Agenda #: 6.2
Meeting Date: November 15, 2022
TO: Honorable Mayor and Members of the City Council
FROM: Daniel Fox, City Manager
TITLE: AMENDMENTS TO TITLE 5 AND TITLE 22 (DEVELOPMENT CODE)
OF THE DIAMOND BAR MUNICIPAL CODE TO CLARIFY THE
EXISTING PROHIBITION ON SHORT-TERM RENTALS IN
RESIDENTIAL NEIGHBORHOODS.
STRATEGIC
GOAL: Safe, Sustainable & Healthy Community
RECOMMENDATION:
A. Open Public Hearing to receive public testimony;
B. Determine that the proposed code amendment is not subject to CEQA pursuant to Sections 15061(b)(3) and 15305 of the CEQA Guidelines; and C. Approve for first reading by title only, waive full reading of Ordinance No. 04(2022); and schedule the second reading and adoption at the next regularly scheduled City Council meeting.
FINANCIAL IMPACT:
None.
BACKGROUND:
Short-term rentals, such as those marketed through Airbnb and similar platforms, are prohibited in Diamond Bar. However, these unlawful businesses continue to proliferate.
Because it is currently difficult to preempt the establishment of short-term rentals, and nearly as difficult to prosecute violators, the City Council directed staff to identify potential solutions that would better enable the staff to eradicate short-term rentals, and thus reduce the nuisance they impose on neighborhoods.
The attached ordinance addresses the City Council’s direction by proposing the following amendments to the Diamond Bar Municipal Code (DBMC):
1. Adding definitions for “short-term occupancy” and “short-term rentals” to clarify the existing prohibition of such uses in residential neighborhoods.
2. Prohibiting the advertising of short-term rentals, as well as their operation.
The proposed ordinance amends both Title 5 (Business Licensing) and Title 22 (Development Code) of the DBMC.
ANALYSIS:
Residential short-term rentals—such as those listed on Airbnb, VRBO and similar sites—have become increasingly popular in recent years. These websites provide a platform for homeowners to operate an online marketplace for the rental of their residential properties for temporary lodging. Many travelers are now using short-term rentals in lieu of more traditional commercial lodging options such as hotels, motels and bed and breakfast inns. Consequently, many communities, including Diamond Bar, are experiencing the impacts of these uses in their residential neighborhoods, including, but not limited to, excessive noise, lack of parking, safety concerns, accumulation of trash and deferred property maintenance. If homes are utilized for transient occupancy, they are no longer part of our housing stock. A reduction in permanent housing units can put an upward pressure on rental prices and negatively affect housing affordability. In addition, when short-term rentals replace traditional commercial lodging, these illegal businesses put a strain on the City’s fiscal health because they do not pay transient occupancy tax, even though they place an added burden on public services.
Short-term rentals have always been prohibited in all residential zones within Diamond Bar. The Municipal Code defines hotels and motels as “facilities with guest rooms or suites, provided with or without kitchen facilities, rented to the general public for transient lodging (for) less than 30 days.” By definition, then, a residence being rented out for fewer than 30 days is classified as a hotel/motel, and is thus not a permissible use in residential zones. However, a recent search of all short-term rental booking platforms revealed that 83 homes in Diamond Bar are currently being advertised as available for temporary lodging. Although the City has been enforcing the prohibition of short-term rentals to varying degrees of success, staff typically must rely on circumstantial evidence to bring forth enforcement action against these illegal businesses.
Adoption Process
Before the City Council may adopt an ordinance that includes amendments to the Development Code, the Planning Commission must first conduct a public hearing to consider the proposed amendments. The Commission then forwards its recommendations via resolution to the Council.
Planning Commission Review
On October 25, 2022, after conducting a duly noticed public hearing, the Planning Commission adopted Resolution No. 2022-19, recommending, by a 3-0 vote (Commissioner Garg and Commissioner Rawlings absent), that the City Council adopt the attached ordinance amending Titles 5 and 22 (Attachment 1). The staff report and draft meeting minutes from that meeting are included as Attachments 3 and 4 respectively.
No public comments were received prior to or during the Planning Commission hearing.
Proposed Amendments to Title 22 (Development Code)
Section 22.80.020. (Definitions of specialized terms and phrases) – The terms “short-term occupancy” and “short-term rental” are introduced for clarification purposes, and to expressly state that short-term rentals are prohibited in all zoning districts. With the addition of these narrowly-defined terms, it will no longer be necessary to rely entirely on the definition of “hotel/motel” to assert that short-term rentals are illegal in Diamond Bar. The new definitions are proposed to read as follows:
• Short-Term Occupancy. The use or possession, or right to use or possess, of any portion of a dwelling unit, room or rooms offered for remuneration for dwelling, lodging or sleeping purposes for a period of less than 30 days.
Short-term occupancy is prohibited in all residential zoning districts. • Short-Term Rental. The use of any dwelling unit, or any portion thereof, for short-term occupancy. Short-term rentals are prohibited in all zoning districts.
Proposed Amendments to Title 5 (Business Licensing)
Section 5.08.050. (Short-term rentals) – This new section expressly states that it is not only a violation of the law to operate a short-term rental in Diamond Bar, but it is also illegal to advertise short-term rentals. Prohibiting the advertising of short-term rentals will serve as a powerful enforcement tool for the City: while it may be difficult to prove that a short-term rental is actually being rented out, it will be very easy to provide evidence that it is being advertised on any of various listing platforms, and the City will be able to prosecute on that basis alone. The new code section should also serve as a powerful deterrent by placing would-be violators on notice that the mere act of advertising a short-term rental is a misdemeanor offense, punishable by a fine of up to $1,000 and/or imprisonment for each offense. Pursuant to Municipal Code Section
1.04.010, each day that a violation is committed shall count as a separate offense.
ENVIRONMENTAL REVIEW:
The City has determined that the proposed Municipal Code Amendment is not subject to the California Environmental Quality Act (“CEQA”) pursuant to Title 14, California Code of Regulations, Section 15061(b)(3), in that it can be seen with certainty that there is no possibility that the Ordinance may have a significant effect on the environment because the Ordinance will not cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, in that it simply clarifies existing conditions, which are that short-term occupancies and short-term rentals are not a permitted use in the City's residential zoning districts. In addition, it is categorically exempt pursuant to Title 14, California Code of Regulations, Section 15305 as a minor alteration in land use limitations in that it will not result in any changes in land use or density for the reasons set forth above.
NOTICE OF PUBLIC HEARING:
Pursuant to Government Code Section 65091(a)(4), notice for this hearing was published in the San Gabriel Valley Tribune newspaper on November 4, 2022, as a 1/8- page display ad. A copy of the public notice was also posted at the City’s designated community posting sites.
LEGAL REVIEW:
The City Attorney has reviewed and approved the Ordinance as to form.
PREPARED BY:
REVIEWED BY:
Attachments:
1. 6.2.a Ordinance No. 04 (2022); Short-Term Rentals
2. 6.2.b Planning Commission Resolution No. 2022-19
3. 6.2.c Planning Commission Staff Report (attachments not included) Dated October 25, 2022
4. 6.2.d Planning Commission Meeting Draft Minutes Dated October 25, 2022