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Home My WebLink About18 - Short Term Lodging Amendments to Chapter 5.95 and Title 21 of the NBMC (PA2020-048)Q �EwPpRT CITY OF O � z NEWPORT BEACH <,FORN'P City Council Staff Report October 13, 2020 Agenda Item No. 18 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, AICP, Principal Planner, jmurillo@newportbeachca.gov PHONE: 949-644-3209 TITLE: Ordinance No. 2020-26: Chapter 5.95 and Title 21 (PA2020-048) ABSTRACT: Short Term Lodging Amendments to of the Newport Beach Municipal Code For City Council's consideration is an amendment to the short-term lodging regulations. In response to resident complaints, the City Council formed a Short -Term Lodging Ad Hoc Committee ("Ad Hoc Committee") to review the current regulations. The Ad Hoc Committee's recommendations include: (1) establishing a minimum 3 -night stay requirement; (2) instituting a maximum cap of 1,550 short-term lodging permits citywide and the creation of a waiting list; (3) adding regulations related to the transferability of permits; (4) establishing a minimum age of 25 for the rental of short-term lodging units; and (5) requiring each owner to be responsible for parking violations issued to transient users while utilizing the unit. While most of the recommendations focus on Chapter 5.95 (Short Term Lodging Permit) of the Newport Beach Municipal Code (NBMC), minor amendments are needed to Title 21 (Local Coastal Program Implementation Plan). RECOMMENDATION: a) Conduct a public hearing; b) Find this project exempt from the California Environmental Quality Act (CEQA) pursuant to Section 21065 of CEQA and State CEQA Guidelines Sections 15060 (c)(2), 15060 (c)(3), and 15378. The proposed action is also exempt pursuant to State CEQA Guidelines Section 15061(b)(3) because it has no potential to have a significant effect on the environment; c) Waive full reading, read by title only, introduce Ordinance No. 2020-26, An Ordinance of the City Council of Newport Beach, California, Amending Portions of Chapter 5.95 of the Newport Beach Municipal Code Relating to Short Term Lodging, and pass to second reading on October 27, 2020; and 18-1 Ordinance No. 2020-26: Short Term Lodging Amendments to Chapter 5.95 and Title 21 of the Newport Beach Municipal Code (PA2020-048) October 13, 2020 Page 2 d) Adopt Resolution No. 2020-91, A Resolution of the City Council of the City of Newport Beach, California, Authorizing Submittal of Local Coastal Program Amendment No. LC2020-007 to the California Coastal Commission, an Amendment to Title 21 (Local Coastal Program Implementation Plan) of the Newport Beach Municipal Code Related to Short -Term Lodging (PA2020-048). FUNDING REQUIREMENTS: There is no fiscal impact related to this item. DISCUSSION: Background NBMC Chapter 5.95 requires an owner of a property to obtain a short-term lodging permit from the Finance Director prior to commencement of operations. As of the date this report was written, the City has 1,500 active permits, which include 1,436 on coastal zone properties (95.7°/x) and 64 on non -coastal zone properties (4.3%). The number of active short-term lodging permits far exceeds the number of permits of similar cities (see Figure 1). Figure 1 City Active STL Permits San Clemente* Carpinteria* Huntington Beach* Anaheim Dana Point* Santa Monica* Carlsbad* Newport Beach* * = coastal community 172 215 266 277 307 340 690 1,500 On April 14, 2020, the City Council adopted Resolution 2020-37 (Attachment C) initiating the subject Local Coastal Program (LCP) Amendment. Most Recent Changes Affecting Short -Term Lodging Permits In January 2019, the City Council held a study session on short-term lodging and later formed an Ad Hoc Committee ("Committee") to review and recommend changes to the ordinance. The Committee included City Council Members Diane Dixon, Joy Brenner, and Jeff Herdman. The Committee members hosted several community events and meetings to gain public input from residents, property owners, as well as property managers and agents. 18-2 Ordinance No. 2020-26: Short Term Lodging Amendments to Chapter 5.95 and Title 21 of the Newport Beach Municipal Code (PA2020-048) October 13, 2020 Page 3 In February 2020, after the Committee made its recommendations and more public comments were submitted, the City Council tasked the Committee with refining its recommendations. While the Committee was working on honing its recommendations, the COVID-19 outbreak occurred, and the City Council adopted emergency ordinances to protect Newport Beach residents. In May 2020, the City Council adopted Emergency Ordinance Nos. 2020-003 and 2020-004, which prohibited the issuance of any new short- term lodging permits and required a three -night minimum stay for all areas of the City, except for Newport Island where rentals were prohibited. In June 2020, the City Council adopted Emergency Ordinance No. 2020-006 that required a four -night minimum stay on Newport Island. These requirements are in effect until the end of the emergency period. At the June 23, 2020, City Council meeting, the Council introduced Ordinance No. 2020- 15 amending the City's short-term lodging regulations. During the meeting, the City Council took and considered further input from the public on the proposed changes. In total, nine public meetings were held with the community, including three district town hall meetings. Each meeting allowed community input from both owners of short-term rentals and residents living near them. At the July 14, 2020, City Council meeting, the Council adopted Ordinance No. 2020-15, amending Chapter 5.95 (Short Term Lodging Permit) of the NBMC (Attachment D). This ordinance was adopted in response to complaints about unlicensed units, noise, too many guests in one unit, shortage of available street parking, and improper use of trash containers at short-term lodging units. Some of the changes adopted in the new ordinance require permit holders to post their permit number on all advertisements, register a local contact person with the City, limit the number of transient users that can stay overnight at a unit, comply with stricter noise standards, and provide transient users with a copy of a good neighbor policy. The Committee had further recommendations that were not part of Ordinance No. 2020- 015 because these recommendations are subject to review by the California Coastal Commission. Therefore, a separate ordinance was drafted and presented to the Planning Commission as it affects Title 21 (Local Coastal Implementation Plan). July 23. 2020 Plannina Commission Review and Recommendation At the July 23, 2020, Planning Commission meeting, staff presented draft code revisions to Title 21 (Local Coastal Program Implementation Plan) of the NBMC that incorporated the Committee's recommendations related to the regulation of short-term lodging citywide, including the coastal zone. These proposed revisions included the following: • Prohibiting New Permits - The City would cease the issuance of new short-term lodging permits. Existing permits could be renewed and would be required to be continuously maintained. Should an owner let a permit lapse, the owner would not be able to obtain a new permit; and 18-3 Ordinance No. 2020-26: Short Term Lodging Amendments to Chapter 5.95 and Title 21 of the Newport Beach Municipal Code (PA2020-048) October 13, 2020 Page 4 • Minimum Night Stay - If the property includes an owner -occupied unit, a three - night minimum stay would be required. If the property does not have an owner - occupied unit, a six -night minimum stay would be required. Extensive public comments were received, both in support of the proposed revisions and against. At the conclusion of the hearing, the Planning Commission adopted Resolution No. PC2020-027 (Attachment E) by a majority vote (4 ayes, 2 nays) recommending the City Council deny Local Coastal Program Amendment No. LC2020-007. The Planning Commission found that the proposed changes to Title 21 were premature and that enforcement of the recently adopted amendments to Chapter 5.95 pursuant to Ordinance No. 2020-15 by the City Council on July 14, 2020, may resolve many of the impacts that short-term lodging units have on neighboring residents. September 8, 2020 City Council Study Session Based on the Planning Commission's recommendation, City staff brought the matter to the City Council at a study session, which was held on September 8, 2020, to discuss the Planning Commission's recommendation, as well as revised recommendations from the Committee. The study session minutes are included as Attachment F. At the conclusion of the study session, the City Council directed staff to prepare the following revisions to Chapter 5.95 (Short -Term Lodging) and Title 21 (Local Coastal Program Implementation Plan) of the NBMC, as applicable: • Minimum Night Stay- Require a minimum 3 -night stay for the rental of all short term lodging units. • Limits on Permits- Establish a maximum cap of 1,550 short-term lodging permits and creating a waiting list for the issuance of new permits once the cap is reached. • Minimum Age- Limit the rental of all short term lodging units to transient users age of 25 year and older. • Transferability- Allow the transferability of short-term lodging permits to immediate family members upon the death of a permit holder and new owners upon the sale of the property. Proposed Amendment to Chapter 5.95 (Short -Term Lodging Permit) The primary regulatory framework for short-term lodging is contained in Chapter 5.95 of the NBMC. The proposed amendments (Attachment No. G) would modify the short-term lodging regulations to incorporate the components and direction received from at September 8, 2020, City Council study session and a few additional items as follows: 18-4 Ordinance No. 2020-26: Short Term Lodging Amendments to Chapter 5.95 and Title 21 of the Newport Beach Municipal Code (PA2020-048) October 13, 2020 Page 5 1. Minimum Night Stay The proposed amendment would implement a minimum 3 -night stay for the rental of short-term lodging units, which has been shown to reduce the number of disturbances at short-term lodging units and the demand on Police and Fire Department personnel services. Specifically, this provision would discourage the use of short-term lodging units for non-residential purposes (e.g. large gatherings, weddings, and commercial filming), and encourage vacationers to spend multiple days visiting the beach and other sites in the area. 2. Limits on Permits — 1,550 Permits After the effective date of the ordinance, the number of short-term lodging permits would be limited to a maximum 1,550. The limit on new permits is needed to stem the tide of short-term lodging operations within the City and the associated impacts that come with said operations. Newport Beach has 1,500 active short-term lodging permits, which far exceeds similar communities. For example, Newport Beach has 473% more short-term lodging units than Huntington Beach and 120% more short- term lodging than Carlsbad, both of which are coastal communities. Newport Beach also has 450% more short-term lodging units than Anaheim, a community that draws visitors from around the world. Based on the number of units already in the City, the Committee is of the opinion that the 1,550 unit cap will maintain a sufficient number of units to provide for lower-cost visitor accommodations. In the event that more than 1,550 valid permits are issued prior to the effective date of the proposed ordinance, an owner will be permitted to renew, reinstate, or transfer a valid permit; however, no new permits will be issued to anyone on the waiting list until the total number of permits does not exceed the 1,550 cap. 3. Waiting List Once 1,550 -permit cap is reached, a waiting list for new permits will be created and maintained by the City's Revenue Division. When a short-term permit becomes available, the City will notify the next person on the waiting list who will be afforded 10 days to apply for the permit. Request to be placed on waiting list shall be accompanied by an application form and filing fee. 4. Transferability and Abandonment Revisions include clarifying the transferability of permits in different scenarios and establishes when a permit is deemed abandoned. A person seeking to reinstate or transfer a short-term lodging permit that has been abandoned will be required to apply to be placed on the waiting list. The permit will not be deemed abandoned unless the permitholder fails to complete a transfer in the time specified in the ordinance. 