Encinitas pursues more restrictions on short-term, vacation rentals

Encinitas will cap the number of city permits it will issue to short-term, vacation rental properties, in an effort to preserve neighborhood character and reduce complaints, the City Council decided Wednesday, April 20.

In a 4-0 vote, with Councilmember Kellie Shay Hinze recusing herself because her family has a vacation rental, the council backed a series of changes to city ordinances, including:

• Placing a 3 percent, city-wide cap on the number of permitted short-term, vacation rental properties that are not owner-occupied, and a 5 percent, regional cap on such places in the city’s coastal region west of Interstate 5.
• Requiring that any new short-term vacation rentals to be at least 200 feet from any existing ones to prevent an “over concentration” of rental units in any one neighborhood.
• Changing what’s now an annual city permit with an accompanying fee into a three-year permit, and revoking permits if the units haven’t been used as vacation rentals in the past 12 months.

An increasingly popular option for homeowners hoping to generate extra cash in costly coastal areas, short-term vacation rentals are places that rent for less than 30 days at a time, typically to vacationing travelers.

Council members also carved out an exemption from the proposed regulations for the Sea Bluffs community, which was designed for vacation use and contains many short-term rental units. Also, they noted that the new rules on required distances between one vacation rental and another would apply to new permit applicants and not to existing properties, which would be “grandfathered” in.

The Wednesday, April 20 decision was just the starting point for a lengthy process. The proposed changes will need to be fine-tuned, and then will go before the Planning Commission for a vote. That’s likely to occur this fall, city Development Services Department Director Roy Sapa’u told the council. If the commission votes to approve, then it’s back to the City Council for a final vote, and then on to the state Coastal Commission early next year, he said.

“That’s longer than I was hoping,” Mayor Catherine Blakespear told him.

Many audience members said the city would be much better off if the proposed changes never took place and said they hoped the Coastal Commission rejected them. Almost all of the nearly two dozen public speakers on the issue said the city ought to do more to enforce its existing regulations on noise and trash issues, rather than finding new ways to ban business people from making money and families from finding affordable places to vacation. Several people said they were currently in escrow on homes in Encinitas that they planned to turn into vacation rentals and the proposed changes might prevent them from making use of these properties.

Council members said the newcomers to the vacation rental market would still be OK, even if the cap on permits wins approval.

“We haven’t even reached the cap yet,” Councilmember Tony Kranz said.

City records indicate that there currently are 437 permitted vacation rentals, plus 90 pending requests for permits, in Encinitas. Those two figures combined — 527 units — amount to just under 2 percent of the city’s housing stock, and the new cap is proposed to be 3 percent citywide, or 798 rental units. Plus, council members said, owner-occupied vacation rental properties — places where a room or part of a house is rented, but the owner still lives on the site — wouldn’t be included in the cap.

While there’s plenty of wiggle room in the citywide limits, the 5 percent cap proposed for the coastal region west of Interstate 5 is closer to what exists now. Cardiff has a 3.7 percent concentration rate, Leucadia is at 4.5 percent and Old Encinitas is at 4.7 percent.

This is the second set of vacation rental regulatory changes the council has pursued within the last year. In December, the council adopted new, stricter standards for non-owner occupied units, including a minimum night stay requirement, in response to complaints about trash and rowdy behavior at some of these units.