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Home My WebLink AboutSS6 - Short Term Lodging PermitsP() 0 U e� C'9GIFORN`P TO: FROM: - CITY OF September 13, 2016 Agenda Item No. SS6 HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL Kimberly Brandt, Community Development Director - 949-644-3232, kbrandt@newportbeachca.gov PREPARED BY: Brenda Wisneski, Deputy Community Development Director — bwisneski@newportbeachca.gov PHONE: 949-949-644-3297 TITLE: STUDY SESSION - Short Term Lodging Permits ABSTRACT: This is a continuation of the August 9, 2016 Council study session. At that meeting staff presented their findings and recommendations related to short term lodging and public comments were received. However, due to time constraints, not all members of the public were able to speak and the Council did not discuss the item. Therefore, the study session item was continued to this meeting. DISCUSSION: A detailed staff report was distributed at the August 9, 2016 meeting. The link to the report is provided below: hftp://ecms.newportbeachca.gov/Web/O/doc/854650/Pa.gel.aspx Staff continues to meet with community groups and collect input from the public. Provided below is the two phased approach which staff recommended at the August 9, 2016 study session. Phase One — Implement through summer 2018, which includes 2 summer seasons I. Expand the STL Operational Requirements. See Attachment 1. STL permits are subject to standard conditions listed in Municipal Code Section 5.95.050, which was last updated in 2003. Comments from residents, as well as STL managers, indicate the need for a more robust list of conditions to ensure that best practices are implemented. It is also recommended that the operational standards be separate from the Municipal Code so that they can be updated as needed, as determined by the City Manager. The standards would be posted on the City's website and attached to all STL permits. SS6- 9 STUDY SESSION — Short Term Lodging September 13, 2016 Page 2 2. Require permits to be renewed on an annual basis. Currently STL permits are issued on a one-time basis. Offering a streamlined, on-line service would allow permits to be renewed more easily, and an annual renewal will ensure that operators are kept aware the City's operational standards. 3. Require Property Owner to Submit HOA verification. Prior to the City's issuance of a STL permit, documentation from the homeowner association shall be submitted verifying that respective HOA's CC&Rs allow for vacation rentals. This requirement may also be included in Municipal Code. 4. Require a Minimum Stay — 4 nights or other appropriate #. Requiring a minimum night stay is common for most STL management companies. Longer rentals reduce guest turnover and associated impacts such as large amounts of trash, frequent cleaning services, and personnel and laundry. Staff recommends that this be included as a new operating standard. 5. Include "Homesharing" in Municipal Code definition. Homesharing is the practice of leasing one room within a residential unit where the owner, tenant, agent, or rental manager is the long-term occupant of the unit. Transient occupancy taxes are also collected for Homesharing. Homesharing does fall within the City's definition of a short-term rental, but staff recommends that the term be clearly identified in the Municipal Code. 6. Phase out the 212 "grandfathered" single family properties. STL permits located in single-family zones which were issued prior to June 1, 2004 are considered "grandfathered" and there is not a Municipal Code provision to phase out the ability to have a STL permit. There are 212 "grandfathered" properties, and 92 have active STL permits. To maintain the single-family character of these neighborhoods and eliminate the inequity created by the ability for these properties to obtain STL permits in the single-family zones, staff is recommending that these properties be phased out by an appropriate amortization period such as 10 years or perhaps less. 7. Increase Code Enforcement Program. The community would benefit greatly with the implementation of a more aggressive enforcement program aimed at vacation rentals. While vacation rentals are part of the community's culture, the increase in these uses has the potential to impact the quality of life for residents. For this reason, enforcement of best practices and elimination of vacation rentals in unpermitted zones is critical. A comprehensive Code Enforcement Program is attached which would be supported by one part-time contract position in Code Enforcement, another part-time contract position in the Revenue Division and an outside vendor. The total annual cost of the Code Enforcement Program is $204,000 to $211,000. 