TO: PLANNING COMMISSION
FROM: BRAD JOHNSON, COMMUNITY DEVELOPMENT DIRECTOR
DATE: FEBRUARY 4, 2025
SUBJECT:
Title
CONSIDER AN AMENDMENT TO THE CLAREMONT ZONING CODE (TITLE 16 TO THE CLAREMONT MUNICIPAL CODE) THAT, IF ADOPTED, WILL: (1) ADD A NEW SECTION 16.110 TITLED SHORT-TERM RENTALS; (2) AMEND VARIOUS PROVISIONS (INCLUDING SECTIONS 16.001.010, 16.004.020, 16.007.010, 16.013.010, AND 16.019.010) PERTAINING TO RENTAL ROOMS; AND (3) AMEND VARIOUS PROVISIONS (INCLUDING SECTION 16.333 AND CHAPTER 16.900 (DEFINITIONS)) PERTAINING TO SHORT-TERM RENTALS AND TERMS PERTAINING TO SHORT-TERM RENTALS (FUNDING SOURCE: GENERAL FUND)
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SUMMARY
A short-term rental (STR) is a residential property, dwelling unit, or portion of a dwelling rented to guests for temporary lodging for fewer than 30 consecutive days. This can include renting an entire home, an apartment, a condominium, or individual rooms within a dwelling. Short-term rentals are often facilitated through online platforms such as AirBNB and VRBO or directly by property owners and are typically used for vacation stays, business travel, visiting family, or other short-term accommodations
In late August 2024, the City issued a survey to receive input from the public for input on potential regulatory options. In September 2024, staff presented a STR regulations study session to the Planning Commission and received input on six key decisions. That input was incorporated into draft STR code amendments that were presented to the Planning Commission on November 19, 2024. The Commission provided input on various aspects of the draft code amendments, and this input was implemented in the attached ordinance.
Because these code amendments would require an amendment to the City’s Zoning Code, public hearings are required before both the Planning Commission (for a recommendation) and the City Council (for final approval).
RECOMMENDATION
Recommended Action
Staff recommends the Planning Commission adopt A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF CLAREMONT, CALIFORNIA, RECOMMENDING THE CITY COUNCIL ADOPT AMENDMENTS TO TITLE 16 OF THE CLAREMONT MUNICIPAL CODE TO (1) ADD A NEW SECTION 16.110 TITLED “SHORT-TERM RENTALS,” (2) AMEND VARIOUS PROVISIONS (INCLUDING SECTIONS 16.001.010, 16.004.020, 16.007.010, 16.013.010, AND 16.019.010) PERTAINING TO RENTAL ROOMS; AND (3) AMEND VARIOUS PROVISIONS (INCLUDING SECTION 16.33 AND CHAPTER 16.900 (DEFINITIONS)) PERTAINING TO SHORT-TERM RENTALS AND TERMS PERTAINING TO SHORT-TERM RENTALS.
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ALTERNATIVES TO RECOMMENDATION
In addition to the staff recommendation, there are the following alternatives:
A. Request changes to the proposed ordinance and/or resolution, which, depending on the extent of the changes, may require the Commission to continue the item.
B. Take no action.
C. Do not recommend approval of the proposed ordinance and/or resolution.
FINANCIAL REVIEW
Staff has engaged a compliance company to assist with identifying and analyzing existing short-term rentals. The cost of this service is $3,500 annually. The compliance company also offers additional services such as address identification, permitting and registration, a 24/7 hotline, and tax collection support. The cost of these add-on services varies depending on the number of listings. Depending on the services the City decides to use, the annual cost can range from $15,000 to $25,000.
If permitted, short-term rentals would be subject to the collection of permit and registration fees charged to the short-term rental host and Transient Occupancy Tax (TOT) charged to the renter. Permit and registration fees are intended to cover the cost of the short-term rental compliance services and any staff time to process applications.
The Claremont Transient Occupancy Tax is currently levied at ten percent. The revenue generated will depend on the number of short-term rentals in the City, the number of nights they are rented out in a year, the rental prices, and the level of compliance with the TOT remittance. The compliance company estimates that with full compliance with the TOT remittance and STR regulations, the city can receive approximately $70,000 per year from TOT, not including any permit and registration fees.
The staff cost to prepare this report and administer this project is estimated at $9,500 and is included in the operating budget of the Community Development Department.
