HomeMy WebLinkAbout04 - Updating the NBMC for Short Term LodgingQ �EwPpRT
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<,FORN'P City Council Staff Report
February 25, 2020
Agenda Item No. 4
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Seimone Jurjis, Community Development Director - 949-644-3232,
sjurjis@newportbeachca.gov
PREPARED BY: Evelyn Tseng, Revenue Manager, etseng@newportbeachca.gov
PHONE: 949-644-3153
TITLE: Ordinance No. 2020-8: Updating the Newport Beach Municipal Code
for Short Term Lodging
ABSTRACT:
For the City Council's consideration is the second reading and adoption of the ordinance
amending Newport Beach Municipal Code (NBMC) Chapter 5.95, revising the short term
lodging requirements. The revisions include regulations for parking, maximum unit
occupancy load, interior information rules for guests, exterior signage advertising and
minimum night stays. The revision also limits the number of short term lodging permits
to be issued, clarifies violation penalties and provides for an appeals process.
RECOMMENDATION:
a) Determine this action is exempt from the California Environmental Quality Act (CEQA)
pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because
this action will not result in a physical change to the environment, directly or indirectly;
and
b) Conduct second reading and adopt Ordinance No. 2020-8, An Ordinance of the City
Council of the City of Newport Beach, California, Amending Section 1.05.020
Subsection (F), Section 3.16.060 and Chapter 5.95 of the Newport Beach Municipal
Code Relating to Short Term Lodging.
FUNDING REQUIREMENTS:
If the proposed ordinance is adopted, the additional requirements will require increased
staff resources for administering and enforcing the program. Staff will evaluate and bring
recommended staffing adjustments as part of the proposed FY 2020-21 Budget.
Additionally, the estimated cost of an outsourced answering service is anticipated to be
$35,000 per year.
To offset the increase in costs, staff proposes to complete a fee study and return to City
Council with a revised short term lodging permit fee from the current amount of $103 per
year. Transient occupancy tax revenue will also increase. Although staff cannot project
the increase at this time, historically, the cost of staffing for short term lodging compliance
has been more than offset with revenues derived from discovery and enforcement efforts.
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Ordinance No. 2020-8: Updating the Newport Beach Municipal Code for
Short Term Lodging
February 25, 2020
Page 2
DISCUSSION:
On February 11, 2020, the City Council introduced and passed to second reading
Ordinance No. 2020-8, modifying Sections 1.05.020 Subsection (F), 3.16.060 and 5.95
of the Newport Beach Municipal Code, as these sections relate to short term lodging. The
City Council amended the draft ordinance and included a provision requiring the property
owner to post a copy of operational conditions inside the unit. The notice of conditions
will be based off a template the City will provide to the property owner. Additionally, the
City Council included a provision to require a minimum two -night stay in any booking. The
revisions would allow short term lodging in residential areas to continue, while preserving
the residential neighborhoods of Newport Beach.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action 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.
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).
ATTACHMENT:
Attachment A — Ordinance No. 2020-8
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ATTACHMENT A
ORDINANCE NO. 2020-8
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF NEWPORT BEACH, CALIFORNIA, AMENDING
SECTION 1.05.020 SUBSECTION (F), SECTION 3.16.060
AND CHAPTER 5.95 OF THE NEWPORT BEACH
MUNICIPAL CODE RELATING TO SHORT TERM
LODGING
WHEREAS, Section 200 of the Charter of the City of Newport Beach ("City")
vests the City Council with the authority to make and enforce all laws, rules and
regulations with respect to municipal affairs subject only to the restrictions and
limitations contained in the Charter and the State Constitution, and the power to
exercise, or act pursuant to any and all rights, powers, and privileges, or procedures
granted or prescribed by any law of the State of California;
WHEREAS, the City is a popular beach resort community that serves a large
number of tourists during the summer months;
WHEREAS, this influx of tourists burdens City streets and services with heavy
volume of vehicle traffic and heavy demand on parking, sewage, and refuse facilities,
paramedics and police services;
WHEREAS, the Police and Fire Departments frequently respond to complaints of
noise disturbances, disorderly conduct and other illegal activity at short term lodging
units;
WHEREAS, a large number of short term lodging units are located in residential
areas where dwelling units are occupied by the property owner or long term tenants and
these permanent residents are adversely impacted by the noise, traffic, refuse and
demand for parking resulting from occupancy of short term lodging units;
WHEREAS, the presence of such visitors within the City's residential
neighborhoods can sometimes disrupt the quietude and residential character of the
neighborhoods and adversely affect the community;
WHEREAS, the City has an interest in preserving its housing stock and the
quality and character of its existing single and multi -family residential neighborhoods;
WHEREAS, occupants of short term lodging units are generally not residents of
the City and the City has limited ability to enforce provisions of the Newport Beach
Municipal Code and the Penal Code related to disorderly conduct when violated by
occupants of short term lodging units;
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Ordinance No. 2020-8
Page 2 of 20
WHEREAS, on May 11, 1992, the City Council adopted Ordinance 92-13,
establishing regulations for the operation of short term lodging units within residential
zones to mitigate the impact of this use on the residents of the City; and
WHEREAS, the City Council has reviewed and considered evidence and
documentation attesting to the need to further regulate and control short term lodging
units in residential zones to ensure that: short term lodging units are regulated in a way
to maintain harmony with surrounding uses; and all transient occupancy taxes and
visitor serving fees are properly collected and remitted to the City.
