TO: ADAM PIRRIE, CITY MANAGER
FROM: BRAD JOHNSON, COMMUNITY DEVELOPMENT DIRECTOR
DATE: APRIL 22, 2025
Reviewed by:
City Manager: AP
SUBJECT:
Title
ORDINANCE REGULATING SHORT-TERM RENTALS AND CODIFYING RELATED TERMS AND PROVISIONS IN TITLE 16 OF THE CLAREMONT MUNICIPAL CODE (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 less than thirty consecutive days. This can include renting an entire home, 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. The City of Claremont has had a long-standing prohibition on any rentals of fewer than thirty days, however, the regulation of STR’s has been an objective of the Claremont City Council since 2019.
After months of review and input from the Claremont City Council, Claremont Planning Commission, and community members, the proposed Ordinance (Attachment A) was drafted by staff based on the direction received at the May 28, 2024 Claremont City Council meeting and the November 19, 2024 Planning Commission meeting. At its February 4, 2025 meeting, the Planning Commission voted 5-1 (Chair Emerson recused himself due to a conflict of interest) to recommend the City Council adopt the proposed Short-Term Rental Ordinance. If approved by the City Council, this Ordinance would be a new chapter in the City’s Zoning Code and would impose requirements on operators of short-term rentals.
RECOMMENDATION
Recommended Action
Staff recommends the City Council:
A. Introduce for first reading, and that reading be by title only AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CLAREMONT, CALIFORNIA, ADOPTING AMENDMENTS TO TITLE 16 OF THE CLAREMONT MUNICIPAL CODE TO: (1) ADD A NEW CHAPTER 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;
B. Provide direction on one or more resolutions to establish application processing fees and boundaries of VR Zones for Short Term Rentals; and
C. Find this item is exempt from environmental review under the California Environmental Quality Act (CEQA).
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ALTERNATIVES TO RECOMMENDATION
In addition to the recommendation, there are the following alternatives:
A. Request changes and/or additions to the proposed Short-Term Rental Ordinance. Per Section 16.315.090(B) of the Claremont Municipal Code (“CMC”), “The City Council shall not make any change or addition to the proposed amendment or Ordinance which has not been previously considered by the Planning Commission during its hearing until the proposed change or addition has been referred to the Planning Commission for a report.” Approving changes that the Planning Commission previously considered but did not recommend generally requires super majority approval (a 4/5 vote) of the City Council.
B. Do not approve the proposed Short-Term Rental Ordinance, in which case the City’s existing short-term rental prohibition would remain in effect.
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, 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 could range from $15,000 to $25,000.
If permitted, short-term rentals would be subject to the collection of permit fees charged to the short-term rental host and Transient Occupancy Tax (TOT) charged to the renter. Permit 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 (10%). The revenue generated will depend on the number of short-term rentals operating in the City, the number of nights they are rented in a year, the rental rates, and the level of compliance with the TOT requirements. The compliance company estimates that with full compliance with the TOT and STR regulations, the City could receive approximately $70,000 per year from TOT, not including any permit and registration fees. Currently, most STRs in Claremont are listed on Airbnb. If the Ordinance is adopted, the City can establish an agreement with Airbnb to collect the Transient Occupancy Tax directly from renters and remit it to the City. Additionally, the compliance company engaged by the City provides a platform for STR operators to report and remit TOT collected from other rental platforms.
If the City Council adopts the proposed Ordinance, staff has estimated the time required to administer and manage the short-term rental (STR) program. These estimates may be subject to change as staff processes applications, and adjustments can be made through a resolution by the City Council. Staff estimates a fee of $704.42 for new and renewal of Short-Term Rental Permits for full cost recovery and a fee of $83.74 for a required building, fire, and safety inspection.
At this time, there are no requests for additional staffing to support the implementation of the proposed STR Ordinance. However, additional staffing or consulting services may be needed depending on the permit application volume to ensure that other City programs and projects continue without disruption.
The staff and legal costs to research this issue and prepare this report is estimated at $11,000 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 fewer 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.
In October 2019, staff presented the City Council with an overview of STRs, 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, allowing for certain hosted and un-hosted stays but continuing the prohibition on vacation rentals. However, due to the COVID-19 pandemic, further Ordinance development was delayed. The following table summarizes the regulatory recommendations made by the City Council during the March 2020 meeting.
