Following an informal discussion, the City Council recently directed staff to come back with an ordinance to create a lottery system for Avalon’s short term rental license waitlist.
There was no formal vote, but there was a consensus.
City Manager David Maistros gave the staff presentation It was the last item on the Oct. 7 agenda.
The council modified the transient rental part of the Municipal Code on Aug. 9, according to the staff report by Maistros and Senior Management Analyst Devin Hart. The new ordinance was adopted on Oct. 1.
“Per the City Council’s direction, the ordinance established a cap of 410 transient rental units within the City of Avalon. This cap includes all grand-fathered transient rental units, all units with conditional use permits and all units with transient rental licenses,” Maistros and Hart wrote.
According to the report, Avalon staff have identified 386 compliant short-term rental properties. According to the report, that number includes 91 grandfathered properties and 23 “banked” short-term rental properties.
“Due to the newly established limit on new transient rental license permits, the ordinance authorizes the City Manager to implement a policy to regulate the manner in which the Planning Commission considers new transient rental license once that limit is reached,” Maistros and Hart wrote.
Staff proposed two options for the council: a lottery system or a first come, first served waitlist.
Maistros told the council that having a lottery discourages speculative real estate purchases because a buyer of a property might not win the lottery.
Maistros also told the council that if the city adopts a waitlist, Avalon should not allow the transfer of a waitlist position.
Staff recommended requiring property owners to keep their contact information current with an annual fee and requiring applications to forfeit their waitlist position if their property is sold or transferred.
“In addition to establishing a general lottery system, Staff propose creating a weighted/priority point system where added points are applied to owners who have long-term rental properties, or have participated in previous lotteries and been rejected,” Maistros and Hart wrote.
According to the staff report, the Planning Commission on Sept. 17 recommended the council adopt a lottery system with a weighted point system.
They proposed lottery system with a 60-day application period.
Council discussion
The following are highlights from the council discussion.
“I have a duplex, but we live in the whole thing. But under the lot, under the lottery, I could apply for CUP on that property or TRL [transient rental license] on one of those units on the front or the back, right?” asked Mayor Anni Marshall.
“Let’s say I got it, but I’m still living in the whole house, would I then to keep that? Can I bank that or do I have to pay you so much if I’m not renting it out?” Marshall asked.
Maistros said the CUP (conditional use permit) doesn’t go with the property anymore. He said the value of banking a short-term rental wasn’t there as much as when you had a CUP.
Councilmember Mary Schickling said that a transient rental license expires.
“So you have to renew it annually. And with that process, that’s not a slam dunk. You have to go up the Planning Commission again, right? To renew your TRL?” Schickling said.
Maistros said no. “Only if you had violations under the new system, verifiable violations you would have to return and be challenged,”” he said.
According to Maistros, if your business license was valid, it’s just a matter of the city renewing the license.
Schickling asked if someone was banking a TRL could staff deny them a license?
According to Maistros, staff could deny if they can determine and prove that someone is not actually renting out a short-term rental 10 times a year.
According to City Attorney Scott Campbell, if someone gets a TRL, and for some reason they are not using it or the city finds they’re committing fraud, there was a period in which that someone would have to reapply, go to the back of the line, and if there are multiple violations, the could be banned from TRLs for a period of time.
Schickling asked if with the city’s tracking system, wouldn’t it be easy to see if a property owner was renting out property or not.
“Yes and no,” Maistros said.
According to Maistros, if the payments are coming in and you could show the property is available for rent, you can see it.
According to Maistros, it is more difficult to bore down to the exact number of days a property is being rented. “It reports monthly,” he said.
Maistros said license renewal is not automatic.
Schickling said: “Just because you win the lottery doesn’t mean that you are definitely going to get a TRL.” According to Schickling, an applicant would still have to go to the Planning Commission.
“No,” Maistros said.
According to Councilmember Michael Ponce, the applicant has to be able to show they actually own the property.
Councilmember Lisa Lavelle said she liked the lottery. “I think it makes more sense,” Lavelle said.
Lavelle said she thought it seemed slightly more fair than the waiting overtime process because everyone has an equal shot.
Schickling said the lottery system is better for the homeowner, too
