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CC 2016-08-09_09h Status Report_Vacation Rentals_Homestays TO: FRO BY: SUB DAT REC It is Deve estab IMPA The appr Ther statu four BAC On J to id and perm Ordin Deve year The ten ( home the P confo CI OM: TE M BJECT: CO DE VA E: AU COMMENDA recommend elopment C blishment a ACT ON FI City’s pe oximately $ re is no imp us of report (4) hours o CKGROUND June 10, 20 entify vaca commercia mitting requ nance wen elopment C . Council rec (10) total p estays eac Planning C orming to th ITY COUNC ERESA Mc ATTHEW D ONSIDERA EVELOPM ACATION UGUST 9, ATION: ded the Cit Code Amen and operatio NANCIAL A ermitted v $19,450 in t pact on fina . Preparatio f personne D: 14, the City ation rentals al zoning uirements t nt into effec Code Amen ceived a on ermits had ch. Approv ommission he regulatio MEM CIL cCLISH, CO DOWNING ATION O ENT COD RENTALS 2016 ty Council ndment 14- on of vacat AND PERS vacation re the last yea ancial and on and pres l resources y Council a s and hom districts o to establish ct on July dment, the ne year stat been appr val of two (2 ; however, ons of the M MORANDUM OMMUNITY , PLANNIN OF STAT DE AMEN AND HOM receive and 002, which ion rentals SONNEL R entals and ar. personnel sentation o s. dopted Ord mestays as of the City h the uses 10, 2014. Council re tus report o roved, inclu 2) of the v both appe Municipal C M Y DEVELO NG MANAG TUS REP DMENT 1 MESTAYS d file inform h implemen and homes RESOURCE d homest resources of the report dinance No permitted y and for s (Attachm As part o equested a on August 2 uding five ( acation ren eals were d Code. Durin PMENT DI GER PORT R 14-002 RE mation on t nted regulat stays within ES: ays have to receive rt utilizes ap o. 663 (the “ uses within ming regu ments 1 an of the app status repo 25, 2015. A (5) vacation ntals were denied due ng the first RECTOR REGARDING EGULATING the status o tions for th n the City. generate and file th pproximatel “Ordinance n residentia ulations an nd 2). Th proval of th ort after on At that time n rental an appealed t to the use year review G G of he ed he ly ”) al nd he he ne e, nd to es w, Item 9.h. - Page 1 CITY COUNCIL CONSIDERATION OF STATUS REPORT REGARDING DEVELOPMENT CODE AMENDMENT 14-002 REGULATING VACATION RENTALS AND HOMESTAYS AUGUST 9, 2016 PAGE 2 the Council directed staff to continue to monitor implementation of the Ordinance and provide a second report at the conclusion of the second year. ANALYSIS OF ISSUES: The City currently has fourteen (14) permitted short-term rental operations. This includes seven (7) each of vacation rentals and homestays (Attachment 3). The City is not currently processing any applications for new rentals. Inquiries regarding the establishment of new rentals have continued to subside over the last year, down to approximately one (1) per month. The low inquiries are also reflected in the reduced number of applications received to establish new rentals, with only four (4) new rentals being approved since the last status report. Regulation Enforcement Enforcement of the permit regulations is difficult. At the time of Ordinance adoption, the regulation of these uses was new to many jurisdictions across the country and dealing with violators was even more untested. Enforcement continues to be difficult for the City for several reasons, including:  Increased enforcement requests Citywide drawing from limited personnel resources;  Increased number of websites advertising rentals; and  Limited information available on advertising sites to adequately identify and inform violators. Based on a cursory review of sites that promote short term rentals, approximately forty (40) illegal rentals are operating without permits. Enforcement of the regulations can be given a higher priority if the Council desires; however, other enforcement priorities may need to be adjusted given the limited availability of Neighborhood Services personnel to perform the enforcement. There are several private operations that can be contracted to monitor rentals, obtain owner information and provide that information to the City to reduce time necessary for enforcement. It is not recommended that these services be sought at this time due to the evolving nature of the short-term rental industry. Impacts to Rental Housing A concern has been identified regarding the Ordinance’s impact to the City’s rental housing market, specifically the establishment of vacation rentals. Vacation rentals require that the property owner not live on the site. Therefore, the residence remains vacant when not being used as a vacation rental. Only seven (7) vacation rentals are currently established so the impact to rental housing is limited. However, due to the constraints of unpermitted rentals Item 9.h. - Page 2 CITY COUNCIL CONSIDERATION OF STATUS REPORT REGARDING DEVELOPMENT CODE AMENDMENT 14-002 REGULATING VACATION RENTALS AND HOMESTAYS AUGUST 9, 2016 