Item F-1 Agenda Report — Beverly Hills City Council, June 14, 2022

AGENDA REPORT
Meeting Date: June 14, 2022
Item Number:

To: Honorable Mayor & City Council
From: Timothea Tway, AICP, City Planner
Chloe Chen, Associate Planner
Subject: AN INTERIM ORDINANCE OF THE CITY OF BEVERLY HILLS EXTENDING INTERIM ORDINANCE NO. 21-O-2841 ESTABLISHING

A MORATORIUM ON FRACTIONAL OWNERSHIP OF RESIDENTIAL

AND COMMERCIAL PROPERTY, DECLARING THE URGENCY

THEREOF AND MAKING A DETERMINATION OF EXEMPTION

UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA)
Attachments: 1. Interim Ordinance No. 21-O-2841

2. Ordinance No. 21-O-2842 (Previous Extension of Interim Ordinance)

3. Draft Ordinance to Extend Interim Ordinance

RECOMMENDATION
Staff recommends the City Council extend Interim Ordinance No. 21-O-2841 (Attachment 1) prohibiting fractional ownership of residential and commercial property for an additional one-year period, which would extend the expiration date of the ordinance to July 15, 2023. Staff also requests that the City Council provide direction to staff regarding the drafting of permanent regulations applicable to fractional ownership and any relevant information needed to inform such permanent regulations.

INTRODUCTION
At its special meeting on June 24, 2021, the City Council discussed the topic of fractional ownership in relation to a proposed development project in the city. Councilmember Wunderlich (then-Mayor) requested that staff prepare an agenda item to more broadly discuss fractional ownership, and requested that an Interim Urgency Ordinance be considered to prevent fractional ownership of properties in the City.

During a study session meeting on July 15, 2021, the City Council discussed the need for adopting an interim urgency ordinance to prohibit fractional ownership in the city, agreeing that such a proactive measure would provide the City additional time to understand all of the potential impacts of this type of ownership model. The City Council F-1
Meeting Date: June 14, 2022

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expressed concern that there could be situations to which the prohibition would technically apply, but is not the type of fractional ownership that the City intended to limit.

Therefore, the City Council ensured that the interim urgency ordinance included a provision for a person who may receive or has received an administrative citation for fractional ownership to request a hearing with the City Council to review the specific details of their fractional ownership operation. At its regular meeting on July 15, 2021, the City Council adopted the interim urgency ordinance, which became effective on July 16, 2021, and which was effective for an initial period of forty-five (45) days. On August 17, 2021, the City Council adopted Ordinance No. 21-O-2842 (Attachment 2), which extended the interim ordinance for an additional ten (10) months and fifteen (15) days, resulting in an expiration date of July 15, 2022. Since the initial extension period will be expiring this coming July, staff is now presenting an ordinance to further extend the interim ordinance to provide additional time for staff to work on any regulations should the Council decide to implement these on a more permanent basis.

DISCUSSION
Fractional ownership is an emerging trend in which shares of ownership rights to a property are sold to multiple buyers, thus allowing each buyer an ownership interest and rights to use said property for a certain period of time. Although this model effectively operates similarly to a timeshare model, it typically conveys actual ownership rights instead of a right for use of the property for a certain period of time only, and also divides a property into fewer fractions than a typical timeshare might. In some existing fractional ownership models, properties are bought and held under entities such as limited liability companies (LLCs), and the operating agreement for the entity conveys a fraction of ownership of the property through the sale of interest shares to a member of the entity.

In a typical fractional ownership scheme, the fraction of ownership may directly correlate to the amount of time the owner is permitted to use and/or occupy the dwelling unit, whereas in a typical timeshare scheme, the customer typically buys only the rights to use the property for a set period of time. Additionally, recent trends indicate that fractional ownership schemes are being applied to single-family residences, while traditional timeshare schemes are more commonly applied to hotel and condominium properties.