NOW THEREFORE, the City Council of the City of Newport Beach ordains as
follows:
Section 1: Section 1.05.020 Subsection (F) of Chapter 1.05 of Title 1 of the
Newport Beach Municipal Code is hereby amended to read as follows:
F. In the case of administrative citations issued for violations of Chapter 5.28
[Live Entertainment Establishments]; Chapter 5.32 [Cafe Dances]; Section 10.50.020(H)
[violation of terms or conditions of a use permit issued by the City]; Section 14.36.030
resulting in bay or beach closure [Illicit Connections and Prohibited Discharges];
California Fire Code section 107.5 (as adopted by Code Section 9.04.010); or California
Fire Code section 107.5.1 (as adopted by Code Section 9.04.020), administrative fines
shall be assessed in the following amounts when authorized by the City Manager or his
or her designee:
1. A fine not exceeding one thousand dollars ($1,000.00) for a first violation;
2. A fine not exceeding two thousand dollars ($2,000.00) for a second violation
of the same ordinance or permit within one year from the date of the prior violation; and
3. A fine not exceeding three thousand dollars ($3,000.00) for a third violation,
or any subsequent violation, within one year from the date of the prior violations.
Section 2: Section 3.16.060 of Chapter 3.16 of Title 3 of the Newport Beach
Municipal Code is hereby amended to read as follows:
Ordinance No. 2020-8
Page 3 of 20
3.16.060 Registration of Hotel.
Within thirty (30) days after commencing business each operator of any hotel
renting occupancy to transients shall register the hotel with the Finance Director and
obtain a "transient occupancy registration certificate" to be at all times posted in a
conspicuous place on the premises. The certificate shall, among other things, state the
following:
A. The name of the operator;
B. The address of the hotel;
C. The date upon which the certificate was issued, and
D. The following statement: This transient occupancy registration certificate
signifies that the person named on the certificate has fulfilled the requirements of the
Uniform Transient Occupancy Tax Ordinance (Chapter 3.16 of the Newport Beach
Municipal Code) by registering with the Finance Director for the purpose of collecting
the tax from transients and remitting the tax to the Finance Director. This certificate
does not authorize any person to conduct any unlawful business, to conduct any lawful
business in an unlawful manner or to operate a hotel without strictly complying with all
local laws, including those requiring a permit from any board, commission, department
or office of the City. This certificate does not constitute a permit.
The requirements of this section shall not apply to the operator of a hotel
required to obtain a short term lodging permit pursuant to Section 5.95.020.
Section 3: Chapter 5.95 of Title 5 of the Newport Beach Municipal Code is
hereby amended to read as follows:
Ordinance No. 2020-8
Page 4 of 20
Chapter 5.95
SHORT TERM LODGING PERMIT
Sections:
5.95.005 Purpose and Findings.
5.95.010 Definitions.
5.95.015 Residential Properties Eligible for Short Term Lodging Permits.
5.95.017 Maximum Number of Permits.
5.95.020 Permit Required.
5.95.025 Agency.
5.95.030 Application for Permit.
5.95.035 Denial of Permit.
5.95.040 Filing Fee.
5.95.045 Conditions.
5.95.047 Violations of Permit Conditions by Transient User, Occupant or Guest.
5.95.050 Agent and Hosting Platform Responsibilities.
5.95.055 Issuance of Administrative Subpoenas.
5.95.060 Violations and Penalties.
5.95.065 Suspensions and Revocations.
5.95.070 Permits and Fees Not Exclusive.
5.95.080 License and Permit Closure.
5.95.005 Purpose and Findings.
The City Council of the City of Newport Beach finds and declares as follows:
A. An ever-increasing number of tourists renting short term lodging units is
increasing the demand for City services and creating adverse impacts in residential
zones.
B. Over a thousand dwelling units within residential zones near the City's beaches
and harbor are rented for less than thirty (30) consecutive calendar days with the vast
majority of those rentals occurring during the summer when the demand for parking and
City services is the greatest.
C. Many of the occupants of short term lodging units are permanent residents of
areas distant from Newport Beach and the City has no effective way to prevent
occupants from continuing to violate provisions of this Code and the Penal Code
relating to noise, disturbances and disorderly conduct. The only effective way to
minimize the problems associated with occupancy of short term lodging units is to
impose responsibility on the owner of the property, either personally or through an
agent, to control the conduct of guests and occupants.
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Ordinance No. 2020-8
Page 5 of 20
D. Numerous incidents involving excessive noise, disorderly conduct, vandalism,
overcrowding, traffic congestion, illegal vehicle parking and accumulation of refuse are
directly related to short term lodging units, which increasingly require response from
police, fire, paramedic and other City services.
