SS2 - Fractional Homeownership Update — Newport Beach City Council, September 13, 2022 (part 1 of 3)

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CITY OF
s NEWPORT BEACH
`q44:09 City Council Staff Report
September 13, 2022
Study Session Item No. SS2
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Seimone Jurjis, Community Development Director - 949-644-3232, [email protected]
PREPARED BY: Jaime Murillo, Principal Planner, [email protected] PHONE: 949-644-3209
TITLE: Fractional Homeownership Update
ABSTRACT:

As requested by City Council, staff will provide an update regarding how other jurisdictions are addressing the growing trend of fractional homeownership.

RECOMMENDATION:

Receive presentation on the results of the attached report regarding what other cities are doing with fractional homeownership uses.

DISCUSSION:

Fractional homeownership is when multiple owners purchase a property and split the allowed time at the property through a formal arrangement. In the fractional model, the allocated time for each owner is based on their percentage of ownership.

Council member Diane Dixon requested, and a majority of Council approved by straw vote, direction to staff to monitor fractional ownership activity in the City and investigate how other jurisdictions where fractional ownership is prevalent are dealing with such uses, and report back. To assist with this effort, staff retained the services of Sagecrest Plan ning+Environmental (Sagecrest) to investigate cities and prepare a report.

The report is included as Attachment A; however, due to bulk, the appendices are available online at www.newportbeachca.gov/fractionalownership .

The report includes an overview of known fractional ownerships in Newport Beach, benefits as described by fractional ownership companies, impacts as described by residents and opposition organizations, and survey of 22 jurisdictions with known fractional ownership properties and a discussion of how they are addressing the issue. In summary, the report found that the response to this issue varies widely between jurisdictions. Some jurisdictions do not regulate at all, whereas other jurisdictions are adopting code revisions to strengthen their land use definitions to clearly prohibit such uses.

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Study Session: Fractional Homeownership Update
September 13, 2022

Page 2 ends

NOTICING:

The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item).

ATTACHMENT:

Attachment A — Fractional Homeownership Report
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ATTACHMENT A
Fractional Homeownership Report
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FRACTIONAL HOMEOWNERSHIP
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Table of Contents
EXECUTIVE SUMMARY..................................................................................................................................1 BACKGROUND...............................................................................................................................................1 Known/Suspected Properties in Newport Beach.....................................................................................1

BENEFITS AND IMPACTS OF FRACTIONAL HOUSING
.................................................................................... 2 Fractional Housing Benefits...................................................................................................................... 2 Fractional Housing Impacts....................................................................................................................... 3 COMMUNITYSURVEY...................................................................................................................................4 Cityof Beverly Hills, CA............................................................................................................................. 5 Cityof Carlsbad, CA...................................................................................................................................5 Cityof Carmel by the Sea, CA.................................................................................................................... 5 Cityof Encinitas, CA..................................................................................................................................5 Cityof Fort Lauderdale, FL........................................................................................................................ 6 Cityof Hermosa Beach, CA....................................................................................................................... 6 Cityof Indian Wells, CA............................................................................................................................. 6 Countyof Monterey, CA........................................................................................................................... 6 Cityof Napa, CA........................................................................................................................................ 6 Villageof North Haven, NY....................................................................................................................... 7 Cityof Oceanside, CA................................................................................................................................7 Cityof Pacific Grove, CA............................................................................................................................ 7 Cityof Palm Desert, CA............................................................................................................................. 7 Cityof Palm Springs, CA............................................................................................................................ 7 Cityof Park City, UT..................................................................................................................................8 Cityof Santa Barbara, CA.......................................................................................................................... 8 Cityof Santa Cruz, CA................................................................................................................................8 Cityof South Lake Tahoe, CA.................................................................................................................... 8 Cityof Sonoma, CA....................................................................................................................................9 Cityof St. Helena, CA................................................................................................................................9 Townof Truckee, CA................................................................................................................................. 9 Cityof Vail, CO........................................................................................................................................10

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APPENDICES................................................................................................................................................10 Appendix A — Pacaso Economic Impact Analysis, prepared by EBP........................................................A1 Appendix B — City of Beverly Hills Urgency Ordinance........................................................................... 131
Appendix C — City of Carlsbad Timeshare ordinance..............................................................................

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Appendix D — City of Carmel by the Sea Cease and Desist Order...........................................................D1 Appendix E — City of Hermosa Beach Planning Commission Resolution ................................................

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Appendix F — County of Monterey Cease and Desist Order...................................................................

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Appendix G —Village of North Haven Code Amendment......................................................................

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Appendix H — City of Palm Desert Ordinance........................................................................................

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Appendix I — City of Palm Springs Cease and Desist Order......................................................................11 Appendix J — Park City Notice of Amendment.........................................................................................J1 Appendix K — City of Santa Cruz Ballot Initiative.....................................................................................

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Appendix L— City of South Lake Tahoe Cease and Desist Order............................................................

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Appendix M — City of Sonoma Ordinance.............................................................................................. M1 Appendix N — City of St. Helena Ordinance...........................................................................................

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Appendix 0 — Pacaso Inc. v. City of St. Helena....................................................................................... 01 Appendix P —Town of Truckee Ordinance..............................................................................................

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Cover Photo by Dex Ezekiel on Unsplash

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EXECUTIVE SUMMARY
The City of Newport Beach (City) is beginning to see the rise of fractional homeownership of single-family houses. Fractional homeownership is when multiple owners purchase a property and split the allowed time at the property through a formal arrangement, as compared to multiple owners who occupy the residence full-time or have no formal arrangement for occupancy. In the fractional model, the allotted time for each owner is based on their percentage of ownership. In reviewing available data on fractional homeownership, there appears to be at least ten such properties within the City but there could be more.

The City is receiving complaints from residents that these properties function similarly to short-term rental vacation homes and result in significant noise, traffic, and other impacts to residential neighborhoods. As a result of these concerns, the City asked Sagecrest Planning+Environmental (Sagecrest) to investigate how other jurisdictions are dealing with fractional housing and the companies that promote them. Based on this investigation, it appears that other communities are adopting moratoriums and pursuing operators of fractional housing companies through code enforcement actions.

BACKGROUND
Fractional homeownership (sometimes called co -ownership) is an emerging trend in real estate where ownership of properties is equally shared among multiple owners (typically between four and 12 owners).

The amount of time the owner may spend at the property correlates to the fraction of ownership (e.g., a 1/8 share owner would be allotted 45 days per year). This time allotment is not typically used consecutively, but rather one or two weeks at a time. In addition to the cost to purchase their share of the home, the owners are responsible for their share of the maintenance, property management fees, HOA fees, cleaning costs, utilities, taxes, insurance, and payment into a reserve fund to cover long-term repairs, such as replacement of the roof. Fractional owners maintain an ownership interest, benefit from a change in property value due to appreciation and have the potential to generate income through short- term rentals, although the City would maintain authority on short-term rentals. It should also be noted that some fractional homeownership companies prohibit short-term rentals in their management agreement.

Companies such as Pacaso, Sharetini, Ember, Equity Estates, and others facilitate the purchase of properties and provide the necessary maintenance, furnishments, property management, and cleaning services in exchange for a monthly fee. Many of these companies utilize ownership models that purchase and hold the properties under entities, such as limited liability companies, to avoid the need for a real estate transaction each time an owner sells their share. Alternatively, an ownership group could forego using a management company and self -govern the access to fractional housing.

Known/Suspected Properties in Newport Beach
Sagecrest reviewed the listings on various sites to identify properties in Newport Beach. Additionally, Sagecrest reviewed the City's database to find properties with mailing addresses that match the fractional home ownership companies. The following table lists the properties that are either known or suspected to be fractional ownership properties.

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117 251h Street
121 Emerald Avenue
Listed on Pacaso
Listed on Pacaso
305 Grand Canal
Listed on Pacaso
315 East Bay Avenue
Listed on Ember
506 West Oceanfront
Listed on Pacaso
1703 Plaza del Sur
Listed on www.compass.com
2137 Miramar Drive
Listed on Ember
2628 Ocean Boulevard
City database mailing address match to Pacaso
3803 Marcus Avenue_
City database mailing address match to Pacaso
4106 River Avenue
Listed on Pacaso

BENEFITS AND IMPACTS OF FRACTIONAL HOUSING
Fractional Housing Benefits
The primary benefit of fractional homeownership is to own a second home at a more affordable price.

According to county records, the home at 506 W Oceanfront sold on March 14, 2022, for $6,800,000. A 1/8 share of this house is currently being offered on Pacaso for $1,098,000.

According to Equity Estates, a vacation home investment firm, the benefits of fractional housing are: 1 • It's more affordable - Perhaps a $410 home is out of reach, but $1M is right in your wheelhouse.

Fractional ownership lets you get the home you want in the most desirable location at the price you can afford. This goes for home upkeep and maintenance, too. By sharing the costs of upkeep, fractional ownership makes long-term ownership a much more realistic possibility. • The home will get some love - No home should sit vacant 48 weeks out of the year. By sharing the ownership, the home will be opened up at regular intervals. Opening and closing windows and doors, running the water, turning on the AC and heater, and using amenities like the hot tub and pool —all of these are essential to maintaining the home. It provides an opportunity to identify issues early on and preserve the home's long-term value. • Peace of Mind - Fractional ownership also means sharing the burden of homeownership. Rather than a single point of failure (i.e., you), you essentially have a group that shares accountability, schedules maintenance, checks on the home, and divides the work and chores that would otherwise be left to a single owner.

Another fractional housing company, Pacaso, claims that its model reduces demand in the housing market. Specifically, they state, "This demand on top of short supply has driven up home prices to unprecedented levels. Instead of eight second home buyers buying eight separate median -priced homes, which drives up prices even further, Pacaso consolidates those eight buyers into just one luxury home, which alleviates pressure at the median -priced tier."' To address concerns that they do not provide a benefit, Pacaso commissioned an economic impact analysis (Appendix A), which found that the average fractional ownership house generates an average of $48,390 in annual spending compared with the 1 https://eguityestatesfund.com/the-pros-and-cons-of-fractional-ownership , retrieved August 16, 2022 Z https://www.pacaso.com/blog/economic-impact-study , retrieved August 16, 2022

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average second home. The study further found that fractional housing generates an average of $3,780 additional revenue in local and state tax dollars over the average second home.

Fractional Housing Impacts
Notwithstanding the aforementioned benefits, many communities have received complaints from their residents that fractional housing creates adverse impacts on the neighborhoods in which they are located and the City as a whole. Jurisdictions that have taken a proactive approach to preventing fractional housing in their communities all have expressed concerns about the following:
• Fractional housing adversely impacts the affordability of full-time homes in the community. As more homes are taken out of the primary housing market and converted to vacation homes, the available housing stock is reduced. Even though the fractional housing companies focus on the high -end market, any loss in available housing supply results in increase costs across the entire market.
• Due to the high turn -over of occupants, fractional housing could adversely impact long-term residents in the surrounding neighborhood. Given that vacations typically last for short periods of time, these properties would have similar impacts as short-term rentals, such as noise, loss of privacy, loss of community buy -in, and decline in property values. • The operation of the fractional homeownership companies within residential areas would result in the commercialization of residential neighborhoods. Several communities that Sagecrest spoke with noted that the operations of these companies would require a business license as they are establishing a commercial use.

Sagecrest discussed concerns with fractional housing with a major opponent to fractional housing, Stop Pacaso Now3. This organization consists of volunteers who provide resources to residents to oppose fractional housing from being established in their community. This includes providing sample yard signs, sample letters, and volunteer coordination guidance. In discussing the effectiveness of their outreach, Stop Pacaso Now stated that they have had great success in communities in which residents have organized. Stop Pacaso Now has sponsored four petitions on change.org (Sonoma 4, Dry Creek Valleys, St.

Helena', and a nationwide petition') against fractional housing with a total of 7,411 signatures.

The Mitchell Hamline Law Journal of Public Policy and Practice published a journal article' that found that "The increasing commodification of single-family homes has had cascading effects on housing and on communities in general." Fractional housing is shared among various owners, as a result, an increase in 3 https://stoppacasonow.com/
4 https://www.change.org/p/sonoma-county-planning-commission-pacaso-time-shares-don-t-belong-in-sonoma- neighborhoods, retrieved August 16, 2022
s https://www.change.org/p/pacaso-time-shares-don-t-belong-in-dry-creek-valley-s-agricultural-zoning-and- farmlands, retrieved August 16, 2022
' https://www.change.org/p/mderosa-cityofsthelena-org-gellsworth-cityofsthelena-org-stop-pacaso-from- commercializing-our-residential-neighborhoods, retrieved August 16, 2022 ' https://www.change.org/p/pacaso-stop-pacaso-s-takeover-of-housing , retrieved August 16, 2022 s Markuson, Christopher (2022) "A Timeshare By Any Other Name: Fractional Homeownership and the Challenges and Effects of Commodified Single -Family Homes," Mitchell Hamline Law Journal of Public Policy and Practice: Vol. 43: Iss. 2, Article 1. Available at: https://open.mitchellhamline.edu/policypractice/vol43/iss2/1

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the number of units could decrease the demand for hotel rooms. This would likely result in a reduction in the amount of transient occupancy tax accrued by the City.

COMMUNITY SURVEY
Sagecrest researched other communities that have fractional ownership properties to determine if there is a concern with these properties and how the community is addressing these concerns. A summary of the actions is contained in the table below, followed by a description of each community.

Notes
(a) Code Amendment in Process
(b) City Council is split on whether or not fractional housing is a timeshare

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City of Beverly Hills, CA
On July 15, 2021, the City of Beverly Hills adopted an urgency ordinance establishing a 45-day moratorium on fractional ownerships of residential and commercial properties. In the staff report, the City expressed concerns that the properties would impact the residents in the surrounding neighborhood since they would operate as vacation rental homes. The City noted 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." In addition to these impacts, the City expressed concerns that converting homes to fractional housing would remove permanent housing from the housing market. Notwithstanding this prohibition, the moratorium does allow the City Council to approve a fractional ownership dwelling if they adopt a finding that "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" during a duly noticed public hearing.

The moratorium was extended for ten months and 15 days on August 17, 2021 and extended again for a second year on June 14, 2022. The moratorium is now set to expire on July 14, 2023. The moratorium intends to allow the City staff time to study the issue and any potential impacts fractional housing may have on the health, safety, and welfare of those who live in surrounding homes and on the City as a whole.

A copy of the urgency ordinance and staff report is included in Appendix B.

City of Carlsbad, CA
The City of Carlsbad noted that the use of fractional properties constitutes a timeshare. They have an existing timeshare ordinance (Appendix C), which they would enforce if they received a complaint. The City has not had an issue with operation of the fractional homes.

City of Carmel by the Sea, CA
The City is aware of fractional ownership companies and their assertation that they sell and manage properties, not timeshares. The City disagrees with this position and is of the opinion that any fractional housing has the same impacts on surrounding residential areas as short-term vacation rentals. Not only is it unlawful for any fractional ownership company to commence or carry on any kind of business in the City without first procuring a business license and pay the applicable business license tax, but any such business would be in violation of the City's prohibition of timeshares. The City noted that their regulations on transient commercial use of residential property have been previously adjudicated.' Carmel by the Sea has issued a cease -and -desist order (Appendix D), ordering Pacaso to stop all advertising and sale of fractional ownership of residential properties within the City and will proceed through its code enforcement authority to obtain compliance.

City of Encinitas, CA
The City is aware of the fractional ownership model and that other communities are working on regulations. Since Encinitas has not had any issues with fractional homeownership, they are not working on any code updates or taking enforcement actions.
' Ewing v. City of Carmel -by -the -Sea (1991) 234 Cal.App.3d 1579

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City of Fort Lauderdale, FL
The City of Fort Lauderdale does not regulate fractional housing since they are considered transient lodging. Within the State of Florida, transient lodging is regulated by the State. Provided the fractional housing is within any zone which permits transient lodging, it would be allowed.

City of Hermosa Beach, CA
The City of Hermosa Beach classifies fractional housing as a timeshare. They are concerned that the operation of the fractional housing and timeshares could change the character of residential neighborhoods as the guest of the units may naturally stay out later, entertain more, and gather in larger numbers while on vacation. Currently, the Hermosa Beach Municipal Code does not regulate timeshares, but the City is processing a code amendment to prohibit timeshares in residential zones. If approved, the code amendment would allow timeshares in commercial zones with approval of a Conditional Use Permit.

The Planning Commission conducted a public hearing on the code amendment on April 19, 2022, at which the Commission adopted a resolution (Appendix E) to recommend the City Council approve the code amendment. This amendment is currently scheduled for a public hearing before the Council on September 27, 2022.

City of Indian Wells, CA
The City of Indian wells does not currently regulate fractional housing but has received complaints from residents regarding impacts being created. The City Council discussed the matter on May 19, 2022, at which time the City Council was split if fractional housing constituents a timeshare or not. They expressed concerns about taking legal action on the fractional ownership companies due to the ongoing litigation in other jurisdictions. The City Council directed the City Attorney to return with options for them to consider on how to proceed. At this time, it is not known when this discussion will be taken back to the City Council.

County of Monterey, CA
Within areas of Monterey County that fall under the County's zoning jurisdiction, fractional ownerships are classified as timeshares. Pursuant to the Monterey County Municipal Code, timeshare projects are only allowed in zones where a hotel, motel, or similar visitor accommodation use would be permitted, and in such cases a Use Permit or a Coastal Development Permit would be required.

Monterey County is aware of certain homes advertised as fractional housing that are located in the Carmel Highlands and the Del Monte Forest. Both areas are within the County's zoning jurisdiction and are within residential zones. Monterey County has issued a cease -and -desist order (Appendix F), ordering Pacaso to stop all advertising and sale of fractional ownership of residential properties within these areas and will proceed through its code enforcement authority to obtain compliance.

City of Napa, CA
The City of Napa does not have an ordinance regulating fractional ownership citywide but does have a Master Development Plan (MDP) for the Stanly Ranch area. This MDP requires fractional ownership properties to pay a transient oriented tax for stays more than 14 days, but research indicates that no fractional ownership property has paid the TOT. In 2021, the City Council conducted a hearing to discuss the matter, during which residents complained of not wanting their neighborhoods to turn into a business venture for the wealthy. There has been no further discussion regarding fractional ownership.

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Village of North Haven, NY
The Board of Trustees of the Village of North Haven enacted a prohibition on fractional ownership, timesharing, and interval uses in single-family homes in January 2022 (Appendix G). The Board found that the needs of transients are adverse to the interest that protect and preserve single-family homes.

Furthermore, the prohibition was deemed necessary to prevent the unwarranted commercialization of residential areas. In a discussion with the Town staff, the ordinance would be enforced through code enforcement if they receive a complaint, but they were unable to confirm if action had been taken on any existing units.

City of Oceanside, CA
The City of Oceanside is not aware of any specific issues surrounding single-family homes used as fractional ownerships. The City does allow fractional ownership in their Downtown District as it pertains to traditional timeshare listings, provided a Conditional Use Permit is approved for the use. Given that most of these fractional ownership listings resemble short-term rental models, staff would consider fractional housing has short-term rentals in single-family homes, which would require the issuance of a short-term rental permit.

City of Pacific Grove, CA
Currently the City of Pacific Grove prohibits timeshares throughout the City. The City Council accepted public comment on fractional housing and timeshares on May 18, 2022, at the conclusion of which the Council directed staff to review the City's current timeshare ordinance and recommend changes to better effectuate the City's prohibition of timeshare projects, including fractional housing. The City anticipates having the draft ordinance to their Planning Commission in October 2022 and to the City Council by the end of year.

City of Palm Desert, CA
In November 2021, the City Council discussed the emergence of fractional ownership businesses within the City. In the Staff Report, the City Attorney opined that the fractional homeownership "model fits within that definition of "time- share plan" as co -owners receive ownership rights to use a property for less than a year on a recurring basis" (Appendix H). The City only allows timeshares in the Planned Residential, General Commercial, and Planned Commercial Resort zones. On May 12, 2022, the City Council adopted an ordinance updating the timeshare provisions of the Palm Desert Municipal Code. The updates include expanding the definition of timeshare that includes the shared use of any property, where the owners have the right of occupancy for less than full year during any given year. The ordinance also established enforcement procedures for violations of the timeshare ordinance.

City of Palm Springs, CA
The City of Palm Springs regulates where timeshares can be located within the City and taxes occupancy of timeshares. Timeshares are only permitted in zoning districts where hotel uses are permitted and with approval of a Conditional Use Permit. Notably, timeshares are not permitted in single-family zones.

Furthermore, the City's business license ordinance requires any party that is transacting any business within the City to first procure a business license and pay the applicable business license tax.

Although the fractional ownership companies claim that they only purchase and sell luxury homes, and therefore they do not impact the availability of affordable housing. However, the City believes the basic laws of supply and demand dictate that every home that is made unavailable to a full-time resident,

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whether "luxury" or not, necessarily reduces the supply of homes, and therefore reduces the affordability of housing in the City. In addition to the loss of housing, fractional ownership companies who involve multiple investors will result in their guests rotating the occupancy of the dwelling throughout the year.

Although the fractional owners are not technically renters, the City believes the neighbors can expect the property to have many of the same secondary impacts that are caused by vacation rentals.

The City of Palm Springs has issued a cease -and -desist order (Appendix 1), ordering Pacaso to stop all advertising and sale of fractional ownership of residential properties within the City and will proceed through its code enforcement authority to obtain compliance.

City of Park City, UT
Park City, Utah allows fractional ownership in single-family homes provided the ownership obtains approval of a Conditional Use Permit. The areas in which the City allows fractional ownership are identified in the City's General Plan and consists of areas that support the resort economy. These are the same areas that allow timeshares and private residential clubs. The fractional ownership properties must comply with specific prohibitions such as on -street parking, nightly rentals, the outdoor display of goods and merchandise, and signage. Additionally, the fractional housing must obtain approval of a management plan that outlines a satisfactory level of management and maintenance of the fractional housing.

The City is currently preparing a code amendment which would prohibit fractional ownership in most single-family zones. The amendments would allow fractional housing in zones where timeshares and private residential clubs are currently permitted. The amendment would also require a business license for fractional ownerships, submittal of a management plan, and prohibition of nightly rentals, on -street parking, outdoor display of goods, signs, and commercial uses (Appendix J). On August 30, 2022, the Planning Commission and City Council are scheduled to conduct a joint work session on the proposed amendments.

City of Santa Barbara, CA
The City of Santa Barbara does not have any regulation for fractional ownership. The City has received complaints regarding fractional housing in single-family residential area. The Planning Commission and City Council have conducted hearings on the matter but have not given staff direction for future research to regulate these ownerships.

City of Santa Cruz, CA
Even with fractional homes being offered within city limits, City staff was not aware of this type of ownership model. The City does not currently regulate fractional ownership or timeshares.

Notwithstanding this, the City Council has placed a ballot initiative on the November election to establish a tax on residential properties that are occupied less than 120-days a year (Appendix K).

City of South Lake Tahoe, CA
The City stated that a property sale or deed that results ownership rights in or the right to use accommodations for a period of time less than full year during any given year is considered timeshare.

Even though timeshares ten or fewer units are not subject to the Vacation Ownership and Timeshare Act of 200410, they are still subject to local authority. In fact, Section 11280(b) of the Business and Professions 10 California Business and Professions Code §§1121-11288

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Code expressly preserves the authority of local jurisdictions to regulate timeshares through "zoning, subdivision, or building code or other real estate use law, ordinance, or regulation." South Lake Tahoe has issued a cease -and -desist order (Appendix L), ordering Pacaso to stop all advertising and sale of fractional ownership of residential properties within the City until such time they comply with the City's timeshare ordinance.

City of Sonoma, CA
On January 19th, 2022, the Sonoma City Council voted unanimously to adopt an urgency ordinance to prohibit timeshares and fractional housing. The Council adopted the urgency ordinance due to concerns that these uses threaten to reduce the housing supply in the City by turning long-term housing in the City into vacation rentals and reducing the affordable housing stock in the City. Furthermore, there are concerns that timeshare and fractional housing interest uses increase traffic and noise impacts as they have the same character as commercial hotels, motels, and other transient occupancy uses making them inappropriate for residential zones. On June 15, 2022, the Sonoma City Council adopted an ordinance (Appendix M) to amend the code to prohibit all timeshares and fractional housing in the City.

City of St. Helena, CA
Within St. Helena, timeshares are only permitted in Service Commercial District and Central Business District. The City Council recently updated the timeshare ordinance to specifically prohibit co -ownership of residential properties (Appendix N). The ordinance updated the definition of a timeshare to broaden its applicability to incorporate fractional housing and limits timeshares uses to their Service Commercial and Central Business District zone. The ordinance also bolsters the City's enforcement authority by including a specific prohibition on timeshare uses in most zones, but also outlines the enforcement process and mechanisms. The enforcement provision was modeled after the City's short-term rental ordinance to which they note has been very effective.

It is important to note that Pacaso filed a lawsuit against the City in federal court" (Appendix O). Pacaso seeks to stop the City from enforcing their timeshare ordinance against Pacaso and other fractional ownership properties because they feel the timeshare ordinance is invalid and enforcement of said ordinance violates the fractional homeowners and Pacaso's due process protection afforded by the 14tn amendment to the U.S. Constitution. Pacaso had also claimed that the City's enforcement actions constituted an intentional interference with prospective economic advantage; however, the Court rejected this portion of the claim. The lawsuit remains pending.

Town of Truckee, CA
In May 2022 the Town of Truckee adopted a general zoning code cleanup ordinance (Appendix P). Among the various amendments included in the ordinance, the Town Council approved changes to the Town's timeshare uses. This includes outlining the application process, development standards and enforcement and violation protocols fortime-share uses; as well as clarifying that timeshare properties are only allowed within existing legal nonconforming single-family residences in the CG (General Commercial) and CN (Neighborhood Commercial) zones.
11 Pacaso Inc. v. City of St. Helena, 21-cv-02493-WHO (N.D. Cal. Jul. 15, 2021)

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City of Vail, CO
The City does not have regulations regarding fractional ownership. Explaining the concerns of the business model, the City Attorney would agree it resembles a timeshare model but does not see how any City ordinance would be able to regulate it since it is the ownership of a property rather than a use in a portion of a building.

APPENDICES

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Appendix A — Pacaso Economic Impact Analysis, prepared by EBP

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EBPOO

PACASO ECONOMIC IMPACT ANALYSIS

Introduction and Overview
Pacaso is a real estate marketplace and property management service that aims to make second homeownership more accessible by facilitating co -ownership of luxury homes between families. The company purchases homes above the median price in popular second home destinations, and then sells up to eight shares to individual buyers. Pacaso vets owners, furnishes and manages each property, and provides a mobile app for owners to schedule time at their home.

