ADMINISTRATIVE REPORT
MEETING DATE: October 15, 2025 AGENDA CATEGORY: Deferred Business TO: Housing and Community Development Committee
FROM: Phillp Burns, Development Services Director
DATE: October 15, 2025
SUBJECT: Short Term Rental Update and Direction
The Committee will receive an update on the Short-Term Rentals and the concept to draft an ordinance to bring later to identify how to manage the Short-Term Rentals already happening throughout the City.
RECOMMENDATION:
Provide staff direction on whether to bring a Short-Term Rental Ordinance to City Council to manage these units throughout the City.
BACKGROUND:
Short term rentals ( or "STRs") have been a growing staple of the tourism economy, providing an alternative from traditional hotel/motel room lodgings for travelers. Although STRs technically include a hotel room or other traditional form of overnight accommodation, the term "STR" is now usually linked to short-term stays within homes in residential areas of communities, including apartments, condominiums, single family homes, and accessory dwelling units. The common denominator is the rental is for thirty days or less. The difference is that whereas hotels are usually permitted uses within the zones they are allowed, STRs are often not permitted within residentially zoned areas of a community, which are anticipated to provide for more permanent forms of residency.
With the advent of online booking engines such as VRBO, AirBnB and HomeAway, among many others, it has become easier for property owners to list a house, condo, or apartment as a STR and manage that rental without support from more traditional property management companies. These online booking engines have also made it easier to search and book STRs. STRs can be second homes that are used by the owner during a portion of the year, investment properties without a permanent owner- occupant at any time, or rooms or portions of homes rented by the owner-occupant to make ends meet.
The increase in STR activity, especially in residential neighborhoods, has created challenges across the country. Issues ranging from noise, trash and parking to a decline in available long-term housing options are regularly cited by residents in impacted communities. Across the State of California and the United States, counties and cities are attempting to strike a balance between regulating STRs to address neighborhood compatibility and environmental concerns while recognizing property owner rights. Resort communities in particular are attempting to find that balance while also acknowledging the role that tourism economy and revenue plays in particularly the smaller resort communities. STRs can generate millions of dollars in Transient Occupancy Tax (TOT) revenue along with substantial accompanying permitting fees.
The main concerns with any land use regulation are: reasonableness and effective enforceability. Staff has begun to review other municipalities that regulate STR's. Due to time constraints, a reliance on previous analysis of California Counties is provided below. It is by no means exhaustive. Over 100
California municipalities currently have STR ordinances in place, including some comparable cites.
Staff will continue to gather information and look for what will work for our City that other have been able to successfully navigate.
The list demonstrates specific commonalities in STR ordinances, including:
• Separate permit required in addition to Transient Occupancy Tax certificate. • Renewal of permit required.
• Imposition of parking and trash regulations.
• Imposition of noise standards or guidelines.
• Posting of rules/regulations of permit and emergency contact information. • Requirement for a local 24-hour contact.
• Occupancy limits.
• Methodologies for enforcement and associated penalties.
As to enforcement, the ordinances range from administrative citations, nuisance abatement proceedings to the "3 Strike Rule" (3 verifiable violations during a prescribed period of time and consequences to permit occur).
Almost every ordinance reviewed to date charges a fee for the permit, thus allowing potential cost recovery of administration of the permit program. Code enforcement already has cost recovery provisions available.
The review of other municipalities also revealed that the Finance Department is not the department/division that is charged with administering or enforcing the permit program. In most cases, the department charged with these duties is the equivalent of Development Services. This is logical because the TOT ordinance addresses taxation and revenue and most if not all the above permitting regulations fall logically within building and zoning codes. Here in Bakersfield, Development Services is the logical choice for a permitting program as it has the expertise to provide permit issuance via the Planning Division and can also regulate and enforce the ordinance via the Code Enforcement Division. Additionally, the TOT taxation program is vastly different in scope than a land use permitting program. It is not advisable to merge them and, as a result, staff does not recommend that the TOT ordinance be amended to include land use regulatory permits or enforcement. A bridge can be provided in the land use regulatory ordinance to ensure compliance with the TOT ordinance.
If the City Council wished to pursue an STR program where staff researches and identifies STRs, adopts an ordinance, does outreach to those properties being used as STRs, and formulates and implements a system of regulation and tax collection for STRs, a significant investment in staff will be required. This memorandum does not fully analyze exactly how much staff would be required, but to operate an in- house program would require multiple additional staff members added throughout the process. Staff has the expertise and manpower to prepare an ordinance for consideration of adoption, but the overall implementation and management of the program over time is not currently in place. Additional enforcement personnel would most probably be required.
One option the City could consider would be to utilize contracted services to implement, manage and maintain the bulk of the requirements necessary for establishing a functional and successful STR program. Staff has completed preliminary dialogue with two firms whose expertise is providing STR support services to municipalities. Those services are scalable per the desires of the municipality, and usually follow the following tiers of service:
1. Short Term Rental Detection and Monitoring – The contracted firm would research all available Bakersfield short-term rental ad listings posted on all of the various STR sites and verify their status as STRs. The contracted firm would then connect the ad listings to property record data, and determine compliance with adopted code and the properties registration status. These listing would be maintained and updated as necessary. All aspects of the system and the databases would be accessible online by Bakersfield staff with unlimited licenses.
2. STR Property Notification and Reconciliation – The contracted firm would then notify noncompliant STRs and educate as to the STR rules for the City. If the property owner wished to continue utilizing the property as an STR, they would be directed to secure the required permit and then access an online registration process with the contracted service. The system would also provide automated notifications and annual license renewal to permit holders.
3. STR Tax Collection System – The contracted firm would then also manage an online TOT remittance to be forwarded to the City. An auditing tool to leverage captured booking data in comparison to tax collection data would be utilized so as to assess overall program compliance.
The contract firm also typically provides a Complaint Hotline, a 24/7 bilingual complaint phone hotline and online complaint reporting system that would serve as an additional code compliance tool. Again, the City would have access to all aspects of the system. A firm would be available to provide a cost outline for annual cost to the City.
STR specialized service firms advertise a greater than 90 percent compliance rate within a year or less.
The Code Enforcement Division would be tasked with responding to the remaining unregistered and unpermitted STRs in an effort to attain full compliance with the STR ordinance
FISCAL IMPACT:
The cost to monitor the STRs throughout the City could be two or three code officers, which would be $200K to $400K program if this is done in house. If the City chose to conduct an RFP to hire a firm to do the Code monitoring the compliance with the new STR ordinance, it could be done for less than $50K plus significant revenue generated from additional TOT over the life of the program.
COUNCIL GOAL:
Economic Opportunity for All
Innovative and Efficient City Government
Safety and Resilience
ATTACHMENTS:
N/A