Will Anaheim City Council Kill Off Short-Term Rentals?

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The Anaheim City Council is holding a special meeting this evening, called by Mayor Tom Tait to consider ordinances that, in essence, would ultimately largely kill off short-term rentals (STRs) in Anaheim.

Sharing economy innovations such as Airbnb and VRBO have empowered individuals to tap what had been a latent asset – their homes – in order to earn additional revenue. It has sparked a new industry of purchasing homes to list on these websites. Hundreds have popped up during the last couple of years in the older neighborhoods around Disneyland – 1950s and 1960s residential tracts, with their ranch-style homes and swimming pools – make them particularly attractive.

STRs have been a permitted use in Anaheim by action of the city since May of 2014, allowed by zoning and governed by ordinance (although a temporary moratorium was enacted in September of 2015). Unfortunately, rapidity with which STRs have grown around the Resort District has caught everyone off guard; provision wasn’t made to prevent the over-concentration of STRs in neighborhoods, and a number of residents have been organizing and agitating for a total ban. They have allied themselves with the militant UNITE-HERE hotel workers union, which opposes STRs in part because the owners don’t use unionized housekeepers, i.e. UNITE-HERE members.

Mayor Tait has been the driving force for banning these businesses, and requested the agendizing of two ordinances. The first imposes a de facto cap on the number of STRs allowed in Anaheim, along with stiffer penalties and a host of additional regulations. The onerous nature of these new requirements – installation of sprinkler system if more than 10 people can stay in an STR, installing exterior doors on every bedroom — are clearly intended to choke STRs to death.

Homes in the neighborhoods where STRs tend to be typically have one or more bedrooms facing the street. Under these proposed rule, these houses would soon be sporting two, three or more front doors. Does anyone think despoiling the street aesthetic that way is good for anyone?

Mayor Tait’s second proposal is for a three-year amortization of existing STRs. In plain English, that means existing STR owners will have three-years to earn revenue from their investment and then shut-down – whether or not they have recouped what the city deems to be reasonable costs.

Common sense regulation of the STRs to mitigate impacts while preserving the rights of individuals who are operating with properly obtained city permits is doable and desirable. However, the City Council ought to strike out the various proposed mandates that are instead designed to drive STRs out of business in a slow-motion taking.

The mayor’s proposed amortization is draconian and ought to be repudiated altogether. It is an emulation of the tactic employed by environmental justice activists to drive out industrial employers who don’t fit their societal vision. If the city suddenly decided liquor stores were undermining neighborhood cohesion and quality of life and decided to amortize them out of existence within three years, conservatives would be appropriately appalled. How is this different, in principle? Employment of this tactic here against property owners – many of whom are simply utilizing sharing economy advances to earn additional income in a way heretofore not possible — is a noxious assault on property rights.

I understand the angst of anti-STR activists, and have wrestled with this issue in my mind for months. I would not be happy if my neighborhood, in the course of a few months, was predominantly STRs rather than owner-occupied. Att the same time, STR owners proceeded according to the legal rules and its arbitrary and unfair to seek to extinguish them because the city didn’t exercise greater foresight. A balance is possible, achievable and ought to be pursued – rather than playing to the passions of organized and vocal factions.

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