Co -ownership of homes is an established practice that Pacaso is extending in new ways.

In 2022, Pacaso hired EBP, a national economics firm, to conduct a study to understand the net economic impact of its co -ownership model in five markets: Palm Springs, California, Colorado Mountains, New York City Area, San Francisco Bay Area, and South Florida. Key findings include the following:

Across the five markets, the average Pacaso home generates nearly 10 times more in annual household spending compared with the average second home. This amounts to about $48,400 more per home. • Compared with the average second home, the average Pacaso home also generates 10 times more in state sales tax revenue and nearly 10 times more in local sales tax revenue. This amounts to $2,400 more in state revenue and $1,400 more in local revenue per home.
• The average Pacaso home costs six times more than the average second home and seven times more than the average year-round home, meaning the company is unlikely to compete with middle-class or lower -income homebuyers in the five markets EBP studied.
2 Utilization
Co -ownership means higher utilization rates.

The average second home sits empty over ten months out
of the year.' By comparison, the average Pacaso home is occupied 89 percent of the year — almost 11 months.2
Co -ownership makes more efficient use of second homes
by increasing the amount of time they are occupied. Since the average Pacaso home is occupied more months of the
year than other second homes, their owners spend more
money in the community. This spending benefits local
businesses and generates tax revenue.

As discussed later, Pacaso also enables people to share in ownership of homes that are significantly more expensive than average. By providing an alternative to median -
priced homes, Pacaso can help maintain local housing
affordability.
1 Census Bureau, 2019 American Housing Survey.
2 Pacaso, Second Homeowners Survey. Utilization is
calculated based on the number of days a home is reserved.

Figure 1. Average Annual Utilization Rates
Pacaso Homes
Second Homes
8 0% 20% 40% 60% 80% 100%
Source: Pacaso and Census Bureau.
3 Household Spending
Pacaso homes contribute more spending in their communities.

The average second homeowner spends money on a range of goods and services, as seen in the table below. Because Pacaso homes are utilized more than the average second home, they produce greater spending across all categories. The average Pacaso home generates an average of $48,390 in annual spending compared with the average second home. This additional spending benefits local restaurants, stores, and many other businesses.

Figure 2. Annual Household Spending By Market and Type
Colorado Mountains New York City Area Palm Springs . South Flora Average Second Home $6,610 $4,960 $4,950 $3,990 $3,770
Average Pacaso Home $72,240 $54,610 $53,850 $44,090 $41,450 Additional Spending $65,630 $49,650 $48.900 $40,100 $37,680 Source: Esri ArcGIS Business Analyst Online and Pacaso.

Notes: Our approach involved adjusting year-round spending patterns from Business Analyst Online to better reflect spending patterns of Pacaso homeowners. See the Notes page for more details. 4 State Tax Revenue
Greater utilization drives more tax revenue for states.

Pacaso homes also generate additional tax revenue compared with the average second home. This includes revenue collected by states, part of which is distributed back to local communities. The table below shows that the average Pacaso home generates an average of $2,370 in additional state tax revenue compared with the average second home. This tax revenue is generated by spending with local businesses.

Figure 3. Annual State Sales Tax Revenue By Market and Type Average Second Home $370 $140 $195 $240 $235
Average Pacaso Home $4,080 $1,555 $2,145 $2,650 $2,590
Additional Tax Revenue $3,710 $1,415 $1,950 $2,410 $2,355 Source: Avalara.com. Tax rates as of March 2022.

Local Tax Revenue
Greater utilization drives more tax revenue for counties.

Pacaso homes also generate local tax revenue. The table below shows that the average Pacaso home also generates an average of $1,410 in additional local tax revenue compared with the average second home. This tax revenue is generated by spending with local businesses.

Figure 4. Annual Local Sales Tax Revenue By Market and Type • -Colorado Mountains New York City Area
Average Second Home $160 $200 $235 $70 $45
Average Pacaso Home $1,740 $2,180 $2,570 $770 $490
Additional Tax Revenue $1,580. $1,980 $2,335 $700 $445
Source: Avalara.com. Tax rates as of March 2022.

Notes: This study does not include the net increase in property tax revenue to counties from Pacaso homes, which is likely higher than that of traditional second homes or homes near the median housing price.

Housing
Comparison
Pacaso concentrates demand into more
expensive homes.

The median Pacaso home is 6.9 times the price of the
typical second home and 8.2 times the price of the typical year-round home, as seen in the figure to the right.'
Through co -ownership, Pacaso concentrates demand
for the most expensive homes in popular second home
destinations, thereby shifting demand away from the
median -priced market. The following page describes this in more detail.
3 Definitions of second homes and year-round homes come from Optimal Blue, which is the source for Pacaso's price data.

Figure 5. Median Listing Price by Home Type
Pacaso Home $4,670,000
Second Home 1
$675,000
Year -Round Home $567,000
$0 $2,500,000 $5,000,000
Source: Pacaso.
7 Eight out-of-town buyers search for homes in a
neighborhood with a mix of median -priced homes
and high -end homes they are unable to afford.

Wanting to spend a portion of the year in the area,
they purchase eight median -priced homes, making
there unavailable to year-round residents and
bidding up the price of each.
qu
The same eight buyers purchase shares of a high -
end Pacaso home, leaving the median -price homes
on the market for year-round residents. Because
Pacaso is available, there is less demand for the
year-round homes, potentially keeping their sale
prices lower than they would have been otherwise.

Market Impact
Co -ownership concentrates demand into fewer homes.

The concentration of buyers into expensive homes likely relieves pressure on local housing markets in popular
second home destinations. This is because in the absence of a co -ownership model, some second homeowners will
likely purchase a median -priced home, reducing the supply available for year-round residents.

The scenarios to the left illustrate the potential effect of Pacaso on a segment of the housing market.

This effect is most likely to be experienced in in popular second home destinations, where the housing markets
are very competitive, partially because of strong demand for second homes, especially in certain sub -markets.

As Pacaso grows, the mitigating effect on the supply of median -priced homes will only increase.

Notes
Pacaso is still in a growth phase, meaning EBP relied on assumptions based on industry and public record data. As Pacaso expands, its effect will likely become clearer, and we encourage future research to this end.

EBP and Pacaso made the following assumptions in completing this study. Adjustments to these assumptions could change the results.
• EBP used a national average utilization rate for Pacaso homes because market -specific rates fluctuate. • We began our household spending analysis using values for all households in all jurisdictions included in our analysis, not spending by second homes or Pacaso homes specifically. To be more accurate, we made the adjustments listed in the table below to household spending categories pulled from our primary data source, Esri ArcGIS Business Analyst Online, which is itself based on data from the Bureau of Labor Statistics Consumer Expenditure Survey. This adjustment process was built on our assumption that second homeowner spending patterns fall somewhere in between short- term visitors and year-round residents. Compared to visitor spending patterns from various reports, we assumed that homeowners spend comparatively more (as a share of their budget) on food and beverages, a similar amount on retail, less on recreation, and less on transportation.
• For the tax impact analysis, we used state and county tax rates as of March 2022 from Avalara.com, a website that helps businesses calculate their tax bills. After comparing Avalara tax rates with tax rates published on several government websites for jurisdictions included in our analysis, EBP determined that it is a reliable source.

Cover Photography by Pacaso.
0 Appendix A. Household Spending Category Inclusion
Alcohol
Apparel
Dining Out
Education
Entertainment and Recreation
Finance
Food at Home
Health Care
Household Goods
Household Services
Housing
Life Insurance and Pensions
Miscellaneous Expenses
Personal Care
Local Transportation
Travel
Included (37% under Dining Out and 63% under Food at Home).

Included. Assumes co -owners spend like year-round residents during longer stays.

Included.

Not included.

Partially included (43%). Includes items, such as event admissions.

Not included.

Included.

Not included.

Not included. There is likely a minimal net increase in spending by Pacaso homes.

Not included. Mostly fixed housing costs, utilities, and maintenance and repairs.

Not included.

Included. Assumes co -owners spend like year-round residents during longer stays.

Partially included (20%). Includes items, such as gasoline and public transportation.

Not included. Related items are covered by other categories.

Source: Esri ArcGIS Business Analyst Online and Pacaso. 10 Appendix B. Annual Household Spending By Market and Category Apparel
$1,090
8820
$830
$650
$610
Dining Out
$1,950
$1,460
$1,440
$1,160
$1,090
Entertainment and Recreation
$280
$210
$200
$170
$160
Food at Home
$2,700
$2,030
$2,040
$1,650
$1,560
Personal Care
$430
$320
$320
$260
$250
Transportation
$160
$120
$120
$100
$100
Total
$6,610
$4,960
$4,950
$3,990
$3,770
Average
Pacaso Home
Apparel
$10,310
$7,790
$7,890
$6,130
$5,800
Dining Out
$18,450
$13,880
$13,600
811,060
$10,360
Entertainment and Recreation
$6,260
$4,770
$4,530
$3,880
$3,600
Food at Home
$25,660
$19,260
$19,320
$15,670
$14,790
Personal Care
$4,070
$3,070
$3,030
$2,490
$2,360
Transportation
$7,490
$5,840
$5,480
$4,860
$4,540
Total
$72,240
$54,610
$53,850
$44,090
$41,450
Source: Esri ArcGIS Business Analyst Online and Pacaso.

Appendix C. Median Listing Price by Market and Type
Year -Round Home $785,000
$600,000
$560,000
$500,000
$390,000
Second Home $845,000
$815,000
$765,000
8530,000
8420,000
Pacaso Home $4,500,000
$8,350,000
$4,700,000
82,000,000
$3,800,000
Source: Pacaso.

Appendix D. Market Definitions
Say Area
Napa
Marin
San Francisco San Mateo Sonoma
Colorado Mountains
Eagle
Pitkin
Summit
New York City Area
Bronx
Kings
Nassau New York Queens
Palm Springs
Riverside
South Florida
Broward
Miami
Monroe Palm Beach
Richmond Suffolk
12 EBPO

EBPOO

PACASO ECONOMIC IMPACT ANALYSIS

Pacaso vets owners, furnishes and manages each property, and provides a mobile app for owners to schedule time at their home. Co -ownership of homes is an established practice that Pacaso is extending in new ways.

In 2022, Pacaso hired EBP, a national economics firm, to conduct a study to understand the net economic impact of its co -ownership model. As described in the following pages, we focused specifically on Pacaso's impact on home utilization, household spending, tax revenue, and the local housing market in the Bay Area, which includes Napa, Marin, San Francisco, San Mateo, and Sonoma counties.
2 Utilization
Co -ownership means higher utilization rates.

The average second homeowner spends money on a range of goods and services, as seen in the table below. Because Pacaso homes are utilized more than the average second home, they produce greater spending across all categories. The average Bay Area Pacaso home generates $65,630 more in annual spending compared with the average second home. This additional spending benefits local restaurants, stores, and many other businesses.

Figure 2. Annual Household Spending By Category and Type Apparel
$1,090
$10,310
$9,220
Dining Out
$1,950
$18,450
$16,500
Entertainment and Recreation
$280
$6,260
$5,980
Food at Home
$2,700
$25,660
$22,960
Personal Care
$430
$4,070
$3,640
Transportation
$160
$7,490
$7,330
Total
$6,610
$72,240
$65,630
Source: Esri ArcGIS Business Analyst Online and Pacaso.

Notes: Our approach involved adjusting year-round spending patterns from Business Analyst Online to better reflect spending patterns of
Pacaso homeowners. See the Notes page for more details. 4 State Tax Revenue
Greater utilization drives more tax revenue for the State of California.

Pacaso homes also generate additional tax revenue compared with the average second home. This includes revenue collected by the State of California, part of which is distributed back to the Bay Area. The table below shows that the average Pacaso home generates an additional $3,710 in state tax revenue on average when compared with the average second home. This tax revenue is generated by spending with local businesses.

Figure 3
=1
Napa
Marin
Annual State Sales Tax Revenue By County
San Francisco
San Mateo
Sonoma
Source: Avalara.com. Tax rates as of March 2022.
$310
$3,450
$3,140
$390
$4,310
$3,920
$440
$4,780
$4,340
$430
$4,740
$4,310
$280
$3,110
$2,830

Local Tax Revenue
Greater utilization drives more tax revenue for the Bay Area.

Pacaso homes also generate local tax revenue. The table below shows that the average Pacaso home generates an average of $1,580 in additional local tax revenue compared with the average second home. This tax revenue is generated by spending with local businesses.

Figure 4. Annual Local Sales Tax Revenue By County
Napa
$90
$1,010
$920
Marin
$150
$1,620
$1,470
San Francisco $190
$2,100
$1,910
San Mateo
$240
$2,670
$2,430
Sonoma
$120
$1,300
$1,180
Source:

Avalara.com. Tax rates as of March 2022.

Notes:

This study does not include the net increase in property tax revenue to counties from Pacaso homes, which is likely higher than that
of traditional second homes or homes near the median housing price.

Housing
Comparison
Pacaso concentrates demand into more
expensive homes.

The median Pacaso home in the Bay Area is 5.3 times the price of the typical second home and 5.7 times the price of the typical year-round home, as seen in the figure to the right.3
Through co -ownership, Pacaso concentrates demand for
the Bay Area's most expensive homes, thereby shifting
demand away from the median -priced market. The
following page describes this in more detail.
3 Definitions of second homes and year-round homes come from Optimal Blue, which is the source for Pacaso's price data.

Figure 5. Median Listing Price by Home Type
Pacaso Home $4,500,000
Second Home 1
$845,000
Year -Round Home 1
$785,000
$0 $2.500,000 $5,000,000
Source: Pacaso.
7 Eight out-of-town buyers search for homes in a
neighborhood with a mix of median -priced homes
and high -end homes they are unable to afford.

Wanting to spend a portion of the year in the Say
Area, they purchase eight median -priced homes,
making them unavailable to year-round residents
and bidding up the price of each.

The same eight buyers purchase shares of a high -
end Pacaso home, leaving the median -price homes
on the market for year-round residents. Because
Pacaso is available, there is less demand for the
year-round homes, potentially keeping their sale
prices lower than they would have been otherwise.

Market Impact
Co -ownership concentrates demand into fewer homes.

The concentration of buyers into expensive homes likely relieves pressure on the Bay Area's local housing market.

This is because in the absence of a co -ownership model, some second homeowners will likely purchase a median -
priced home, reducing the supply available for year-round residents.

The scenarios to the left illustrate the potential effect of Pacaso on a segment of the housing market.

This effect is most likely to be experienced in places
like the Bay Area, where the housing market is very
competitive, partially because of strong demand for
second homes, especially in certain sub -markets. As
Pacaso grows, the mitigating effect on the supply of
median -priced homes will only increase.

EBP and Pacaso made the following assumptions in completing this study. Adjustments to these assumptions could change the results.
• EBP used a national average utilization rate for Pacaso homes because market -specific rates fluctuate. • We began our household spending analysis using values for all households in the Bay Area, not spending by second homes or Pacaso homes specifically. To be more accurate, we made the adjustments listed in the table below to household spending categories pulled from our primary data source, Esri ArcGIS Business Analyst Online, which is itself based on data from the Bureau of Labor Statistics Consumer Expenditure Survey. This adjustment process was built on our assumption that second homeowner spending patterns fall somewhere in between short-term visitors and year- round residents. Compared with Bay Area visitor spending patterns from a 2019 study by Dean Runyan Associates, we assumed that homeowners spend comparatively more (as a share of their budget) on food and beverages, a similar amount on retail, less on recreation, and less on transportation. • For the tax impact analysis, we used state and county tax rates as of March 2022 from Avalara.com, a website that helps businesses calculate their tax bills. After comparing Avalara tax rates with tax rates published on several government websites for jurisdictions included in our analysis, EBP determined that it is a reliable source.

Cover Photography by Jacob Morch on Unsplash. Report Photography by Pacaso. 0 Appendix A. Household Spending Category Inclusion
Alcohol
Apparel
Dining Out
Education
Entertainment and Recreation
Finance
Food at Home
Health Care
Household Goods
Household Services
Housing
Life Insurance and Pensions
Miscellaneous Expenses
Personal Care
Local Transportation
Travel
Included (37% under Dining Out and 63% under Food at Home).

Included. Assumes co -owners spend like year-round residents during longer stays.

Included.

Not included.

Partially included (43%). Includes items, such as event admissions.

Not included.

Included.

Not included.

Not included. There is likely a minimal net increase in spending by Pacaso homes.

Not included. Mostly fixed housing costs, utilities, and maintenance and repairs.

Not included.

Included. Assumes co -owners spend like year-round residents during longer stays.

Partially included (20%). Includes items, such as gasoline and public transportation.

Not included. Related items are covered by other categories.

Source: Esri ArcGIS Business Analyst Online and Pacaso. 10 EBPO

EBPOO
Co-
% A -
DD
L
M

PACASO ECONOMIC IMPACT ANALYSIS

Introduction and Overview
Pacaso is a real estate marketplace and property management service that aims to make second homeownership more accessible by facilitating co -ownership of luxury homes between families. The company purchases homes above the median price in popular second home destinations like the Colorado Mountains, and then sells up to eight shares to individual buyers. Pacaso vets owners, furnishes and manages each property, and provides a mobile app for owners to schedule time at their home. Co -ownership of homes is an established practice that Pacaso is extending in new ways.

In 2022, Pacaso hired EBP, a national economics firm, to conduct a study to understand the net economic impact of its co -ownership model. As described in the following pages, we focused specifically on Pacaso's impact on home utilization, household spending, tax revenue, and the local housing market in the Colorado Mountains, which includes Eagle, Pitkin, and Summit counties.

ZI
2 Utilization
Co -ownership means higher utilization rates.

The average second homeowner spends money on a range of goods and services, as seen in the table below. Because Pacaso homes are utilized more than the average second home, they produce greater spending across all categories. The average Colorado Mountains Pacaso home generates $49,650 more in annual spending compared with the average second home. This additional spending benefits local restaurants, stores, and many other businesses.

Figure 2. Annual Household Spending By Category and Type Apparel
$820
$7,790
$6,970
Dining Out
$1,460
$13,880
$12,420
Entertainment and Recreation
$210
$4,770
$4.560
Food at Home
$2,030
$19,260
$17,230
Personal Care
$320
$3,070
$2,750
Transportation
$120
$5,840
$5,720
Total
$4,960
$54,610
$49,650
Source: Esri ArcGIS Business Analyst Online and Pacaso.

Notes: Our approach involved adjusting year-round spending patterns from Business Analyst Online to better reflect spending patterns of
Pacaso homeowners. See the Notes page for more details. 4 State Tax Revenue
Greater utilization drives more tax revenue for the State of Colorado.

Pacaso homes also generate additional tax revenue compared with the average second home. This includes revenue collected by the State of Colorado, part of which is distributed back to the Colorado Mountains. The table below shows that the average Pacaso home generates an additional $1,410 in state tax revenue on average when compared with the average second home. This tax revenue is generated by spending with local businesses.

Figure 3. Annual State Sales Tax Revenue By County
Average Second Home
Eagle $150
Pitkin
Summit
Source:

Avalara.com. Tax rates as of March 2022.
$140
$130
$1,590
$1,520
$1,450
$1,540
$1,380
$1,320
E

Local Tax Revenue
Greater utilization drives more tax revenue for the Colorado Mountains.

Pacaso homes also generate local tax revenue. The table below shows that the average Pacaso home generates an average of $1,980 in additional local tax revenue compared with the average second home. This tax revenue is generated by spending with local businesses.

Figure 4. Annual Local Sales Tax Revenue By County
Eagle $80 $880 $800
Pitkin $360 $3,920 $3,560
Summit $160 $1,740 $1,580
Source: Avalara.com. Tax rates as of March 2022.

Housing
Comparison
Pacaso concentrates demand into more
expensive homes.

The median Pacaso home in the Colorado Mountains is

10.2 times the price of the typical second home and 13.9 times the price of the typical year-round home, as seen in the figure to the right.3
Through co -ownership, Pacaso concentrates demand for
the Colorado Mountains' most expensive homes, thereby
shifting demand away from the median -priced market.

The following page describes this in more detail.
3 Definitions of second homes and year-round homes come from Optimal Blue, which is the source for Pacaso's price data.

Figure 5. Median Listing Price by Home Type
Pacaso Home $8,350,000
Second Home 815,000
Year -Round Home $600,000
0 $5,000,000 $10,000,000
Source: Pacaso.
7 Eight out-of-town buyers search for homes in a
neighborhood with a mix of median -priced homes
and high -end homes they are unable to afford.

Wanting to spend a portion of the year in the
Colorado Mountains, they purchase eight median -
priced homes, making them unavailable to year-
round residents and bidding up the price of each.

MOOM
The same eight buyers purchase shares of a high -
end Pacaso home, leaving the median -price homes
on the market for year-round residents. Because
Pacaso is available, there is less demand for the
year-round homes, potentially keeping their sale
prices lower than they would have been otherwise.

Market Impact
Co -ownership concentrates demand into fewer homes.

The concentration of buyers into expensive homes
likely relieves pressure on the Colorado Mountains' local housing market. This is because in the absence of a co - ownership model, some second homeowners will likely
purchase a median -priced home, reducing the supply
available for year-round residents.

The scenarios to the left illustrate the potential effect of Pacaso on a segment of the housing market.

This effect is most likely to be experienced in places like the Colorado Mountains, where the housing market is
very competitive, partially because of strong demand
for second homes, especially in certain sub -markets.

As Pacaso grows, the mitigating effect on the supply of median -priced homes will only increase.

EBP and Pacaso made the following assumptions in completing this study. Adjustments to these assumptions could change the results.
• EBP used a national average utilization rate for Pacaso homes because market -specific rates fluctuate. • We began our household spending analysis using values for all households in the Colorado Mountains, not spending by second homes or Pacaso homes specifically. To be more accurate, we made the adjustments listed in the table below to household spending categories pulled from our primary data source, Esri ArcGIS Business Analyst Online, which is itself based on data from the Bureau of Labor Statistics Consumer Expenditure Survey. This adjustment process was built on our assumption that second homeowner spending patterns fall somewhere in between short-term visitors and year-round residents. Compared with Colorado Mountains visitor spending patterns from a 2019 study by Dean Runyan Associates, we assumed that homeowners spend comparatively more (as a share of their budget) on food and beverages, a similar amount on retail, less on recreation, and less on transportation. • For the tax impact analysis, we used state and county tax rates as of March 2022 from Avalara.com, a website that helps businesses calculate their tax bills. After comparing Avalara tax rates with tax rates published on several government websites for jurisdictions included in our analysis, EBP determined that it is a reliable source.

Cover Photography by Joshua Sukoff on Unsplash. Report Photography by Pacaso. 0 Appendix A. Household Spending Category Inclusion
Alcohol
Apparel
Dining Out
Education
Entertainment and Recreation
Finance
Food at Home
Health Care
Household Goods
Household Services
Housing
Life Insurance and Pensions
Miscellaneous Expenses
Personal Care
Local Transportation
Travel
Included (37% under Dining Out and 63% under Food at Home).

Included. Assumes co -owners spend like year-round residents during longer stays.

Included.

Not included.

Partially included (43%). Includes items, such as event admissions.

Not included.

Included.

Not included.

Not included. There is likely a minimal net increase in spending by Pacaso homes.

Not included. Mostly fixed housing costs, utilities, and maintenance and repairs.

Not included.

Included. Assumes co -owners spend like year-round residents during longer stays.

Partially included (20%). Includes items, such as gasoline and public transportation.

Not included. Related items are covered by other categories.

Source: Esri ArcGIS Business Analyst Online and Pacaso. 10 EBPO

EBPO

PACASO ECONOMIC IMPACT ANALYSIS

In 2022, Pacaso hired EBP, a national economics firm, to conduct a study to understand the net economic impact of its co -ownership model. As described in the following pages, we focused specifically on Pacaso's impact on home utilization, household spending, tax revenue, and the local housing market in Palm Springs. 2 Utilization
Co -ownership means higher utilization rates.

The average second homeowner spends money on a range of goods and services, as seen in the table below. Because Pacaso homes are utilized more than the average second home, they produce greater spending across all categories. The average Palm Springs Pacaso home generates $40,100 more in annual spending compared with the average second home.

This additional spending benefits local restaurants, stores, and many other businesses.

Figure 2. Annual Household Spending By Category and Type Apparel
$650
$6,130
$5,480
Dining Out
$1,160
$11,060
$9,890
Entertainment and Recreation
$170
$3,880
$3.710
Food at Home
$1,650
$15,670
$14,030
Personal Care
$260
$2,490
$2,230
Transportation
$100
$4,860
$4,760
Total
$3,990
$44,090
$40,100
Source: Esri ArcGIS Business Analyst Online and Pacaso.

Notes: Our approach involved adjusting year-round spending patterns from Business Analyst Online to better reflect spending patterns of
Pacaso homeowners. See the Notes page for more details. 4 State Tax Revenue
Greater utilization drives more tax revenue for the State of California.

Pacaso homes also generate additional tax revenue compared with the average second home. This includes revenue collected by the State of California, part of which is distributed back to Palm Springs. The table below shows that the average Pacaso home generates an additional $2,410 in state tax revenue compared with the average second home. This tax revenue is generated by spending with local businesses.

Figure 3. Annual State Sales Tax Revenue By County
Riverside
Source: Avalara.com. Tax rates as of March 2022.
$240 $2,650 $2,410
5 Local Tax Revenue
Greater utilization drives more tax revenue for Palm Springs.

Pacaso homes also generate local tax revenue. The table below shows that the average Pacaso home also generates an additional $700 in local tax revenue compared with the average second home. This tax revenue is generated by spending with local businesses.

Figure 4. Annual Local Sales Tax Revenue By County
Riverside $70 $770 $700
Source: Avalara.com. Tax rates as of March 2022.

Housing
Comparison
Pacaso concentrates demand into more
expensive homes.

The median Pacaso home in Palm Springs is 3.8 times the price of the typical second home and 4 times the price of the typical year-round home, as seen in the figure to the right.3
Through co -ownership, Pacaso concentrates demand for
Palm Springs' most expensive homes, thereby shifting
demand away from the median -priced market. The
following page describes this in more detail.
3 Definitions of second homes and year-round homes come from Optimal Blue, which is the source for Pacaso's price data.

Figure 5. Median Listing Price by Home Type
Pacaso Home $2,000,000
Second Home $530,000
Year -Round Home � $500,000
Source
$0
Pacaso.
$1,000,000 $2,000,000
7 Eight out-of-town buyers search for homes in a
neighborhood with a mix of median -priced homes
and high -end homes they are unable to afford.