The operation of fractional ownership schemes in established single- and multi-family neighborhoods has the potential to create adverse impacts to residents of established neighborhoods that would otherwise not experience impacts from transient uses. Since fractional ownership agreements provide rights to utilize a property for a period of time that is shorter than a typical rental agreement, the property effectively operates as a short-term rental and/or vacation rental home. Given that vacations typically last for short periods of time, these properties would likely experience high turnover rates of occupants, and result in impacts related to their operation such as noise, loss of privacy, loss of community buy-in, and decline in property values. Additionally, the city and the greater Los Angeles metro region are experiencing a housing crisis, in which a lack of housing, including affordable and market-rate products, is available. The purchase of a single-family or multi-family unit for the purpose of private vacation or other short-term uses would further exacerbate this crisis, as it removes available housing units from the market for long-term residents to utilize. Finally, fractional ownership of residential or commercial property, can adversely impact future development, redevelopment, safety, and proper maintenance of the property as a result of the complexities associated with the incongruent and changing objectives, intents, and goals of multiple owners.

Recently, in other areas of California, several companies have started to advertise fractional ownership shares of vacation dwellings. These companies facilitate the sale of the fractions of ownership, and manage the shared use of the property. Therefore, the Meeting Date: June 14, 2022

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potential proliferation of fractional ownership operations presents an immediate threat to the public health, safety, and welfare of the city, and continuation of the interim urgency ordinance may be appropriate to prevent these adverse impacts while study and permanent ordinance drafting continues.

The extension of the interim ordinance would continue to prohibit fractional ownership, defined as “shared ownership of real property, entitlement to ownership rights of real property, entitlement to the use of real property, or possession of real property through:
a) direct ownership of the property, b) indirect ownership of the property through a membership, stake, interest, share, association, or similar device in the owner of the property or a subsidiary or parent of the owner of the property, or c) a membership, stake, interest, share, association, or similar device in an entity, group, association or similar device which by virtue of such membership, stake, interest, share, association or similar device grants entitlement to ownership rights or the use or possession of the property”. The ordinance prohibits fractional ownership models from operating in the city if the fractional ownership includes “any arrangement, schedule, plan, scheme, or similar device, whether by agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby an owner of the property or a fraction thereof, receives ownership rights in, or the right to use, the property for a period of time less than a full year”, with the exception of those approved through a specific plan. Thus, the ordinance language prohibits fractional ownership that correlates to a time-based occupancy agreement. Per the City Council’s direction, the interim ordinance regulations also contain a provision to allow a person who may receive or has received an administrative citation for operating a fractional ownership scheme to request a hearing before the City Council to discuss the details of their arrangement. Thus, the ordinance provides some flexibility for cases that may technically fall under the definition of fractional ownership, but are not the types of schemes that the ordinance intends to prohibit.

At this time, staff recommends that the City Council adopt an ordinance to extend the prohibition regulations on fractional ownership to provide additional time to study the potential effects of such an ordinance, and to draft permanent regulations that may be tailored to specifically prohibit fractional ownership models that may have adverse impacts to the community, while still providing the ability for this type of ownership model to be used by property owners should there be a legitimate reason to do so. Staff also requests that the City Council provide direction regarding the permanent regulations pertaining to fractional ownership models in the city, in order to help staff prepare and/or gather any necessary information to aid in the drafting of these regulations. As an update since the last extension of the interim ordinance, staff has not seen activity in the city that would be considered a fractional ownership scheme, nor has staff received any complaints regarding a situation that may require review before the City Council for an exemption from these regulations.

FISCAL IMPACT
It is not currently known whether allowing fractional ownership would have a positive or negative impact on the City’s revenue, as any revenue impacts would be determined by the applicable ownership model and taxation structure. However, extending the prohibition on fractional ownership would not have an adverse impact on the City’s revenue as it would maintain the status quo from a tax base perspective. Accordingly, there does not appear to be a fiscal impact associated with the extension of the interim ordinance to prohibit fractional ownership.

