200 S. Anaheim Blvd.
Suite #162
Anaheim, CA 92805
Tel: (714) 765-5139
Fax: (714) 765-5280
www.anaheim.net
CITY COUNCIL AGENDA REPORT
City of Anaheim
PLANNING AND BUILDING DEPARTMENT
DATE: SEPTEMBER 10, 2024
FROM: PLANNING AND BUILDING DEPARTMENT
SUBJECT: SHORT-TERM RENTAL PROGRAM OVERVIEW
ATTACHMENT (Y/N): YES ITEM # 15
GOVERNMENT CODE § 84308 APPLIES: NO
ACTION:
Receive an informational overview on the City’s Short-Term Rental (STR) program and associated regulations; and, provide direction to staff, as necessary.
DISCUSSION:
At the January 23, 2024 Council meeting, Council Member Leon requested a report on the city’s Short-Term Rental regulations, including an overview of the approval process, and the procedures and resources available for enforcement of regulations.
Background:
Short-Term Rental regulations are commonplace in cities throughout the country, especially in jurisdictions with thriving tourism-based industries. Cities have adopted regulations in response to the growing popularity of online platforms like Airbnb and VRBO, which established online marketplaces for homeowners to rent out their properties on a short-term basis.
In 2014, the City adopted an ordinance requiring property owners to obtain a Short- Term Rental Permit for rentals of less than 30 days. The ordinance also required property owners to pay Transit Occupancy Taxes (TOT) for short-term rentals.
As STRs became more prevalent, residents raised concerns about issues such as noise, parking, the overall effect of STRs on neighborhoods, and concerns over the reduction and availability of long-term residential units. In July 2016, the City Council adopted an ordinance that strengthened regulations and operational requirements on existing STRs, established a ban on new STRs, and established a phase-out period for existing STRs.
Short Term Rental Program Overview
September 10, 2024
In June 2019, the City Council updated the 2016 ordinance to 1) eliminate the required phase-out of existing STRs and allow the majority of existing STRs to continue to operate; 2) further update and strengthen operational requirements; and, 3) provide for the relocation of certain STR permits to new locations. The updated ordinance continued the prohibition of new STRs in the city. The Short-Term Rental (STR) regulations provide a framework designed to manage the operation of short-term rental properties in the city, while striking a balance between supporting the tourism industry in the City and protecting residential neighborhoods.
Overview of the Short-Term Rental Program:
Permitting and Licensing: The city requires all STR operators to obtain a Short-Term Rental Permit. Short-Term Rental Permits are valid for one (1) year and must be renewed annually.
There are currently 222 active STR Permits in the city. An additional 19 STR Permits, which were required to cease operations at previous locations as part of the 2019 ordinance, are eligible for relocation to other properties in the City. The majority of STRs operate in close proximity to The Anaheim Resort, with more than half (129) operating in District 4.
Transient Occupancy Tax (TOT): STR operators are required to collect and remit Transient Occupancy Taxes (TOT), also known as a “hotel tax.” The TOT rate for an STR is 15% of gross rental revenue, which is the same rate as hotels operating in the city. TOT revenue generated from STRs in 2023 was approximately $5.5 million.
Operational Standards: The STR ordinance includes operational standards that outline expectations for STR operators and guests. The ordinance includes standards for minimum night stay, maximum occupancy, noise, parking, and trash disposal. The intent is to minimize potential disruptions to neighbors and maintain the character of residential neighborhoods.
Operational standards include, but are not limited to, the following:
Minimum Night Stay: The minimum stay in a Short-Term Rental is three (3) consecutive nights. The minimum stay is required to reduce the impact of arriving and departing guests on residential neighborhoods.
Occupancy: The maximum number of occupants in a short-term rental property is based on the number of bedrooms in the residence, and is limited to the following:
Number of Bedrooms Total Occupants
0-Studio 2
1 4
2 7
3 9
4 11
5 13
Short Term Rental Program Overview
September 10, 2024
6 15
7 17
8 19
The use of STRs for the purposes of hosting weddings, receptions, parties, commercial functions, conferences, or other similar assemblies that are separate from the purpose of lodging are prohibited.
Trash and Refuse: Trash and refuse shall not be left stored within public view, except in proper containers for the purpose of collection by the responsible trash hauler and between the hours of 5:00 p.m. the day before and 12:00 midnight the day of the scheduled trash collection. The owner of a short-term rental property shall provide sufficient trash collection containers and service to meet the demand of the occupants.
The short-term rental property shall be free of debris both on-site and in the adjacent portion of the street.
Parking: Occupant vehicles shall be parked only in an approved driveway or garage on the property; except that the owner of a short-term rental property may also purchase one (1) parking permit or placard from the city that can be used by, and must be visibly displayed inside the vehicle of, the short-term rental unit occupant, allowing no more than one (1) occupant vehicle to park on a public street where parking is otherwise legal.
