TO: ADAM PIRRIE, CITY MANAGER
FROM: BRAD JOHNSON, COMMUNITY DEVELOPMENT DIRECTOR
DATE: MAY 13, 2025
Reviewed by:
City Manager: AP
SUBJECT:
Title
SECOND READING AND ADOPTION OF AN ORDINANCE REGULATING 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 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 that the City Council adopt the proposed Short-Term Rental Ordinance.
At its April 22, 2025 meeting, the City Council, by a supermajority vote (4-1), approved the first reading of the ordinance with an amendment to allow and permit homesharing short-term rentals under a one-year pilot program, while prohibiting all other types of short-term rentals, including unhosted vacation rentals. The ordinance also established a cap of 100 short-term rental permits to be evenly divided among the five City Council districts (20 permits per district).
The final proposed ordinance (Attachment A) is before the City Council for second reading and adoption. If adopted, the ordinance will take effect in thirty (30) days.
RECOMMENDATION
Recommended Action
Staff recommends the City Council:
A. Waive further reading and adopt 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. Adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CLAREMONT, CALIFORNIA, ADOPTING THE INITIAL RATES AND ESTABLISHING STR ZONES FOR THE SHORT-TERM RENTAL ORDINANCE PURSUANT TO CHAPTER 16.110 OF THE CLAREMONT MUNICIPAL CODE; 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 staff to make changes to the proposed Ordinance.
B. Do not adopt the Ordinance.
C. Request additional information from staff.
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 would 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 staff and legal costs to research this issue and prepare this report is estimated at $13,000 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 significant concerns about the impact of STRs on the community. A specific concern was their impact 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 to 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.
At its April 22, 2025 meeting, the City Council, by a supermajority vote (4-1), approved the first reading of the Ordinance with an amendment to allow and permit homesharing short-term rentals under a one-year pilot program, while prohibiting all other types of short-term rentals, including unhosted vacation rentals. The Ordinance also established a cap of 100 Short-Term Rental Permits to be evenly divided among the five City Council districts (20 permits per district).
Ordinance Overview
The STR Ordinance includes comprehensive changes to regulating short-term rentals in Claremont. 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 a Short-Term Rental Permit
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 Short-Term Rentals: Neighborhood-specific caps to prevent over-concentration.
• Accessory Dwelling Units (ADUs): ADUs and accessory structures may be used as a short-term rental if the property is the operator's primary residence.
• Vacation Rentals: Rentals that are not the operator's primary residence and where the operator does not reside on site are prohibited.
Proposed STR Fees
If the City Council adopts the proposed Ordinance, staff has estimated the time required to administer and manage the short-term rental 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 recommends the following rates for full cost recovery, included in the Short-Term Rentals Fee Resolution (Attachment B):
A. Initial Short-Term Rental Permit Application Fee: $585.20
B. Annual Short-Term Rental Permit Renewal Fee: $435.73
C. Short-Term Rental Re-Inspection Fee: $95.21
D. Supplemental Review for Unverified Habitable Space (ADU/Accessory Structure): $81.38 per hour
The Short-Term Rental Application and Renewal fees include the initial inspection cost. If the applicant fails the inspection, a re-inspection fee will be required for any subsequent inspections. Due to the uncertainty surrounding the permitting status of some ADUs and accessory structures, staff also included an hourly Supplementary Review for Unverified Habitable Space Fee. This fee would cover staff time needed to research and verify whether the structure was legally permitted as habitable space.
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.
COUNCIL COMMITTEE/COMMISSION REVIEW
The development of the proposed Short-Term Rental Ordinance 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.
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
Attachments:
A - Short-Term Rentals Ordinance
B - Short-Term Rentals Fee Resolution
C - Public Comments Received After the April 22, 2025 City Council Meeting