8. Continue to negotiate with online host platforms. Discussions with on-line platforms continue, but with limited progress. Therefore, an effective code enforcement program is critical. SS6-2 STUDY SESSION — Short Term Lodging September 13, 2016 Page 3 Phase Two — Evaluation of Phase 1 Effectiveness Staff would return to the Council in fall 2018 with monitoring data to determine the effectiveness of Phase One in improving compliance with the STL provisions. If additional regulations are needed, considerations may include establishing a cap on the total number of STL permits issued citywide or geographically, extending the length of minimum stay requirements, limiting the number of days any particular property could be used for vacation rentals, and/or other more aggressive code enforcement efforts. Phase Two may also include increased audits to improve compliance with transient occupancy tax requirements. Currently, audits are limited to hotels which are conducted by a city employee. Recognizing the growth of STL permits in the City and the limits of the current auditing efforts, a contract employee devoted to the auditing and enforcement of the City's Municipal Code transient occupancy tax provisions would increase compliance. A full time, contract auditor is estimated to be $110,000 annually. Not Recommended 1. Expansion of STL areas. STL is currently permitted in residential zones, with the exception of single-family and some Planned Community districts. The City Council requested staff review allowing STL within the few small pockets of single-family districts on the Peninsula which are located amongst two -unit residential districts. Research reflects that many of these single family districts were re -zoned to single family in 1989 due to their small size, while other areas have historically been designated single family. The purpose of precluding STL in single family neighborhoods is to maintain the single-family character of these areas. Therefore, expansion of the areas where STL is permitted is not recommended. CONCLUSION With City Council's direction, staff will return to a regular meeting to request consideration of necessary amendments to the Municipal Code and additional resources required for implementation. Correspondence received since the August 9, 2016 study session is provided as Attachment A. ATTACHMENT: Attachment A — Correspondence SS6-3 Attachment A Correspondence SS6-4 320 Island Avenue Newport Beach, California 92661 To: Mayor Diane Dixon Kimberly Brandt, Community Development Director Brenda Wisneski, Deputy Community Development Director Re: City Council Staff Report, Short Term Lodgings As you draft ordinances to address the concerns of residents concerning short term lodgings in residential areas of the city, we would like you to consider the following: These tenants do not understand the complexities of the neighborhoods where the short term lodgings are. For example, many older homes in these neighborhoods do not have garages or off street parking spaces so residents plan several days in advance if a parking place is necessary on street sweeping days or on days when we have guests. We depend on each other to help find parking. When short term lodging tenants are suddenly faced with no parking, they too often illegally park in the alley. (see pictures sent from our Picasa immediately following the sending of this letter). We do call parking control, but their personnel is limited, and quite honestly, we do not want to be "those people who are always calling". In addition, our houses are very close together. Any conversation can be heard from another porch or deck no matter how softly one speaks, and even music, television, and gatherings inside generate noise which can disturb others. We neighbors understand that and do our best to limit noise after 10:00 p.m. because we know people are going to work in the morning Monday -Friday. We avoid loud talking outside and keep windows shut and inside noises very quiet. It is part of being good neighbors. Short term lodging tenants may be respecting the City's partying ordinance, but they have no idea how much sound is carrying from every day, commonplace activities. This is not something for which we can call the noise ordinance number, but it is a serious problem. Too often the owners of these properties are not Newport Beach residents. They have purchased in our city for the sole purpose of renting out short term. One such landowner on AirBNB is an LLC that owns 7 properties. The duplex behind us is owned by a couple in San Clemente. Owners who do not live in the community are not vested in the community. If you look on AirBNB and VRBO, there are hundreds of Newport Beach listings, and more are added each day. Since most of the listings on these sites do not give addresses, it requires someone looking at each description and the pictures and then trying to figure out what the address is often by walking the neighborhood. I have done it, and it takes hours and hours. Matt Cosylion in code enforcement is such