For those streets governed by permit parking districts, the owner of a short-term rental property may purchase one (1) parking permit or placard from the city that can be used by, and must be visibly displayed inside the vehicle of, the short-term rental unit occupant. No more than one (1) occupant vehicle is permitted to park on a public street in that particular permit district. The maximum number of vehicles allowed on a short- term rental property shall be limited to the number of available off-street parking spaces; however, such property must have a minimum of two (2) off-street parking spaces. Noise Restrictions: Short-Term Rentals shall comply with the following noise restrictions:
o No musical instrument, phonograph, loudspeaker, amplified or reproduced sound, or any machine or device for the production or reproduction of any sound shall be used outside or be audible from the outside of a short-term rental unit between the hours of 10 p.m. and 9 a.m.
o The hours between 10:00 p.m. and 9:00 a.m. are considered to be "quiet time," so that no outdoor activity will disturb the peace and quiet of the neighborhood adjacent to a short-term rental property or cause discomfort or annoyance to any reasonable person of normal sensitivity residing in the area. It shall constitute a major violation if any occupants engage in outdoor activities on a short-term rental property between the hours of 10:00 p.m. and 9:00 a.m. that involve the use of fire pits, barbecues, swimming pools, hot tubs, spas, tennis or paddleboard courts, or other similar and related improvements or play equipment, or if any Short Term Rental Program Overview
September 10, 2024
occupants engage in outdoor parties, outdoor singing, shouting, clapping or other activities generally associated with partying or if occupants engage in any outdoor drunk or disorderly conduct during those hours. Any other outdoor conduct between the hours of 10:00 p.m. and 9:00 a.m. that disturbs the peace and quiet of the neighborhood adjacent to a short-term rental property or causes discomfort or annoyance to any reasonable person of normal sensitivity residing in the area, shall constitute a minor violation. It is not a violation for an occupant to merely be out of doors during quiet time hours, so long as there is no conduct that disturbs the peace and quiet of the neighborhood adjacent to a short-term rental property or causes discomfort or annoyance to any reasonable person of normal sensitivity residing in the area. The owner shall post signs of a size, type and at a location (or locations) near all doors leading to the exterior of a short-term rental unit, advising occupants of "quiet time."
24-Hour Contact: During operation of the STR, the owner, the owner's agent and/or a local contact person shall be available by telephone twenty-four (24) hours per day, seven (7) days per week to respond to complaints regarding the use, condition, operation or conduct of occupants of a short-term rental unit. The owner, the owner's agent, and/or a local contact person must be on the premises of the short-term rental at the request of an enforcement officer or the city's Police Department within forty-five (45) minutes of contact to satisfactorily correct or take remedial action necessary to resolve any complaint, alleged nuisance or violation of this chapter by occupants occurring at the short-term rental property. Contact information must also be provided to owners and occupants of properties contiguous to and directly across the street from the short-term rental property.
Rental Agreement Required: Prior to occupancy of an STR, the owner or owner’s agent shall enter into a written rental agreement with a responsible person which establishes and sets out the terms and conditions of the rental agreement and requires the responsible person to (1) provide his or her name, age, address, and driver's license number or passport number and agree to be accessible to the owner, the owner's agent and the local contact person (if any) by telephone at all times, and (2) acknowledge his or her understanding of all City of Anaheim short-term rental rules and agree that he or she is liable for any fines incurred by occupants and legally responsible for compliance by all occupants of the short-term rental unit with all provisions of this chapter and this code. Right to Inspect: The city shall have the authority to conduct random inspections of a short-term rental property and short-term rental unit(s) as the Planning Director deems necessary or prudent to ensure compliance with the provisions of this chapter, including without limitation, based upon any complaints or violations that occur or prior to a renewal of a permit.
Compliance with Applicable Codes and Laws: STRs must comply with all applicable codes regarding fire, building, health and safety, and all federal, state, and municipal laws, regulations and ordinances.
Short Term Rental Program Overview
September 10, 2024
Display of Short-Term Rental Permit: Each registered property must display a valid Short-Term Rental Permit in a visible location within the property.
Enforcement and Penalties: The Code Enforcement Division maintains a pro-active enforcement team that includes a dedicated Code Enforcement Officer seven nights a week from 8 PM to 2 AM. Enforcement activities include the monitoring of permitted STRs and removal of unpermitted STRs from online platforms, monitoring and responding to a dedicated resident complaint hotline, and proactively patrolling neighborhoods with high concentrations of STRs.
The Code Enforcement team was established in 2019 and is funded by revenue generated by the STRs.
Penalties for STR ordinance violations include fines, suspension, and/or revocation of STR permits. Violations of STR regulations by STR Permit holders are categorized into “major” and “minor” violations. The STR ordinance prescribes that two major violations or ten minor violations within 12 months are grounds for the suspension and/or revocation of a permit. Over the past four years, there have been three (3) suspensions and no revocations of STR permits.
Unpermitted STRs operating without an STR Permit face heavy fines and/or alternative enforcement actions up to and including the potential termination of public utilities. 2024 Renewal Inspections: As part of the current year annual renewal process, the Code Enforcement Division and Building Division conducted proactive inspections of all Short-Term Rental properties. Inspections focused on unpermitted modifications or improvements that could result in a health or safety concern, such as unpermitted structural changes, occupancy changes, or unpermitted electrical or natural gas lines. Violations were found in numerous properties and enforcement efforts are ongoing. Short-Term Rental owners are cooperating with Code Enforcement to rectify violations and/or obtain any required permits.
City Webpage: The City maintains www.anaheim.net/STR webpage as a centralized repository of relevant information on the City’s STR program, including a Short-Term Rental Fact Sheet (Attachment 1), forms and handouts related to the Short-Term Rental Program.
IMPACT ON BUDGET:
Funding for the enforcement of the Short-Term Rental Program is included in the Planning and Building Department’s FY 2024/25 General Fund Budget.
Respectfully submitted,
Ted White
Deputy City Manager / Planning and Building Director
Attachment:
1. Short-Term Rental Fact Sheet