Murrieta continues to provide new framework for short-term vacation rentals

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Murrieta City Council picks up discussion regarding short-term vacation rentals at the Tuesday, Oct. 20, meeting. Valley News/Courtesy photo

The short-term vacation rental saga continued Tuesday, Oct. 20, in Murrieta with the second reading of the proposed ordinance, which was introduced at the Oct. 12 hearing. Staff proposed various amendments to 16 of the development codes providing framework for short-term vacation rentals.

These updates relate to parking and sign criteria and also Title 5, which is more of the operational aspects under the code, according to staff.

On Oct. 12, Murrieta City Council voted to approve Option B-2; there was an additional modification to remove estate-residential 3 as a permitted zone for non-hosted STVR’s.

The related ordinance permits hosted STVR’s in all residential zones within the city.

“Non-hosted” rentals would be limited to the following zones within the city’s jurisdiction: Estate Residential 1, Estate Residential 2 and Rural Residential.

Some background on Title 5.27 – location and cap is limited to single-family residential dwellings and accessory structures, i.e., pool house, casita and privately owned condominiums. There’s a citywide limit of 300 STVR permits.

Staff recommended that the council conduct a second reading of the following ordinance regulating short-term vacation rentals, adding chapter 5.27 to the Murrieta Municipal Code and amending sections 16.08, 16.10, 16.11, 16.12, 16.14, 16.34, 16.38, 16.44 and 16.110 of the development code with the adoption of ordinance 561-20, with the incorporation of Errata 1.

Councilmember Kelly Seyarto gave his thoughts.

“What it really boils down to is it’s not about us not caring about people’s property rights; in fact, I know my colleagues pretty well, and every single one of them are pretty big property rights advocates,” Seyarto said. “The problem we have is when we have a clash of those property rights. And when that happens, we have to decide who’s being harmed more and protect that.

“For the integrity of our neighborhoods, that’s why this ordinance was put forward with B-2. That’s really what it boils down to, is we want to protect the integrity of our neighborhoods for people, so they can live and enjoy their properties,” he said.

Seyarto said that it’s a difficult decision, but that it’s something they really need to do. He also noted that there are a lot of cities who have already banned STVR’s outright, and that’s something Murrieta doesn’t want to have to do.

Before making a motion, Mayor Gene Wunderlich concluded with his thoughts.

“The council – we do our best to represent the divergent voices of our constituents but don’t always agree on the approach to that. We all bring something different to the table…” Wunderlich said.

Since people don’t always agree, they need collaboration, discussion and at time, reasonable dissent, according to Wunderlich.

The motion passed 3-1-1, with Councilmember Jonathan Ingram being absent, and Mayor Gene Wunderlich voting “no.”

Staff gave with a presentation on the short-term vacation rental fees, proposing a fee resolution for hosted and non-hosted. The fees help offset cost for reviewing and processing STVR permit applications and helps with the program costs, including contracting with a platform operator. It also includes administrative costs associated with permitting and enforcement costs with code enforcement and police.

The proposed fee structure would be as following: $349 for a non-hosted application/renewal fee per year and $200 for hosted application/renewal fee per year.

The proposed fee for $349 for non-hosted STVR’s reflects the estimated full cost recovery amount for the program.

The proposed fee of $200 for hosted STVR’s reflects a reduced cost, consistent with previous direction.

If the reduced cost for hosted STVR’s is adopted, the additional revenue to fund the program would be recovered from new transient occupancy tax revenues paid by STVR operators.

There are two fiscal impacts: one is with the revenue side and the other is with the cost and expenditures associated with the program, according to staff.

The cost with the implementation, monitoring, management and enforcement of the program is approximately $104,400. The proposed application fee at $349 for non-hosted and $200 for hosted would cover approximately 65% of the cost, or $67,500.

The remaining costs of approximately $36,900 will come from the expected increase in transient occupancy tax revenues.

On the revenue side, the expected revenue for transient occupancy tax and business license fee included several factors and estimates to arrive at the overall amount. Actual revenues may defer from this estimate; however, assuming a compliance rate of approximately 50% on the first year of implementation, with a 60% occupancy rate, which is the current average in this area, it will yield approximately $232,360 in TOT revenue.

Based on the same factors, the estimated business license fees revenues is approximately $11,250. All of this fiscal impact is considered to be the best-case scenario considering the maximum number of 300 permits, according to staff.

Staff recommended to receive and file public comments and to adopt a resolution of the city council of Murrieta, establishing permit fees for STVR’s, reflective of Exhibit A.

The motion was made to adopt the resolution; it passed unanimously.

To see the presentation on STVR administration that followed, or any other matters associated with STVR’s discussed in the Oct. 20 city council meeting, visit https://www.facebook.com/CityofMurrieta/videos/3579521858734997.

Lexington Howe can be reached by email at lhowe@reedermedia.com.