Encinitas will cap the number of municipal permits it issues to short-term vacation rental properties, in an effort to preserve neighborhood character and reduce complaints, city council decided Wednesday, April 20.
In a 4-0 vote, Councilor Kellie Shay Hinze recusing herself because her family has a vacation rental, council backed a series of changes to city ordinances, including:
- Placing a 3% city-wide cap on the number of permitted short-term vacation rental properties that are not owner-occupied, and a 5% regional cap on such locations in the coastal region of the town west of Interstate 5.
- Requiring all new short-term vacation rentals to be at least 200 feet from any existing rentals to avoid “over-concentration” of rental units in one neighborhood.
- Changing what is now an annual city permit with an accompanying fee to a three-year permit and revoking the permits if the units have not been used as vacation rentals in the last 12 months.
An increasingly popular option for landlords hoping to generate additional income in expensive coastal areas, short-term vacation rentals are places that rent out for less than 30 days at a time, typically to vacationing travelers.
Council members also provided an exemption from the proposed settlement for the Sea Bluffs community, which was designed for vacations and contains many short-term rental units. In addition, 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”.
The decision of Wednesday April 20 was only the start of a long process. Proposed changes will need to be refined, and then will be voted on by the Planning Commission. That should happen this fall, the director of the city’s development services department, Roy Sapa’u, told the council. If the commission votes to approve, it goes to the city council for a final vote and then to the state coastal commission early next year, he said.
“It’s longer than I expected,” Mayor Catherine Blakespear told her.
Many audience members said the city would be much better off if the proposed changes never happened and said they hoped the Coast Commission would vote them down. Almost all of the nearly two dozen public speakers on the issue said the city should do more to enforce its existing regulations on noise and litter issues, rather than find new ways to ban men from businesses to earn money and families to find affordable vacation spots. . Several people said they are currently in receivership over homes in Encinitas that they plan to turn into vacation rentals and that the proposed changes could prevent them from using those properties.
Council members said new entrants to the vacation rental market would still be okay, even if the permit cap were approved.
“We haven’t even hit the cap yet,” council member Tony Kranz said.
City records show there are currently 437 vacation rentals licensed, plus 90 pending permit applications, in Encinitas. Those two numbers combined — 527 units — represent just under 2% of the city’s housing stock, and the new cap is proposed at 3% citywide, or 798 rental units. Additionally, council members said, owner-occupied vacation rental properties — places where a room or part of a house is rented out, but the owner still lives on the site — would not be included in the ceiling.
While there is plenty of wiggle room within the city limits, the proposed 5% cap for the coastal region west of Interstate 5 is closer to what currently exists. Cardiff has a concentration rate of 3.7%, Leucadia is at 4.5% and Old Encinitas is at 4.7%.
This is the second round of vacation rental regulatory changes the council has pursued in the past year. In December, the council passed tougher new standards for non-owner occupied units, including a minimum overnight stay requirement, in response to complaints about litter and rowdy behavior in some of those units.