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HomeMy WebLinkAboutItem 2b - Short-Term Rentals and Home Sharing DATE:August 1, 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:Adopt SUMMARY At its regular meeting of July 18, 2017, the City Council, by a vote of 4-0 with one City Council member absent, introduced Ordinance No. 2348with an exemption under the California Environmental Quality Act (“CEQA”),to amend various sections of Article IX of the Arcadia Municipal Code to prohibit short-term rentals, home sharing, and the advertisement of these uses.Attached isOrdinance No. 2348, the Notice of Exemption, and the Staff Reportsfrom the July 18,2017, meeting. RECOMMENDATION It is recommended that the City Council adoptOrdinance No. 2348amending 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. Adoption of Ordinance No. 2347 June 6, 2017 Page 2of 2 Attachment 1-OrdinanceNo. 2348 Attachment 2-Notice of Exemption Attachment 3-July 18,2017,City Council Staff Report NOTICE OF EXEMPTION TO: FROM: City of Arcadia County Clerk (Public 240 West Huntington Drive County of Los Angeles Agency) Post Office Box 60021 Environmental Office, Room 101 Arcadia, CA 91006-6021 12400 East Imperial Highway Norwalk, CA 90650 Contact: Jordan Chamberlin Associate Planner Phone: (626) 821-4334 Ordinance No. 2348 An Ordinance to amend 1. Project Title: various sections of Article IX, Chapter 1 of the Arcadia Municipal Code (The Development Code) to prohibit short-term rentals, home sharing, and the advertisement of these uses City of Arcadia, Development Services Department 2. Project Applicant: City-Wide 3. Project Location Identify street address and cross streets or attach a map showing project site (pre quadrangle name): 4. (a) Project Location City: Arcadia (b) Project Location County: Los Angeles An Ordinance to revise various sections of Article 5. Description of nature, purpose, and IX, Chapter 1 of the Arcadia Municipal Code beneficiaries of Project: (Development Code) to prohibit short-term rentals and home sharing in all zones allowing residential uses and to prohibit the advertisement of these uses Notice of Exemption City of Arcadia 6. Name of Public Agency approving project: Jordan Chamberlin, Associate Planner 7. Name of Person or Agency undertaking the project, including any person undertaking City of Arcadia Development Services an activity that receives financial Department assistance from the Public Agency as part 240 West Huntington Drive P.O. Box 60021 of the activity or the person receiving a lease, permit, license, certificate, or other Arcadia, CA 91066-6021 entitlement of use from the Public Agency as part of the activity: 8. Exempt status: (check one) (Pub. Res. Code § 21080(b)(1); State CEQA (a) Ministerial project. Guidelines § 15268) (b) Not a project. (Pub. Res. Code § 21080(b)(4); State CEQA (c) Emergency Project. Guidelines § 15269(b),(c)) Section 15321 (d) Categorical Exemption. State type and section number: (Pub. Res. Code § 21080(b)(3); State CEQA (e) Declared Emergency. Guidelines § 15269(a)) Section 15282(h) (f) Statutory Exemption. State type and section number: Section 15061(b)(3) of the CEQA Guidelines that it (g) Other. Explanation: can be seen with certainty that there is no possibility that the text amendments may have a significant effect on the environment. Ordinance No. 2348 to prohibit short-term rentals, 9. Reason why project was exempt: 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. Jordan Chamberlin, Associate Planner 10. Lead Agency Contact Person: (626) 821-4334 Telephone: Notice of Exemption 11. If filed by applicant: Attach Preliminary Exemption Assessment (Form 12. Has a Notice of Exemption been filed by the public agency 13. If yes, the date of the public hearing was: July 18, 2017 Signature: __________________________________ Date: _______________ Title: __________________________ Signed by Applicant Date Received for Filing: (Clerk Stamp Here) Authority cited: Sections 21083 and 21110, Public Resources Code. Reference: Sections 21108, 21152, and 21152.1, Public Resources Code. Notice of Exemption 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 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. -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-. 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. 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 - 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 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 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 prohibit short-term rentals and home sharing. DISCUSSION -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 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. 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 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 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 Page 6 of 9 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 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 -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 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 Page 7 of 9 -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 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--family neighborhoods, which are an Policy LU-4-2: Encourage residential development that enhances the 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- 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 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