City Council
Report
City Council Meeting: May 9, 2023
Agenda Item: 10.E
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To: Mayor and City Council
From: David Martin, Director, City Planning
Subject: Introduction and First Reading of an Ordinance to Amend Santa Monica Municipal Code Chapter 6.20, Home-Sharing and Vacation Rentals, to Authorize Home-Sharing in Certain Qualifying Accessory Structures and Incorporate a Home-Sharing Legalization Program
Recommended Action
Staff recommends that City Council:
1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines set forth in “Environmental Analysis”; and
2. Introduce for first reading an ordinance amending Santa Monica Municipal Code Chapter 6.20, Home-Sharing and Vacation Rentals, to authorize home-sharing in certain accessory structures and incorporate a home-sharing legalization program.
Summary
On June 8, 2021, City Council directed staff to return with proposed amendments to SMMC Chapter 6.20, the City’s home-sharing ordinance, to allow the home-sharing of detached accessory buildings located more than six feet from the main building occupied by the host. Amendments to SMMC Section 9.21.020 (Accessory Structures) were also identified as necessary for consistency with Council direction.
On October 25, 2022, the City Council adopted Resolution 11481 (CCS) to create a special home-share legalization program to authorize previously permitted home-share operators to receive a temporary, conditional permit to resume operations pending updates to the home-share ordinance and zoning ordinance. More specifically, Council’s Resolution 11481 (CCS) establishes a limited-term program through June 30, 2 of 6
2023 to allow the home-sharing of certain accessory dwelling units (ADUs) and detached accessory buildings located more than six feet from the main building occupied by the host, as long as the proposed home-share units do not have any outstanding unpermitted work.
The proposed ordinance contains amendments to the home-sharing ordinance (Santa Monica Municipal Code [SMMC] Chapter 6.20) that are consistent with the Council’s June 8, 2021 and October 25, 2022 actions. The companion zoning ordinance amendment (SMMC Section 9.21.020) was recently codified on April 11, 2023 as part of the Council’s approval of amendments for Phase One Housing Element program implementation. Together, these two ordinance amendments would complete the subsequent actions needed in response to Council’s earlier direction regarding the City’s home-share program whereby allowing the use of certain accessory structures more than six feet away from the main building for home-sharing and a very limited number of previously permitted home-share operators to resume operations in a manner that is consistent with zoning and home-share regulations.
Background
On May 12, 2015, Council adopted Ordinance 2484 (CCS) to clarify the long-standing prohibition of vacation rentals and to allow and impose regulations on home-sharing. On January 24, 2017, Council adopted Ordinance 2535 (CCS) to amend the home-sharing ordinance to clarify certain definitions and, in response to portions of the ordinance challenged by home-sharing platforms, to limit the obligations imposed on those platforms.
On June 27, 2017, Council adopted Ordinance 2547 (CCS), to amend the home-sharing ordinance to treat accessory dwelling units (“ADUs”) that received building permits on or after March 31, 2017, as separate dwelling units for the purpose of defining homesharing activity. On September 24, 2019, Council adopted Ordinance 2616 (CCS), to further amend the Home-Sharing Ordinance to strengthen regulation of home-sharing and vacation rentals.
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On June 8, 2021, City Council directed staff to return with proposed amendments to SMMC Chapter 6.20, the City’s home-sharing ordinance, to allow the home-sharing of detached accessory buildings located more than six feet from the main building occupied by the host. Amendments to SMMC Section 9.21.020 (Accessory Structures) were also identified as necessary for consistency with Council direction.
Temporary Home-Sharing Legalization Program
Attachment “A” provides a link to the Council staff report that provides a detailed discussion of the key issues that serve as background to the Council’s establishment of the temporary legalization program. In summary, prior to the Council’s October 25th resolution, then-existing home-share and accessory building regulations did not provide a way for certain property owners to continue to home-share their detached structures, even though they were previously permitted by the City for home-share.
The following are the conditions to qualify for the program that were established by the Council on October 25, 2022:
1. The home-share applicant must have been previously permitted by the City to home-share;
2. The home-share applicant’s request to renew their permit must have been denied by the City due to changes in home-share regulations or because the permit was previously erroneously issued; and
3. The proposed home-share unit cannot have any outstanding violations for unpermitted work. This would require homeowners to obtain building permits and final inspection approval for their home-share units to ensure that spaces are safe for overnight occupancy.
