As the peak of tourism season comes to a close in Half Moon Bay, the City Council is discussing a proposed ordinance that could limit where visitors to the Coastside stay and who would be allowed to host them.
At last week’s City Council meeting, the consensus among city leaders was the proposed short-term rental ordinance needed some refinement. After a staff report and lengthy discussion, the council opted to continue the topic to a second reading and directed staff to amend parts of the ordinance.
Specifically, the council wants to put a limit on the number of nights a whole house can be rented each year. It will also determine where to cap the number of people allowed in rental units, likely either six or eight people, including children.
The crux of the ordinance is that it requires property owners to live on the rental property for at least six months. While the council believed the primary residency requirement was a good principle in preserving neighborhood integrity, members took issue with the notion that the primary owner could rent an entire house, referred to in the ordinance as “unhosted,” for up to 180 days, or nearly half the year.
City Councilmember Debbie Ruddock said the ordinance didn’t go far enough in terms of prioritizing residential use over rental operations.
“We’re basically allowing our residential neighborhoods to become mixed-use districts,” Ruddock said.
After some deliberation, other council members agreed that renting an unhosted unit should be limited to between 60 to 90 nights per year. The hope is that by limiting the number of short-term units available and barring them in apartments and mobile homes, the door will open for use of the properties for affordable housing rather than short-term rental.
“We want to be able to allow people to use their assets, but not in a way that housing stock is slighted,” Councilmember Harvey Rarback said. “The important thing is that we don’t turn our neighborhoods into motels.”
But some property owners said they believe the ordinance discriminates against them because it allows some exceptions to the primary residency requirement in the mixed-use Commercial-Downtown and Commercial-General districts. The ordinance also does not allow rentals in accessory dwelling units unless grandfathered before the certification. Several residents said they had never received complaints about their operation and feel penalized because of a smaller number of owners who do get violations.
The city’s data indicates there are 50 short-term rentals in Half Moon Bay currently, and a little more than 100 have ever been on record since 2017. Short-term rentals don’t account for a large portion of the city’s transient occupancy tax revenue, according to City Manager Bob Nisbet. The rentals are charged the same amount of tax as hotel rooms and provide nearly 4 percent of the city’s TOT revenue each year.
The city’s efforts to amend zoning policy for rental units date back to a Planning Commission study session in 2018. There was a community survey in 2019 and three additional study sessions in 2020 and 2021. The Planning Commission published its final draft in May.
The process was impacted by the pandemic, as far fewer visitors opted to stay at hotels in Half Moon Bay last year. Hotel occupancy averaged about 37 percent in 2020, according to the Half Moon Bay Coastside Chamber of Commerce and Visitors’ Bureau, a steep drop from the nearly 68 percent occupancy average.
The ordinance also requires online hosting platforms like Airbnb and Vrbo to unlist properties that the city says are unregistered or not complying with the ordinance.
“In numerous other jurisdictions, the major hosting platforms are working with the cities on these notices and takedown provisions,” Deputy City Attorney Sarah Clark said. “It allows the city to use these platforms as an enforcement partner.”