In May 2024, the City Council reaffirmed the regulation of STRs as a priority item. Staff presented a study session to the City Council due to changes in the short-term rental market following the regulatory recommendations made by the City Council during the March 20, 2020 meeting. During this study session, staff presented updates regarding short-term rentals and prepared four key decisions for the City Council's consideration. These decisions would be used to update the prior regulatory recommendations made by the City Council in 2020. The key decisions with Council direction are summarized below.
Council Key Decision #1: Should Claremont permit and regulate short-term rentals?
Direction: Yes, the City Council directed staff to move forward with permitting and regulating short-term rentals.
Council Key Decision #2: Should Claremont permit and regulate vacation rentals?
Direction: Yes, the City Council directed staff to move forward with permitting and regulating vacation rentals.
Council Key Decision #3: Should Claremont allow accessory dwelling units (ADUs) to be used as short-term rentals?
Direction: Yes, the City Council directed staff to develop regulations allowing accessory dwelling units (ADUs) to be used as short-term rentals.
Council Key Decision #4: Should Claremont implement rental term limits for hosted and un-hosted short-term rentals?
Direction: No, City Council directed staff not to implement rental term limits for hosted, un-hosted, and vacation rentals.
With these decisions, the City Council directed City staff to prepare an ordinance to permit and regulate all short-term rentals and conduct a community and commission input process.
In August 2024, the City conducted a community survey to receive input on how it should regulate STRs. The survey showed that there were significant concerns about the impact of STRs on the community. A specific concern was the impact they may have on long-term (more than thirty days) rental prices due to housing units being taken off the market for short-term rentals. Findings related to this concern are discussed further in the following section.
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 six decisions are summarized below.
Commission Key Decision #1: Should homesharing and vacation rentals be permitted with different fees and requirements based on the rental type?
Direction: The Commission did not reach a consensus on whether homesharing and vacation rentals should have different fees and requirements. The proposed Ordinance applies the same regulations to all rental types.
Commission Key Decision #2: What should the maximum occupancy limits be for short-term rentals?
Direction: The Commission recommended a maximum occupancy of two people per bedroom plus one. The Ordinance allows for two minor children (age 12 or under) in addition to the maximum occupancy. The Commission also supported higher daytime occupancy, allowing double the overnight limit. For a two-bedroom STR, the overnight occupancy would be five people (excluding children), with a daytime limit of ten people.
Commission Key Decision #3: Should STRs be required to provide on-site parking?
Direction: The Commission agreed to require STRs to provide overnight parking on-site but allow daytime street parking. The Commission also supported limiting the number of vehicles per STR, with the Ordinance capping the number of automobiles at one per bedroom plus one additional automobile.
Commission Key Decision #4: Should health and safety inspections be required for STRs?
Direction: The Commission agreed to require all rentals, including homesharing, limited vacation rentals, and vacation rentals, to have initial inspections for fire, building, and safety, and biannual inspections unless a violation occurs, in which case annual inspections would be required.
Commission Key Decision #5: How should noise and nuisance regulations be enforced?
Direction: The Commission did not support requiring exterior noise monitors but endorsed reinforcing the City’s existing noise control regulations. The Ordinance prohibits any noise-making devices from being audible at the property line of the vacation rental. The Commission supported the implementation of a 24-hour hotline for noise complaints and prohibiting commercial events such as weddings, baby showers, and corporate gatherings.
Commission Key Decision #6: Should the City implement a cap on the total number of STRs in the City?
Direction: The Commission supported implementing a cap for the total number of Vacation Rental Permits, but not Homesharing or Limited Vacation Rental Permits. The Commission also requested staff develop regulations for limited vacation rentals, allowing for a maximum of four separate rental contracts per year. The Ordinance also limits owners to one vacation rental at a time and prohibits business entities from obtaining a Short-Term Rental Permit.
The Planning Commission’s recommendations were incorporated into the draft Ordinance presented to the Commission in November 2024. During that meeting, the Commission provided input and recommended modifying the draft Ordinance. The primary recommendations were due to confusion regarding some of the terms. The presented Ordinance also allowed the use of ADUs as vacation rentals in compliance with State law. The Commission was not in favor of allowing ADUs as vacation rentals and came to the compromise of allowing ADUs to be used as limited vacation rentals, which limited them to being rented no more than four times per year. ADUs would still need to comply with State law.