ENVIRONMENTAL REVIEW
The draft ordinance has been assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA, Public Resources Code Meeting Date: June 14, 2022

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Sections 21000 et seq.), the State CEQA Guidelines (California Code of Regulations, Title 14, Sections 15000 et seq.), and the environmental regulations of the City. The adoption and implementation of the ordinance represents minor alterations in land use limitations and do not result in any changes in land use or density, and the ordinance does not authorize construction. In fact, the draft ordinance imposes greater restrictions on certain properties in order to protect the public health, safety and general welfare because the ordinance will impose a temporary moratorium on certain fractional ownership in the City in order to protect the public health, safety and general welfare, and will thereby serve to avoid potentially significant adverse environmental impacts during the term of the moratorium. It can therefore be seen with certainty that there is no possibility that the proposed amendments may have a significant effect on the environment. Accordingly, the City Council will consider the staff recommendation to find the draft ordinance exempt from the environmental review requirements of CEQA pursuant to Sections 15305 as a minor change to land use regulations and 15061(b)(3), of the California Code of Regulations because it can be seen with certainty that there is no possibility that the activity in question would have a significant effect on the environment.

Ryan Gohlich, AICP,
Director of Community Development
Approved By
Attachment 1
Interim Ordinance No. 21-O-2841
ORDINANCE NO. 21-0- 2841

AN INTERIM ORDINANCE OF THE CITY OF BEVERLY HILLS

ESTABLISHING A MORATORIUM ON FRACTIONAL

OWNERSHIP OF RESIDENTIAL AND COMMERCIAL

PROPERTY, DECLARING THE URGENCY THEREOF AND

MAKING A DETERMINATION OF EXEMPTION UNDER THE

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA)

THE CITY COUNCIL OF THE CITY OF BEVERLY HILLS HEREBY ORDAINS AS FOLLOWS:

Section 1. Legislative Findings.

A. California is experiencing a housing supply crunch. Existing housing in this state, especially in its largest cities, has become very expensive. California needs an estimated 180,000 additional homes annually to keep up with population growth, and the Govemor has called for 3.5 million new homes to be built by 2025.

B. Fractional ownership of residential property for use or possession of the property for a period of less than a full year, akin to a vacation time-sharing property model, reduces the availability of residential property for long-term occupancies in the City. Thus, creating the need for more housing. Moreover, the use of fractional ownership can be detrimental to the City and its residents because such multiple occupancies disturb the stability of residential neighborhoods.

C. Fractional ownership of residential or commercial property, can adversely impact future development, redevelopment, safety, and proper maintenance of the property as a result of the complexities associated with the incongruent and changing objectives, intents, and goals of multiple owners.

D. The City Council believes that unregulated fractional ownership of residential or commercial properties with time-based occupancy restrictions would unduly impact the City.

The City Council therefore believes there is a current and immediate threat to the public health, safety and welfare that is presented by such ownership models, and that a moratorium is necessary to study the regulation of fractional ownership.

E. The City Council finds that the time provided by the moratorium will allow for a comprehensive analysis of residential and commercial property ownership models, including fractional ownership, with time-based occupancy restrictions. During the moratorium, the City will be able to analyze potential impacts on public health and safety related to time-based occupancy restrictions; and impacts on the public welfare due to the removal of full-time housing units from the market and replacing them with vacation or part-time units, the inference with the stability of residential neighborhoods and the impact on the maintenance and redevelopment of properties. The City Council finds that these analyses will help the City Council determine how to best prevent impacts to the public health, safety and welfare. The City Council further finds that the moratorium will allow time to achieve a reasonable level of assurance that there will not 60785-000 l\2552952v9.doc
be serious negative impacts to the overall community and ensure a positive and mutually acceptable set of outcomes for the City's residents, business community, and property owners.

F. Based on the foregoing, the City Council finds that if the City fails to enact this moratorium, fractional ownership of properties with time-based occupancy restrictions may be allowed under outdated zoning regulations that do not address the unique impacts of such ownership models. Therefore, a current and immediate threat to the public safety, health and welfare exists.

Section 2. Authority.

Pursuant to Government Code Section 65858, the City Council may adopt, as an urgency measure, an interim ordinance that prohibits any uses that may be in conflict with a contemplated zoning proposal that the City Council is considering, studying, or intends to study within a reasonable period of time.

Sections. Urgency Findings.

The City Council finds and determines that there is an immediate threat to the public health, safety, or welfare, and that fractional ownership of residential and commercial properties with time-based occupancy restrictions constitute a threat to the public health, safety or welfare.

