CITY COUNCIL STAFF REPORT
May 6, 2025 {{section.number}}a
INTRODUCTION OF A ZONING ORDINANCE AMENDMENT TO SECTIONS 86.04 AND 86.78 OF THE CORONADO MUNICIPAL CODE TO CLARIFY THE CITY’S EXISTING PROHIBITION
OF RESIDENTIAL TIME-SHARES
RECOMMENDATION:
Introduce “An Ordinance of the City Council of the City of Coronado Amending Portions of the Coronado Municipal Code Related to Time-shares.”
BACKGROUND:
Adopted in 1981, Ordinance No. 1493 (Attachment 2) established the prohibition of time-shares within all residential zones of the City. In 1993, Coronado Municipal Code (CMC) Chapter 86.78 was created by Ordinance No. 1809 (Attachment 3) that regulates both transient occupancy and time-share uses and further clarified the prohibition of the establishment or conversion of dwelling units to time-share occupancy use. Additionally, Chapter 86.78 established the current definition of 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.” There is one existing time-share complex in Coronado located at 1415 Orange Avenue known as Coronado Beach Resort that is located within the Hotel-Motel Zone and is considered legal non-conforming.
An emerging real estate trend, known as fractional ownership, expands the time-share model to single family dwellings and condominium units. Ownership is typically shared among four to eight owners and the amount of time each owner may spend at the property correlates to the fraction of their ownership.
While the CMC currently prohibits this type of use, the proposed amendments would expressly clarify that time-shares and fractional ownership models are not allowed in Coronado.
At a public hearing held on February 25, 2025, the Planning Commission voted unanimously to recommend approval of the proposed ordinance amendments with a modification clarifying the amendments apply to entities as well as individuals.
At a public hearing held on March 18, 2025 the City Council directed staff to further clarify the definition of “time-share” and to return at a future meeting.
ANALYSIS:
The City's current time-share regulation language needed updating in light of market trend changes and competing state policies since it was originally adopted.
The time-share (also known as fractional ownership) model has gained popularity. Conversion of housing to time-shares depletes the number of housing units that are available to people who seek permanent or longer-term residencies. The loss of owner-occupied housing is a concern for many communities, including Coronado.
The State of California Department of Housing and Community Development (HCD) and local Metropolitan Planning Organizations such as SANDAG, have recognized the deleterious effect that short-term housing can have on a community’s housing supply and have discussed increasing a City’s Regional Housing Needs Allocation (RHNA) if they have a disproportionate number of short-term housing units in their housing inventory.
Fractional ownership time-shares and vacation rentals can also inflate real estate prices by reducing a city’s supply of permanent housing, especially in coastal cities with a high and stable housing demand. The potential loss of permanent housing, reduced housing affordability, and RHNA implications resulting from short-term housing could significantly hamper the City’s ability to develop a compliant Housing Element Update in the next cycle.
Fractional ownership time-shares impact community character because these units tend to be vacant more often than permanent housing, and the occupants may not be engaged in the community activities or share the same pride of community as long-term residents.
Consequences of fractional ownership time-share models are similar to those of short-term rentals, including declining student populations in the local school district, additional noise, traffic, and parking issues.
The proposed amendments clarify that the current time-share prohibition encompasses fractional ownerships regardless of their model or occupancy duration. The amendments incorporate a definition of "time-share" that expressly includes alternative fractional ownership structures and makes corresponding edits for consistency within the sections addressing time-share regulations.
Additional updates included in this ordinance ensure continuity in the language addressing transient occupancy and time-shares, further clarifying the regulations.
At the direction of the City Council staff have amended the proposed definition of “time-share” to exclude arrangements in which multiple persons or successors join directly in purchasing full ownership of an accommodation and thereafter agree upon arrangements for their shared use, such as a trust, LLC, or other agreement. Additionally, Section 86.78.070 is now proposed to include the prohibition of advertising a time-share that is made, established, or converted in violation of the CMC, as defined. Violations would be subject to the provisions of Chapter 1.08 and 1.10 of the CMC. A redline 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 adoption 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:
Public notice of this public hearing was published in the Coronado Eagle and Journal on Tuesday, March 5, 2025.
ATTACHMENTS:
1. Ordinance 2025-04
2. Ordinance No. 1493
3. Ordinance No. 1809
4. Proposed Coronado Municipal Code Amendments in Redline Submitted By: Community Development Department / Kirk Fatland