HomeMy WebLinkAboutItem 1a - Short-Term Rentals and Home Sharing
DATE: July 18, 2017
TO: Honorable Mayor and City Council
FROM: Jason Kruckeberg, Assistant City Manager/Development Services Director
By: Lisa Flores, Planning Services Manager
Prepared By: Jordan Chamberlin, Associate Planner
SUBJECT: ORDINANCE NO. 2348 AMENDING VARIOUS SECTIONS OF ARTICLE
IX, CHAPTER 1 OF THE ARCADIA MUNICIPAL CODE (“THE
DEVELOPMENT CODE”) WITH AN EXEMPTION FROM THE
CALIFORNIA ENVIRONMENTAL QUALITY ACT (“CEQA”) TO PROHIBIT
SHORT-TERM RENTALS, HOME SHARING, AND THE
ADVERTISEMENT OF THESE USES
Recommendation: Introduce
SUMMARY
Ordinance No. 2348 has been prepared to amend various sections of the Development
Code to prohibit short-term rentals, home sharing, and the advertisement of these uses.
The City of Arcadia’s Development Code currently does not address short-term rentals
and home sharing. Due to concerns raised by residents regarding the negative impacts
of these uses to surrounding neighborhoods, at its May 2, 2017 Study Session, the City
Council directed staff to prepare an Ordinance to prohibit short-term rentals in all zones
allowing residential uses. It is recommended that the City Council introduce Ordinance
No. 2348 (Attachment No. 1).
BACKGROUND
A short-term rental is a residential unit that is available for rent for a brief period of time,
typically less than 30 consecutive days. Short-term rentals allow guests to have
exclusive use of the entire property. Home sharing is similar to a short-term rental
except that the accommodations are shared and either the property owner or resident
lives on-site throughout the visitors’ stay. Short-term rentals and home sharing have
been around for many years, located predominantly in vacation communities such as
Palm Springs, Big Bear, and coastal communities. With the rise of the sharing economy
and over 100 hosting platforms found on the internet, such as Airbnb, Homeaway, and
VRBO, it is easier than ever for property owners and residents to advertise a property
as available for a short-term rental or home share. Short-term rentals and home sharing
Ordinance No. 2348 - Short-Term Rentals and Home Sharing
July 18, 2017
Page 2 of 9
appeals to property owners and residents because they provide additional income by
offering a room or a home for rent that might otherwise go unused. The additional
income can help cover the cost of the home or other expenses. Due to the financial
benefit and how easy it is to list a property for rent, the use has found its way into many
suburban communities like Arcadia. The use offers guests flexibility and access to more
amenities, often for a cheaper price, when compared to hotels. Kitchens, multiple
bedrooms and bathrooms, and outdoor areas, appeal to many different types of
travelers such as families with children, large groups, and those traveling with pets.
Guests can enjoy feeling like a “local” in a residential neighborhood rather than feeling
like a tourist in a hotel in a commercial area.
However, there are a growing number of issues that cities around the State and nation
are dealing with regarding this use. The main issue is the nuisance activity that can
occur from these uses. The guests of short-term rentals and home shares are often in
“vacation-mode”. Due to the transient nature of the use, guests have little incentive to
keep good neighborly relations or abide by local jurisdictions’ regulations – guests may
not even be aware of local rules. This can result in unruly neighbors, excessive parties
and trash, illegal parking, and other activities that are incompatible with residential uses.
Neighbors can be greatly impacted and often feel as if there has been of a loss of
community and that their neighborhoods are not as safe with the constant turnover of
unidentified guests. Because the City has received many of these types of complaints,
staff is recommended continuing to ban the use.
Another issue regarding short-term rentals and home sharing is the potential loss of
housing stock and the effect on affordable housing. Conversion of permanent, long-term
housing units to short-term rentals and home sharing has been identified as a trend and
a concern in many cities such as New York, Los Angeles, and San Francisco where
housing supply is limited. Property owners may be motivated to offer units as a short-
term rental or home share rather than a long term rental because short-term and home
sharing guests are willing to pay more for the unit. When homes intended for
permanent housing are utilized as short-term rentals or home shares they are no longer
a part of the housing stock, and the number of permanent housing units is reduced. A
reduction in permanent housing units can put an upward pressure on rental prices and
negatively affect housing affordability.