E. The increase in demand for City services resulting from short term lodging units
overburdens, and threatens the City's ability to provide necessary services.
F. Many short term lodging units are operated by agents and/or absentee owners
who exercise little or no supervision or control of occupants.
G. There has been an increase in the number of lodging units booked on a short
term basis where the owner of the unit does not have a short term lodging permit,
affecting the ability of the City to properly regulate the impacts caused by the illegal
operation.
H. There has been an increase in the number of lodging units booked on a short
term basis where the owner of the property has not taken steps to ensure the transient
occupancy tax and visitor service fee is collected and/or remitted to the City, resulting in
an unfair business advantage to these illegal operations and loss of revenue necessary
to provide City services.
I. Problems with short term lodgings are particularly acute in residential districts
where the peace, safety and general welfare of the long term residents is threatened.
J. There has been an increase in the number of short term rentals in areas of the
City outside of the Coastal Zone, which affects neighborhoods that have traditionally not
had short term rentals. It is in the City's interest to stop issuing new permits in areas
outside the Coastal Zone after March 31, 2020 and to stop renewing permits for short
term lodging units outside of the Coastal Zone after March 31, 2030.
K. To ensure the effective enforcement of this Code, it is necessary to have the
owner include the short term lodging permit number issued by the City on all
advertisements for a short term lodging unit so the transient user knows the owner is
authorized to rent the lodging unit on a short term basis.
L. To make sure the transient user knows the total cost associated with renting the
lodging unit and to prevent fraud, it is necessary for the owner to ensure the transient
user is informed of the amount of the transient occupancy tax and visitor service fee,
prior to completing a booking transaction.
M. The restrictions of this chapter are necessary to preserve the City's housing
stock, the quality and character of the City's residential neighborhoods as well as to
prevent the continued burden on City services and adverse impacts on residential
neighborhoods posed by short term lodgings.
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Ordinance No. 2020-8
Page 6 of 20
5.95.010 Definitions.
For the purpose of this chapter, the following definitions shall apply:
A. "Accessory dwelling unit" shall have the same definition as set forth in Chapter
20.70 of Title 20 of this Code.
B. "Agent" shall mean any person who is authorized in writing by the owner to
represent and act for an owner.
C. "Booking transaction" shall mean any reservation or payment service provided by
a person who facilitates a short term lodging rental transaction between a transient user
and owner for the use of a unit for a period of less than thirty (30) consecutive calendar
days.
D. "City Manager" shall mean the City Manager of the City or his or her designee.
E. "Finance Director" shall mean the Finance Director of the City or his or her
designee.
F. "Gross floor area," shall mean the area of the lodging unit that includes the
surrounding exterior walls and any interior finished portion of a structure that is
accessible and that measures more than six feet from finished floor to ceiling.
Stairwells and elevator shafts above the first level shall be excluded from the calculation
of gross floor area.
G. "Home -sharing" shall mean an activity whereby the owner hosts a transient user
in the owner's lodging unit, for compensation, for periods of less than thirty (30)
consecutive calendar days, during which time the owner of the unit lives onsite, in the
unit, throughout the transient user's stay and the owner, the transient user and any
other occupants live together in the same unit as a single housekeeping unit.
H. "Hosting platform" shall mean a person, other than an owner or agent, who
participates in the short term lodging business by collecting or receiving a fee, directly or
indirectly through an agent or intermediary, for conducting a booking transaction using
any medium of facilitation.
I. "Lodging unit" or "unit" shall mean a "dwelling unit" as that term is defined in
Chapter 20.70, of Title 20 of this Code. An accessory dwelling unit shall not be
considered a lodging unit or unit for purposes of this chapter.
J. "Owner" shall mean the person(s) that hold(s) legal and/or equitable title to the
lodging unit.
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Ordinance No. 2020-8
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K. "Person" shall mean any individual and any form of business entity including, but
not limited to, all domestic and foreign corporations, associations, syndicates, joint stock
corporations, partnerships of every kind, clubs, business or common law trusts,
societies, or limited liability company.
L. "Residential district" shall mean those areas of the City so designated by Title 20
of this Code as well as any other area in the City designated for a residential use as part
of a Planned Community Development Plan, Specific Area Plan or Planned Residential
District.
M. "Short term" shall mean a lodging unit that is rented or leased as a single
housekeeping unit for a period of less than thirty (30) consecutive calendar days. This
also includes home -sharing.
N. "Short term lodging unit registry" shall mean the published registry maintained by
the City that sets forth a list of all owners and the address of all units that have a valid
short term lodging permit and business license with the City, a copy of which is
available, without charge, to any person who requests a copy and which shall be
accessible on the City's website.
O. "Single housekeeping unit" shall have the same definition as set forth in Chapter
20.70 of Title 20 of this Code.