Wanting to spend a portion of the year in Palm
Springs, they purchase eight median -priced homes,
making them unavailable to year-round residents
and bidding up the price of each.

Market Impact
Co -ownership concentrates demand into fewer homes.

The concentration of buyers into expensive homes likely relieves pressure on Palm Springs' local housing market.

This is because in the absence of a co -ownership model, some second homeowners will likely purchase a median -
priced home, reducing the supply available for year-round residents.

The scenarios to the left illustrate the potential effect of Pacaso on a segment of the housing market.

This effect is most likely to be experienced in places
like Palm Springs, where the housing market is very
competitive, partially because of strong demand for
second homes, especially in certain sub -markets. As
Pacaso grows, the mitigating effect on the supply of
median -priced homes will only increase.

EBP and Pacaso made the following assumptions in completing this study. Adjustments to these assumptions could change the results.
• EBP used a national average utilization rate for Pacaso homes because market -specific rates fluctuate. • We began our household spending analysis using values for all households in Riverside County, not spending by second homes or Pacaso homes specifically. To be more accurate, we made the adjustments listed in the table below to household spending categories pulled from our primary data source, Esri ArcGIS Business Analyst Online, which is itself based on data from the Bureau of Labor Statistics Consumer Expenditure Survey. This adjustment process was built on our assumption that second homeowner spending patterns fall somewhere in between short-term visitors and year- round residents. Compared with Palm Springs visitor spending patterns from a 2019 study by Dean Runyan Associates, we assumed that homeowners spend comparatively more (as a share of their budget) on food and beverages, a similar amount on retail, less on recreation, and less on transportation. • For the tax impact analysis, we used state and county tax rates as of March 2022 from Avalara.com, a website that helps businesses calculate their tax bills. After comparing Avalara tax rates with tax rates published on several government websites for jurisdictions included in our analysis, EBP determined that it is a reliable source.

Cover Photography by Nathan Dumlao on Unsplash. Report Photography by Pacaso. 0 Appendix A. Household Spending Category Inclusion
Alcohol
Apparel
Dining Out
Education
Entertainment and Recreation
Finance
Food at Home
Health Care
Household Goods
Household Services
Housing
Life Insurance and Pensions
Miscellaneous Expenses
Personal Care
Local Transportation
Travel
Included (37% under Dining Out and 63% under Food at Home).

Included. Assumes co -owners spend like year-round residents during longer stays.

Included.

Not included.

Partially included (43%). Includes items, such as event admissions.

Not included.

Included.

Not included.

Not included. There is likely a minimal net increase in spending by Pacaso homes.

Not included. Mostly fixed housing costs, utilities, and maintenance and repairs.

Not included.

Included. Assumes co -owners spend like year-round residents during longer stays.

Partially included (20%). Includes items, such as gasoline and public transportation.

Not included. Related items are covered by other categories.

Source: Esri ArcGIS Business Analyst Online and Pacaso. 10 EBPO

EBPOO
(Q) - D DD z
J\-

PACAECONOMIC IMPACT ANALYSIS

In 2022, Pacaso hired EBP, a national economics firm, to conduct a study to understand the net economic impact of its co -ownership model. As described in the following pages, we focused specifically on Pacaso's impact on home utilization, household spending, tax revenue, and the local housing market in South Florida, which includes Broward, Miami -Dade, Monroe, and Palm Beach counties.
2 Utilization
Co -ownership means higher utilization rates.

The average second homeowner spends money on a range of goods and services, as seen in the table below. Because Pacaso homes are utilized more than the average second home, they produce greater spending across all categories. The average South Florida Pacaso home generates $37,680 more in annual spending compared with the average second home.

This additional spending benefits local restaurants, stores, and many other businesses.

Figure 2. Annual Household Spending By Category and Type Apparel
$610
$5,800
$5,190
Dining Out
$1,090
$10,360
$9,270
Entertainment and Recreation
$160
$3,600
$3,440
Food at Home
$1,560
$14,790
$13,230
Personal Care
$250
$2,360
$2,110
Transportation
$100
$4,540
$4,440
Total
$3,770
$41,450
$37, 680
Source: Esri ArcGIS Business Analyst Online and Pacaso.

Notes: Our approach involved adjusting year-round spending patterns from Business Analyst Online to better reflect spending patterns of
Pacaso homeowners. See the Notes page for more details. 4 State Tax Revenue
Greater utilization drives more tax revenue for the State of Florida.

Pacaso homes also generate additional tax revenue compared with the average second home. This includes revenue collected by the State of Florida, part of which is distributed back to South Florida. The table below shows that the average Pacaso home generates an additional $2,360 in state tax revenue on average when compared with the average second home. This tax revenue is generated by spending with local businesses.

Figure 3. Annual State Sales Tax Revenue By County
Broward
$220
Miami
$210
Monroe
$250
Palm Beach
$250
Source: Avalara.com. Tax rates as of March 2022.
$2,470
$2,250
$2,290
$2,080
$2,800
$2, 550
$2,800
$2,550
5 Local Tax Revenue
Greater utilization drives more tax revenue for South Florida.

Pacaso homes also generate local tax revenue. The table below shows that the average Pacaso home generates an average of $450 in additional local tax revenue compared with the average second home. This tax revenue is generated by spending with local businesses.

Figure 4.
�IKOIFIII�
Broward
Miami
Monroe
Palm Beach
Source:

Notes:

Annual Local Sales Tax Revenue By County
$40
$410
$370
$30
$380
$350
$60
$700
$640
$40
$470
$430
Avalara.com. Tax rates as of March 2022.

This study does not include the net increase in property tax revenue to counties from Pacaso homes, which is likely higher than that of traditional second homes or homes near the median housing price.

Housing
Comparison
Pacaso concentrates demand into more
expensive homes.

The median Pacaso home in South Florida is 9 times the
price of the typical second home and 9.7 times the price of the typical year-round home, as seen in the figure to the right.3
Through co -ownership, Pacaso concentrates demand for
South Florida's most expensive homes, thereby shifting
demand away from the median -priced market. The
following page describes this in more detail.
3 Definitions of second homes and year-round homes come from Optimal Blue, which is the source for Pacaso's price data.

Figure 5. Median Listing Price by Home Type
Pacaso Home $3,800,000
Second Home $420,000
Year -Round Home $390,000
$0 $2.000,000 $4,000,000
Source: Pacaso.
7 Eight out-of-town buyers search for homes in a
neighborhood with a mix of median -priced homes
and high -end homes they are unable to afford.

Wanting to spend a portion of the year in South
Florida, they purchase eight median -priced homes,
making them unavailable to year-round residents
and bidding up the price of each.

Market Impact
Co -ownership concentrates demand into fewer homes.

The concentration of buyers into expensive homes likely relieves pressure on South Florida's local housing market.

This is because in the absence of a co -ownership model, some second homeowners will likely purchase a median -
priced home, reducing the supply available for year-round residents.

The scenarios to the left illustrate the potential effect of Pacaso on a segment of the housing market.

This effect is most likely to be experienced in places
like South Florida, where the housing market is very
competitive, partially because of strong demand for
second homes, especially in certain sub -markets. As
Pacaso grows, the mitigating effect on the supply of
median -priced homes will only increase.

EBP and Pacaso made the following assumptions in completing this study. Adjustments to these assumptions could change the results.
• EBP used a national average utilization rate for Pacaso homes because market -specific rates fluctuate. • We began our household spending analysis using values for all households in South Florida, not spending by second homes or Pacaso homes specifically. To be more accurate, we made the adjustments listed in the table below to household spending categories pulled from our primary data source, Esri ArcGIS Business Analyst Online, which is itself based on data from the Bureau of Labor Statistics Consumer Expenditure Survey. This adjustment process was built on our assumption that second homeowner spending patterns fall somewhere in between short-term visitors and year-round residents. Compared with South Florida visitor spending patterns from a 2019 study by the Greater Miami Convention and Visitors Bureau, we assumed that homeowners spend comparatively more (as a share of their budget) on food and beverages, a similar amount on retail, less on recreation, and less on transportation. • For the tax impact analysis, we used state and county tax rates as of March 2022 from Avalara.com, a website that helps businesses calculate their tax bills. After comparing Avalara tax rates with tax rates published on several government websites for jurisdictions included in our analysis, EBP determined that it is a reliable source.

Cover Photography by Arnel Hasanovic on Unsplash. Report Photography by Pacaso. 0 Appendix A. Household Spending Category Inclusion
Alcohol
Apparel
Dining Out
Education
Entertainment and Recreation
Finance
Food at Home
Health Care
Household Goods
Household Services
Housing
Life Insurance and Pensions
Miscellaneous Expenses
Personal Care
Local Transportation
Travel
Included (37% under Dining Out and 63% under Food at Home).

Included. Assumes co -owners spend like year-round residents during longer stays.

Included.

Not included.

Partially included (43%). Includes items, such as event admissions.

Not included.

Included.

Not included.

Not included. There is likely a minimal net increase in spending by Pacaso homes.

Not included. Mostly fixed housing costs, utilities, and maintenance and repairs.

Not included.

Included. Assumes co -owners spend like year-round residents during longer stays.

Partially included (20%). Includes items, such as gasoline and public transportation.

Not included. Related items are covered by other categories.

Source: Esri ArcGIS Business Analyst Online and Pacaso. 10 EBPO

EBPOO
ilk

PACASO ECONOMIC IMPACT ANALYSIS

Introduction and Overview
Pacaso is a real estate marketplace and property management service that aims to make second homeownership more accessible by facilitating co -ownership of luxury homes between families. The company purchases homes above the median price in popular second home destinations like the New York City Area, and then sells up to eight shares to individual buyers. Pacaso vets owners, furnishes and manages each property, and provides a mobile app for owners to schedule time at their home. Co -ownership of homes is an established practice that Pacaso is extending in new ways.

In 2022, Pacaso hired EBP, a national economics firm, to conduct a study to understand the net economic impact of its co -ownership model. As described in the following pages, we focused specifically on Pacaso's impact on home utilization, household spending, tax revenue, and the local housing market in the New York City Area, which includes Bronx, Kings, Queens, Nassau, New York, Richmond, and Suffolk counties. 2 Utilization
Co -ownership means higher utilization rates.

The average second homeowner spends money on a range of goods and services, as seen in the table below. Because Pacaso homes are utilized more than the average second home, they produce greater spending across all categories. The average New York City Area Pacaso home generates $48,900 more in annual spending compared with the average second home. This additional spending benefits local restaurants, stores, and many other businesses.

Figure 2. Annual Household Spending By Category and Type Apparel
$830
$7,890
$7,060
Dining Out
$1,440
$13,600
$12,160
Entertainment and Recreation
$200
$4,530
$4,330
Food at Home
$2,040
$19,320
$17,280
Personal Care
$320
$3,030
$2,710
Transportation
$120
$5,480
$5,360
Total
$4,950
$53,850
$48,900
Source: Esri ArcGIS Business Analyst Online and Pacaso.

Notes: Our approach involved adjusting year-round spending patterns from Business Analyst Online to better reflect spending patterns of
Pacaso homeowners. See the Notes page for more details. 4 State Tax Revenue
Greater utilization drives more tax revenue for the State of New York.

Pacaso homes also generate additional tax revenue compared with the average second home. This includes revenue collected by the State of New York, part of which is distributed back to the New York City Area. The table below shows that the average Pacaso home generates an additional $1,950 in state tax revenue on average, when compared with the average second home. This tax revenue is generated by spending with local businesses.

Figure 3. Annual State Sales Tax Revenue By County
Bronx
Kings
Nassau
New York
Queens
Richmond
Suffolk
Source: Avalara.com. Tax rates as of March 2022.
$110
$1,200
$1,090
$180
$1,900
$1,720
$250
$2,770
$2,520
$260
$2,860
$2,600
$170
$1,840
$1,670
$180
$2,000
$1,820
$220
$2,450
$2,230

Local Tax Revenue
Greater utilization drives more tax revenue for the New York City Area.

Pacaso homes also generate local tax revenue. The table below shows that the average Pacaso home generates an average of $2,340 in additional local tax revenue compared with the average second home. This tax revenue is generated by spending with local businesses.

Figure 4. Annual Local Sales Tax Revenue By County
Bronx
$140
$1,460
$1,320
Kings
$210
$2,320
$2,110
Nassau
$290
$3,210
$2,920
New York
$320
$3,490
$3,170
Queens
$210
$2,240
$2,030
Richmond
$220
$2,440
$2,220
Suffolk
$260
$2,840
$2,580
Source:

Avalara.com. Tax rates as of March 2022.

Notes:

Housing
Comparison
Pacaso concentrates demand into more
expensive homes.

Though Pacaso does not currently operate in the New
York City Area, the median Pacaso home is expected to
be 6.1 times the price of the typical second home and

8.4 times the price of the typical year-round home. These values can be seen in the figure to the right.3
Through co -ownership, Pacaso is expected to concentrate demand for the New York City Area's most expensive
homes, thereby shifting demand away from the median -
priced market. The following page describes this in more detail.
3 Definitions of second homes and year-round homes come from Optimal Blue, which is the source for Pacaso's price data.

Figure 5. Median Listing Price by Home Type
Pacaso Home $4,700,000
Second Home 1
$765,000
Year -Round Home $560,000
$0 $2,500,000 $5,000,000
Source: Pacaso.
7 Eight out-of-town buyers search for homes in a
neighborhood with a mix of median -priced homes
and high -end homes they are unable to afford.

Wanting to spend a portion of the year in the New
York City Area, they purchase eight median -priced
homes, making them unavailable to year-round
residents and bidding up the price of each.

Market Impact
Co -ownership concentrates demand into fewer homes.

The concentration of buyers into expensive homes
likely relieves pressure on the New York City Area's local housing market. This is because in the absence of a co - ownership model, some second homeowners will likely
purchase a median -priced home, reducing the supply
available for year-round residents.

The scenarios to the left illustrate the potential effect of Pacaso on a segment of the housing market.

This effect is most likely to be experienced in places
like the New York City Area, where the housing market
is very competitive, partially because of strong demand for second homes, especially in certain sub -markets.

As Pacaso grows, the mitigating effect on the supply of median -priced homes will only increase.

EBP and Pacaso made the following assumptions in completing this study. Adjustments to these assumptions could change the results.
• EBP used a national average utilization rate for Pacaso homes because market -specific rates fluctuate. • We began our household spending analysis using values for all households in the New York City Area, not spending by second homes or Pacaso homes specifically. To be more accurate, we made the adjustments listed in the table below to household spending categories pulled from our primary data source, Esri ArcGIS Business Analyst Online, which is itself based on data from the Bureau of Labor Statistics Consumer Expenditure Survey. This adjustment process was built on our assumption that second homeowner spending patterns fall somewhere in between short-term visitors and year- round residents. Compared with New York City Area visitor spending patterns from 2019 studies by Tourism Economics, we assumed that homeowners spend comparatively more (as a share of their budget) on food and beverages, a similar amount on retail, less on recreation, and less on transportation. • For the tax impact analysis, we used state and county tax rates as of March 2022 from Avalara.com, a website that helps businesses calculate their tax bills. After comparing Avalara tax rates with tax rates published on several government websites for jurisdictions included in our analysis, EBP determined that it is a reliable source.

Cover Photography by Laurenz Heymann and Report Photography by Rafael Leao on Unsplash. 0 Appendix A. Household Spending Category Inclusion
Alcohol
Apparel
Dining Out
Education
Entertainment and Recreation
Finance
Food at Home
Health Care
Household Goods
Household Services
Housing
Life Insurance and Pensions
Miscellaneous Expenses
Personal Care
Local Transportation
Travel
Included (37% under Dining Out and 63% under Food at Home).

Included. Assumes co -owners spend like year-round residents during longer stays.

Included.

Not included.

Partially included (43%). Includes items, such as event admissions.

Not included.

Included.

Not included.

Not included. There is likely a minimal net increase in spending by Pacaso homes.

Not included. Mostly fixed housing costs, utilities, and maintenance and repairs.

Not included.

Included. Assumes co -owners spend like year-round residents during longer stays.

Partially included (20%). Includes items, such as gasoline and public transportation.

Not included. Related items are covered by other categories.

Source: Esri ArcGIS Business Analyst Online and Pacaso. 10 EBPO

Appendix B — City of Beverly Hills Urgency Ordinance

FRACTIONAL HOUSING
-B1-

ORDINANCE NO. 22-0-2862

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 Findinas.

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.

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 -tern 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 continue studying the regulation of fractional ownership.

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 expired on August 29, 2021.

F. On August 17, 2021, the City adopted Ordinance No. 21-0-2842, which extended the Interim Urgency Ordinance No. 21-0-2841 for an additional ten (10) months and fifteen (15) days, with an expiration date of July 15, 2022.

SaRlMa@5_SGIR'FiC[•'i

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 pas- 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 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 Govenunent 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.
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.

Section 3. 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 I, the staff report accompanying this Interim Urgency Ordinance, and other evidence in the record, such fractional ownership in the City could threaten the health, -2-
80r85-0/2868011 vZ.dw

safety and welfare of the community through negative impacts that include, but are not limited to, removing full -tinge housing units from the market and replacing them with vacation or part- time 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.

Fused on the facts and findings set forth in Sections t through 3 of this Interim Urgency Ordinance. and notwithstanding any other ordinance or provision of the Bc%,crly IIiIIs Municipal Code. the City of Beverly I Ii11s hereby extends the following moratorium - A. Definitions. For the purposes of this moratorium, the ibilo►cing phrase has the meaning given herein.
"Fractional Ownership- shall mean shared ownership of real property.

Entitlement to ownership rights of real property, cnlitlement to use of real property. or possession of real property through any of the folIowing ntcans:
a. Direct ownership of the properiv.
b. Indirect ownership of the property through a membership, stake. interest, share, assoc ialion, or similar device in the owner of the property or a subsidiary or patent 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, assoc ialion or simitar 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 ofa ny real property in the Cily shall be prohibi Led if sue 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 I searing_ Any person with a fractional ownership in [lie 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 tinge -based occupancy restrictions as applied against the property with such fractional ownership. Any such application shall he in writing and shall be received by the Community Development Department. Any application as a result nf'an administrative citation shall be received by the Community Development Department within thirty (30) days after the date of the administrative citation.
-.3-
fin�BS-+��xi I.2firrxn t t �•_.dac

D. Notification for i-learing. I learings pursuant to this Ordinance shall be preceded by public notice by the following method:

Mailed Notices: The applicant shall mail notices providing, at a miturnum, 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 sucli hearing by the reviewing authority.

Mailed notices shall he sent to properties within a 300-foot radius, measured from the exterior boundaries of the property involved with the hearing. ?. Affidavit/Proof of Ma'tlin-,: The applicant shall submit an affidavit to the Community Development Department within live (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 Occupancy 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 mainlenance of the pre ipert y.

Section 5. Enforcement.

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

Section 6. CEOA Findinus.

The City Council hereby finds that it can he 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 environntentat impacts during the term cif the moratorium. In addition. the Ordinance consists of minor a]teralions in land use 11inRations artei do not result in any changes iit 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.
-�1-
BQ7ss4Hlp t'2668Q l 1 r?.doC

Section 7. 5everahility.
1 f 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 unenl'orceabhc by the final decision of ally court 0f"competent jurisdiction. such invalidity or unenforecability 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 liereby 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.
5ertiun 8. I;ffecliN a 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 01cci concurrent with the expiration of Interim Urgency Ordinance No. 21-0- 2841, as extended by Ordinance No 21-0-2542, at inidnight on July 15, 2022. and shall remain in effect for a period of one year. through and including, lttly 14, 2023, in accordance with Cali fomia Government Code Section 65859.
li
;i
r�
P
ii
-5-
H(1715AKHll'_Mgt) 11ti2 dux

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: June 14, 2022
Effective: July 15, 2022
L BOSS
Mayor of the City of Beverly Hills,
_ - - California

ATTEST -
I ,
(SEAL)

HUMA AHMED -
City CIA
APPROVED AS TO FORM: APPROVED AS TO CONTENT:

LAURENCE S. WIENER GEORG C VEZ
City Attorney City Manager
-6-
amssnaoicraani i.ee�

Appendix C — City of Carlsbad Timeshare ordinance

FRACTIONAL HOUSING
-C1-

1 2
3 4
5 6
7 8
9'
10'
11i
12 13
14''
15 16
17''
18 19
20 21
22 23
24'
25'.
26'
27 28
ORDINANCE NO. 9663

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA AMENDING TITLE 21, CHAPTERS 21.04 AND 21.42 OF

THE CARLSBAD MUNICIPAL CODE BY THE ADDITION OF SECTIONS

21.04.357 AND 21.42.010(10) TO DEFINE AND REGULATE THE
CONSTRUCTION OF TIME-SHARE PROJECTS.

The City Council of the City of Carlsbad, California does ordain as follows:

Section 1: That Title 21 of the Carlsbad Municipal code be amended by the addition of Section 21.04.357 to read as follows:

21.04.357 Time -Share Project: "Time -Share Project" means a project in which a purchaser receives a right in perpetuity for life, or for a term of years to the recurrent exclusive use or occupancy of a lot, parcel, unit or segment of real property annually or on some other periodic basis, for a period of time that has been, or will be, allotted from the use or occupancy periods onto which the project has been divided.

Section 2: That Title 21 of the Carlsbad Municipal Code be amended by the addition of Section 21.42.010(10) to read as follows:
(10) V-R, R-P, R-3, RD-M and R-T zones only:
(A) Time-share projects as defined by Section

21.04.357 of this code and subject to the
following regulations:
(i) A Conditional Use Permit shall be required
for all time-share projects. All projects
shall be subject to the development
standards and design criteria of Chapter

21.45 of this code, except that:

I. The City Council may reduce the
required resident parking down to one
parking space per unit.

II. The City Council may waive the storage
area requirements of Section

21.45.090(1). Any reduction in the
parking or storage requirements shall
be supported by a finding that the
reduction is necessary for the
development of the project and will not
adversely affect the neighborhood.
-2-

�i
•
•
i
(ii)
If a time-share project is proposed
2 with reduced standards, the applicant
shall provide a conversion plan showing
3 how the project can be altered to bring
it into conformance with the
4 development standards and design
criteria of the Planned Development
5 ordinance. A conversion plan shall be
approved as and be made a part of the
6 permit for the project.
7 (iii)
All proposals for time-share projects
shall be accompanied by a detailed
8 description of the methods proposed to
be employed to guarantee the future
9 adequacy, stability and continuity of a
satisfactory level of management and
10 maintenance. A management and
maintenance plan shall be approved as
11 and made a part of the permit for the
project.
12 m
(iv)
All units in a time-share project shall
La o
0 13
be time-share units except a permanent
a �
17 ,d
(v)
In addition to the four mandatory
18 findings required for the issuance of a
conditional use permit, under Section
19 21.42.020, the City Council shall find
that the time-share project is located
20 in reasonable proximity to an existing
resort or public recreational area and,
21 therefore, can financially and
geographically function as a successful
22 time-share project and that the project
will not be disruptive to existing or
23 future uses in,the surrounding
neighborhood.
24 (vi)
Time-share projects may be allowed in
25i
the P-C zone if specified in the Master
Plan for the area in which they will be
26 located and the land use designation
for the Master Plan area in which the
27 proposed time-share project will be
located is similar to the R-P, R-3,
28 RD-M or R-T zones.

2. J
1 (vii) All of the provisions of this section
2 shall apply to the conversion of an -
existing structure to a time-share
3 project.
4 (viii) All time-share projects shall be
processed in accordance with this
5 section except that subsequent to
Planning Commission review, the matter
6 shall be set for public hearing before
the City Council. The City Council may
7 approve, conditionally approve or deny
the project. The decision of the City
8 Council is final.
9 (ix) A subdivision map filed in accordance
with Title 20 of this code shall
10accompany any application for a
time-share project.
11 Section 3: The City Council hereby declares that it
12 °a would have passed this ordinance phrase by phrase, sentence by CO
W CO
0 13
J O
sentence, paragraph by paragraph and section by section, and does 14 0 o z '
o } >o hereby declare that the provisions of this ordinance are m�-aJ 15
LL LL; 16 severable and, if for any reason any sentence, paragraph, or wZod
z o^M section of this ordinance shall be held invalid, such decision '> 17
} shall not affect the validity of the remaining parts of this Y 18
U
ordinance.
19 EFFECTIVE DATE: This ordinance shall be effective
20 21� thirty days after its adoption, and the City Clerk shall certify 22 to the adoption of this ordinance and cause it to be published at 23 least once in the Carlsbad Journal within fifteen days after its adoption.
24 25
26 27
28 3.

l
INTRODUCED AND FIRST READ at a regular meeting of the
2 Carlsbad City Council held on the 4TH day of January , 3 198J., and thereafter
4 PASSED AND ADOPTED at a regular meeting of said City
5 6 Council held on the 18th day of January , 1983, by the 7 following vote, to wit:

AYES: Council. Meibers Casler, Leos, Kulchin, Chick and Prescott 8 NOES: None
9 ABSENT: None
10 11
12 MARY H. ASLER, Mayor
0 m ATTEST:

U' 0 13
J �
LL
d Q m
14 z �Zo ALETHA L. RAUTENKRANZ, City C r
o '' Q `� 15
m V � J
a (SEAL)
WZ �
a Q
18 19
20 21
22 23
24 25
26 27
28 .4

Appendix D — City of Carmel by the Sea Cease and Desist Order

FRACTIONAL HOUSING
-D1-

2310 East Ponderosa Drive - Suite 25
llmplavk�
Camarillo, California 93010-4747
voice 805.987.3468 - fax 805.482.9834
BURKE, WILLIAMS& SORENSEN, LLP www.bwslaw.com
April 7, 2022

VIA E-MAIL TO
PATRICK(a)-PACASO.COM and
ELLEN(c�PACASO.COM
0ii7[.7.7_17on- 11
Senior Legal Counsel
Pacaso, Inc.
2021 Fillmore St. Suite 183
San Francisco, CA 94115
Ellen Haberle, Director
Government & Industry Relations
Pacaso, Inc.
2021 Fillmore St. Suite 183
San Francisco, CA 94115
Cell No.: 805.377.3565
[email protected]
Re: Request to Immediately Cease and Desist Unlawful Operations Dear Mr. Abell and Ms. Haberle:

This law firm serves as City Attorney for the City of Carmel -by -the Sea, California ("City"). In that capacity, we are writing to advise Pacaso Inc. ("Pacaso") that Pacaso's current operations within the City are unlawful and must cease immediately. The City has been made aware of at least one property sold by Pacaso within the City at Dolores 7 SW 13th, Carmel by -the -Sea, CA 93921. The sale of this property constitutes the sale of a timeshare prohibited by the Carmel -by -the -Sea Municipal Code ("CMC") Section

17.28.010.

