Morro Bay takes new look at short-term vacation rentals. Here’s what city wants to do
The city of Morro Bay will consider a new short-term vacation rental policy limiting the number of homes that can be licensed at any given time.
The draft ordinance, which comes after several committee meetings, also aims to address noise, safety and density concerns for short-term rentals in the city. It expands on an emergency ordinance that was passed in 2016, then renewed in 2018.
In addition to continuing to cap the number of residential properties that can be used as short-term rentals at 250, the draft ordinance proposes to establish a local contact person available by phone on a 24-hour basis to respond to complaints of guests violating city laws such as noise, illegal drug use, disorderly conduct and overcrowding.
Other proposals include a separation of at least three residential lots between licensed vacation rental homes, and an inspection report that includes adequate exits, off-street parking, a “Good Neighbor Brochure” to be provided to guests and compliance with applicable city city codes.
The draft ordinance would establish grounds for the suspension or dismissal of a short-term rental license based on violations such as health and safety breaches and public nuisances, and forbid the transfer of permits with the sale of a property or passing a permit from one family member to the next.
Property owners are awarded vacation rentals on a first come, first served basis under Morro Bay’s density rules.
New Morro Bay short-term vacation rental ordinance in the works
The proposed policy is expected to go before the city’s Planning Commission on Aug. 18. It will then be reviewed by the Tourism Business Improvement district and the Morro Bay City Council, likely in September or October.
A new vacation rental license in Morro Bay currently costs a $330.34, while an annual renewal is $315.34, said Scot Graham, the city’s community development director. The fee cost includes the license fee, vacation rental monitoring fee and a fire inspection fee.
“The cap on the number of vacation rental homes (of 250) is the same as our existing policy, but because of the buffer zone (spacing out rentals at least three lots apart), the overall number could be a bit lower, maybe in the 200 or so total,” Graham said. “The draft added some conditions such as requiring a contact person for any complaints and a new inspection process as well.”
Vacation rentals have inspired concerns from some about noise, parking, and traffic — as well as impacts on the overall rental housing market with housing demand.
But vacation rental owners cite the economic benefits of short-term rentals, citing them as sources of much-needed income.
“My father loved Morro Bay and retired there and passed on the home to me,” said Burbank resident Diane Doban, who owns a Morro Bay vacation rental. “The annual fees have gone up quite a bit recently, more than double what I paid just a couple of years ago. Everybody is hurting right now economically. It just seems like a big (fee) jump.”
Graham said the current fee schedule will remain in place “in the near term.”
A eight-member committee — comprised of three vacation rental owners, three community members concerned about their impacts, a hotelier and planning commissioner — met 12 times between October 2019 and February 2020 to hash out the details of the draft policy, forming consensus on some key points and voting on other issues to decide input on the policy.
Existing accessory dwelling units, also known as granny units, licensed as vacation rentals can retain valid permits for up to three years.
But those permits will be phased out moving forward under a state law prohibiting ADUs from being used as short-term rental dwellings, city officials said.
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