Anaheim, Santa Ana Pass Moratoriums on Short-Term Rentals

A vacation rental in an Anaheim neighborhood near Disneyland. (Photo credit: unknown)

Faced with an avalanche of complaints from residents, the Anaheim and Santa Ana city councils Tuesday night passed 45-day emergency moratoriums targeting short-term rentals while officials craft new regulations to curb neighborhood impacts of the rapidly growing industry.

The Anaheim moratorium only prevents city officials from accepting new applications to operate short-term rentals — meaning businesses that have already submitted applications or have permits aren’t affected. Santa Ana’s moratorium goes farther, banning the operation of any short-term rental while the moratorium is in place.

A vacation home rental in Santa Ana’s affluent Floral Park triggered an outcry from residents in that city. But the backlash has been much more intense in Anaheim, where the number of short-term rentals has doubled from 200 to 400 since the city passed an ordinance last year establishing regulations.

Anaheim’s police department has received 300 calls for service related to short-term rentals, according to city officials. More than 100 were complaints about loud parties, while others related to parking issues, reports of crime and other problems.

The short-term rental explosion is due in large part to websites like Airbnb and HomeAway, which have become extremely popular in recent years as adventurous and more intimate alternatives to hotel stays. Their impacts are most felt on neighborhoods in trendy places and tourism destinations, where homeowners can make more money operating short-term rentals than on long-term leases.

There appears to be no end in sight to the flood of Anaheim homes being converted into short-term rentals. City officials say they’re receiving between five and 10 applications a week, while at least one resident said homes put on the market are immediately snapped up by short-term rental operators.

City officials also reported that at least half of the permitted rental operators have pulled construction permits, presumably to add multiple bedrooms to the homes to increase the number of people allowed to stay in a short-term rental under the city’s rules.

Residents, meanwhile, claimed some homes have been rented to well over 20 occupants.

Not surprisingly, the problems in Anaheim are especially pronounced in the area around Disneyland, which is most concentrated with short-term rentals. Residents who attended the meeting said their neighborhoods are being transformed into one giant tourism zone.

“You should be ashamed for letting this go on. It’s destroyed us,” resident Loren Wilson told council members. “If you wanted Anaheim to be nothing but Disneyland, that’s what you’re getting. Because you’re running out all the residents.”

Last year, Anaheim leaders attempted to stem the tide by adopting a regulatory regime whereby operators would have to apply for permits and adhere to restrictions on the number of tenants, the posting of rules about noise and required parking spaces, among other requirements. Guests at short-term rentals in Anaheim also have to pay the city’s 15 percent room-tax.

But homeowners who spoke at the council meeting said the rules are rarely enforced.

Meanwhile, a representative for short-term rental operators urged council members to not overreact to the problem.

The city should crack down on the few bad actors, but not “throw the baby out with the bathwater,” said Ryan McIntosh, who claimed to be affiliated with a group that represents about 30 percent of all short-term rentals in the city. McIntosh said only one short-term rental operator in his group has received a notice of violation from the city.

Others mentioned a “three strikes” rule, saying that under the ordinance operators who violate the rules three times should be shut down.

“Let’s please focus on proper enforcement,” McIntosh said.

City staff rejected characterizations that the city wasn’t enforcing violations of the rules. They said they had been “diligently” enforcing violations, issuing letters and code enforcement citations, among other things.

It’s unclear what new rules the city might come up with, but staff suggested in its report to council that having distance requirements between short-term rentals could help resolve complaints about entire neighborhoods changing into de facto hotel zones.

Councilman Jordan Brandman said the main problem with short-term rentals was lax enforcement of the current rules. He asked that $200,000 in funds be allocated to code enforcement to beef up enforcement against those that violate the ordinance.

Brandman asked for the moratorium to be postponed until city staff could meet with the “stakeholders” – operators and residents – and for it to be brought back at the Oct. 6 meeting.

“I do not believe that what is being presented here tonight is fully cooked,” Brandman said.

But his colleagues rejected the request, saying the need to pass the moratorium was urgent.

“I think we need to give some relief to the people in the audience,” Kring said.

The moratorium passed 4-1, with Brandman the sole no vote.

The problem is not nearly as acute in Santa Ana, but it has nonetheless raised the ire of some Floral Park residents.

Residents began lobbying City Hall about a home in West Floral Park that was converted into a short-term rental. They complained that some guests at the home would stay up until 2 a.m. and throw pool parties.

There was little public comment on the issue at Tuesday’s Santa Ana council meeting. The one resident who spoke said his short-term rental was also his primary residence and that he only rented out a single room.

Douglas MacLeith said he has turned to renting out a detached room at his house through Airbnb, to help pay for surgeries his daughter has required for severe birth defects.

In his three years of providing short-term rentals, MacLeith said there hasn’t been “one little bit” of negative impacts to neighbors, such as noise.

“I’ve had dozens and dozens of people stay with me,” usually just one or two people at a time, he said, adding that the opportunity was a “godsend” and has allowed him to take care of his children without losing his home.

In response, Councilman Vincent Sarmiento emphasized that the 45-day ban is intended to simply give time for the council to consider options for regulating the impacts of short-term rentals.

When the issue came up at a council meeting two weeks ago, Mayor Miguel Pulido and Councilwoman Michele Martinez indicated that the majority of council members are not interested in cracking down on single-room rentals.

However, the temporary ban that was approved Tuesday, and went into effect immediately, applies to all short-term rentals, including single rooms, according to city staff.

While violations of the ban violations could result in six-month jail terms and a $1,000 fine, neither the ban nor city code defines what makes a rental “short-term,” and thus illegal. The measure went into effect immediately Tuesday night.

Santa Ana’s planning director, Hassan Haghani, said the moratorium prevents MacLeith from continuing his short-term rentals. But City Manager David Cavazos hinted that the city might only be interested in prosecuting locations that are causing negative impacts to neighbors.

After Haghani’s comments, Cavazos emphasized that the city couldn’t give advice to MacLeith Tuesday night, and that “we’re only enforcing at this time at one location,” the West Floral Park house.

The issue is slated to return Oct. 20 for public input, debate and a vote on permanent regulations.

Please contact Adam Elmahrek directly at aelmahrek@voiceofoc.org and follow him on Twitter: @adamelmahrek