ANALYSIS
Background
The City of Claremont has maintained a long-standing prohibition on rentals of less than thirty consecutive days. In 2019 the Future Financial Opportunities Committee (FFOC) recommended that the City consider regulating STRs to enhance transparency and accountability in the market while generating additional revenue. The FFOC placed recommendations in the following categories: immediate recommendations, future recommendations, and not recommended. The FFOC included the regulation of short-term rentals as an immediate recommendation.
In October 2019, staff presented the City Council with an overview of potential STR regulations, including comparisons with other cities, best practices, and potential regulatory approaches. Following this item, the City Council directed staff to draft program guidelines and regulations for future consideration. In March 2020, staff presented proposed regulations to the City Council. The 2020 draft regulations would have allowed for certain hosted and un-hosted STR stays but retained the existing prohibition on vacation rentals. However, due to the COVID-19 pandemic further ordinance development was delayed.
In May 2024, the City Council reaffirmed the regulation of STRs as a priority item. Staff prepared a study session at which the City Council directed staff to prepare regulations addressing all STR types, including vacation rentals, limited vacation rentals, and homesharing. While the discussion of STRs initially began with a focus on revenue diversification, the focus has shifted to regulating the STR market to ensure neighborhood stability and safety is addressed.
In August 2024, the City conducted a community survey to receive input on how the City should regulate STRs. The survey showed that there were significant concerns about the impact of STRs in the community. A specific concern was the impact they may have on rental prices for long-term (30 or more days) leases due to housing units being taken off the market for short-term rentals.
In September 2024, The Planning Commission reviewed six key regulatory decisions, including occupancy limits, parking requirements, health and safety standards, noise controls, and permit caps. The Planning Commission’s recommendations were then incorporated into a draft ordinance, which was presented to the Commission in November 2024. During that meeting, the Commission provided input and made recommendations for modifying the ordinance. There was confusion regarding some of the terms which has been addressed in the current ordinance.
Ordinance Overview
The draft ordinance includes comprehensive changes to the regulation of short-term rentals in Claremont, balancing the need to address community concerns with the benefits of a regulated STR market. The key regulatory updates outlined below aim to promote neighborhood stability, ensure the safety and well-being of residents and guests, and establish clear operational standards for STR operators.
• Permit Requirements: STR operators must obtain one of three permits: Vacation Rental Permit, Limited Vacation Rental Permit, or Homesharing Rental Permit.
• Occupancy Limits: Maximum overnight occupancy follows the formula (number of bedrooms x 2) +1, with allowances for minor children. Allows for double the occupancy for daytime guests.
• Parking Standards: Overnight parking must be on-site, while daytime street parking is allowed.
• Noise and Nuisance Controls: Prohibition of amplified noise audible at property boundaries and a 24/7 hotline for complaints.
• Caps on Vacation Rentals: Neighborhood-specific caps to prevent over-concentration. There shall be no limits for Limited Vacation Rental Permits or Homesharing Rental Permits.
• Accessory Dwelling Units (ADUs) and Junior Accessory Dwelling Units(JADUs): ADUs are not eligible for a Vacation Rental Permit or Homesharing Rental Permit. ADUs may be eligible for a Limited Vacation Rental Permit, if they comply with state law. JADUs are not eligible for any Short-Term Rental Permit type
• Business Entity Prohibition: Business entities are not eligible for a Short-Term Rental Permit. A Permit shall only be offered to natural persons.
• Limits on Permits per Individual: Each natural person shall be limited to one Short-Term Rental Permit, except in cases where an individual holds both a Limited Vacation Rental Permit and a Homesharing Rental Permit.
• Apartment Use Restriction: Apartments are prohibited from being used as short-term rentals. For the purposes of this ordinance, an apartment is a development with three or more units.
RELATIONSHIP TO CITY PLANNING DOCUMENTS
Staff has evaluated the agenda item in relationship to the City’s strategic and visioning documents and finds that it applies to the following City Planning Documents: Council Priorities, Economic Sustainability Plan, and 2024-26 Budget.
CEQA REVIEW
This item is not subject to environmental review under the California Environmental Quality Act (CEQA). It can be seen with certainty that the Code Amendment has no possibility of having a significant effect on the environment. Therefore, the adoption of the proposed Ordinance is not a project subject to the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of Title 14 of the California Code of Regulations.
PUBLIC NOTICE PROCESS
The agenda and staff report for this item have been posted on the City website and distributed to interested parties. If you desire a copy, please contact the Nhi Atienza at natienza@claremontca.gov.
Submitted by: Prepared by:
Brad Johnson Alex Cousins
Community Development Director Senior Management Analyst
Attachment:
Draft Resolution Recommending City Council Approval