To regulate or react to these uses, cities have taken varied and different approaches.
To help mitigate the nuisance activity associated with short-term rentals and home
sharing, some cities require that a short-term rental or home sharing permit application
be submitted. The permit can incorporate requirements and operational standards that
must be abided by the property owner and guests during the duration of the stay. Short-
term rental and home sharing permits will often require a business license application,
safety inspections, and proof of insurance from the property owner. In many cases,
operators of short-term rentals and home sharing units are required to pay Transient
Occupancy Tax (“TOT”), just like a hotel. TOT can be an important revenue source for
Ordinance No. 2348 - Short-Term Rentals and Home Sharing
July 18, 2017
Page 3 of 9
jurisdictions that are vacation-oriented communities. Many cities are pursuing
regulations to require TOT collection as part of their short-term rental or home sharing
regulation package.
Some cities also provide a “Good Neighbor Brochure” that outline the specific quiet
hours, maximum daytime and night time occupancy, maximum number of vehicles on-
site, and include many other operational standards designed to minimize impacts to the
surrounding neighborhood. The brochure is made available to guests to ensure they are
aware of these rules in the hope that the surrounding neighbors are not impacted. Local
cities that have pursued or are pursuing such regulations include Pasadena, Newport
Beach, and Palm Springs. Cities that are evaluating this issue are trying to find a
balance between private property rights and financial benefits, and regulations that
protect neighborhoods.
Whether a city decides to allow short-term rentals and home sharing or prohibit them,
regulating and bringing properties into compliance can be challenging. There are over
100 hosting platforms available to list short-term rentals and home sharing units.
Listings are added, changed, and removed daily. Most hosting platforms do not provide
the physical address of the short-term rental and home share until the unit is booked.
This makes it very difficult to locate the exact property and identify the owners.
Monitoring, tracking, and enforcing short-term rentals and home sharing can take a
considerable amount of staff time. Depending on how popular short-term rentals are in
the community, some cities hire additional staff to focus solely on regulating these uses.
Other cities like Indio, Palm Springs, Palm Desert, and the County of Riverside, choose
to hire a consulting firm to take the burden off of staff and streamline enforcement.
To understand the type of services available, three firms were contacted who work with
other cities: Harmari, Host Compliance, and Vacation Rental Compliance – refer to
Attachment No. 2 for Host Compliance’s Handout. These companies offer a full range of
services including ordinance creation, identifying and tracking short-term rental and
home sharing properties, sending notices to properties that do not comply with
regulations, creating the necessary handouts and applications for short-term rental and
home sharing permits, assistance with TOT collection, and provide 24-hour non-
emergency hotlines for neighbors to file complaints. Services can cost as little as $2,000
to well above than $10,000 a year.
Regulating short-term rentals was discussed by the City Council when the Development
Code was being updated in 2016. However, due to pending litigation in a number of
cities around the same time and a desire to see some of this case law settled, no
regulations were adopted at that time. Since the adoption of the Development Code,
short-term rentals and home sharing have become more prevalent in Arcadia and have
begun to negatively impact residents. On May 2, 2017, the City Council held a Study
Session to discuss the possibility of regulating short-term rentals and home sharing or
whether the City had the ability to prohibit these uses – refer to Attachment No. 3 for the
Ordinance No. 2348 - Short-Term Rentals and Home Sharing
July 18, 2017
Page 4 of 9
Study Session PowerPoint. The City Attorney opined on the issue and stated that the
City can prohibit short-term rentals and home sharing in order to protect residential
areas. At the Study Session, a number of residents spoke about the negative impacts of
short-term rentals and home sharing properties in their neighborhoods. Nuisance
activities such as, excessive noise, increased vehicular traffic, and concerns regarding
security and public safety were common. In order to protect the character and quality of
Arcadia’s neighborhoods, the City Council directed staff to prepare an ordinance to
prohibit short-term rentals and home sharing.