a help and resource, but he is one person trying to verify the permit status of hundreds of listings and dealing with complaints such as mine. Adding one part-time contract position is simply inadequate if you do, indeed, want "to maintain the character of the City's residential neighborhoods". As the report states, only 46% of the 212 grandfathered single family properties have current permits. That means more than half do not. An adequate staff could make sure that all properties for rent have permits, maintain safe living conditions, and follow up on whether the bed tax is accurately reported. You must increase the number of staff to a reasonable number to accomplish this monumental task. If you look at the pictures in some of the listings, there are beds blocking window egress! Someone must be requiring the same safety standards as are required of licensed hotels in the city to prevent an avoidable tragedy, but that requires ample personnel. Someone must be applying the same criteria for auditing and SS6-5 collecting bed tax as those used for hotels in the area. That requires ample personnel. The revenue generated by additional YEARLY permits and the collected bed tax will cover those salaries. For monitoring purposes, you need a designated email or phone number, and a person to collect that information on a regular, daily basis. I am sure the Newport Police Department and the City's code enforcement department would be thrilled to have these complaints centralized somewhere and not coming in to their 911 or dispatch or email. Finally, as you phase out the grandfathered properties, in 5 years rather than 10 years, you must change the zoning for streets like Anade that are an anomaly. If you look at the zoning map, Anade alone in this area is R-2, even though only 6 of the 26 properties are duplexes. Anade is a family street with many, many long term owners and residents. And yet, it currently has 4 identified short term lodgings listed on AirBNB and VRBO. The R-2 designation allows for these short term lodgings on this street. This is also a street that shares alleys with Island Avenue and Montero. Both of those streets are R-1 zones. Both are family neighborhoods, and both are being negatively impacted by the short term tenants on Anade. We have just had to install an $1100 security camera to monitor the comings and goings of the cars in the short term lodging behind us. On more than one occasion, cars crammed in a very small parking area have barely missed a legally parked car or our garage! If such an incident occurs, we know that no one will come forward and take responsibility. They will simply drive off. We should not have had this expense, but at least with this system, we have recourse with the owner of the duplex in court. We are frustrated at the lack of options for the constant illegal parking and the trash and the noise and the steady stream of unfamiliar, out of state, out of area people coming and going in the neighborhood. We are frustrated that our very safety has been compromised, and that we must be ever -vigilant for theft and crime in a neighborhood where we all used to feel so safe and secure. We are frustrated by our City's willingness to allow short term lodgings in the first place and the City's slow response to the problem. This report of August 9, 2016, followed a Council study session overview on February 26. 2016. That is over 5 months. We hope that your next steps will be much quicker and provide relief for the community. Please confirm your receipt of this letter and the pictures which accompany it from Picasa, and let us know when this issue is again coming to the Council for discussion or action. Sincerely, David and Kathy Frazer SS6-6 SS6-7 I .;I LV n 4ko 0 w L. 9 I SS6-10 SS6-11 -----Original Message ----- From: Gary Sherwin [mailto:gary@newportbeachandco.com] Sent: Wednesday, August 10, 2016 9:21 AM To: Dixon, Diane; Kevin Muldoon; duffs@duffyboats.com; Selich, Edward; Keith D. Curry; Scott Peotter; Tony.Petros@lsa.net Cc: Torres, Michael; Brandt, Kim; Kiff, Dave; Finnigan, Tara Subject: Short Term Lodging Issue Dear Mayor Dixon and City Council Members: I know we were running short on time yesterday so I didn't weigh in on the short term lodging issue but I wanted you to have my thoughts. I think Kim Brandt and the city staff did a very thoughtful job with examining the issue which is surprisingly complex, especially given the emergence of the online companies. This is a topic every organization similar to mine throughout the country is struggling to address, so we are far from alone. As I have said before, I believe this is an issue of fairness. We have many upstanding operators and homeowners who play by the STL rules and most off the online companies do not. I support most of the recommendations that were presented yesterday as I believe we need a balance between protecting our