AGENDA REPORT
Meeting Date: January 16, 2025
Item Number:
To: Honorable Mayor & City Council
From: Michael Forbes, Director of Community Development Subject: AN ORDINANCE OF THE CITY OF BEVERLY HILLS TO SUSPEND
SHORT-TERM RENTAL RESTRICTIONS TO ADDRESS THE
IMMEDIATE NEED FOR SHORT-TERM HOUSING AS A RESULT OF
THE LOS ANGELES COUNTY FIRES AND WINDSTORM EVENT OF
JANUARY 2025 AND DECLARING THE URGENCY THEREOF AND
FINDING THE ORDINANCE EXEMPT FROM THE CALIFORNIA
ENVIRONMENTAL QUALITY ACT (CEQA)
Attachments: 1. Proposed Urgency Ordinance
RECOMMENDATION
Staff recommends that the City Council:
1. Waive full reading, read by title only, and adopt an urgency ordinance entitled “AN
ORDINANCE OF THE CITY OF BEVERLY HILLS TO SUSPEND SHORT-TERM RENTAL RESTRICTIONS TO ADDRESS THE IMMEDIATE NEED FOR SHORTTERM HOUSING AS A RESULT OF THE LOS ANGELES COUNTY FIRES AND WINDSTORM EVENT OF JANUARY 2025 AND DECLARING THE URGENCY
THEREOF AND FINDING THE ORDINANCE EXEMPT FROM THE CALIFORNIA
ENVIRONMENTAL QUALITY ACT (CEQA)
INTRODUCTION
The devastating wildfires in Los Angeles County have displaced thousands of individuals and families from their homes. This has resulted in unprecedented demand for short-, medium-, and long-term temporary housing in the region. Housing demand in Beverly Hills and surrounding communities is especially high due to the proximity of the Palisades Fire to the City.
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Meeting Date: January 16, 2025
Short term rentals, typically reserved through platforms such as Airbnb, are playing a critical role in helping to meet temporary housing needs. In Beverly Hills, short term rentals are restricted as follows:
• Single-family homes (including accessory dwelling units (ADUs) and guest houses on single-family properties) may be rented for a period of less than six months up to two times per calendar year.
• Multi-family residential units may not be rented for a period of less than 30 days.
These restrictions arguably limit the ability of Beverly Hills to help meet the immediate temporary housing needs in and around the community.
DISCUSSION
The proposed ordinance would suspend the City’s short term rental restrictions to respond to housing needs following the January 2025 fire and windstorm event. The suspension would be contingent upon several requirements to ensure that short term rentals are being legitimately used to meet emergency housing needs, as follows. • For single-family homes, ADUs, and guest houses, rental rates could not exceed 10% above the most recently charged rate to be consistent with the price gouging provisions of state law and the Beverly Hills Municipal Code. If the property is being used as a short term rental for the first time, rental rates would be limited to 160% of the fair market value of rental housing established by the United States Department of Housing and Urban Development.
• For multi-family properties, rental rates could not exceed 10% above the most recently charged rate for RSO and non-RSO units.
• Units could only be rented to households legitimately displaced as a result of the declared emergency. Unit listings would be required to state that the unit is only available for displaced persons and the property owner would be required to submit documentation to the City verifying that the tenant lives in an active evacuation order or evacuation warning area, has lost their home, or has otherwise been displaced from their home due to the emergency.
Staff recommends exempting owners of emergency short term rental units from the requirement to pay City business tax (if they did not pay a City business tax previously) and exempting emergency short term rentals from the City’s Transient Occupancy Tax (TOT). Suspending these taxes ensures that property owners are not simply passing the taxes through to their tenants and placing an additional financial burden on tenants in an emergency situation.
Staff further recommends exempting units that are utilized for emergency short term rentals from the provisions of the Rent Stabilization Ordinance (RSO) while they are being rented for emergency purposes. Since the provisions of the RSO are intended to protect the rights of long term tenants, some requirements may conflict with the purpose and intent of emergency short term rentals. This also avoids any potential confusion or ambiguity between the 10% rent increase allowed under price gouging laws and the more restrictive rent increases allowed under the RSO. At such time that a unit subject to the RSO is no longer used for emergency short term rental purposes, the RSO suspension would end and the unit would again be subject to the provisions of the RSO.