P. "Transient" or "Transient user" shall mean any person or persons who, for any
period less than thirty (30) consecutive calendar days either at his own expense or at
the expense of another, obtains lodging in a lodging unit or the use of any lodging space
in any unit, for which lodging or use of lodging space a charge is made.
5.95.015 Residential Properties Eligible for Short Term Lodging Permits.
Only properties in a residential district that are authorized under Titles 20 and 21 of this
Code and this chapter shall be eligible for a short term lodging permit.
A. Subsequent to June 1, 2004, no permit shall be issued to or renewed for any
dwelling unit on any parcel zoned for "Single-family Residential (R-1)" or that is
designated for a single-family residential use as part of a Planned Community
Development Plan, Specific Area Plan or Planned Residential District, unless a permit
has previously been issued for that lodging unit and the permit was not subsequently:
1. Closed by the Finance Director because the unit is demolished or rebuilt
on or after July 1, 2020;
Ordinance No. 2020-8
Page 8 of 20
2. Closed by the Finance Director because the unit is modified in any way
that increases gross floor area by more than twenty-five percent (25%) on or after July
1, 2020; or
3. Revoked.
B. Prior to April 1, 2030, no permit shall be issued to or renewed for any lodging unit
located outside the Coastal Zone, unless the owner had a permit for the lodging unit on
or before March 31, 2020, and the permit was not subsequently revoked.
C. On or after April 1, 2030, no permit shall be issued to or renewed for any lodging
unit located outside the Coastal Zone.
D. No permit shall be issued to or renewed for any owner that does not have at least
one parking space for each unit in a garage, carport, or driveway at the property.
5.95.017 Maximum Number of Permits.
A. The maximum number of short term lodging permits shall be limited to sixteen
hundred (1,600) at any time.
B. If the City has issued the maximum number of permits available, the City shall
maintain a waiting list. An application for placement on the waiting list shall be
submitted to the Finance Director, on a form approved by the Finance Director, and
shall be accompanied by a fee established by resolution of the City Council. In the
event a short term lodging permit becomes available, the Finance Director shall notify
the person or persons next in order on the waiting list. The notice shall specify that
applications will be accepted for ten (10) calendar days after the date of the notice, and
that failure to apply within the ten (10) calendar day period shall result in removal of the
person or persons receiving notice from the waiting list. Notice shall be deemed given
when deposited in the United States mail, with the first class postage prepaid, and
addressed as specified by the person or persons on the waiting list. The City shall not
be liable for a failure to notify any person or persons on the waiting list since placement
on the list does not create any property right in any person or persons on the list nor any
contractual obligation on the part of the City.
5.95.020 Permit Required.
No owner of a lodging unit shall advertise for rent or rent a lodging unit located within a
residential district for a short term without a valid short term lodging permit for that unit
issued pursuant to this chapter.
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Ordinance No. 2020-8
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5.95.025 Agency.
An owner may retain an agent to comply with the requirements of this chapter,
including, without limitation, the filing of an application for a short term lodging permit,
the management of the short term lodging unit or units, and the compliance with the
conditions to the short term lodging permit. The permit shall be issued only to the owner
of the short term lodging unit or units. The owner of the short term lodging unit or units
is responsible for compliance with the provisions of this chapter and the failure of an
agent to comply with this chapter shall be deemed non-compliance by the owner.
5.95.030 Application for Permit.
An application for a short term lodging permit shall be filed with the Finance Director
upon forms provided by the City and shall contain the following information:
A. The name, address and telephone number of the owner of the unit for which the
short term lodging permit is to be issued.
B. The name, address and telephone number of the agent, if any, of the owner of
the unit.
C. Evidence of a valid business license issued by the City for the separate business
of operating a short term lodging unit or units.
D. The number of bedrooms in the lodging unit.
E. The number of parking spaces available onsite and a description indicating the
location and size of each parking space.
F. A proposed location for the placement of the sign required to be posted on the
exterior of the unit.
G. A certification that the applicant has reviewed the covenants, conditions and
restrictions, if any, and a short term use is permitted at the location pursuant to the
terms of the covenants, conditions and restrictions, if any.
H. Acknowledgement of receipt and inspection of a copy of all regulations pertaining
to the operation of a short term lodging unit.
I. Such other information as the Finance Director deems reasonably necessary to
administer this chapter.
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Ordinance No. 2020-8
Page 10 of 20
5.95.035 Denial of Permit.
If permits are available for issuance, no application filed by an owner for a permit or
renewal of a permit for a unit eligible to be used as a short term lodging unit, as
provided for in Section 5.95.015 and this Code, shall be denied unless the owner does
not have a current valid business license; or the short term lodging permit for the same
unit and issued to the same owner has been revoked.
5.95.040 Filing Fee.
An application or renewal application for a short term lodging permit shall be
accompanied by a fee established by resolution of the City Council, provided, however,
the fee shall be no greater than necessary to defer the cost incurred by the City in
administering the provisions of this chapter and for providing the answering service.