neighborhoods and residents and supporting the visitor industry. The only points I might take exception is the minimum stay of four nights which given current travel patterns with people taking more long weekends and fewer extended stays, could hurt our competitiveness. Three nights to me sounds very reasonable. Also, the elimination of the 200 plus "grandfathered" permitted units sounds like a possible violation of property rights to me. I know many homeowners who purchased their homes with the understanding that they can help pay for it by renting it out in the summer. As long as they conform to the regulations of STL in the city, these people haven't done anything wrong and it seem punitive to take that right away from them. As to our friends at Airbnb, I was very dismayed after a recent meeting with them at City Hall that was attended by Mayor Dixon, Kim Brandt, Dave Kiff and Michael Torres among others. Michael indicated to the Airbnb representative that all the city wanted was for company to pay the TOT (which they readily agreed to) and to include a small box on a Airbnb host application that would require the host to provide a STL permit number. The representative said this could not be done but perhaps could be explored in another year. I believe the city has been very accommodating in their requests and this response struck me as absurd. My feeling is that Airbnb wants to give the impression that they are working with cities but the company as a whole does not support this since agreements with cities will likely reduce their revenue by cutting out illegal hosts. And by the way, the Airbnb representative seemed surprised that under Newport Beach city ordinance they were already in violation by not paying TOT. Last week, I was named Chairman of the Destination Marketing Association International, which represents all the tourism marketing agencies in the world. The association is working very aggressively with online operators including Airbnb and in fact Airbnb sent their CEO to our conference to discuss this issue in a general session. It is clear that we still have a lot of work to do with them and I support continued dialogue. There is no way the City of Newport Beach can stop or even control this new online world so we need to broker some agreement to at least collect taxes owned and help protect our homeowners. SS6-12 One other thing, thanks as well for approving our budget and marketing plan last night. We always appreciate your support! Gary Gary Sherwin I President & CEO Newport Beach & Company 1 1600 Newport Center Drive Ste. 120 Newport Beach, CA 92660 1 Ph: 800.94.COAST 1 949.719.6100 VisitNewportBeach.com<http://www.visitnewportbeach.com> Facebook<http://www.facebook.com/visitnewportbeach> Twitter<http://www.twitter.com/newportbeach> YouTube<http://www.youtube.com/NewportBeachCVB> Pinterest<http://pinterest.com/newportbeach1> SS6-13 From: Kiff, Dave Sent: Monday, August 15, 2016 2:04 PM To: 'BSDDO@aol.com' Cc: Brandt, Kim Subject: RE: short term lodging Hi Thomas — Thanks for letting me know. I will make sure that your comments are provided for the record. FYI, there was a flyer going around in the Newport Shores neighborhood in advance of our last Council meeting (August 9) that suggested that the City was about to open up new areas such as Newport Shores for STI -s. This is not so. The flyer had no stated author or address so we couldn't contact the distributor for a correction. Just so you know: We currently allow new STLs in all residential zones EXCEPT R-1 (single family), provided that the homeowner receive a permit and follow our regulations. STLs have been a presence in Newport Beach for decades - especially on the Peninsula. In 2004, we capped the amount of STL Permits that could be issued in R-1 zones to basically what was in use at the time. Therefore, a person operating an STL in an R-1 zone without a current permit would be unable to get one today. I have not heard any of our Council suggest that the current cap on STL permits in the R-1 zone should be lifted or removed. Thank you again for your comments, and please stay tuned on this issue as the Council works through it with the community. Our next meeting where this will be discussed is Tuesday, September 13th here at the Civic Center starting at about 4:30 p.m. You can watch it at home or attend the meeting. Dave Kiff City Manager From: BSDDO@aol.com [mailto:BSDDO@aol.com] Sent: Monday, August 15, 2016 11:02 AM To: Dept - City Council Cc: michael@jkd4insurance.com Subject: short term lodging Hi Dave - As residents of 439 62nd st, NB, we are unalterably opposed to allowing short term lodging in any Newport Beach neighborhood. Thomas Herron SS6-14 10."TA When is the continuation of the STL item being scheduled? I am hopeful the staff will be presenting a draft of the "TERMS OF USE" agreement that all STL permit holders will agree to abide