About 10 years ago, the beachfront city of Carpinteria experienced rapid growth of short-term rentals, prompting the city to implement short-term rental regulations in the summer of 2017 to protect the housing stock for long-term residency and the local workforce.
The regulations went into effect in July 2017 following certification by the California Coastal Commission, and they address concerns regarding neighborhood compatibility of short-term rentals in the city’s residential zones while regulating an important lodging resource in the city.
“Based on concerns, we had a number of meetings with the Planning Commission, (the city) council, and ended up going to the Coastal Commission with our current ordinance,” said Steve Goggia, Carpinteria’s community development director. “At the time, the (Coastal Commission) director held it up and said, ‘Carp is doing this correctly. They are balancing short-term vacation rentals key for a coastal city, but also maintaining the affordable housing workforce.’”
Goggia gave an overview of the short-term rental regulations and updated the Carpinteria City Council on Monday night on the status of the program so far.
The regulations define short-term rentals as the “rental of a residential unit for a period of 30 consecutive calendar days or less, subject to all applicable city land use regulations, permit/licensing requirements, and payments of fees and/or taxes including transient occupancy tax.”
Short-term rentals can include vacation rentals where the owner is not present during the rental period and homestays where the owner has to be present during the homestay period. Stays of 30 days or longer are not considered short term and are not subject to regulations.
The regulations divide the city into a four-area vacation rental overlay district (VROD) with different numbers of vacation rentals allowed in each area. Area A, which goes from the coast between Ash Avenue and Linden Avenue up until Sandyland Road, is allowed 55 short-term rental units, Area B is allowed 115 short-term rental units, Area C is allowed 30 units and Area D is allowed 18 units.
Licenses within these areas are issued on a first-come, first-issued basis, and the city creates a wait list when the maximum number of units are filled, Goggia said.
Applicants that are granted licenses must submit transient occupancy tax statements each quarter whether or not they collect taxes, and licensees must use their license at least once every two years or the license expires, according to the staff report. The city audits about 5% of the short-term rental licenses each year, with the exception of 2020 because of the COVID-19 pandemic, the staff report stated.
To date, there are 12 licenses available in Area A, 23 available in Area B, and no remaining licenses remain available in Areas C and D, Goggia said. Area D first maxed out capacity in September 2018, and Area C maxed out in November 2018, the staff report stated. There are 19 properties on the wait list for Area C and seven on the wait list for Area D, according to Goggia.
There were 23 nonconforming units that were eligible to apply for five-year amortized vacation rental licenses outside of the VROD, of which 18 applied and all were granted licenses, he added. To date, 13 of those nonconforming units remain in operation, with the licensing expiring on June 30, 2022. Those licenses are no longer eligible for renewal, and the units will continue to be available to long-term renters once the licenses permanently expire, according to the staff report.
Seven homestay licenses have been issued since 2017, and four are active, according to the staff report.
During the past four years, 74 vacation rental licensees have ceased use, forfeited, not renewed or sold their properties. There were 10 non-renewals per year on average, eight cease use/sold properties per year on average and no licenses were revoked because of noncompliance, according to the staff report.
The city has received $86,310 from vacation rental and homestay application and license fees during the past four years, $80,850 from short-term rental renewal license fees and $1.7 million in transient occupancy taxes from licensed short-term rentals.
City Council members have received correspondence or inquiries about four main short-term, rental-related issues: 30-day rentals, nonconforming vacation rental licensees outside of the VROD, homestay regulations, and wait lists in Areas C and D.
The staff report said that some real estate agents have questioned whether entering into a rental agreement for greater than 30 days but allowing renters to stay less than 30 days is permitted, as some short-term rental license holders may wish to employ this practice to avoid paying transient occupancy taxes.
Goggia gave the example of “snowbirds,” or people vacationing in Carpinteria over the winter months to escape colder weather conditions in other areas, and said that in those cases, the city would be losing housing for the workforce.
“Staff is aware that this is happening in other jurisdictions, but we haven’t seen it. Staff doesn’t think this is a problem right now,” he said.
For the 13 nonconforming licensees outside of the VROD, Goggia said that staff is aware that owners have asked to extend the amortization period for longer or open up the location where vacation rentals are allowed. However, he said that staff does not recommend changing this because it would require going through the Planning Commission and the Coastal Commission — a process that could take up to a year and a half.
The city recently received its first complaint from neighbors of a licensed homestay property that said they question if the homeowners were present during the time of the homestay rental, as is required by the regulations. To remedy this, Goggia said that the city will have licensees sign an affidavit saying that they will be on the property during the homestay and will look at the licensees’ driver’s license to make sure the property is their primary residence.
In regards to the last issue, some owners of apartment complexes in Area C are applying for short-term rental licenses for every unit in the complexes they own, the staff report said. Two owners have done this, and together they represent 15 of the 19 applicants on the wait list for Area C. There are also licensees in both Areas C and D who rarely use their licenses, and some licensees have never used their licenses but held onto them for the 24 months permitted under the ordinance, according to the staff report.
However, the City Council established the areas of the VROD and the number of licenses available with an interest in balancing both vacation rental and long-term rentals in the area, the staff report said.
The council members debated expanding the zoning of the VROD to allow for more licenses. Councilman Roy Lee said that times have changed since the regulations came before council, and “we have to be open-minded about such changes.”
Councilwoman Natalia Alarcon said that Carpinteria is attracting a lot of wealth, and with that, a lot of local families will be forced to leave.
“That is scary,” she said. “That’s a scary future for Carpinteria.”
Vice Mayor Al Clark said there is a housing crisis in Carpinteria, and it is the council’s job to defend housing.
“That’s one of the goals of our town is to protect affordable housing,” he said. “The short-term rental doesn’t do that; the short-term rental is the enemy of that.”
The council agreed to look into amending the VROD to extend it into a contiguous area, consider amending the amortization period, zoning changes targeted at certain properties, and other entitlement tools that are not zoning to allow affected properties to continue short-term rental uses. Staff will gather that information and report back to the council at a later date.
— Noozhawk staff writer Jade Martinez-Pogue can be reached at jmartinez-pogue@noozhawk.com. Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.