PAGE 3 identified above, it is unknown how many of those identified would apply as vacation rentals instead of homestays, where the owner lives within the residence. This unknown combined with comments from vacation rental operators who were considering month-to-month rental of their property and instead wanted to try out the vacation rental industry has preliminarily raised this issue. The number of vacation rentals will be monitored to evaluate any impact to the City’s housing supply. ALTERNATIVES: The following alternatives have been identified for the Council’s consideration:  Receive and file the report as recommended; or  Provide direction to staff. ADVANTAGES: The status report responds to Council’s desire to remain informed on the implementation of the Ordinance since its adoption. DISADVANTAGES: None identified by staff. ENVIRONMENTAL REVIEW: No environmental review is required for this item. PUBLIC NOTICE AND COMMENT: The agenda was posted at City Hall on Thursday, August 4, 2016 and the agenda and staff report were posted on the City’s website on Friday, August 5, 2016. No public comments were received. Attachments: 1. Ordinance No. 663 2. Minutes of the May 27, 2014 City Council meeting (introduction of the Ordinance) 3. Map showing distribution of vacation rentals and homestays Item 9.h. - Page 3 ORDINANCE NO. 663 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE AMENDING TITLE 16 OF THE ARROYO GRANDE MUNICIPAL CODE REGARDING VACATION RENTALS AND HOMESTAYS WHEREAS, the City of Arroyo Grande ("City") currently does not regulate vacation rentals or homestays; and WHEREAS, the City does regulate similar transient uses with similar impacts such as bed and breakfast inns; and WHEREAS, the City Council finds that, unless properly regulated, vacation rentals and homestays can result in adverse impacts to adjacent properties; and WHEREAS, the purpose of these regulations is to ensure that vacation rentals and homestays conform to the existing character of the neighborhood in which they are located and do not create an adverse impact on adjacent properties; and WHEREAS, the increasing popularity of vacation rentals and homestays in the City the implementation of appropriate regulations to ensure that impacts are addressed and the character of existing neighborhoods is maintained, while providing an expanded type of lodging facility available within the City; and WHEREAS, it is the purpose of this Ordinance to protect the public health, safety, and welfare within the City by establishing rules and requirements for vacation rentals and homestays; and WHEREAS, after consideration of all testimony and all relevant evidence, the City Council has determined that the following Development Code Amendment findings can be made in an affirmative manner: A. The proposed revisions to Title 16 are required to ensure consistency with the objectives, policies and implementation measures of the General Plan, particularly the Land Use Element, and is therefore desirable to implement the provisions of the General Plan. B. The proposed revisions to Title 16 will not adversely affect the public health, safety, and welfare or result in an illogical land use pattern. C. The proposed revisions are consistent with the purpose and intent of Title 16 and satisfy the intent of Chapter 16.08 of the Municipal Code and provide for internal consistency. D. The proposed revisions to Title 16 are exempt under per Sections 15061(b)( 3) and 15308 of the California Environmental Quality Act (CEQA) Guidelines. ATTACHMENT 1 Item 9.h. - Page 4 ORDINANCE NO. 663 PAGE 2 NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Arroyo Grande as follows: SECTION 1: The above recitals and findings are true and correct and incorporated herein by this reference. SECTION 2: Arroyo Grande Municipal Code Section 16.52.230 is hereby added as follows: SECTION 16.52.230 —VACATION RENTALS A. Purpose and intent. The purpose of these regulations is to ensure that vacation rentals located in the city conform to the existing character of the neighborhood in which they are located and do not create an adverse impact on adjacent properties. B. Applicability. Vacation rentals may be permitted only with approval of a minor use permit. Vacation rentals shall comply with the property development standards of the underlying district and the performance standards and special conditions listed in Section 16.52.230.C. C. Performance standards and conditions for vacation rentals. 1. Operators of vacation rentals are required to obtain a minor use permit- plot plan review (Section 16.16.080) and a business license. 