As described in Section 1, the staff report accompanying this Interim Urgency Ordinance, and other evidence in the record, such fractional ownership in the City could threaten the health, safety and welfare of the community through negative impacts that include, but are not limited to, removing full-time housing units from the market and replacing them with vacation or parttime units, interference with the stability of residential neighborhoods and interference with the maintenance and redevelopment of properties. To preserve the public health, safety, and welfare, the City Council finds that it is necessary that this Interim Urgency Ordinance take effect immediately pursuant to Government Code Sections 65858 to prevent such harm.

Section 4. Moratorium Established.

Based on the facts and findings set forth in Sections 1 through 3 of this Interim Urgency Ordinance, and notwithstanding any other ordinance or provision of the Beverly Hills Mimicipal Code, the City of Beverly Hills hereby establishes the following moratorium:

A. Definitions. For the purposes of this moratorium, the following phrase has the meaning given herein.

1. "Fractional Ownership" shall mean shared ownership of a property, entitlement to ownership rights of a property, entitlement to use of a property, or possession of a property through any of the following means:
a. Direct ownership of a property;
b. Indirect ownership of a property through a membership, stake, interest, share, association, or similar device in the owner of the property or a subsidiary or parent of the owner of the property; or
B0785-0001\2552952v9.doc
c. A membership, stake, interest, share, association, or similar device in an entity, group, association or similar device which by virtue of such membership, stake, interest, share, association or similar device grants entitlement to ownership rights or the use or possession of a property.

B. Time-Based Occunancv Restrictions. Unless approved by a specific plan, fractional ownership of any property in the City shall be prohibited if such ownership includes any arrangement, schedule, plan, scheme, or similar device, whether by agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby an owner of the property or a fraction thereof, receives ownership rights in, or the right to use, the property for a period of time less than a full year.

C. Request for Hearing. Any person with a fractional ownership in the City who is threatened with enforcement of time-based occupancy restrictions or to whom an administrative citation is issued pursuant to this Ordinance may apply to the City Council for a hearing to review the time-based occupancy restrictions as applied against the property with such fractional ownership. Any such application shall be in writing and shall be received by the Community Development Department. Any application as a result of an administrative citation shall be received by the Community Development Department within thirty (30) days after the date of the administrative citation.

D. Notification for Hearing. Hearings pursuant to this Ordinance shall be preceded by public notice by the following method:

1. Mailed Notices: The applicant shall mail notices providing, at a minimum, the property address of the property involved with the hearing, general scope of the request, basic hearing information, and City contact information to recipients of the notice. Such mailed notices shall be sent via private courier service with the ability to track delivery of the notice, and shall be mailed at least twenty (20) days prior to such hearing by the reviewing authority.

Mailed notices shall be sent to properties within a 300-foot radius, measured from the exterior boundaries of the property involved with the hearing.

2. Affidavit/Proof of Mailing: The applicant shall submit an affidavit to the Community Development Department within five (5) days of mailing the notices required by this section, verifying that the mailings are in compliance with this section.

E. Exception to Time-Based Occunancv Restrictions. The time-based occupancy restrictions shall not apply to a property with fractional ownership if the City Council makes the following finding:

1. The fractional ownership of a property will not disturb the stability of a residential neighborhood or residential building and will not adversely impact future development, redevelopment, safety, and proper maintenance of the property.
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Sections. Enforcement.

The provisions of this Interim Urgency Ordinance shall be enforceable pursuant to the general enforcement provisions in Title 1 of the Beverly Hills Municipal Code.

Section 6. CEOA Findings.

The City Council hereby finds that it can be seen with certainty that there is no possibility that the adoption of this Ordinance may have a significant effect on the environment. This Ordinance does not authorize construction and, in fact, imposes greater restrictions on certain properties in order to protect the public health, safety and general welfare because the Ordinance will impose a temporary moratorium on certain fractional ownership in the City in order to protect the public health, safety and general welfare, and will thereby serve to avoid potentially significant adverse environmental impacts during the term of the moratorium. In addition, the Ordinance consists of minor alterations in land use limitations and do not result in any changes in land use or density. It is therefore not subject to the California Environmental Quality Act review pursuant to Title 14, Chapter 3, Sections 15305 and 15061(b)(3) of the California Code of Regulations.

Section 7. Severabilitv.

