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Newport Beach relaxes pandemic restrictions on vacation rentals

A woman walks her dog past a waterfront duplex on 38th Street on Newport Island. The duplex is reportedly used as a vacation rental.
(Kevin Chang / Staff Photographer)

Vacationers can soon return to Newport Beach, as long as they stay for at least three nights, after the City Council voted Tuesday to loosen its pandemic-driven moratorium on short-term rentals.

Rentals resume May 20, when the previous restrictions the council agreed to in April were set to expire. The minimum stay requirement will lift when the city rescinds its locally declared emergency, a date to be determined.

Vacation homeowners and managers welcomed the shift and at least partial restoration of their income streams.

“We have a lot of people that are wanting to come and to socially distance and be good residents of Newport on a temporary basis,” said Chris Nielson, who owns several rentals near Newport Pier. “They have been for years and years and years.”

About 1,500 homes in Newport Beach hold short-term lodging permits, concentrated on the Balboa Peninsula and Balboa Island and in Corona del Mar neighborhoods. Short-term rentals are a key component of the local tourism industry and have been part of the Newport economy for decades, but the council moved to shut them down for six weeks this spring to tamp down on visitors during the coronavirus pandemic.

Newport Beach’s shoreline partially reopened Wednesday after receiving state approval for an “active recreational use” plan. Newport will allow walking, running, bicycle riding, swimming, surfing and other board sports, kayaking, fishing from 5 a.m.-10 p.m. seven days a week.

Officials noted that market forces — driven by stay-at-home orders in California and nationwide intended to stem the spread of the virus that causes the respiratory illness COVID-19 — had eliminated almost all local short-term rental business. But the city is a perpetually attractive getaway, and in the early weeks of the stay-at-home orders, the council moved to cut down on activity in the dense seaside neighborhoods where vacation homes concentrate.

Nielson already has a three-night minimum for his oceanfront condos, as does Connie Adnoff at Beachview Realty. Three nights tend to make the most financial sense for renters, and the minimum discourages tenants who only want an overnight rental for a house party, she said.

Don Abrams of Abrams Coastal Properties said his company also requires at least three nights to keep pop-up parties away. He said April was his worst rental month in 22 years and he was eager to bounce back.

Restrictions on daily living have eased in recent days, with Newport and other Orange County cities reopening their sands last week after a brief hard closure under order of Gov. Gavin Newsom. Los Angeles County also reopened its beaches Wednesday, and Newsom authorized a limited revival of retail statewide last Friday.

Shopping centers in Orange County sprang to relative life Friday as locals took advantage of deals and offers presented by businesses. California entered Stage 2 of reopening with the permission of Gov. Gavin Newsom.

Some restrictions on local vacation rentals remain. The city will maintain the moratorium on Newport Island and will continue to hold off on issuing new rental permits citywide. Violators are subject to a $1,000 fine or permit suspension or revocation.

Councilwoman Diane Dixon suggested Newport Island get an exception through the duration of the pandemic emergency because the small, traditionally residential island had been especially impacted by an influx of vacation rental conversions even before the coronavirus crisis.

The island, tucked into the northwest corner of Newport Harbor, only has about 20 homes permitted for short-term rentals. It also only has about 110 homes overall, with tight lots and limited street parking. The vacation rentals have mostly cropped up over the past two years.

This was already causing “significant distress” to year-round residents, Dixon said.

“It’s not like anywhere else in the city. That’s the difference,” added Councilman Duffy Duffield, a one-time island resident. “If you have a house with four or five cars from an Airbnb, the impact is atrocious.”

The council voted 6-1 to allow all vacation rentals, minus Newport Island, to begin offering three-night or longer stays, with Councilman Kevin Muldoon voting no because he supported lifting the moratorium but not the minimum stay.

The council voted 5-2 on the Newport Island exception, with Muldoon and Mayor Will O’Neill voting no. O’Neill dissented because he said the density isn’t necessarily worse than in other parts of town and it might be hard to justify the restriction on ocean and bay visitation to the California Coastal Commission as an emergency health issue.

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