DISCUSSION
The City of Arcadia’s Development Code is silent on short-term rentals and home
sharing. The Development Code is based on permissive zoning, whereby if a use of
land is not specifically listed, the use is not allowed. Despite the use not being allowed,
the number of homes available for short-term rental and home sharing has steadily
increased over the past four years. In 2013, according to AirDNA and Inside Airbnb,
sites that monitor Airbnb usage, there were no homes in Arcadia listed on Airbnb. As of
early June 2017, there were between 38 to 86 “entire home” rentals and 89 to 174
“single room rentals” in Arcadia. These numbers do not include homes listed on other
hosting platforms as well – refer to Attachment No. 4 for a Map of Short-term Rental and
Home Sharing Locations as of June 2017 from Inside Airbnb.
With the rise of short-term rentals and home sharing in the community, Code
Enforcement and the Police Department have also seen a rise in complaints from
neighbors regarding the use. The most common issues are excessive noise, increased
traffic, and parking problems. Some of the properties are being used for parties which
take place on the weekends and can extend into late hours of the night, disrupting the
neighborhood and requiring the Police Department to respond. In the case of several
properties, homes are being rented commercially for a night or weekend for events such
as illegal filming, wedding receptions, and advertised parties with cover charges.
Residents located near unpermitted short-term rentals or home sharing properties have
expressed concerns that the use is changing the character and quality of the
neighborhood. With different guests constantly coming and going neighbors feel like
there has been of a loss of community and that the neighborhood is not as safe since
the guests are unidentified. Due to the transient nature of the use, guests may have no
connection with the neighborhood and have little incentive to invest time in the
community or be concerned about how certain activities may affect the neighbors. They
may not maintain the same quality of life standards as permanent residents or are
unaware of regulations that help maintain peaceful residential neighborhoods such are
noise limitations and parking.
In order to eliminate ambiguity regarding this use and to protect the City’s
neighborhoods, staff recommends adding language to the Development Code
specifically prohibiting short-term rentals, home sharing, and the advertisement of
Ordinance No. 2348 - Short-Term Rentals and Home Sharing
July 18, 2017
Page 5 of 9
these uses. The proposed Ordinance will protect Arcadia’s neighborhoods by explicitly
prohibiting a use that has the ability to negatively affect the surrounding community –
refer to Attachment No. 1, for Ordinance No. 2348 which outlines the proposed
amendments. The Ordinance will prohibit not only short-term rentals and home sharing
activities, but the advertisement of them as well. Code Enforcement will not be required
to complete a physical inspection in order to verify that a violation of the Development
Code has occurred. This will save staff time, allow the City to take action and begin
enforcement proceedings, and bring properties into compliance sooner, which will help
mitigate potential problems before they start. At this time, the Code Enforcement
Division and the Police Department should have sufficient tools to enforce the proposed
Ordinance. However if in the future short-term rentals become more prevalent,
disruptive or, more difficult to track, the City can consider contracting with a private
company to assist with enforcement.
It should be noted that the prohibition of short-term rentals and home sharing will not
impact a property owner’s ability to rent out one room or the entire home for a period of
29 consecutive days or more. The renting of two or more rooms under separate rental
agreements for any length of time will still be considered a boarding house and a
prohibited use in all zones in the City. The Ordinance only applies to dwellings and
therefore does not impact hotels, motels, emergency shelters, or extended stay
locations, which may be allowed under other provisions of the Development Code. The
Ordinance also does not apply to residential care facilities or dwellings operated as a
group home pursuant to the Community Care Facilities Act that are otherwise exempt
from local zoning regulations.
PLANNING COMMISSION HEARING
The Planning Commission held a public hearing on June 27, 2017, for the consideration
of Text Amendment No. TA 17-04, which is the basis for the proposed Ordinance No.
2348. After concluding the public hearing, the Commission discussed the proposed
Ordinance and the negative impacts of short-term rentals and home sharing on
neighborhoods and voted unanimously to recommend that the Ordinance be presented
to the City Council.
FINDINGS
Pursuant to Section 9108.03.060 of the Arcadia Municipal Code requires that for an
amendment to the Development Code to be granted, it must be found that all of the
following prerequisite conditions can be satisfied:
1. The amendment is internally consistent with all other provisions of the
General Plan.
Ordinance No. 2348 - Short-Term Rentals and Home Sharing
July 18, 2017
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Facts to Support this Finding: Proposed Ordinance No. 2348 to prohibit short-
term rentals, home sharing, and the advertisement thereof, does not amend the
General Plan but is consistent with all provisions of the General Plan to protect
neighborhoods from nuisances and other adverse effects resulting from improper
operation of short-term rentals and home sharing.
