CITY COUNCIL STAFF REPORT
March 18, 2025 {{section.number}}a
INTRODUCTION AND FIRST READING OF AN ORDINANCE AMENDING SECTIONS 86.04 AND 86.78 OF THE CORONADO MUNICIPAL CODE TO CLARIFY THE CITY’S EXISTING
PROHIBITION OF RESIDENTIAL TIME-SHARES
RECOMMENDATION:
Consider introduction of an ordinance amending sections 86.04 and 86.78 of the Coronado Municipal Code clarifying the City’s prohibition of residential time-shares and fractional ownership models.
BACKGROUND:
The City of Coronado has regulated time-shares in residential zones for over four decades. In 1981, the City established its initial prohibition of time-shares within all residential zones through Ordinance No. 1493 (Attachment 2). In 1993, the City created Coronado Municipal Code (CMC) Chapter 86.78 through Ordinance No. 1809 (Attachment 3) to regulate both transient occupancy and time-share uses. This ordinance further clarified the prohibition against establishing or converting dwelling units to time-share occupancy. Chapter 86.78 defines a time-share complex as "a building or group of buildings containing one or more habitable units with such dwelling units as may be allowed by this code, whose ownership or right to use facilities are conveyed to multiple individuals for transient time-share occupancy."
Currently, there is one existing time-share complex in Coronado located at 1415 Orange Avenue (Coronado Beach Resort). This facility is located within the Hotel-Motel Zone and operates as a legal non-conforming use, meaning it was legally established prior to current regulations but would not be permitted under today's zoning code.
In recent years, a real estate trend known as "fractional ownership" has emerged, expanding the time-share model to single-family dwellings and condominium units. In this arrangement, ownership is typically shared among four to eight owners, with each owner's usage time proportional to their ownership share.
On February 25, 2025, the Planning Commission unanimously recommended approval of the proposed ordinance amendments with a modification clarifying that the amendments apply to entities as well as individuals.
ANALYSIS:
The City's time-share regulations require updating to address market trends and competing state policies that have emerged since the original regulations were adopted. While the CMC currently prohibits time-shares, the proposed amendments would explicitly clarify that newer fractional ownership models are also prohibited.
Fractional ownership time-share models present several concerns for Coronado's housing market. These ownership arrangements reduce the number of single-family residences and condominium units available for permanent or longer-term residency. By reducing the supply of permanent housing in a coastal city with high housing demand, fractional ownership models can contribute to housing price inflation. The California Department of Housing and Community Development (HCD) and regional planning organizations like SANDAG have recognized that short-term housing can negatively impact a community's housing supply. These agencies have discussed increasing a City's Regional Housing Needs Allocation (RHNA) requirements for communities with disproportionate numbers of short-term housing units. Such an increase could significantly challenge the City's ability to develop a compliant Housing Element Update in the next cycle.
Fractional ownership time-shares can adversely affect community character in several ways.
Short-term units tend to be vacant more frequently than permanent housing. Transient occupants may not share the same community pride and investment as long-term residents. Similar to shortterm rentals, fractional ownership properties can generate additional noise, traffic, and parking issues. A shift from permanent to transient housing can contribute to declining student populations in local schools.
The proposed amendments would establish a comprehensive definition of "time-share" that includes alternative fractional ownership structures, regardless of their model or occupancy duration. They would make corresponding edits throughout the Municipal Code to ensure consistency in regulations addressing time-shares. The amendments would also update language addressing both transient occupancy and time-shares to maintain regulatory clarity. A redline version of the proposed amendments can be found in Attachment 4.
FISCAL IMPACT:
None.
ALTERNATIVE:
The City Council may choose to not introduce the ordinance and provide further direction to staff.
CALIFORNIA ENVIRONMENTAL QUALITY ACT:
The introduction of this ordinance is exempt from the requirements of the California Environmental Quality Act pursuant to State CEQA Guidelines section 15061(b)(3), because it can be seen with certainty that there is no possibility that this action may have a significant effect on the environment. The prohibition on the conversion of existing or proposed residential uses to timeshare units would regulate how residential units are owned but would not otherwise change the land use designations, permitted densities, or other development standards that could result in a significant physical effect on the environment. This prohibition does not authorize any development, demolition, or other activity that may have a direct or indirect impact on the environment.
PUBLIC NOTICE:
Notice of this public hearing was published in the Coronado Eagle and Journal on Tuesday, March 5, 2025.
ATTACHMENTS:
1. Ordinance 2025-02
2. Ordinance No. 1493
3. Ordinance No. 1809
4. Proposed Coronado Municipal Code Amendments in Redline Submitted By: Community Development Department / Kirk Fatland