18-5 Ordinance No. 2020-26: Short Term Lodging Amendments to Chapter 5.95 and Title 21 of the Newport Beach Municipal Code (PA2020-048) October 13, 2020 Page 6 5. Minimum Age The code would be revised to prohibit the owner of a lodging unit to rent to a transient user that is under the age of 25 . 6. Owner Responsibility for Transient User's Parking This item was developed after discussions with community members, following the September 8, 2020 study session. Revisions include allowing for the owner to be cited if a user receives a parking ticket while utilizing a short term lodging unit. For example, if a parking ticket is issued to a tenant staying at a short term lodging unit, then the property owner may also receive an administrative citation for the violation. This would only affect parking tickets issued within 100 feet of the unit being rented. To ensure compliance, owners would be responsible for collecting license plate numbers for all vehicles of their transient users and guests and required to provide the information to the City upon request. If the ordinance is adopted, the changes to Chapter 5.95, described in items 1-4 above, will not go into effect until approval of Local Coastal Program Amendment No. LC2020- 007 described below is approved by the California Coastal Commission (CCC) and subsequent adoption, including any modifications suggested by CCC, of an ordinance by the City Council. Items 5-6 would go into effect prior to CCC review and approval of LC2020-007. Proposed Amendments to Title 21 (Local Coastal Proaram Imalementation Plan Although short-term lodging is primarily regulated through Chapter 5.95 of the NBMC, short term lodging is classified as providing lower-cost visitor accommodations. As such, Section 21.48.115 of Title 21 (Local Coastal Program Implementation Plan) of the NBMC currently includes general standards affecting the regulations of short-term lodging in the coastal zone. Of the proposed amendments to Chapter 5.95 discussed above, the maximum cap of 1,550 permits and 3 -night minimum stay are recommended to be included in Title 21 as Local Coastal Program Amendment No. LC2020-007. The proposed Title 21 amendments are included as Attachment No. H. CCC review and approval is required for any proposed amendment to the certified LCP. The City's certified Coastal Land Use Plan includes Policy 2.3.3-6 that provides: 2.3.3-6. Continue to issue short-term lodging permits for the rental of dwelling units as a means of providing lower-cost overnight visitor accommodations while continuing to prevent conditions leading to increased demand for City services and adverse impacts in residential areas and coastal resources. 18-6 Ordinance No. 2020-26: Short Term Lodging Amendments to Chapter 5.95 and Title 21 of the Newport Beach Municipal Code (PA2020-048) October 13, 2020 Page 7 The Coastal Commission has previously held that short-term lodging provides a low-cost alternative accommodation for families. Newport Beach hosts a variety of styles for visitor accommodations including, approximately 4,086 hotel/motel rooms and 471 campground/RV spaces, above and beyond what is provided by permitted short-term lodging units. Short-term lodging accounts for a significant amount (28%) of the visitor accommodations within the City. Establishing a maximum cap of 1,550 permits accommodates a minor expansion of the City's short-term lodging capacity, while guarding against future impacts that unregulated expansion would create. The City has more short-term lodging units than any other southern California city of a similar size and limiting the number of short-term lodging units will reduce the demand for City services, preserve the housing stock, as well as the quality and character of the City's neighborhoods. Instituting a minimum 3 -night stay for short-term lodging will not prevent public access to coastal resources and would easily accommodate a weekend rental that is desirable to many members of the public. It is staff's opinion that the proposed changes under this amendment are consistent with this policy as permits would continue to be issued and the limitations are designed to address the adverse impacts of short-term lodgings. Additionally, staff believes the amendment would not have a significant impact to public access or views to coastal resources. Furthermore, the proposal would continue to allow a significant number of accommodations compared to other communities with coastal zones. General Plan Consistency General Plan Policy LU 2.6 (Visitor Serving Uses): "provide[s] 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 is consistent with this policy since it continues to allow short-term lodging at levels greater than currently permitted, while providing necessary protections for neighborhoods and residents. ENVIRONMENTAL REVIEW: The ordinance and LCP Amendment is exempt from the California Environmental Quality Act ("CEQA") pursuant to Section 21065 of CEQA and State CEQA Guidelines Sections 15060 (c)(2), 15060 (c)(3), and 15378. The proposed action is also exempt pursuant to State CEQA Guidelines Section 15061(b)(3) because it has no potential to have a significant effect on the environment. The proposed ordinance and amendment would decrease impacts to on -street parking and limit the number of short-term lodging permits to minimize impacts to residential neighborhoods. Neither the ordinance nor amendment authorize development that would directly result in physical change to the environment. 18-7 Ordinance No. 2020-26: Short Term Lodging Amendments to Chapter 5.95 and Title 21 of the Newport Beach Municipal Code (PA2020-048) October 13, 2020 Page 8 NOTICING: Pursuant to Section 13515 of the California Code of Regulations, a review draft of the LCP Amendment was made available and a Notice of Availability was distributed on July 14, 2020, to all persons and agencies on the Notice of Availability mailing list and posted online. Notice of this amendment was published in the Daily Pilot as an eighth -page advertisement, consistent with the provisions of the Municipal Code. The item also appeared on the agenda for this meeting, which was posted at City Hall and on the City website. ATTACHMENTS: Attachment A — Ordinance No. 2020-26 (Chapter 5.95 Amendments) Attachment B — Resolution No. 2020-91 (Title 21 Amendments) Attachment C —Resolution No. 2020-37 Attachment D —Ordinance No. 2020-15 Attachment E —Planning Commission Resolution No. PC2020-027 Attachment F — September 8, 2020 City Council Study Session Minutes Attachment G —Chapter 5.95 Redline Attachment H —Title 21 Redline 18-8 ATTACHMENT A ORDINANCE NO. 2020- 26 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, AMENDING PORTIONS OF 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 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; WE Ordinance No. 2020 - Page 2 of 11 WHEREAS, requiring a three (3) night minimum stay has been shown to reduce the number of disturbances at short term lodging units, thereby reducing the demand on Police and Fire Department personnel; WHEREAS, the City has more short term lodging units than any other southern California city of a similar size, and limiting the number of short term lodging units will reduce the demand for City services, preserve the housing stock and quality and character of the City's neighborhoods; and WHEREAS, the City Council has reviewed and considered evidence and documentation attesting to the need to limit the number of short term lodging permits and 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. NOW THEREFORE, the City Council of the City of Newport Beach ordains as follows: Section 1: The table of contents for Chapter 5.95. of Title 5 of the Newport Beach Municipal Code is hereby amended to read as follows: 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. 5.95.020 Permit Required. 5.95.025 Agency. 5.95.030 Applicant for Permit. 5.95.035 Denial of Permit. 5.95.040 Filing Fee. 5.95.042 Maximum Number of Permits. 5.95.043 Transfer of Permit. 18-10 Ordinance No. 2020 - Page 3 of 11 5.95.045 Conditions. 5.95.047 Violations of Permit Conditions by Transient User, Occupant or Guest. 5.95.050 Agents and Hosting Platform Responsibilities. 5.95.055 Issuance of Administrative Subpoenas. 5.95.060 Violations, Penalties and Enforcement. 5.95.065 Suspensions and Revocations. 5.95.070 Permits and Fees Not Exclusive. 5.95.080 License and Permit Closure. Section 2: Section 5.95.005, Subsection (L), of Chapter 5.95. of Title 5 of the Newport Beach Municipal Code is hereby amended to read as follows: L. 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 and address the impacts on residential neighborhoods posed by short term lodgings. Section 3: Section 5.95.025, of Chapter 5.95. of Title 5 of the Newport Beach Municipal Code is hereby amended to read as follows: 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 an annual permit, the renewal of a permit, the reinstatement of a permit or the transfer of a permit; the management of the short term lodging unit or units; and the compliance with the short term lodging permit conditions. 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. Section 4: Section 5.95.030, of Chapter 5.95. of Title 5 of the Newport Beach Municipal Code is hereby amended to read as follows: 5.95.030 Applicant for Permit. An application for an annual short term lodging permit, renewal of a short term lodging permit, reinstatement of a short term lodging permit or transfer of a short term lodging permit shall be filed with the Finance Director upon forms provided by the City. 18-11 Ordinance No. 2020 - Page 4 of 11 A. 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 owner of the unit for which the short term lodging permit is to be issued. 2. The name, address and telephone number of the agent, if any, of the owner of the unit. 3. Evidence of a valid business license issued by the City for the separate business of operating a short term lodging unit or units. 4. The number of bedrooms in the lodging unit. 5. The gross floor area of the lodging unit. 6. The number of parking spaces available on site and a description indicating the location and size of each parking space. 7. A nuisance response plan, which sets forth the owner's plan for handling disruptive transient users. 8. 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. 9. Acknowledgement of receipt and inspection of a copy of all regulations pertaining to the operation of a short term lodging unit. 10. Such other information as the Finance Director deems reasonably necessary to administer this chapter. B. An application for the renewal of a short term lodging permit shall be filed within thirty (30) calendar days of the short term lodging permit's expiration, or the short term lodging permit shall be deemed abandoned. C. An application for the reinstatement of a short term lodging permit closed by the Finance Director pursuant to Section 5.95.080, shall be filed within thirty (30) calendar days of the date the permit was closed by the Finance Director, or the short term lodging permit shall be deemed abandoned. 18-12 Ordinance No. 2020 - Page 5 of 11 D. An application for the reinstatement of a previously suspended short term lodging permit, shall be filed within thirty (30) calendar days of the end of the suspension period, or the short term lodging permit shall be deemed abandoned. E. If any application is deemed incomplete, which shall be determined in the sole discretion of the Finance 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. F. If good causes exist, as determined in the sole discretion of the Finance Director, the Finance Director may extend the deadlines set forth in Subsections (B) through (E). G. For purposes of calculating the maximum number of permits under Section 5.95.042, a short term lodging permit shall be deemed valid until the applicable permit has been deemed abandoned. Section 5: Section 5.95.035, of Chapter 5.95. of Title 5 of the Newport Beach Municipal Code is hereby amended to read as follows: 5.95.035 Denial of Permit. If permits are available for issuance, no timely application filed by an owner 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 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; the owner has failed to pay transient occupancy tax, the visitor service fee, a penalty, a fine or inspection cost, due and owing to the City; the nuisance response plan is deemed inadequate by the Finance Director; or the short term lodging permit for the same unit and issued to the same owner has been revoked. Section 6: Section 5.95.040, of Chapter 5.95. of Title 5 of the Newport Beach Municipal Code is hereby amended to read as follows: 5.95.040 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 and for providing the answering service. 