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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
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ATTACHMENT 3 Item 9.h. - Page 14