In February 2025, the Planning Commission held a public hearing to consider an amendment to the Claremont Zoning Code, that would permit and regulate STRs, incorporating the Planning Commission and City Council’s previous direction and recommendations. The Commission made some additional modifications to the Ordinance; this included increasing the number of times a limited vacation rental could be rented per year from four to six and adding clarifying language for “non-contiguous periods of less than 30 days and changing the 12-month period to calendar year. “Times” is defined below in the permit types as a contract time period, not the number of rental days per year.
The Commission also wanted to include the vacation rental (VR) zone percentage in the Ordinance to limit the ability to change the cap without a thorough public hearing process. The Commission set the VR zone percentage cap at one percent (1%) of residential units, excluding properties with more than two units, in each VR Zone. The previous Ordinance allowed this cap to be changed by resolution. These changes are reflected in the attached Short-Term Rental Ordinance.
Ordinance Overview
The STR 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.
o Vacation Rental: Allows a single-family dwelling to be rented for periods of fewer than thirty consecutive days without the owner residing on-site during the rental term.
o Limited Vacation Rental Permit: Allows a single-family dwelling or eligible ADU to be rented for periods of fewer than thirty consecutive days, with no more than six rental contracts per calendar year. This permit is designed for occasional short-term rentals.
o Homesharing Rental Permit: Allows an owner to host guests in their primary residence for a period of fewer than thirty consecutive days, provided the owner resides on-site throughout the guest’s stay.
• 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. Maximum of one vehicle per bedroom, plus one additional vehicle.
• Noise and Nuisance Controls: Prohibition of amplified noise audible at property boundaries and a 24/7 hotline for complaints.
• Gatherings & Events: Prohibits commercial and/or social events, including weddings, receptions, baby showers, parties, commercial gatherings, or similar events that would exceed the occupancy limits.
• Caps on Vacation Rentals: Neighborhood-specific caps to prevent over-concentration. No limits for junior vacation rentals or homesharing rentals.
• Apartments Prohibition: Properties with three or more units are not eligible for any short-term rental permit types.
• Accessory Dwelling Units (ADUs): ADUs may only be used as a limited vacation rental, if they comply with State law.
• Vacation Rental Limit Per Person: Business entities are prohibited from being issued any Short-Term Rental Permits. An owner of a vacation rental can only be issued and maintain one Vacation Rental Permit at any time.
Vacation Rental Zone Caps
Setting a cap on the number of vacation rental permits within a city or certain neighborhoods or zones is a common practice for cities regulating short-term rentals. During the Planning Commission’s September 2024 meeting, staff requested direction on whether there should be a limit on the number of STR permits. A majority of the Commissioners supported implementing a cap on the total number of vacation rental permits but with no cap on homesharing or limited vacation rental permits. The VR zone can be determined by resolution, while the VR zone percentage cap could only be changed by amending the Ordinance.
The Ordinance sets a cap based on the total number of housing units located in a zone within the City. There would then be a percentage cap on each of the zones. The percentage cap would be the same for all zones to ensure that vacation rentals are spread evenly among the community. The Planning Commission has proposed a one percent (1%) VR zone percentage cap, and has recommended using Claremont City Council Districts as VR zones.
The chart below shows how the vacation rentals would be distributed across the city.
|
VR Zone |
Total Residential Units* |
1% of Units (VR zone percentage cap) |
Existing Identified STR Units |
|
1 |
1,963 |
20 |
12 |
|
2 |
1,974 |
20 |
10 |
|
3 |
1,551 |
16 |
12 |
|
4 |
2,118 |
21 |
10 |
|
5 |
1,637 |
16 |
8 |
|
Total: |
9,243 |
92 |
51 |
|
*Does not include apartment units, only single-family homes, duplexes, and condominium units. |
Community Survey and Concerns
In late August 2024, the City conducted a community survey (Attachment B) to receive input on how the City should regulate STRs. Due to the City Council’s direction for staff to move forward with developing regulations, the focus of this survey was not on whether STRs should be allowed but instead to provide guidance on regulations. The survey also aimed to assess the impact of the existing unpermitted STRs on the community.
