July 22, 2025
Agenda Item No. 19
TO:
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM:
Seimone Jurjis, Assistant City Manager/Community Development Director - 949-644-3232, [email protected] PREPARED BY:
Jaime Murillo, AICP, Deputy Community Development Director - 949-644-3209, [email protected] Jessica Kan, Revenue Manager -
949-644-3153, [email protected]
TITLE:
Response to Grand Jury Report: “Long-Term Solutions to
Short-Term Rentals”
ABSTRACT:
For the City Council’s consideration is the approval of a response letter to the 2024-2025 Orange County Grand Jury Report, “Long-Term Solutions to Short-Term Rentals,” pursuant to California Penal Code (Penal Code) Section933.05(a) and (b). The City of Newport Beach is required to comment on the findings and recommendations pertaining to matters under the City’s control no later than August 20, 2025.
RECOMMENDATIONS:
Determine this action is exempt from the California Environmental Quality Act (CEQA pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA guidelines because this action will not result in a direct or indirect physical change to the environment; and Approve the City’s response to the 2024-2025 Orange County Grand Jury Report, “Long-Term Solutions to Short-Term Rentals” and authorize the Mayor to submit the response to the Presiding Judge of the Superior Court of California, County of Orange County pursuant to Penal Code Section 933.05(a) and (b).
DISCUSSION:
The Newport Beach Municipal Code limits the number of short-term lodging permits issued in Newport Beach to 1,550. As of this report, the City has reached that cap, with approximately 665 properties on the waitlist.
The 2024-2025 Orange County Grand Jury Report, “Long-Term Solutions to Short-Term Rentals”, was released on May 22, 2025, in response to resident concerns regarding the impacts of short-term lodging and increased enforcement costs. The report outlines best practices for short-term rental (STR) regulation and enforcement.
Under Penal Code Section 933, the City must respond to the Grand Jury’s findings and recommendations within 90 days—by August 20, 2025. For each finding, the City must indicate agreement or disagreement; for each recommendation, the City must state whether it will implement the action and provide justification as required by Penal Code Section 933.05.
The Grand Jury acknowledges the complexity of STR regulation, particularly in coastal areas where outright bans conflict with guidance from the California Coastal Commission. The Commission discourages blanket bans and requires regulations to align with local coastal programs.
The report emphasizes the importance of permitting procedures, regular inspections, and operational standards to reduce neighborhood impacts and support enforcement efforts. It also highlights the challenges cities face in collecting transient occupancy tax, noting Newport Beach’s current paper-based system. As described in the draft response, the City is procuring a software upgrade to introduce digital reporting by permit number, which will improve accuracy, compliance and efficiency.
The report includes 12 findings and nine recommendations. The City must respond to 10 findings and all recommendations. Many identified practices are already in place in Newport Beach, and the City remains committed to continuous improvement and modernization of its STR program.
FISCAL IMPACT
There is no fiscal impact related to the item.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Section 15060(c)(2) (the activity will not result in a direct or reasonable foreseeable indirect physical change in the environment) and Section 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in a direct or indirect physical change to the environment.
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).
ATTACHMENTS:
Attachment A – Orange County Grand Jury Report
Attachment B – Newport Beach Draft Response
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Response to Grand Jury Report: “Long-Term Solutions to Short-Term Rentals” July 22, 2025
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