2. Any proposed vacation rental shall be compatible with the neighborhood in which it is located in terms of landscaping, scale and architectural character. The use shall be harmonious and compatible with the existing uses with the neighborhood 3. All Building Code and Fire Code requirements for the level of occupancy of the vacation rental shall be met. 4. All environmental health regulations shall be met. 5. The operator of the vacation rental shall, at all times while the property is being used as a vacation rental, maintain a contact person/entity within a fifteen (15) minute drive of the property. The contact person or entity must be available via telephone twenty-four (24) hours a day, seven (7) days a week, to respond to complaints regarding the use of the vacation rental. The contact person or entity shall respond, -either in person or by return telephone call, with a proposed resolution to the complaint within three (3) hours between 7:00 am and 9:00 pm, and within thirty (30) minutes between 9:00 pm and 7:00 am. Item 9.h. - Page 5 ORDINANCE NO. 663 PAGE 3 6. The operator of the vacation rental shall annually, at the time of renewal of the business license, notify the Community Development Department of the name, address and telephone number of the contact person required in subsection 16.52.230.C.6. 7. A written notice shall be conspicuously posted inside each vacation rental unit setting forth the name, address and telephone number of the contact person required in subsection 16.52.230.C.6. The notice shall also set forth the address of the vacation rental, the maximum number of occupants permitted to stay overnight in the unit, the maximum number of vehicles allowed to be parked on-site, and the day(s) established for garbage collection. The notice shall also provide the non-emergency number of the Arroyo Grande Police Department. 8. On-site advertising of the vacation rental is prohibited. 9. The number of overnight occupants shall be limited to two persons per bedroom and two additional persons. A bedroom shall meet the minimum size requirements as defined in the Building Code. 10. All refuse shall be stored in appropriate containers and placed at the curb for collection every week. 11. The operator of the vacation rental shall pay Transient Occupancy Tax as required by Arroyo Grande Municipal Code Section 3.24.030. 12. Establishment of a vacation rental within 300 feet of an existing vacation rental on the same street shall not be permitted. 13. Violations — violation of these requirements shall constitute grounds for revocation of the minor use permit pursuant to Section 16.16.220. SECTION 3: Arroyo Grande Municipal Code Section 16.52.240 is hereby added as follows: SECTION 16.52.240 — HOMESTAYS A. Purpose and intent. The purpose of these regulations is to ensure that homestays located in the city conform to the existing character of the neighborhood in which they are located and do not create an adverse impact on adjacent properties. B. Applicability. Homestays may be permitted only with approval of a minor use permit. Homestays shall comply with the property development standards of the Item 9.h. - Page 6 ORDINANCE NO. 663 PAGE 4 underlying district and the performance standards and special conditions listed in Section 16.52.240.0. C. Performance standards and conditions for homestays. 1. Operators of homestays are required to obtain a minor use permit-plot plan review (Section 16. 16.080) and a business license. 2. Any proposed homestay shall be compatible with the neighborhood in which it is located in terms of landscaping, scale and architectural character. The use shall be harmonious and compatible with the existing uses with the neighborhood 3. All Building Code and Fire Code requirements far the level of occupancy of the homestay shall be met. 4. All environmental health regulations shall be met. 5. The operator shall reside on the premises. 6. Individual guest stays shall be limited to fourteen (14) days, with a seven- day period between stays. 7. On-site advertising of the homestay is prohibited. 8. A bedroom shall meet the minimum size requirements as defined in the L Building Code. 9. The operator of the homestay shall pay Transient Occupancy Tax as required by Arroyo Grande Municipal Code Section 3.24.030. 10. Establishment of a homestay within 300 feet of an existing homestay on the same street shall not be permitted. 11. Violations — violation of these requirements shall constitute grounds for revocation of the minor use permit pursuant to Section 16.16.220. SECTION 4: The following definitions in Arroyo Grande Municipal Code Subsection 16.04.070.C. are hereby amended or added as follows: 16.04.070.C. Definitions Bed and breakfast inn" means an owner-occupied dwelling unit where three (3) or more short-term lodging rooms and meals are provided for compensation or onsite signage is desired. r Item 9.h. - Page 7 ORDINANCE NO. 663 PAGE 5 Homestay" means an owner-occupied dwelling unit where a maximum of two (2) short- term lodging rooms are provided for compensation. Vacation rental" means a structure being rented for less than thirty (30) days without concurrently being occupied by the owner/operator where the short-term lodging is provided for compensation. SECTION 5: Arroyo Grande Municipal Code Section 16.16.080 is hereby amended to add Subsection B.10 and Subsection C.6 as follows: 16.16.080.B.10. Establishment of vacation rentals or homestays in applicable zoning districts identified in Table 16.32.040-A and Table 16.36.030(A). 