The survey allowed respondents to provide open-ended feedback alongside structured answers. Approximately 70 percent of those who selected the "other option" in response to regulatory questions strongly opposed STRs, particularly vacation rentals. In the final question, which invited respondents to share additional comments or suggestions, 175 of the 377 survey participants provided written responses. While opinions were somewhat divided, the majority expressed strong opposition to STRs. Common concerns included housing shortages resulting from STR conversions, disruptions to community cohesion and neighborhood stability, and negative impacts from investor-owned STRs on neighborhood character. Supporters, though a minority, highlighted the potential economic benefits STRs could bring, such as increased accommodation options for visitors and opportunities for stricter regulations to address community issues.
Since the item was presented to the City Council in May 2024, residents have had increasing concerns regarding the impact of STRs in the community. A specific concern is their impact on long-term rental (more than thirty days) prices due to housing units being taken off the market for short-term rentals. Vacation rentals could increase the price of for-sale housing in the City due to an increase in demand from investors while the available housing supply remains the same.
The Ordinance aims to strike a balance by addressing these concerns while regulating the City’s existing unpermitted vacation rentals. It includes protections for tenants by prohibiting evictions if the property owner intends to convert the unit into a short-term rental. Furthermore, the Ordinance limits vacation rentals to single-family homes and condominiums, prohibiting their operation in apartment buildings.
Accessory Dwelling Units (ADUs)
During the May 28, 2024 City Council meeting, the Claremont City Council provided direction to allow ADUs to be used as STRs in compliance with State law. However, during its November 19, 2024 meeting, the Planning Commission recommended restricting ADUs to only be eligible for Limited Vacation Rental permits. Since that meeting, increasing numbers of community members have expressed concerns regarding this limitation.
Over the past decade, the State of California has passed multiple laws to promote ADU construction. On January 1, 2020, Assembly Bills 68 and 881 took effect, reducing barriers to ADU development by eliminating owner-occupancy requirements for five years and limiting local control over ADU approvals.
A key provision, California Government Code § 65852.2(e)(5), now relocated to § 66323(e) as part of Senate Bill 477 in 2024, requires that ADUs approved under ministerial processes be rented for longer than thirty days. This requirement applies to most ADUs, including new construction detached ADUs up to 800 square feet and 16 feet in height, and ADUs or Junior ADUs (JADUs) built within an existing or proposed single-family dwelling or accessory structure. If the City were to allow ministerially approved ADUs or JADUs that were permitted after AB 68 and AB 881 to be used as short-term rentals, the Ordinance would be in direct violation of State law.
In response to these State law changes, the Claremont City Council adopted Ordinance No. 2019-07 in September 2019, amending Chapter 16.333 (Accessory Dwelling Units) of the Claremont Municipal Code. CMC Section 16.333.060(D) states that neither the accessory dwelling unit nor the primary dwelling unit shall be rented for a period of fewer than thirty days. Due to the difficulty distinguishing ministerial ADUs, subject to § 65852.2(e)(5), from non-ministerial ones, the rental term provision was applied to all ADUs and JADUs approved after the Ordinance went into effect.
All ADUs and JADUs entitled after the adoption of Ordinance No. 2019-07 include a deed restriction that prohibits rentals of fewer than thirty consecutive days. This deed restriction is recorded on the property title, and all ADU applicants must sign it as part of the approval process. If an ADU approved after the Ordinance’s adoption is currently used as a short-term rental, it is in violation of its deed restriction and the Claremont Municipal Code.
ADUs approved before the adoption of Ordinance No. 2019-07 do not include the thirty-day deed restriction. Additionally, because these units were entitled before the 2020 State law changes, they are not subject to California Government Code § 65852.2(e)(5), now § 66323(e), and may be used as short-term rentals under the proposed Short-Term Rental Ordinance.
If STRs are permitted in pre-2019 ADUs, the units must be legally permitted as habitable space. Some properties in Claremont have secondary or accessory units originally constructed as non-habitable spaces, such as game rooms, pool rooms, workshops, or artist studios. To legally convert these types of structures to habitable structures, costly improvements could be necessary to become legally habitable structures. There are also many properties across the City that contain structures that were permitted as guest houses or sleeping rooms where kitchens were prohibited based on the Claremont Zoning Ordinance. It is likely that many of these types of accessory living units have unpermitted kitchens installed. Property owners must apply for an ADU permit to convert these spaces into habitable units or legalize improvements that were not permitted or inspected. However, once an ADU is permitted and entitled, State law and City regulations would prohibit renting the unit for fewer than thirty days.
