Ryan McDonald

Beach 2016: Hermosa Beach short-term rental debate persisted during 2016

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Illustration by Keith Robinson

by Ryan McDonald

No issue  galvanized Hermosa Beach this year like short-term vacation rentals. Throughout the year, it pushed City Council meetings into the wee small hours, generated at least two lawsuits, and loomed over the pending approval of important city planning efforts.

A practice that had occurred periodically over the decades became impossible to ignore in recent years with the growth of a new technology: online exchanges like Airbnb and VRBO. The websites link people seeking to rent homes or rooms with offerings sorted by geographical area. They allowed short-term rentals to spread rapidly, with decidedly mixed results. Some of the rentals were filled by business travelers and families looking for an alternative to hotels. But others were booked by raucous partiers, who felt little need to curb their behavior when surrounded by neighbors they would likely never see again. Exactly how many of the renters were staid and how many Dionysian has never been clear. But the loud ones drew far more attention.

“There are thousands of people who are opposed to [short-term rentals],” said Mike Glassman, whose south Hermosa home bordered what he described as a repeat problem house. “They just don’t know it yet, because they haven’t had one move next door to them.”

Aggrieved residents found the issue to be a classic instance of a problem that is capable of repetition, yet evading review: they would call the police or code enforcement about nuisance homes, but found that little could be done besides break up a party, and the situation would repeat with each new booking.

The movement to address the issue through changes to city code began gathering steam at the beginning of the year. City staff said that existing law had long banned short-term rentals — a point that would be disputed in subsequent lawsuits filed against the city — but that the language of the prohibition was outdated and difficult to enforce in the Airbnb era.

A March Planning Commission hearing found unanimous support for a ban on short-term rentals in residentially zoned areas of the city, but also revealed persistent resistance among a segment of the population. While many residents assailed disruptions to their peace and quiet, operators of short-term rentals argued that they boost the incomes of some struggling homeowners, and bolstered local businesses by expanding tourism.

The issue then headed to the City Council for a series of dramatic public hearings on the issue. The meeting at which the council chose to support the planning commission’s recommendation drew 60 speakers on the issue. Although the speakers that evening were evenly divided on the issue, council members also came down unanimously in favor of a ban on residential areas, citing a far larger stream of letters, emails and petitions from residents in support of a ban.

But while the decision to ban short-term rentals was clear, how to actually curb the practice was anything but. Councilmembers agreed on the need to cut off the problem before it reached the stage of giant parties, and in a subsequent meeting shaped the law’s key provision: stern, escalating penalties for the advertising properties for rent in the city for less than 30 days. But they faced difficulty in getting information needed to enforce the prohibition Websites like Airbnb and VRBO do not reveal the exact address of homes offered for rent or identity of the landlord, information that only comes farther on in the booking process; in Hermosa and other cities throughout the country, the websites have defied requests for information and ignored letters from city attorneys. So the city hired Host Compliance, a San Francisco startup that uses Internet metadata to find the location of homes offered on various websites.

Operators of short-term rentals, many of whom had pre-existing bookings that would be affected by the law, planned to resist. Led by Jim Holtz, owner of a South Hermosa short-term rental, they began to organize.

“I’m going to continue what I’m doing…I’m not going to just stick my tail between my legs,” one rental operator said.

One of the nonconforming residential units in a commercially zoned area. According to city staff, the downtown property is thought to have inadequate parking to meet current code. Photo by Ryan McDonald

The city planned to begin issuing citations under the law after Labor Day, but faced a pair of lawsuits filed over the summer which sought to halt enforcement. One came from Holtz, who alleged that the city’s prohibition constituted a new law and, because it impacted “intensity of use” in the beach-side town, violated the California Coastal Act. Another case, Johnston v. Hermosa Beach, gathered multiple plaintiffs and made similar claims, while also arguing that short-term rentals in the city had a long history, and constituted a pre-existing use exempt from new restrictions.

Both suits hit snags. Los Angeles County Superior Court Judge James C. Chalfant agreed with Holtz that Hermosa’s prohibition likely constituted a new law, but declined to issue an injunction in the case, and Holtz’s suit was subsequently withdrawn. This fall, an injunction was also denied in the Johnston case, though the plaintiff’s attorneys said at the time that they planned to appeal the ruling.

Holtz was again in the spotlight in the fall, racking up citations totalling $15,000 under the law’s advertising provision; Holtz claimed that he had gotten out of the short-term rental business, and said he was not aware the ads still existed.

As the year drew to a close, the Planning Commission returned to an aspect of the issue that they had put off addressing earlier in the year: whether to permit short-term rentals in nonconforming residential units in commercially zoned areas. Part of the motivation for considering the proposal was the possibility that allowing them would curry favor with the Coastal Commission, from whom Hermosa is seeking certification of its Local Coastal Program (LCP). The commission sent the city three letters over the year indicating that outright bans on short-term rentals, especially when done without a coastal program in place, could violate the Coastal Act. But despite spending significant time coming up with a draft ordinance, planning commissioners ultimately declined to support it, their opposition to the practice outweighing speculation about approval of the city’s LCP.

“If we are doing this to appease the Coastal Commission, I think we should dig in our heels and say no,” Commissioner Rob Saemann said.

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