Cities across Orange County are finding ways to handle the rapidly expanding business of short term rentals, rooms or whole homes rented for just a few nights in residential areas that have left resident’s with split opinions on the issue.
Thus far, cities have largely taken one of two routes: an outright ban or a licensing system.
Residents across the county have come out to city council meetings, saying the rentals in their neighborhood have become havens for partiers, a problem for parking and an overall irritation in the neighborhood.
“It was basically three days of continuous party,” said one resident at a Costa Mesa City Council meeting in November. “The worst of everything was that after this nightmare was over, neighbors found used needles and used condoms on their front yards, which I believe this is totally unacceptable in a neighborhood that is full of kids.”
Residents have also raised concerns over the expansion of short term rentals creating a new hurdle in California’s affordable housing struggle. Every city in Orange County has to zone for thousands of new units in the coming decade, with many questioning where they’ll find the space in a largely developed county.
Rental operators have fired back, saying that renting helps them pay the bills when they’re not at home to maintain the property, and that as long as the process is regulated it’s a benefit to the community.
Short term rental operator and Orange resident Dory Williams shared at a recent city council meeting that she lost her job with an airline due to the pandemic, and since then has moved out of her home and operated it as a short term rental to meet her mortgage payments and pay for groceries.
“Since March, I’ve been unable to find a job and fully rely on my rental,” Williams said. “If rentals are banned, I don’t know what to do. I’d be forced to sell the house I worked so hard for.”
One common method cities including Fullerton and Newport Beach have taken is requiring homeowners hoping to rent register with the city, making themselves available to respond to any disturbances at the house and requiring they pay transient occupancy taxes, the same tax hotels are required to pay. Newport Beach’s program has even served as a strong source of tax revenue, bringing in around $4 million annually according to staff.
Huntington Beach approved a similar program at their meeting last week, requiring operators to register with the city and instituting a variety of restrictions including an age limit of 25 to rent in the city.
But other cities have chosen to do away with rentals altogether instead of paying to monitor them.
Two weeks ago, Irvine became the newest city to outright ban short term rental services in the city limits after nearly two years of attempting to regulate them. The ban forbids companies like AirBnB from processing transactions in the city, and requires them to turn over the name and address of applicants within the city limits.
To read the ban that takes effect Feb. 11, click here.
One of the drives behind the ban as described by city staff was the struggle to effectively police unlicensed operators. The city brought in contractor company Host Compliance to police the listings in May 2019, cutting the number of hosts in half over a few months, but staff said hundreds are still running.
“Despite the City’s adoption of these regulations, the lucrative nature of the home-rental business has resulted in a significant number of properties in the City being advertised and operated as short-term rentals,” said Assistant City Attorney Noam Duzman in a report to the council.
Residents also said the city’s current enforcement wasn’t keeping up with the problem in public comments.
“It’s a big problem that we have to play ‘whack-a-mole’ and report each listing that’s less than 31 days,” said Mari Fujii. “Most times, the listing will later reappear in which we have to report the same listing again, over and over again.”
Costa Mesa enacted a temporary moratorium on short term rentals last November, giving existing operators a month to close up shop. That moratorium was extended by a unanimous vote just over a month later, keeping short term rentals closed in the city through at least November 2021.
Yorba Linda also enacted its own laws banning short term rentals, and the cities of Garden Grove and Tustin have banned them as well without passing any new ordinance.
The city of Orange is also discussing a ban on short term rentals again at their Feb. 8 meeting.
Correction: An earlier version of this article stated that the city of Huntington Beach postponed discussion on regulation of short term rentals. The Huntington Beach City Council approved a new regulatory system for short term rentals on Jan 19, 2021. We regret the error
Noah Biesiada is a Voice of OC Reporting Fellow. Contact him at nbiesiada@voiceofoc.org or on Twitter @NBiesiada.