time share uses of residential property increases in the City, the number of dwelling units for long-term occupancy can decrease. This decrease impacts the ability for the City to comply with the 6th and future cycle RHNA allocation. 3-598 EXHIBIT Y LOCAL COASTAL PROGRAM AMENDMENT No. PA2022.0202 DE MINiMIS FINDINGS 1. The Local Coastal Program Amendment No. 2022-0202 would have no impact, either individually or cumulatively, on coastal resources, and that it Is consistent with the Chapter 3 policies of the Coastal Act. The City of Newport Beach has seen an influx of time share use of residential property, where ownership of residence is equally shared among multiple nonrelated owners (typically between four and 12 owners) through a formal arrangement. The amount of time an owner may access and use the property is directly correlated to their share of ownership (e.g., a 118 share owner would be allotted 45 days per year). This time allotment is not typically used consecutively, but rather one or two weeks at a time. This has resulted in increased traffic, additional parking congestion, and increased noise within the residential areas of the coastal zone due to the fractional ownership uses operating as a short-term vacation stay in lieu of a full-time owner -occupied unit. Local Coastal Program Amendment No. 2022-0202 would clarify that fractional ownership uses are defined as a time share use within the City of Newport Beach. Time share uses are currently allowed in the CG (Commercial General), CV (Commercial Visitor -Serving), MU-MM (Mixed -Use Mariners' Mile), and MU-CVl15th St. (Mixed -Use Cannery Village and 15th Street) coastal zoning districts. The permitted locations and development standards that apply to time shares would not be changed by Local Coastal Program Amendment No. 2022-0202. Furthermore, the LCP does not authorize new development or establish new uses within the coastal zone. As a result, there would be no impact on coastal resources or public access to coastal resources. Moreover, Local Coastal Program Amendment No. 2022-0202 is consistent with the Chapter 3 policies of the Coastal Act. 2. The local government provides public notice of the proposed amendment at least 21 days prior to submitting the amendment to the Commission, by one of the following methods: posting on -site and off -site in the affected area, newspaper publication, or direct mailing to owners and occupants of contiguous property. The City Council of the City of Newport Beach held study sessions to accept public testimony and discuss the impacts of fractional ownership uses on November 16, 2021, September 13, 2022, September 27, 2022, and March 14, 2023. Likewise, the Planning Commission of the City of Newport Beach held similar study sessions on October 6, 2022, October 20, 2022, and February 24, 2023. The public testimony provided during the study sessions provided guidance to formulate the specific language contained in Local Coastal Program Amendment No. 2022-0202. These 3-599 study sessions were duly agendized and posted to the City's website 72-hours in advance of the study session. To consider Local Coastal Program Amendment No. 2022-0202, the Planning Commission conducted a public hearing on April 20, 2023, Public Notice of this hearing was published on in the Daily Pilot, the local adjudicated newspaper with distribution in Newport Beach; as well as, posted on the City's website. Additionally, a Notice of Availability of a draft LCP amendment was posted in the city libraries on ######. The City Council also conducted a public hearing to consider the proposed amendment to the LCP on May 9, 2023. Public notice of the City Council hearing was published in the Daily Pilot and posted to the City's website on Therefore, the 21-day notice requirement has been satisfied. 3. The amendment does not propose any change in use of land or water or allowable use of property. The Local Coastal Program (Title 21 of the Newport Beach Municipal Code) includes various permitted use and development regulations for the coastal zone. Among these is time shares, a visitor accommodation that is permitted in the CG (Commercial General), CV (Commercial Visitor -Serving), MU-MM (Mixed -Use Mariners' Mile), and MU-CVl15th St. (Mixed -Use Cannery Village and 15th Street) coastal zoning districts. Local Coastal Program Amendment No. 2022-0202 would clarify that fractional ownership uses are defined as a time share use. There would be not change to the allowable uses within the coastal zone as established by the LCP. Furthermore, the LCP amendment does not authorize development or alter existing development standards, thus would not result in the change in use of land or water. 3-600