2. The proposed amendment will not be detrimental to the public interest,
health, safety, convenience, or general welfare of the City.
Facts to Support this Finding: Proposed Ordinance No. 2348 will be in the public
interest and will not be detrimental to the health, safety, or general welfare of the
City. Short-term rentals and home sharing have been around for many years
located predominantly in vacation communities. It isn’t until fairly recently with the
rise of the sharing economy and hosting platforms like Airbnb, Homeaway, and
VRBO that these uses have found their way into many suburban communities like
Arcadia. The City of Arcadia’s Development Code is silent on short-term rentals
and home sharing. The Development Code is based on permissive zoning,
whereby if a use of land is not specifically listed, the use is not allowed. Despite the
use not being allowed, the number of homes available for short-term rental and
home sharing has steadily increased over the past four years. The City has also
seen a rise in complaints from neighbors regarding these uses. The most common
issues are excessive noise, increased traffic, and parking problems. Properties are
being used for parties which can extend into late hours of the night or are being
rented commercially for events such as illegal filming, wedding receptions. These
activities are very disruptive to the surrounding neighborhood. Residents located
near unpermitted short-term rentals and home shares have expressed concerns
that the use is changing the character and quality of the neighborhood. With
different guests constantly coming and going neighbors feel like there has been of
a loss of community and that the neighborhood is not as safe since the guests are
unidentified.
Prohibiting short-term rentals and home sharing in all zones allowing residential
uses is in the public’s interest in order to eliminate the negative impacts associated
with these uses such as, disorderly conduct, increased vehicular traffic, parking
problems, excessive noise, and security and public safety concerns. Prohibiting
short-term rentals and home sharing is necessary to ensure that in all zones
allowing residential, that the uses are compatible with the surrounding
neighborhood and that these communities remain safe and quiet.
3. The proposed amendment is consistent with the General Plan and any
applicable specific plan(s).
Facts to Support this Finding: Proposed Ordinance No 2348 is consistent with
the Arcadia General Plan Land Use and Community Design Element and House
Ordinance No. 2348 - Short-Term Rentals and Home Sharing
July 18, 2017
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Element goals and policies. The City’s experience with short-term rentals and
home sharing, and the experiences of other cities, indicates that these uses are
often associated with negative impacts to residential neighborhoods such as
increased vehicular traffic, parking problems, excessive noise, security and public
safety concerns from residents, and a loss of residential character. Due to the
transient nature of the use, visitors may have no connection with the neighborhood
and have little incentive to maintain the same standards and quality of life as
permanent residents. Because the properties are associated with temporary and
vacation uses, they are often a source of late-night parties and noise. The number
of guests utilizing short-term and home sharing properties also results in increased
neighborhood parking demands. Short-term rental and home sharing uses can
change the character of a neighborhood because such properties have been used
for events such as illegal filming, wedding receptions, and advertised parties with
cover charges. Prohibiting short-term rentals and home sharing will ensure that the
character and quality of Arcadia’s neighborhoods are preserved and a high quality
of life for the residents is maintained.
The Housing Element states that Arcadia is in good condition and provides
housing opportunities, so it is important to conserve that housing stock. If homes
are utilized for transient occupancy, they are no longer part of our housing stock.
Prohibiting home sharing is also a way to preserve affordable housing
opportunities as rooms and secondary units can be used for permanent housing
rather than transient stays. A reduction in permanent housing units can put an
upward pressure on rental prices and negatively affect housing affordability.
Prohibiting short-term rental and home sharing is consistent with the following
General Plan goals and policies:
Land Use and Community Design Element
Goal LU-3: Preservation and enhancement of Arcadia’s single-family
neighborhoods, which are an essential part of the City’s code identity.
Policy LU-4-2: Encourage residential development that enhances the
visual character, quality, and uniqueness of the City’s neighborhoods and
districts.
Policy LU-4.4: Strictly enforce City codes, including building and safety,
zoning and land use regulations, and property maintenance codes, to
maintain safe, high-quality residential neighborhoods”. In addition, the
General Plan calls for the City to create a safe place for residents to live
and to minimize noise impacts as part of land use planning decisions.