5.95.045 Conditions.
A. All permits issued pursuant to this chapter are subject to the following standard
conditions:
1. The owner shall enter into a written agreement with the transient user that
requires all persons residing in the short term lodging unit to live as a single
housekeeping unit; and that the transient user limit the overnight occupancy of the short
term lodging unit to two occupants per bedroom plus two persons per lodging unit. The
owner shall ensure that the overnight maximum occupancy is not exceeded.
2. The owner shall use best efforts to ensure that the transient user,
occupants and/or guests of the short term lodging unit do not create unreasonable noise
or disturbances, engage in disorderly conduct, or violate provisions of this Code or any
state or federal law pertaining to noise, disorderly conduct, the consumption of alcohol,
or the use of illegal drugs.
3. The owner shall, upon notification that any transient user, occupant and/or
guest of his or her short term lodging unit has created unreasonable noise or
disturbances, engaged in disorderly conduct or committed violations of this Code or any
state or federal law pertaining to noise, disorderly conduct, the consumption of alcohol
or the use of illegal drugs, promptly use best efforts to prevent a recurrence of such
conduct by any transient user, occupant or guest.
4. The owner of the short term lodging unit shall use best efforts to ensure
compliance with all the provisions of Title 6 of this Code.
5. The owner of the short term lodging unit shall provide the transient user
with a copy of Sections 5.95.047, 10.28.007, 10.28.010, 10.28.020, 10.58.030, and
10.66.020 of this Code.
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Ordinance No. 2020-8
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6. The owner of the short term lodging unit shall post a copy of the short term
lodging permit and a copy of the conditions set forth in this subsection in a conspicuous
place within the unit. The notice shall be in substantial compliance with a template
created by the City, which shall be available on the City website, and contain the
following:
a. The name of the local contact person(s) and phone number at
which that person(s) may be reached on a twenty-four (24) hour basis. The local
person(s) must be located within twenty-five (25) miles of the unit and shall respond to
any call related to the unit within thirty (30) minutes.
b. The number and location of onsite parking spaces.
c. The street sweeping schedule for all public right-of-ways within 300
feet of the unit.
d. The trash collection schedule for the unit, and the Code rules and
regulations concerning the timing, storage and placement of trash containers and
recycling requirements.
e. Notification that no amplified sound or reproduced sound is
allowed outside or audible from the property line between the hours of 10:00 p.m. and
10:00 a.m.
f. Notification that any transient user, occupant or guest is
responsible for all activities occurring on the property and that any transient user,
occupant or guest may be cited and fined for creating a disturbance or violating any
provision of this Code.
7. With respect to any short term lodging unit that is located in any Safety
Enhancement Zone, the owner of the unit and any agent retained by the owner shall
take immediate action during the period that the Safety Enhancement Zone is in effect
to prevent any transient user, occupant or guest from engaging in disorderly conduct or
committing violations of this Code or state or federal law pertaining to noise, disorderly
conduct, the consumption of alcohol or the use of illegal drugs.
8. The owner shall:
a. Ensure that all transient occupancy taxes and visitor service fees
are collected and remitted to the City and otherwise comply with all transient occupancy
tax and visitor service fee requirements, as set forth in Chapters 3.16 and 3.28.
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Ordinance No. 2020-8
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b. If the owner uses an agent to collect and remit the transient
occupancy tax and the visitor service fee, the owner shall be responsible for ensuring
that the agent collects and remits the transient occupancy tax and the visitor service fee
to the City pursuant to the requirements set forth in this chapter, Chapter 3.16 and
Chapter 3.28.
C. If the owner uses a hosting platform to collect and remit the
transient occupancy tax and the visitor service fee, the owner shall: (i) be responsible
for ensuring that the hosting platform collects and remits the transient occupancy tax
and the visitor service fee to the City in accordance with this chapter; and (ii) when filing
a return in accordance with Sections 3.16.070 and 3.28.040, the owner shall provide the
City with a copy of all receipts showing the date the short term lodging unit was rented,
the amount of transient occupancy tax and visitor service fee collected by the hosting
platform, and proof that the transient occupancy tax and visitor service fee was remitted
to the City.
9. The owner shall utilize the City's answering service and shall provide the
City with the name and twenty-four (24) hour phone number of a local contact person(s)
(who reside within twenty-five (25) miles of the property) who shall ensure compliance
with this chapter in a timely manner. The owner or agent must provide a new local
contact person and his or her phone number within five (5) business days, if there is a
change in the local contact person(s).
10. The owner shall ensure that all available parking spaces onsite, which
may include garage, carport, and driveway spaces, as well as tandem parking are
available for the transient user, occupant or guest of the short term lodging unit. The
owner shall disclose the number of parking spaces available onsite and shall inform the
transient user, occupant and/or guest that street parking may not be available.
11. The owner shall maintain a valid business license and short term lodging
permit when engaging in short term lodging.
12. The owner shall include the City issued short term lodging permit number
on all advertisements for the rental of the short term lodging unit and shall ensure the
transient user is informed of the amount of the transient occupancy tax and visitor
service fee prior to completion of the booking transaction.