16.16.080.C.6. For plot plan reviews establishing the use of property for vacation rental purposes, the decision of the community development director shall also be mailed to all property owners of parcels within three hundred (300) feet of the property for which the plot plan review has been requested, in addition to the requirements of Section 16.16.080.C.5. The notice shall indicate the appeal provisions of Section 16.12.150. SECTION 6: Arroyo Grande Municipal Code Table 16.32.040-A, entitled "Uses Permitted Within Residential Districts", Section A. Residential Uses is hereby amended to add Subsection A.17. as follows: USE RE RH RR RS SF VR D-2.4 MF MFA MFVH MHP A. Residential Uses 17.Vacation Rentals MUP MUP MUP MUP MUP MUP MUP MUP NP NP and Homestays SECTION 7: Arroyo Grande Municipal Code Table 16.36.030(A), entitled "Uses Permitted Within Mixed Use and Commercial Districts", Section B. Services -General is hereby amended to add the following use: USE VCD VMU HCO D-2.11 OMU1 TMU D- HCO D=Specific IMU D-2.11 2.4 D-2.4 GMU FOMU HMU 2.20 RC2 Use Stds B.Services -General Vacation Rentals and NP MUP MUP MUP MUP MUP MUP MUP NP 16.52.230 Homestays 16.52.240 SECTION 8: If any section, subsection, subdivision, paragraph, sentence, or clause of this Ordinance or any part thereof is for any reason'held to be unlawful, such decision shall not affect the validity of the remaining portion of this Ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, or clause thereof, irrespective of the fact that any one or more section, subsection, subdivision, paragraph, sentence, or clause be declared unconstitutional. Item 9.h. - Page 8 ORDINANCE NO. 663 PAGE 6 SECTION 9: Upon adoption of this Ordinance, the City Clerk shall file a Notice of Exemption pursuant to 14 CCR § 15062. SECTION 10: A summary of this Ordinance shall be published in a newspaper published and circulated in the City of Arroyo Grande at least five (5) days prior to the City Council meeting at which the proposed Ordinance is to be adopted. A certified copy of the full text of the proposed Ordinance shall be posted in the office of the City Clerk. Within fifteen (15) days after adoption of the Ordinance, the summary with the names of those City Council Members voting for and against the Ordinance shall be published again, and the City Clerk shall post a certified copy of the full text of such adopted Ordinance. SECTION 11: This Ordinance shall take effect thirty (30) days from the date of adoption. On motion of Council Member Barneich, seconded by Council Member Brown, and on the following roll call vote to wit: AYES: Council Members Barneich, Brown, Costello, Guthrie, and Mayor Ferrara NOES: None ABSENT: None the foregoing Ordinance was adopted this 10th day of June, 2014. Item 9.h. - Page 9 ORDINANCE NO. (0493 PAGE 7 TONY F MAYOR ATTEST: Wgkitet'L-- KELLY ET j RE, CITY CLERK APPROVED AS TO CONTENT: S E ADAMS, CITY MANAGER APPROVED AS TO FORM: 7n/V- TIMVIO111Y J. CARME"C, CITY ATTORNEY 1 Item 9.h. - Page 10 OFFICIAL CERTIFICATION I, KELLY WETMORE, City Clerk of the City of Arroyo Grande, County of San Luis Obispo, State of California, do hereby certify under penalty of perjury, that the attached is a true, full, and correct copy of Ordinance No. 663 which was introduced at a regular meeting of the City Council on May 27, 2014; was passed and adopted at a regular meeting of the City Council on the 10th day of June 2014; and was duly published in accordance with State law (G.C. 40806). WITNESS my hand and the Seal of the City of Arroyo Grande affixed this 12th day of June 2014. i 1 I KELL WE/ ORE, CITY CLERK Item 9.h. - Page 11 Minutes: City Council Page 5 i Tuesday, May 27, 2014 9. PUBLIC HEARINGS 9.a. Consideration of Development Code Amendment Case No. 14-002 regarding Vacation Rentals and Homestays; Location: Citywide; Applicant — City of Arroyo Grande. Associate Planner Downing presented the staff report and recommended the Council introduce an Ordinance amending portions of Title 16 of the Arroyo Grande Municipal Code regulating vacation rentals and homestays. Staff responded to questions from Council. Mayor Ferrara opened the public hearing. The following members of the public spoke: Jennifer Swift, James Way, in opposition of the proposed ordinance; Robin Rinzler, in support of the proposed ordinance; Shirley Volpatti, Hillcrest Drive, in support of the proposed ordinance; Diane Puhek, in support of the proposed ordinance; Audrey Howard, Robin Circle, in opposition of the proposed ordinance; Peggy Thayer, SLO resident, in support of the proposed ordinance; Doug Gayer, Allen Street, in support of the proposed ordinance; Aaron