This project is exempt from the California Environmental Quality Act pursuant to Section 15061(b)(3) of the California Environmental Quality Act Guidelines which covers activities with no possibility of having a significant effect on the environment, and pursuant to California Public Resources Code § 21080.17.

Should the Commission wish to recommend approval of short term rentals:

A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF LA HABRA RECOMMENDING THAT THE CITY COUNCIL ADOPT AN ORDINANCE AMENDING TITLE 5 BUSINESS TAXES, LICENSES AND REGULATIONS ADDING CHAPTER 5.26 SHORT-TERM RENTALS AND ZONE CHANGE 21-01, AMENDING TITLE 18 ZONING, ADDING CHAPTER 18.08.140 SHORT-TERM RESIDENTIAL RENTALS.

Should the Commission wish to recommend denial of short term rentals:

A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF LA HABRA RECOMMENDING THAT THE CITY COUNCIL ADOPT AN ORDINANCE PROHIBITING SHORT-TERM RESIDENTIAL RENTALS IN THE CITY OF LA HABRA

Short-term residential rentals have been exploding in popularity in what is commonly called the “sharing” economy.  Many cities are taking a hard look at the impacts of such rentals in the community. Online hosting platforms such as Airbnb, HomeAway and VBRO have created a direct connection between hosts (for example, residential owners) and travelers or other temporary visitors and make it easy to rent a home or room for short periods of time.

Opponents are concerned with loss of affordable housing stock and the residential character of neighborhoods. Cities regularly receive complaints about negative impacts from parking, traffic, noise, disruptions of the peace, excessive coming and going of people, as well as other public safety issues.

Alternatively, proponents desire to supplement their income with such rentals for a variety of reasons, such as avoiding foreclosure by earning money to pay mortgages.  The business community may also welcome the acknowledged positive effects of more visitors who frequent city restaurants and purchase other services.  For visitors, short-term rentals often offer more affordable and flexible options in a residential environment, including the ability to cook and eat in the home.  This is a benefit for travelers with children, pets, and large groups.  Many travelers enjoy the feel of being in a “local” neighborhood as opposed to a typical commercial hotel district. 

This report and ordinance have been prepared by staff for your consideration, due to complaints we have been receiving regarding the negative effects of a short-term rental unit in a particular neighborhood.

Regulatory Options for Short-term Residential Rentals
Short-term residential rentals can be regulated under the City’s police power like other land uses.  The City has three options to regulate short-term residential rentals:

· Prohibit short-term residential rentals,
· Allow them with a variety of regulations designed to reduce negative impacts,
· Allow them by right, subject to existing code regulations, such as public nuisance, noise, and parking ordinances.

Staff is recommending that the Commission recommend to City Council to consider option number two to provide property owners the opportunity to earn some income while protecting the neighborhoods.

Proposed Regulations
In addition to the guidance from the City Attorney's office staff reviewed the ordinances adopted by the surrounding cities of Fullerton, Buena Park, Anaheim and Placentia. The cities of Brea, Whittier, La Habra Heights and La Miranda do not have any regulations on STRs. While we initially just looked at other cities in our area, we have become aware of a number of cities that have adopted ordinances banning short-term rentals, such as Tustin, Villa Park, Garden Grove, and Irvine.

A draft ordinance has been prepared for your review that requires the property owner to obtain a permit and includes many regulations/conditions designed to protect the quality of the neighborhood. Key sections include provisions for:

· The locations and conditions of operations of short-term residential rentals
· Complying with City noise standards
· Maintaining the residential character of the neighborhood
· Parking
· Limiting the time for use
· Provisions for revocation of the permit
· Administrative citation(s) for violations of the conditions
· Inspection
· Annual renewal

Locations (Concentration)
Different methods for the location of STRs have been use by our neighboring cities. One method is to limit the total number citywide (Fullerton has set a limit of 325, whereas Anaheim set it limit at 235). The other method is to utilize a distance requirement; Buena Park and Placentia have set a minimum distance of 300 feet between rentals. The other cities surveyed have no limitations.