City Prohibition on Timeshare Uses
CMC section 17.28.010 provides that "[t]imeshare projects, programs and occupancies are prohibited uses within all of the zoning districts within the City." Timeshare projects, programs and occupancies are further defined in CMC Section 17.70.020:

Los Angeles — Inland Empire — Marin County — Oakland — Orange County — Palm Desert — San Diego — San Francisco — Silicon Valley — Ventura County

BURKE, WILLIAMS & SORENSEN, LLP
Patrick Abell
Ellen Haberle
Pacaso, Inc.

April 7, 2022

Page 2 ends

A "time-share program" is "[a]ny arrangement for a project whereby the use, occupancy, or possession of real property has been made subject to a time- share estate, use, or occupancy, whereby such use, occupancy, or possession circulates among purchasers of the time-share intervals according to a fixed or floating time schedule on a periodic basis for a specific period of time during any given year, but not necessarily for consecutive years." • A "time share estate" is defined as "[a] right of occupancy in a time-share project that is coupled with an estate in the real property.
• A "time-share use" is "a license or contractual or membership right of occupancy in a time-share project which is not coupled with an estate in the real property." A "time-share project" is "[a] project in which a purchaser receives the right in perpetuity, for life, or for a term of years, to the recurrent, exclusive use or occupancy of a lot, parcel, unit, or segment of real property, annually or on some other periodic basis, for a period of time that has been or will be allotted for the use or occupancy periods into which the project has been divided. • A "project" specifically includes "[a]ny proposal for a new or changed use." Pacaso's Business Involves the Sale and Management of Prohibited Timeshare Uses
Pacaso's website indicates that its business model involves sales of property held by an limited liability company in 1/8 ownership shares, with the associated right to exclusive use of the subject property by the owner of the share, with Pacaso managing among other things, the upkeep of the property and providing an app to arrange for periods of exclusive use by the share owners. Pacaso's website further states that each owner of a 1/8 share is entitled to 6 "general stays," booked at least 61 days in advance, which may range between 2 to 14 nights, and unlimited "short notice stays" booked less than 60 days in advance. However, maximum stay length is limited to 14 nights regardless of the method of booking. Owners of two shares have the option to book stays up to 28 nights.

Pacaso's business model meets the City's Ordinance's definition of a prohibited "timeshare program," because the ownership of the property through the LLC is an "arrangement for a project whereby the use, occupancy, or possession of real property

SU KF, WILLIAMS & SORENSEN, LLP
Patrick Abell
Ellen Haberle
Pacaso, Inc.

April 7, 2022

Page 3 ends

has been made subject to a time-share estate, use, or occupancy," and rights to periods of exclusive use are circulated among the owners of the shares, in specific intervals up to 14 nights per 1/8 share, "according to a ... floating schedule on a periodic basis for a specific period of time during any given year." Additionally, division of the property into fractionalized ownership under Pacaso's business model will create either a "time-share estate" or "time-share use" — either the owners of the shares of the LLC hold a "right of occupancy" and "an estate in the real property" which establishes a time-share estate, or if the LLC is deemed the sole holder of the "estate in the real property," then such owners have a "time-share use" because they will hold a right to determine and establish their rights of occupancy pursuant to their right to operate and control the LLC under the terms of any membership or operating agreements.

We are aware that Pacaso has asserted to other jurisdictions that the properties that they sell and manage are not timeshares, but rather "fractionalized ownerships." According to Pacaso, a Pacaso home is no different from any other single family residence. However, this is simply not true. Regardless of what Pacaso wants to calls its business model, the impact is the same — this type of commercially managed short-term vacation use has the same impacts on surrounding residential areas as short-term vacation rentals, which are generally prohibited by the City's municipal code. (See CIVIC Sections 17.08.040, 17.68.030; 17.28.040.) The frequent, rotating occupancy of the owners is functionally akin to short-term rentals, and the City's existing regulations on timeshare uses are specifically intended to minimize the impacts created by this type of use and occupancy of land. Similar prohibitions on short-term rotating occupancies have already found lawful under Ewing v. City of Carmel -by -the -Sea (1991) 234 Cal.App.3d 1579, which found that the City could lawfully prohibit short-term rental of residential property for transient occupancy in residential neighborhoods as an incompatible "commercial" use.

Finally, several significant policy reasons justify the City's prohibition against timeshares. The City's prohibitions on timeshares were first adopted in 1988 in order to preserve housing stock. The Housing Element of the City's General Plan includes Goal G3-2, which is to "[p]reserve existing residential units and encourage the development of new multifamily housing in the Commercial and R-4 Districts." Furthermore, Goal G34 specifically requires that the City "[p]rotect the stability of residential neighborhoods by promoting year-round occupancy and neighborhood enhancement." As part of this goal, the City has committed to "maintain and encourage the expansion of permanent residential housing stock," because the Housing Element notes that "[a] substantial percentage of the City's housing stock lies vacant much of the

BURKE, WILLIAMS & SORENSEN, LLP
Patrick Abell
Ellen Haberle
Pacaso, Inc.

April 7, 2022

Page 4 ends

year as second homes occupied for weekends, vacations or on a seasonable basis" which "has the effect of reducing the number of permanent, year-round residents in the City." To avoid depletion of residents and associated impacts on community, City services, Goal G3-4 of the City's Housing Element specifically requires the enforcement of the prohibitions on short-term, transient rentals and timeshares in residential dwellings.

In sum, conversion of any existing housing stock into timeshares or "fraction aIized ownerships" reduces the available supply of homes for occupation for full-time residency, and therefore reduces the affordability of housing in the City, based on basic laws of supply and demand.

Pacaso is Unlawfully Operating Without Required Business Licenses Pursuant to CIVIC section 5.04.020, it is unlawful for any person employed by Pacaso to commence or carry on any kind of business in the City without first procuring a business license and pay the applicable business license tax. (CIVIC section 5.04.020.) Pacaso does not possess a City business license, nor has it paid any business license tax to the City. As a result, Pacaso's operations within the City also are in conflict with the City's business license ordinance. However, we note that even if Pacaso obtains a business license, the business may not operate in the manner described above due to the prohibitions in the City's Municipal Code regarding timeshares.

Request to Cease Unlawful Operation
In conclusion, Pacaso's current operations within the City are unlawful and must cease immediately. The City requests that Pacaso cease all advertising and sale of fractional ownership of residential properties within the City. Failure to comply may result in enforcement. Any violation of City zoning prohibitions is subject to administrative citation and imposition of new fines for each day of unlawful operation pursuant to CIVIC Chapter 18.04. Furthermore, any violation of CIVIC section 17.28.010 prohibiting timeshare uses is a misdemeanor subject to criminal prosecution, punishable by a fine not exceeding $1,000 and imprisonment for a term not exceeding a period of six months. (CIVIC 1.16.010, 17.66.040.)
We are requesting your written response to this letter by April 21, 2022 which you may submit to me via email to bpierik(a)_bwslaw.com

BURKE, WILLIAMS & SORENSEN, LLP
Patrick Abell
Ellen Haberle
Pacaso, Inc.

April 7, 2022

Page 5 ends

Thank you for your cooperation.
u /
Brian A. Pierik
City Attorney
City of Carmel -by -the Sea
BAP:SAR/jc

Appendix E — City of Hermosa Beach Planning Commission Resolution

FRACTIONAL HOUSING
-E1-

RESOLUTION P.C. 22-07

A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF

HERMOSA BEACH RECOMMENDING CITY COUNCIL APPROVAL OF TEXT

AMENDMENTS TO THE CITY OF HERMOSA BEACH MUNICIPAL CODE
AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT

TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A

CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT.

The Planning Commission of the City of Hermosa Beach does hereby resolve as follows:

SECTION 1. Findings.

A. The Planning Commission held a duly noticed public hearing on April 19, 2022 to consider a text amendments to the City of Hermosa Beach Municipal Code, Title 17 (Zoning), as described in the proposed ordinance attached as Exhibit A.

B. The City of Hermosa Reach ("City") is a scenic beachfront city, known for its many diverse restaurants, local retailers and popular commercial areas like its downtown area and Pier Avenue.

C. Preserving the City's costal resource and the quality and character of the City has been a focal point of the City's land use planning for decades, and remains a primary focus in the City's current General Plan.

D. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy.

E. The City values and welcomes all visitors to the City and recognizes their contributions to the City's economy, but finds that in order to maintain the City's long term viability as a community where people not only come to visit, but also live, work and contribute to the long term betterment of the community through participation in the City's schools, local community groups, civic government and local serving businesses, the City must maintain a balance between residential land uses and visitor serving uses.

F. The City's existing housing stock is significantly impacted, with demand outweighing supply, resulting in extremely high housing prices as detailed in the accompanying staff report. A limited supply of suitable vacant land, exorbitantly high land costs, and limitations in the City's existing infrastructure, among other factors, have limited the construction of additional housing in the City.

G. According to the U.S. Census Bureau, the current median household income in the City is $136,702, while the estimated value of owner -occupied housing units from 2015-2019 was approximately $1,542,900 with current real estate listings suggesting that prices are increasing significantly, meaning that homes in the City are not affordable to the median household in the City.

H. The conversion of existing residential units to uses other than long-term residential use will further reduce the City's existing long-term housing supply, causing further imbalance between the demand for housing in the City and the existing supply, not only altering the character of the City's residential neighborhoods, but also presenting further challenges to the City's efforts to provide affordable housing within the community.

I. The City additionally has, for many years, worked to preserve its existing housing stock for long term residential use, both to maintain the character of its residential neighborhoods and prevent residential districts from becoming visitor and tourist serving districts, and to ensure that it would not be converted to uses other than long-term residential uses.

J. This high impact use associated with timeshares, combined with the frequent turnover and commercial management involved in timeshare properties is not consistent with the purpose and nature of residential districts in the City. Rather, they are commercial in nature, in that these timeshare uses are structured as a short- term, tourist oriented, visitor serving use of the subject properties. The use of properties as timeshares adds excessive noise and traffic to residential districts by using these properties for high impact tourist oriented uses more appropriately located in commercial districts of the City.

K. The use of residential properties for timeshare uses will further reduce the availability of housing stock for long-term residential use, and create a new demand for timeshare uses of residential properties.

L. This encroachment of tourist oriented, visitor serving uses in residential neighborhoods is likely to compromise the character of residential areas within the City, and further increase the costs for housing in the City, undermining the City's efforts to provide a balance of housing for all income levels in the City.

M. The City's authority to enact zoning ordinances is based on the powers accorded cities and counties under the State constitution to make and enforce police regulations. This police power grants the City broad authority to regulate the development and use of real property within its jurisdiction to promote the public welfare.

N. Pursuant to and in accordance with this authority, the Planning Commission desires to prohibit timeshare uses in residential areas, and certain commercial zones and to

update the language of the Zoning Code to provide consistency with the terminology used to define timeshare uses in State law. Further, the City desires to provide greater clarity as to the zones which timeshare uses are permitted as conditional uses, and the standards pursuant to which they will be reviewed in those zones.

O. On April 19, 2022, the Planning Commission held a duly -noticed public hearing and considered the staff report, recommendations by staff, and public testimony concerning the proposed ordinance.

SECTION 2. This ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines (the Guidelines), and the environmental regulations of the City. The City Council hereby finds that this ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in specified zones within the City pursuant to a conditional use permit, and prohibits them in all other zones, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment.

Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment.

SECTION 3. The Planning Commission finds that the proposed amendments to the Municipal Code to permit timeshares in specified zones within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City are consistent with the General Plan goals, policies and implementation programs as the Ordinance will continue to preserve the character of the City; will preserve the City's residential districts for residential uses; and will help to preserve the City's existing housing stock for long term residential uses, to avoid further exacerbating the existing impacts on the City's housing supply.

SECTION 4. Based on the entire record before the Planning Commission, and all written and oral evidence presented, the Planning Commission hereby finds that the proposed ordinance is consistent with the City's adopted General Plan and does not conflict with any of the General Plan's goals or policies.

SECTION 5. The Planning Commission hereby recommends that the City Council adopt the attached proposed ordinance entitled, "AN ORDINANCE OF THE CITY OF HERMOSA BEACH. AMENDING CHAPTER 17.40 (CONDITIONAL USE
PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION

17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL

ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING

THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA
ENVIRONMENTAL QUALITY ACT.

I HEREBY CERTIFY that the foregoing recommendation to the City Council was duly and regularly approved by the Planning Commission of the City of Hermosa Beach at a regular meeting of said Planning Commission held on April 19, 2022, by the following roll call vote:

VOTE:

AYES: 5 - Chair Pedersen, Vice Chair Izant, Commissioner Saemann, Commissioner Hoffman, and Commissioner Rice
NOES: None
ABSTAIN: None
ABSENT: None

CERTIFICATION
I hereby certify that the foregoing Resolution P.C. 22-07 is a true and complete record of the action taken by the Planning Commission of the City of Hermosa Beach, California, at its regular meeting of April 19, 2022.

Dave Pedersen, Chairperson
-7/),L'52
Date
ae�nnl -
Ang a Crespi, Secretary

Appendix F — County of Monterey Cease and Desist Order

FRACTIONAL HOUSING
-F1-

MONTEREY COUNTY

OFFICE OF THE COUNTY COUNSEL
168 WEST ALISAL STREET, 3RD FLOOR, SALINAS, CALIFORNIA 93901-2439 (831) 755-5045 FAX: (831) 755-5283
LESLIE J. GIRARD

COUNTY COUNSEL
June 24, 2022
Patrick Abell
Senior Legal Counsel
Pacaso, Inc.
2021 Fillmore St. Suite 183
San Francisco, CA 94115
patricka,]2acas o. com
Ellen Haberle, Director
Government & Industry Relations
Pacaso, Inc.
2021 Fillmore St. Suite 183
San Francisco, CA 94115
[email protected]
Sent via email
KELLY L. DONLON

ASSISTANT COUNTY COUNSEL
Re: Request to Immediately Cease and Desist Unlawful Operations Dear Mr. Abell and Ms. Haberle,
I write to bring your attention to the requirements of the Monterey County Codel with regard to Pacaso's operations. As detailed fully below, to the extent that Pacaso's advertisements or operations are occurring in zones within the unincorporated areas of Monterey County ("County") where timeshares are not allowed, Pacaso's operations are unlawful and must cease immediately. For Pacaso's operations in zones where timeshares are allowed under the Monterey County Code ("MCC"), Pacaso must apply for a Use Permit in the inland zone or Coastal Development Permit in the coastal zone as applicable.

Under Chapters 20.06 and 21.06 of the MCC the following definitions are relevant to Pacaso's operations:
- "Timeshare Estate" is defined as "a right of occupancy in a timeshare project which is coupled with an estate in the real property."
- "Timeshare Use" is defined as "a license or contractual or membership right of occupancy in a timeshare project which is not coupled with an estate in the real property."
- "Timeshare Project" is defined as "a development in which a purchaser receives the right 1 hlt2s:Hlibrary.municode.com/ca/monterey county/codes/code of ordinances http://www2 . co.monterey. ca.us/planning/dots/ordinances/Title2O/20_toc.htm

in perpetuity, for life, or for term of years, to the recurrent, exclusive use or occupancy of a lot, parcel, unit or segment of real property, annually or on some other periodic basis, for a period of time that has been or will be allotted from the use or occupancy periods into which the project has been divided. The definition of time share project includes a timeshare estate and a timeshare use."
Pacaso's website indicates that its business model involves sales of property held by limited liability companies in 1/8 ownership shares, with the associated right to exclusive use of the subject property by the owner of the share, with Pacaso managing among other things, the upkeep of the property and providing an app to arrange for periods of exclusive use by the share owners. Pacaso's website further states that each owner of a 1/8 share is entitled to 6 "general stays," booked at least 61 days in advance, which may range between 2 to 14 nights, and unlimited "short notice stays" booked less than 60 days in advance. However, maximum stay length is limited to 14 nights regardless of the method of booking. Owners of two shares have the option to book stays up to 28 nights.

Pacaso's business model clearly meets Monterey County's definitions of "Timeshare Estate" and "Timeshare Project", because Pacaso provides a right of occupancy which is coupled with an estate in real property. Specifically, individuals have a right to occupy/use the real property for a certain number of days per year, and they hold a fractional ownership interest in the real property.

Sections 20.64.110 and 21.64.110 of the MCC state that Timeshare Projects are only allowed in zones where a hotel, motel or similar visitor accommodation use would be permitted and in such a case a Use Permit or a Coastal Development Permit is required. Specifically, these zones include the following: High Density Residential, Mixed Use, Light Commercial, Heavy Commercial, Visitor Serving, and Coastal General Commercial. As such, in order for Pacaso to market and sell homes within these zoning districts, it first must apply with the County's Housing Community & Development department for a Use Permit or Coastal Development Permit depending on the prospective home's location.

Monterey County is aware of certain homes advertised on Pacaso's website that are located in the Carmel Highlands and the Del Monte Forest. Both of these areas are zoned Low Density Residential, Rural Density Residential or Medium Density Residential, and therefore Timeshare Projects are not allowed per the MCC. The County respectfully requests that Pacaso cease all advertising and sale of fractional ownership of residential properties within incorporated zones where Timeshare Projects are not allowed. The County also requests, if applicable, that Pacaso apply with Housing Community & Development for an appropriate land use entitlement in zones where Timeshare Projects are permitted. Failure to comply with the MCC may result in enforcement. Any violation of the MCC is subject to administrative citation and imposition of new fines for each day of unlawful operation pursuant to Chapter 1.22 of MCC. Furthermore, any violation of the MCC is a misdemeanor subject to criminal prosecution, punishable by a fine not exceeding $1,000 and imprisonment for a term not exceeding a period

of six months pursuant to Chapter 1.20 of the MCC.

I appreciate your prompt attention to this matter. Please feel free to contact me with any questions at donlonkl&co.monterey.ca.us or 831-755-5313.

Sincerely,
LESLIE J. GIRARD
County Counsel
By: 94L9 !�
Kelly LJ�Donlon
Assistant County Counsel
cc: Monterey County Board of Supervisors
Charles J. McKee, County Administrative Officer
Leslie J. Girard, County Counsel
Erik Lundquist, Director of Housing Community & Development

Appendix G —Village of North Haven Code Amendment

FRACTIONAL HOUSING
-G1-

North Haven adopted this legislation last Tuesday night.

PUBLIC NOTICE PLEASE TAKE NOTICE that the Board of Trustees of the Village of North Haven will hold a public hearing on the 18th day of January 2022, at 5:00 P.M., location to be determined based on current COVID-19 safety measures in place at the time of the meeting (please call 631-725-1378 for updates), to consider the adoption of a Local Law as follows:

LOCAL LAW NO. OF 2022 A LOCAL LAW ADDING TO
VILLAGE CODE CHAPTER 163 ENACTING ARTICLE XII
§ 163-96 BE IT ENACTED BY THE BOARD OF TRUSTEES
OF THE VILLAGE OF NORTH HAVEN AS FOLLOWS:

SECTION 1. THE ENACTMENT OF THE VILLAGE CODE
ARTICLE XI §163-96 §163-96 FRACTIONAL

OWNERSHIP, TIME-SHARING, OR INTERVAL USES

PROHIBITED
The creation fractional ownership, time-sharing, or interval projects are prohibited in single-family residences within the Village.

A. Findings and Purpose. An important function of local land use regulation is the establishment and protection of single-family residential districts in which tranquil, healthy, and safe neighborhood environments are maintained for
the quiet enjoyment of resident homeowners and their
families.

1. Fractional ownership, time-sharing, or interval
ownership projects have the same character as
commercial hotels, motels, lodges, and other commercial occupancy uses due to their transient nature and multiple short-term (less than six months annually) occupancies.

Such commercial or quasi -commercial like uses is
inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods.

2. The needs of transients are averse to the interests
sought to be protected and preserved in single-family
residential districts because commercial uses for
transients may sacrifice other values critical to residential neighborhoods.

3. The Village deems it necessary and appropriate to
protect the existence of single-family residences and the quiet and peace of the Village by preventing unwarranted commercialization from encroaching therein, including
commercialization caused by the misuse of single-family residences. Thus, the Village Board finds and determines that this section is necessary to protect the public health, safety, and welfare of the residents of the Village.

4. B. Prohibition of fractional ownership, time-sharing, or interval projects in single-family zoning districts.

The use of any property in any single-family zoning district as a fractional ownership, time-sharing, or interval project shall be prohibited. A fractional ownership, time-sharing, or interval project shall exist if the following features are found: Multiple owners: Ownership is divided amongst 3
or more unrelated property owners, either through direct ownership of the property or indirect ownership through a membership, stake, interest, share, association, or similar device that grants entitlement to ownership rights or the use or possession of a property for the purpose of interval occupancy.

1. Time-sharing or interval occupancy: Use, possession, or occupancy of the property is transient in nature based on an arrangement, schedule, plan, agreement, license, or any other means or scheme whereby an owner of the
property receives ownership rights or the right to use the property for a period of time less than six months.

2. Commercial purpose: Use of the property is commercial in nature based on an agreement, arrangement, or any
other means or scheme whereby the owners retain, hire,
or otherwise utilize a third -party individual or entity for a fee (service, management, etc.) to control, manage, or
facilitate scheduling the use or occupancy of the property.

3. C. Exceptions. This subsection shall not be deemed to preclude the creation of mortgages, liens, easements or other similar interests encumbering the residential
property as a whole to secure a loan or for any other
legitimate purposes.

D. Severability. If any section, subsection, sentence,
clause or phrase of this section is for any reason held to be invalid or unconstitutional by the decision of a court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this chapter.

E. Injunctive Relief. Any land use activity conducted
contrary to this chapter may be enjoined or restrained by injunction or otherwise abated in a manner provided by
law.

F. Violations and penalties. In addition to or as an
alternative to any penalty provided herein or by law, any person who violates the provisions of this chapter shall be guilty of a violation punishable by a fine not exceeding $500, or imprisonment for a period not to exceed six
months, or both, for conviction of a first offense; for conviction of a second offense, both of which were
committed within a period of five years, punishable by a fine not less than $750 nor more than $1,000, or
imprisonment for a period not to exceed six months, or
both; and upon conviction for a third or subsequent
offense, all of which were committed within a period of five years, punishable by a fine not less than $1,000 nor more than $2,500, or imprisonment for a period not to
exceed six months, or both. Each week's continued
violation shall constitute a separate additional violation.

SECTION 2. EFFECTIVE DATE. This Local Law shall take
effect immediately upon filing with the Secretary of State as provided by law. All persons in interest will be heard by the Board of Trustees at the public hearing to be held as aforesaid and may appear in person or by representative.

The Village Hall is accessible to handicapped persons.

Dated: January 6, 2022 BY ORDER OF THE BOARD OF
TRUSTEES OF THE VILLAGE OF NORTH HAVEN. BY:

Eileen Tuohy, Village Clerk/Treasurer

Appendix H — City of Palm Desert Ordinance

FRACTIONAL HOUSING
-H1-

1 ORDINANCE NO. 1378

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT,

CALIFORNIA, AMENDING PALM DESERT MUNICIPAL CODE, CHAPTER 25, MODIFYING SECTION 25.34.60 REGARDING TIME-SHARE PROJECTS CASE NO: ZOA 22-0001
WHEREAS, the Planning Commission of the City of Palm Desert, California, did on the 18th day of January 2022, hold a duly noticed public hearing to consider the request by the City of Palm Desert for approval of the above -noted, and adopted Resolution No. 2805, recommending that the City Council adopt the Zoning Ordinance Amendment (ZOA) for said projects regulating the time-share projects; and
WHEREAS, the Zoning Ordinance Amendment (ZOA) modifies the Palm Desert Municipal Code (PDMC) Section 25.34.60 (Time -Share Projects) and implements a requirement for time share uses; and
WHEREAS, the City Council of the City of Palm Desert, did on the 24th day of February 2022, hold a duly noticed public hearing to, the City Council opened the public hearing and approved staffs request to continue to the 24th of March 2022. On the 24th of March 2022, another continuance of the public hearing was granted to the 28th of April 2022. On the 28t" of April 222, the City Council considered the request by the City of Palm Desert for approval of a ZOA determined that the time-share process is consistent with the City's General Plan; and
WHEREAS, at said public hearing, upon hearing and considering all testimony and arguments, if any, of all interested persons desiring to be heard, said City Council did find the following facts and reasons exist to approve said request:

SECTION 1. Adoption of Recitals. The City Council hereby adopts the foregoing recitals as its findings in support of the following regulations and further finds that the following regulations are beneficial and appropriate to protect the health, safety, and welfare of the residents and businesses of Palm Desert within the City limits.

A. The City of Palm Desert, California ("City") is a municipal corporation, duly organized under the constitution and laws of the State of California; and B. The Planning and Zoning Law authorizes cities to establish by ordinance the regulations for land use and development.

SECTION 2. Amendment. The City Council of the City of Palm Desert, California, approve, and adopt the PDMC amendment to Section 25.34.60 (Time -Share Projects) as shown in Exhibit A, which is attached hereto and incorporated herewith.

SECTION 3. Severabilit . If any section, subsection, subdivision, paragraph, sentence, clause, or phrase in this ordinance or any part thereof is for any reason held to be

ORDINANCE NO. 1378
unconstitutional or invalid or ineffective by any court of competent jurisdiction, such decision shall not affect the validity or effectiveness of the remaining portions of this ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause, or phrase thereof irrespective of the fact that one (1) or more subsections, subdivisions, paragraphs, sentences, clauses, or phrases be declared unconstitutional, invalid, or ineffective.

SECTION 4. Publication. The City Clerk of the City of Palm Desert, California, is hereby directed to publish this ordinance in The Desert Sun, a newspaper of general circulation, published and circulated in the City of Palm Desert, California, and shall be in full force and in effect thirty (30) days after its adoption.

PASSED, APPROVED, AND ADOPTED by the City Council of the City of Palm Desert, California, at its regular meeting held on the 12th day of May 2022, by the following vote, to wit:

AYES: KELLY, QUINTANILLA AND HARNIK
NOES: JONATHAN
ABSENT: NESTANDE
ABSTAIN: NONE
J9i C. HA lK, WMAYOR
ATTEST:

IONY J. M q CLE K

OF PALM VESEFRTI CALIFORNIA
i
2 City of Palm Desert Document

ORDINANCE NO. 1378
"EXHIBIT A" '

ZONING ORDINANCE AMENDMENT
SECTION 1. Amendment to Palm Desert Municipal Code. Palm Desert Municipal Code section 25.34.060 is hereby amended as follows:

25.34.060 Time -Share Uses
A. Purpose. The purpose of the special use regulations for time-share uses is to establish special location and site development standards.

