NEWPORT BEACH : Council Backs Plan to Control Rentals

In a compromise measure that seeks to control summer “party houses,” the City Council on Monday night gave preliminary approval to an ordinance that has won the backing of local real estate agents.

If it wins final approval at the council’s next meeting in two weeks, the proposal--a revised ordinance written after realtors complained that an earlier version would have irreparably damaged their businesses--would be in place by the start of the summer rental season.

Councilwoman Ruthelyn Plummer, who has spearheaded efforts to curb loud parties in her West Newport Beach district with a tough rental ordinance, said: “Nothing’s perfect, but every little bit helps. . . . I don’t know if this is the kind of thing where the word spreads and gets out that you can’t come party here anymore, but I hope it is.”

This summer, she said, “we’re just going to get it started. We might find some relief this summer, but the payoff will be next year.”

The main component of the new ordinance is a long-discussed plan requiring short-term rental properties to be treated like businesses. Property owners seeking to lease their homes for the summer would be required to obtain a use permit for operation, more like a hotel than a standard rental.

In a revision of the earlier version of the ordinance, the property owners, rather than a real estate agent or manager, would be responsible for obtaining the city permit and would be held liable for fines and revocation if rules are broken.

For example, if police are called to the property to break up parties or if renters invite too many guests and create excessive noise or litter, the holder of the permit would be fined. Subsequent violations could lead to revocation of the permit.

The second major revision is that rather than immediately revoking the permit, there will be a tiered fine system for property owners who rent to rowdy tenants. On the first complaint, the owner would be fined up to $250; a second call would result in a $500 fine; and a third incident would bring a $1,000 fine. The owner’s permit could be revoked after four calls, and in all cases there is an appeals process for the owner to challenge the city’s action.

In previous summers, complaints of raucous parties have mainly come from rentals in the West Newport Beach area, from about 15th Street to city limits.

Short-term rentals, under which tenants stay 30 days or less, have historically been a lucrative market for Newport Beach realtors. Renters commonly pay at least $1,000 a week during the summer for an oceanfront unit.

The changes in the ordinance pleased local rental agents and managers, who argued that they could have been put out of business if they were forced to foot the bill for renters who violate city codes.

The realtors argued that they could not police the conduct of all of their renters all the time and that it was unfair for the city to revoke their permits based on a small minority of tenants.