The temporary home-share legalization program adopted by resolution on October 25, 2022 is in effect until June 30, 2023 and was established to allow qualified property owners to receive home-share permits while necessary code amendments are pending.
The resolution also provides a pathway to incentivize previously permitted home-share operators to obtain building permits and final inspection to ensure that home-share units 4 of 6
meet current Building and Fire Codes and by doing so, they are eligible to obtain a home-share permit to resume their home-share operation.
Since Council adopted the temporary home-share legalization program in October 2022, several eligible property owners subsequently received approval to resume home-sharing and several others are in the process of building permit review and approval to allow them to resume home-sharing. The proposed amendments would authorize the City to issue business licenses and home-sharing licenses for qualifying operators going forward.
Discussion
In response to Council’s direction, the proposed amendments to the City’s home-share regulations (Attachment “C”) set forth in SMMC Chapter 6.20 include the following:
• Eliminate requirement that an accessory building proposed for home-sharing must be within 6 feet of the primary residence; thus allowing accessory buildings eligible for home-sharing to be located anywhere on the same property as primary residence.
• Consistent with the Home-Share Legalization Program:
o Limit enforcement of deed restrictions recorded against a permitee’s property that prohibit use of an accessory structure as a rented room or sleeping quarters when the permittee has a valid permit issued pursuant to the Home-Share Legalization Program; and
o Eliminate requirement that an ADU have received a building permit prior to March 31, 2017, in order to allow home-sharing by the long-term resident of the primary dwelling when the permittee has a valid permit issued pursuant to the Home-Share Legalization Program.
On April 11, 2023, the Zoning Ordinance amendments also eliminated the prohibition against accessory buildings containing a shower or a tub enclosure.
The Council’s April 11, 2023 approval of the Zoning Ordinance amendment outlined above coupled with the proposed changes to SMMC Chapter 6.20 set forth in 5 of 6
Attachment “C” would complete the subsequent actions needed in response to Council’s earlier direction regarding the City’s home-share program. The ordinance amending SMMC Chapter 6.20 would go into effect 30 days after second reading which would be scheduled to occur prior to the June 30, 2023 expiration of the temporary program.
Environmental Analysis
The proposed amendment to SMMC Chapter 6.20 would modify regulations related to the home-sharing and would allow a very limited number of previously permitted homeshare operators to apply to resume operations in a manner that is consistent with zoning regulations. The proposed amendment to SMMC Chapter 6.20 is exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of the CEQA Guidelines. Based on the evidence in the record, it can be seen with certainty that there is no possibility that the proposed changes will have a significant effect on the environment. The home-share code amendments would allow the resumption of operations in locations that were previously permitted for home-share on properties with existing dwelling units. All home-share units would need to be fully permitted and complete final inspection in order to be eligible for this program.
Therefore, no further environmental review under CEQA is required.
Past Council Actions
Meeting Date Description
5/12/2015 (Attachment D) Ordinance 2484 – Home-sharing Ordinance 1/24/2017 (Attachment E) Ordinance 2535 – Home-sharing Ordinance update; amend definitions, limit obligations on
hosting platforms
6/27/2017 (Attachment F) Ordinance 2547 – Home-sharing Ordinance update; treatment of accessory dwelling units
9/24/2019 (Attachment G) Ordinance 2616 – Strengthen regulation of homesharing and vacation rentals 10/25/2022
(Attachment B)
Resolution 11481 – Establish a special homeshare legalization program to authorize previously permitted home-share operators to resume
operations pending updates to the home-share
ordinance and zoning ordinance
4/11/2023 (Attachment H) Zoning Ordinance amendments for Housing 6 of 6
Element implementation, including amendments to
accessory structures
Financial Impacts and Budget Actions
Home-share properties are required to collect and remit the City’s Transient Occupancy Tax. If the proposed amendment results in an increase in the number of home-share properties, there may be an increase in tax revenues. However, some of the properties that were previously permitted for home-share before being denied continued to pay the tax. Therefore, any increase in tax revenues is anticipated to be minor.
Prepared By: Roxanne Tanemori, Principal Planner
Approved Forwarded to Council
Attachments:
A. Link to Council Action 10-25-2022
B. Homeshare Legalization Program 10-25-2022 (Res 11481) C. CDD-Ord-Home-Sharing Legalization Program 050923
D. Homeshare (Ord 2484)
E. Homeshare (Ord 2535)
F. Homeshare (Ord 2547)
G. Homeshare (Ord 2616)
H. Previously Approved Zoning Ord Amendment for Homeshare I. PowerPoint Presentation