An initiative giving Dana Point residents a voice on how the city manages short-term rentals will be on the November ballot.
Forcing the public vote, the political action committee Residents Who Care About Dana Point collected more than 2,500 signatures – verified by the Orange County Registrar of Voters last month – to put the initiative that could change the city’s current policy on short-stay lodging opportunities on the ballot, and the City Council recently completed the process.
“We feel great; this is a chance for the people of Dana Point to be heard,” said Buck Hill, who, with his wife, Betty, headed up the effort and began collecting signatures in late January.
“We got 90% of people we contacted,” Betty Hill added. “This was a grassroots campaign with limited funds.”
In 2016, the Hills led a successful referendum to rescind the council’s plan to add more short-term rentals in the city. In the same year, they pushed Measure H, successfully winning voter approval on any development changes in the city’s Lantern District.
They began focusing on short-term lodging, they said, when the council passed new rules after getting approval from the California Coastal Commission last year to increase the number of available units from 115 to 230.
“They started awarding those and in the coastal zone they were almost exclusively investor-owned,” Buck Hill said.
Among the initiative’s major points is requiring renewal of the short-term rental permits each year, with a priority placed on homestays and primary properties – defined as the owner’s primary residence – and then setting up a lottery to fill in 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 said.
The ballot measure also proposes reducing the total number of short-term rentals allowed in the city by about half. It would also shift the responsibility of paying the transitory occupancy tax to the hosting platforms, which would directly pay the city and also include the city-issued permit number when advertising the property for rent.
“It gives more responsibility to the hosting platform,” Buck Hill said. “We think that will improve enforcement.”
But a woman at the City Council meeting, who identified herself as owning and renting a property on Beach Road, said in her view the initiative was taking away homeowner’s rights.
“They’re asking STRs to go into a lottery system,” she said. “So what happens to my fully furnished home when I have to wait for the permit to come in on the lottery? I don’t think it’s feasible or practical. The (opponents) that are here tonight are always talking the same rhetoric about complaints and violations. I think the bottom line is they don’t want renters in their neighborhoods.”
Councilmembers, on July 16, were also set to consider giving out more permits to properties that had been waiting, but decided to stall that discussion because of the pending ballot vote. They did, however, grant five locally owned properties permits. Those will still need to go through the full process.
The city has 174 permitted short-term rentals citywide; 60% are in the coastal zone, primarily on Beach Road and on Corniche Drive, a row of rentals near Niguel Road and Camino Del Avion, and 40% 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 of the properties are listed with owners outside the city. City officials said short-term rentals brought in between $700,000 and $750,000 in taxes this year.
In the city’s process, applications are submitted, and depending on the type of short-term rental, the application is reviewed based on the city’s current count in either the coastal zone or the inland communities to see if there’s a cap, said Johnathan Ciampa, an analyst with the city.
Homestays and primary ownerships are given priority. In the second tier are multi-family homestay options. The third is properties in mixed-use locations; the fourth priority is properties owned by out-of-town investor groups.
Ciampa said applications are reviewed for being in “good standing and having no prior applications.”
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Once cleared, they go to code enforcement, and the properties are inspected and verified for the necessary insurance. Then, when all that is checked off, they are issued a permit for capacity.
Citywide, Ciampa said, short-term rentals aren’t disruptive to the neighborhoods they’re in. As an example, he said in his report to the council, this year there have been six calls about rentals. Four of those turned out not to need city response. In one case, there was an overflow of trash on a street and in the second, neighbors complained of noise. Those making the noise were given a citation, he said.
As further evidence of their lack of impact, city officials referred to a 2022 community survey in which fewer than 2% of people identified the lodging option as an issue they were concerned about.
City Attorney Patrick Munoz is required to write an impartial analysis to accompany the ballot measure. It was also decided the city’s mayor and another council member will lay out the city’s program and include a city rebuttal.
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