18-13 Ordinance No. 2020 - Page 6 of 11 Section 7: Section 5.95.042 of Chapter 5.95. of Title 5 of the Newport Beach Municipal Code is hereby added to read as follows: 5.95.042 Maximum Number of Permits. A. The maximum number of short term lodging permits shall be limited to fifteen hundred and fifty (1,550) permits at any time. If there are more than fifteen hundred and fifty (1,550) valid permits that have been issued as of the effective date of this section, an owner shall be permitted to renew, reinstate, or transfer a valid permit in accordance with the provisions of this chapter, however, no new permit shall be issued to anyone on the waiting list, as described in Subsection (D), until the total number of permits does not exceed the fifteen hundred and fifty (1,550). 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 Section 5.95.030, (B) through (F), and/or Section 5.95.043 (B). B. An owner who has a short term lodging permit or an owner seeking to reinstate a short term lodging permit, that has not been abandoned in accordance with Section 5.95.030 (B) through (F), shall have priority to renew or reinstate the permit over anyone on the waiting list, as described in Subsection (D). C. An owner seeking to transfer a valid short term lodging permit, that files an application within the timeframes set forth in Section 5.95.043 (A), shall have priority to transfer the permit over anyone on the waiting list, as described in Subsection (D). D. 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. 18-14 Ordinance No. 2020- Page7of 11 Section 8: Section 5.95.043, of Chapter 5.95. of Title 5 of the Newport Beach Municipal Code is hereby added to read as follows: 5.95.043 Transfer of Permit. A. A short term lodging permit that is valid and has not been abandoned in accordance with Section 5.95.030 (B) through (F), may be transferred to any of the following: 1. If the owner transfers the ownership of the lodging unit to an inter vivos trust, family trust, or other similar type of trust estate, a valid short term lodging permit may be transferred to the inter vivos trust, family trust, or other similar type of trust estate, if an application to transfer a valid permit, in accordance with Section 5.95.030, is filed within three hundred and sixty-five (365) days of the date title is transferred to the inter vivos trust, family trust, or other similar type of trust estate. 2. If the owner transfers the ownership of the lodging unit to a corporation, limited liability company, partnership, limited partnership, or similar business entity, a valid short term lodging permit may be transferred to the business entity, if an application to transfer a valid permit, in accordance with Section 5.95.030, is filed within three hundred and sixty-five (365) days of the date title is transferred to the business entity. 3. If the owner transfers the ownership of the lodging unit to an immediate family member, which shall include a spouse, domestic partner, child, stepchild, grandchild, parent, stepparent, mother-in-law, father-in-law, son-in-law, daughter-in-law, grandparent, great grandparent, brother, sister, half-brother, half-sister, stepsibling, brother-in-law, sister-in-law, aunt, uncle, niece, nephew, or first cousin (that is, a child of an aunt or uncle), a valid short term lodging permit may be transferred to the immediate family member, if an application to transfer a valid permit, in accordance with Section 5.95.030, is filed within three hundred and sixty-five (365) days of the date title is transferred to the immediate family member. 4. If the owner sells the lodging unit to a bona fide purchaser for value, a valid short term lodging permit may be transferred to the purchaser, if an application to transfer a valid permit, is filed in accordance with Section 5.95.030, within sixty (60) days of the date title is transferred to the purchaser. 5. If the owner is deceased, the short term lodging permit for the short term lodging unit may be transferred to the heir(s) once the estate is closed and the assets distributed, if an application to transfer a valid permit, is filed in accordance with Section 18-15 Ordinance No. 2020 - Page 8 of 11 5.95.030, within ninety (90) days of the date the heir(s) becomes the owner of the short term lodging unit. B. The deadlines set forth in Subsection (A) are established for purposes of setting deadlines for the transfer of a valid permit that has not been deemed abandoned in accordance with Section 5.95.030 (B) through (F). The deadlines set forth in Section A shall not extend the deadlines set forth in or in accordance with Section 5.95.030 (B) through (F). Authorization to transfer a valid short term lodging permit shall be deemed waived and the permit abandoned if an application is not filed to transfer a permit in accordance with the deadlines set forth in this section. Section 9: Section 5.95.045, Subsection (A), (2), of Chapter 5.95. of Title 5 of the Newport Beach Municipal Code is hereby amended to read as follows: 2. The owner shall not rent a lodging unit to a transient user that is under the age of twenty-five (25). Section 10: Section 5.95.045, Subsection (A), of Chapter 5.95. of Title 5 of the Newport Beach Municipal Code is hereby amended to add conditions numbers twenty- one (21) through twenty-three (23), which shall read as follows: 21. Neither an owner or the owner's agent shall rent, let, advertise for rent, or enter into an agreement for the rental of any lodging unit, for less than three (3) consecutive nights. 22. The owner shall: a. Require every transient user and guest of the transient user to comply with all state and local laws that regulate parking while staying at or visiting the short term lodging unit; b. Require every transient user to provide the owner with the license plate number for all vehicles, which are used by the transient user or the transient user's guest while staying at or visiting the short term lodging unit; and C. Provide the City with the vehicle license plate number(s) for every vehicle, which were used by the transient user or the transient user's guest while staying at or visiting the short term lodging, within seven calendar days after the City serves the owner with a notice of request for the vehicle license plate number(s) in accordance with Section 1.08.080. 18-16 Ordinance No. 2020 - Page 9 of 11 23. The owner shall be responsible for any violation by a transient user or transient user's guest of any state or local law that regulates parking that occurs while the transient user or transient user's guest is staying at or visiting the short term lodging unit. For purposes of this condition, a transient user or transient user's guest shall be presumed to be staying at or visiting a short term lodging unit if a parking citation is issued to the transient user or the transient user's guest within one hundred (100) feet of the property line of the short term lodging unit during the time the transient user is renting the short term lodging unit. Section 11: Section 5.95.047, of Chapter 5.95. of Title 5 of the Newport Beach Municipal Code is hereby amended to read as follows: 5.95.047 Violations of Permit Conditions by Transient User, Occupant or Guest. A. 1n 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: 1. Exceed the overnight occupancy limit designated for the short term lodging unit. 2. Use street parking prior to utilizing all available on-site parking space(s) for the lodging unit. 3. Place trash for collection in violation of this Code's rules and regulations concerning: a.m.: 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. Outside of the lodging unit; or b. That is audible from the property line for the lodging unit. 5. Use the short term lodging for any nonresidential purpose, including, but not limited to, large commercial or noncommercial gatherings, commercial filming and/or nonowner wedding receptions. 6. Rent a lodging unit to any person for a short term. 18-17 Ordinance No. 2020 - Page 10 of 11 B. In addition to other provisions of this Code, it shall be unlawful for any lessee to rent a lodging unit to any transient user for a short term. Section 12: The recitals provided in this ordinance are true and correct and are incorporated into the substantive portion of this ordinance. Section 13: 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 14: 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 15: 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 16: 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. Section 9, the portion of Section 10, which adds Subsections 22 and 23 to Section 5.95.045, Chapter 5.95. of Title 5, and Section 11, of this ordinance, shall become effective thirty (30) calendar days after its adoption. Sections 1 through 8 and the portion of Section 10, which adds Subsection 21, to Section 5.95.045, Chapter 5.95. of Title 5, of this ordinance, shall become final and effective upon the effective date of approval by the California Coastal Commission of LC2020-007 and adoption, including any modifications suggested by the California Coastal Commission, by resolution(s) and/or ordinance(s) of the City Council. 18-18 Ordinance No. 2020 - Page 11 of 11 This ordinance was introduced at a regular meeting of the City Council of the City of Newport Beach held on the 13th day of October, 2020, and adopted on the 27th day of October, 2020, by the following vote, to -wit: AYES: IkqlF."T&I ABSENT: WILL O'NEILL, MAYOR I_1111111*3ii LEILANI I. BROWN, CITY CLERK APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE C-V,L- ( . C!i-`- R N C. HARP, CITY A ORNEY 18-19 ATTACHMENT B RESOLUTION NO. 2020- 91 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, AUTHORIZING SUBMITTAL OF LOCAL COASTAL PROGRAM AMENDMENT NO. LC2020-007 TO THE CALIFORNIA COASTAL COMMISSION, AN AMENDMENT TO TITLE 21 (LOCAL COASTAL PROGRAM IMPLEMENTATION PLAN) OF THE NEWPORT BEACH MUNICIPAL CODE RELATED TO SHORT-TERM LODGING (PA2020-048) 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, the City is a popular beach resort community that serves a large number of tourists during the summer months. To accommodate this large influx, the City has in excess of 4,000 hotel/motel rooms and 1,500 short-term lodging units; 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, a survey conducted by the City of permitted short-term lodging within 52 communities that are located in Orange County and coastal regions of Los Angeles and San Diego counties has shown that the City has the third highest concentration of short-term lodging units, exceeding 177 short-term lodging units per 10,000 residents; 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; 18-20 Resolution No. 2020 - Page 2 of 6 WHEREAS, approximately 3.4 percent of the City's housing stock is utilized for short-term lodging units; WHEREAS, the City has an interest in preserving its housing stock and the quality and character of its existing residential neighborhoods; WHEREAS, the City has more short term lodging units than any other southern California city of a similar size, and limiting the number of short term lodging units will reduce the demand for City services, preserve the housing stock and quality and character of the City's 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; WHEREAS, requiring a three (3) night minimum stay has been shown to reduce the number of disturbances at short term lodging units, thereby reducing the demand on Police and Fire Department personnel; WHEREAS, establishing a maximum cap of 1,550 permits accommodates a minor expansion of the City's short-term lodging capacity, while guarding against future impacts that unregulated expansion would create; WHEREAS, the City Council has reviewed and considered evidence and documentation attesting to the need to limit the number of short term lodging permits and 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; WHEREAS, a telephonic public hearing was held by the Planning Commission on July 23, 2020, in the Council Chambers located at 100 Civic Center Drive, Newport Beach, California, due to the Declaration of a State Emergency and Proclamation of Local Emergency related to COVID-19. A notice of time, place, and purpose of the public hearing was given in accordance with Government Code Section 54950 et seq. ("Ralph M. Brown Act") and Chapter 21.62 (Public Hearings) of the Newport Beach Municipal Code ("NBMC"). Evidence, both written and oral, was presented to, and considered by, the Planning Commission at this public hearing. WHEREAS, Local Coastal Program Amendment No. LC2020-007, as drafted at the time, included more restrictive proposed standards, including prohibiting the issuance of any new short-term lodging permits and establishing a minimum six (6) night stay for non owner -occupied units. 