Newport Beach tightens restrictions on short-term rentals after Coastal Commission approvals

A woman walks her dog past the waterfront duplex.
A woman walks her dog past the waterfront duplex at 3801 38th St. on Newport Island, a short-term rental.
(Kevin Chang / Staff Photographer)

Newport Beach City Council tightened its restrictions on short-term lodging in the city and Newport Island at large Tuesday after a years-long effort brought forward by residents fed up with the noise and parking issues caused by the lodgings.

New restrictions — recently approved with minor modifications from the California Coastal Commission — were formally OKd Tuesday by the majority of council members with Mayor Pro Tem Kevin Muldoon and Councilman Noah Blom dissenting.

The new regulations will be in effect on Jan. 13, 2022, following a second, finalizing vote at the council’s next meeting on Dec. 14.

The city will now have a maximum of 1,550 short-term lodging permits citywide and require a minimum stay of two consecutive nights.

Principal planner Jaime Murillo said there are currently 1,581 permits issued and that number may increase between the meeting and the time the changes take effect in January.

As properties eventually leave the list and drop the number of active permits below 1,550, city staff will pull from a waiting list.

Newport Island will have a cap of 20 short-term lodging permits and require properties to be owner-owned and occupied.

Daytime and nighttime occupancy limits and minimum parking requirements will be required of such lodgings on Newport Island. Rentals there will also be restricted to one per week.

Prior language submitted to the Coastal Commission indicated a stay of three consecutive nights, which Murillo said the Coastal Commission felt was potentially restrictive for families with lower-to-moderate incomes.

A duplex at 3800 Channel Place on Newport Island is a short-term rental.
A duplex at 3800 Channel Place on Newport Island is a short-term rental.
(Kevin Chang / Staff Photographer)

The Coastal Commission also suggested the addition of a restriction on apartment conversions. For apartments that are five units or larger, no more than 20% of total units can be converted to a short-term rental. Duplexes are exempt.

Additionally, the commission adjusted prior language about parking requirements, which called for at least one on-site space to reduce street parking.

That space, the commission’s change makes clear, does not need to be an additional space, and an existing parking space can satisfy the requirement.

All modifications were adopted.

City Council members initially passed short-term lodging reforms earlier this year but needed approval from the commission to implement them in its local coastal program.

The city defines short-term rentals as any dwelling unit occupied for less than 30 consecutive days. Newport Beach initially implemented guidelines for those rentals in 1992, which were subsequently amended in 2004 to allow rentals in R-1 zoning districts.

An ad hoc committee was established on the matter in 2019.

Residents largely spoke in favor of the restrictions, though some property owners running short-term rentals objected to the tighter guidelines for Newport Island.

One homeowner wondered if long-term residents should be prioritized over newer residents. He had started renovations on his house only to find out he could no longer get a permit to have a short-term rental.

“This really did start at the resident level and we’re here to represent the residents, and I’m delighted with the support of members of the council that we have advanced it this far,” said Councilwoman Diane Dixon, adding she was “pleasantly surprised” with the support of the Coastal Commission and that commissioners were concerned about coastal housing enduring the negative effects of the proliferation of rentals.

“The Coastal Commission sees the impact of short-term rentals on permanent residential homes,” Dixon said.

“When they understood that we have currently over 1,500 short-term rental permits when six or seven years ago, we had half that? They actually commended the city for having as many visitor-serving rooms or places to stay in addition to the 3[,000] or 4,000 hotel rooms in the city.

“We’ve had many struggles with the Coastal Commission as long as I’ve been on council and we win a few and lose a few, but I ... think we were able to meet the needs imposed upon us and I’m grateful for staff support and the residents who really drove this home,” Dixon said.

Support our coverage by becoming a digital subscriber.