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Short-term rentals, advertised on websites like Airbnb and Vrbo, are often viewed by residents as nuisances that attract rowdy crowds, loud noise and an influx in parking and partying.
It’s an issue city officials struggle with along Orange County’s coastline where short term rentals invite tourists to enjoy beachfront property and coastal access in cities like Huntington Beach, Dana Point and Newport Beach.
Some cities in Orange County like Laguna Hills, Fountain Valley and Costa Mesa have banned these rentals to curb impacts on neighborhoods.
Earlier this year, Santa Ana also made the call to ban short-term rentals.
While some cities are doing away with vacation rentals entirely, some coastal cities are considering the best way to permit these units — which benefit the city through transient occupancy taxes — while also preserving residents’ quality of life.
A Citizen-Led Initiative on the Ballot in Dana Point
A group of Dana Point residents are so unhappy with the city’s short-term rental ordinance that they’re proposing their own to replace it through a ballot initiative.
“Having the initiative on the ballot gives voters the chance to compare the city’s policy with that proposed in the initiative, and essentially, vote for one for them,” Dana Point resident Betty Hill, who helped collect signatures for the ballot initiative, said at a council meeting last week.
“That’s all residents really want,” she said.
The citizen-led initiative has gathered enough signatures — around 3,000 — to make it on the November ballot this year.
If approved, it would repeal and replace the city’s pre-existing regulations, which have only been in effect for a little over a year.
One of the biggest differences in the citizen-led proposal is the maximum number of permits allowed in the city.
The council already has a set maximum cap of 224 permits — 109 in the city’s coastal zone and another 115 outside that zone.
Not all those permits are currently available.
Right now, there are about 179 active short-term rental permits in use.
The proposed changes would lower the cap to 56 total units in the coastal zone and 53 units outside the coastal zone — 109 in total.
The new proposal would also require property owners to reapply for a permit every year.
Additionally, permits would be handed out according to a priority system.
Short-term rentals where the owner is renting out their primary residence will have the highest priority for permits. Units in commercial or mixed-use zones will be given higher priority than units in residential zones.
The point is to reduce disturbances in single-family neighborhoods and prioritize short-term rentals for Dana Point residents who will be nearby to quickly address any issues if needed.
“Residents were overwhelmingly supportive of the initiative, many thanking us for this effort,” Hill said. “Support came from all five districts, and even in districts with HOAs.”
Some property owners who already hold a permit expressed frustration and confusion about the proposed changes.
“They don’t like renters — they don’t like it in their neighborhood, and that’s the bottom line,” said Yuri Cramer, who’s been renting out a property on Beach Road for 12 years. “I just think our rights as homeowners are getting taken away.”
If the citizen proposal passes in November, it would prevent the council from making any future alterations.
Instead, it would require another vote from the public to make any future changes.
“The council could never lower the number, the council could never add more strict regulations — it makes it just so difficult to manage something like this,” Mayor Jamey Federico said at the meeting.
Councilmember John Gabbard agreed that residents should know that the measure could have some unintended consequences that they won’t be able to correct.
“It’s important for all of us to state for the public exactly why this initiative, while well-meaning, creates a number of problems for the city of Dana Point,” Gabbard said. “Not the least of which is trying the council’s hands from fixing things in the future.”
Huntington Beach Studies First Three Years
Huntington Beach city officials took a look at the first three years of their short-term rental program during a study session at the beginning of their meeting last week.
In Huntington Beach, short-term rentals generated about $1 million in transient occupancy taxes in 2023, according to a presentation from Jill Bos, deputy director of community development.
The city has about 200 active permits — 38% are in the city’s coastal zone and 58% are outside that zone.
“The policy we brought forward back in 2021 was a very conservative, incremental approach,” Councilman Dan Kalmick said at the meeting “I think a lot of the strategy here is trying to balance property rights with the rental market.”
“One of the things I don’t want to do is to take rental units or for sale units farther away from where something would be considered affordable or attainable off the market and turning it into an STR,” he said.
Bos said while there’s been a decline in unpermitted short-term rentals, there were 135 unpermitted units as of November 2023.
The program has been around for three years. In that time, Bos said there were 156 violations documented for permit holders — mostly near the coastal zone and downtown areas.
Most complaints were about noise or a lack of property owners on-site.
“I’m very sensitive to this, as it relates to quality of life incidents and disturbances,” Councilmember Casey McKeon said.
“For me, if I was going to consider any kind of expansion, I would like to understand how code enforcement could have a rapid response team when there is a quality of life disturbance — noise, parking,” he said.
The council also discussed potentially partnering with a third party to handle collecting transient occupancy taxes and ensure all short-term rental permit holders are complying with city requirements.
Newport Beach Hits Rental Limit
Newport Beach has already reached the city’s maximum of 1550 short-term rental permits — the highest in the county.
In May 2023, the council was slated to vote on a code amendment that would have required owners of short-term rentals to reinvest and improve their units at least once every three years.
But that item was continued to a future meeting without public discussion.
Over a year later, it still hasn’t been brought back for council consideration.
The ordinance would have required short-term rental owners to reinvest at least 10% of the rent collected from the unit during a three-year period and use it for improvements in the unit.
Angelina Hicks is a Voice of OC Tracy Wood Reporting Fellow. Contact her at ahicks@voiceofoc.org or on Twitter @angelinahicks13.
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