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PUBLIC HEARING
City of San Bernardino
Request for Council Action
Date: February 21, 2024
To: Honorable Mayor and City Council Members
From: Charles A. Montoya, City Manager;
Mary Lanier, Director of Community, Housing, and Economic Development
Department: Community, Housing, & Economic Development (CED) Subject: Development Code Amendment 23-01 (Short-Term
Rental Program)
Recommendation:
It is recommended that the Mayor and City Council of the City of San Bernardino, California:
1) Introduce for first reading, read by title only, and waive further reading of Ordinance No. MC-1628 of the Mayor and City Council of the City of San Bernardino, California, adopting the Short-Term Rental Program, and approving Development Code Amendment 23-01 amending Section 19.02.020 (Basic Provisions – Definitions) and Chapter 19.04 (Residential Zones) of the City of San Bernardino Development Code (SBMC Title 19) in order to establish a Short-Term Rental Program in the City of San Bernardino; and finding that Development Code Amendment 23-01 is exempt from review under the California Environmental Quality Act;
2) Conduct the Public Hearing; and
3) Schedule the adoption of the above Ordinance to the regularly scheduled meeting of the Mayor and City Council on March 6, 2024.
Executive Summary
This agenda item is the first reading of the proposed Short-Term Rental Program, a program to provide property owners with short-term rental opportunities, manage the number of units, address potential impacts, and the collection of Transit Occupancy Tax (TOT) similar to hotels. The fiscal impact is estimated to be a contribution of approximately $324,000 in TOT to the City’s General Fund. It is recommended that the 1 8
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Mayor and City Council accept the first reading and schedule a second reading for adoption of Ordinance MC-1628.
Background
On December 13, 2022, the Planning Commission received and filed an update on the state of short-term rentals in the City and forwarded a recommendation to the Mayor and City Council to direct staff to develop a regulatory scheme for short-term rentals in the City’s residential districts.
On January 18, 2023, the Mayor and City Council recommended that staff work to adopt a regulatory scheme for Short-Term Rentals.
On February 27, 2023, the Planning Commission heard a report from staff and conducted a workshop to provide staff direction to include or consider items to regulate Short-Term Rentals.
On November 14, 2023, Development Code Amendment 23-01 was continued by the Planning Commission to the meeting of December 12, 2023.
On December 12, 2023, the Planning Commission, by a unanimous vote, adopted Resolution No. 2022-031 forwarding a recommendation (Attachment 3) that the Mayor and City Council approve Development Code Amendment 23-01 amending Section
19.02.020 (Basic Provisions – Definitions) and Chapter 19.04 (Residential Zones) of the City of San Bernardino Development Code (SBMC Title 19) in order to establish a Short-Term Rental Program in the City of San Bernardino; and find that Development Code Amendment 23-01 is exempt from review under the California Environmental Quality Act.
Discussion
A Short-Term Rental (STR) refers to a residential dwelling unit, that is offered or provided to a paying guest by a short-term rental operator for thirty (30) or fewer consecutive nights. The term "short-term rental" does not include a hotel, motel, inn, or bed and breakfast inn.
Statewide STRs are a part of California’s tourism market, but when left unregulated, they can lead to unwanted negative effects caused by those uses, such as excessive noise and parking problems within existing residential neighborhoods. As such, many communities have recently adopted or proposed restrictions on STRs. Restrictions can include establishing designated areas for STRs, limiting the number of days a year a property can be rented, or banning STRs entirely.
The City of San Bernardino does not currently have an ordinance that expressly regulates STRs and has experienced the negative effects of excessive noise, parking problems and discarded trash on surrounding properties, resulting in numerous complaints, creating a threat to the public interest, health, safety, convenience, and welfare of the community. While the demand for vacation rental units within the City is 1 8
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evident, it is necessary to establish regulations that will provide a reasonable balance between the short-term rental operations and the recognized need to protect the residential character of existing neighborhoods.
Table 1 below provides a summary of the proposed regulations for short-term rental operations.
