Tag: Short-Term Rentals

SECOND DISTRICT FINDS 90-DAY STATUTE OF LIMITATIONS APPLIES TO LAWSUIT ALLEGING CITY FAILED TO OBTAIN COASTAL DEVELOPMENT PERMIT PRIOR TO ADOPTING SHORT-TERM RENTAL ORDINANCE

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In Coastal Act Protectors v. City of Los Angeles (2022) 75 Cal.App.5th 526, the Second District Court of Appeal held a lawsuit alleging the City of Los Angeles was required to obtain a coastal development permit (CDP) prior to the adoption an ordinance imposing restrictions on short-term vacation rentals was subject to the 90-day statute of limitations in Government Code section 65009 subdivision (c)(1)(B). Because the lawsuit was not filed with 90 days, the court dismissed the case.

Background

The City adopted an ordinance imposing restrictions on short-term vacation rentals in December 2018. More than a year later, Coastal Act Protectors (CAP) filed a lawsuit seeking a writ of mandate to enjoin the City from enforcing the ordinance in the Venice coastal zone until the City obtained a CDP pursuant to the California Coastal Act, arguing that the ordinance constituted a “development” under the Act.

The trial court concluded that the 90-day statute of limitations in Government Code section 65009, subdivision (c)(1)(B), applied to the City’s adoption of the ordinance, and CAP’s petition was therefore untimely. It reasoned that the City’s purported duty to obtain a CDP was a procedural task to perform in enacting a lawful ordinance; therefore, CAP’s petition challenging the City’s failure to obtain a CDP constituted an action to “attack, review, set aside void, or annual” the decision of the City to adopt the ordinance, bringing it within the ambit of Government Code section 65009 subdivision (c)(1)(B). The trial court also addressed the merits of the petition and concluded that the ordinance was not a “development” under the Coastal Act. CAP appealed.

Court of Appeal’s Decision

On appeal, CAP argued that the City’s purported failure to comply with the Coastal Act when it adopted the ordinance was not an “action” or “decision” contemplated by section 65009 of the Government Code, but was instead subject to the three-year statute of limitations in Code of Civil Procedure section 338, subdivision (a), for actions “upon a liability created by statute.”

The Court of Appeal agreed with the trial court that CAP’s petition constituted an action to “attack, review, set aside void, or annual” the decision of the City to adopt the ordinance, and therefore, the 90-day limitations period applied. The court explained that, unlike in cases where it would have been impossible for a petitioner to bring a lawsuit within 90 days, the Coastal Act predated the County’s ordinance. If the City did have a duty to obtain a permit for application of the ordinance to residences in the Venice coastal zone, the court held, that duty would have existed when the City enacted the ordinance. The statute of limitations in the Government Code therefore applied. Because CAP waited over a year to file suit, the Court of Appeal agreed with the trial court that the petition was untimely. The court concluded by noting its determination comported with the Legislature’s stated intent to “provide certainty for property owners and local governments regarding” local zoning and planning decisions. (Gov. Code, § 65009, subd. (a)(3).)

Since its holding on the statute of limitations issue was dispositive, the Court of Appeal did not address whether the ordinance constituted a “development” subject to the CDP requirements of the Coastal Act.

– Elizabeth Pollock

FOURTH DISTRICT HOLDS CITY OF PALM SPRINGS’ SHORT-TERM RENTAL ORDINANCE IS CONSISTENT WITH ZONING CODE

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The Fourth District Court of Appeal in Protect Our Neighborhoods v. City of Palm Springs (Jan. 7, 2022) 73 Cal.App.5th 667 (part. pub.), upheld the City of Palm Springs’ ordinance authorizing short-term rentals in residential zones as consistent with the City’s Zoning Code.

Factual Background

The 2008 Short-Term Rental Ordinance

The City of Palm Springs’ Zoning Code authorizes two uses in a single-family residential (R-1) zone without a permit: (1) a “permanent single-family dwelling”; and (2) uses “customarily incident to the permitted uses when located on the same lot therewith.” All other uses not expressly permitted are prohibited, and the Planning Commission shall not permit commercial uses in such zones.

