Agenda Item
City Council
Item #: 6.3. 5/9/2023 File #: 23-0314
TO: Honorable Mayor and Members of the City Council
FROM: Tom Kisela, City Manager
1. SUBJECT
Short Term Rental program update and option to increase the maximum number of short term rental permits from 125 to 200.
2. SUMMARY
Update on the Short Term Rental program with the option to increase the maximum number of short term rental permits from 125 to 200.
3. RECOMMENDED ACTION
Consider adoption of Resolution No. 11454. A Resolution of the City Council of the City of Orange Revising the Maximum Number of Short Term Rental Permits allowed.
4. FISCAL IMPACT
None.
5. STRATEGIC PLAN GOALS
Goal 3: Enhance and promote quality of life in the community c: Support and enhance attractive, diverse living environments.
Goal 4: Provide outstanding public service
a: Obtain, implement, and evaluate public input into our services and programs.
6. DISCUSSION AND BACKGROUND
In May 2021, the City Council approved an Ordinance to permit a limited number of short term rentals (STRs) in the City of Orange. The Ordinance was developed over a period of several months and included extensive public comments, input from the Orange Short Term Rental Alliance (OSTRA), a review of STR policies in other cities, discussions with STR hosting platforms, and research into compliance services. The resulting Ordinance had three main objectives:
· Create a program to allow responsible STR hosts to operate in the City of Orange · Provide sensible regulations to reduce the impacts of STRs to residential neighborhoods · Provide the City with tools to address a small number of problem properties At the time the STR Ordinance was adopted, the City Council also adopted a Resolution that capped the total number of STR permits at 125. The City began issuing STR permits in late 2021, and soon reached the maximum number of STR permits. The program has successfully achieved its three City of Orange Printed on 5/4/2023Page 1 of 2
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Item #: 6.3. 5/9/2023 File #: 23-0314
reached the maximum number of STR permits. The program has successfully achieved its three main objectives during the year and a half of its operation. The City has only had to issue a total of 10 violations under the ordinance, and permit holders have been responsive to the small number of complaints from their neighbors.
There are approximately 125 property owners on a waiting list for STR permits. The City Council could expand the number of STR permits through Resolution to give additional people on the waiting list the opportunity to apply for an STR permit. The proposed Resolution would revise the total number of STR permits allowed from 125 to 200. It would also give the City Manager authority to develop procedures for phasing in the increase in STR permits. Staff would most likely increase the number of permits by 25 and then wait six months before releasing the next batch of 25 permits. This would allow for existing staff resources to process the new permits as well as assess any neighborhood impacts before issuing additional permits.
The 125 STR permits that are currently operating generate approximately $500,000 a year to the City in transient occupancy tax (TOT). An additional 75 permits would generate approximately $300,000 per year in TOT.
Ordinance Update
Staff has also identified cleanup language for the STR Ordinance that would provide more clarity about the program, simplify administration, and tighten up some of the regulations. Staff could present proposed changes to the STR ordinance at a future City Council meeting.
7. ATTACHMENT
· Resolution No. 11454
City of Orange Printed on 5/4/2023Page 2 of 2
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