when granted a STL permit via the city website. The TERMS OF USE pledge is pivotal, providing a clear expectation for a "best practices" requirement for all operators (including ByOwners). It gives code enforcement the tools the option to revoke a STL permit if the operator is not adhering to the pledge. Based on the comments made at the study session, I believe there is enough consensus for a 3 day minimum (rather than the proposed 4 day) which nearly eliminates week end party goers. Also, please drop the idea of abating grandfathered R-1 permits. There is no need for abatement and many owners rely on this income to pay mortgages or receive supplemental revenue and have collectively invested millions of dollars in their properties with the expectation grandfathered means grandfathered. May I remind you, these grandfathered permits have been in place for many, many years, certainly since the restriction was implemented in 2004, 12 years ago. There have been literally no DACS issued on these properties (less than 1% of all DACS issued). I am offering to provide input to a "best practices" TERMS OF USE agreement. Please advise. CRAIG BATLEY � 049129114630 rr;f9avMhr5-idxt F:OH9)05.21.27- I.LC a: (10-183741 RUFr W11ItCRrslty a Wh1 C1111C^Znm ZMI NmT wt Rrailewd. K mrprl FWAA. {;A 9.663 SS6-15 324 Island Ave Newport Beach, CA 92661 To: Mayor Diane Dixon Kimberly Brandt, Community Development Director Brenda Wisneski, Deputy Community Development Director Re: City Council Staff Report, Short Term Lodgings We are homeowners that are impacted by the short term lodging that is located on Anade. We are sure other homeowners in our neighborhood are also impacted by this, and other short term rentals. We are concerned about the noise level and lack of consideration to the rest of us who either live here full time or this is their vacation home. Our biggest concern is the parking in the alley. Many vehicles are parking in the space which cannot really accommodate the number or size of the vehicles that are being parked. The tenants have come extremely close to hitting our car which is parked behind our house, our trashcans and our neighbor's car and garage. The tenants seem to have no problem using our trashcans when theirs are too full. This is a small, close knit neighborhood and it is unfortunate that this AirBNB is allowed to operate in our neighborhood. We are being negatively impacted by the short term tenants on Anade.....concern for the safety of our homeowners and their homes as well as potential physical damage to our cars and property. We now must be vigilant about possible theft and crime in our once safe and secure neighborhood. We would appreciate you taking very careful consideration of this issue at your next city council meeting. Sincerely, IV . _11. 1 I : 1 1 V_ 1 SS6-16 W isneski, E rend a From: Craig Batley <cbatley@t urrwhile.aom: Senil: Monda)l, Septernl ara9, 20:112:16 IN To: Dixon, Diane; 'llc ny Petrol' (Tony,F etros@lia-assoc.aom); Curry, Keith; Piatter, 9clot i; Selich, Odward; Duflfield, Duff)l; I a vinrnnrtilcloonCl)lahoo.oc m Cc: Beth Hammons; Brandt, Kim; \A iinesld, Brenda; Hiff, Davi; Harp, Aar( n; Cos)llion, Matt Subjeai: Study 9easion-Short Term I c clgling Recomme nclationi 81 Modificatiorns Continued A laaf menis: S71 Reaamrn6ndationi to 4ZTY.DOCX; 7errns of Use 9TL.daa:i Hi All This ii a llollow un email to IE st mon'J's a mail. I it cludecl the Recommendations from Iasi mond Ic r aonvir iir oe i s well. lA l' zt is different in ihi9 email is l lltit logether a RCIIIGH Terms oil U.se z greemeni wl is h with !ta Ifi helll ar d lega l reviiv+ car k E nrE rented as a aorn R dation oil publia comma nt: in a format'11 a l nerm it I o We rs mu: t < gree. Rewc r # CIN.E the ait)l needs a TIRMl c fl.USE agrE E ment a: pari of the a 11 n lice tion Ilrose s:i'lo r a STI perm it k to 11 ro) iicle CODE enlorcema nt 1 he 1 ooL to c verses 1 hese openai o rs. "ill out E terms oil mg agreement MCI97 vR 8 Ci lyll i owners a re uni \A a re of E 111 he requirements to ! ucae s! fully oiller tl air 9TL props riy lo it e public. REPI5ON # z all !Ill permit operators will chi ak the BC A "I AIGR 90 to tl a terms in the TIR N ! OI U91111 agreement, BEIC R A tl a ait)l is ; uei a permil. This in! uric a 11 a peratio ns undersii nd the rules and viill a I iclo Ly 1he oit)l cotta 1 itlE 5. This i1 ar €Ie in is: wing STI perm its will go a long viay 11or t1 a city to ac ntinuei its policy after lorcinaint c ftha aiiy nois e regulations and € c ad neighbor polis iE s. Tl is to orris of usea€IreE rreni shoulc I a presented to i a Linc it in next we al's itrr(I)l sisiia r . It doe: n't 1 < \ e to be per -led, jiist a dra-11 & r priblia di! cuision. Thar k you for your i a n s ideration and input. ( a 11 me c lireat if you ha) o any glue s1 iom (9119 293 4610). P.J. 4day minimumdoeinot \niorl in the markitplace (it is pro Ilerralic11orc((k Erforaement. 