B. Definitions.

1. "Accommodation" means any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.160.

2. "Developer' means person, who at any point in time, owns, or has an option or contract to acquire eleven or more time-share interests for purposes of sale in the ordinary course of business if the time-share interests were acquired or are to be acquired from the original recipient of a public report for the time-share plan, or from a person who succeeded to the interest of the original recipient in eleven or more time-share interests in a time-share plan.

3. "Owner' means owner of a time-share interest.

4. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof.

5. "Time-share instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan.

6. "Time-share interest" means and includes either of the following:
(i) A "time-share estate," which is the right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, coupled with a freehold estate or an estate for years with a future interest in a time-share property or a specified portion thereof.
(ii) A "time-share use," which is the, right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-stLare plan, which right is neither coupled with a freehold interest, nor coupled with an estate for years with a future interest, in a time-share property.

7. "Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, sale, lease, deed, license, right to use agreement, or

ORDINANCE NO. 1378
by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years. "Timeshare Plan" does not include arrangements whereby multiple parties join in directly purchasing full ownership of an accommodation and thereafter agree upon arrangements for their shared use.

8. "Time-share property" means one or more accommodations subject to the same time-share instrument, together with any other property or rights to property appurtenant to those accommodations.

9. "Time-share use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan.

C. Permitted zones. A time-share use shall be permitted only in a planned residential zone, a general commercial zone, or a planned commercial resort zone. Any time- share use shall be developed in conjunction with a resort hotel having 500 or more rooms and an 18-hole golf course of not less than 6,400 yards, and then only if and when a conditional use permit has been obtained from the Commission in accordance with Section

25.72.050 (Conditional Use Permit) of this code.

D. Application submittal requirements. In addition to standard application submittal requirements, an applicant for a conditional use permit approval involving a time- share use shall submit in the application at least the following information:

1. Copies of documents and information required pursuant to Article 12.2 of the California Code of Regulations, Sections 2809.1, 2809.2, and 2809.3 wherein the requirements for a "properly completed" application for a final subdivision public report are enumerated, excluding those documents so enumerated which are subject to the approval of the City and therefore otherwise available to the City. In the event such documents and information have not been filed with the California Department of Real Estate at the time an applicant applies for a conditional use permit, the applicant shall furnish such documents and information upon the submission of such documents and information to the Department of Real Estate, but in no event later than the issuance of the conditional use permit.

2. In the event an existing condominium project is proposed to be converted to a whole or partial time-share use, a verified description or statement of the number and percentage of the current condominium owners desiring or consenting to the proposed conversion of some or all of the units to a time-share basis shall be submitted. Also, in such instance there shall be submitted to the Commission prior to or during the hearing process, a verified statement of the number and percentage of owners who have received notification, either personally or by receipted certified US mail.

3. In the case of a new mixed project (i.e., time-sharing condo miniumtrental), a description of the means proposed to be employed to disclose the number and location of all time-share accommodations within the time-share use shall be submitted.

ORDINANCE NO. 1378

4. Description of time periods, types of accommodations, and which accommodations are in the time-share program (if less than all), and the length of time each of the accommodations are committed to the time-share plan shall be submitted.

E. Requirements. Notwithstanding any other provisions of this chapter, the following requirements must be met by any time-share use in any permitted zone:

The time-share use must be composed of time-share interests.

2. All maintenance agreements and conditions, covenants, and restrictions must be approved by the City.

3. The minimum time-share interest exclusive occupancy period shall be for one week (seven days).

4. Developer of the time-share plan shall post a maintenance bond, letter of credit, or cash deposit to ensure the maintenance of any landscaping along the perimeter of the time-share use abutting any public right-of-way. The amount of the bond, letter of credit, or cash deposit shall be equal to 25 percent of the annual budget of the time-share use owner's association having the duty to maintain the exterior of the time-share property which is for such landscaping expenses. The bond, letter of credit, or cash deposit shall run to the City and shall remain in place for life of the time-share plan.

5. With respect to a time-share use, all interests created therein shall be subject to a public facilities impact mitigation fee of $150 per week share. With respect to each week share in a time-share use, a public facilities impact fee payable under this section shall be paid on the first day of the first calendar month following the sale and conveyance of such week share by the developer of a time-share plan to an individual consumer (excluding bulk sales from one developer to another, in which case the successor developer shall have the obligation to pay the public facilities impact fee described herein upon the sale and conveyance of a week share to a consumer). On the first day of each calendar month, or less frequently if required by the Council, a developer of a time-share plan shall also submit a written report to the City which specifies the number of week shares in the time-share plan which have been sold and conveyed in the preceding calendar month.

F. Minimum number of units. The minimum number of units in a time-share project shall be 50.

G. Development standards. Time-share uses shall be designed to conform to the standards for hotel developments in the event the time-share use is located in a planned commercial resort or general commercial zone. The time-share use must comply with all development standards of the zone in which it is located. With respect to time-share uses developed within a planned residential zone, the density of the time-share uses shall not exceed the density permitted in such zone for residential projects; with respect to time-share uses developed in a general commercial zone or a planned commercial resort zone, the density of the time-share uses shall not exceed the density permitted in such zone for general commercial or planned commercial projects. In determining the density of a time-share use, upon the request of an applicant, the Director shall have the authority to transfer the density permitted in other similarly zoned property owned by an applicant to the time-share use.

ORDINANCE NO. 1378
H. Violations, Enforcement and Civil Penalties

1. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.12 (General Penalty).

2. Any responsible person, including by not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is subject to administrative fines as set forth in Chapter 8.81 (Administrative Citations). Any person issued an administrative citation pursuant to this section shall for each separate violation be subject to: (1) an administrative fine in an amount not to exceed one thousand dollars ($1,000) for the first citation; (2) an administrative fine in an amount not to exceed three thousand dollars ($3,000) for a second citation issued for the same offense within a twelve-month period of the date of the first offense; and (3) a fine in an amount not to exceed five thousand dollars ($5,000).

3. Time-share use, and/or advertisement for time-share use, of an accommodation in violation of this section is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance and may be abated pursuant to Chapter

8.20 (Public Nuisances), Chapter 9.24 (Noise Control), and Chapter 9.25 (Multiple Responses to Loud or Unruly Parties, Gatherings or Other Similar Events).

4. Each day the violation of this chapter occurs shall constitute a separate offense.

5. The remedies under thissection are cumulative and in addition to any and all other remedies available at law and equity.
1 �_.� e _ �.� ss.. .,.,...

Appendix I — City of Palm Springs Cease and Desist Order

FRACTIONAL HOUSING
-11-

TTORNEYS AT LA
IMC-k
BEST & KRrE
dway, 15th Floor, San Di
00 � Fax: (619) 233-6118
December 6, 2021
Indian Wells
Riverside
(760) 568-2611
(951) 686-1450
Irvine

BEST GER
Sacramento
Jeffrey S. Ballinger
(619) 525-1343
[email protected]
VIA E-MAIL ELLEN(U7PACASO.COM
Ellen Haberle
Director, Government & Industry Relations
Pacaso.com
2021 Fillmore St. Suite 183
San Francisco, CA 94115
Re: Pacaso's Operations within the City of Palm Springs, California Dear Ms. Haberle:

As you know, this law firm serves as City Attorney for the City of Palm Springs, California.

In that capacity, we are writing to advise Pacaso.com that Pacaso's current operations within the City are unlawful and must cease immediately.

While I appreciate your recent efforts to meet with City officials and present Pacaso's position as to why the City's timeshare ordinance does not apply to Pacaso, as set forth more fully below, such a position it not legally tenable.

Pacaso is a company that holds itself out as a new way to own a second home. According to Pacaso's website ( https://www.pacaso.com/leam) , accessed earlier this year, Pacaso operates as follows:
"Co -ownership with Pacaso is the best way to buy and own a great second home.

From buying to closing here's how Pacaso works. First, tell us a little about yourself and what you are looking for in a second home. Then, start shopping. If a listing currently on Pacaso is not a fit, find one you love on any real estate site and share it with us. If the home is a match for Pacaso, we will partner with you to purchase up to half of the property in a private and professionally managed LLC uniquely designed for co -ownership. This LLC is referred to as the Pacaso Home LLC. On behalf of Pacaso, we line up financing for the LLC and close quickly. In parallel Pacaso remarkets remaining ownerships shares in the home to interested buyers. Buyers can purchase their desired amount of ownership from one -eighth 55575.18100\34590098.1

lyOak

BEST BEST & KMEGER

ATTORNEYS AT LAW
VIA E-MAIL [email protected]
Ellen Haberle
December 6, 2021

Page 2 ends

to one-half of the whole home. We enable qualified buyers to access funds in the LLC and finance up to half of their purchase. The financing relationship is directly between the LLC and the buyer. Pacaso signs closing paperwork on behalf of the LLC. In parallel buyer signs the LLC owner operating agreement to complete their purchase. Ownership is recorded in the owner's schedule section of the owner operating agreement. Following closing the collective owners own 100% ownership interest in the LLC. We transform the home with modern interior design and address any necessary repairs. Owners use the mobile app to book stays 2 days to 24 months in advance. Scheduling is easy and equitable based on the number of shares owned. From there we take care of everything, overseeing local property management, bill pay and platform technology, all from the mobile app. Owners simply show up, relax and enjoy their Pacaso."
The maximum length of a stay is based on shares owned. Owners of one share can enjoy a stay anywhere from 2 to 14 nights. A stay with a duration of 2-7 nights counts as one general stay, while a stay with a duration of 8-14 nights counts as 2 general stays. Owners of two shares have the option to book stays up to 28 nights.

Pacaso asserts that the properties that they sell and manage are not timeshares. According to Pacaso, a Pacaso home is no different from any other single family residence. Pacaso further asserts that Pacaso co -owners agree to several restrictions to help ensure that their use promotes the public interest, safety and comfort. For example, Pacaso states that there is a maximum of eight co -owners for any home, with only one family using the property at a time; co -owners are prohibited from having large events or parties that exceed the maximum occupancy of the home; co -owners must adhere to a 9pm to lam quiet hour policy; co -owners are prohibited from renting the home; and Pacaso encouraged homeowners to avoid parking on the street unless absolutely necessary. However, Pacaso does not provide any documentation or explanation of how these rules are enforced. The stays are reserved on an app, and while each co-owner is prohibited from renting the home as a short-term rental, they are permitted to allow other guests to stay there during their allotted days.

According to Pacaso, as of September, one single-family residence within Palm Springs has been fully sold, and Pacaso was marketing four others within the City.

City of Palm Springs Timeshare Ordinance
The City of Palm Springs regulates where timeshares can be located within the City and taxes occupancy of timeshares. Specifically, under the City's zoning ordinance, a timeshare 55575.18100\34590098.1

lyOak

BEST BEST & KMEGER

ATTORNEYS AT LAW
VIA E-MAIL [email protected]
Ellen Haberle
December 6, 2021

Page 3 ends

project is allowed only in those zoning districts where a hotel use would be permitted (i.e., R-3, R-4, R-4VP, C-B-D, C-1, C-lAA and C-2 zones, and G-R-5 and R-2 zones when fronting on a major or secondary thoroughfare). (Palm Springs Zoning Code, § 93.23.11(B).) Indeed, such uses are not allowed by right, but instead require a conditional use permit. Notably, timeshares are not permitted in single-family zones.
as
The City's Zoning Ordinance defines a "timeshare" as follows:
"...a "time-share project" is one in which time-share rights or entitlement to use or occupy any real property or portion thereof has been divided as defined in Section 3.24.020(7) of the Palm Springs Municipal Code into twelve (12) or more time periods of such rights or entitlement." (PSZC, § 93.23.11(A).) Section 3.24.020(7) defines timeshares, for purposes of taxation. It defines a "timeshare" "occupancy related to the situation wherein a purchaser receives the right or entitlement in perpetuity, for life, or for a term of years or other extended term, to the recurrent, exclusive use or occupancy of a lot, parcel, unit, room(s), hotel or portion thereof, or segment of real property, annually or on some other seasonable or periodic basis, for a period of time that has been or will be allotted from the use or occupancy periods into which the time-share project which is involved has been divided. The said right or entitlement to occupancy may attach in advance to a specific lot, parcel, unit, room(s), or portion of a hotel, or segment of real property, or may involve designation or selection of the same at a future time or times." Despite Pacaso's assertions to the contrary, Pacaso's business model meets the City's Ordinance's definition of a "timeshare". The City's definition, broken down into its constituent parts, applies to Pacaso.

Specifically, Pacaso's business model fits the following definition: "wherein a purchaser receives the right in perpetuity... or other extended term, to the recurrent, exclusive use or occupancy of a lot ... annually or on some other ... periodic basis, for a period of time that has been or will be allotted from the use or occupancy periods into which the time-share project which is involved has been divided."
Here, purchasers of a Pacaso LLC receive the right, in perpetuity or some other period defined in the LLC agreement, to the recurrent and exclusive use of the lot on which the residence 55575.18100\34590098.1

lyOak

BEST BEST & KMEGER

ATTORNEYS AT LAW
VIA E-MAIL [email protected]
Ellen Haberle
December 6, 2021

Page 4 ends

is located. The right to such use is on some periodic basis, for a period of time that is allotted under the LLC agreement.

Thus, by its terms, the City's ordinance applies to a use such as Pacaso's. As such, Pacaso's operations are not permitted in single family -zones within the City of Palm Springs, California.

In addition to the City's Zoning Ordinance, the City's business license ordinance requires any party that is transacting any business within the City to first procure a business license and pay the applicable business license tax. (Palm Springs Municipal Code, § 3.48.010.) Pacaso does not possess a City business license, nor has it paid any business license tax to the City. As a result, Pacaso's operations within the City also are in conflict with the City's business license ordinance.

Finally, several significant policy reasons justify the City's prohibition against timeshares in single-family zones. As the City's Housing Element of the General Plan states, "Palm Springs considers housing affordability to be a critical issue. The inability to afford housing leads to a number of undesirable situations, including the doubling up of families in a single home, overextension of a household's financial resources, premature deterioration of housing due to the high number of occupants, situations where children and seniors cannot afford to live near other family members because of the lack of affordable housing options, and in more extreme cases, homelessness." (City of Palm Springs General Plan, Housing Element, p. 3-19, (2014-2019).)
For every house that Pacaso sells to one of its limited liability corporations, to be used as a second, vacation home, that house becomes unavailable to a buyer or renter who could live there full time. This necessarily reduces the amount of housing stock that is available for full time residents in the City. The reduction in housing stock, in turn, feeds the affordability crisis, making the remaining houses within the City more costly.

Pacaso may claim that it only purchases and sells "luxury" homes, and therefore does not impact the availability of affordable housing. However, basic laws of supply and demand dictate that every home that is made unavailable to a full time resident, whether "luxury" or not, necessarily reduces the supply of homes, and therefore reduces the affordability of housing in the City.

One of the policies of the City's Housing Elements is to "protect established single-family residential neighborhoods from the transition, intensification, and encroachment of uses that 55575.18100\34590098.1

lyOak

BEST BEST & KMEGER

ATTORNEYS AT LAW
VIA E-MAIL [email protected]
Ellen Haberle
December 6, 2021

Page 5 ends

detract and/or change the character of the neighborhood." (Housing Element, HS1.8, p. 3-63.) Pacaso portrays its business model as "the modern way to buy and own a second home". However, Pacaso's "modern way" involves up to eight (8) investors and their guests rotating occupancy throughout the year. Although the LLC investors are not technically "renters", neighbors can expect the property to have many of the secondary impacts of vacation rentals, which are currently prohibited in many Coachella Valley cities and heavily regulated in Palm Springs. For example, house cleaners will have to come to the home in between each stay, and the home can turn over multiple times in a week. To a neighbor, that impact is very much the same as if the occupants were short-term vacation renters. In addition, the "co -owners" of the limited liability company really have no connection with one another, other than their investment in the company. All of this necessarily changes the character of a neighborhood, in contravention of the City's stated policy of preserving the single-family residential character of its neighborhoods.

Another Housing Element policy is to "preserve the supply of affordable rental housing in the community, including mobile home parks, publicly subsidized rental housing, and special needs housing." (Housing Element, HS2.9, p. 3-68.) As stated above, Pacaso's business model removes single-family homes from the housing market for individuals or families who wish to reside in Palm Springs and therefore reduces the supply of affordable rental housing for those individuals or families.

Therefore, Pacaso's current operations within the City are unlawful and must cease immediately.

Should you have any questions, please do not hesitate to contact me.

Sincerely,
9�e 75-:�,,,
Jeffrey S. Ballinger
of BEST BEST & KRIEGER LLP
City Attorney
City of Palm Springs
55575.18100\34590098.1

lyOak

BEST BEST & KMEGER

ATTORNEYS AT LAW
VIA E-MAIL [email protected]
Ellen Haberle
December 6, 2021

Page 6 ends

cc: Hon. Mayor and Councilmembers
Justin Clifton, City Manager
Teresa Gallavan, Asst. City Manager
Flinn Fagg, Development Services Director
55575.18100\34590098.1

Appendix J — Park City Notice of Amendment

FRACTIONAL HOUSING
-J1-

LAND USE REGULATIONS FOR FRACTIONAL OWNERSHIP AND USE OF

SINGLE-FAMILY DWELLING VACATION HOMES
In the past two years, companies have started to modernize the practice of co -ownership of a property under a fully managed LLC of Single -Family Dwellings. This model has been introduced to the Park City community, fractionalizing the ownership of vacation homes. Planning Staff is working on Land Management Code amendments to protect primary residential neighborhoods, while allowing fractional ownership of Single -Family Dwellings to those Zoning Districts that support secondary residences.

The proposed amendments prohibit fractional ownership of Single -Family Dwellings in primarily residential areas, including the Historic Residential Zoning Districts, Single -Family Zoning District, and Estate Zoning District. The amendments allow fractional ownership of Single -Family Dwellings in those Zoning Districts where Timeshares and Private Residence Clubs are allowed. (Please see the map below.) Originally, these amendments required a Conditional Use Permit, but Staff is evaluating regulation through a business license. Also, Staff is evaluating whether these could be allowed in all Historic Zoning Districts.

OPEN HOUSE
Please drop by on Tuesday, August 16, 2022, from 5:00 - 6:30 PM at the Park City Library, room 301 to meet with Staff and representatives from Pacaso to learn about the proposed Land Management Code amendments.

NEXT STEPS
On August 30, 2022, the Planning Commission and City Council are scheduled to conduct a joint work session on the proposed amendments. On October 6, 2022, the City Council is scheduled to conduct a public hearing on the proposed Land Management Code amendments. Pacaso's Public Affairs Manger committed to pause acquisitions until these amendments are complete.

Fractional Ownership
Park City limits
Zoning
Allowed
Not Allowed
Subdivisions
Nl J
a

.. ICJ �w -- rZ.[ ` +�•�.
if
6W
The proposed Land Management Code amendments include:

1. Definition of Single -Family Dwelling Fractional Ownership/Use o Not all residences with multiple owners or owned by business entities (such as family trusts, LLCs, or corporations without fraction use limitations) fall under the proposed definition.

2. Establish Single -Family Dwelling Fractional Ownership/Use in Zoning Districts where Timeshares and Private Residence Clubs are allowed.

3. Establish regulations regarding management and use of the fractional ownership o To protect primarily residential Zoning Districts, the proposed amendments recommend restricting fractional ownership to the same Zoning Districts outlined for Timeshare Units and Private Residential Clubs. If adopted by City Council, the following Zoning Districts will allow Single -Family Fractional Ownership/Use as a Conditional Use:
■ Recreation Commercial
■ General Commercial
■ Historic Commercial Business
■ Historic Recreation Commercial
■ Residential Development*
■ Residential Development - Medium Density
■ Regional Commercial Overlay
*If approved, Fractional Ownership/Use will be prohibited in subdivisions that have specifically prohibited nightly rentals, these include: April Mountain, Mellow Mountain Estates Subdivisions, Meadows Estates Subdivision Phases #1A and #1B, Fairway Meadows Subdivision, and Hidden Oaks at Deer Valley Phases 2 and 3.

4. Require an active Business License
o Requiring an active Business License helps the City monitor and ensure the fractional ownership of Single -Family Dwellings operates in compliance with the proposed amendments.

For more information, please see the following:

May 11, 2022: Planning Commission Work Session (Staff Report; Meeting Minutes) May 25, 2022: Planning Commission Review and Public Hearing (Staff Report; Meeting Audio) June 23, 2022: City Council Consideration and Public Hearing (Staff Report; Meeting Audio) August 30, 2022: Joint City Council and Planning Commission Work Session October 6, 2022: Upcoming City Council meeting and Public Hearing

Appendix K — City of Santa Cruz Ballot Initiative

FRACTIONAL HOUSING
-K1-

Ballot Title:

AN INITIATIVE MEASURE PROPOSING AN ORDINANCE ADDING CHAPTER 3.38 TO

THE SANTA CRUZ MUNICIPAL CODE TO ESTABLISH AN EMPTY HOMES TAX, A

PARCEL TAX ON VACANT RESIDENTIAL PROPERTY IN THE CITY OF SANTA CRUZ Summary:

If approved by the voters, this initiative would add Chapter 3.38 to the Santa Cruz Municipal Code, establishing a tax on residential parcels that are in use less than 120 days within a calendar year ("vacant parcels"). This would be a special tax, i.e., the City could use the revenue only for purposes specified in the measure. The tax would apply to various types of vacant properties, including single-family and multi -family residential parcels, condominiums, and townhomes.

The measure would require each owner of a residential parcel to submit an annual declaration to the City regarding the vacancy status of their property. The City would also be required to establish a process to annually audit properties declared "in use" to verify vacancy status.

Making a false declaration as to a property's vacancy status would constitute a misdemeanor.

Other violations of proposed Chapter 3.38 would be charged as infractions for the first two violations in a one-year period, and misdemeanors for three or more violations in the same time period.

The following annual tax rates would be established, subject to an annual CPI adjustment:
• $6,000 per vacant single-family residence;
• $6,000 per residential parcel with six or fewer units, where all units are in use less than 120 days per calendar year;
• $3,000 per vacant residential unit of a condominium or townhome; and • $3,000 per vacant residential unit on residential parcels with seven or more units.

An owner would be permitted to claim an exemption from the tax in a number of enumerated circumstances, including demonstrable hardship, as defined, where the owner has experienced a significant medical event, construction activities are active or pending, where the property is affected by natural disaster, and other circumstances as specified.

The use of tax revenue would be restricted to specified purposes, including financing affordable housing construction, purchasing existing units for the purpose of maintaining or converting them to affordable housing, providing restroom and hygiene services to the homeless, and paying the costs of administering the tax and for independent audits of the use of tax revenues.

An Empty Home Tax Oversight Committee would be established to oversee the administration of the tax and to make recommendations to the City Council for improvement of zoning and land use designations in the interest of creating affordable housing. The Committee would have up to nine members, including three members who must be renters, two low-income individuals, two with financial expertise, one UCSC student, and one unionized city employee. The measure would require the City Manager or designee to provide clerical assistance, administrative support and technical assistance, and to attend Committee meetings.

This measure would authorize the City to adopt rules and regulations for implementation and administration of the tax. A simple majority of voters is required to pass the measure.

RESOLUTION NO. NS-30,016
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CRUZ 1) ORDERING AN ELECTION, 2) REQUESTING COUNTY ELECTIONS CONDUCT THE ELECTION, 3) REQUESTING CONSOLIDATION WITH THE GENERAL ELECTION ON NOVEMBER 8, 2022 FOR THE PURPOSE OF ADDING TWO MEASURES, AND 4) DIRECTING THE

CITY ATTORNEY TO PREPARE AN IMPARTIAL ANALYSIS OF THE MEASURES WHEREAS, pursuant to Elections Code Section 10002, the governing body of any city or district may, by resolution, request the Board of Supervisors of the county to permit the county elections official to render specified services to the city relating to the conduct of an election; and WHEREAS, the resolution of the governing body of the city shall specify the services requested; and
WHEREAS, pursuant to Elections Code Section 10002, the city shall reimburse the county in full for the services performed upon presentation of a bill to the city; and WHEREAS, pursuant to Elections Code Section 10400, whenever two or more elections of any legislative or congressional district, public district, city, county, or other political subdivision are called to be held on the same day, in the same territory, or in territory that is in part the same, they may be consolidated upon the order of the governing body or bodies or officer or officers calling the elections; and
WHEREAS, pursuant to Elections Code Section 10400, such election for cities and special districts may be either completely or partially consolidated; and WHEREAS, pursuant to Elections Code Section 10403, whenever an election called by a district, city, or other political subdivision for the submission of any question, proposition, or office to be filled is to be consolidated with a statewide election, and the question, proposition, or office to be filled is to appear upon the same ballot as that provided for that statewide election, the district, city or other political subdivision shall, at least 88 days prior to the date of the election, file with the board of supervisors, and a copy with the elections official, a resolution of its governing board requesting the consolidation, and setting forth the exact form of any question, proposition, or office to be voted upon at the election, as it is to appear on the ballot. Upon such request, the Board of Supervisors may order the consolidation; and WHEREAS, pursuant to Elections Code Section 10418, if consolidated, the consolidated election shall be held and conducted, election boards appointed, voting precincts designated, candidates nominated, ballots printed, polls opened and closed, voter challenges determined, ballots counted and returned, returns canvassed, results declared, certificates of election issued, recounts conducted, election contests presented, and all other proceedings incidental to and connected with the election shall be regulated and done in accordance with the provisions of law regulating the statewide or special election, or the election held pursuant to Section 1302 or 1303, as applicable.

RESOLUTION NO. NS-30,016
WHEREAS, the resolution requesting the consolidation shall be adopted and filed at the same time as the adoption of the ordinance, resolution, or order calling the election; and WHEREAS, various district, county, state, and other political subdivision elections have been called to be held on November 8, 2022.

NOW THEREFORE, BE IT RESOLVED AND ORDERED that the City Council of the City of Santa Cruz hereby orders an election to be called and consolidated with any and all elections also called to be held on November 8, 2022 insofar as said elections are to be held in the same territory or in territory that is in part the same and requests the Board of Supervisors of the County of Santa Cruz to order such consolidation under Elections Code Sections 10401, 10403, and 10418.