ADUs as STRs - Other Cities Regulations
Staff has conducted research on other cities' regulations for using ADUs as STRs and has summarized the findings below:
• Rancho Cucamonga
o Any accessory dwelling unit subject to a covenant that specifically prohibits rentals of thirty days or fewer may not be used as a short-term rental.
o All JADUs or ADUs entitled after September 2018 include a covenant to require the JADUs and ADUs to be rented for more than thirty days. Units permitted before then may be eligible to be used as STRs.
• Palm Springs
o No ADU or JADU may be rented for a term that is shorter than thirty days. This prohibition applies regardless of when the ADU or JADU was created.
o Prohibits all ADUs and JADUs from being used as STRs.
• Upland
o No ADU or JADU may be rented for a term that is shorter than 31 days. This prohibition applies regardless of when the ADU or JADU was created.
o Prohibits all ADUs and JADUs from being used as STRs.
• Pomona
o From the STR regulations chapter, no accessory dwelling unit, junior accessory dwelling unit, or dwelling created under Government Code Sections 65852.2 or 65852.22 may be used for short-term rental.
o From the Zoning and Development Code, no ADU or JADU may be rented for a term that is shorter than thirty days. This prohibition applies regardless of when the ADU or JADU was created.
o Prohibits all ADUs and JADUs from being used as STRs.
• La Verne
o STR section states that “The dwelling unit shall be the primary residence of the host.”
o Dwelling unit is defined as “a structure or portion thereof which is used for human habitation, as more particularly described in Section 18.94.010 <https://ecode360.com/44525767>. A dwelling unit for purposes of this chapter is a single-family detached unit or a single-family attached (townhome) unit.”
o The zoning code requires that all junior or accessory dwelling units be rented for a minimum of thirty days.
o Only allows for hosted and un-hosted stays; the property must be the owner/operator's residence. The “dwelling unit” definition does not include ADUs or JADUs as an eligible unit type.
City Council Authority to Modify Planning Commission Recommendations
The City Council has the authority to approve or modify short-term rental (STR) regulations recommended by the Planning Commission; however, certain procedural requirements outlined in Municipal Code § 16.315.090 must be followed. If the Planning Commission has recommended an ordinance or amendment, the City Council may approve it by a majority vote. However, any proposed changes that were not previously reviewed by the Planning Commission must first be referred back to the Commission for consideration.
If the City Council wishes to modify a regulation that contradicts the Planning Commission’s recommendation, the change must be approved by at least four affirmative votes of the City Council. Due to these procedural requirements, the City Council cannot make certain changes unilaterally without first referring the matter back to the Planning Commission for review. Some items that were not discussed by the Planning Commission include the definition of a single-family dwelling, which excludes apartments and multi-unit buildings containing more than two dwelling units under single-family property ownership, the limit of one Vacation Rental Permit per owner, owner’s insurance requirements, and the owner’s contractual requirements with the responsible person (renter).
LEGAL REVIEW
The proposed Short-Term Rental Ordinance has been reviewed and approved as to form by the City Attorney.
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
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 this 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.
COMMISSION REVIEW
The development of the proposed Short-Term Rental Ordinance (Attachment A) involved an extensive public process, including the following Commission review.
• Planning Commission review on September 17, 2024 and November 19, 2024.
• Planning Commission recommendation to the City Council on February 4, 2025.
Minutes from these meetings may be found in Attachments C through E, for reference.
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.
Notice of this public hearing was published in the Claremont Courier on Friday, March 28, 2025, electronic notices were sent to the Short-Term Rentals interested parties list.
Submitted by: Prepared by:
Brad Johnson Alex Cousins
Community Development Director Senior Management Analyst
Attachments:
A - Proposed Short-Term Rentals Ordinance
B - Short-Term Rental Regulations Community Survey
C - Planning Commission September 17, 2024 Meeting Minutes
D - Planning Commission November 19, 2024 Meeting Minutes
E - Planning Commission February 4, 2025 Meeting Minutes
F - Public Comments