13. The owner shall ensure that a permitted short term lodging unit is only
used for residential purposes and not used for non-residential uses, including, but not
limited to, large commercial or non-commercial gatherings, commercial filming and/or
non -owner wedding receptions.
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Ordinance No. 2020-8
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14. The owner shall ensure that no amplified sound, or reproduced sound is
used outside or audible from the property line between the hours of 10:00 p.m. and
10:00 a.m. and that the transient user does not violate the requirements set forth in this
chapter, Chapters 10.28, 10.58 and 10.66.
15. The owner shall post, on a sign not to exceed two square feet, which shall
be approved by the City, the local primary contact name, the phone number for the
City's answering service, and maximum overnight unit occupancy. The sign shall be
posted at a location on the exterior of the unit readily visible from public right of way,
subject to the approval by the City, in lettering of sufficient size to be easily legible.
16. The owner shall not rent a short term lodging unit for less than two
consecutive calendar days.
B. The City Manager shall have the authority to impose additional standard
conditions, applicable to all short term lodging units, as necessary to achieve the
objectives of this chapter.
C. The City Manager shall have the authority to impose additional conditions on any
permit in the event of any violation of the conditions to the permit or the provisions of
this chapter subject to compliance with the procedures specified in Section 5.95.065.
5.95.047 Violations of Permit Conditions by Transient User, Occupant or Guest.
In addition to other provisions of this Code, it shall be unlawful for any transient user,
occupant or guest of a short term lodging unit to:
A. Exceed the overnight occupancy limit designated for the short term lodging unit.
B. Use street parking prior to utilizing all available onsite parking space(s) for the
lodging unit.
C. Place trash for collection in violation of this Code's rules and regulations
concerning:
1. The timing, storage or placement of trash containers; or
2. Recycling requirements.
D. Amplify or reproduce sound between the hours of 10:00 p.m. and 10:00 a.m.:
1. Outside of the lodging unit; or
2. That is audible from the property line for the lodging unit.
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Ordinance No. 2020-8
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E. Use the short term lodging for any non-residential purpose, including, but not
limited to, large commercial or non-commercial gatherings, commercial filming and/or
non -owner wedding receptions.
5.95.050 Agents and Hosting Platform Responsibilities.
A. Agents or hosting platforms that receive payment for the rental of a short term
lodging unit shall collect all applicable transient occupancy taxes and visitor service fees
that are imposed on the transient, pursuant to Chapters 3.16 and 3.28, from the
transient, or from the person paying for such rental, at the time payment for such rental
is made. The agent and hosting platform shall remit to the City any transient occupancy
taxes or visitor service fees collected by the hosting platform or agent to the City before
the last day of the month following the close of each calendar quarter or on the day
specified by the Finance Director if a different reporting period has been established.
Nothing herein shall be deemed to relieve an operator, as that term is defined in
Sections 3.16.020 and 3.28.020, from complying with the requirements set forth in
Chapters 3.16 and 3.28 of this Code.
B. Subject to applicable laws, agents and hosting platforms shall disclose to the City
on a regular basis each home -sharing and vacation rental listing located in the City, the
names of the persons responsible for each such listing, the address of each such listing,
the length of stay for each such listing and the price paid for each stay.
C. Agents and hosting platforms shall not:
1. Complete any booking transaction for any short term lodging unit unless
the unit is listed in the City's short term lodging unit registry as having obtained and
maintained a valid business license and short term lodging permit issued by the City.
2. Collect or receive a fee, directly or indirectly for facilitating or providing
services ancillary to an unpermitted short term lodging unit including, but not limited to,
insurance, concierge services, catering, restaurant bookings, tours, guide services,
entertainment, cleaning, property management, or maintenance of the short term
lodging unit.
D. A hosting platform operating exclusively on the internet, which operates in
compliance with subsection (A), (B), and (C) above, shall be presumed to be in
compliance with this chapter, except that the hosting platform remains responsible for
compliance with the administrative subpoena provisions of this chapter.
E. The provisions of the section shall be interpreted in accordance with otherwise
applicable state and federal law(s) and will not apply if determined by the City to be in
violation of, or preempted by, such law(s).
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5.95.055 Issuance of Administrative Subpoenas.
The City Manager shall have the authority to issue and serve administrative subpoenas
to the owner, agent or hosting platform, as necessary, to obtain specific information
regarding short term rental listings located in the City, including but not limited to, the
names of the persons responsible for each such listing, the address of each such listing,
the length of stay for each such listing and the price paid for each stay, to determine
whether the short term rental listing complies with this chapter. Any subpoena issued
pursuant to this section shall not require the production of information sooner than thirty
(30) calendar days from the date of service. A person that has been served with an
administrative subpoena may seek judicial review during that thirty calendar day (30)
period. Failure to respond to an administrative subpoena in accordance with the terms
set forth therein shall be punishable in accordance with Section 5.95.060 and the City
may file a judicial action to compel compliance with the subpoena.