BE IT FURTHER RESOLVED AND ORDERED that the City of Santa Cruz hereby requests the Board of Supervisors to permit the Santa Cruz County Elections Department to provide any and all services necessary for conducting the election and agrees to pay for said services, and
BE IT FURTHER RESOLVED AND ORDERED that the Santa Cruz County Elections Department shall conduct the election for the attached measures to be voted on at the November 8, 2022 election.

BE IT FURTHER RESOLVED AND ORDERED that the Santa Cruz County Elections Department is requested to print the attached measure text exactly as filed or indicated on the filed document in the County Voter Information Guide for the November 8, 2022 election. Cost of printing and distribution of the measure text will be paid for by the City.

Pursuant to its right, title, and authority under Section 3 of Article XI of the California Constitution and Sections 1415(a)(2) and 9255(b)(1) of the California Elections Code, the City Council hereby calls an election to be held in the City of Santa Cruz on Tuesday, November 8, 2022 for the purpose of submitting to the voters the following measures (and such other questions as the City Council may hereafter order to be presented to the voters):

Measure "" Empty Home Tax (see Exhibit A for full text) Shall the City of Santa Cruz establish an "Empty Home
Yes
Tax" on residences that are in use less than 120 days per calendar year in the amount of $6,000 per single-family residence, $6,000 per parcel with six or fewer units, and No
$3,000 per year on condominiums and residential units
on parcels with seven or more units, with revenue
allocated toward affordable housing projects, 15% for
administration, and 5% for homeless sanitation services, with administration overseen by a community oversight
committee?
K

RESOLUTION NO. NS-30,016
Measure " " Our Downtown, Our Future — General Plan and Downtown Plan Amendment (See Exhibit B for full text)
Shall the City of Santa Cruz General Plan and Downtown
Yes
Plan be amended to: (1) prohibit construction of the
proposed Downtown Library and Affordable Housing
Project and relocation of the Downtown Farmers Market;
(2) require development of affordable housing on certain No
Downtown City -owned surface parking lots; and (3)
designate the use of surplus parking district revenue for Downtown affordable housing development projects,
alternative transportation programs for downtown
workers and other non -parking related expenditures?
BE IT FURTHER RESOLVED, arguments for or against either measure will be accepted after the deadline set by the City Clerk.

BE IT FURTHER RESOLVED, the City Council hereby directs the City Clerk to transmit a copy of the measures to the City Attorney. The City Attorney shall prepare an impartial analysis of the measures showing the effect of the measures on the existing law and the operation of the measures. The impartial analysis shall be filed by the date set by the City Clerk for the filing of primary arguments.

BE IT FURTHER RESOLVED, if any section, subsection, sentence, clause, or phrase of this resolution is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this resolution. The City Council hereby declares that it would have passed this resolution, and each section, subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid or unconstitutional.

PASSED AND ADOPTED this 28 h day of June, 2022 by the following vote:

AYES: Councilmembers Kalantari-Johnson, Cummings, Brown, Meyers; Vice Mayor Watkins; Mayor Brunner.

NOES: None.

ABSENT: Councilmember Golder.

DISQUALIFIED: None. e--N
APPROVED:

Sonja Brunner, Mayor
ATTEST:
!7onnic Bush City C rk Administrator
3 RESOLUTION NO. NS-30,016

EXHIBIT A
AN INITIATIVE MEASURE PROPOSING AN ORDINANCE ADDING CHAPTER 3.38 TO

THE SANTA CRUZ MUNICIPAL CODE TO ESTABLISH AN EMPTY HOMES TAX, A

PARCEL TAX ON VACANT RESIDENTIAL PROPERTY IN THE CITY OF SANTA CRUZ BE IT ORDAINED by the people of the City of Santa Cruz:

Section 1. Title
This Ordinance may be referred to as the "City of Santa Cruz Empty Home Tax." Section 2. Purpose
The taxes imposed under this Ordinance are solely for the purpose of raising revenue necessary to support and fund the creation of affordable housing, and related programs, described below.

Because the proceeds of the parcel tax will be deposited into a special fund restricted for the services and programs specified in this Ordinance, the tax is a special tax.

Section 3. Code amendment
A new Chapter is hereby added to the City of Santa Cruz Municipal Code to read as follows:

Chapter 3.38 Empty Home Tax
Section 3.38.010 Definitions
Section 3.38.020 Determination of vacancy
Section 3.38.030 Audit authority and procedures
Section 3.38.040 Imposition of parcel tax on vacant property Section 3.38.050 Empty Home Tax Fund
Section 3.38.060 Use of Empty Home Tax Ordinance revenue Section 3.38.070 Empty Home Tax Oversight Committee
Section 3.38.080 Accountability
Section 3.38.090 False declarations
Section 3.38.100 Enforcement and penalties
Section 3.38.110 Appeal process
Section 3.38.120 Administrative regulations and delegation Section 3.38.010. Definitions.
"Affordable housing" means housing intended to operate as affordable to low, very low, and extremely low incomes as defined in Title 25 of the California Code of Regulations, Sections 6922 (Affordable Rent), 6924 (Affordable Housing Purchase) and 6932 (Income Limits) or their successor provisions by the California Department of Housing and Community Development, in perpetuity, and not subject to a single contract period, regardless of renewability. "Calendar year" refers to the twelve-month period from January 1 through December 31 pursuant to which the City will determine whether any parcel or unit is subject to the tax.

RESOLUTION NO. NS-30,016

EXHIBIT A
"City" means the City of Santa Cruz.
"Committee" means the Empty Home Tax Oversight Committee which reviews the annual independent fiscal audits and is responsible to issue an annual report on its findings regarding the special tax proceeds being spent for their authorized purposes. "Condominium" as defined in Section 4125 or 6542 of the Civil Code of the State of California. "County" means Santa Cruz County.
"CPI" means the San Francisco - Oakland - Hayward, CA Consumer Price Index for All Urban Consumers (CPI-U) 12-Month Percent Changes, All Items Index, Not Seasonally Adjusted, for October of the subject year.
"Financial expertise" means understanding generally accepted accounting principles and financial statements, experience preparing, auditing, analyzing, or evaluating financial statements, and internal controls and procedures for financial reporting. "In use" means physical occupancy of a residential parcel, dwelling unit, house, apartment, condominium, or townhome by a lawful inhabitant.
"LGBTQIA2S+" means Lesbian, Gay, Bisexual, Transgender, Queer and/or Questioning, Intersex, Asexual, Two -Spirit, and the countless affirmative ways in which people choose to self - identify.
"Long-term care facility" means any licensed facility as defined in California Health and Safety Code Chapter 2.4 Section 1418.
"Mixed -use" means a parcel where residential components must be the predominant use of the property with at least fifty (50) percent of the buildings' square footage or lot area to be allocated to residential uses and has at least one (1) residential unit and at least one (1) non-residential use. "Mobilehome park" shall mean an area of land in the city where five (5) or more mobilehome spaces are rented, or held out for rent, or made available for use, to accommodate mobilehomes used for human habitation.
"Multifamily residential parcel" means a parcel that is improved with more than one (1) residential unit.
"Nonresidential parcel" means a parcel that is improved with uses other than residential units. "Owner" means the owner or owners of the real property located within the City of Santa Cruz as of the last day of December of the calendar year pursuant to which a property is deemed to have been vacant or not vacant for the purposes of applying any exemptions defined in Section

3.38.040(G). The owner shall not be exempt from the tax unless each person or entity that owns a portion of the real property can separately demonstrate that they are entitled to an exemption. 2 RESOLUTION NO. NS-30,016

EXHIBIT A
"Parcel" shall mean a unit of real property in the City of Santa Cruz as shown on the most current official assessment roll of the Santa Cruz County Assessor. "Public parcel" means a parcel that is publicly owned and that is normally exempt from the levy of general ad valorem property taxes under California law, including but not limited to public streets, schools, parks, public drainage ways, public landscaping, wetlands, greenbelts, and public open space.
"Residential parcel" means a parcel that is improved with one (1) or more residential units. "Residential unit" means a building or structure, or portion thereof, designed for or occupied exclusively by one (1) household, including unrelated persons who live together and maintain a common household.
"Single -Family residential parcel" means a parcel which is improved with only one (1) residential unit.
"Tax" or "City of Santa Cruz Empty Home Tax" means the special tax authorized by this Chapter. "Taxable property" means a parcel of real property excluding public, undeveloped, non-residential and mobilehome parks, within the City.
"Townhome" means a single-family dwelling unit constructed in a group of three (3) or more attached units in which each unit extends from the foundation to roof and with a yard or public way on not less than two (2) sides.
"Undeveloped parcel" means a parcel, regardless of zoning or other land use designation, upon which no permanent improvements are constructed or placed. "Vacant" means in use for less than one hundred and twenty (120) days within a calendar year.

Section 3.38.020. Determination of vacancy.

A. For the purposes of this Chapter, a taxable property, shall be deemed "vacant" and subject to the tax imposed by Section 3.38.040 below if the parcel is any of the following:

1. A single-family residential parcel that is in use less than one hundred and twenty (120) days during a calendar year.

2. A condominium or townhome unit under separate ownership that is in useless than one hundred and twenty (120) days during a calendar year.

3. A multifamily residential parcel, including mixed -use, with six (6) Residential Units or less where all units are in use less than one hundred and twenty (120) days during a calendar year, assessed on a per parcel basis. 3 RESOLUTION NO. NS-30,016

EXHIBIT A

4. A multifamily residential parcel, including mixed -use, with seven (7) or more Residential Units where any unit is in use less than one hundred and twenty (120) days during a calendar year, assessed on a per unit basis.

B. The vacancy status of a taxable property shall be determined by an annual declaration of the owner, their agent, or a representative authorized to declare on their behalf.

1. The City shall establish a process for annual declaration of vacancy status for a taxable property, that shall include the following components. a. A website or online portal which explains the Tax and allows declaration of vacancy status.
b. A paper declaration form and instructions to be mailed to owners no later than December 31 of the calendar year for which the Tax is being imposed using the name and address found on the Santa Cruz County Secured Tax Roll.

C. A method to claim exemption from the Tax pursuant to Section 3.38.040(G) of this Chapter. Any taxable property deemed exempt from the Tax shall not be required to submit an annual declaration of vacancy status.

2. The owner or their agent or representative shall declare vacancy status no later than April 15 of the year following the calendar year for which the Tax is being imposed.

Section 3.38.030. Audit authority and procedures
A. The City shall establish a process to annually audit taxable properties declared "in use" as defined in this Chapter to verify the declaration of vacancy status. The process shall include the following components:

1. A registered owner may be required to provide information at any time and for a period of up to three (3) years after the applicable calendar year respecting:
a. the property;
b. the identity and address of the registered owner;
C. the status of the property; and
d. the nature of the occupancy of the property.

2. If audited, the owner or their agent or representative shall be required to submit documentation or evidence as required by separate ordinance or regulation adopted by the City Council by resolution in support of their vacancy status declaration. 4 RESOLUTION NO. NS-30,016

EXHIBIT A
B. Not more than once annually, the City may examine and perform an audit to review the requested documentation or evidence submitted by an owner to substantiate their vacancy declaration status to ensure compliance with Section 3.38.020. Audits may be performed:

1. any time the City believes an owner is making a false declaration of vacancy status;

2. when there is a pending ownership change; and

3. at appropriate intervals as determined by the City.

Section 3.38.040. Imposition of parcel tax on vacant property.

A. A special tax in the amounts set forth below is hereby imposed on every taxable property within the City determined pursuant to Section 3.38.020, except as exempted, as described below in Section 3.38.040(G).

B. The Tax constitutes a debt owed by the owner of each taxable property to the City.

C. The County shall levy and collect the Tax on each taxable property in the City for which the owner receives a separate ad valorem property tax bill, at the same time and manner, and subject to the same penalties and procedures as ad valorem property taxes collected by the County except as otherwise set forth in this Ordinance.

D. The Tax shall be imposed on the ad valorem property tax bill for the fiscal year that begins July 1 following the end of the calendar year in which the taxable property was vacant.

The special tax shall first be imposed no sooner than the ad valorem property tax bill for fiscal year 2024-2025 for taxable properties that were vacant in the previous calendar year.

E. Tax Rates.

1. The tax rates for each taxable property type shall be as set forth in the table below.

The City shall be responsible for assigning a tax rate for each parcel. The City shall not lower the rates or adopt further categories of exemption without voter approval.

Taxable Property Type
Annual Tax Rate
Residential parcel with six (6) or fewer units
$6,000.00 per vacant parcel
Condominium or townhome under separate
$3,000.00 per vacant residential unit
ownership
Residential unit on parcel with seven (7) or
$3,000.00 per vacant residential unit
more units

2. For residential parcels with one to six (1-6) units, the parcel is not vacant if any unit on the parcel is "in use" as defined in this Chapter. A condominium or townhome under separate ownership is treated as a separate unit, and if not "in

RESOLUTION NO. NS-30,016

EXHIBIT A
use", is subject to the tax regardless of the status of any other unit on the same parcel, lot or that is part of the same development. For residential parcels with seven (7) or more units, the vacancy status of each unit is assessed individually for the purposes of this Chapter, and if it is not "in use", it is subject to the tax regardless of the status of any other unit on the same parcel or that is part of the same development.

3. On January 1 of the year after the tax in this Chapter is enacted, and every January 1 thereafter, the City shall adjust the tax rates in Section 3.38.040(E) to account for the rate of inflation by the lesser of the CPI for the prior year or two (2) percent, except that in the event of a negative CPI no adjustment shall be made, rounded to the nearest one dollar ($1). The incremental change shall be added to the associated tax rate for that year.

F. Real property otherwise wholly exempt from ad valorem tax by state law shall also be exempted from the tax imposed by this Chapter.

G. Claimed Exemptions.

1. A taxable property owner may claim an exemption from the tax imposed by this Chapter in any of the circumstances specified in this Section. The following exemptions shall be granted when such exemption has been properly claimed by the taxable property owner and when the grounds for such exemption have been fully verified:
a. An owner, for any period of time during the relevant calendar year, experienced a significant medical event that kept the owner from engaging in their normal work or business activities for at least thirty (30) days. b. A taxable property that is vacant due to a demonstrable hardship that is unrelated to the owner's personal finances. The following circumstances constitute a "demonstrable hardship":
1) The subject taxable property was, for at least one hundred and eighty (180) days during the relevant calendar year, subject to a lis pendens, or similar court order, giving notice of a conflict regarding title or ownership interests, pursuant to any pending lawsuit, probate action, condemnation action or other action or proceeding filed with any court.
2) The owner, for at least sixty (60) days during the relevant calendar year, was serving in the military and deployed in another state or overseas.
3) The then owner died at some time during the relevant calendar year.

RESOLUTION NO. NS-30,016

EXHIBIT A
4) The owner inherited the taxable property during the relevant calendar year or in the immediately preceding calendar year.

C. The subject taxable property is under active construction. To qualify for this exemption, an owner must keep the building permit or permits active.

The "active construction" exemption applies if the owner held, for at least fifty (50) days during the relevant calendar year, a valid and active building permit for the taxable property.
d. An owner of taxable property for which an active building permit application is being processed by the City. This "building permit application" exemption applies if during or previous to the relevant calendar year, the owner submitted a building permit application to the City and the total number of days during which the application was pending plus any number of days after the application was approved but before the end of the relevant calendar year was at least fifty (50) days. e. An owner of a taxable property which is included in a substantially complete application for planning approvals that has not yet received approval. An owner of a taxable property for which a project with development entitlements has been approved but needing time for completion may apply for and receive a one-time three-year exemption.

The "substantially complete application for planning approvals" exemption applies if the owner held a notice from the City stating that an application for planning approvals with respect to the subject taxable property was complete and such application remained pending for at least fifty (50) days during the relevant calendar year. After an application for planning approvals is approved for the subject taxable property, the owner may apply for an administrative one-time three-year exemption, exempting the subject taxable property from being deemed vacant for the calendar year during which the application for planning approvals was approved and for the following two calendar years. Exemption expires upon issuance of certificate of occupancy.
f. An owner of taxable property who demonstrates to the satisfaction of the City Planning Department that the taxable property is not habitable for at least one hundred and twenty (120) days during the calendar year, due to being affected by natural disaster or environmental hazard. g. An owner placed in a long-term care facility or that has moved permanently into a family member or friend's home to receive care will receive a one- time three-year exemption from the tax which includes the calendar year the owner was placed in long -term -care outside of the taxable property. h. Taxable property registered under the Santa Cruz Short Term Rental Ordinance.
7 RESOLUTION NO. NS-30,016

EXHIBIT A
i. One hundred (100) percent of the legal interest in the taxable property is transferred within the relevant calendar year.

2. Pursuant to Section 3.38.020(B) of this Chapter, the City shall establish the procedures and guidelines for owners to apply for, and grant, the exemptions identified in this Section as part of the declaration process. owners who claim an exemption may be required to submit information annually to substantiate their continuing qualification for an exemption.

3. The City Council may, by ordinance, provide supplemental definitions for the exemptions in this Section and for the administration of the exemptions.

Section 3.38.050. Empty Home Tax Fund.

The "Empty Home Tax Fund" ("Fund") is hereby created as a special revenue fund. Proceeds from the Santa Cruz Empty Home Tax, including penalties and interest earned on such proceeds, shall be deposited into the Fund and used only for the purposes listed in Section 3.38.060.

Section 3.38.060. Use of Empty Home Tax Ordinance revenue.

Monies deposited in the Empty Home Tax Fund shall be used solely for those purposes identified in this Section.

A. Monies in the Fund may be used to finance the construction of affordable housing as defined in this Chapter.

B. Monies in the Fund may be used to purchase existing housing units for the purposes of maintaining or converting them to affordable housing as defined in this Chapter.

C. A residential unit is considered affordable housing if it falls under any of the following restrictions:

1. public housing owned by the City, County, State, or Federal government, subject to internal legal restrictions on affordability consistent with affordable housing as defined in the Chapter;

2. privately owned housing with a transferrable affordability restriction applied on the deed consistent with affordable housing as defined in the Chapter;

3. housing under an easement contract owned by any government agency stipulating its usability only for affordable housing as defined in this Chapter; or

4. housing owned by a nonprofit affordable housing provider with internal bylaws that do not include a fixed contract term of affordability, and with a reasonable expectation of long-term affordability protections consistent with affordable housing as defined in the Chapter.

RESOLUTION NO. NS-30,016

EXHIBIT A
D. Up to five (5) percent of the revenue deposited into the Fund in any single year may be used to provide sanitation, bathroom, and hygiene services for the unhoused community in the City.

E. Monies in the Fund may be used to pay the costs of an independent third -party audit of the use of monies in the Fund.

F. Monies in the Fund may be used to pay for the costs of administering the Tax, regardless of how or by what entity those administrative services are provided. No more than fifteen (15) percent of the revenue deposited into the Fund in any single year may be used to pay for such administrative costs, except that revenue used to pay for the costs of the Empty Home Tax Fund Oversight Committee established by Section 3.38.070 shall not count toward the fifteen (15) percent. Notwithstanding the foregoing, the City shall be reimbursed for its administrative costs of establishing the program for collecting the tax, whose costs shall be confirmed by a third -party auditor. Administrative costs include, but are not limited to:
the costs to the City associated with monitoring and enforcing compliance with this Chapter;

2. the costs to the City associated with developing ordinances and regulations to implement this Chapter;

3. the costs to the City associated with the operations of the Empty Home Tax Fund Oversight Committee established by Section 3.38.070; and

4. the costs to the City associated with collecting the tax.

Section 3.38.070. Empty Home Tax Oversight Committee.

A. The Empty Home Tax Oversight Committee is hereby established for community oversight of the Tax established by this Chapter, and to make recommendations to the City to improve zoning and land use designations to better support the creation of affordable housing as defined by this Chapter.

B. The Committee shall meet at least one (1) time per calendar year and more frequently as needed. The first meeting of the Committee each year shall be held within three (3) months of the release of the annual audit. A majority of Committee members may request in writing that the City Council approve the Committee meeting more than once per year.

C. The Committee shall review relevant financial and operational reports, including enforcement and compliance data, related to the expenditures. The Committee shall publish an annual report that shall be posted on a dedicated page of the City of Santa Cruz website regarding how and to what extent the City has implemented this Chapter.

Additionally, the Committee may obtain or prepare and publish reports regarding the following:
0 RESOLUTION NO. NS-30,016

EXHIBIT A

1. recommendations from the Committee for consideration by the City Council on how to prioritize the allocation of funds in accordance with the requirements of this Chapter, including for supporting the provision of affordable housing to households qualifying at least low-income households (those at fifty (50) percent Average Median Income or below); and

2. information, if available, concerning the impacts of programs funded by the Empty Home Tax in the City.

D. The Committee shall appoint a member as liaison to communicate with the City Manager and City.

E. The Committee shall consist of nine (9) members who are all residents of the City. No fewer than three (3) members must be renters. No fewer than two (2) members must be in the low, very low or extremely low income category but do not have to be renters. No fewer than two (2) representatives must have financial expertise. No fewer than one (1) member shall be a currently enrolled student at the Santa Cruz campus of the University of California at the time of appointment. No fewer than one (1) member must be a city worker who is an active member of a union bargaining unit during their tenure on the Committee. Members may fulfill more than one (1) of these criteria for the purposes of meeting these requirements. The City will hold an open application period for all seats similar to the process for other Advisory Bodies. Members of the Committee shall be appointed by the City pursuant to Section 2.40 of the City of Santa Cruz Municipal Code.

Members of the Committee shall receive no salary for serving.

F. Members shall serve four (4) year terms, as provided for in Santa Cruz Municipal Code Section 2.40.011(c). No member shall serve more than two (2) consecutive four (4) year terms. Of the initial members of the Committee, three (3) appointments shall be for one- year terms, three (3) appointments shall serve for two-year terms, and three (3) appointments shall be for three-year terms. Thereafter, all terms shall be for four (4) years.

All terms of members shall begin as of the date that nine (9) members have been appointed, which is when the Committee may begin its work. All future terms shall begin and end on that same day and month of subsequent years.

G, A quorum of the Committee shall never be fewer than five (5) members and if seats are not filled due lack of applicants, work may begin with five (5) members and a quorum will consist of three (3) members.

H. A member may be removed for cause by a majority vote of the City Council. Absence from three (3) consecutive regular meetings, or four (4) non-consecutive regular meetings during a single fiscal year, may constitute cause for removal from the Committee. In addition, any cause for removal may be voted on by the Committee and if a majority votes to recommend removal, it shall be referred to the City Council for a final vote on removal of the member from the Committee. If the City Council fails to appoint a Committee member following a vacancy within three months (3) of the vacancy, the Committee may appoint an interim Committee member by a majority vote. 10 RESOLUTION NO. NS-30,016

EXHIBIT A
I. The City Manager or designee shall provide clerical assistance, administrative support and technical assistance to the Committee and shall be present at the Committee meetings.

J. The Committee may hold at least one (1) meeting per year at a location outside of City Hall but within the City of Santa Cruz.

K. The Committee may convene community meetings to solicit community testimony and other input to build trust between the community, neighborhoods and the City, and to address other similar and relevant subjects as determined by the Committee within its jurisdiction.

L. The Committee may invite subject matter experts and individuals to provide informational presentations, including but not limited to representatives from faith -based groups, non- profit affordable housing developers, land use experts, unhoused community advocates, renters' rights groups, land trusts, youth groups, LGBTQIA2S+ advocates, veterans, racial equity experts, and other members of the community.

M. The Committee may establish by a majority vote, bylaws, working groups and sub- committees.

N. Committee members shall be provided and shall attend training on the following:

1. basic principles of Robert's Rules of Order and meeting procedures; and

2. the legal requirements of California's Political Reform Act (Cal. Gov. Code section 81000, et seq.), Santa Cruz's Conflict of Interest Code (Resolution No. NS-18,483 - 2/14/89), California's Brown Act (Cal. Gov. Code section 54950, et seq.), and California's Public Records Act (Cal. Gov. Code section 6250, et seq.) and diversity, equity and inclusion.

Section 3.38.080. Accountability.

In accordance with the requirements of California Government Code Sections 50075.1 and 50075.3, the following accountability measures, among others, shall apply to the tax:

A. A separate, special account, referred to as the Empty Home Tax Fund, shall be created, into which the proceeds of the Tax must be deposited.

B. The specific purposes of the Tax are for provision of affordable housing and for the other purposes set forth in Section 3.38.060 of this Chapter. The proceeds of the tax shall be applied only to these specific purposes.

C. The Committee established by Section 3.38.070 shall perform the oversight functions listed in that Section to ensure that the revenue from the tax is spent solely for the purposes listed in Section 3.38.060.
11 RESOLUTION NO. NS-30,016

EXHIBIT A
D. An independent third -party auditor shall perform regular audits at least annually to ensure accountability and proper disbursement of all revenue collected by the City from the Tax imposed by this Chapter, in accordance with the objectives stated herein and in compliance with provisions of California law.

3.38.090. False declarations.

Any person required to make, render, sign or verify any report under the provisions of this Chapter, who makes any false or fraudulent declaration, with intent to defeat or evade the determination of an amount due and required to be paid hereunder, is guilty of a misdemeanor, and upon conviction thereof shall be punishable by a fine of not more than five hundred (500.00) dollars or by imprisonment in the county jail for a period of not more than six (6) months, or by both such fine and imprisonment.

3.38.100. Enforcement and penalties.

A. Except as provided in Section 3.38.090, a violation of any of the provisions of this Chapter shall constitute an infraction for the first two (2) violations of this Chapter in a one-year period, which shall be punishable by a fine in a bail established by the City Council by resolution. Each person or entity in violation of this Chapter may be charged with a separate offense for each and every day during any portion of which any violation of any provision of this Chapter is committed, continued or permitted by such person or entity and shall, upon conviction, be punished accordingly. Three (3) violations within a one- year period shall constitute a misdemeanor, which shall be punishable by a fine of one thousand (1,000.00) dollars and/or by imprisonment in the county jail for a period of not more than six (6) months.

B. In addition to any other remedy provided by this code, this Chapter may be enforced by injunction issued by the superior court upon a suit brought by the City of Santa Cruz, or upon a suit brought by any aggrieved party. Pursuant to Section 4.04.020, as part of a civil action filed to enforce provisions of this chapter, a court may assess a maximum civil penalty of two thousand five hundred (2,500.00) dollars per violation of this chapter for each day during which any person commits, continues, allows or maintains a violation of any provision of this chapter.

