Zoning Code Amendment: Short-Term Rental Regulations City Council October 2, 2017

DATE DESCRIPTION September 15, 2016 Ed Tech meeting regarding STRs – background, scale, and scope of STR activity December 1, 2016 Community meeting to receive input from residents and businesses on STRs December 3, 2016 January 17, 2017 Ed Tech given summary of STR regulations in other cities and input from community meetings February 16, 2017 3rd community meeting held to introduce draft regulations April 12, 2017 Planning Commission considered new regulations for STRs June 14, 2017 Planning Commission approved revised regulations for STRs June 20, 2017 Ed Tech provided additional policy direction on short-term rentals

Introduction What is a short-term rental? The renting out of a furnished dwelling on a temporary basis (30 consecutive days or less) to guests as an alternative to a hotel or other traditional temporary accommodations, e.g. Airbnb Considered an accessory use to a home

Introduction What’s the difference between home-sharing and a vacation rental? Home-sharing: Dwelling is the primary residence of the host Unit is “shared” in whole or part (e.g. bedroom, guest house) Can be “hosted” where the owner/resident remains on-site during the guest stay or “un-hosted” where the owner/resident remains off-site during the stay Vacation Rental: Owner does not reside on-site Used almost exclusively for guests as a way of generating income

Growth of Short-Term Rentals Rise in popularity of short-term rentals has led to a 13-fold increase in STR activity over the past 5+ years Number of STR listings in Pasadena 2010 – 2017 (Q3)

Map of Listings – Sept. 2017

Public Outreach & Engagement December 1 & 3, 2016 2 community meetings held to receive initial input from residents and businesses on STRs; approx. 40 people attended each meeting February 16, 2017 3rd community meeting held to introduce draft regulations; approx. 100 people attended Numerous comments from those in favor and those with concerns about STRs * As well, staff has received 100s of comments via mail and email

Pros and Cons of STRs Support of short-term rentals: Affordable and flexible accommodation option for visitors Extra income for hosts; efficient use of spare bedrooms, guest houses; enables owners to stay in home as it relates to rising costs of housing Economic spin-off through increased tourism Collection of transient occupancy tax or TOT Estimate of $600 – $700K annually based on current STR activity

Pros and Cons of STRs Concerns with short-term rentals: Effect on neighborhood character Long-term neighbors replaced by short-term guests Potential for nuisance activities e.g. noise, inadequate parking, excessive coming and going Impact on housing stock Rental units removed from long-term housing market

Regulatory Approach Cities are increasingly allowing and regulating STRs Lessons learned from efforts in other cities San Francisco, Santa Monica, Anaheim, Los Angeles No one-size fits all approach Tailored to nuances of the community

Proposed Regulations Types of short-term rentals – Hosted Stays: Dwelling must be the primary residence of the host Note: Renters of residential units would need the landlord’s permission to sublease as STRs Permitted in SFRs, condominiums, townhomes, multi-family Allowed in ADUs and accessory structures legally permitted and constructed before January 1, 2017, which are considered subordinate to the main structure or primary residence on-site Note: No new ADUs or accessory structures would be permitted to be built for STR purposes

Proposed Regulations Types of short-term rentals – Un-Hosted Stays: Dwelling must be the primary residence of the host Permitted in SFRs, condominiums, and townhomes Allowed in ADUs and accessory structures legally permitted and constructed before January 1, 2017, which are considered subordinate to the main structure or primary residence on-site Limit bookings to a maximum of 90 days/year Must retain a local contact person or property management company that is available 24 hours/day

Proposed Regulations Key provisions: Occupancy limit based on size of home: 2 guests per bedroom plus 2 additional guests Cannot be used for any commercial parties or events (Note: This would not prevent a guest from using the short-term rental to entertain during their stay, but is only intended to prevent an STR from becoming a “party house”) Parking for all guests to be provided on-site No signs can be posted on the exterior of the home advertising the short-term rental use Must adhere to the City’s Noise Ordinance and Litter Ordinance

Proposed Regulations Short-term rental permit requirements: Must be obtained and renewed annually Permit may be combined w/ City business license as a package Self-certification that abutting neighbors will be notified of STR activity May have only one STR property in the City (i.e. primary residence) Must reside at the residence for 9 months out of the year Required to remit Transient Occupancy Tax (TOT) to the City Contact person or property mgmt. company must be available 24 hrs/day Self-certification or third-party inspection for fire and life safety items (e.g. smoke detectors); accessory structures must be habitable Permit number must be included in any listing for the STR

Proposed Regulations Host requirements: Must keep records necessary to determine the amount of TOT liable for payment to the City

Proposed Regulations Enforcement: Code Compliance will respond to complaints related to STRs 3 violations against the same property being used for short- term rental will result in the revocation of the home-sharing permit Listing without a permit will be considered a violation After-hours complaints related to noise, etc. will be handled by the Police Department; Code Compliance will use documented incidents as violations

Proposed Regulations Enforcement: At the discretion of the Police or Fire Chief, or his/her designee, the revocation process could begin immediately based upon a threat to public safety, e.g. unsafe living conditions Municipal Code allows for full cost recovery for egregious violations

Key Issues Vacation Rentals: A dwelling unit that is not a primary residence and which is available for temporary lodging, for compensation Differs significantly from home-sharing Concerns about the impacts of vacation rentals on the City’s long-term rental housing stock ED Tech recommended creating a pilot program to allow vacation rentals as STRs for a trial period

Key Issues Vacation Rental pilot program: Pilot program be reviewed by the City within one year Permitted to a maximum of 0.1% of the total housing stock Dwelling must be the primary residence of the host Permitted in SFRs, condominiums, and townhomes Allowed in ADUs and accessory structures legally permitted and constructed before January 1, 2017, which are considered subordinate to the main structure or primary residence on-site Must retain a local contact person or property management company that is available 24 hours/day

Key Issues Properties with two or more units: PC concluded that “home-sharing” as a way of short-term renting should explicitly mean sharing one’s primary residence Some interest that a host be allowed to short-term rent more than just their primary residence if they own and reside on a property developed as a duplex, triplex, etc. Concerns over the erosion of the long-term rental housing stock If allowed, it is recommended that the threshold not exceed the primary residence + one additional unit

Key Issues Curbing overconcentration: Preserving the residential character of single-family neighborhoods remains a priority Considering long-range potential for nuisance issues Certain areas or districts within the City are anticipated to experience greater STR demand pressure, e.g. Rose Bowl A 5% cap on STRs in the Rose Bowl area would allow 126 STRs Alternatively, a 5% cap on STRs per census tract could be applied citywide

Key Issues

Recommendation Find that the proposed Zoning Code Amendment is not a project subject to the California Environmental Quality Act (CEQA) in accordance with Section 21065 of CEQA and State CEQA Guidelines Sections 15060 (c)(2), 15060 (c)(3), and 15378; and is exempt from CEQA pursuant to State CEQA Guidelines Section 15061(b)(3) (general rule) and 15301 “Existing Facilities” (Class 1); Adopt the Findings of Consistency with the General Plan in Attachment A; Approve the proposed Zoning Code Amendment as contained in this report; and Direct the City Attorney to prepare an ordinance within 60 days amending Title 17 of the Pasadena Municipal Code (Zoning Code) as presented in this report.

End of Presentation City Council October 2, 2017

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