Housing Element
Goal H-1: Conserve and improve the condition of the existing housing
stock.
Ordinance No. 2348 - Short-Term Rentals and Home Sharing
July 18, 2017
Page 8 of 9
Policy H-1.1: Continue to monitor and enforce building and property
maintenance codes in residential neighborhoods to prevent the physical
deterioration of existing sound housing within the City.
Policy H-1.2: Continue to provide code enforcement services designed to
maintain the quality of the housing stock and the neighborhoods.
4. For Development Code amendments only, the proposed amendment is
internally consistent with other applicable provisions of this Development
Code.
Facts to Support this Finding: Proposed Ordinance No. 2348 is internally
consistent with all other applicable provisions of the Development Code. The
proposed Ordinance prohibits property owners from utilizing residential units as
short-term rentals or home sharing, in order to eliminate negative impacts
associated with said uses such as disorderly conduct, increased vehicular traffic,
parking problems, excessive noise, security and public safety concerns, and the
loss of residential character. The Development Code is based on permissive
zoning, whereby if a use of land is not specifically listed, the use is not allowed.
There is no current provision of the Development Code permitting short-term
rentals or home sharing as an allowed use in residential zones. The Ordinance
only applies to dwellings and therefore does not impact hotels, motels, emergency
shelter, or extended stay locations, which may be allowed under other provisions
of the Development Code. The Ordinance also does not apply to residential care
facilities or dwellings operated as a group home pursuant to the Community Care
Facilities Act that are otherwise exempt from local zoning regulations.
ENVIRONMENTAL IMPACT
Ordinance No. 2348 to prohibit short-term rentals, home sharing, and the
advertisement of short-term rentals is exempt from review under CEQA pursuant to
Section 15061(b)(3) and Section 15321. Section 15061 states that CEQA applies only
to projects which have the potential for causing a significant effect on the environment.
Where it can be seen with certainty that there is no possibility that the activity may have
a significant effect on the environment, the activity is not subject to CEQA. The
proposed Ordinance is exempt under Section 15321 because it consists only of minor
revisions and clarifications to an existing Development Code and will not have the effect
of deleting or substantially changing any regulatory standards or findings. The proposed
Ordinance is an action that does not have the potential to cause significant effects on
the environment, but rather will clarify prohibited uses in all zones allowing residential
uses in the City. A Preliminary Exemption Assessment is included as Attachment No. 5.
Ordinance No. 2348 - Short-Term Rentals and Home Sharing
July 18, 2017
Page 9 of 9
PUBLIC COMMENTS/NOTICE
Pursuant to Development Code Section 9108.13.020.B.2, if the number of property
owners to whom notice would be mailed is more than 1,000, a notice may be published
in a general circulation news publication. Accordingly, a public hearing notice for
proposed Ordinance No. 2348 was published in the Arcadia Weekly on July 6, 2017. As
of July 12, 2017, no comments were received in response to the notice.
RECOMMENDATION
It is recommended that the City Council introduce Ordinance No. 2348 amending
various sections of Article IX, Chapter 1 of the Arcadia Municipal Code (“The
Development Code”), with an exemption under the California Environmental Quality Act
(“CEQA”), to prohibit short-term rentals, home sharing, and the advertisement of these
uses.
Attachment No. 1: Ordinance No. 2348
Attachment No. 2: Host Compliance Handout
Attachment No. 3: May 2, 2017 City Council Study Session PowerPoint
Attachment No. 4: Map of Short-term Rental and Home Sharing Locations as of June
2017 from Inside Airbnb
Attachment No. 5: Preliminary Exemption Assessment
Cost-effective solutions short-term rental
monitoring and compliance problems
1
April, 2016
Agenda
Introductions
U.S. and Arcadia Specific Market Context
The Host Compliance Solution
Discussion and Next Steps
2
Partnership combines latest Silicon Valley data-science
with 17 years of local government software expertise
Only provider of short-term rental
Helping Local Government improve
compliance monitoring technology for
efficiency for over 17 years
local governments
Customer base of over 500 cities and
Silicon Valley based start-up company
public agencies across the United
Brings
States and Canada.
technology to any sized municipal
100% focused on Local Government
government
Solutions designed and constantly
Team of seasoned local government
improved by Local Governments.
technology executives and data-
scientists
3
Introductions
UlrikBinzer
Paul Hetherington
Founder & CEO
Chief Revenue Officer
Working with Local Government for over
Prior COO of 2 Venture Capital backed
20 years
companies
Love of technology and efficiency
Former military officer and graduate of
Focused on solutions with dramatic
Harvard Business School
impact.