C. This Chapter is enacted for the significant public benefit of promoting public health, safety and welfare to minimize any adverse impact on the community due to vacant residential units exacerbating the housing affordability crisis and to increase the affordable housing stock for the lowest income levels in the City. Therefore, if a private attorney general plaintiff successfully brings an action to enforce this Chapter against any offenders of this Chapter, it is the desire and intent of the city of Santa Cruz that the successful plaintiff be able to recover its reasonable attorneys' fees under Code of Civil Procedure Section 1021.5, or any similar private attorney general successor statute.

D. Repeated violations of this Chapter constitute a public nuisance which may be enjoined under all applicable law, including, but not limited to, Municipal Code Section 4.04.020 and Code of Civil Procedure Section 731. Therefore, pursuant to Municipal Code Sections

4.25.010 and 4.25.020, the prevailing party to an action or proceeding to enjoin a public 12 RESOLUTION NO. NS-30,016

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nuisance arising from violations of this Chapter shall recover the amount of its reasonable attorneys' fees.

E. If the owner of a taxable property previously declared "in use" cannot provide requested required documentation to substantiate that status, the taxable property will be considered to be "vacant", and excluding a successful appeal pursuant to Section 3.38.110 of this Chapter, be subject to the Tax and any associated penalties. Additionally, the owner of the taxable property shall be subject to all of the following:
a. immediate audit of the declaration of vacancy status for the three (3) preceding calendar years, except; if the tax has not yet been enacted for the preceding three (3) calendar years, the declaration of vacancy status shall be audited for all preceding calendar years in which the tax was applied; if the current majority interest property owner has not owned the taxable property for the entirety of the audit period defined above, the audit will be constrained to only the time period the current owner held a majority interest in the taxable property; if one hundred (100) percent of the legal interest in the taxable property was transferred within the preceding three (3) calendar years, the declaration of vacancy status shall be audited only back to the calendar year immediately following the transfer; b. ongoing audit of the declaration of vacancy status for the two (2) following calendar years; and
C. pursuant to Santa Cruz Municipal Code Chapter 4.26, any additional administrative costs associated with audits required due to an owner being unable to provide required documentation to substantiate vacancy status shall be recovered from the owner directly. Monies recovered through this provision shall be deposited in the Empty Home Tax Fund.

F. The City may take any other action permitted by law to ensure compliance with this Chapter and other City ordinances subject to its administration, including, but not limited to, general municipal code enforcement procedures in Santa Cruz Municipal Code Title 4.

G. The remedies provided herein shall be cumulative and not exclusive. No remedy provided in this Chapter shall be deemed to be a prerequisite to the taking of any other action provided for herein.

Section 3.38.110. Appeal process.

A. Request for Hearing. Following an adverse decision after an audit pursuant to Section

3.38.030 or the imposition of the tax pursuant to Section 3.38.040 an owner may, within twenty (20) days of notification of an adverse decision of an audit or receiving their ad valorem tax bill, file a petition and request an appeal hearing before a hearing officer as defined in Section 4.22 of the Santa Cruz Municipal Code. Upon such request, the City Manager shall randomly appoint an independent hearing officer from a panel of at least five (5) previously identified hearing officers.
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B. Pre -Hearing Procedure. Prior to the hearing, the hearing officer may receive supplemental materials and evidence from the petitioner and the City. As soon as practical, the hearing officer shall set a deadline to receive any supplemental materials and evidence and shall set a hearing date.

C. Hearing Procedure. Formal rules of evidence shall not apply to the conduct of the hearing and decisions shall be made on the preponderance of the evidence standard. The hearing officer shall have the authority and discretion to permit examination of witnesses. Any party to a hearing may be assisted by a representative, including an attorney.

D. Decision Following Hearing. As soon as practical following the hearing, the hearing officer shall issue a written decision regarding the vacancy status of the subject taxable property. At the discretion of the hearing officer, the decision may, but is not required to, include findings of fact. The hearing officer's decision shall be considered final on the day it is executed by the hearing officer.

E. Further Action. After the hearing officer issues a final decision, any party may seek further appropriate relief from the superior court. Any person whose complaint, claim, or petition may be resolved by employing the administrative remedies provided in Section 3.38.110 (A-D) must exhaust those remedies before filing any suit for refund, rebate, exemption, cancellation, amendment, adjustment, or other codification of the tax.

Section 3.38.120. Administrative regulations and delegation.

A. The City is authorized to adopt rules and regulations consistent with this Chapter as needed to implement this Chapter, and to develop all related forms and/or other materials and take other steps as needed to implement this Chapter and make such interpretations of this Chapter as they may consider necessary to achieve the purposes of this Chapter.

B. The City Manager may delegate any authority within the City Manager's discretion pursuant to this Chapter as the City Manager deems reasonably necessary.

Section 4. Severability.

If any section or portion of this Ordinance is found to be invalid by a court of competent jurisdiction, such finding shall not affect the validity of the remainder of the Ordinance, which shall continue in full force and effect, and to that extent, the provisions of this Ordinance are severable.

Section 5. California Environmental Quality Act requirements.

The City hereby determines that this Ordinance is not in -and -of -itself a "project" pursuant to the California Environmental Quality Act, Public Resources Code section 21000 et seq., including without limitation CEQA Guidelines 15378(b)(4) and 15061(b)(3), as it can be seen with certainty that there is no possibility that the adoption of the ordinance itself may have a significant effect on the environment. To the extent that special tax revenues generated by the Ordinance may in the future be used to fund the construction of capital improvements, the Ordinance may assist in the financing of future "projects" that will be subject to environmental review pursuant to CEQA at the "earliest feasible time" prior to "approval" consistent with CEQA Guidelines Sections 15004 14 RESOLUTION NO. NS-30,016

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and 15352.

Section 6. Approval; effective date.

This Ordinance, and all the provisions thereof, shall become effective only upon affirmative passage by a fifty (50) percent plus one (1) majority vote of the voters voting on the Ordinance.

This Ordinance shall be considered adopted on the date that the City declares the results of the election at which it was voted upon and shall be effective ten (10) days thereafter.

Section 7. Council amendments.

This Ordinance may only be amended by a vote of the people if the amendment would result in the special tax being imposed, extended, decreased or increased in a manner not authorized by this Ordinance as originally approved by the voters. The City Council of the City of Santa Cruz is hereby authorized to amend Chapter 3.38 of the Santa Cruz Municipal Code as adopted by this Ordinance in any manner that does not decrease or increase the tax rates, or otherwise constitute a tax increase for which voter approval is required by Article XIII C of the California Constitution. 15 RESOLUTION NO. NS-30,016

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The full text of the Measure is as follows:

The People of the City of Santa Cruz do hereby ordain as follows:

Section 1. Purposes
The purposes of this Measure are to establish policies:
(1) to address the City's housing crisis by prioritizing development of affordable housing on specified City -owned properties in Downtown Santa Cruz; (2) to maintain the Downtown Farmers' Market and Downtown Library, important community institutions, at their current locations;
(3) to prevent the construction of a multi -level parking garage Downtown that transportation consultants to the City have concluded is unnecessary. The garage would contribute to increased greenhouse gas emissions.
(4) to prioritize the expenditure of surplus parking revenue for:
(a) promoting development of affordable housing Downtown, (b) supplementing 2016 Bond Measure S funding to renovate and modernize the Downtown Library,
(c) making improvements to the public space hosting the Downtown Farmers' Market; and (d) providing funding for transportation demand management programs that reduce vehicle trips and make more parking available to visitors.

This measure further directs City officials to make any further conforming changes to the General Plan, Downtown Plan, Zoning Ordinance, and/or Local Coastal Program that are necessary and appropriate to comply with this Measure and State law.

Section 2. Findings
The people of City of Santa Cruz find and declare:

1. Action is needed to maintain Downtown as a place where a broad diversity of people can meet their needs in a Complete Neighborhood.

The Santa Cruz 2030 General Plan explicitly values "Complete Neighborhoods." These are neighborhoods where people can live, work, access goods and services, recreate, learn, and

2. 3.

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socialize. Complete Neighborhoods include housing for a diversity of income levels. The General Plan adds to the definition of Complete Neighborhoods: "Residents need access to parks, open space, and other places where they can relax and socialize." Planning for a Downtown that includes affordable housing prioritized on City -owned underutilized property, an improved Downtown Farmers' Market and event space, and a renovated and modernized Downtown Library at its historic location across from City Hall will enhance Downtown as a Complete Neighborhood. The experience of cities across the world is that Complete Neighborhoods reduce demand for auto transportation and parking.

Housing Affordability Is a Pressing Need.

A. According to the National Low Income Housing Coalition report (2019), Santa Cruz is the least affordable small city in the US. The limited supply of housing and especially affordable housing relative to demand causes stress and disruption of our community.

B. In Downtown locations where parking demand can be met, conversion of specified City - owned surface parking lots for development of affordable multi -family dwellings can add at least twice as many and potentially three times as many affordable housing units as currently proposed for City Lot 4, the current site of the Downtown Farmers' Market on Cedar Street, including 120 to 200 units on Lot 7, a City -owned lot on Front Street, and additional units on other City parking lots specified for affordable housing development in this Measure. Public parking continuing on the ground levels of these and other structures can meet localized parking demand.

C. The Housing Crisis Act of 2019 ("SB 330") calls for the expansion of residential development opportunities throughout the City, including opportunities for affordable housing development. Consistent with this State law, this Measure prioritizes affordable housing development on certain designated City -owned parcels that are now used as surface parking lots.

Farmers' Market Open Space is a Community Priority.

A. As more housing is developed Downtown, the need for public space for residents becomes more acute. As the City's General Plan provision calling for Complete Neighborhoods states, "Residents need access to parks, open space, and other places where they can relax and socialize."
B. Retaining the Downtown Farmers' Market where it has been for over two decades, at 119 Lincoln Street on the City -owned parcel known as Lot 4, will further the policies and goals of the City's General Plan that provides for "establishing a sense of place and walkability of the City," and of the Downtown Plan that provides that: "Open spaces within downtown Santa Cruz should have value and meaning; they should be carefully located where people want to be and in locations that take advantage of the unique resources, heritage, and traditions of the community." The proposed move of the Downtown Farmers' Market from its current location to the smaller Lot 7 on traffic -congested Front St. at Cathcart St. or another location would inhibit adherence to these policies and achievement of these goals, 2 RESOLUTION NO. NS-30,016

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and is inconsistent with the Downtown Plan.

4. The Downtown Library, thoroughly modernized at its current location, can serve the public well and enhance the Civic Center.

A. Measure S, passed in 2016, provides bond funds for the Santa Cruz Libraries Facilities Financing Authority to "modernize, upgrade and repair local libraries in Santa Cruz [and other locations] — replace failing roofs, outdated bathrooms, electrical systems/ structurally damaged facilities; support growing use by children, seniors, veterans and others; expand access to modern technology; and construct/ expand facilities where necessary." B. City consultants Jayson Architecture have proposed plans to use a portion of the City's share of Measure S bond funds to thoroughly renovate the existing Downtown Library to create a 21'-century facility with new plumbing, electrical, HVAC, shelving, carpeting, lighting, and elevators, and adjacent handicapped and other parking. The proposal includes study rooms, a teen space, and a greatly increased children's area and large community room, both with outdoor patios.

C. Creating a state-of-the-art Downtown Library at its present site builds on the 117-year tradition of having the Library in the city's Civic Center.

5. Parking competes with and reduces opportunities for affordable housing.

A. Parking competes with housing for space. According to Urban Planning Partners, reporting to the Santa Cruz City Planning Commission on January 7, 2021, the space required to park two cars (including circulation space) is equivalent to the space required for a two -bedroom housing unit.

B. Parking competes with affordable housing for City funds. Tens of millions of dollars saved from not building a new garage can be used to support development of affordable housing Downtown.

C. Based on parking supply/demand projections and financial considerations, professional parking consultants have advised the City that a new parking garage is unnecessary.

NelsonlNygaard's "Economics of Parking: Santa Cruz Strategic Parking Plan" (2019), produced for the City of Santa Cruz, states, "The most fiscally prudent approach to accommodating additional demand: Modernize parking management and better align parking prices to the cost of building and maintaining the system." This report further states that "In aggregate almost thirty percent of off-street parking in the Downtown remains empty even at the peak of the peak times.... Oversupplying parking in a space -constrained area like a downtown can fragment the built environment, creating a less desirable place to work, live, visit, and walk around."

6. The City's Climate Action Goals can be advanced by this Measure.

A. Prioritizing a public space for the Downtown Farmers' Market on Lot 4, Cedar St., will

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permit the preservation of40 Heritage trees and preserve the parcel for possible future development as a public space, park, or commons, thereby advancing the City's Climate Action Goals, rather than undermining them.

B. Expansion of auto infrastructure undermines the ability of the City to reduce automobile dependency, the largest local contributor to global warming. The City failed to achieve its Climate Action Plan (2012) goal of reducing vehicle trips within town by 10% by 2020.

C. Increasing the City's supply of affordable and market -rate housing can enable more workers to live close to their jobs in Downtown Santa Cruz, reducing vehicle miles traveled.

D. Prioritizing Lot 4 for the Downtown Farmers' Market and other fairs and public events will allow use of 2016 Measure S Bond funds to renovate and modernize the Downtown Library at its existing location, thereby reducing the production of greenhouse gases required for the construction of a new library as part of a mixed -use project on Lot 4. As the 2021 winners of the prestigious Pritzker Architecture Prize assert: "Never demolish, never remove — always add, transform and reuse."

7. Surplus parking revenue can support Downtown as a Complete Neighborhood.

The City can avoid building a new garage by following consultant recommendations to make better use of existing parking resources. Savings from not building a garage can be invested in affordable housing and improvements to the Downtown Library and Downtown Farmers' Market infrastructure, as well as incentives for workers Downtown to commute by means other than single -occupant autos.

Section 3. Defmitions
As used in this measure:
"Affordable housi " means residential dwelling units which are affordable to extremely low, very low, low, median, or moderate income households as defined by the Affordable Housing Provisions of the Santa Cruz Municipal Code (Chapter 24.16), or by any federal or state housing program and are subject to rental, sale, or resale provisions to maintain affordability. "Downtown Plan" means the City of Santa Cruz Downtown Plan (September 1991) As Amended through January 28, 2020 and the date of approval of this measure by the voters of the City of Santa Cruz.
"General Plan" means the City of Santa Cruz 2030 General Plan, as amended through the date of approval of this Measure by the voters of the City of Santa Cruz. "Lot 4" means the City -owned parcel at 119 Lincoln Street on the east side of Cedar Street between Lincoln and Cathcart Streets (APN 005-141-21), as shown on EXHIBIT B. "Measure" means this Initiative measure, including its statement of reasons and full text. 4 RESOLUTION NO. NS-30,016

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"SB 330" means the Housing Crisis Act of 2019, as approved by the Governor on October 9, 2019 and subsequently codified in the California Government Code. "Sumlus parking revenue" means revenue determined by the City Council to be in excess of what is required in order to pr-evide and maintain, improve or expand existing parking facilities or create new parking facilities in_e-f-the Downtown Parking District and deteffnined by the City Geifieil "ZoninL - Code" means Title 24, Zoning, of the Santa Cruz Municipal Code.

Section 4. General Plan Amendments
A. The voters hereby amend the City of Santa Cruz 2030 General Plan, Chapter 5 (Mobility), to add the following new General Plan Policy (addition in underline text):

M1.5.7 Prioritize. in a manner consistent with State law, the expenditure of surplus parking revenue from the Downtown Parking District that is in o o of funds needed to FeN4de and -maintain for use in: 1) supporting the development of affordable housing for people who work Downtown; 2) establishing transportation demand management programs for people who work Downtown, including free transit passes; 3) supporting two Complete Neighborhoods projects — ' renovation and modernization of the Santa Cruz Public Libraries' Downtown Branch at 224 Church Street and improvements to Lot 4, to enhance the use of the space for public gatherings and recreation, including the Downtown Farmers' Market.

B. The voters hereby amend the City of Santa Cruz 2030 General Plan, Chapter 4, Land Use, to add the following new General Plan Policy LU3.7.2 under existing Policy LU3.7 as shown below (additions in underline text):

RESIDENTIAL USES
LU3.7 Encourage higher -intensity residential uses and maximum densities in accordance with the General Plan Land Use designations. Cf. LU4.1.

LU3.7.1 Allow and encourage development that meets the high end of the General Plan Land Use designation density unless constraints associated with site characteristics and zoning development standards require a lower density. Cf. LU 1.3
LU3.7.2 Require, to the maximum extent feasible, that certain designated parcels situated within the Cite of Santa Cruz Downtown Plan area, as shown in EXHIBIT A, and with the APNs as shown. that are City -owned parcels as of the date the voters approve this Measure, shall be developed with permanently affordable housing, with parking permissible on the ground level and not permissible on floors above the ground level. and public park space permissible, where appropriate. For Lots 14 and 16 libM facilities and library -associated functions shall also be permissible on floors above the ground level. This Policy shall apply notwithstanding any subsequent sale or transfer of any City -owned parcels to private__parties after the date the voters

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approve this Measure.

C. The voters hereby amend the City of Santa Cruz 2030 General Plan, Chapter 4, Land Use, to add the following new General Plan Policy LU1.1.6 under existing Policy LULL as shown below (additions in underline text):

LU L 1.6 Recognize as a policy prioritythat the City -owned parcel at 119 Lincoln Street known as Lot 4 APN 005-141-21 is the Rreferred long-term location of the Downtown Farmers' Market as well as other fairs and public events, with other ground -level uses incompatible with this priority strongly discouraged. This policy priority shall specifically not preclude the development of affordable housing and associated uses on Lot 4 above the ground level. Parking and other uses not associated with affordable housing, prohibited in any development on Lot 4 on floors above ground level.

D. The voters hereby amend the City of Santa Cruz 2030 General Plan, Chapter 4, Land Use, to add the following new General Plan Policy LU1.1.7 under existing Policy LULL as shown below (additions in underline text):

LUL 1.7 Reco Mize as a policy prioritythat the current location of the Santa Cruz Public Libraries' Downtown Branch at 224 Church Street is the preferred long, -term location of this important community institution, with other uses incompatible with this priority strongly discouraged.

Section 5. Downtown Plan Amendments
A. The voters hereby amend the Downtown Plan, Chapter 1, Introduction, Executive Summary, pp. 10-11, to amend text as shown below (additions in underline text, deletions in st-Fikethreugh text):
[continued on next page]

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Downtown Plan
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Reinforcing the Pedestrian -Oriented Environment
Downtown Santa Cruz should be a place where pedestrians feel comfortable throughout the day and nighttime hours. Great pedestrian places are those that always feel full and active, with people promenading, window shopping or watching other people, people sitting in cafes with friends, people passing by on bicycles, or people enjoying a 7 RESOLUTION NO. NS-30,016

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spontaneous street performance. The public spaces and streets of downtown Santa Cruz must be appropriately scaled to ensure that a comfortable pedestrian environment is created. As the major open space within the downtown, streets should be designed to respond to the cyclical nature and needs of the community. The ability to have larger pedestrian spaces when they are needed and more intimate and active places at other times will give the streets a life and character of their own. For instance, an annual parade or festival may warrant the temporary closure of all of Pacific Avenue to automobiles; whereas a weeMy fafmef's market eould be aeeenunedated on a paftieular- street segment ., . Similarly, traffic could be closed on other streets within the downtown (e.g., Cooper Street between Pacific and Front or Front Street between Water and River Streets) for special events.

B. The Downtown Plan, Chapter 1, Introduction, Executive Summary, p. 14 is amended as shown below (additions in underline text):

Housing Feasibility and Affordability
A comprehensive housing implementation strategy should be developed by the City to establish a feasible program for the creation of market -rate and affordable housing, including developer incentives, land write -downs, public participation in financing, parking reductions, etc. The Downtown Plan does not recommend the imposition of exactions on commercial developers for the creation of residential development. However, the Downtown Plan requires, to the extent feasible that certain designated parcels situated within the Ci of Santa Cruz Downtown Plan area as shown in Exhibit A. and with the APNs as shown that are City -owned Parcels as of the date the voters approve this Measure, shall be developed with permanently affordable housing— with arking- permissable on the ground level and not permissible on floors above the ground level, and public park space permissible, where appropriate.

C. The Downtown Plan, Chapter 3, Land Use Plan, The Cedar Street Village Corridor, p. 29, is amended as follows (additions in underline text):

The land use plan and the standards and guidelines strive to preserve and enhance the informal "village" qualities of the Cedar Street Corridor. Unlike the Pacific Avenue district, permitted ground -level uses include office in addition to retail, and residential uses are allowed at the ground level along the east -west streets and Center Street. No strict "build -to" lines are established, and the height of development is purposely stepped down to a maximum of 35 feet, or three floors.

The land use plan further strives to preserve ad uate space for the Downtown Farmers' Market on Lot 4, the City -owned parkin, lot at 119 Lincoln Street, the east side of Cedar Street between Lincoln and Cathcart Streets APN 005-141-21 .

D. The Downtown Plan, Chapter 4, Development Standards and Guidelines, Additional Regulations — Upper Floor Uses, p. 44, is amended as follows:
(2) Multi -family Housing. Development projects containing up to 60 units in size are principally permitted uses. Residential uses shall incorporate sound attenuation space planning designs and construction materials and methods such that noise from nearby

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commercial activities do not unduly disturb occupants of new dwelling units.

Residential development exceeding 60 units will be considered with a Special Use Permit if it can be demonstrated that such a development includes a mixture of unit types (e.g., variety of unit sizes) that will be attractive to a wide range of potential residents. Single -Room Occupancy projects require approval of an AUP and are subject to 24.12.1000 et seq. Single -Room Occupancy projects exceeding 60 units require approval of City Council. For properties east of Front Street between Soquel Avenue and Laurel Street, housing is a priority use and shall be at least 60% of the total floor area of the project. This requirement does not apply to properties within 75 feet of Laurel Street or Soquel Avenue. Parking shall be a prohibited use above the round floor of any future development of the City -owned parcels referenced in Policy LU3.7.2 and shown in EXHIBIT A_ thereto, where upper level affordable housing development is prioritized.

E. The Downtown Plan, Chapter 6, Streetscape and Open Space Plan, Pacific Avenue:

Cathcart to Lincoln, p. 105, first paragraph, is amended as follows (additions in underline text, deletions in str-ikethfough text):

Pacific Avenue: Cathcart to Lincoln
The segment of Pacific Avenue between Cathcart and Lincoln Streets has a right-of- way width of approximately 80 feet. The area is characterized by a significant number of vacant parcels resulting from the earthquake. These sites include the Ford's Department Store property at Cathcart and Pacific, Plaza and Logos Books, and the Good Times and Gularte properties on the east side of Pacific Avenue. In spite of this devastation, the area is also characterized by several strong destinations including the Del Mar Theater, the Plaza Books Annex, and the Cat `n' Canary clothing store the w oeMy & Fme--'s market on the Ford's property. Redevelopment efforts are fairly advanced in the area, with three approved projects: two retail/residential developments on the Gularte and Good Times sites, and a retail/office development that will replace Logos Books.

F. The Downtown Plan, Chapter 6, Streetscape and Open Space Plan, Pacific Avenue:

Cathcart to Lincoln, p. 106, second paragraph, is amended as follows (deletions in stfikedffetigh text):

The redevelopment of the Ford's and Plaza Books site will be critical to the achievement of a strong pedestrian environment in this area. The Plan recommends the consolidation of these two properties for the creation of a major retail anchor that could reinforce this portion of the downtown as a strong retailing destination. At the corner of Cathcart and Pacific, a setback of approximately 800 square feet is proposed as an entry plaza and cafe for this anchor use, to activate the street and to create a strong gateway to the downtown. Major storefront displays within the retail development would also serve to enliven the street and build off the creative windows across the street at Cat'n Canary. The nlafl also r-eeenunends that "s segment eftho Z

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G. The Downtown Plan, Chapter 7, Implementation and Management Strategy, Downtown Management Strategy, p. 130, is amended to delete text as follows (deletions in str-ikethr,augh text):
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Section 6. Implementation
A. Effective Date. Upon the effective date of the approval of this Measure by the voters of the City of Santa Cruz, the provisions of Section 4 of the Measure concerning parcels that do not lie within the Coastal Zone are hereby inserted into the City of Santa Cruz General Plan, and the provisions of Section 5 of the Measure are hereby inserted into the City of Santa Cruz Downtown Plan; except that if the four amendments of the mandatory elements of the General Plan permitted by state law for any given calendar year have already been utilized in the year in which the Measure becomes effective, this General Plan amendment shall be the first amendment inserted into the City of Santa Cruz General Plan on January 1 of the next year. At such time as the provisions of Section 4 of the Measure are inserted into the City of Santa Cruz General Plan, and the provisions of Section 5 of the Measure are inserted into the City of Santa Cruz Downtown Plan, any provisions of the City of Santa Cruz Zoning Code, as reflected in the Zoning Code itself or in the City of Santa Cruz Zoning Map, that are inconsistent with the provisions of Section 4 and/or Section 5 of this Measure shall not be enforced. The exception to the effective date is the Measure's application to parcels within the Coastal Zone. Parcels within the Coastal Zone require a Local Coastal Program amendment. The City Council is directed to submit an amended Local Coastal Program to the Coastal Commission within 6 months of voter approval, incorporating the provisions of Section 4 of this Measure. If the Coastal Commission denies the amendment, this Measure's application to parcels within the Coastal Zone will be void. If the Coastal Commission requires a modification of the amendment, the City Council will have 4 months to approve the modification or withdraw the amendment. For parcels within the Coastal Zone, the provisions of this Measure shall go into effect immediately upon Coastal Commission approval of an amended Local Coastal Program. No voter approval is necessary for the City Council to agree to a modification of the Local Coastal Program required by the Coastal Commission.

B. Interim Amendments. The date that the notice of intention to circulate this Initiative was submitted to the City elections official is referenced herein as the "Submittal Date." The 10 RESOLUTION NO. NS-30,016

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City of Santa Cruz General Plan in effect on the Submittal Date as amended by this Measure is required by state law to comprise an integrated, internally consistent, and compatible statement of policies for the City of Santa Cruz. In order to ensure that nothing in this Measure would prevent the General Plan from being an integrated, internally consistent, and compatible statement of the policies of the county, as required by State law, and to ensure that the actions of the voters in enacting this Measure are given effect, any amendment or update to the General Plan that is adopted between the Submittal Date and the date that the General Plan is amended by this Measure shall, to the extent that such interim -enacted provision is inconsistent with the General Plan provisions adopted by this Measure, be amended as soon as possible to ensure consistency between the provisions adopted by this Measure and other provisions of the General Plan.