Staff has searched the internet to determine how many single-family homes are being advertised as short-term rentals in La Habra. The search is inconclusive, but it appears that there are somewhere between four and eight. However, based on the fact that we have been receiving complains about operations of an STR we believe that it would be wise to put distance requirements in place. When we have used this approach for other potentially impactful uses we have adopted a standard of a 300-foot distance between such uses, therefore we have included this requirement in the draft ordinance. 
 
Citations
The ordinance as proposed would subject the property owners to the provisions of Chapter 1.20 "Administrative Citations", of the La Habra Municipal Code and fines subject to City Council Resolution 5256, adopted on Aught 6, 2007. The current fines are $100 for the first violation, $200 for the second violation and $500 for the third violation. Additionally, we are proposing to modify section 1.08.20 “Enforcement as misdemeanor of infraction” by including STRs. This provides the City with the option of charging violations as misdemeanors if it is warranted by the circumstances. 

One additional proposed provision in the code is a requirement that a "Good Neighbor" Brochure be created that provides the occupants with the rules. It includes such things as the City's noise standards, parking standards, street sweeping and trash pickup days, along with notification that an occupant may be cited or fined by the City for violating any provisions of this chapter.

Fees, Inspections, Renewals and Calls for Service
Per government code the City can create fees for services, based on the cost of the time and materials necessary to perform those services. In this case staff is recommending an application fee, an inspections fee, and an annual renewal fee. If the Commission adopts this ordinance, staff will return to Council with a resolution to establish the fees for short-term rentals.  A rough estimate for the application fee will be between $750 -$1,000.

Zoning Code Modifications
In addition to the creation of the Short-Term Rental Permit and regulations, it is also proposed to amend chapter 18.08 of the Zoning Code to regulate where short-term rentals would be allowed.     

18.08.140 SHORT-TERM RESIDENTIAL RENTALS
A short-term residential rental is a permitted use in the following zones only upon the issuance of an operating permit/license by the City pursuant to Chapter 5.26 of the La Habra Municipal Code:
 

R-1a	One-family zone
R-1b	One-family zone
R-1c	One-family zone
R-2	Two-family zone
R-3	Limited multiple-family zone
R-4	Multiple-family dwelling zone
R-5	Multiple-family dwelling zone
R-6	Multiple-family dwelling zone
R-7	Multiple-family dwelling zone
SP-1	La Habra Boulevard specific plan

  
Summary
As noted above, the City has three options to regulate short-term residential rentals. 1) Prohibit them; 2) Allow them with regulations designed to reduce negative impacts; or 3) Allow them by right subject to existing code regulations such as public nuisance and noise.
Should the Commission wish to recommend allowing short-term rentals, staff has prepared regulation as outlined in the draft ordinance. The key proposed “citable” regulations include:

• Amplified sound which is readily discernable from any neighboring property or from the right of way may not be used on the premises between 10:00 p.m. and 8:00 a.m.
• Exceeding the maximum occupancy on the premises of the short-term residential- two (2) persons per bedroom with an exception for children under the age of six (6).
• Utilization of any vehicle (or RV), tent, or other portable structure for a dwelling unit on the grounds of the premises.  
• The utilization of the property for weddings, receptions, commercial functions, conferences, parties, or similar purposes.
• Using garages for sleeping purposes. 
• Using pools and spas between the hours of 10:00 p.m. and 8:00 a.m.
• Exceed, more than one (1) vehicle per bedroom. (All vehicles of occupants of the short-term residential rental shall be parked only in an approved driveway or garage on the premises).
• Overnight street parking.  

Alternatively, the Commission could recommend to the City Council that short-term rentals be prohibited.
 

Each application for an STR permit must be accompanied by a fee established by a resolution of the City Council.  As the Commission is aware, fees are based on the actual cost of time and materials. Pursuant to the City's "Master Schedule of Fees". Should the Commission adopt the ordnance, staff will take a separate action/request to the City Council to adopt fees for short-term rentals.

This action is not subject to the requirements of NPDES since no construction is proposed.

The General Plan has many goals and policies geared toward preserving neighborhoods while allowing a mix of compatible uses. The proposed regulations and permitting process would allow property owners the full use of their properties while preserving the quality of life for the neighborhood. Specific policies would include: