TO: ADAM PIRRIE, CITY MANAGER
FROM: BRAD JOHNSON, COMMUNITY DEVELOPMENT DIRECTOR
DATE: JUNE 23, 2026
Reviewed by:
City Manager: AP
SUBJECT:
Title
SHORT-TERM RENTAL ORDINANCE - PILOT PROGRAM REVIEW AND POLICY DISCUSSION ITEMS (FUNDING SOURCE: GENERAL FUND)
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SUMMARY
On May 13, 2025, the City Council adopted Ordinance No. 2025-04, establishing a one-year pilot program regulating short-term rentals (STRs) in the City of Claremont under Chapter 16.110 of the Claremont Municipal Code. The Ordinance permitted only hosted homesharing rentals, where the property owner resides on-site throughout the guest’s stay, while prohibiting all other rental types, including unhosted vacation rentals. The program was capped at twenty Short-Term Rental Permits per STR Zone or 100 Citywide. The Ordinance took effect on June 12, 2025, and Claremont Municipal Code Section 16.110.140 requires the City Council to re-evaluate the program after one year.
Staff is returning to the City Council to report on program performance, enforcement outcomes, and permit and revenue activity during the first year of the program. In addition, staff is presenting policy discussion items to the City Council for consideration as potential future directions for the program, including the following: (1) whether to extend homesharing eligibility to qualifying primary-resident tenants with written landlord consent; (2) whether to codify the scope of what a Short-Term Rental Permit authorizes, including multi-room homesharing and coverage of eligible accessory structures on the same parcel; (3) whether to adopt ordinance language invoking California Senate Bill 346 (chapter 751, Statues of 2025) to authorize platform data reporting and strengthen enforcement; and (4) whether to create a limited unhosted short-term rental category for primary residents temporarily absent from their homes.
RECOMMENDATION
Recommended Action
Staff recommends the City Council:
A. Receive and file the report;
B. Provide direction on the four policy discussion items described in this report regarding tenant eligibility, permit scope, SB 346 alignment, and unhosted primary residence rentals; and
C. Direct staff to prepare amendments to Claremont Municipal Code Chapter 16.110 for any discussion items on which the City Council wishes to move forward, for Planning Commission review, and a future City Council public hearing.
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ALTERNATIVES TO RECOMMENDATION
In addition to the recommendation, there are the following alternatives:
A. Receive and file the performance report and take no further action.
B. Provide direction on only a subset of discussion items.
C. Decline to extend the pilot program and direct staff to prepare an ordinance to repeal CMC Chapter 16.110.
FINANCIAL REVIEW
During the first year, the Short-Term Rental Program generated $29,355 in Transient Occupancy Tax (TOT) and $15,215 in Short-Term Rental Permits, for a total of $44,570 in revenue.
The City utilizes the Rentalscape compliance program to assist with identifying short-term rentals, tracking usage, offering a portal for permits and TOT payments, and a 24/7 bilingual hotline. The cost of these services is approximately $14,000 a year. The staff cost to manage this program is estimated at $12,600 and is included in the operating budget of the Community Development Department. Total annual program expenses amount to approximately $26,600 per year and are more than covered by the revenue received from Transient Occupancy Tax and Short-Term Rental Permit Fees.
The staff cost to prepare this report is estimated at $1,500 and is included in the operating budget of the Community Development Department.
ANALYSIS
Pilot Program Performance
The Short-Term Rental Pilot Program Ordinance went into effect on June 12, 2025. Due to the delayed rollout of the City’s online permitting portal, Rentalscape, staff temporarily began accepting paper applications in late June 2025. The Rentalscape permit portal went live in August 2025.
The following metrics reflect program activity through June 18, 2026:
Enforcement Activity
Enforcement of the STR Ordinance has been a priority throughout the pilot year. With the coordination of the City’s compliance monitoring vendor, Rentalscape, and staff’s research, staff have successfully identified unpermitted STR activity on major platforms, including Airbnb, VRBO, and direct-booking sites.
The following metrics reflect enforcement activity through June 18, 2026:
The enforcement framework established under Chapter 16.110 has proven effective at identifying and removing unpermitted listings. The primary enforcement tool in the first year was the issuance of Notices of Violation, which in most cases, led to voluntary removal of unpermitted listings without escalation to administrative citations. Additionally, staff contacted hosts directly through listing websites such as Airbnb and VRBO. If the unit was an eligible STR under the STR Ordinance, staff informed them of the process to obtain a permit. If it was not, staff requested that they remove the listing. The average time from issuance of a Notice of Violation to confirmed listing removal was approximately one week.
Policy Discussion Items
Based on the first year of program experience and changes in State law, staff has identified four policy areas for the City Council to discuss and provide direction on. Based on the City Council’s direction, staff will prepare an ordinance and present it to the Claremont Planning Commission for review, then to the City Council for consideration.
Discussion Item 1: Renter-Occupied Homesharing with Landlord Authorization
Under the existing Ordinance, only property owners are eligible for a Short-Term Rental Permit. Staff have received interest from primary-resident tenants who wish to participate in the homesharing program and whose landlords are supportive. This discussion item asks whether the City Council wishes to extend eligibility to qualifying tenants in single-family dwellings, duplexes, and individually owned condominiums, the property types already eligible under the current ordinance, subject to documented landlord consent.
The core elements of a renter homesharing framework would include a primary residency requirement for the tenant (documented by a lease and at least one corroborating document such as a utility bill or bank statement), written landlord consent, and automatic permit termination upon the tenant vacating the unit or the landlord revoking consent. The permit would be issued to the tenant as the responsible operator, and the property would remain subject to the existing zone cap.
Discussion Item 2: Codifying the Scope of a Short-Term Rental Permit
This item has been raised by current permitted hosts who have demonstrated responsible operation during the pilot year and wish to more fully utilize their property for homesharing. The current ordinance is ambiguous on whether a host may rent more than one room within their home simultaneously as separate listings. The permit definition and homesharing rental definition do not address simultaneous use of multiple rooms or multiple structures separately under one permit.
Staff is asking the City Council to consider two policy questions:
• Multi-Room Home Sharing. Should the ordinance allow a host to rent more than one room in their home to different guests simultaneously? Under the current framework, a host can already rent multiple rooms to a single traveling group under one listing. Codifying multi-room home sharing would allow those same rooms to be occupied by different guest groups at the same time. A retained bedroom requirement would ensure the host maintains a private living space in the dwelling throughout any guest stay to preserve the distinction between home sharing and a vacation rental.
• Multiple Structures on One Parcel. Should a single permit cover the primary residence and up to two eligible accessory structures on the same parcel? This would allow a host with an accessory structure or guest house to operate a home sharing activity across multiple structures simultaneously under one permit. The host would be required to maintain a dedicated living space separate from any rented structure, meaning if two accessory structures are rented, the host must occupy the primary residence. Staff also notes that allowing three structures on a single parcel may conflict with the apartment definition in Chapter 16.110, which would need to be amended to exclude owner-occupied home sharing properties from that classification.
Discussion Item 3: Alignment with SB 346 - Short-Term Rental Facilitator Act
California Senate Bill 346 (Chapter 751, Statutes of 2025) took effect on January 1, 2026. The law authorizes local agencies to adopt an ordinance to require short-term rental platforms such as Airbnb and VRBO to report property data to the City, display permit numbers on listings, and face administrative fines of up to $10,000 per day for non-compliance. The City must adopt a local ordinance invoking it before the provisions apply.
During the first year of the pilot program, staff identified unpermitted listings but lacked legal authority to compel platforms to disclose host information. Invoking SB 346 would close that gap, strengthen the City’s ability to identify unpermitted activity at scale, reduced enforcement response timelines, and improve TOT compliance. It would also reinforce the existing requirement in CMC Section 16.110.050.E that permit numbers appear in all STR advertising, by making that a platform-level requirement as well.
Discussion Item 4: Primary Residence Unhosted Short-Term Rentals
The current Ordinance prohibits all unhosted short-term rentals. Staff has received interest from current residents and prospective hosts who wish to rent their primary residence on a short-term basis while they are temporarily away, such as for extended travel, a seasonal absence, a sabbatical, or a work assignment. These would not be investor-owner properties or second homes; they are the host’s primary residence.