As a popular vacation destination, the City has expressly allowed for short-term rentals of single-family dwellings since 2008. The corresponding ordinance initially applied to rentals for 28 days or less and limited occupancy based on the number of bedrooms. Rental owners were required to register the property with the City and use “reasonably prudent business practices” to ensure that renters and their guests did not create unreasonable disturbances or engage in disorderly conduct.

The 2016–2017 Ordinance Amendments

In 2016, the City amended the short-term rental ordinance to authorize short-term rentals of single-family residences and duplexes, but not apartments. The City adopted subsequent amendments in 2017, which barred ownership of more than one vacation rental, limited rentals to 36 per year, and added new provisions for “estate homes” (5+ bedrooms) and “homesharing.” The 2017 amendments also included findings that—when taken together—confirmed vacation rentals are permitted in R-1 zones as “ancillary and secondary uses of residential properties.”

Procedural Background

Protect Our Neighborhoods, an organization of homeowners opposed to vacation rentals, filed a petition for writ of mandate alleging the 2017 amendments violated the City’s Zoning Code, General Plan, and CEQA. The trial court denied the petition. Protect Our Neighborhoods appealed on the zoning code claims, but did not appeal the trial court’s ruling on the CEQA or General Plan claims.

The Court of Appeal’s Opinion

On appeal, petitioners alleged short-term rentals violated the zoning code because they are “commercial,” not “residential” uses, and improperly change the character of the R-1 Zone. Petitioners also contended that, if the zoning code permits short-term rentals at all, it only does so on the condition that an owner obtain a land use or conditional use permit.

Conflict With the Zoning Code

Effect of a Conflict

The Court of Appeal rejected petitioners’ contention that the ordinance conflicted with the zoning code. Petitioners treated the code as some kind of “higher law” that invalidated any subsequent conflicting law, even though the zoning code and ordinance are “coequal parts of the Municipal Code.” The court thus reasoned that, to the extent they conflicted with one another, “the most recently enacted statute expressed the will of the Legislature.” Therefore, even if the ordinance and zoning code could not be reconciled, the ordinance would remain valid because the City’s findings evinced its intent to repeal any inconsistent provision of the zoning code.

Existence of a Conflict

The court also rejected petitioners’ claim that vacation rentals constituted “commercial uses” that were barred in R-1 residential zones. The court noted that R-1 zones expressly permit any use that is “customarily incident to” the use of a “permanent single-family dwelling.” A “dwelling” includes “a building or portion thereof designed exclusively for residential occupancy…” Here, the ordinance plainly states that “vacation rentals are an ‘ancillary and secondary use of residential property…’” Petitioners failed to establish that this interpretation was erroneous.

Petitioners also failed to establish how short-term vacation rentals fell within the definition of a “commercial use.” The zoning code meaningfully distinguishes between commercial stays, and the City could reasonably conclude that the short-term rental of a single-family dwelling has different impacts than the short-term rental of a 20, 50, or 100-unit motel. That vacation rentals will impermissibly change the character of the R-1 zone is equally unavailing. Petitioners mistakenly cited to the “business regulations” provision of the code’s “home occupations” chapter, which does not apply to short-term rentals. Nevertheless, even if rentals did affect nearby single-family residents, allowing them was a legislative judgment left up to the City.

The Ordinance’s Findings

Petitioners claimed the ordinance’s supportive findings were internally inconsistent because they impliedly permitted an owner to acquire property and exclusively use it as a short-term rental without ever living in it. The court observed that a property can be “residential,” even if it is vacant. The code defines “dwelling” based on whether the building is designed exclusively for residential occupancy, not whether the building is actually occupied. The building is then limited to use as a single-family residence or uses customarily incident thereto, such as vacation rentals.

Need for a Discretionary Permit

Finally, petitioners argued short-term rentals in R-1 zones required issuance of a discretionary permit. Though the zoning code only requires permits for large day cares, model homes, temporary onsite trailers in conjunction with sale of subdivision lots, accessory apartments, churches, schools, and golf courses in R-1 zones, petitioners argued that vacation rentals have greater impacts than those uses. The court rejected this by observing that the zoning code does not require permits for “similar uses” with “similar impacts.” Rather, uses customarily incident to uses as a single-family dwelling—i.e., vacation rentals—are allowed without a permit.

– Bridget McDonald