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New short-term rental rules go into effect in Newport Beach

  • Aug 18, 2020 | Jennifer Sokolowsky

Newport Beach, California

A new law tightening vacation rental rules went into effect in Newport Beach, California, on August 13.

The new regulations include limits on how many people can stay in a short-term rental and a minimum age of 21 for renters.

Short-term rental operators will be required to include their license number on any advertisement, and the city will work with short-term rental platforms to remove illegal rentals from listings.

A new 24-hour hotline will handle complaints about vacation rentals and hosts will be required to have a Nuisance Response Plan to deal with disruptive guests. Designated contacts for short-term rental properties must be able to arrive at the property within 30 minutes of a complaint.

Newport Beach currently has more than 1,500 active short-term rental permits, making it among the top cities in California in terms of number of vacation rentals.

Along with licensing and other rules, Newport Beach hosts are responsible for collecting transient occupancy tax from guests, filing transient occupancy tax returns with the city, and remitting the tax. Hosts are considered responsible for the tax and still required to file returns even if an agent, such as a short-term rental platform, collects the tax from guests and remits it on the host’s behalf. Neither Airbnb nor Vrbo collect transient occupancy tax for their listings in Newport Beach.

MyLodgeTax can help short-term rental operators comply with Newport Beach transient occupancy tax compliance. For more on California lodging taxes, see our state Vacation Rental Tax Guide. If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.    

Court overturns Manhattan Beach short-term rental law

The short-term rental law of Manhattan Beach, California, violates the California Coastal Act, a Los Angeles Superior Court judge has ruled.

In the case brought by a Manhattan Beach short-term rental owner, Judge James C. Chalfant ruled that the city cannot enforce its ban on short-term rentals in residential areas of the coastal zone unless it amends its Local Coastal Plan (LCP), which was approved by the California Coastal Commission. The city said it’s discussing a settlement with the plaintiff and may consider an appeal.

The Coastal Commission is tasked with preserving public access to coastal areas and has been involved in several decisions about short-term rentals in recent years.

Short-term rentals “provide a significant supplement for visitor accommodations promoting public access and visitor-serving opportunities to coastal communities … At the same time, the Commission has recognized legitimate community concerns over potential adverse impacts associated with vacation rentals, with respect to housing stock and affordability, community character, noise and traffic impacts,” the commission wrote in a recent report.

Manhattan Beach first banned short-term rentals in 2016. In 2019, the city passed another law that more aggressively enforced the ban, including hiring an outside firm to identify illegal rentals and issuing fines of $1,000 per day for violations.

In 2015 and 2016, the city made moves to amend its LCP with the Coastal Commission, but withdrew its proposal in 2017. In 2019, it moved forward with the ban without Coastal Commission approval, stating that short-term rentals had never been legally allowed, and so the law did not represent a change.

The Manhattan Beach short-term rental ordinance only bans vacation rentals in residential areas; vacation rentals are allowed in commercial zones with a business license, including in the coastal zone. The law also requires short-term rental platforms to disclose information on listings to the city and bars platforms from completing transactions for residential properties.

Meanwhile, further south, the city of Laguna Beach is seeking the approval of the Coastal Commission to tighten restrictions on short-term rentals.

Laguna Beach seeks to grandfather in more than 90 short-term rentals in residential areas currently operating with a permit, but prohibit any others. The proposal would allow more vacation rentals in mixed-use commercial areas.

Earlier this summer, the city of Long Beach also instituted new short-term rental rules, regulating vacation rentals for the first time and requiring operators to hold a permit. The new law goes into effect in mid-October. However, property owners located in the city’s coastal zone will have to wait for the rules to be approved by the California Commission before they can offer short-term rentals.

Lodging tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Jennifer Sokolowsky
Avalara Author Jennifer Sokolowsky
Jennifer Sokolowsky writes about tax, legal, and tech topics. She has an extensive international background in journalism and marketing, including work with The Seattle Times, The Prague Post, Avvo, and Marriott.

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