18-21 Resolution No. 2020 - Page 3 of 6 WHEREAS, at the hearing, the Planning Commission adopted Resolution No. PC2020-027 by a majority vote (4 ayes, 2 nayes), thereby recommending the City Council deny Local Coastal Program Amendment No. LC2020-007; WHEREAS, a telephonic study session was held by the City Council on September 8, 2020, in the Council Chambers located at 100 Civic Center Drive, Newport Beach, California, due to the Declaration of a State Emergency and Proclamation of Local Emergency related to COVID-19 to discuss short-term lodging in the City; WHEREAS, a telephonic public hearing was held by the City Council on October 13, 2020, in the Council Chambers located at 100 Civic Center Drive, Newport Beach, California, due to the Declaration of a State Emergency and Proclamation of Local Emergency related to COVID-19. A notice of time, place and purpose of the public hearings was given in accordance with the 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 City Council at these public hearings; and WHEREAS, pursuant to Section 13515 of the California Code of Regulations Title 14, Division 5.5, Chapter 8, Subchapter 2, Article 5 ("Public Participation"), drafts of LCP Amendment No. LC2020-007 were made available and a Notice of Availability was distributed at least six (6) weeks prior to the City Council public hearing. NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows: Section 1: The City Council authorizes staff to submit Local Coast Amendment No. LC2020-007, as set forth below, to the California Coastal Commission. Section 2: The row entitled "Short -Term Lodging" set forth in Table 21.18-1 (Allowed Uses) in Section 21.18.020(C) (Residential Coastal Zoning Districts Land Uses) of Chapter 21.18 (Residential Coastal Zoning Districts (R -A, R-1, R -BI, R-2, and RM)) of Title 21 (Local Coastal Program Implementation Plan) of the NBMC is amended to read as follows: 18-22 Resolution No. 2020 - Page 4 of 6 Land Use R -BI R-1 R-2 RM R-1- R-2- RM - R -A 6,000 6,000 6,000 Specific Use Regulations Residential Uses Short -Term Lodging — A A Chapter 5.95 and Section 21.48.115 Section 3: Section 21.48.115 (Short-term Lodging) of Chapter 21.48 (Standards for Specific Land Uses) of Title 21 (Local Coastal Program Implementation Plan) of the NBMC is repealed and replaced with the following: 21.48.115 Short -Term Lodging. A. Purpose. This section provides standards for the operation of short-term lodging units to prevent over -burdening City services and adverse impacts on residential neighborhoods and on coastal access and resources. B. Zoning Districts and Planned Communities. No short-term lodging unit shall be permitted on any parcel in the R-1 (Single -Unit Residential) Coastal Zoning District or any parcel designated for single -unit dwelling land use as part of a planned community development plan, unless the short-term lodging unit was legally established on or before June 1, 2004. C. Permits. No owner of a short term 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 Chapter 5.95. Asset forth in Section 5.95.042, of Chapter 5.95, the maximum number of short term lodging permits shall be limited to fifteen hundred and fifty (1,550) permits at anytime. If there are more than fifteen hundred and fifty (1,550) valid permits that have been issued as of the effective date of this section, an owner shall be permitted to renew, reinstate, or transfer a valid permit in accordance with the provisions of Chapter 5.95; however, no new permit shall be issued to anyone on the waiting list, as described in Section 5.95,043 (D), until the total number of permits does not exceed the fifteen hundred and fifty (1,550). D. Operational Standards. The owner, or any other person(s) or entity(ies) that hold(s) legal and/or equitable title to the lodging unit, shall comply with all federal, state, and local laws, rules, regulations and conditions of approval including, but not limited to, all short term lodging permit conditions set forth in Chapter 5.95. In addition, the owner, or any other person(s) or entity(ies) that hold(s) legal and/or equitable title to the lodging unit, shall - 18 -23 Resolution No. 2020 - Page 5 of 6 1. By written agreement, limit overnight occupancy of the short-term lodging unit to the maximum permitted by the Building Code and Fire Code. 2. 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. 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. Use best efforts to ensure compliance with applicable health and sanitation regulations relating to waste disposal. 5. Post a copy of any applicable permits and conditions in a conspicuous place within the unit. 6. Not rent, let, advertise for rent, or enter into an agreement for the rental of any lodging unit, for less than three (3) consecutive nights. 7. 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 section. Section 4: LCP Amendment No. LC2020-007, shall be carried out in full conformance with the California Coastal Act of 1976 as set forth in the California Public Resources Code Section 30000 et seq. LCP Amendment No. LC2020-007 shall not become effective until approval by the Coastal Commission and adoption, including any modifications suggested by the Coastal Commission, by resolution(s) and/or ordinance(s) of the City Council. Section 5: The recitals provided in this resolution are true and correct and are incorporated into the operative part of this resolution. 18-24 Resolution No. 2020 - Page 6 of 6 Section 6: If any section, subsection, sentence, clause or phrase of this resolution 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 resolution. The City Council hereby declares that it would have passed this resolution, 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 7: The City Council finds the adoption of this resolution is not a project subject to the California Environmental Quality Act ("CEQA") in accordance with Section 21065 of the California Public Resources Code and Sections 15060 (c)(2), 15060 (c)(3), and 15378 of the California Code of Regulations Title 14, Division 6, Chapter 3 ("CEQA Guidelines"). The proposed action is also exempt pursuant to CEQA Guidelines Section 15061(b)(3), the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. The LCP Amendment itself provides additional regulations on short-term lodging; but, since the use is already permitted, it does not authorize development that would directly result in physical change to the environment. Section 8: This resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting the resolution. ADOPTED this 13th day of October, 2020 Will O'Neill Mayor ATTEST: Leilani I. Brown City Clerk APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Aaron C. Harp City Attorney 18-25 Attachment C City Council Resolution No. 2020-37 18-26 RESOLUTION NO. 2020-37 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, INITIATING AMENDMENTS TO TITLE 20 (PLANNING AND ZONING) AND TITLE 21 (LOCAL COASTAL PROGRAM IMPLEMENTATION PLAN) OF THE CITY OF NEWPORT BEACH MUNICIPAL CODE, AND TO THE COASTAL LAND USE PLAN OF THE LOCAL COASTAL PROGRAM RELATED SHORT TERM LODGING (PA2020-048) WHEREAS, Section 20.66.020 (Initiation of Amendment) of Newport Beach Municipal Code ("NBMC") provides that the City Council of the City of Newport Beach ("City Council") may initiate an amendment to Title 20 (Planning and Zoning) of the NBMC with or without a recommendation from the Planning Commission; WHEREAS, City Council Policy K-1 entitled "General Plan and Local Coastal Program" requires amendments to the City of Newport Beach certified Local Coastal Program to be initiated by the City Council; and WHEREAS, the City Council desires to amend Title 20 and Title 21 of the NBMC, and the Coastal Land Use Plan of the Local Coastal Program related to short term lodging. NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows: Section 1: The City Council hereby initiates amendments to Title 20 (Planning and Zoning) of the NBMC, Title 21 (Local Coastal Program Implementation Plan) of the NBMC, and the Coastal Land Use Plan of the Local Coastal Program related to short term lodging. Section 2: The recitals provided in this resolution are true and correct and are incorporated into the operative portion of this resolution. Section 3: If any section, subsection, sentence, clause or phrase of this resolution 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 resolution. The City Council hereby declares that it would have passed this resolution, 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. 18-27 Resolution No. 2020-37 Page 2 of 2 Section 4: The City Council finds the adoption of this resolution is exempt from environmental review under the California Environmental Quality Act ("CEQA"), pursuant to Section 15262 of the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, Chapter 3, because it involves feasibility or planning studies for possible future actions which the agency, board, or commission has not approved or adopted. Section 5: This resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting this resolution. ADOPTED this 14th day of April, 2020. ATTEST: 401, it, ►_ilani 1. Brown -. City Clerk APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Aaron C. Harp City Attorney Will O'Neill Mayor 18-28 STATE OF CALIFORNIA } COUNTY OF ORANGE } ss. CITY OF NEWPORT BEACH } I, Leilani I. Brown, City Clerk of the City of Newport Beach, California, do hereby certify that the whole number of members of the City Council is seven; the foregoing resolution, being Resolution No. 2020-37, was duly introduced before and adopted by the City Council of said City at a regular meeting of said Council held on the 14th day of April, 2020; and the same was so passed and adopted by the following vote, to wit: AYES: Mayor Will O'Neill, Mayor Pro Tem Brad Avery, Council Member Joy Brenner, Council Member Diane Dixon, Council Member Duffy Duffield, Council Member Jeff Herdman, Council Member Kevin Muldoon NAYS: None IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the official seal of said City this 151h day of April, 2020. 6�4 Leilani I. Brown City Clerk Newport Beach, California Ni. 18-29 Attachment D City Council Ordinance No. 2020-15 18-30 ORDINANCE NO. 2020-15 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, AMENDING SECTION 3.16.060 AND CHAPTER 5.95 OF THE NEWPORT BEACH MUNICIPAL CODE RELATING TO SHORT TERM LODGING 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; 18-31 Ordinance No. 2020-15 Page 2 of 18 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 service 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 3.16.060 of Chapter 3.16 of Title 3 of the Newport Beach Municipal Code is hereby amended to read as follows: 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. 18-32 Ordinance No. 2020-15 Page 3 of 18 Section 2: Chapter 5.95 of Title 5 of the Newport Beach Municipal Code is hereby amended to read as follows: 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. 5.95.020 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, Penalties and Enforcement. 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. 18-33 Ordinance No. 2020-15 Page 4 of 18 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. 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 is particularly acute in residential districts where the peace, safety and general welfare of the long term residents are threatened. J. 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. K. To ensure the transient user knows the total cost associated with renting the lodging unit and to prevent fraud, it is necessary for the owner to make sure the transient user is informed of the amount of the transient occupancy tax and visitor service fee prior to completing a booking transaction. 