If any section, subsection, subdivision, paragraph, sentence, clause, phrase, or portion of this Ordinance or its application to any person, place, or circumstances, is for any reason held to be invalid or unenforceable by the final decision of any court of competent jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remaining sections, subsections, subdivisions, paragraphs, sentences, clauses, phrases, or portions of this Ordinance, or its application to any other person, place, or circumstance. The City Council hereby declares that it would have adopted each section, subsection, subdivision, paragraph, sentence, clause, phrase, or portion hereof, irrespective of the fact that any one or more sections, subsections, subdivisions, paragraphs, sentences, clauses or phrases hereof be declared invalid or unenforceable.

Sections. Effective Date; Approval and Extension of Ordinance.

This Ordinance, being an Interim Ordinance adopted as an urgency measure for the immediate protection of the public safety, health, and general welfare, containing a declaration of the facts constituting the urgency, and passed by a minimum four-fifths (4/5) vote of the City Council, shall take effect immediately upon its adoption and shall continue in effect for a period of not longer than forty-five (45) days. After notice pursuant to Government Code Section 65090 and a public hearing, the City Council may extend the effectiveness of this Urgency Ordinance as provided in Government Code Section 65858.

Section 9. Publication.

The City Clerk shall certify to the passage and adoption of this Ordinance and shall cause its publication in accordance with applicable law.
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Adopted: July 15, 2021
Effective: July 16, 2021
ATTEST:

HUMA AHMED
City Clerk _
imoi (SEAL)

ROBERT WUNDERLICH
Mayor of the City of Beverly Hills,
California
APPROVED AS TO FORM:

LAURENCE S. WIENER
City Attorney
APPROVED AS TO CONTENT:

GEORGE CHAVEZ
City Manager
B0785-0001\2552952v9.doc
Attachment 2
Ordinance No. 21-O-2842 (Previous
Extension of Interim Ordinance)
ORDINANCE NO. 21-0- 2842

AN INTERIM ORDINANCE OF THE CITY OF BEVERLY HILLS
EXTENDING INTERIM ORDINANCE NO. 21-0-2841

ESTABLISHING A MORATORIUM ON FRACTIONAL

OWNERSHIP OF RESIDENTIAL AND COMMERCIAL

PROPERTY, DECLARING THE URGENCY THEREOF AND

MAKING A DETERMINATION OF EXEMPTION UNDER THE

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA)

THE CITY COUNCIL OF THE CITY OF BEVERLY HILLS HEREBY ORDAINS AS FOLLOWS:

Section 1. Legislative Findings.

A. California is experiencing a housing supply crunch. Existing housing in this state, especially in its largest cities, has become very expensive. California needs an estimated 180,000 additional homes annually to keep up with population growth, and the Governor has called for 3.5 million new homes to be built by 2025.

D. The City Council believes that unregulated fractional ownership of residential or commercial properties with time-based occupancy restrictions would unduly impact the City.

E. On July 15,2021, the City adopted Interim Urgency Ordinance No. 21-0-2841, which imposed an initial 45-day moratorium on the fractional ownership of residential and commercial property within the City during the pendency of the City's review and adoption of permanent regulations governing fractional ownership in the City. The initial 45-day moratorium is scheduled to expire on August 29,2021.

F. The City Council continues to find that the time provided by the moratorium will allow for a comprehensive analysis of residential and commercial property ownership models, including fractional ownership, with time-based occupancy restrictions. During the extended period of the moratorium, the City will continue to analyze potential impacts on public health B0785-0001\256I141vl.doc
and safety related to time-based occupancy restrictions; and impacts on the public welfare due to the removal of full-time housing units from the market and replacing them with vacation or parttime units, the inference with the stability of residential neighborhoods and the impact on the maintenance and redevelopment of properties. The City Council finds that these analyses will help the City Council determine how to best prevent impacts to the public health, safety and welfare. The City Council further finds that extension of the moratorium will allow time to achieve a reasonable level of assurance that there will not be serious negative impacts to the overall community and ensure a positive and mutually acceptable set of outcomes for the City's residents, business community, and property owners.