Staff is asking whether the City Council wishes to permit a limited unhosted STR category tied to documented primary residency. This would allow an owner who lives on the property for at least nine months of the year to rent it unhosted for the remaining period, subject to a rental-day cap. All existing operational requirements, including occupancy limits, parking, noise controls, and local contact person, would continue to apply. Permitted properties would count towards the existing zone cap.
A combination of tools would be available to verify the owner occupies the property nine months of the year and does not exceed the rental day cap. This includes platform reporting data under SB 346, guest contract filing, annual attestation at permit application and renewal, and Rentalscape monitoring of listing activity. Staff believe these tools provide a workable tracking framework to enforce the rental day cap.
Staff is seeking direction from the City Council on whether to pursue this category before developing specific code language.
Claremont STR Regulations History
The City of Claremont’s discussion of adopting a Short-Term Rental Ordinance spans more than six years and involved multiple rounds of community engagement, commission review, and City Council direction.
2019 Initial Direction. In April 2019, the Claremont Future Financial Opportunities Committee (FFOC) recommended that the City Council consider regulating short-term rentals to enhance transparency and accountability in the market while generating additional revenue. In October 2019, staff presented the City Council with an overview of short-term rentals, including comparisons with other cities, best practices, and potential regulatory approaches. Following that presentation, the City Council directed staff to draft program guidelines and regulations for future consideration.
2020 Proposed Regulations and COVID-19 Delay. In March 2020, staff presented proposed regulations to the City Council that would have allowed both hosted and unhosted stays while continuing the prohibition on vacation rentals. Further development of the ordinance was delayed by the COVID-19 pandemic and did not resume until 2024.
2024 Reaffirmation and Study Sessions. In May 2024, the City Council reaffirmed the regulation of short-term rentals as a priority item. Staff presented a study session to update the City Council on changes in the short-term rental market since 2020. The City Council provided direction on four key policy decisions:
• Key Decision 1: Should Claremont permit and regulate short-term rentals? Direction: Yes
• Key Decision 2: Should Claremont permit and regulate vacation rentals? Direction: Yes.
• Key Decision 3: Should Claremont allow ADUs and accessory structures to be used as short-term rentals? Direction: Yes.
• Key Decision 4: Should Claremont implement rental term limits? Direction: No.
In August 2024, the City conducted a community survey to solicit public input on how short-term rentals should be regulated. The survey revealed significant community concern about the impact of short-term rentals on the local housing supply, particularly the risk of residential units being removed from the long-term rental market.
In September 2024, the Planning Commission held a study session to review six key regulatory decisions covering occupancy limits, parking requirements, health and safety standards, noise controls, permit caps, and the treatment of homesharing versus vacation rentals. The Planning Commission’s recommendations from that session were incorporated into a draft ordinance presented to the Commission in November 2024.
2025 Planning Commission and City Council Public Hearings.
On February 4, 2025, the Planning Commission held a public hearing on the proposed ordinance. After reviewing the staff report, staff presentation, and public testimony, the Commission voted 5-1 to recommend that the City Council adopt the proposed code amendments, with modifications including increasing the limited vacation rental booking cap from four to six times per year and clarifying language regarding non-contiguous rental periods.
On April 22, 2025, the City Council held a public hearing on the proposed ordinance. The City received a significant volume of written public comment, primarily in opposition to the ordinance, prior to the hearing. After reviewing the staff report, Planning Commission recommendation, and public testimony, the City Council voted 4-1 (Councilmember Leano voting no) to approve a first reading of the ordinance with a significant amendment: rather than adopting the full regulatory framework recommended by the Planning Commission, the City Council chose to permit only hosted home sharing rentals under a one-year pilot program, while prohibiting all unhosted vacation rentals. The ordinance also established a cap of 100 Short-Term Rental Permits Citywide, to be evenly divided among five Short-Term Rental Zones with twenty permits per zone.
On May 13, 2025, the City Council conducted a second reading and adopted Ordinance No. 2025-04. The ordinance took effect on June 12, 2025. Section 16.110.140 of the adopted ordinance established the program as a pilot subject to re-evaluation by the City Council after one year of its effective date, which is the basis for this report.
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 the 2024-26 Budget.
CEQA REVIEW
This item is not subject to environmental review under the California Environmental Quality Act (CEQA).
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 City Clerk’s Office.
Submitted by: Prepared by:
Brad Johnson Alex Cousins
Community Development Director Senior Management Analyst