March 2020

Orange opts not to ban short-term rentals

By Tina Richards

Short-term rentals (STRs) in the City of Orange got a reprieve, Feb. 11, when the city council opted to regulate them rather than prohibit them outright.

The city realized it had to reckon with STRs following a spate of serious complaints from neighbors who lived near rental units that were primarily party houses. Those complaints about trash, noise, lack of parking and “strangers roaming residential streets” at all hours, coupled with the increased popularity of short-term rentals, prompted the city council to hold a policy discussion on the issue during its January meeting.

At that time, Councilman Chip Monaco recommended banning STRs citywide, and Councilman Mike Alvarez insisted that they should not be allowed in residential neighborhoods.  Mayor Mark Murphy and Councilwoman Kim Nichols took a more tempered approach, opposing a ban but agreeing to explore regulating them. The council asked City Manager Rick Otto to draft an ordinance banning them, but leave the option open to regulate them instead.

Backing off ban
Otto presented the draft ordinance at the council’s February meeting, with the understanding that it might be rejected in favor of leaving the STR door open instead of slamming it shut. The proposed ordinance prohibiting STRs, regardless of zoning, was met with a lukewarm reception by the council and mixed reviews from the audience. While the January meeting centered around the problems neighbors experienced with short-term rentals, the February public hearing attracted more rental owners who extolled their benefits.

Public speakers who reiterated the downside and supported the ban were met with an equal number of STR proponets. Homeowners who have been renting their homes, accessory dwellings and garage apartments to short-term visitors for years reported no tenant problems, no complaints from neighbors and a screening process that kept party-house renters away.  

Speakers cited the economic benefits both to landlords and the city. “STRs bring visitors to the city, and they spend money here,” Bob Bell explained. “My rental house is the best-looking property on my street. I want to protect my investment, and I want the home to appeal to renters. I think STRs add to property values and bring value to our city.”

Defining the target
“You don’t shoot a fly with a cannon,” Councilwoman Kim Nichols advised. “I’m in favor of regulation, not a full ban. It makes sense to me to allow current STR owners to get a business license and to put restrictions on the number of people per bedroom, parking and parties. The license fees would pay for code enforcement. We have to do the right thing for the neighbors and shut down properties that are abusers. We could also put a cap on the number of STRs in the city.”

Chip Monaco, who strongly supported a complete ban on STRs at the January meeting, agreed that the city does regulate how businesses are run and STRs are a business. “I strongly believe STRs are inconsistent with neighborhoods,” he said, “but I don’t believe we’ve clearly defined the problem.  

“We don’t have enough actionable information. How many code enforcement visits? How many police calls? How do we enforce what we regulate? If we don’t do this right from the get-go, then we shouldn’t do it at all.” Monaco said he favored staff coming to a future meeting with a regulatory ordinance, but  wanted to leave the ban on the table in the meantime.

Both sides now
At the January meeting, Mike Alvarez was adamant that he would not abide STRs in r-1 zoned neighborhoods. After listening to public comments at this meeting, he reported that he had gathered “lots of valuable information.” “I’m still opposed to STRs in r-1,” he said, “but I’m willing to listen.” He suggested the city continue the discussion with a public forum or a workshop in a less formal environment. “I want to continue this,” he said. “I want to get more information.”

Mayor Mark Murphy noted that, ”STRs are going to be part of life whether we like it or not. We want to focus on the five percent of bad owners; we want to go after those issues right away, but we don’t want to penalize the good owners.” He pointed out that the city already has boarding house, noise and party ordinances on the books, and recommended staff “assemble a framework for what we’ve discussed tonight” and send it to the planning commission.  

The council voted, 4-0, to consider an ordinance regulating STRs. Potential restrictions include licensing, owner occupancy, limits on tenants per room, parking considerations and fines for noncompliance.