F. Based on the foregoing, the City Council ultimately finds that if the City fails to extend the moratorium, fractional ownership of properties with time-based occupancy restrictions may be allowed under outdated zoning regulations that do not address the unique impacts of such ownership models before the City Council is able to review the matter in order to adequately protect the health, safety and welfare of the residents, business community, and property owners of the City. Therefore, a current and immediate threat to the public safety, health and welfare remains in existence.

G. A written report describing the measures taken to alleviate the conditions which led to the adoption of the aforementioned Interim Urgency Ordinance was issued by the City Council on August 13,2021, which was at least ten (10) days prior to the expiration of the Interim Ordinance on August 29,2021, in compliance with State law.

H. Pursuant to Government Code Sections 65858 and 65090, the City Council conducted a duly noticed public hearing on August 17, 2021, at which time the City Council considered this Ordinance to extend the existing 45-day moratorium on the establishment of the moratorium on fractional ownership of residential and commercial property for an additional 10 months and 15 days.

Section 2. Authority.

Section 3. Urgency Findings.

As described in Section 1, the staff report accompanying this Interim Urgency Ordinance, and other evidence in the record, such fractional ownership in the City could threaten the health, safety and welfare of the community through negative impacts that include, but are not limited to, removing full-time housing units from the market and replacing them with vacation or parttime units, interference with the stability of residential neighborhoods and interference wiA the maintenance and redevelopment of properties. To preserve the public health, safety, and -2-
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welfare, the City Council finds that it is necessary that this Interim Urgency Ordinance take effect immediately pursuant to Government Code Sections 65858 to prevent such harm.

Section 4. Moratorium Extended,
Based on the facts and findings set forth in Sections 1 through 3 of this Interim Urgency Ordinance, and notwithstanding any other ordinance or provision of the Beverly Hills Municipal Code, the City of Beverly Hills hereby extends the following moratorium:

A. Definitions. For the purposes of this moratorium, the following phrase has the meaning given herein.

I. "Fractional Ownership" shall mean shared ownership of real property, entitlement to ownership rights of real property, entitlement to use of real property, or possession of real property through any of the following means:
a. Direct ownership of the property;
b. Indirect ownership of the property through a membership, stake, interest, share, association, or similar device in the owner of the property or a subsidiary or parent of the owner of the property; or c. A membership, stake, interest, share, association, or similar device in an entity, group, association or similar device which by virtue of such membership, stake, interest, share, association or similar device grants entitlement to ownership rights or the use or possession of the property.

B. Time-Based Occupancv Restrictions. Unless approved by a specific plan, fractional ownership of any real property in the City shall be prohibited if such ownership includes any arrangement, schedule, plan, scheme, or similar device, whether by agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby an owner of the property or a fraction thereof, receives ownership rights in, or the right to use, the property for a period of time less than a full year.

D. Notification for Hearing. Hearings pursuant to this Ordinance shall be preceded by public notice by the following method:
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B0785-000l\2561141vl.doc

Mailed notices shall be sent to properties within a 300-foot radius, measured from the exterior boundaries of the property involved with the hearing.

2. AfRdavit/Proof of Mailing: The applicant shall submit an affidavit to the Community Development Department within five (5) days of mailing the notices required by this section, verifying that the mailings are in compliance with this section.

E. Exception to Time-Based Occupancv Restrictions. The time-based occupancy restrictions shall not apply to real property with fractional ownership if the City Council makes the following finding:

1. The fractional ownership of the property will not disturb the stability of a residential neighborhood or residential building and will not adversely impact future development, redevelopment, safety, and proper maintenance of the property.

Section 5. Enforcement.

The provisions of this Interim Urgency Ordinance shall be enforceable pursuant to the general enforcement provisions in Title 1 of the Beverly Hills Municipal Code.

Section 6. CEOA Findings.

Section 7. Severabilitv.

If any section, subsection, subdivision, paragraph, sentence, clause, phrase, or portion of this Ordinance or its application to any person, place, or circumstances, is for any reason held to be invalid or. unenforceable by the final decision of any court of competent jurisdiction, such B0785-0001\256n41vl .doc
invalidity or unenforceability shall not affect the validity or enforceability of the remaining sections, subsections, subdivisions, paragraphs, sentences, clauses, phrases, or portions of this Ordinance, or its application to any other person, place, or circumstance. The City Council hereby declares that it would have adopted each section, subsection, subdivision, paragraph, sentence, clause, phrase, or portion hereof, irrespective of the fact that any one or more sections, subsections, subdivisions, paragraphs, sentences, clauses or phrases hereof be declared invalid or unenforceable.

