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Council divided on short-term lodging regulations

By BARBARA DIAMOND

The City Council voted 3-2 Tuesday night to submit to the Coastal Commission proposed modifications to the city’s Short-Term Lodging Ordinance.

Community Development Director Greg Pfost has been dueling with the commission staff for about 16 months to try to reach a compromise on regulations for short-term lodging – defined as less than 30 days. The city’s position is that any new STLs should not be permitted in residential neighborhoods – new being the operative word. The commission in 2017 faulted the city ordinance for excluding up to 5,200 residential units as possible STLs, thus reducing visitor-serving opportunities and negatively affecting the visitor-serving uses in residential districts on the ocean side of North and South Coast Hwy.

“Since the Commission’s decision, the [city] staff and the Coastal Commission staff have met numerous times to discuss potential alternatives for a revised ordinance that would be acceptable to the commission and yet meet the city’s goal of restricting new STLs in residential zones,” Pfost reported at the meeting. 

The staffs have reached a consensus as a result of the meetings, Pfost said. 

Six key changes have been incorporated into the revised ordinance that will be submitted to the commission staff, in about two weeks after the required second reading of the proposed ordinance at the May 21 council meeting.   

“I am hoping for a commission hearing before the end of the year,” said Pfost. 

Pfost informed the council that he believes the revised ordinance is a balanced solution that will be consistent with the California Coastal Act, the city’s General Plan and Local Coastal Plan, while recognizing the city’s special character.

“A previous council’s 5-0 vote [instructed] staff to go to coastal and see if they could reach a compromise and that is what Greg did,” said Mayor Bob Whalen, who voted with Council members Sue Kempf and Toni Iseman to approve the revisions to be submitted to commission staff.

Whalen also tried to allay concerns about terminating existing permits for STLs in residential zones.

“Anyone who has it, gets to keep it,” said Whalen.    

Currently the city reportedly has 734 STLs.

Councilman Peter Blake, who voted with Mayor Pro Tem Steve Dicterow against the revised ordinance, opined that short-term lodgers were preferable to six meth addicts moving next door, over which the city has no control, by state law.

Dicterow suggested that permits be granted in the residential zones if the city imposes strict regulations on the number of days the unit could be rented and if the owner is on the premises.

“Non-owner occupied [sites] leads to problems,” said Dicterow, addressing concerns about loud, unruly renters.

Michele Monda said she rented an STL for 12 years before she moved to Laguna.

“I couldn’t afford a hotel,” said Monda. ”No one likes party houses.” 

She also said the city is losing money (bed taxes) by restricting STLs.

Sixteen members of the audience spoke about STLs: some reported confusion about their status, others were upset with the permit process and some favored the restrictions on locations.

South Laguna resident John Thomas supported the staff recommendation.

“The plan is fair and presents positive opportunities to address emerging problems,” said Thomas. 

“In a climate where online retail has created an oversupply of brick and mortar retail, and at the same time where there is a housing shortage, using excess commercial space for residential purposes could help both situations.” 

However, he added a caveat: If the commission will not accept the city compromise – litigate.

The compromise reached by the staffs of the city and the commission includes six key issues that have been incorporated into the revised ordinance that will be submitted to the commission staff: 

--Continue to exclude STLs in residential zones and permit them only in the same commercial-mixed use district as previously proposed by the city

--Allow existing STLs in the commercial-mixed use districts to be converted to STLs, regardless of non-conformance to density, parking or other development standards

--Prohibit existing residential units that are restricted by covenant for affordable, senior or disabled housing to be used as an STL

--Place new responsibility, including collection of bed taxes and code enforcement, on STL hosting platforms that advertise and serve as facilitators to those who rent out STLs, encouraged by Santa Monica’s successful court challenge against the provisions

--Increase penalties for violations, eliminating the scaled penalties of $100, $200 and $500, and instead impose a flat penalty of $1,000 per violation 

--Applications for permits to be heard by the Planning Commission, rather than the Community Development Director

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