Fountain Valley City Council formally approves outright ban of short-term rentals

The Fountain Valley City Council unanimously approved an ordinance earlier this month that adds language to the municipal code expressly prohibiting short-term rentals within the city.

The ordinance, which also provides for increased fines as an enforcement measure and prohibits advertising such lodgings, moves to a second reading, scheduled for Tuesday.

Failure to comply with the ordinance could subject a person to a $1,500 fine for the first violation. If a second violation occurs within a year, a $3,000 fine can be assessed, and any additional violation within that time frame can be met with a $5,000 penalty.

A short-term rental is defined in the ordinance as any portion of a residential dwelling that is rented out for a period of 30 consecutive days or less.

As the panel deliberated on whether to allow short-term rentals over the past year — deciding not to allow them in a 5-0 vote on Sept. 20 — city officials had said that existing short-term rentals were operating illegally because they were not expressly permitted. The City Council at that time directed staff to come back with the subsequent ban to bring further clarity to the city’s position on the matter.

“We need to give our residents … their neighborhoods back,” Mayor Pro Tem Kim Constantine said preceding the vote. “We owe it to them.”

A staff report indicated the city plans to send cease and desist letters to properties that have operated as short-term rentals following adoption of the ordinance. The city can begin enforcement of the ordinance 30 days after final approval.

“Each and every day there’s a violation it is a separate violation,” Colin Burns, an attorney for the city, said. “If a person has a short-term rental open and they’re up to $5,000 and they do a short-term rental for seven days a week, it’s going to be a $35,000 administrative citation. … This is the maximum the government could allow.”

The city also plans to pursue the collection of transient occupancy tax for properties that have operated as short-term rentals. The statute of limitations pertaining to the collection of TOT tax is four years.

While there were some residents who maintained support for short-term rentals, many came before the council to express appreciation regarding the panel’s decision to not allow them. Proponents of the ban largely viewed short-term rentals to have an adverse effect on residents’ quality of life.

“For those that are doing short-term rentals, there’s still an opportunity to do long-term rentals,” Mayor Patrick Harper said. “Sometimes, you have a bad experience, but there are a lot of good long-term renters out there that can still provide good income for you.

“… The other thing that kind of is a decision factor for me is just the shortage of general housing in California. … Short-term rentals, while they serve a purpose in the market, they do take away long-term housing, and so that’s also a factor in my decision.”

Although he voted with the ban, Councilman Michael Vo asked those in the audience to have an open mind when considering the reasons why someone might want to operate a short-term rental.

“Your home is your castle,” Vo said. “Most of the time, you have the right to do anything you want. … I know my vote tonight will hurt some people because sometimes it’s their livelihood.”

Support our coverage by becoming a digital subscriber.