Section 8. Effective Date: Approval and Extension of Ordinance.

This Ordinance, being an Interim Ordinance adopted as an urgency measure for the immediate protection of the public safety, health, and general welfare, containing a declaration of the facts constituting the urgency, and passed by a minimum four-fifths (4/5) vote of the City Council, shall take effect concurrent with the expiration of Interim Urgency Ordinance No. 21-0- 2841 at midnight on August 29, 2021, and shall remain in effect for a period of ten (10) months and fifteen (15) days, through and including July 14, 2022, in accordance with California Government Code Section 65858.. After notice pursuant to Government Code Section 65090 and a public hearing, the City Council may extend the effectiveness of this Urgency Ordinance as provided in Government Code Section 65858.

Section 9. Publication.

The City Clerk shall certify to the passage and adoption of this Ordinance and shall cause its publication in accordance with applicable law.

Adopted: August 17, 2021
Effective: August 29, 2021
ATTEST
(SEAL)
AHMET)
City ClefkJ ^

ROBERT WUNDERLICH
Mayor of the City of Beverly Hills,
California
APPROVED AS TO FORM:
/
pi
LAURENCE S. WIENER
City Attorney
APPROVED AS TO CONTENT:

GEOR
City Manager
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Attachment 3
Draft Ordinance to Extend Interim
Ordinance
B0785-0001\2668011v2.doc
ORDINANCE NO. 22-O-________

AN INTERIM ORDINANCE OF THE CITY OF BEVERLY HILLS
EXTENDING INTERIM ORDINANCE NO. 21-O-2841

ESTABLISHING A MORATORIUM ON FRACTIONAL

OWNERSHIP OF RESIDENTIAL AND COMMERCIAL

PROPERTY, DECLARING THE URGENCY THEREOF AND

MAKING A DETERMINATION OF EXEMPTION UNDER THE

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA)

THE CITY COUNCIL OF THE CITY OF BEVERLY HILLS HEREBY ORDAINS AS FOLLOWS:

Section 1. Legislative Findings.

A. California is experiencing a housing supply crunch. Existing housing in this state, especially in its largest cities, has become very expensive. California needs an estimated 180,000 additional homes annually to keep up with population growth, and the Governor has called for 3.5 million new homes to be built by 2025.

D. The City Council believes that unregulated fractional ownership of residential or commercial properties with time-based occupancy restrictions would unduly impact the City.

E. On July 15, 2021, the City adopted Interim Urgency Ordinance No. 21-O-2841, which imposed an initial 45-day moratorium on the fractional ownership of residential and commercial property within the City during the pendency of the City’s review and adoption of permanent regulations governing fractional ownership in the City. The initial 45-day moratorium expired on August 29, 2021.

F. On August 17, 2021, the City adopted Ordinance No. 21-O-2842, which extended the Interim Urgency Ordinance No. 21-O-2841 for an additional ten (10) months and fifteen (15) days, with an expiration date of July 15, 2022.
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G. The City Council continues to find that the time provided by the moratorium will allow for a comprehensive analysis of residential and commercial property ownership models, including fractional ownership, with time-based occupancy restrictions. During the extended period of the moratorium, the City will continue to analyze potential impacts on public health and safety related to time-based occupancy restrictions; and impacts on the public welfare due to the removal of full-time housing units from the market and replacing them with vacation or parttime units, the inference with the stability of residential neighborhoods and the impact on the maintenance and redevelopment of properties. The City Council finds that these analyses will help the City Council determine how to best prevent impacts to the public health, safety and welfare. The City Council further finds that extension of the moratorium will allow time to achieve a reasonable level of assurance that there will not be serious negative impacts to the overall community and ensure a positive and mutually acceptable set of outcomes for the City’s residents, business community, and property owners.

H. Based on the foregoing, the City Council ultimately finds that if the City fails to extend the moratorium, fractional ownership of properties with time-based occupancy restrictions may be allowed under outdated zoning regulations that do not address the unique impacts of such ownership models before the City Council is able to review the matter in order to adequately protect the health, safety and welfare of the residents, business community, and property owners of the City. Therefore, a current and immediate threat to the public safety, health and welfare remains in existence.

