Newport Beach council agrees to more regulation of vacation homes

Newport Beach is moving ahead on tightening its short-term lodging rules by requiring a two-night minimum stay, limiting occupancy, requiring off-street parking and capping the number of permitted rentals in the city.

The City Council voted 5-2 on Tuesday night to give initial approval to the regulations.

Councilwoman Diane Dixon, whose Balboa Peninsula district includes about a third of the city’s roughly 1,465 short-term rentals, said she has heard continuous complaints about vacation homes since she was elected in 2014.

“How long does it take for this council, and myself included, to say this is a problem in our community?” she said. “We keep thinking — as we are all optimists and positive-thinking people because we live in a beautiful community — that this will self-correct. … But that is not happening.”

Short-term lodging is part of Newport’s heritage as a seaside tourism magnet. Traditional property management firms with local brick-and-mortar offices still oversee many homes, and online platforms like Airbnb have become popular in the past 10 years.

“It has only been since the inception of the online platforms that it became burdensome to many of our neighborhoods,” Dixon said.

Mayor Will O’Neill said there should be more enforcement but that the package of rules would make business harder and more expensive for good operators. He questioned whether the low numbers of code-violation citations issued — 35 last year and 50 in 2018 — make the new regulations worthwhile.

He and Councilman Kevin Muldoon were the two votes against the amendments.

“We’ve got hundreds and hundreds of people representing thousands and thousands of vacation [stays] in a community that has always been welcoming,” O’Neill said. “This goes too far and this isn’t appropriate for the people that have been good operators for decades.”

The changes include:

• Minimum stay: two nights. The council added the provision Tuesday.
• Permit cap: 1,600 at any given time. Currently, the city has about 1,465 active permits, almost entirely at the Balboa Peninsula, Balboa Island and Corona del Mar.
• Locations: The city would phase out permits for homes not within the “coastal zone,” which is approximately up to the seaward side of Coast Highway. This would affect about 60 homes, which would get to keep their permits for up to 10 more years.
• Parking: All short-term rental homes would need at least one off-street space per unit.
• Maximum occupancy: Short-term lodgings would be held to two guests per bedroom, plus two others. This means, for example, that no more than eight people could stay overnight in a three-bedroom house.
• Signage: Required interior signs will let guests know the rules and information like trash pickup days, and exterior signs will list the maximum occupancy and a 24-hour phone number to call with complaints.

The city also is considering increasing the $103 cost of a short-term lodging permit, pending further study. The increase would cover the potential costs of additional staffing dedicated to vacation rentals and of contracting with an answering service, which could act as a go-between for complainants and property owners when code enforcement or police officers can’t respond promptly to calls about noise, crowds and other concerns.

Former Mayor Nancy Gardner, who lives next to a short-term rental in Corona del Mar, welcomed the changes.

Sometimes guests there are very good and “sometimes they are horrid,” she said.

Larry Robinson, who lives on Newport Island, said a recent swell of vacation rentals has negatively changed the small island of about 100 homes.

“I didn’t even know this was allowed until like two years ago,” he said. “Who are all these people here that I’ve never seen before?”

Some visitors are drunk in public, drive fast and hog parking spots, he said, adding that police have other things to do than tend to such matters.

Craig Williams, who rents out a circa-1937 two-bedroom cottage on Balboa Island’s Pearl Avenue, said all of his neighbors know how to contact him, he keeps the occupancy to four people, and he knows his guests’ names and their children’s.

“I wish all the hosts were involved like myself,” he said.

Don Abrams, whose real estate brokerage on Balboa Island also manages vacation rentals, said some of the council’s provisions are reasonable, such as the occupancy limits and minimum stay.

But with only 35 citations last year, “is this a problem that really needs fixing?” he asked.

He also called the permit cap arbitrary. “Should we regulate the number of driver’s licenses in the state because we could screen out bad drivers?” he said.

Dixon, who helped author the changes, said Wednesday that they are “a few small but significant code changes that I call the ‘Newport Beach Good Neighbor Policy.’”

The rules will help level the playing field between traditional property managers and online platforms, Dixon added.

“We want to ensure that our local businesses continue to thrive,” she said. “It is the Wild West in Newport Beach, with some online rental platforms skirting our laws and our [bed tax] requirements.”

The council is scheduled to take a final vote on the changes Feb. 25.

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