3da)lminimum dois wa rk AIN[ R ri`renls moi +meek end pE rpl grc tips. I alio sril8est dropping 111 ase two 11rom the presintatia n. 11 is enou@ll to for the publia is fc au: c r F h aie ONO. Inom: Craig Batli)l Sa nt: Sunday, Augui 1, 2016 8:10 1IN To: 'ddi)ion@ne wportI a achaa.gov' sic c lxon@n ewportl e a cha•a gov: ;'Tony Pe t ros' (1 any, Pei ra s @lsa-t s:ra a. ii a m) <Tony.Fetroi Isa-aisoo.com>;'keiilaurr)I](A)lahoo.cam'Kikeithcrrrryl@vahoo.vm,;':IleatierQna�Aportbia(hca.aov' <s peotte r@r E wportt a achaagov: ; 9dSelia1roadrunner.com;'ciclulilieId@newlla ri bead aa.gv' <ddr ill fele a new a rtl eaal ( a. osr, ; 'keriin m rn uldoon@)lahoo.ca m' 4evir m rn .11dc a n(@ya 1 CC .com> Ca: HE t1 Ha m m ons <bha mmon @burrwhi1 e.ca m. ; 1,bra r dt nevil a rtbeaiI aa.gc %-;'\A isni ski, Brenda' <B\A i, r aski@nevipartbeail aa.ga` Subja d: 91 rrcl)l Simian A I c rl Ti rm I a dging Riaom rr endal ions 81 ModHications HE Ilo All: SS6-17 As rna sd of you know, miy company rla;u bean in 1he bUsinesisi of planing well oveii 14 4,M's 0's of family vacalioneiis an the beaah/ peninmula irle pasit 49 yeani (I 1 have been all Ilia aomp-,ny ilo:u naarlyi 20 years,. I am also a mambesi all tl e Vacation Reni al Managar:i Asioaiation iIVRMX wl]iel] helps m e stay currant will] industry lvends. Ihe bu sine; i,,i Ila s markedly changed wi l h tl] e piia lifeiial is n of int err. el vocal ion nenl al plc l ilomi si, inarea sing bath inventovy and vititalioris. Those changes are helie to sla3l. Thesa propo!iaal ahangas go a long way to proactively a d jus l to th a miarliel pla a s I shared with Slafl our cornpany'si bes'l piaclices aambined with yeaiis of experiience in the indusiq disausming what ahangas in the iegilla lions would work and what won't. Aflar i eviewirig the it, If raps it 1 am sugge:iting a Jew changes to fine lune the F apart. I believe mane work is iaquined before this mia ltor is placed on a formal council agenda. With your diiieclion and comrrierits a'I the upcomiirig study session I believe city staff can fine tune the proposed staff reaa rnruiendalions before this matteii is placed on a council agenda for a final vola. Fool flee to call me a n miyi cell 949 293 463 0witfl any questions. 1 plan an atlending,Illa stud3i se;ision. 0RAI G 1�hTI Ur G (9.19)291.4619 crM§3W5-46141 1:0,19)5+5.127 t R, A: ®UII&II51 BurrWhiwKoly tt�asr:6�rrK3sitc.i•7p MI Nmpnzt r,Bnule a€& Newpai t nOt, CA 9..60 SS6-18 Mayor & City Council: As most of you know, my company has been in the business of placing well over 10,000's of family vacationers on the beach and peninsula the past 49 years ( I have been at the company for nearly 20 years. The business has markedly changed with the advent of the internet rental platforms, increasing both the inventory and visitations. I attended both public discussion meetings on the subject of STL, heard all the comments, met with city staff, made suggestions on how to improve the regulation of STL while preserving vacation rentals as an AFFORDABLE alternative housing (The Coastal Commission views vacation rentals as affordable public access to the beach) for families to visit Newport Beach ON the peninsula. Excluding Balboa Island, 90 percent of all city wide vacation rentals occur on the Peninsula. The Peninsula has been a designation for visitors for 100+ years. I have attached a slide illustrating the non -owner rental mix of housing existing on the Peninsula. All but a few R-1 STL grandfathered permits are located on the Peninsula, due mostly to the checker -board pocket zoning that exists on the Peninsula. I shared our company's best practices with the city staff changes for years in order to have purposeful implementation of STL ordinances. However, there needs to be a balance between the market place, STL permitted properties and neighbors. The overall purpose for these revisions is to improve community relations by providing more specific rules encouraging STL operators to be good neighbors while recognizing existing STL permitted property rights and dynamics of the market place. With that in mind I suggest the following modifications: 1. Terms of Use. All STL permits should be renewable yearly, requiring each applicant to reaffirm agreement to the Terms of Use (check box must be checked prior to issuance of STL permit ONLINE). If permit is issued over the counter, applicant must sign terms of use agreement. Terms of use set forth the conditions under which operators must adhere. Recommendation: Mandatory Terms of Use agreement acknowledged prior to issuance of permit 2. Minimum Stay (Proposed Operational Conditions). Staff has arbitrarily recommended 4 -night (or other appropriate number) minimum. The main purpose of imposing minimum night standard is to prevent non-compliant guest behavior. The bulk of "party groups" ask for 1 or 2 night stays. If three night stays are required, a guest must take at least ONE day off work and stay Friday -Sunday OR Saturday -Monday. Whereby a 3 -day minimum accomplishes 95% of what a 4 day stay allegedly accomplishes. The idea is to prevent week -end ONLY vacation visitors. Recommendation: 3 -day minimum is the best compromise, eliminating 1 or 2 day bookings. 3 -day stays eliminates 95% (1 & 2 day bookings) of weekend only bookings, thus relieving most of the police &code enforcement issues. A 4 -day minimum will cost the city $10, 000's in lost TOT and overload code enforcement (non-compliant bookings). There is no empirical evidence a 4 -day minimum eliminates code infractions any more than a 3 -day minimum. The market demand for shorter stays is huge, since people cannot take much time off work, therefore the demand for 3, 4, 5 day stays is very common today. In fact, if you take the total STL TOT of approx. $2M, there are more 3-5 day stays (including year around STL properties) than any other length of stay. 3. 212 "Grandfathered" SFR Properties. First of all, the 2004-6 ordinance restricting STL in R- 1 zoning was passed solely as a defensive move to combat Recovery Homes proliferation. It had nothing to do with the merits of STL. Furthermore, STL had been available city-wide for 100 years with no real problems (see attached boardwalk picture). The grandfathered STL R-1 permits have obviously been in place for a minimum of 12+ years, most of them dating back when the city began issuance of STL permits in approximately 1991 (30+years) coinciding with collection of TOT. Analysis of the DAC's issued the past several year's shows only a 2% issuance of total DAC's issued to R-1 STL permitted property occupied by a GUEST. SS6-19 Additionally, many of these owners rely on STL income for living expenses and mortgage payments. R-1 owners usually have a relationship with the neighbors since the owners occupy these SFR's when available as second homes. The staff states they want to "maintain the single family character of these neighborhoods". The only "family type neighborhoods in or around the peninsula are Lido (2 R-1 STL permits) Peninsula Point (16 R-1 STL permits) and Newport Shores (7 R-1 STL permits). With few exceptions the overall Peninsula neighborhoods are approximately 77% (92663) rentals or second homes (see attachment). Besides, these grandfathered R-1 rentals will slowly dwindle due to attrition (92 active out of 212). Of the total R-1 STL grandfathered R-1 permits city wide 83% are on the peninsula (not counting above). Recommendation: Whereas, due to the number of years these R-1 permits have been in place and the disruption of retirement income to these homeowners (in some cases $200K+/ yr or $15,000/week); whereas, only 92 of the permits are "actively" paying TOT (some of these are paying very little); whereas, due to the longstanding rental history of these properties causing no measurable disruption to the "neighborhoods" and longstanding status of permitted use; and VERY low DAC issuance (see attached 2% of all DAC's issued), I recommend no action to abate R -I STL permits especially since "the peninsula neighborhood is 77% rentals. The 3 SFR neighborhoods of Lido, Newport Shores & Peninsula Point have very few R-1 STL permits), Why abate since the new proposed regulations establishes a procedures wherein a R-1 STL permit can be revoked. AND if a grandfathered R-1 STL permit is revoked it can never be reissued again. There is no need to abate. 4. Proposed Exterior Notification Sign & Notices: The owner of the short term lodging unit shall display a notice on the exterior of the dwelling unit so that it is legible and visible to the general public. The sign shall include: a. Local contact person and phone number who is available on a 24-hour basis and resides within 10 miles of the property. b. Short Term Lodging Permit Number and City website address to access permit information. C. The phone number of the City's Police Department 949-644-3215 and Code Enforcement Recommendation: The Newport Beach sign ordinance allow for 12" X18" signs to be posted on for sale or rental property. These signs are small. To require too much info on a sign is impractical. The only necessary items to be posted are: a. Responsible contact person (company) b. 24 hour LIVE person answering service phone number (no static answer machines) C. STL permit # First, all STL permit signs need to be the same size as dictated by city real estate sign ordinance (12' x 18'). In the code revisions please state all STL signs need to conform to city sign ordnances , specifying (12 X 18) size.. Any other information will crowd the sign. The city should not get into the business of dictating sign design. 