Laguna council backs away from banning short-term rentals

Laguna Beach property owners seeking to rent out space in houses or apartments for 30 days or less may not be out of luck after all.

The City Council on Tuesday eased away from an outright prohibition of short-term rentals in the city’s residential zones, declining to follow certain recommendations from the Planning Commission that included restricting short-term lodging to commercial areas.

Instead, after a number of people spoke in support of short-term lodging, including a group of residents calling themselves Homeshare Laguna Beach, the council voted 4 to 1 for staff to return at a later date with a revised ordinance. Councilman Robert Zur Schmiede, a former planning commissioner, dissented, saying he agreed with planners’ proposal to outlaw the practice in all residential zones.

Short-term rentals are a hot-button issue up and down the coast. Critics say the renters tend to add to parking, noise and other problems in a neighborhood, while the property owners say this is a great way for them to make extra money to keep up on their mortgage payments.

“One of the most important rights you have as a homeowner is the quiet enjoyment of your home and neighborhood,” Mayor Steve Dicterow said, adding that he favors regulation instead of prohibition. “For anybody to deny the potential for short-term lodging to create problems in neighborhoods is really failing to see reality.

“On the other hand ... I don’t want to see people in Laguna Beach losing their homes.”

Council members went back and forth discussing possible options for property owners. Councilman Bob Whalen suggested placing limits on the duration and number of times owners could rent out their homes.

In areas with single-family houses, for example, an owner could be allowed to rent out space four weeks per year at one-week minimums, in essence doing away with partiers who just want a weekend place to crash.

In this case, the owner would not have to live on site during guest stays, but the house would have to be his or her primary residence.

“It seems to be unfair competition with hotels who follow the rules and pay bed taxes,” former Laguna Beach Mayor Jane Egly said. “Enforcing the rules are so much easier.”

Proponents of short-term lodging countered that it gives visitors a less-expensive option than pricier hotels.

Planning commissioners had voiced concern that the practice forces out much-needed long-term rental housing in the city.

The council didn’t reach clear direction on homesharing — having an owner remain on the premises — as it pertains to short-term stays, though Mayor Pro Tem Toni Iseman suggested setting limits.

“I think four weeks is too narrow. I would go as high as 12 weeks,” Iseman said, extolling the value of an on-site host when she stayed in a 300-year-old house in the Cotswolds area of England in November.

“The best part,” Iseman said, was having someone to explain the area to her.

Currently, 36 property owners in Laguna have permits to rent short-term, though it’s unclear how many of those permits belong to properties in residential zones. The council agreed with commissioners that owners could keep those permits regardless of whether the ordinance is revised.

In May, the council declared a 45-day moratorium on the issuing of new permits for property owners seeking to rent space for 30 days or less. The council voted later in the year to extend the moratorium to Oct. 1, giving staff time to research enforcement options and how other cities handle the issue.

As part of the council’s vote, Whalen and Dicterow agreed to form a subcommittee to work with staff on a revised ordinance.