Meeting Date: January 16, 2025
FISCAL IMPACT
The proposed ordinance would exempt emergency short term rental units from TOT and would exempt property owners from paying business tax when not already otherwise required for their rental properties. However, absent the suspension of the City’s short term rental restrictions, the emergency short term rentals could not occur and no TOT or business tax would likely be collected.
Staff resources will be required to administer the emergency short term rental program and verify that tenants meet the requirements of the ordinance. The required resources are expected to be minimal, with no associated fiscal impact.
Michael Forbes,
Director of Community Development
Approved By
Attachment 1
B0785-0001\3065762v2.doc
ORDINANCE NO. 25-O- _____
AN ORDINANCE OF THE CITY OF BEVERLY HILLS TO
SUSPEND SHORT-TERM RENTAL RESTRICTIONS TO
ADDRESS THE IMMEDIATE NEED FOR SHORT-TERM
HOUSING AS A RESULT OF THE LOS ANGELES COUNTY
FIRES AND WINDSTORM EVENT OF JANUARY 2025 AND
DECLARING THE URGENCY THEREOF , AND FINDING THE
ORDINANCE EXEMPT FROM THE CALIFORNIA
ENVIRONMENTAL QUALITY ACT (CEQA)
THE CITY COUNCIL OF THE CITY OF BEVERLY HILLS HEREBY ORDAINS AS FOLLOWS:
WHEREAS, the Los Angeles County Fires and Windstorm Event of January 2025 has burned over 40,000 acres, destroyed more than 12,000 residential and commercial structures, and damaged critical infrastructure; and
WHEREAS, on January 7, 2025, the Governor of California declared a State of Emergency to exist in Los Angeles and Ventura Counties due to the Fires and Windstorm Event; and
WHEREAS, thousands of Los Angeles County residents have had their lives significantly impacted through partial or complete property loss, damage or evacuation orders, and
WHEREAS, while the City of Beverly Hills has escaped the path of the fires, neighboring cities have been adversely impacted and neighboring residents will require safe and secure housing while they rebuild their lives; and
WHEREAS, the City of Beverly Hills believes that temporarily suspending the City’s restrictions on short-term housing rentals would provide urgently needed shelter and housing to victims of the Fires and Windstorm Event; and WHEREAS, in the interest of the public peace, health or safety, it is necessary for the City Council to exercise its authority to adopt this urgency ordinance to ensure the physical and mental health and safety of displaced fire victims through adequate housing.
Section 1. Urgency Declaration. Based upon the recitals above, the City Council finds that this Ordinance is necessary for the immediate preservation of the public peace, health or safety. Housing stability is essential for good health and provides a physical and psychological foundation upon which fire victims can begin the long process of recovery. The City Council finds and determines that the immediate preservation of the public peace, health, or safety requires that this Ordinance be enacted as an urgency ordinance pursuant to Government Code Sections 36934 and 36937(b) and take effect immediately upon adoption. This Ordinance must be adopted and -2-
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must become effective immediately in order to adequately respond to the immediate loss of housing created by the Fires and Windstorm Event.
Section 2. This ordinance shall suspend the existing short-term rental restrictions of the Beverly Hills Municipal Code. The suspension of the short-term rental restrictions shall be subject to the conditions set forth in the Sections below.
Section 3. The ordinance shall be effective for ninety (90) days from the date of adoption and may be extended for a maximum of ninety (90) days by the City Manager.
Section 4. Under the terms of this ordinance, a “short-term rental” is defined as a rental for fewer than thirty (30) days of a multi-family unit and a rental for fewer than six (6) months of a single-family home, or portion thereof, accessory dwelling unit (“ADU”), or guest house.