5. HOA verification: One of the biggest complaints at the public hearing was the city issuance of STL permits to a R-2 zoned property governed by an HOA. Currently, some applicants are knowingly violating the CC & R's of their Association, prohibiting STL in the dwelling. Recommendation: The applicant must agree, per the Terms of Use, to NOT apply for a STL permit when the CC&R's prohibit STL. IF, the city mistakenly issues such a permit, then the city will be permitted to immediately revoke said permit due to the fact the applicant willfully violated his CC&R's. The aggrieved condo owner must provide the evidence to the city that the STL permitted property obtained the permit unlawfully. Such a permit should be subject to revocation. SS6-20 Annual Terms of Use STLP Agreement Standard Operational guidelines for vacation rentals Terms of Use. Please read these Terms of Use carefully before applying for a Short Term Lodging Permit. Your permit is conditioned on your acceptance of and compliance with these terms. These terms apply to all owners, agents or their representatives who operate a STL dwelling. By accessing or obtaining this STL permit you agree to be bound by these Terms. If you disagree with any part of the terms then you may not apply for a STL permit. Termination. The city of Newport Beach may terminate or suspend your STL permit immediately, without prior notice or liability if you breach the terms. All provisions of the terms herein are in accordance to city ordinances. Acknowledgement. All guests required to sign contracts acknowleging city ordinances and peaceful, neighborly, lawful conduct. Such items shall address the following, but not be limited to: Occupancy limit, adhere to all city ordinances, payment of TOT, parking, unreasonable noise, etc Interior (Contract) Notification. 1. Local contact and phone number 24/7. Local contact to be within io miles of unit. 2. Number and location of on-site parking. 3. Trash pickup day and collection information disclosure. 4. Street sweeping day. 5. Notice that guests are responsible for all activities, violations will result in fines. Exterior Notification. 1. Shall display a notice on the exterior that is legible and visible to the general public. 2. Local contact person phone number that is within io miles of unit. SS6-21 3. Short term lodging permit number displayed on exterior sign. Other. 1. Maximum occupancy: 2 adults (18 years or older) per bedroom. 2. Provide City with local contact person phone number within 10 miles. 3. Short term lodging permit number to be displayed on all advertisements. 4. Unregistered/Non Compliant Units will be required to vacate the guests from the unit at the end of the agreement, and no further rentals allowed. 5. No Commercial activities. 6. Onsite parking must be made available to guests. 7. City's right to inspect. 8. Need emails from property owners 9. HOA Verification. As part of application, Require HOA letter stating Vacation Rentals are allowed by CC&Rs, if applicable 10. "Short term" shall mean occupancy of a lodging unit for a period of thirty (30) consecutive calendar days or less. This also includes a maximum of one written rental agreement within a lodging unit for a period of thirty (ao) consecutive calendar days or less 11. Require a Minimum Stay — 4 nights 12. LUGO addendum signed by all guests a. Noise Abatement: DAC/LUGO Enforcement b. Use of Tier 2 Fines ($1,000, $2,000, $3,000) 13.Adhere to all STL City Ordinances and regulations (Title 5) pertaining to Operational Requirements. 14-STL permits to be renewed on an annual basis 15.All STL permit holders agree to pay Transient Occupancy Tax TOT currently 10 16. Obtain a Short-term Lodging Permit (STLP) and a Business License SS6-22 6. STL guest contracts: It is my opinio, all STL guests be required to sign a contract setting forth the terms for occupancy, spelling out guest obligations to all city code regulations Recommendation: Such items shall address the following, but not be limited to: Occupancy limit, obey all city ordinances, payment of TOT, parking, unreasonable noise, etc 7. LUGO addendum. Recommendation: Must be signed by all guests 8. Excerpt from Newport Beach Municipal Code Section 5.95.050. Proactive Code Enforcement Program, Proposed: Proactive Enforcement 1. Enforce or abate unlicensed STL. STL may be located in the proper zone, but require a license. STL located in areas not allowed shall be abated. 2. Impose Tier 2 fines for STL violations, as necessary. 3. Suspend permit for 60 days if LUGO issued. 4. Suspend permit for 60 days if two DACs are issued in a consecutive twelvemonth period. Recommendation: Change the above to read: 3. Suspend permit for 60 days if LUGO issued to STL guest. 4. Suspend permit for 60 days if two DACs are issued to STL guest in a consecutive twelvemonth period. Thank you reviewing the above recommendations which if adopted by staff will significantly improve the proposed regulation modifications and alleviate future burdensome code enforcement issues. Respectfully Submitted, Craig Batley SS6-23