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Huntington Beach council explores lifting prohibition on short-term vacation rentals

Short-term rentals
A map shows 821 active short-term rental units in Huntington Beach, with a high concentration near the coast, according to data presented by Los Angeles-based Lisa Wise Consulting.
(Courtesy of city of Huntington Beach)

Huntington Beach’s prohibition on short-term vacation rentals may be lifted, albeit with restrictions.

Rentals of rooms or entire homes — typically for 30 days or less — have boomed since gaining traction with online platforms such as Airbnb and VRBO. Such rentals currently are allowed only in Sunset Beach — a neighborhood annexed into Surf City in 2011 — though the city says there are 821 active short-term rental units throughout Huntington Beach.

During a study session Tuesday, the City Council heard a report on the pros and cons of short-term rentals and studies on what four other coastal communities are doing to regulate them.

Though the council took no vote, members said they’re open to exploring the idea of lifting the city’s prohibition to allow homeowners to rent out a room if certain regulations were in place to help preserve neighborhood character.

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The council asked city staff to return at a future study session with additional information about short-term rental enforcement, fees and the city’s potential revenue from transient occupancy taxes, which are charged at local lodgings.

Mayor Erik Peterson said he wasn’t sold on the idea of renting a whole house on a full-time basis without the owner present but was open to home stays, a type of short-term rental in which the owner is in the residence during the rental period.

“You have the owner there, they have a vested interest in their property in their neighborhood,” Peterson said.

“I don’t have a problem if it’s their primary residence and they go to Europe for two weeks [and say] ‘I’ll rent my house,’” he added. “I don’t think that’s necessarily going to be harmful. But when you bring in that business element to a neighborhood, it does change it.”

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Councilwoman Jill Hardy said short-term rentals would help homeowners afford living in the area if their circumstances change.

According to data presented Tuesday by Los Angeles-based Lisa Wise Consulting, Huntington Beach has 222 partial-home and 599 entire-home rental listings, with a high concentration near the coast. More than half require a minimum stay of one to seven nights.

An estimated 30% of the homeowners make no more than about $10,000 a year in revenue, and about 12% may make $25,000 or more, according to the data.

The city looked at Carlsbad, Carpinteria, Newport Beach and Pismo Beach to learn how they handle short-term rentals.

Newport Beach implemented regulations in 2004 and is estimated to have 1,451 active licensed and unlicensed short-term rental listings. It allows such rentals in higher-intensity residential zones.

Hosts must obtain a $103 permit and provide 24-hour contact information, supply guests with city rules and regulations and attempt to prevent nuisance activities.

Pismo Beach has stricter requirements, in which a single-family homeowner must live there at least half the year to be eligible for a $399 permit.

Huntington Beach Director of Community Development Ursula Luna-Reynosa told the council that data showed short-term rentals aren’t less expensive than hotels for a two-person stay, though that may change if the city looks at larger units.

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An enforcement cost analysis is needed to get a better estimate of how much the city could net through such businesses, Luna-Reynosa said. She also noted that enforcement of a complete prohibition may be harder and that the four cities studied considered the businesses revenue-positive.

The council’s direction to continue the conversation on potentially legalizing short-term rentals marks a win for local advocates such as the Huntington Beach Short-Term Rental Alliance, which has about 100 members and believes such businesses could benefit the city if regulated and taxed like hotels.

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