I. A written report describing the measures taken to alleviate the conditions which led to the adoption of the aforementioned Interim Urgency Ordinance was issued by the City Council on June 2, 2022 which was at least ten (10) days prior to the expiration of the Interim Ordinance on July 15, 2022, in compliance with State law.

J. Pursuant to Government Code Sections 65858 and 65090, the City Council conducted a duly noticed public hearing on June 14, 2022, at which time the City Council considered this Ordinance to extend the existing moratorium on the establishment of the fractional ownership of residential and commercial property for an additional one (1) year period.

Section 2. Authority.

Section 3. Urgency Findings.

As described in Section 1, the staff report accompanying this Interim Urgency Ordinance, and other evidence in the record, such fractional ownership in the City could threaten the health, -3-
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safety and welfare of the community through negative impacts that include, but are not limited to, removing full-time housing units from the market and replacing them with vacation or parttime units, interference with the stability of residential neighborhoods and interference with the maintenance and redevelopment of properties. To preserve the public health, safety, and welfare, the City Council finds that it is necessary that this Interim Urgency Ordinance take effect immediately pursuant to Government Code Sections 65858 to prevent such harm.

Section 4. Moratorium Extended.

Based on the facts and findings set forth in Sections 1 through 3 of this Interim Urgency Ordinance, and notwithstanding any other ordinance or provision of the Beverly Hills Municipal Code, the City of Beverly Hills hereby extends the following moratorium:

A. Definitions. For the purposes of this moratorium, the following phrase has the meaning given herein.

1. “Fractional Ownership” shall mean shared ownership of real property, entitlement to ownership rights of real property, entitlement to use of real property, or possession of real property through any of the following means:
a. Direct ownership of the property;
b. Indirect ownership of the property through a membership, stake, interest, share, association, or similar device in the owner of the property or a subsidiary or parent of the owner of the property; or c. A membership, stake, interest, share, association, or similar device in an entity, group, association or similar device which by virtue of such membership, stake, interest, share, association or similar device grants entitlement to ownership rights or the use or possession of the property.

B. Time-Based Occupancy Restrictions. Unless approved by a specific plan, fractional ownership of any real property in the City shall be prohibited if such ownership includes any arrangement, schedule, plan, scheme, or similar device, whether by agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby an owner of the property or a fraction thereof, receives ownership rights in, or the right to use, the property for a period of time less than a full year.

Mailed notices shall be sent to properties within a 300-foot radius, measured from the exterior boundaries of the property involved with the hearing.

E. Exception to Time-Based Occupancy Restrictions. The time-based occupancy restrictions shall not apply to real property with fractional ownership if the City Council makes the following finding:

Section 5. Enforcement.

The provisions of this Interim Urgency Ordinance shall be enforceable pursuant to the general enforcement provisions in Title 1 of the Beverly Hills Municipal Code.

Section 6. CEQA Findings.

Section 8. Effective Date; Approval and Extension of Ordinance.

This Ordinance, being an Interim Ordinance adopted as an urgency measure for the immediate protection of the public safety, health, and general welfare, containing a declaration of the facts constituting the urgency, and passed by a minimum four-fifths (4/5) vote of the City Council, shall take effect concurrent with the expiration of Interim Urgency Ordinance No. 21-O2841, as extended by Ordinance No 21-O-2842, at midnight on July 15, 2022, and shall remain in effect for a period of one year, through and including July 14, 2023, in accordance with California Government Code Section 65858.
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Section 9. Publication.

The City Clerk shall certify to the passage and adoption of this Ordinance and shall cause its publication in accordance with applicable law.

Adopted:

Effective:

LILI BOSSE
Mayor of the City of Beverly Hills,
California
ATTEST:
(SEAL)

HUMA AHMED
City Clerk
APPROVED AS TO FORM: APPROVED AS TO CONTENT:

LAURENCE S. WIENER GEORGE CHAVEZ
City Attorney City Manager

Beverly Hills City CouncilJune 14, 2022

Beverly Hills City Council
June 14, 2022