Short-term rentals will not be permitted in Laguna Hills following city officials banning advertisements of such properties in all residential areas. 

The City Council voted unanimously to give final approval to the ordinance in late April. Discussions began last year after some residents voiced concerns about a house party causing a nuisance. While the council and several residents agreed there should be regulations in place, some residents who operate short-term rentals said they fear the ban would strip away a significant part of their income. 

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Laguna Hills’ decision follows several other Orange County cities that have regulated short-term rentals. Anaheim prohibited new short-term rentals in 2016, but existing ones were allowed to continue operations for an 18-month grace period to phase out. At the beginning of 2020, Newport Beach tightened regulations by limiting rentals to coastal zones due to complaints regarding noise and lack of street parking. Most recently, Fountain Valley banned all existing and future short-term rentals late last year.

Laguna Hills’ municipal code previously did not explicitly address short-term rentals.

“Short-term rentals have always been prohibited in Laguna Hills because the city’s development code does not enumerate short-term rentals as a permitted use in the development code use tables,” Community Development Director Larry Longenecker said in an email interview.

During a late February meeting, the council discussed short-term rentals and directed staff to draft an ordinance banning the lodgings. At that meeting, Councilmember Don Caskey said the law would not change much in the city.

“Let’s say we pass an ordinance. Does that really change anything from what we’ve got right now? Are we going to go around and shut down and monitor every person that rents a room or rents a very small property? I rather doubt that,” he said.

As of June 2022, the city had 29 short-term rentals, according to a city staff report.

Caskey said the number of rentals in the city was not significant. “I don’t care whether there’s 20 or 10 of them; it’s small potatoes compared to everything we’ve got to look after,” he said.

Councilmember Erica Pezold, in echoing similar concerns, brought up the cost of policing the lodgings.

“There are around 29 short-term rentals. If we were to monitor, the city would have to hire a code enforcer, and that could be approximately $80,000 to $100,000 a year,” Pezold said. “Is that something we as a City Council are prepared to pay?”

According to the staff report, the first citation for an illegal short-term rental may be $2,000 if the city finds evidence that a property owner illegally advertised their residential property for rent as a short-term rental or for the rental of the property as an illegal short-term rental.

A grace period for individuals that currently rent out their properties in the city to close the lodgings may be implemented at the discretion of the city manager. However, the timeframe is yet to be determined, according to Longenecker, the community development director.

Adrian Placinta said he and his wife turned their Laguna Hills home into a short-term rental to supplement the costs of raising three children last year.

Now, their financial future could be in jeopardy.

“Recently, hearing that this is going to come to a ban will put a financial burden on myself and my family,” Placinta told the City Council during the April 11 meeting

He also expressed that the decision to enforce a ban could harm the price value of homes in the city. “If this causes distress sales on current short-term renters, they’re going to sell that property for less, and it’s going to hurt the neighborhood,” Placinta said.

Resident Patrice Mills, who is part-owner of some short-term rentals in town, recalled when a drug rehab house operated near her home. 

“When you talk about the quality of life and the choice of having an Airbnb next to you or a drug rehab house, I would say most people would want the short-term rental,” Mills told the council.

While Mills said she believes short-term rentals are harmless, resident Bruce Freeman disagreed, referring to a party that occurred last year at a short-term rental in his neighborhood.

“It’s the coming and going of strangers in strange cars, pool parties, music,” Freeman said. “When I bought my house 30 years ago, I had no intention of living next to a hotel.”

Agreeing with Freeman, resident Karen Litfin said short-term rentals make sense for resort areas but not for residential cities like Laguna Hills. “We have families, young children, and you never know who may move in next door,” she said.

In a city survey of residents last November, 71% of 140 respondents supported banning short-term rentals in town, with safety being one of the main concerns.

“Safety and crime are becoming larger issues every passing month, and these do not impact our quality of life in a positive way. People move to Laguna Hills to be part of a residential community, not in the middle of a party town,” one resident noted in comments in the survey. 

The ban on short-term rentals in Laguna Hills will go into effect on May 26.

Correction: An earlier version of this story said Councilmember Don Caskey’s comments were from the April meeting. He said the law wouldn’t change much during the February meeting. We regret the error.

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