5.95.060 Violations and Penalties.
A. Any violation of this chapter is punishable as provided in Chapters 1.04 and
Chapter 1.05 of the Code.
B. Except as provided in subsection (C), in the case of any administrative citation
issued pursuant to this chapter, administrative fines shall be assessed in the following
amounts:
1. A fine not exceeding two hundred and fifty dollars ($250.00) for a first
violation.
2. A fine not exceeding five hundred dollars ($500.00) for a second violation,
within one year of the date of the prior violation.
3. A fine not exceeding one thousand dollars ($1,000.00) for a third violation,
or any subsequent violation, within one year of the date of the prior violation.
C. In the case of a short term lodging permit for a dwelling that is located in a Safety
Enhancement Zone, the penalty for the failure to comply with any standard condition
during the period that the Safety Enhancement Zone is in effect shall be a fine of one
thousand dollars ($1,000.00).
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5.95.065 Suspensions and Revocations.
In addition to any fine or penalty that may be imposed pursuant to any provision of this
Code including, but not limited to Section 5.95.060, a short term lodging permit for a unit
may be suspended or revoked as provided in this section.
A. Suspensions/Revocations.
1. Except as otherwise provided in this subsection, if any person violates a
short term lodging permit condition two (2) or more times in any twelve (12) month
period or any other provision of this Code, state law or federal law, two (2) or more
times in any twelve (12) month period, and the violation relates in any way to the unit
that has a short term lodging permit, the short term lodging permit for the unit may be
suspended for a period of six (6) months in accordance with subsection (B).
2. In the case of a short term lodging permit for a unit that is located in a
Safety Enhancement Zone, if there is a violation of any provision of this Code during the
period that the Safety Enhancement Zone is in effect, the short term lodging permit for
the unit may be suspended for a period of one (1) year or revoked in accordance with
subsection (B).
3. If a lodging unit that is subject to a short term lodging permit has been the
location of two or more loud or unruly gatherings, as defined in Chapter 10.66 of this
Code, while the lodging unit was occupied on a short term basis, within any twenty-four
(24) month period, the permit may be suspended for a period of one (1) year or revoked
in accordance with the subsection (B). A loud or unruly gathering that occurred prior to
the passage of fourteen (14) calendar days from the mailing of notice to the owner in
compliance with Section 10.66.030(D) shall not be included within the calculation of the
two or more loud or unruly gatherings required to revoke a short term lodging permit.
4. If a person violates Section 5.95.020 in regards to any unit that has had a
short term lodging permit suspended pursuant to subsection (B), the short term lodging
permit for the unit may be revoked in accordance with subsection (B).
5. If any person violates a short term lodging permit condition or any other
provision of this Code, state or federal law within six (6) months of having a previously
suspended short term lodging permit reinstated for a unit, and the violation relates in
any way to the unit that has the short term lodging permit, the short term lodging permit
for the unit may be revoked in accordance with subsection (B).
6. If any person violates a short term lodging permit condition three (3) or
more times in any twelve (12) month period or provision of this Code, state or federal
law three (3) or more times in any twelve (12) month period, and the violation relates in
any way to the unit that has a short term lodging permit, the short term lodging permit
for the unit may be revoked in accordance with subsection (B).
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7. If any person fails to collect and remit transient occupancy tax or the
visitor service fee in accordance with the requirements of this chapter, Chapters 3.16 or
3.28 in regards to any unit that has a short term lodging permit, two or more times within
any thirty six (36) month period, the short term lodging permit for the unit may be
revoked in accordance with subsection (B).
B. Permits shall be suspended or revoked, only in the manner provided in this
section.
1. The Finance Director shall conduct an investigation whenever he or she
has reason to believe that an owner has committed a violation of a permit condition, this
Code, state or federal law related to a permitted unit. Such investigation may include,
but is not limited to, on-site property inspections. Should the investigation reveal
substantial evidence to support a finding that a violation occurred that warrants a
suspension or revocation of the short term lodging permit, the Finance Director shall
issue written notice of intention to suspend or revoke the short term lodging permit. The
written notice shall be served on the owner in accordance with Section 1.08.080, and
shall specify the facts which, in the opinion of the Finance Director constitute substantial
evidence to establish grounds for imposition of the suspension and/or revocation, and
specify the proposed time the short term lodging permit shall be suspended and/or that
the short term lodging permit shall be revoked within thirty (30) calendar days from the
date the notice is given, unless the owner files, before the suspension and/or
revocation becomes effective, a request for hearing before a hearing officer, who shall
be retained by the City, and pays the fee for the hearing established by resolution of the
City Council.
