Dana Point Voters Could Cut Short-Term Rental Units by Half

Dana Point voters will decide in November whether to slash the number of short-term rentals by half.

A neighborhood group has collected enough signatures to put an initiative on the ballot this fall that could revise the city’s policy on short-term rentals, while limiting the number of stays, the Orange County Register reported.

Residents Who Care About Dana Point, led by Buck and Betty Hill, aim to overturn the city’s short-term rental policy which last year increased the number of available units to 230, from 115, after getting approval from the California Coastal Commission.

“They started awarding those and in the coastal zone they were almost exclusively investor-owned,” Buck Hill told the Register.

The approved ballot measure would reduce the total number of short-term rentals allowed in the city by about half.

The measure would shift the responsibility of paying the transitory occupancy tax to hosting platforms such as Airbnb, which would directly pay the city and also include the city-issued permit number when advertising the property for rent.

The initiative would also require landlords to renew their short-term rental permits each year, with a priority placed on “homestays” and primary properties, or owner’s primary residences.

It would then set up a lottery to fill the remaining permit applications with investor-owned properties.

The initiative aims to give more opportunities to locals who may want to vacation for a month and rent out their homes or help those who may have fallen into economic hardship to rent out extra rooms.

“We want permits issued every year so everyone has a chance,” Buck Hill told the newspaper.

Dana Point has 174 permitted short-term rentals citywide, of which 60 percent are in the coastal zone and 40 percent are inland. Rental rates in the city range from $160 to $2,300 a night.

City records show that about one-third of the permitted rentals are owned by residents and two-thirds are registered to owners outside the city. Short-term rentals were expected to rake in between $700,000 and $750,000 in taxes this year, city officials said.

If the ballot measure is approved, Dana Point would join a growing number of cities that have clamped down on the short-term rental business, which critics say can rob families of available homes to rent or buy. But such firms as Airbnb and Vrbo are fighting back.

— Dana Bartholomew