Section 5. Upon expiration of this ordinance a landlord may not advertise or enter into a new short-term rental under the terms of this ordinance. However, nothing in this ordinance shall prohibit a landlord and tenant from completing the duration of a short-term rental agreement entered into while this ordinance is in effect.
Section 6. For single-family homes or portions thereof, ADUs, and guest houses which have been rented in the past twelve (12) months, landlords are prohibited from increasing the price of rental housing by more than ten percent (10%) of the previously charged or advertised price.
Section 7. For single-family homes or portions thereof, ADUs, and guest houses not rented or advertised for rent within the past twelve (12) months prior to the declaration of emergency, the rental price cannot exceed one hundred sixty percent (160%) of the fair market value of the rental housing as established by the U.S. Department of Housing and Urban Development and found at:
https://www.huduser.gov/portal/datasets/fmr/fmrs/FY2025_code/select_Geography.od n
Section 8. For non-rent stabilization ordinance (“non-RSO”) multi-family units, the daily rate cannot exceed the monthly rate charged or advertised before January 6, 2024 divided by thirty (30) plus ten percent (10%).
Section 9. For rent stabilization ordinance (“RSO”) units, the daily rate cannot exceed the monthly rate charged or advertised before January 6, 2024 divided by thirty (30) plus ten percent (10%).
Section 10. RSO applicability is suspended for short-term rental units.
Section 11. Transient Occupancy Tax (“TOT”) is suspended for short-term rental units.
Section 12. Business tax is suspended for properties that do not lawfully have a valid -3-
B0785-0001\3065762v2.doc
2024 business tax registration certificate from previous short-term rental or normal rental units.
Section 13. All listings for short term rentals in multi-family units, and all listings for short-term rentals in single-family units, must include a statement that: per City of Beverly Hills ordinance, the unit may only be rented to a household displaced by a fire or other reason that resulted in a declared emergency.
Section 14. A renter must submit evidence to the landlord in the form of a government issued ID, utility bill, bank statement, or other document with name and address to confirm one of the following.
a. The renter lives in an area that is currently under an evacuation order or warning; or
b. The renter lives in an area that was previously under an evacuation order and the renter is unable to return home at this time.
Section 15. Upon renting a unit, the landlord must submit the following information to the City on a form provided by the City, within three business days of the commencement of the short-term rental:
• Address of unit
• Type of unit (e.g., Single-Family, Multi-Family, ADU) • Number of bedrooms
• Square footage
• Website/platform used for rental, if any
• Link to or copy of rental listing
• Dates rented
• Number of tenants
• Name of primary tenant
• Home address of tenant
• Documentation showing home address of tenant
• Reason for tenant displacement
• Documentation of the most recent monthly rental rate charged, when applicable • Signature under penalty of perjury that the rental amount charged complies with these requirements and the tenant qualifies per these requirements • Information deemed reasonable by the City Manager
Section 16. Nothing in this ordinance shall prohibit the rental of a single-family home or portion thereof or a multi-family unit, in full compliance with the Beverly Hills Municipal Code Section 17. Severability. If any provision of this Ordinance is held invalid by a court of competent jurisdiction, such provision shall be considered a separate, distinct and independent provision and such holding shall not affect the validity and enforceability of the other provisions of this Ordinance.
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Section 18. Publication. The City Clerk shall cause this Ordinance to be published at least once in a newspaper of general circulation published and circulated in the City within fifteen (15) days after its passage in accordance with Section 36933 of the Government Code, shall certify to the adoption of this Ordinance and shall cause this Ordinance and the City Clerk’s certification, together with proof of publication, to be entered in the Book of Ordinances of the Council of this City.
Section 19. Effective Date. This Ordinance is adopted as an urgency ordinance for the immediate preservation of the public peace, health, or safety within the meaning of Government Code Section 36937(b), and therefore shall be passed immediately upon its introduction and shall take effect immediately upon its adoption by a minimum 4/5 vote of the City Council.
Section 20. Certification. This City Clerk shall certify to the adoption of this Ordinance.
Adopted:
Effective: LESTER J. FRIEDMAN
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 NANCY HUNT-COFFEY
City Attorney City Manager