Newport Beach Tightens Grip on Short-Term Rentals

HOSAM ELATTAR, Voice of OC

Newport Beach City Council members at their Jan. 14, 2020 meeting.

Newport Beach is cracking down on short term rentals, amid resident complaints about overcrowded homes, noise, shortages of street parking and overflowing trash. 

City officials, who say these issues are increasing required responses from police and other city services, are now applying stricter rules on short term renting, trying to limit rentals to the coastal zone and requirement for hosting platforms like Airbnb.

Examples of violations include not having an appropriate short term permit and not advertising your permit numbers on hosting platforms like VRBO or Airbnb. Violation fines range up to $1,000, if three violations occur within one year of each other. 

And after two violations, the city will have the power to suspend or revoke a short term rental permit altogether permit from a homeowner. Prior to this, permits could be only suspended after four violations.

The ordinance was also amended at the meeting to require short term rental guests stay at least two nights. This is to deter people from renting homes for one night to throw a party.

“There are more than a few bad apples in the rental business that are encouraging this revolving door of overnight stays that are creating overnight havoc in our neighborhoods,” Councilwoman Diane Dixon said at Tuesday’s City Council meeting.

“It’s a constant problem in our highly dense neighborhoods.”

She and other City Council members voted 5-2 Tuesday for the ordinance changes, with Mayor Will O’Neill and City Councilmember Kevin Muldoon voting in opposition.

“This goes too far, and it isn’t appropriate for the people that have been good operators for decades inside of our city to do this to. So I’m not going to support this,” O’Neill said. “What we’re doing to them is making their business harder and more expensive.”

Newport Beach currently has 1,465 homes with short term lodging permits, which generate a total of $4 million annually in taxes from renters, according to the city. The council’s ordinance changes will cap the number of short term lodging permits in the city at 1,600.

Newport Beach has a particularly active short term rental market, compared with other coastal cities, city officials said.

“We have a very robust short term lodging business here in Newport,” said Seimone Jurjis, Newport Beach’s community development director, during the meeting. “What were proposing is just some changes to improve the quality of life of the residents.”

Newport Beach’s original short term rental ordinance was adopted in 1992, in an effort to regulate weekly and monthly home rentals in the city. But in recent years, city officials said, there has been an increase of homeowners engaging in short term rentals without a permit. Last year, Newport Beach issued 35 citations related to short term housing, according to the city.

Some property owners pointed to those numbers in questioning why the ordinance was being changed.

“We’re doing all this because there were 35 citations written last year – 35 out of thousands and thousands of vacation stays,” said Don Abrams, owner of Abrams Coastal Properties. “Is this a problem that really needs fixing?”

Councilwoman Joy Brenner said while there were 35 official citations, the city faced many more phone calls to police that ended with verbal warnings.

“I don’t think 35 citations is an accurate number of the problems we’ve experienced in the community,” Brenner said at the meeting. “We’re getting complaints galore on this.”

In Newport Beach, residents who want to rent out their homes for short term rentals are required to have a permit, which are restricted to certain areas of the city. Property owners in areas zoned for single family homes are not allowed to do short term renting. 

 The city’s new ordinance requires short term rental units to have at least one parking space as well as limit occupancy to two people per bedroom plus two additional people.

Starting in April 2030, the new ordinance forbids short lodging permits to be issued or renewed outside of the Coastal Zone, a state-defined area that covers parts of the south and south west of the city including Balboa Peninsula.

Starting 30 days after it’s adoption, the ordinance will require residents to advertise their permit numbers on hosting platforms like Airbnb, Homeaway and VRBO. Signs will also be required outside the homes indicating their maximum occupancy limit.

Multiple property owners spoke against the signs at Tuesday’s meeting, saying they’ll make the area look “cheap.”

The ordinance changes will be brought back before the City Council for a second and final reading on Feb. 25.

“We’ve always been pro-business in this town, pro-growth,” said Councilman Brad Avery. “And on the flipside we got residents that are in a lot of pain because they’ve seen their neighborhoods transform.”

“We are a victim of our own success here.”

Hosam Elattar is a Voice of OC news intern. Contact him @[email protected] or on Twitter @ElattarHosam.