C. Compliance with SB 330. The City of Santa Cruz and its City Council are hereby authorized and directed to amend the Santa Cruz General Plan, Downtown Plan, all specific plans, the Zoning Ordinance, the Zoning Map, Land Use Maps, and any other ordinances and policies affected by this Measure as soon as possible and in the manner and time required by any applicable state law, to ensure consistency between the policies adopted in this Measure and any governing provisions of SB 330.

D. Other City Ordinances and Policies. The City of Santa Cruz and its City Council are hereby authorized and directed to amend the Santa Cruz General Plan, Downtown Plan, all specific plans, the Zoning Ordinance, the Zoning Map, Land Use Maps, and any other ordinances and policies affected by this Measure as soon as possible and in the manner and time required by any applicable state law, to ensure consistency between the policies adopted in this Measure and other elements of the General Plan, Downtown Plan, all specific plans, the Zoning Ordinance, the Zoning Map, Land Use Maps, and other City ordinances and policies.

Section 7. Severability and Interpretation
A. This Measure shall be interpreted so as to be consistent with all federal and state laws, rules, and regulations. If any section, sub -section, sentence, clause, phrase, part, or portion of this Measure is held to be invalid or unconstitutional by a final judgment of a court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Measure. The voters hereby declare that this Measure, and each section, sub -section, sentence, clause, phrase, part, or portion thereof would have been adopted or passed even if one or more sections, sub -sections, sentences, clauses, phrases, parts, or portions are declared invalid or unconstitutional. If any provision of this Measure is held invalid as applied to any person or circumstance, such invalidity shall not affect any application of this Measure that can be given effect without the invalid application. This Measure shall be broadly construed in order to achieve the purposes stated in this Measure.

B. If any portion of this Measure is held by a court of competent jurisdiction to be invalid, the voters hereby declare their strong desire that: (i) the City Council use its best efforts to sustain and re-enact that portion, and (ii) the City Council implement this Measure by taking all steps possible to cure any inadequacies or deficiencies identified by 11 RESOLUTION NO. NS-30,016

EXHIBIT B
the court in a manner consistent with the express and implied intent of this Measure, including adopting or reenacting any such portion in a manner consistent with this Measure.

C. Should the City Council determine that it is impossible to comply with the requirements of state law without amending the General Plan and/or Zoning Code in a manner inconsistent with the purposes, intent, or operative provisions of this Measure, it shall first seek voter approval of any proposed inconsistent amendments, and should the voters reject such amendments the City Council shall thereafter seek a judicial declaration or similar relief from a court of competent jurisdiction as to the existence and extent of the proposed amendments' inconsistencies with this Measure.

Section 8. No Unconstitutional Taking
This initiative is not intended, and shall not be applied or construed, to authorize the City to exercise its powers in a manner which will take private property for public use without the payment of just compensation, but shall be interpreted, applied and implemented so as to accomplish its purposes to the maximum constitutionally permissible extent. If application of this initiative to a specific property of record as of its effective date would create a taking, then the City Council may allow additional uses on said property, upon findings that the level of additional development permitted is the minimum necessary to avoid a taking, and no lesser level of development would be sufficient to avoid a taking.

Section 9. Amendment or Repeal
Except as otherwise provided herein, this Measure, including the General Plan Amendments and Downtown Plan Amendments enacted hereby, may be amended or repealed only by a majority of the voters of the City of Santa Cruz.

Section 10. Effective Date and Duration
A. The provisions of this initiative shall remain in effect through the year 2050.

B. This initiative shall take effect 10 days after the city council declares the results of the election approving this measure.

Section 11. Conflicting Ballot Measures
In the event that this Measure and another measure or measures relating to the same or similar subject matter shall appear on the same election ballot, the provisions of the other measures shall be deemed in conflict with this Measure. In the event that this Measure shall receive a greater number of affirmative votes, the provisions of this Measure shall prevail in their entirety, and the provisions of the other measure or measures shall be null and void.
12 RESOLUTION NO. NS-30,016

EXHIBIT B
R Y16.h.i T ie+
EXHIBIT A. Map depicting City -owned parcels in the Downtown Plan area currently used as surface parking lots, to be prioritized for affordable housing development, as designated in this Measure (APN Nos. 005-048-11; 005-048-12; 005-075-12; 005-142-09; 005-151-35; 005-151-48; 005-153-03; 005- 153-05; 005-153-17; 005-153-28; 005-153-29; 007-012-01; 007-012-02).

EXHIBIT B. City Parking Lot 4. Map showing Santa Cruz City -owned parcel at 119 Lincoln Street on the east side of Cedar Street between Lincoln and Cathcart Streets (APN 005-141-21).

EXHIBIT A
Map depicting City -owned parcels situated within the Downtown Plan area, currently used as surface parking lots, to be prioritized for affordable housing development, as designated in this Measure.
z a
a � ANGLE AL
Santa Cruz

CHURCH ST

LOCUST ST
14 16
_,�, races ST
W.

FF,it.
0 M
n
Z
7�
[3
it
r
L"NCOLN ST

COOPERST
oq+slu.r
L arum ar Fri .,
NEW ST

TAYLOR ST CATHCART
e+u,n q
N ST
Y A
Gr N
O
z
N
""APLE ST MAPLE ST

BIRCH LN
Y
N +uql Ya,A
G

LAUREL ST
1P
26a 26b
O
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-i
11 a

SOGUELAV
BRO�O�Py
13 RESOLUTION NO. NS-30,016

EXHIBIT B
City
Location Parking
on Map
Lot
APN
Street Location
7a
7 005-153-03
Front Street
7b
7 005-153-05
Front Street
7c
7 005-153-17
Front Street at corner of Cathcart Street
7d
7 005-153-28
Front Street
7e
7 005-153-29
Front Street
8 8
005-075-12
Cedar Street at corner of Lincoln Street
9 9
005-142-09
Cedar Street at corner of Elm Street
11 11
005-151-35
Front Street
14 14
005-048-11
Locust Street
16 16
005-048-12
Church Street
26a
26 007-012-01
Center Street at corner of Laurel Street
26b
26 007-012-02
Center Street
27 27
005-151-48
Front Street at corner of Laurel Street
14 RESOLUTION NO. NS-30,016

EXHIBIT B

EXHIBIT B
City Parking Lot 4. Map showing Santa Cruz City -owned parcel at 119 Lincoln Street on the east side of Cedar Street between Lincoln and Cathcart Streets (APN 005-141-21). i
�L tA
r, ,t,-, I. I,_ nV. 'ii
Libi7ir-
�
r""•
nr3
}ti Wltr.'pu I J'
r tar i,--=n I , � •��
P resre:: r.�?
,74
iTk+
_•_� Nr � � R.r u r_
afill3um �+ '
j,r}� }{I
# L &
Lot Dck%vtry n
4 nrrd
;f
f_j
r.•
im St
;J i gg CA
j�fG �•
r-'
15 Appendix L— City of South Lake Tahoe Cease and Desist Order

FRACTIONAL HOUSING
-L1-

Office of the City Attorney
Heather L. Stroud

VIA EMAIL
July 12, 2021
Patrick Abell
Senior Counsel, Real Estate, Pacaso
[email protected]

NOTICE TO CEASE AND DESIST
Dear Mr. Abell:

Thank you for acknowledging the Courtesy Notice of Zoning Regulations Restricting Time Share Use sent to Pacaso on May 14, 2021. 1 received your email dated May 20, 2021 which asserts that Pacaso is not subject to the City of South Lake Tahoe's time share regulations. I have reviewed your assertions and disagree that Pacaso is not advertising, selling, and operating time shares as defined in the South Lake Tahoe City Code. Section 6.60.020 of the South Lake Tahoe City Code broadly defines "time-share" as "the right to use and occupy a unit on a periodic basis in any manner which under the laws of the state of California constitutes a time-share arrangement or estate." Under California law, a "time-share plan" is similarly broadly defined to mean "any arrangement, plan, scheme, or similar device, other than an exchange program, whether by membership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby a purchaser, in exchange for consideration, received ownership rights in or the right to use accommodations for period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years." Bus. & Prof. Code §11212(z).

You attempt to distinguish Pacaso from a time share by stating that "Pacaso sells ownership interests in real estate." However, under the definition above, a "sale" or "deed" resulting in "ownership rights in or the right to use accommodations for a period of time less than a full year during any given year ..." is a "time-share plan." You also note that time-share plans of 10 or fewer units are not subject to the Vacation Ownership and Time -Share Act of 2004, citing Business & Professions Code section 11211.5(b)(1). This does not mean that time-share plans of 8 units (like Pacaso's) are not time-share plans, just that they are not regulated by the state under this statute.

The Vacation Ownership and Time -Share Act of 2004 includes a savings clause that expressly preserves the authority of local jurisdictions to regulate time shares through "zoning, subdivision, or building code or other real estate use law, ordinance, or regulation." Bus. & Prof. Code § 11280(b).

The City's zoning ordinance includes time share regulations that expressly prohibit conversion of residential structures to a time share use irrespective of the number of units. South Lake Tahoe City Code §6.60.040(B)(2). This provision was added in 2006, as the City Council found that "there is a 1901 Lisa Maloff Way, Ste. 300 1 South Lake Tahoe, CA 96150 1 (530) 542-6046 1 www.citvofslt.us

Page 2 ends

critical shortage of affordable housing" and "the conversion of residential property within the city to vacation time-sharing projects eliminates residential property otherwise available for rental in the city." South Lake Tahoe City Council Ord. No. 966. The City Council further found that "vacation time-sharing projects have the character of a commercial use due to the multiple occupancy of such projects by those participating in time-sharing projects" and "such commercial or quasi -commercial use is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods." Id. This provision broadened a 1987 prohibition on converting multi -family housing to time shares to include all residential dwellings.

Information from Pacaso's website, downloaded on April 27, 2021, indicates that Pacaso is advertising properties for sale of 1/8 fractional ownership, with the ability to have exclusive use of the property for 1/8 of each year, or 44 days split into non-consecutive short-term stays of between 2 and 14 days. Since property usage is allocated based on time, this type of commercially managed co -ownership falls within the broad definition of "time-share" under the City Code. This type of commercially managed short-term vacation use has the same impacts on surrounding residential areas as short-term vacation rentals, which are prohibited in residentially zoned areas in South Lake Tahoe following the passage of a citizens initiative in November 2018 (Measure T), and will be completely phased out of residential areas by the end of 2021.

In continuing to monitor the issue since sending the Courtesy Notice, I found three properties within the City of South Lake Tahoe on July 2 continuing to be advertised on Pacaso's website for sale of 1/8 fractional ownerships (3914 Saddle Rd., 1325 Wildwood Ave., and 783 Michael Dr. (with a note of "1 share left"). While the City is unaware of any Pacaso properties in operation as a time share use to date, we are concerned that potential buyers of fractional ownerships are not familiar with the City's time share regulations and Pacaso's advertising is misleading buyers whose use will be in violation of the South Lake Tahoe City Code from day one. Pacaso's continued solicitation and offering to sell illegal time shares is also a violation of South Lake Tahoe City Code. §§6.60.020(B), (D), (G); 6.60.040(B)(2); 6.60.070.

The City respectfully requests that Pacaso cease and desist all advertising and sale of fractional ownership of residential properties within the City of South Lake Tahoe. Failure to comply with this request within 30 days (by August 11, 2021), may result in enforcement including issuance of administrative citations under South Lake Tahoe City Code chapter 2.35. Further, any violation of the time share regulations in Chapter 6.60 is a misdemeanor and a public nuisance which may be enjoined in any court of competent jurisdiction under South Lake Tahoe City Code §6.60.080. Please note that there is also a private right of action for any person who has suffered damage as a result of a violation of the time share regulations under South Lake Tahoe City Code §6.60.090. 1 appreciate your prompt attention to this matter. Please feel free to contact me with any questions.

Respectfully,
(�la 40e
Heather L. Stroud
City Attorney
cc: Joseph Irvin, City Manager
David Willbrand, Chief Legal Officer, Pacaso
Ellen Haberle, Director, Government & Community Relations, Pacaso

Appendix M — City of Sonoma Ordinance

FRACTIONAL HOUSING
-M1-

Citp Of *Onoma

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SONOMA AMENDING SONOMA MUNICIPAL CODE TITLE 19,
SECTION 19.10.050 (ALLOWABLE LAND USES AND PERMIT
REQUIREMENTS) AND AMENDING TITLE 19, SECTION

19.50.140 (TIME-SHARES) TO THE CITY OF SONOMA

MUNICIPAL CODE
WHEREAS, time share and fractional interest uses have been and currently are prohibited as uses not specifically enumerated in the Sonoma development code; and WHEREAS, the City has recently become aware of time-share companies or fractional interest companies wishing to operate in the City; and
WHEREAS, a severe housing crisis exists in the state with the demand for housing outpacing the supply; and
WHEREAS, the City of Sonoma is particularly experiencing a housing emergency due to its relative isolation, limited housing supply, and desirable location; and WHEREAS, time-share or fractional interest uses threaten to reduce the housing supply in the City by turning long-term housing in the City into vacation rentals and reducing the affordable housing stock in the City; and
WHEREAS, time-share and fractional interest uses increase traffic and noise impacts and have the same character as commercial hotels, motels, and other transient occupancy uses due to their transient nature making them inappropriate for residential zones; and WHEREAS, the development of time-share or fractional interest uses in Commercial and Mixed Use zones (which also have a "residential component" requirement) will reduce the City's ability to collect valuable property tax, sales tax, or Transient Occupancy Tax; and WHEREAS, by allowing time-share or fractional interest uses in the City, market pressure will incentivize property owners to convert their existing commercial, hotel or residential uses, thereby reducing revenue to the City in the form of commercial property taxes, sales tax, Transient Occupancy Tax, and valuable existing housing stock; and WHEREAS, allowing time-share or fractional interest uses in the Commercial and Mixed Use zones reduces the availability of suitable lands to provide housing units to meet the City's Regional Housing Needs Allocation for the 5th and 6th Cycles; and WHEREAS, by allowing times -share or fractional interest uses in the City, developers of those uses will seek to convert underutilized commercial uses (in Commercial and Mixed Use zones), thereby reducing the City's ability to identify those sites as potential Housing Opportunity sites in the development of the City's 6th Cycle Housing Element; and WHEREAS, on January 19, 2022 the City Council adopted an Urgency Ordinance pursuant to Government Code Sections 36934 and 36937 to make express the City's existing prohibition on time-share and fractional ownership uses in all zones in the City; and 276349.3

WHEREAS, the City Council desires to adopt a non -urgency ordinance to supersede the urgency ordinance to ensure the City's municipal code addresses the impact that time-share and fractional ownership uses have and could have on the City's housing supply; and WHEREAS, on February 10, 2022, the Planning Commission reviewed and discussed potential changes to the Sonoma Municipal Code to address time-share and fractional ownership uses and unanimously recommended that the item be continued to March 10, 2022; and WHEREAS, on March 10, 2022, the Planning Commission held a public hearing to review and discuss potential changes to the Sonoma Municipal Code to address time-share and fractional ownership uses and unanimously recommended that the City Council introduce the attached ordinance; and
WHEREAS, the City Council found this action to be exempt from the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.) ("CEQA") and the State CEQA Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.) pursuant to CEQA Guidelines section 15061(b) (3) prior to taking action; and
WHEREAS, on June 1, 2022, the City Council considered amendments to the Sonoma Municipal Code, consistent with the applicable policies of the Sonoma General Plan, at a public hearing; and
WHEREAS, the proposed amendments to the Sonoma Municipal Code are consistent with State Law.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SONOMA DOES ORDAIN AS FOLLOWS:

SECTION 1. RECITALS.

The above set forth recitals and findings are true and correct and incorporated herein by reference, as if set forth herein in full.

SECTION 2. FINDINGS FOR DEVELOPMENT CODE AMENDMENTS.

Pursuant to Section 19.86.070(B) of the Sonoma Municipal Code, the proposed amendments of the development code under this ordinance:

A. Are consistent with the goals, policies, and actions of the General Plan because the amendments the amendments promote and preserve the use of property for vital housing; B. Would not be detrimental to the public interest, health, safety, convenience, or welfare of the city for the reasons described in the recitals above; C. Comply with the provisions of the California Environmental Quality Act (CEQA) as described in Section 4 below; and
D. Are internally consistent with other applicable provisions of this development code because the amendments merely codify the existing prohibition on time-share and fractional ownership uses under the City's permissive zoning regime. 276349.3

SECTION 3. MUNICIPAL CODE AMENDMENTS.

A. Tables 2-1, 2-2, 2-3 and 2-4 set forth in Sonoma Municipal Code section 19.10.050 are amended to read as set forth in Exhibit "A".

B. Section 19.50.140 of the Sonoma Municipal Code is amended to read as follows:

19.50.140 Time -Shares.

This section sets forth requirements for the establishment and operation of time-share uses.

A. Definitions.

1. "Accommodation" means any dwelling unit, multifamily dwelling, apartment, condominium or cooperative unit, cabin, lodge, hotel or motel room, or other private or commercial structure containing toilet facilities therein that is designed and available, pursuant to applicable law, for use and occupancy as a residence by one or more individuals.

2. "Management entity" means the person who undertakes the duties, responsibilities, and obligations of the management of a time-share plan.

3. "Owner" means owner of a time-share interest.

4. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof.

6. "Time-share interest" means and includes either of the following:
a. The right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, coupled with a freehold estate or an estate for years with a future interest in a time-share property or a specified portion thereof.
b. The right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, which right is neither coupled with a freehold interest, nor coupled with an estate for years with a future interest, in a time-share property or a specified portion thereof.

7. "Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, sale, lease, deed, license, right to use agreement, articles of organization or incorporation, operating agreement or bylaws, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years.
276349.3

8. "Time-share property" means one or more accommodations subject to the same time-share instrument, together with any other property or rights to property appurtenant to those accommodations.

9. "Time-share use" and "fractional interest use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan.

B. Permitted zones. None. Time share uses and fractional interest uses are prohibited throughout the City of Sonoma
C. Violations, Enforcement and Civil Penalties

3. Time-share use, fractional interest use and/or advertisement for time-share use and/or fractional ownership use, of an accommodation in violation of this section is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance and may be abated pursuant to Chapter 1.12 (General Penalty), Chapter 1.30 (Administrative Notice and Order Proceedings), Chapter 9.56 (Noise), and any other relevant provision of this code as it may be amended from time to time

4. Each day a violation of this chapter occurs shall constitute a separate offense.

5. The remedies under this section are cumulative and in addition to any and all other remedies available at law and equity.

SECTION 4. CEQA.

This Ordinance has been assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines, and the environmental regulations of the city. City Planning Staff has determined that the adoption and implementation of the Ordinance is exempt from further environmental review under the general rule in California Environmental Quality Act (CEQA) Guidelines Section 15061(b)(3) that CEQA only applies to projects that have the potential for causing a significant effect on theenvironment. As a text amendment and addition without any physical project being approved, it can be seen with certainty that there is no possibility that the Ordinance will have a significant effect on the environment. The 276349.3

proposed Ordinance is therefore exempt from the provisions of CEQA because it does not involve a commitment to any specific project that may result in a potentially significant physical impact on the environment. The City Council concurs in these findings and adopts them as its own. The City Council, therefore, directs that a Notice of Exemption be filed with the County Clerk of the County of Sonoma in accordance with CEQA Guidelines.

SECTION 5. SEVERABILITY.

If any section, subsection, subdivision, sentence, clause, phrase, or portion of this Ordinance for any reason is held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance.

The City Council hereby declares that it would have adopted this Ordinance, and each section, subsection, subdivision, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases, or portions thereof be declared invalid or unconstitutional.

SECTION 6. EFFECTIVE DATE.

This ordinance shall take effect thirty (30) days after passage thereof.

SECTION 7. PUBLICATION.

This ordinance shall be published in accordance with the provisions of Government Code section 36933, subdivision (c)(1).

SECTION 8. THIS ORDINANCE PREVAILS WHERE THERE IS CONFLICT.

To the extent that this Ordinance conflicts with any other provision in the Sonoma Municipal Code or city ordinance (urgency or otherwise), policy or regulation, this Ordinance will control. _vJw:• p
Jack Ding, Mayor
ATTEST:

Rebekah Barr, MMC, City Clerk
276349.3

I HEREBY CERTIFY the foregoing ordinance was duly adopted at a Regular Meeting of the City Council of the City of Sonoma held on the , 2022 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Rebekah Barr, MMC, City Clerk
276349.3

EXHIBIT
Amendments to "Zones and Allowable Uses" (Title 19, Section 19.10.050) of the Sonoma Municipal Code.

A. Table 2-1 (Residential Uses and Permit Requirements) is hereby amended as follows:

Allowed Uses and Permit
Permit Required by District
P Use permitted
Requirements for Residential
(2)
UP Use Permit
Districts (1)
required
L License required
— Use not allowed
Land Use (1)
R-
R-R
R-L
R-S
R-M
R-H
R-O
R-P
Specific
HS
Use
Regulation
s

AGRICULTURE, RESOURCE AND OPEN SPACE USES
Animal Keeping
P
P
UP
—
—
—
—
—
Chapter

8.08 SMC
Crop Production
P
P
UP
—
—
—
—
and Horticulture
Produce Stands
P
P
UP
—
—
—
—
—
SMC
for On -Site

19.50.070
Production

MANUFACTURING AND PROCESSING USES
Existing Uses
—
—
—
—
—
—
—
—
SMC

19.82.020

RECREATION, EDUCATION AND PUBLIC ASSEMBLY USES
Equestrian
UP
UP
—
—
—
—
—
—
Facilities
Parks and
P
P
P
P
P
P
P
—
Playgrounds
Religious
—
—
UP
UP
UP
UP
—
—
Facilities
Schools — Public
—
—
UP
UP
UP
UP
—
and Private
RESIDENTIAL USES (2)
Ord. Title 19 SMC 2022

Page 1 of 14 ends

Duplex
—
—
UP
P
P
UP
UP
—
Emergency
—
—
—
—
UP
UP
UP
—
SMC
Shelters

19.50.033
Home
P
P
P
P
P
P
P
P
SMC
Occupation

19.50.035
Live/Work
—
—
—
—
UP
—
—
—
Facilities
Mobile Home
—
—
—
—
—
—
—
UP
SMC
Park

19.50.035
Multi -family
—
—
—
UP
P
P
P
—
Dwelling (Four or
fewer units)
Multi -family
—
—
—
UP
UP
UP
P
—
Dwelling (Five or
more units)
Personal Indoor
P
P
P
P
P
P
P
P
SMC
Cannabis

19.50.032.

Cultivation (4)
A
Personal Outdoor
P
P
P
P
P
P
P
P
SMC
Cannabis

19.50.032.

Cultivation (4)
B
(Prohibited
if
multifamily
dwelling or
mobile
home)
Residential
P
P
P
P
P
P
P
P
Accessory
Structures
Residential Care
—
—
P
P
P
—
—
—
Homes, Six or
fewer clients
Residential Care
—
—
—
—
UP
—
—
—
Homes, Seven or
more clients
Single -Family
P
P
P
P
P
UP
—
—
SMC
Dwellings

19.50.035
Accessory
P
P
P
P
P
P
P
P
SMC
Dwelling Units

19.50.090
Accessory
P
P
P
P
P
P
P
P
SMC
Dwelling Units,

19.50.090
Junior
Ord. Title 19 SMC 2022

Page 2 of 14 ends

Supportive
P
P
P/UP
P/UP
P/UP
P/UP
—
—
Housing (3)
Transitional
P
P
P/UP
P/UP
P/UP
P/UP
—
—
Housing (3)

RETAIL TRADE AND SERVICES
Art, Antique,
—
—
—
UP
—
—
—
—
Collectible and
Gift Sales
Artisan Shops
—
—
—
UP
—
—
—
—
Bed and
UP
UP
UP
—
—
—
—
—
SMC
Breakfast Inns

19.50.030
(B&Bs)
Child Day Care
—
UP
UP
UP
UP
UP
UP
—
Center
Child Day Care:
—
UP
UP
UP
UP
UP
—
—
Small Family Day
Care Home
Child Day Care:
—
—
UP
UP
UP
UP
UP
—
Large Family Day
Care Home
General Retail
—
—
—
UP
—
—
—
—
Governmental
—
UP
UP
UP
UP
UP
UP
and Public
Facilities
Libraries and
—
—
—
UP
—
—
—
—
Museums
Medical Services
—
—
—
UP
UP
—
—
-
- Extended Care
Offices,
—
—
—
UP
—
—
—
—
Professional and
Administrative
Personal
—
—
—
UP
—
—
—
—
Services
Restaurant
—
—
—
UP
—
—
—
—
Senior
—
—
—
—
UP
—
—
—
Residential Care
Facilities
Telecommunicati
See Chapter 5.32 SMC, Telecommunications Facility and Antenna ons Facilities,
Criteria
Commercial
Time-shares
_
_
SMC
Ord. Title 19 SMC 2022

Page 3 of 14 ends

19.50.14 0

SPECIAL PURPOSE USES
Public Utility
—
—
—
—
—
—
—
—
Facilities
Public Utility
P
P
P
P
P
P
P
P
Equipment
Notes:

1. See SMC 19.10.050(C) regarding uses not listed. See Division VIII for definitions of the listed land uses.

2. New residential developments subject to the City's Growth Management Ordinance (SMC 19.94).

3. Supportive and Transitional Housing shall be subject to those restrictions that apply to other residential dwellings of the same type in the same zone. For example, such housing structured as single-family is permitted in the R-HS, R-R, RL and IRS residential zones, whereas Supportive and Transitional housing structured as multi -family is limited to the RM and RH residential zones and the Mixed -Use Zone.

4. Personal cultivation of cannabis (Indoor and Outdoor) only allowable in conjunction with residential use subject to SMC 19.50.032.

B. Table 2-2 (Commercial Uses and Permit Requirements) is amended as follows:

Allowed Uses and Permit
Permit Required by District
P Use permitted
Requirements for Commercial
(2)
UP Use Permit required
Zoning Districts (1)
L License required
— Use not allowed
Land Use
C
CG
Specific Use Regulations

MANUFACTURING AND PROCESSING USES
Artisans/Craft Product
UP
UP
Manufacturing
Food and Beverage
UP
UP
Manufacturing
Furniture/Fixtures
UP
UP
Manufacturing, Cabinet
Shops
Recycling Facilities — Reverse
UP
P
Vending Machines
Recycling Facilities — Small
UP
UP
Collection Facilities
Research and Development
UP
—
(R&D)
Ord. Title 19 SMC 2022

Page 4 of 14 ends

Newport Beach City CouncilSeptember 13, 2022

Newport Beach City Council
September 13, 2022