Launched Host Compliance when asked
Dad, Triathlete and graduate of British
by my local town council to study
Columbia Institute of Technology
possible ways to address the issues with
short-term rentals in our community
4
Broad set of stand-alone and
integrated solutions for local
governments
Records
Management
Public Records
Agendas and
and Permitting
Minutes
Focus
VideoShort-Term
StreamingRental
for MeetingsCompliance
5
Tell us a bit about you, Arcadia, and where you are in
terms of regulating short-term rentals?
My
city
6
What most important goals as it relates to
short-termrentals?
Reduce noise, parking and trash-problems
Eliminate party houses
Ensure building safety
responsiveness to neighbor complaints
Improve permit and tax compliance to increase tax revenue
Ensure a level playing field between law abiding traditional lodging
providers and illegal short-term rentals
Reduce tension between short-term rental property owners and their
neighbors
Send a clear message to citizens that the city takes the STR problems
seriously
Other?
7
How big of a problem are short-term rentals in Arcadia?
Many
Crisis
Problem
ConcernIssue
Few
Debate Temperature
ColdHot
8
Agenda
Introductions
U.S. and Arcadia Specific Market Context
The Host Compliance Solution
Discussion and Next Steps
9
Market Context: AirBnb
rental websites have turned vacation rentals into a booming
+ 100s of other
web platforms
Sources: AirBnB, HomeAway, VRBO and Flipkey
10
in Arcadia we have identified 140 listings and 124
unique short-term rental properties
Unique short-term rentals in Arcadia as of April, 2016
Sources: Host Compliance proprietary data
11
Increased tourist traffic from short-term renters has the potential
to character while introducing new safety risks,
noise issues, trash and parking
Increased tourism can change Visitors don't always know (or follow) local rules
neighborhood character
Short-term renters may want to party and have
Increased occupancy and short-
less incentives to keep good neighborly relations
can have negative side-effects
12
disgruntled
isloud,andthereislivemusicandkaraokestuff,and
alldoneoutsidebecauseofthepool.outin
frontat4intheafternoonwaitingfortheirUbertocome,
drunkonthefrontlawn.
Emmy Jodoin
a hotel. Would you buy a home if you knew a
hotel like this was operating next door, if you
Jessica C. Neufeld
playing beer pong just wearing their
Hazel Old, age 11
Worry for Home
13
economy and
ability to
effectively protect their interests
Arcadia loses out on tax revenue that could have been
invested in improving the quality of life for its residents
Conversion of residential units into tourist accommodations
results in a tighter housing market, less affordable housing
and higher rents
Jobs are lost and wages are lowered in the local hospitality
industry as unfair competition from unregulated vacation
rentals lower demand for traditional tax-paying lodging
providers
Lack of proper regulation or limited or non-existing
enforcement of existing ordinances, leads to tension
between neighbors and the disillusionment with local
government
*Source: ZervasAirBnB
14
Unfortunately manual compliance monitoring and
enforcement is ineffective and prohibitively expensive
Rental property listings are spread across 100s of different
websites, with new sites popping up all the time
Manually monitoring 100s of properties is practically impossible
as listings are constantly added, changed or removed
Address data is hidden from listings making it time-consuming or
impossible to locate the exact properties and identify owners
It is practically impossible to collect taxes as there is no easy way
to find out how often the individual properties are rented and for
how much
The vacation rental platforms refuse to exchange data or
collaborate with local governments*
Law enforcement and local government staff have no legal basis
to evict problematic short-term renters even if several ordinances
are violated
*except for in a few major cities such as New York, San Francisco and Chicago where one of the 100s of rental platforms (AirBnB) helps collect TOT
15
Agenda
Introductions
U.S. and Arcadia Specific Market Context
The Host Compliance Solution
Discussion and Next Steps
16
Ways we can help
Trend Monitoring: Monthly report with aggregate statistics on the
short-term rental activity in Arcadia
Address Identification: Monthly report with complete address
information and screenshots of all identifiable STRs in
jurisdiction
Compliance Monitoring: Ongoing monitoring of STRs for zoning and
permit compliance coupled with systematic outreach to illegal short-
term rental operators (using form letters)
Tax Collection Support: Ongoing monitoring of STR listings
for tax compliance. Pro-active, systematic and data-informed
outreach regarding tax remittance obligations
Dedicated Hotline: 24/7 staffed telephone and email hotline for
neighbors to report non-emergency problems related to STR
properties.
