Vacation Rentals Rule the Day in Morro Bay

Editor’s note: Last issue we published a letter from Morro Bay Councilman Jeff Heller that was incomplete. He sent us the completed letter after the paper came out and asked that we reprint it.

In case you missed the most recent council meeting, Morro Bay’s elected officials approved (4-1) a new short-term vacation rental ordinance after many months of meetings, discussion, and community input. While the ordinance was intended to “protect the quality and character of our neighborhoods”, it seems to primarily protect the financial interests of the vacation rental owners, the tax generated by their properties, and the Coastal Commission’s desire that there be a wide variety of accommodations available to tourists.

None of this would be a problem unless you are one of the people who live next door or near a busy, “non-hosted” short term vacation rental. These single-family homes typically accommodate 8-12 people for the weekend (or up to 30 days), along with their cars, guests, pets, toys, etc. The negative impacts of what many consider to be commercial operations in residential areas form the crux of most complaints. That, combined with the challenge and cost of enforcing rules and regulations, can make the “non-hosted” short-term rental a highly undesirable neighbor.

Many cities outside the jurisdiction of the Coastal Commission simply ban these kinds of rentals due to the deleterious effect they have on neighborhoods. Some cities accommodate these rentals by physically separating them from one another. “Buffer” distances (200-500 ft.) are commonly used for this purpose. Los Osos is pursuing a 500-foot separation. By the way, there is no buffer distance required in Morro Bay’s new ordinance for existing short-term rentals. They have all been “grandfathered in” regardless of how many are clustered together as they commonly are in the Beach Tract. However, in a nod to our neighbor’s concerns, a minimum separation distance will apply to future vacation rentals. What will the future buffer distance be —175 ft?

Another option available to jurisdictions is to limit (CAP) the overall number allowed, which is often tied to a percentage of housing stock available. I think most of us will agree there is a housing crisis in California, so the % of our stock that we remove from the potential long-term rental pool is important. Morro Bay’s previous mayor and council established a vacation rental CAP of 250 in 2015 I believe. That amounts to 4% of our SFR housing stock. When added to our 20% of vacant 2nd homes here, a total of 24% of our housing market was unavailable to those looking for long term rental/purchase opportunities. So a reduced CAP was important to our residents and was much discussed in the various meetings. Several members of the initial “ad hoc” committee suggested a CAP of 120, which would be about 2% of our housing stock. What is the final CAP in the new ordinance? 175. 3% of our single-family home inventory. How will the CAP be reduced from 250 to 175? Through strict enforcement policies to be detailed in future resolutions, and attrition of existing permits over time. But first, the California Coastal Commission must certify the ordinance approved on Tuesday night.

Jeff Heller
Morro Bay City Council

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