TABLE 1: SUMMARY OF PROPOSED SHORT-TERM RENTAL PROGRAM
Program Type •Vacation Rental Only
Registration Permit
•Annual Permit Required
•1 License per Property Owner
•Property can be owned by individuals & non-
individuals (Corp, LLC, Trust) if proof of
connection to the property owner can be
established
Fees
•Permit Fee to range between $500 - $775*
•*Fee is based on Cost Recovery and may
change
Density
•4 Bedroom / 8 Occupant Max
•Not to Exceed (NTE) 8 Occupants Per Stay (2
people per bedroom)
•Not to Exceed (NTE) 12 People on the property
at one time
Length of Stay
•No Minimum # of Days
•Max 29 Day Stay / NTE 120 Days in a
Calendar Year
Property Type
•Eligible Types: Primary Residence SFR,
Condo, Guest House *SFR with Detached
Guest House to be rented as one unit
•No properties within High Fire Zones are
allowed to participate
Inspection
•In-person property inspection to be conducted
as part of the application process
•Inspection to be done annually at renewal
Noise
•Default to Municipal Code Noise Control
•Quiet hours from 10 p.m. – 8 a.m.
•Outdoor Noise Monitoring Device Required
Parking •Limited to On-Site Parking Only in designated
spaces
Fines
•Default to Municipal Code – Code Enforcement
Procedures
•3 Violations will result in Non-Renewal of
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Permit
Enforcement
•24/7 Complaint Hotline
•Owner/Agent must respond to complaints
within 60 Minutes
Transit Occupancy
Tax /
Transient Lodging
Tax
•All permits subject to Transient Occupancy Tax
(TOT)
•*Pending election to amend Ordinance No.
MC-1484
Additional Items
•Good Neighbor Policy Brochure required to be
provided to and signed by each renter and kept
on-site
•Copy of Permit with the number of guests
allowed to be posted at the house
•In-person or virtual check-in allowed
•Must have a 24/7 phone number listed for
property owner/agent
•Cannot have a restricted affordable housing
covenant
•Change of property ownership requires a new
application
•Evidence of Property Insurance / Commercial
Insurance specifically for STR $500k minimum
limit/occurrence
Proposed Amendment
In order to ensure that short-term rentals are compatible with the neighborhoods in which they may be located, this amendment will update definitions and establish development and operational standards regulating short-term rentals in the City of San Bernardino.
Development Code Amendment 23-01 amends SBMC Title 19, as summarized below:
§ Chapter 19.02 (Basic Provisions), Section 19.02.050 (Definitions) is updated to add definitions for those terms used specifically within the Short-Term Rental Program (Attachment A, Exhibit A).
§ Chapter 19.04 (Residential Zones), Table 04.01 (Permitted and Conditionally Permitted Uses) is updated to add short-term rentals as a permitted use within all single-family and multi-family zones (Attachment A, Exhibit B).
§ Chapter 19.04 (Residential Zones), Section 19.04.030(2)(W) (Residential Zones Specific Standards – Short-Term Rentals) is added to establish development and 1 8
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operational standards for short-term rentals (Attachment A, Exhibit C).
The Police Department has reviewed the regulations contained within the proposed Development Code Amendment 23-01 and has concluded that none of the proposed changes pose any challenges to enforcement.
Implementation
The regulations governing short-term rentals will take effect 30 days following approval of Development Code Amendment 23-01 by the Mayor and City Council. As currently written, the ordinance does not provide for any exemptions for rentals with an existing business license. All properties currently operating as a short-term rental will be required to register and obtain a Short-Term Rental Permit. The City will send all properties potentially operating as a short-term rental a letter notifying them of the newly adopted regulations and will provide operators with 60 days to comply or face enforcement measures.
