The city of Orange is looking to tighten regulations on short-term rentals as such lodgings continue to proliferate in town and all across Orange County.
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Over the years, the rentals have become a prominent issue in the city with typical complaints including noise, trash, possible illegal activity and parking issues.
A proposed ordinance being weighed by the City Council outlines regulations for allowing short-term rentals, including licensing, and adding zoning requirements for the lodgings. The Planning Commission at a meeting last August recommended the council approve the law.
The City Council is expected to consider the ordinance at its April 13 meeting.
During a February Council meeting residents spoke in favor and in opposition to potential regulations of short-term lodgings. Currently, the rentals are “not specifically allowed” in the city.
Following discussion at the meeting, the council voted 4-3 to direct staff to bring back the short-term rentals ordinance to a future council meeting with amendments focusing on lodgings that are in violation of the current Orange municipal codes, the number of permits that will be allowed, and the prioritization for getting a permit, according to an email from City Clerk Pamela Coleman.
Council member Chip Monaco, who voted with the minority, said during the meeting that he was in favor of prohibiting short-term rentals.
“A nuisance in the neighborhood is a nuisance, to one person, to 12 people, to any person,” he said. “Commercializing our neighborhoods is not okay with me.”
“I’m not empathetic to the short-term rental owners,” he said. “It’s been illegal in Orange. It’s an investment risk they took and the investment risk is now being called by the city and it’s not our job to bail them out at all… I don’t want Orange police wasting one minute of time on noise complaints when there are real crimes that need to be taken care of in our community.”
Mayor Pro Tem Kim Nichols, who operates a short-term rental in Newport Beach and who voted to bring back the ordinance, said at the council meeting she was empathetic toward owners of the lodgings in Orange.
“I believe that … allowing short-term rentals, regulating short-term rentals and providing limitations — that include no parties, include the enforcement of a noise ordinance, include number of guests within their business license restrictions,” she said. “I think that we can do that and it gives us a mechanism to stop the houses that are abusing our neighborhoods.”
The lodgings are classified as residential units — generally hosted on platforms such as Airbnb and HomeAway — that are rented for a period of fewer than 30 days.
According to a staff report, the city previously took the position that since the Orange municipal code does not specify this type of rental, therefore it has no basis to regulate it. In 2013, during the uptrend of such rentals, the city began sending notices to properties listed on rental sites and informed them that they were required to file for a business license and collect transient occupancy tax or bed tax for the city.
However, in 2017 staff determined the city cannot issue a business license or collect the tax as the lodgings are not specifically permitted in the existing code. At that time, the city had 30 registered properties that generated approximately $8,000 per month in bed taxes. The city acknowledged that it did not actively prohibit the activity, according to the staff report.
Staff estimates that currently approximately 350 properties in the city serve as short-term rentals at least part of the year.
During the February council meeting, several Orange residents voiced their need for the lodgings, especially with COVID-19 halting the city’s economy.
Ryan Robertson, who has lived in Orange for 10 years, said he has many friends who run a short-term rental.
“They take great pride in making their properties immaculate and most impressive homes on the block. These people are ambassadors to our great communities in Orange County and drive extra tourism to the state and county. These rentals bring much-needed income to all of our local communities to bolster local businesses,” Robertson said.
Carter Page, a longtime resident of Orange, said, “Everywhere I go, I see more and more of my favorite businesses closing for good. These are businesses that have served our city for years that now have to close due to the monopolies of other big businesses. I would hate to see another avenue for a simple family to make money during these hard times to be taken away.”
On the other hand, on behalf of his elderly parents, who could not attend the council meeting, David Hillman expressed concerns about the adverse effects of short-term rentals in neighborhoods.
“Leadership should be proactive with the goal of protecting existing neighborhoods. Allowing short-term rentals in quiet neighborhoods disrupts the quality of life for residents seeking peaceful living. Converting homes to short-term rentals originally intended for long-term residents is totally counterproductive… Our neighborhoods should be protected and not turned into hotel zones,” Hillman said.
Orange is not the only city in Orange County looking to tighten and re-evaluate restrictions on short-term rentals.
In response to the increasing number of complaints, the Costa Mesa City Council in November voted unanimously to put a temporary moratorium on such lodgings.
In January, Irvine banned short-term rentals in the city citing the adverse effects of the lodgings. “These effects are often cited by neighbors who complain to the city of unpermitted short-term rental uses in their communities,” according to an Irvine city staff report.
Fullerton and Newport Beach have taken an alternative approach to monitoring the lodgings. Both cities require homeowners looking to rent to register with the city, thus allowing them to make themselves available to respond to any disturbances that renters make at their properties.
In addition, Newport Beach and Fullerton are requiring property owners to pay transient occupancy taxes — the same tax paid by traditional hotels.