17
Affordable pricing tailored needs
STR Trend Monitoring$380/yr
Address Identification
$4,200 /yr
(PLUS all services above)
Compliance Monitoring
$6,300 /yr
(PLUS all services above)
Tax Collection Support
$9,100 /yr
(PLUS all services above)
24/7 Dedicated Hotline
$10,780 /yr
(PLUS all services above)
Note: Above pricing assumes 140 short-term rental listings. Host Compliance would be happy to discuss
alternative contract terms, contract durations and pricing structures if that would be of interest.
18
services
Ensures fair, continuous and consistent compliance monitoring and
enforcement
Frees up valuable staff time that can be focused on higher-value added
activities
Minimizes noise, parking and trash violations
Minimizes the impact on local law and code enforcement agencies as
complaints are first handled by our 24/7 hotline and routed to the
appropriate property owner before further enforcement actions are
triggered
tax and permit fee collections
REVENUE POSITIVE in most cases, the additional permitting fees
Requires NO up-front investment or complicated IT integration
-> we can be up and running in a couple of weeks
6 MONTH UNCONDITIONAL MONEY BACK GUARANTEE!
19
Agenda
Introductions
U.S. and Arcadia Specific Market Context
The Host Compliance Solution
Discussion and Next Steps
20
Feedback
21
Working backwards to a solution to STR
problems
22
Next Steps
Send you this presentation
Schedule all team meeting?
Set timeline to decide on best solution for
needs
Confirm timing of possible rollout (needed to
secure place in the queue)
23
Contact info
Please feel free to contact us anytime if you have any questions
about short-term rental regulation and how to best address the
associated monitoring and enforcement challenges.
Ulrik Binzer Paul Hetherington
binzer@hostcompliance.compaulh@hostcompliance.com
857.928.0955604.763.7285
www.hostcompliance.com
24
SHORT TERM RENTALS
City Council Study Session
May 2, 2017
1
SHORT TERM RENTALS – GENERAL
Market Context: Short Term or Vacation Rental
sites such as Air BnB, VRBO, Flipkey, and many
others have exploded in popularity around the
country. All forms of residential units being
utilized in different ways in every community.
Cities handling this Increase in many ways...some
are embracing this rise in home sharing and/or
rentals as great for the economy, others are filing
lawsuits against the various platforms and
rejecting these uses outright.
2
SHORT TERM RENTALS – GENERAL
In vacation communities like Palm Springs,
Newport Beach, Big Bear, etc., these uses are
common and integrated into the community.
Impacts much more noticeable and shocking in
traditional, residential communities such as
Arcadia. Especially noticeable given recent regional
trend of houses being treated as investments, and
not permanent residences.
3
SHORT TERM RENTALS – PROS AND CONS
POSITIVES NEGATIVES
Private income generation Creation of “transient”
communities
Transient Occupancy Taxes (TOT) Impacts to neighborhoods (noise,
can be payable to cities trash, disturbances)
Economic boost to region Safety concerns
Use of homes in a non-residential
fashion (parties, weddings, filming,
etc.)
4
SHORT TERM RENTALS – WHAT IS THE
SITUATION IN ARCADIA?
Sites that track AirBnB (Air DNA, Inside Air BnB)
list between 38 and 62 “entire place” rentals, and 89
to 174 “single rooms” in Arcadia.
Despite the numbers, most of these sites are used in
a residential manner and few complaints are
received. Also, 85% of rentals available listed as
“high availability” – so not used much.
However, several problem sites around the City
cause great consternation and generate numerous
complaints.
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SHORT TERM RENTALS – WHAT ARE
OTHER CITIES DOING?
Many cities are not doing much...the use is
“prohibited” based on definition of hotel, but no
enforcement.