Property owners of Short-Term Rentals will be responsible for reporting and paying into the City’s Transient Lodging Tax/Transit Oriented Tax (TOT). In order for the City to impose this tax on STRs, the City is required to amend and update Ordinance No. MC- 1484, which outlines regulations on the collection of the City’s TOT. Staff plans to bring forward an updated Ordinance for public consideration to the next eligible election. Once approved and certified, reporting and collection of TOT would be effective the first day of the first quarter following the election (January 1, 2025).
Staff members may exercise the option to postpone the commencement of the program from the effective date, aiming to finalize an agreement with a software platform that will facilitate the seamless implementation of the Short-Term Program regulations. This decision allows for a more comprehensive and efficient integration of the necessary tools and resources for the program's successful launch.
General Plan Goals and Policies
The City of San Bernardino General Plan includes goals and policies to guide future housing development, as follows:
Land Use Goal 2.1: Preserve and enhance San Bernardino’s unique Neighborhoods.
Land Use Goal 2.2: Promote development that integrates with and minimizes impacts on surrounding land uses.
San Bernardino contains a wide range of neighborhoods accommodating an assortment of lifestyles. Each neighborhood has, or can have, its own unique character that is a source of pride for the residents. Neighborhood character is defined by many factors: what the neighborhood looks like, safety and security, maintenance of streets and green spaces, and more. But more importantly, neighborhood character is an image in the minds of those who live and work there and in the perceptions of those who visit. 1 8
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The rise of short-term rentals within the City has created the need to establish regulations to ensure the compatibility between short-term rentals and the residential character of neighborhoods in which they may be located in order to mitigate any potential conflicts that may arise from their operation.
The adoption and implementation of Development Code Amendment 23-01 is consistent with the City’s General Plan by allowing for the development of Short-Term Rentals within residential zones in a manner that will prevent negative impacts to the existing residential neighborhoods and the community at large.
California Environmental Quality Act
The Planning Division conducted an environmental evaluation in connection with the proposed Development Code Amendment 23-01 and concluded that it is exempt from CEQA under Section 15061(b)(3) (Common Sense Exemption) of the CEQA Guidelines due to the fact that the proposed Development Code Amendment will not create significant effects on the environment as it establishes standards for the rental of existing residential properties in areas zoned for residential use.
2021-2025 Strategic Targets and Goals
Development Code Amendment 23-01 aligns with Key Target Goal No. 3: Improved Quality of Life and 4(b): Economic Growth and Development – Update the General Plan and Development Code. Specifically, the program will update the Development Code to establish standards to help protect the residential character of neighborhoods in which short-term rentals may be located. The amendment to the Development Code will ensure consistency with the City’s land use designations as required by the City’s General Plan.
Fiscal Impact
There is no immediate General Fund impact associated with this item. Once adopted, this item has the potential to contribute approximately $324,000 into the General Fund Transit Occupancy Tax.
Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California:
1) Introduce for first reading, read by title only, and waive further reading of Ordinance No. MC-1628 of the Mayor and City Council of the City of San Bernardino, California, adopting the Short-Term Rental Program, and approving Development Code Amendment 23-01 amending Section 19.02.020 (Basic Provisions – Definitions) and Chapter 19.04 (Residential Zones) of the City of San Bernardino Development Code (SBMC Title 19) in order to establish a Short-Term Rental Program in the City of San Bernardino; and finding that Development Code Amendment 23-01 is exempt from review under the California Environmental Quality Act;
2) Conduct the Public Hearing: and
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3) Schedule the adoption of the above Ordinance to the regularly scheduled meeting of the Mayor and City Council on March 6, 2024.
Attachments
Attachment 1 Ordinance No. MC-1628 (Approving Development Code Amendment 23-01)
Attachment 2 Ordinance No. MC-1628 Exhibit A-C Attachment 3 Planning Commission Resolution 23-043 from December 12, 2023
Attachment 4 PowerPoint
Attachment 5 Newspaper Publication
Ward:
All Wards
Synopsis of Previous Council Actions:
On January 18, 2023, the Mayor and City Council recommended that staff work to adopt a regulatory scheme for Short-Term Rentals.