Thompson, Crown Hill, in support of the proposed ordinance; Jenny Shaheen, Heritage Lane, in opposition of the proposed ordinance; Pete Evans, SLO resident, in support of the proposed ordinance; Kathy Johnson, Robin Circle, in opposition of the proposed ordinance; Paul Rinzler, Gaynfair, in support of the proposed ordinance; Marian Colver, SLO resident, in support of the proposed ordinance; John Diaz, Arroyo Grande, in opposition of the proposed ordinance; Claire Volner, Arroyo Grande, in support of the proposed ordinance; Joe Klamon, in support of the proposed ordinance; Andrew Woodard, in support of the proposed ordinance; Betty De Paul, Robin Circle in opposition of the proposed ordinance; Eve Newhouse, SLO resident, in support of the proposed ordinance; Michael Howard, Robin Circle, in opposition to homestays; Gay Groomes, Arroyo Grande, in support of the proposed.ordinance; Walt Bethel, Cardinal Court, in support of the proposed ordinance; Catherine Doyle, SLO resident, in support of the proposed ordinance. Upon hearing no further comments, Mayor Ferrara closed the public hearing. Mayor Ferrara called for a break at 7:55 p.m. The Council reconvened at 8:10 p.m. Council questions and discussion ensued regarding application fees, concentration limits, traffic, parking, and whether or not the ordinance should include a look back provision after one year. Action: Council Member Brown moved to introduce an Ordinance, entitled: "AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE AMENDING TITLE 16 OF THE ARROYO GRANDE MUNICIPAL CODE REGARDING VACATION RENTALS AND HOMESTAYS"; as modified to include a condition that there would be a 300 linear foot distance restriction for location of vacation rentals and homestays, and with the provision that there ATTACHMENT 2 Item 9.h. - Page 12 Minutes:City Council Page 6 Tuesday, May 27, 2014 would be a minimum of a one year look back unless conditions warrant an earlier review due to complaints received. Further, to request that educational discussions be provided to vacation rental and homestay hosts regarding neighborhood sensitivity to parking issues. Council Member Costello seconded. Brief discussion ensued clarifying that the 300 linear foot distance restriction is applied in either direction on the same street; and that staff would provide a monthly report to Council on any complaints/code enforcement action taken with regard to violations of the vacation rental and homestay ordinance. In response to Council discussion, City Attorney Carmel clarified the modifications to the Ordinance and read them for the record, as follows: Adding Condition No. 12 for vacation rentals to read: "Establishment of a Vacation Rental within 300 feet of an existing Vacation Rental on the same street shall not be permitted:" Changing the existing No. 12 to No. 13. Adding Condition No. 10 for homestays to read: "Establishment of a Homestay within 300 feet of an existing Homestay on the same street shall not be permitted." Changing the existing No. 10 to No. 11. Council Members Brown and Costello confirmed the changes to the ordinance as part of the motion, and the motion passed on the following roll-call vote: AYES: Brown, Costello, Barneich, Guthrie, Ferrara NOES: None ABSENT: None Council Member Costello left the meeting at 9:00 p.m. 9.b. Consideration of Request from South County Sanitary Service for Integrated Solid Waste Collection Rate Increase. Recommended Action: Adopt a Resolution establishing integrated solid waste collection service rates. Administrative Services Director Malicoat introduced Bill Statler, who presented the results of the rate study and recommended solid waste collection rate increase. Mr. Statler and Tom Martin, representing South County Sanitary Service, responded to questions from Council. Mayor Ferrara opened the public hearing. Upon hearing no comments, Mayor Ferrara closed the public hearing. Action: Mayor Pro Tem Guthrie moved to approve "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE ESTABLISHING INTEGRATED SOLID WASTE COLLECTION SERVICE RATES". Council Member Barneich seconded, and the motion passed on the following roll-call vote: Item 9.h. - Page 13 Ci t y o f A r r o y o G r a n d e Va c a t i o n R e n t a l a n d H o m e s t a y L o c a t i o n s Homestay Vacation RentalFigure 1 July 2016Figure 1 July 2016 10 7 O r o D r i v e 10 0 5 R o b i n Ci r c l e 55 0 C r o w n Hi l l 75 6 M y r t l e St r e e t 53 7 M a y St r e e t 20 2 Ca n y o n Wa y 81 1 R o b i n Ci r c l e 13 0 5 Ne w p o r t Av e 32 0 O l d Ra n c h R o a d 50 4 I d e St r e e t 15 1 W Br a n c h St r e e t 70 9 M u s t a n g Ci r c l e 62 0 Vi c t o r i a Wa y 21 9 Mi l l e r Wa y 0 0.5 1 0.25Miles Th i s m a p d i s p l a y s t h e h o m e s t a y a n d v a c a t i o n r e n t a l l o c a t i o n s wi t h i n t h e C i t y o f A r r o y o G r a n c e a t a s c a l e o f 1 : 9 , 5 0 0 . ATTACHMENT 3 Item 9.h. - Page 14