18-34 Ordinance No. 2020-15 Page 5 of 18 L. 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. 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 facilitating 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. 18-35 Ordinance No. 2020-15 Page 6 of 18 J. "Owner" shall mean the person(s) that hold(s) legal and/or equitable title to the lodging unit. 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 companies. 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 or her 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. Subsequent to June 1, 2004, no annual 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 revoked. 18-36 Ordinance No. 2020-15 Page 7 of 18 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. 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 an annual short term lodging permit, or renewal thereof, 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 gross floor area of the lodging unit. F. The number of parking spaces available onsite and a description indicating the location and size of each parking space. G. A nuisance response plan, which sets forth the owner's plan for handling disruptive guests. H. 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. I. Acknowledgement of receipt and inspection of a copy of all regulations pertaining to the operation of a short term lodging unit. 18-37 Ordinance No. 2020-15 Page 8 of 18 J. Such other information as the Finance Director deems reasonably necessary to administer this chapter. 5.95.035 Denial of Permit. If permits are available for issuance, no application filed by an owner for an annual 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; the owner has failed to pay transient occupancy tax, the visitor service fee, a penalty, a fine or inspection cost, due and owing to the City; the nuisance response plan is deemed inadequate by the Finance Director; 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 prohibit a lessee of a lodging unit from renting the lodging unit to a transient user for a short term and from home -sharing. 2. The owner shall not rent a lodging unit to a transient user that is under the age of 21. 3. The owner shall enter into a written agreement with the transient user that requires: a. All persons residing in the short term lodging unit to live together as a single housekeeping unit; and b. Limits the overnight occupancy of the short term lodging unit to the maximum permitted by the Building Code and Fire Code. 4. The owner shall ensure that the transient user complies with all terms of the written agreement set forth in Subsection 5.95.045 A (3). Ordinance No. 2020-15 Page 9 of 18 5. 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. 6. 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. 7. 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. 8. 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. 9. The owner of the short term lodging unit shall provide the transient user with a copy of the good neighbor policy created by the City and available on the City website, post a copy of the short term lodging permit and post 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 rights-of-way within three hundred (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.; and 18-39 Ordinance No. 2020-15 Page 10 of 18 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. 10. 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. 11. 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. b. If the owner uses an agent to collect and remit the transient occupancy tax and the visitor service fee, either voluntarily or as directed by the City, 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 Finance Director directs, in writing, 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 name of the hosting platform, 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. 12. The owner 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 respond to contacts from the answering service, respond to any call related to the unit within thirty (30) minutes, and 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). Ordinance No. 2020-15 Page 11 of 18 13. 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. 14. The owner shall maintain a valid business license and short term lodging permit when engaging in short term lodging. 15. 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. 16. 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. 17. 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. 18. The owner shall comply with the nuisance response plan submitted with the application for a short term lodging permit and approved by the Finance Director. 19. The owner shall allow the City to inspect the short term lodging unit to confirm the number of bedrooms, gross floor area, and number/availability of parking spaces, seven (7) calendar days after the City serves the owner with a request for inspection in accordance with Section 1.08.080. If, based on the inspection, it is determined that the information submitted to the City in accordance with Section 5.95.030 was false, in addition to any other remedy set forth in this chapter, the owner agrees that the owner shall be liable for the cost of conducting the inspection. 20. The owner shall provide the City with a copy of any written rental agreement(s) and the good neighbor policy, within seven (7) calendar days after the City serves the owner with a notice of request for written rental agreements and the good neighbor policy in accordance with Section 1.08.080. 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. 18-41 Ordinance No. 2020-15 Page 12 of 18 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. 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. If directed to do so by the Finance Director, in writing, agents or hosting platforms shall: 1. 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; and 2. 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. 18-42 Ordinance No. 2020-15 Page 13 of 18 Hosting platforms shall not collect or remit such taxes unless expressly authorized to do so by the Finance Director, in writing. Nothing in this subsection shall be deemed to relieve an operator, as that term is defined in Sections 3.16.020 and 3.28.010, from complying with the requirements set forth in Chapters 3.16 and 3.28 of this Code, or to interfere with the ability of an agent or hosting platform and an owner to enter into an agreement regarding fulfillment of the requirements of this subsection. 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: 1. Shall prompt any person utilizing their advertising services to include the City -issued registration number in their listing(s), in a format designated by the City and shall not advertise any short term lodging unit where a registration number is not provided. Upon notice from the City that a listing is non-compliant, agents and hosting platforms shall cease any short-term rental booking transactions for said listing(s) within five (5) business days. An agent or hosting platform shall not complete any booking transaction for any short term lodging unit subject to a City notice that a unit is non- compliant, until notified by the City that the short term lodging unit follows the local registration requirement. 2. Shall not 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 this 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). 18-43 Ordinance No. 2020-15 Page 14 of 18 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 (30) calendar day 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, Penalties and Enforcement. A. It shall be unlawful for any person to violate any provisions or to fail 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. 5.95.065 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 any 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). -; — Ordinance No. 2020-15 Page 15 of 18 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 regarding 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 any 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 any 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). 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 (2) 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). 8. If any person is determined to have provided false information on an application for an annual short term lodging permit, or renewal thereof, 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. 18-45 Ordinance No. 2020-15 Page 16 of 18 1. The Finance Director shall investigate whenever he or she has reason to believe that an owner 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 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 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 with the Finance Director, 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. 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. Ordinance No. 2020-15 Page 17 of 18 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 as evidenced by remitting zero dollars on the required transient occupancy tax and visitor service fee forms 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. Section 3: The recitals provided in this ordinance are true and correct and are incorporated into the substantive portion of this ordinance. Section 4: 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 5: 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. 18-47 Ordinance No. 2020-15 Page 18 of 18 Section 6: 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 7: 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 become effective thirty (30) days after the adoption of this ordinance. This ordinance was introduced at a regular meeting of the City Council of the City of Newport Beach held on the 23rd day of June, 2020, and adopted on the 14th day of July, 2020, by the following vote, to -wit: AYES: Mayor O'Neill Mayor Pro Tem Avery, Council Member Brenner Council Member Dixon, Council Member Duffield Council Member Herdman NAYS: Council Member Muldoon ABSENT: Council Member Duffy Duffield RECUSED: ATTEST: WILL O'NEILL, MAYOR APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE AARON C. HARP, CITY ATTORNEY 18-48 STATE OF CALIFORNIA } COUNTY OF ORANGE } ss. CITY OF NEWPORT BEACH } I, Leilani I. Brown, City Clerk of the City of Newport Beach, California, do hereby certify that the whole number of members of the City Council is seven; that the foregoing ordinance, being Ordinance No. 2020-15 was duly introduced on the 231d day of June, 2020, at a regular meeting, and adopted by the City Council at a regular meeting duly held on the 141h day of July, 2020, and that the same was so passed and adopted by the following vote, to wit.- AYES: it: AYES: Mayor Will O'Neill, Mayor Pro Tem Brad Avery, Council Member Joy Brenner, Council Member Diane Dixon, Council Member Jeff Herdman NAYS: Council Member Kevin Muldoon ABSENT: Council Member Duffy Duffield IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the official seal of said City this 151h day of July, 2020. Qc►r-oa/ da�iou*_ Leilani I. Brown, MM City Clerk City of Newport Beach, California CERTIFICATE OF PUBLICATION STATE OF CALIFORNIA } COUNTY OF ORANGE } ss. CITY OF NEWPORT BEACH } I, LEILANI I. BROWN, City Clerk of the City of Newport Beach, California, do hereby certify that Ordinance No. 2020-15 has been duly and regularly published according to law and the order of the City Council of said City and that same was so published in The Daily Pilot, a newspaper of general circulation on the following dates: Introduced Ordinance: June 27, 2020 Adopted Ordinance: July 18, 2020 2020. r' - In witness whereof, I have hereunto subscribed my name this ' day of � W, 0� � CIFO'0' INV��• Leilani I. Brown, MMC City Clerk City of Newport Beach, California 18-49 Attachment E Planning Commission Resolution No. PC2020-027 18-50 RESOLUTION NO. PC2020-027 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF NEWPORT BEACH, CALIFORNIA, RECOMMENDING THE CITY COUNCIL DENY LOCAL COASTAL PROGRAM AMENDMENT NO. LC2020-007, A REQUEST TO AMEND TITLE 21 (LOCAL COASTAL PROGRAM IMPLEMENTATION PLAN) OF THE CITY OF NEWPORT BEACH MUNICIPAL CODE REGARDING SHORT-TERM LODGING REGULATIONS (PA2020-048) THE PLANNING COMMISSION OF THE CITY OF NEWPORT BEACH HEREBY FINDS AS FOLLOWS: SECTION 1. STATEMENT OF FACTS. 