2. If the owner requests a hearing and pays the hearing fee, established by
resolution of the City Council, within the time specified in subsection (13)(1), the Finance
Director shall serve written notice on the owner, pursuant to Section 1.08.080, setting
forth the date, time and place for the hearing. The hearing shall be scheduled not less
than fifteen (15) calendar days, nor more than sixty (60) calendar days, from the date on
which notice of the hearing is served by the Finance Director. The hearing shall be
conducted according to the rules normally applicable to administrative hearings. At the
hearing, the hearing officer will preside over the hearing, take evidence and then submit
proposed findings and recommendations to the City Manager. The City Manager shall
suspend or revoke the short term lodging permit only upon a finding that a violation has
been proven by a preponderance of the evidence, and that the suspension or
revocation is consistent with the provisions of this section. The City Manager shall
render a decision within thirty (30) calendar days of the hearing and the decision shall
be final.
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C. If a short term lodging permit is suspended, it shall be the owner's responsibility
to vacate any future bookings and remove all advertisements related to the short term
rental of the unit during the term of the suspension. If a short term lodging permit is
revoked, it shall be the owner's responsibility to vacate any future bookings and remove
all advertisements related to the short term rental of the unit.
D. After any suspension, the owner may reapply for reinstatement of the short term
lodging permit which shall be processed in accordance with Section 5.95.030, provided
the owner has paid the City all amounts owed the City in accordance with this chapter
and Chapters 3.16 and 3.28 of this Code.
5.95.070 Permits and Fees Not Exclusive.
Permits and fees required by this chapter shall be in addition to any license, permit or
fee required under any other chapter of this Code. The issuance of any permit pursuant
to this chapter shall not relieve the owner of the obligation to comply with all other
provisions of this Code including, but not limited to, those provisions pertaining to the
use and occupancy of the lodging unit or the property on which it is located as well as
the collection and remittance of transient occupancy taxes and visitor service fees in
accordance with this chapter and Chapters 3.16 and 3.28.
5.95.080 License and Permit Closure.
A. Any owner that has ceased operating a short term lodging unit shall inform the
Finance Director in writing of the date of the last rental, and having done such, the short
term lodging permit shall be closed. The City will send a final transient occupancy tax
and visitor service fee bill, which will be due and payable thirty (30) days from the date
of the invoice.
B. The Finance Director shall close any permit that has no short term lodging
activity for a period of two consecutive years by remitting zero dollars on the required
transient occupancy tax and visitor service fee forms and or has failed to return the
transient occupancy and visitor service forms. After any permit closure pursuant to this
subsection, the owner may reapply for reinstatement of the short term lodging permit
which shall be processed in accordance with Section 5.95.030.
C. Any dwelling unit on any parcel zoned for "Single-family Residential (R-1)" or is
designated for single-family residential use as part of a Planned Community
Development Plan, Specific Area Plan or Planned Residential District that has a short
term lodging permit issued on or before June 1, 2004, shall have its short term lodging
permit closed by the Finance Director if the unit is demolished or rebuilt on or after July
1, 2020; or if the unit is modified in any way that increases gross floor area by more
than twenty-five percent (25%) on or after July 1, 2020.
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Section 4: The recitals provided in this ordinance are true and correct and are
incorporated into the substantive portion of this ordinance.
Section 5: If any section, subsection, sentence, clause or phrase of this
ordinance is for any reason held to be invalid or unconstitutional, such decision shall not
affect the validity or constitutionality of the remaining portions of this ordinance. The
City Council hereby declares that it would have passed this ordinance and each section,
subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or
more sections, subsections, sentences, clauses or phrases be declared invalid or
unconstitutional.
Section 6: The City Council finds the introduction and adoption of this
ordinance is not subject to the California Environmental Quality Act ("CEQA") pursuant
to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable
indirect physical change in the environment) and 15060(c)(3) (the activity is not a
project as defined in Section 15378) of the CEQA Guidelines, California Code of
Regulations, Title 14, Division 6, Chapter 3, because it has no potential for resulting in
physical change to the environment, directly or indirectly.
Section 7: Except as expressly modified in this ordinance, all other Sections,
Subsections, terms, clauses and phrases set forth in the Newport Beach Municipal
Code shall remain unchanged and shall be in full force and effect.
Section 8: The Mayor shall sign and the City Clerk shall attest to the passage
of this ordinance. The City Clerk shall cause the ordinance, or a summary thereof, to be
published pursuant to City Charter Section 414. The Chapter headings for Section
5.95.015, Residential Properties Eligible for Short Term Lodging Permits and Section
5.95.017, Maximum Number of Permits, as set forth in Section 3 of this ordinance, shall
become effective thirty (30) days after adoption of this ordinance. Section 5.95.015,
Residential Properties Eligible for Short Term Lodging Permits, and Section 5.95.017,
Maximum Number of Permits, as set forth in Section 3 of this ordinance, shall become
effective thirty (30) days after the adoption of this ordinance. The remainder of this
ordinance shall become effective July 1, 2020.
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This ordinance was introduced at a regular meeting of the City Council of the City
of Newport Beach held on the 11th day of February, 2020, and adopted on the 25th day
of February, 2020, by the following vote, to -wit:
AYES:
NAYS:
ABSENT:
WILL O'NEILL, MAYOR
ATTEST:
LEILANI I. BROWN, CITY CLERK
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
AARON C. HARP, CITY ATTORNEY
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