Some cities are adopting regulatory Ordinances.
Many layers and steps to regulation and
enforcement. Recent examples that appear
comprehensive include Beverly Hills, Palm
Springs, Pacific Grove, & Emeryville.
Other cities are adopting Ordinances to
specifically prohibit such uses (some grandfather
existing uses, some do not). Examples are Rancho
Palos Verdes, Cerritos, and Anaheim.
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REGULATORY OPTIONS
1. Regulate these uses by drafting an Ordinance
detailing the allowable time, place, and manner for
short term rentals. Require TOT to be paid, business
license, etc.
2. Prohibit these uses by drafting an Ordinance not
allowing them in residential zones.
3. Leave as is, enforce as needed.
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REGULATING SHORT TERM RENTALS
Potential Ordinance Contents
Limitation on number of rentals/number of days
in calendar year
Establish a permitting process
Limitations on occupancy and use (i.e. only
residential)
Limitations on parking
Clear violation/citation provisions
Clear enforcement regulations and neighbor
“rights”, local contacts
Process of registration and collection of TOT
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REGULATING SHORT TERM RENTALS –
PROPOSED CITY ORDINANCE
Highlights of Potential Ordinance
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OPTIONS FOR REGULATORY ORDINANCE
Regulations should be tailored City’s overall goal.
A strong approach will severely limit rentals by
regulating room counts, enforcing quiet hours,
requiring a 24/7 contact, installing separation
requirements, and limiting stays severely.
A more permissive approach will focus on those uses
that are clearly commercializing the neighborhood
(e.g. acting like hotels, creating party houses). This
approach would allow true residential rentals
without many constraints.
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PROHIBITING SHORT TERM RENTALS
City can prohibit such uses, has broad police
powers to do so to “protect” residential areas.
City does not allow primarily commercial uses in
residential zones.
Many cities regulate by simply enforcing these uses
on a complaint basis by citing them as commercial.
An Ordinance is a direct way of prohibition.
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ENFORCEMENT
Very challenging enforcement environment. Staff-
intensive to follow up on complaints, collect TOT,
issue business licenses, correspondence and
citiations, and ensure compliance with regulations.
Third-party consultants are available to track
listings, engage in correspondence, collect TOT, and
keep consistent pressure on the providers.
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DISCUSSION AND NEXT STEPS
Threshold Question: Should the City regulate or
prohibit Short Term Rentals?
If a Regulatory Ordinance is desired, what are the key
components?
Questions and Discussion
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Map of short-term rental and home sharing locations as of June 2017 from Inside Airbnb.
The red dots represent short-term rental locations. The green and blue dots represent home
sharing location.
(Certificate of Determination
When Attached to Notice of Exemption)
1. Name or description of project: Ordinance No. 2348, is a Text Amendment to amend various
sections of Article IX, Chapter 1 of the Arcadia Municipal Code
(Development Code) to prohibit short-term rentals, home sharing,
and the advertisement of these uses.
2. Project Location Identify street Citywide
address and cross streets or attach
a map showing project site
topographical map identified by
quadrangle name):
3. Entity or person undertaking project: A. City of Arcadia
Development Services Department
B. Other (Private)
(1) Name
(2) Address
4. Staff Determination:
accordance with the Lead Agency's "Local Guidelines for Implementing the California Environmental
Quality Act (CEQA)" has concluded that this project does not require further environmental assessment
because:
a. The proposed action does not constitute a project under CEQA.
b. The project is a Ministerial Project.
c. The project is an Emergency Project.
d. The project constitutes a feasibility or planning study.
e. The project is categorically exempt.
Applicable Exemption Class: The text amendment is exempt under Section 15321
as it consists of minor revisions and clarifications to an
existing Development Code and will not have the effect
of deleting or substantially changing and regulatory
standards or findings.
f. The project is statutorily exempt.
Applicable Exemption:
g. The project is otherwise exempt Section 15061(b)(3) of the CEQA Guidelines that it can
on the following basis: be seen with certainty that there is no possibility that
the text amendments may have a significant effect on
the environment.
h. The project involves another public agency which constitutes the Lead Agency.
Name of Lead Agency:
Date: June 1, 2017 Staff: Jordan Chamberlin, Associate Planner
Preliminary Exemption Assessment