1. On April 14, 2020, the City Council of the City of Newport Beach adopted Resolution No. 2020-37 initiating an amendment to Title 21 (Local Coastal Program Implementation Plan) ("LCP Amendment") related to short-term lodging. 2. Pursuant to Section 13515 (Public Participation and Agency Coordination Procedures) of the California Code of Regulations, Title 14, Division 5.5, Chapter 8, a draft of the LCP Amendment was made available and a Notice of Availability was distributed on July 13, 2020, a minimum of six (6) weeks prior to the anticipated final action date. 3. A telephonic public hearing was held by the Planning Commission on July 23, 2020, in the Council Chambers located at 100 Civic Center Drive, Newport Beach, California, due to the Declaration of a State Emergency and Proclamation of Local Emergency related to COVID-19. A notice of time, place, and purpose of the public hearing was given in accordance with Government Code Section 54950 et seq. ("Ralph M. Brown Act") and Chapter 21.62 (Public Hearings) of the Newport Beach Municipal Code ("NBMC"). Evidence, both written and oral, was presented to, and considered by, the Planning Commission at this public hearing. SECTION 2. CALIFORNIA ENVIRONMENTAL QUALITY ACT DETERMINATION. 1. The LCP Amendment is not a project subject to the California Environmental Quality Act ("CEQA") in accordance with Section 21065 of the California Public Resources Code and Sections 15060 (c)(2), 15060 (c)(3), and 15378 of the California Code of Regulations Title 14, Division 6, Chapter 3 ("CEQA Guidelines"). The proposed action is also exempt pursuant to CEQA Guidelines Section 15061(b)(3), the general rule that CEQA applies only to projects, which have the potential for causing a significant effect on the environment. 18-51 Planning Commission Resolution No. PC2020-027 Paae 2 of 2 SECTION 3. FINDINGS. 1. The City Council adopted Ordinance No. 2020-15 on July 14, 2020, amending Chapter 5.95 (Short Term Lodging Permit) of the NBMC. This ordinance was adopted in response to complaints about noise, too many guests in one unit, shortage of available street parking, and overflowing trash occurring at short-term lodging. The Planning Commission finds considering changes to Title 21 is premature and that enforcement of the amendments to Chapter 5.95 may resolve impacts that short-term lodging units have on neighboring residents. 2. The recitals provided in this resolution are true and correct and are incorporated into the operative part of this resolution. SECTION 4. DECISION. NOW, THEREFORE, BE IT RESOLVED: 1. The Planning Commission finds the LCP Amendment is not a project subject to CEQA pursuant to Section 21065 of CEQA and CEQA Guidelines Sections 15060 (c)(2),15060 (c)(3), and 15378 of the California Code of Regulations Title 14, Division 6, Chapter 3. The LCP Amendment is also exempt pursuant to CEQA Guidelines Section 15061(b)(3), because it has no potential to have a significant effect on the environment. 2. The Planning Commission of the City of Newport Beach hereby recommends the City Council deny Local Coastal Program Amendment No. LC2020-007. PASSED, APPROVED, AND ADOPTED THIS 23RD DAY OF JULY, 2020. AYES: Ellmore, Klaustermeier, Kleiman, and Lowrey NOES: Rosene and Weigand ABSTAIN: None ABSENT: Koetting BY. <�jl & Erik Weigand, air BY: Z�= Lauren Kleiman, Secretary 18-52 Attachment F September 8, 2020, City Council Study Session Minutes 18-53 CITY OF NEWPORT BEACH City Council Minutes Study Session and Regular Meeting September 8, 2020 I. ROLL CALL - 4:00 p.m. Present: Mayor Will O'Neill, Mayor Pro Tem Brad Avery, Council Member Joy Brenner, Council Member Diane Dixon, Council Member Duffy Duffield, Council Member Jeff Herdman, Council Member Kevin Muldoon II. CURRENT BUSINESS SS1. Clarification of Items on the Consent Calendar - None SS2. Proclamation Recognizing September 17-23, 2020 as Constitution Week Mayor O'Neill read the proclamation and presented it to Ashley Rodi from the Daughters of the American Revolution. SS3. Short Term Lodging (STL) Community Development Director Jurjis used a presentation to discuss the Ad Hoc Committee on Short Term Lodging, previous Emergency Ordinances, Ordinance No. 2020-15 (Phase 1) and enforcement, Planning Commission review on July 23, 2020, Ad Hoc Committee recommendations, minimum night stay survey, the survey regarding STL permit caps, STL requirements in other cities, timeline to begin the 24-hour answering service, STL permit fee updates, and the draft Phase 2 ordinance. In response to Mayor O'Neill's question, Community Development Director Jurjis indicated Council may request an agenda item regarding removal of the existing Emergency Ordinances. Hal Sears opposed limiting the number of STLs on Balboa Island and believed the ban causes Council's constituents to lose revenue. Jim Mosher believed the City did not adequately inform the public about the topic for which Council seeks input, expressed concern regarding laws that create classes of citizens that are treated differently than others, suggested if Council wants to institute a cap, permits should be granted through an lottery system, and believed revisions need to go through the Planning Commission before Council. Charles Dayton indicated STLs are not the issue, believing hotels do not want STLs to succeed. Carmen Rawson asked if permitted or illegal units in Newport Beach are causing noise, trash, and other issues, suggested implementing Phase 1, evaluating the results, and enforcing STL requirements, and suggested the City get rid of illegal units. Debbie Gubernick stated that Council has to create consistency in the rules, expressed appreciation for all the research that has occurred, wanted Newport Beach to be a peaceful, enjoyable place for everyone, including families, and suggested Council strike the right balance by capping the number of STL permits. Denys Oberman noted that the reasons to manage the number of STL units are contained within the ordinance, questioned the equity of complaint -driven enforcement, supported the recommendation for capping the number of STL permits, and requested additional study of the three -night minimum suggestion. Volume 64 - Page 508 18-54 City of Newport Beach Study Session and Regular Meeting September 8, 2020 Angela Haryew believed that STL renters are not the problem and permit caps will adversely affect her family, and opposed a three -night minimum. Yolena Tam believed that the cap on the number of STL permits is a problem and now is not the time to implement a cap if Council wants to support small businesses. She suggested that Council review the results of Phase 1 before considering Phase 2 and increase the cap on permits. Meg Cooper shared her experience with renting to tenants and stated noise enforcement should be applied consistently throughout the City, whether a STL, long-term renter, or homeowners. An unidentified speaker indicated that Newport Beach is a favorite location for renters, suggested Council implement Phase 1, and agreed with the need to apply rules consistently. David Tanner suggested Council learn the outcome regarding similar legislation for Laguna Beach with the Coastal Commission before proceeding, believed Council should look at accessory dwelling units and junior accessory dwelling units, stated that STL units should meet building codes, be subject to inspection by the fire department, and provide onsite parking, and noted that permits should be appealable by the public. Gila Willner concurred with comments for implementing Phase 1 before Council considers adding new restrictions and expressed concern that a cap on permits would result in more nine- month rentals to college students, which may raise more issues. Lori Hamel opposed having a minimum -night stay requirement, proposed that those with violations and issues lose their permits, allow responsible STL owners to continue to rent to responsible tenants, and requested to see an economic report on the proposed changes. Jolene Capparelle shared her family's experience renting their STL unit and asked Council to protect her rights and not to penalize her for those that do not comply. Ken Rawson believed the City should enforce STL regulations and not grant permits to owners that do not comply with the rules, stated that there are 1,510 active STL permits and only 87 complaints, and noted that Council approved a 24-hour answering service that has not been implemented yet, and believed data received from the service can allow the City to pull permits. Laura Curran advised that a drug and alcohol recovery facility adjacent to her property does not follow local, County, and State codes and violated its agreement within six months of signing the agreement in 2012, stated that the City should help residents work with State licensing agencies to attach conditions to all licenses and permits, and asked Council to work with the State to vigorously enforce licensing requirements. Frank Capparelle believed the answering service should count complaints against both STL and long-term renters. Sue Reed asked Council to reconsider the requirement for a second person to be on-call for complaints as this is unreasonable for a STL permittee and preferred no minimum -night requirement. Scott McFetters, Newport Island, commented that enforcing an ordinance is not easy and stated that parking violations should count against retaining a STL permit. Craig Wallace urged Council to halt the next phase until the results of the new regulations are available, to act on evidence, and not to apply solutions to problems that do not exist for most STLs. Bud Reveley believed the number of permits should remain at the current number and asked if there are illegal units in the City and, if so, how many. Volume 64 - Page 509 18-55 City of Newport Beach Study Session and Regular Meeting September 8, 2020 Avo Abadizian opposed increasing the minimum night stay, indicated the STL ban would have weighed heavily on his decision to purchase a home in Newport Beach, and believed some of the issues could be resolved by regulating long-term rental homes. Jacqueline Wittmeyer expressed disappointment with the Planning Commission's discussion and hoped Council would consider that she relies on her long-term rental for income. Carol McDermott, representing Burr White Realty, Balboa Vacation Rentals, Sea Breeze Vacation Rentals, and Abrams Coastal Properties, indicated the goal of the Ad Hoc Committee was to balance the needs of property owners and residents, believed the standards of Phase 1 and Phase 2 are designed to diminish STL as it has existed for years, noted the Planning Commission voted to deny Phase 2 regulations, stated the findings for Phase 2 are misleading and unfair in describing all tourists as burdens, believed comparing Newport Beach to cities without miles of coastal and bay frontage is unfair, Phase 2 should be postponed, regulations must be approved by the Coastal Commission which has determined that STL is a permitted right, supported a three -night minimum, the STL ban forced visitors into more crowded situations and prevented new STL owners from obtaining permits, the ban prevents a single- family homeowner who proposes a tear down/rebuild from retaining a STL permit, the proposed cap will limit coastal access and reduce Transient Occupancy Tax (TOT) paid to the City, the proposed cap does not address inactive permits or a mechanism for acquiring new permits as inactive permits expire, suggested Council consider a different process for allowing new permits and require permitholders to pay a minimum of $1,000 in TOT annually, which will reduce the number of permits, STL comprises only 7 percent of total dwellings on the Peninsula, the Good Neighbor Policy and the Nuisance Response Plan need further clarification, a guest contract could address the policy and response plan, the Phase 1 ordinance should require a minimum age of 25 years to rent a STL, a local contact person should be located within 5 miles of the property, violation and penalty provisions should be based on the issuance of clearly defined standards, a minimum of one parking space per property is acceptable, and Council should consider occupancy limits. Tresa Holloway discussed her reason for purchasing a STL unit, agreed with instituting an age limit of 25 years or more, a three -night minimum stay, and a cap, believed the language of the current ordinance is very negative and only allows negative input to Council through the dedicated phone line, suggested hiring a patrol or private security to monitor and help enforce some of these restrictions, and believed STL owners and management companies should form some type of alliance. Pete Evans opposed a 6 -night minimum and indicated he has adapted to a three -night minimum and has been a good operator with no complaints. Mayor Pro Tem Avery noted a housing revolution across the State, which is changing neighborhoods, stated the solution to noise, parking, and trash complaints is robust and fair/equitable code enforcement, but code enforcement boils down to dollars, believed the City should invest more money into code enforcement and education, noted that he has always felt the vast majority of STL owners/operators are good, but the City needs to focus on violations of all types in all neighborhoods. He suggested that neighbors also form their own peaceful solutions to the problems. Council Member Dixon indicated she watched the Planning Commission meeting and did not believe they fully understood the circumstances. Community Development Director Jurjis agreed in that the Planning Commission has not spent 18 months on the subject, unlike the Ad Hoc Committee. Council Member Dixon noted the Ad Hoc Committee separated the changes into items that do and do not require Coastal Commission approval, noting the recommended minimum night stay and cap on permits will need to go to the Coastal Commission. Community Development Director Jurjis explained that staff recommended bifurcating the ordinances, staff believes the Coastal Commission will support the proposal, and Newport Beach has the most Volume 64 - Page 510 18-56 City of Newport Beach Study Session and Regular Meeting September 8, 2020 STLs of any city of its size. In response to Council Member Dixon's question, Community Development Director Jurjis advised that from the City's standpoint, the City has a permit program with conditions; therefore, it is a conditional permit to operate STLs and is not a property right. City Attorney Harp concurred and advised that a STL is allowed through an annual permit and that permits do not vest anyone with a property right, and it can be withdrawn. However, he explained that a long-term lease or a rental agreement for more than 30 days is a property right. Council Member Dixon clarified that Council is trying to find peace between STL owners/management companies and residents. Community Development Director Jurjis reiterated that there is no recommendation to take permits away from anyone, the goal is more enforcement, and the program is reactive as residents report issues to code enforcement, added that the 24-hour hotline will track data, and noted that complaints reported after business hours should be directed to the Police Department. Council Member Dixon related that good STL operators will not be affected by the recommendations. Community Development Director Jurjis asked Council to provide feedback regarding establishing a cap, as current permitholders might lose their permits through a lottery system. Council Member Dixon explained that a property owner cannot demolish a duplex and build a single-family home, stated that the City needs to think about the impacts of replacing single-family homes with duplexes or quadraplexes on neighborhoods and STLs, and indicated that the Regional Housing Needs Assessment (RHNA) allocation will be an interesting conflict between the Coastal Commission and the Governor because STLs remove homes from the housing stock. Community Development Director Jurjis noted the number of illegal units have dropped significantly, between 10-20. Council Member Dixon supported a three -night minimum and a cap because STLs decrease the housing stock and believed that the City should conduct an Environmental Impact Report (EIR) of STL impacts on the community. Council Member Herdman stated he wants this industry to thrive in the City and noted that it has never been the intent of the Ad Hoc Committee to eliminate this industry. Jim Mosher commented that placing a cap on STL permits would increase the value of homes with permits, added that if Council does not place a cap, the proliferation of STL permits might decrease home values because the proliferation may change the complexion of neighborhoods, believed a lottery system would be very difficult to manage because of the property owners' uncertainty of obtaining a permit each year, noted that the claims that there is no evidence of a need for the Ad Hoc Committee and its recommendations are not true, and stated his support for establishing a cap and a minimum three -night stay. Council Member Brenner emphasized that the Planning Commission was put at a disadvantage by having to weigh in after only a couple of hours of testimony, stated that the Ad Hoc Committee has gone through an extensive process of revisions and meetings and has tried to balance the rights of STL operators and residents. In response to her question, Community Development Director Jurjis indicated STLs have grown 50% in the last six or seven years, probably due to online platforms. Council Member Brenner believed not regulating STLs would change the community from residential to one big hotel, noted that Council may need to consider using the 24-hour phone service for all nuisance violations, and stated support for the minimum rental age of 25 years of age and the possibility of adopting Airbnb's no -party -policy. Mayor O'Neill believed the language Council has used in the ordinance is particularly harsh against this industry, inquired to the statistic for the conversion of STLs to homes on Balboa Island, expressed concern about Coastal Commission approval if there is not an evidence -based approach, noted that the 24-hour answering service will be operating soon and if the complaints are valid, they will result in citations, and expressed his desire to see an economic analysis to understand the impacts of STLs on City revenues. Council Member Muldoon favored less regulation and continuing the item until the economy has recovered. With Mayor Pro Tem Avery and Council Members Brenner, Dixon, Duffield, and Herdman agreeing, there was a 5-2 straw vote to require a three -night minimum stay. Volume 64 - Page 511 18-57 City of Newport Beach Study Session and Regular Meeting September 8, 2020 With Mayor Pro Tem Avery and Council Members Brenner, Dixon, and Herdman agreeing, there was a 4-3 straw vote to institute a cap of 1,550 STL permits. With Council Member Brenner disagreeing, there was a 6-1 straw vote to allow STL permits upon the death of the permitholder to be transferred to a family member or heir such that the transfer is not considered a new permit. With Council Member Brenner disagreeing, there was a 6-1 straw vote to allow STL permits to be transferred/assigned to a new owner upon the sale of the property. With Mayor Pro Tem Avery and Council Members Brenner, Dixon, and Herdman agreeing, there was a 4-3 straw vote to impose an age limit of at least 25 years to rent a STL. III. PUBLIC COMMENTS Mayor O'Neill announced that Closed Session will be continued to the September 22, 2020 City Council meeting. Jim Mosher believed the description of the Closed Session item is opaque and suggested language for a future notice, commenting that if the item pertains to a sale of the property, Council should publicly discuss the desirability of selling the property prior to discussing a price. He further believed that two of the Future Agenda Items involve ballot measures, and a city may not use taxpayer funds to tell voters whether they should support or oppose ballot measures. Matthew Hurray inquired about opening the Balboa Island boardwalk. Sylvia Santana advised that the Big Canyon Coastal Habitat Restoration and Adaptation Project is occurring under her balcony and requested a review of the project due to the removal of trees and the destruction of the trail. An unidentified speaker thought the Big Canyon Coastal Habitat Restoration and Adaptation Project area was a bird sanctuary and requested clarification from the City about what has been removed and what is planned to be removed in the near future. An unidentified speaker stated the trees in the Big Canyon Coastal Habitat Restoration and Adaptation Project area were providing value and asked Council to take it seriously in order to save some of the trees and accomplish the project. IV. CLOSED SESSION — Continued to the September 22, 2020 City Council meeting A. CONFERENCE WITH REAL PROPERTY NEGOTIATORS (Government Code § 54956.8): 1 matter Property: 883 W 15t" Street, Newport Beach, CA 92660 APN: 424-011-37 Agency Negotiators: Seimone Jurjis, Community Development Director Lauren Wooding Whitlinger, Real Property Administrator Negotiating Parties: David Bahnsen for Pacifica Christian High School — Orange County Under Negotiation: Instruct negotiators as to price and terms of payment. V. RECESSED — 6:37 p.m. VI. RECONVENED AT 7:00 P.M. FOR REGULAR MEETING Volume 64 - Page 512 18-58 ATTACHMENT G 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. 5.95.020 Permit Required. 5.95.025 Agency. 5.95.030 Applicant for Permit. 5.95.035 Denial of Permit. 5.95.040 Filing Fee. 5.95.042 Maximum Number of Permits. 5.95.043 Transfer of Permit. 5.95.045 Conditions. 5.95.047 Violations of Permit Conditions by Transient User, Occupant or Guest. 5.95.050 Agents and Hosting Platform Responsibilities. 5.95.055 Issuance of Administrative Subpoenas. 5.95.060 Violations, Penalties and Enforcement. 5.95.065 Suspensions and Revocations. 5.95.070 Permits and Fees Not Exclusive. 5.95.080 License and Permit Closure. Section 5.95.005 Subsection (L) L. 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 Eentinued burden on City sep.(i es and adverseaddress the impacts on 18-59 residential neighborhoods posed by short term lodgings. Ord: 020 15 § 2 (part), 2 Ord $z213 § 3 (pa 92) 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 l,,dgiR an annual permit, the renewal of a permit, the reinstatement of a permit or the transfer of a permit; the management of the short term lodging unit or units, and the compliance with the short term lodging permit conditions to the short �erm�ging 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 nenGemplian^enon- compliance by the owner. (Ord. 2020-15-§z'-020''0: Ord. °? 13 § 3 (part), 1992-) 5.95.030 Applicant for Permit. An application for an annual short term lodging permit, er-renewal thereefof a short term lodging permit, reinstatement of a short term lodging permit or transfer of a short term lodging permit shall be filed with the Finance Director upon forms provided by the City and. A. An application for a new permit, renewal permit, the reinstatement of a permit or the transfer of a permit shall contain the following information: A—.1. The name, address and telephone number of the owner of the unit for which the short term lodging permit is to be issued. R-.-2. The name, address and telephone number of the agent, if any, of the owner of the unit. C3. Evidence of a valid business license issued by the City for the separate business of operating a short term lodging unit or units. D-.-4.The number of bedrooms in the lodging unit. E—. —5. The gross floor area of the lodging unit. 18-60 F—.6. The number of parking spaces available on site and a description indicating the location and size of each parking space. G-.-7. A nuisance response plan, which sets forth the owner's plan for handling disruptive gueststransient users. H. 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. �.-9. Acknowledgement of receipt and inspection of a copy of all regulations pertaining to the operation of a short term lodging unit. X10. Such other information as the Finance Director deems reasonably necessary to administer this chapter. (Ord: 0 i(p-�parrt), 2020: Ord. 92-13 § 3 (part), 4492-) B. An application for the renewal of a short term lodging permit shall be filed within thirty (30) calendar days of the short term lodging permit's expiration, or the short term lodging permit shall be deemed abandoned. C. An application for the reinstatement of a short term lodging permit closed by the Finance Director pursuant to Section 5.95.080, shall be filed within thirty (30) calendar days of the date the permit was closed by the Finance Director, or the short term lodging permit shall be deemed abandoned. D. An application for the reinstatement of a previously suspended short term lodging permit, shall be filed within thirty (30) calendar days of the end of the suspension period, or the short term lodging permit shall be deemed abandoned. E. If any application is deemed incomplete, which shall be determined in the sole discretion of the Finance 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. F. If good causes exist, as determined in the sole discretion of the Finance Director the Finance Director may extend the deadlines set forth in Subsections (B) through (E). 18-61 G. For purposes of calculating the maximum number of permits under Section 5.95.042, a short term lodging permit shall be deemed valid until the applicable permit has been deemed abandoned. 5.95.035 Denial of Permit. If permits are available for issuance, no timely application filed by an owner for an annual permitor reRewal, renewal of a permit, reinstatement of a permit or transfer 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; the owner has failed to pay transient occupancy tax, the visitor service fee, a penalty, a fine or inspection cost, due and owing to the City; the nuisance response plan is deemed inadequate by the Finance Director; or the short term lodging permit for the same unit and issued to the same owner has been revoked. Ord: 02-0-1-5 § 2 (paq, riLMENCT-1..t•Ti7Gt I r•TORM 5.95.040 Filing Fee. An application er-for a new annual permit, the renewal app;TEatien f�s"eFt term ledgi 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 and for providing the answering service. Prd. 220_15 § 2 (part), 2020 -Ord. °Z2-1-3 § 3 ( 992) 18-62 5.95.042 Maximum Number of Permits. A. The maximum number of short term lodging permits shall be limited to fifteen hundred and fifty (1,550) permits at any time. If there are more than fifteen hundred and fifty (1,550) valid permits that have been issued as of the effective date of this section, an owner shall be permitted to renew, reinstate, or transfer a valid permit in accordance with the provisions of this chapter; however, no new permit shall be issued to anyone on the waiting list, as described in Subsection (D), until the total number of permits does not exceed the fifteen hundred and fifty (1,550). 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 Section 5.95.030, (B) through (F), and/or Section 5.95.043 Lai B. An owner who has a short term lodging permit or an owner seeking to reinstate a short term lodging permit, that has not been abandoned in accordance with Section 5.95.030 (B) through (F), shall have priority to renew or reinstate the permit over anyone on the waiting list, as described in Subsection (D). C. An owner seeking to transfer a valid short term lodging permit, that files an application within the timeframes set forth in Section 5.95.043 (A), shall have priority to transfer the permit over anyone on the waiting list, as described in Subsection (D). D. 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. 18-63 5.95.043 Transfer of Permit. A. A short term lodging permit that is valid and has not been abandoned in accordance with Section 5.95.030 (B) through (F), may be transferred to any of the following: If the owner transfers the ownership of the lodaina unit to an inter vivos tru family trust, or other similar type of trust estate, a valid short term lodging permit may be transferred to the inter vivos trust, family trust, or other similar type of trust estate, if an application to transfer a valid permit, in accordance with Section 5.95.030, is filed within three hundred and sixty-five (365) days of the date title is transferred to the inter vivos trust, family trust, or other similar type of trust estate. 2. If the owner transfers the ownership of the lodging unit to a corporation, limited liability company, partnership, limited partnership, or similar business entity, a valid short term lodging permit may be transferred to the business entity, if an application to transfer a valid permit, in accordance with Section 5.95.030, is filed within three hundred and sixt -fy ive (365) days of the date title is transferred to the business entit .. 3. If the owner transfers the ownershia of the lodaina unit to an immediate family member, which shall include a spouse, domestic partner, child, stepchild, grandchild, parent, stepparent, mother-in-law, father-in-law, son-in-law, daughter-in-law, grandparent, great grandparent, brother, sister, half-brother, half-sister, stepsibling, brother-in-law, sister-in-law, aunt, uncle, niece, nephew, or first cousin (that is, a child of an aunt or uncle), a valid short term lodging permit may be transferred to the immediate family member, if an application to transfer a valid permit, in accordance with Section 5.95.030, is filed within three hundred and sixty-five (365) days of the date title is transferred to the immediate familv member. 4. If the owner sells the lodging unit to a bona fide purchaser for value, a valid short term lodging permit may be transferred to the purchaser, if an application to transfer a valid permit, is filed in accordance with Section 5.95.030, within sixty (60) days of the date title is transferred to the purchaser. 5. If the owner is deceased, the short term lodging permit for the short term lodging unit may be transferred to the heir(s) once the estate is closed and the assets distributed, if an application to transfer a valid permit, is filed in accordance with Section 5.95.030, within ninety (90) days of the date the heir(s) becomes the owner of the short term lodging unit. 18-64 B. The deadlines set forth in Subsection (A) are established for purposes of setting deadlines for the transfer of a valid permit that has not been deemed abandoned in accordance with Section 5.95.030 (B) through (F). The deadlines set forth in Section A shall not extend the deadlines set forth in or in accordance with Section 5.95.030 (B) through (F). Authorization to transfer a valid short term lodging permit shall be deemed waived and the permit abandoned if an application is not filed to transfer a permit in accordance with the deadlines set forth in this section. Section 5.95.045, Subsection (A)(2) 2. The owner shall not rent a lodging unit to a transient user that is under the age of twenty-five (25). Section 5.95.045, Subsection (A)(21) - (23) 21. Neither an owner or the owner's agent shall rent, let, advertise for rent, or enter into an agreement for the rental of any lodging unit, for less than three (3) consecutive nights. 22. The owner shall: a. Require every transient user and quest of the transient user to comply with all state and local laws that regulate parking while staving at or visiting the short term lodging unit; b. Require every transient user to provide the owner with the license plate number for all vehicles, which are used by the transient user or the transient user's quest while staying at or visiting the short term lodging unit; and C. Provide the City with the vehicle license plate number(s) for every vehicle, which were used by the transient user or the transient user's quest while staying at or visiting the short term lodging, within seven calendar days after the City serves the owner with a notice of request for the vehicle license plate number(s) in accordance with Section 1.08.080. 23. The owner shall be responsible for anv violation by a transient user or transient user's quest of any state or local law that regulates parking that occurs while the transient user or transient user's quest is staving at or visiting the short term lodging unit. 18-65 For purposes of this condition, a transient user or transient user's quest shall be presumed to be staying at or visiting a short term lodging unit if a parking citation is issued to the transient user or the transient user's guest within one hundred (100) feet of the property line of the short term lodging unit during the time the transient user is renting the short term lodging unit. 5.95.047 Violations of Permit Conditions by Transient User, Occupant or Guest. A. 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—.1. Exceed the overnight occupancy limit designated for the short term lodging unit. 2. Use street parking prior to utilizing all available on-site parking space(s) for the lodging unit. C3. Place trash for collection in violation of this Code's rules and regulations concerning: 4-a. The timing, storage or placement of trash containers; or b. Recycling requirements. D. Amplify or reproduce sound between the hours of 10:00 p.m. and 10:00 a.m.: 4-a. Outside of the lodging unit; or 21b. That is audible from the property line for the lodging unit. E—. —5. Use the short term lodging for any nonresidential purpose, including, but not limited to, large commercial or noncommercial gatherings, commercial filming and/or nonowner wedding receptions. Ord: 02-0-15 §2(x)22) 6. Rent a lodging unit to any person for a short term. 18-66 B. In addition to other provisions of this Code, it shall be unlawful for any lessee to rent a lodging unit to any transient user for a short term. 18-67 ATTACHMENT H Table 21.18-1 (Allowed Uses) in Section 21.18.020(C) Land Use R -BI R-1 R-2 RM R-1- R-2- RM - R -A 6,000 6,000 6,000 Specific Use Regulations Residential Uses Short -Term Lodging — — A A Chapter 5.95 and Section 21.48.115 21.48.115 Short -Term Lodging. A. Purpose. This section provides standards for the operation of short-term lodging units to prevent over -burdening City services and adverse impacts on residential neighborhoods and on coastal access and resources. B. Zoning Districts and Planned Communities. No short-term lodging unit shall be permitted on any parcel in the R-1 (Single -Unit Residential) Coastal Zoning District or any parcel designated for single -unit dwelling land use as part of a planned community development plan, unless the short-term lodging unit was legally established on or before June 1, 2004. C. Permits. No owner of a short term lodaina 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 Chapter 5.95. As set forth in Section 5.95.042, of Chapter 5.95, the maximum number of short term lodging permits shall be limited to fifteen hundred and fifty (1,550) permits at any time. If there are more than fifteen hundred and fifty (1,550) valid permits that have been issued as of the effective date of this section, an owner shall be permitted to renew, reinstate, or transfer a valid permit in accordance with the provisions of Chapter 5.95; however, no new permit shall be issued to anyone on the waiting list, as described in Section 5.95.043 (D), until the total number of permits does not exceed the fifteen hundred and fifty (1,550). D. Operational Standards. The owner, or any other person(s) or entity(ies) that hold(s) legal and/or equitable title to the lodging unit, shall. comply with all federal, state, and local laws, rules, regulations and conditions of approval including, but not limited to, all short term lodging permit conditions set forth in Chapter 5.95. In addition, the owner, or 18-68 any other person(s) or entity(ies) that hold(s) legal and/or equitable title to the lodging unit, shall: By written or oral agreement, limit overnight occupancy of the short- term lodging unit to a speGifin R unbar Of GGG paRtS with the R urvmber of occ pante RO fn cmoo the maximum permitted by the Building Code and Fire Code E)GG paRGY IimitS 2.— 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 EedeCode or any Statestate or federal law pertaining to noise, disorderly conduct, the consumption of alcohol, or the use of illegal drugs. 3.— Upon notification that ecGpap#-sany transient user, occupant and/or gue #sguest of his or her short --term lodging unit #avehas created unreasonable noise or disturbances, engaged in disorderly conduct or committed violations of this eedeCode or Stateany 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 these .,GG pants or guest any transient user, occupant or quest. 4.— Use best efforts to ensure compliance with applicable health and sanitation regulations relating to waste disposal. 5. --Post a copy of any applicable permits and conditions in a conspicuous place within the unit. 1-.--6. Not rent, let, advertise for rent, or enter into an agreement for the rental of any lodging unit, for less than three (3) consecutive nights. 7. 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 section. ( rd. n� ° § 9 (€xh. A)(part), 204-6) 18-69