HomeMy WebLinkAboutStudy Session - Short-Term Rental (STR) Program Update (2) �NtINCT 2000 Main Street,
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File #: 24-185 MEETING DATE: 3/19/2024
Short-Term Rental (STR) Program Update
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City of Huntington Beach Page 1 of 1 Printed on 3/13/2024
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Program Update
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March 19, 2024
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29
Background
• September 3, 2019 — City Council Study Session on m
It I, .%
short-term rentals (STRs)
• Four coastal cities studied (Carlsbad, Carpinteria, Newport m. ��s°s � t gyp ,
Beach, and Pismo Beach), as well as the range of approaches in
regulating short-term rentals in the coastal zone -Utt INN
S
• Council expressed a desire for a high threshold type of goL
regulation GI
• December 21 , 2020 — City Council approved ordinance
to permit "hosted STRs" citywide and "hosted and
unhosted STRs" in Sunset Beach only
30
Background (cont.
• February 19, 2021 - Ordinance No. 4224 regulating STRs went into effect
• Sunset Beach operators given 6 months from permit fee adoption to apply for an STR
permit and secure their "unhosted" rights.
• One STR permit allowed per operator
• Regulatory framework includes permit application requirements, STR operational _
requirements and enforcement provisions
• Summer 2021 — City Council Ad Hoc Committee created to gather additional
community input on STRs.
• December 2, 2021 — Ordinance No. 4238 approved, extending time to allow
Sunset Beach owners to obtain an Unhosted STR Permit by March 1 , 2022.
• After March 1 , 2022, all new STR Permits required to be hosted.
31
Roles & Responsibilities
• Community Development
• Permit Center reviews STR applications; issues STR Permits
• Code Enforcement inspects each property to ensure compliance with STR
ordinance
• Finance
• Issues Business License for Operators after an STR Permit is issued
• City Treasurer's Office
• Collects and reports Transient Occupancy Taxes (TOT) and Tourism Business
Improvement District (TBID) Assessments gathered from Operators.
32
Hosted & U n hosted STR Perm its
(by calendar year)
250 — -- —
204 Total
200 — 174 Total a A 1� .-ir
,
150 e s Z � , ; xn,F �
r A yo � �
4. 8s.
68 Total °. d �. .
100
at.�-YC "" aryl ` £ 4 se ° .,Asa pax
50
pry a ? t°°l * •� . v .. L .
0
a
�> ..__.�_.$ x4 ...... .......... .....
2021 2022 2023
Hosted Unhosted
33
Permitted Short-Term Rentals
-,.--�t`"� r r i�. 'fie
f Perm1t:edshortT ennRentals Approx. 38% are located within
g _.._ '} '"1L. i s city of
Thou; ion lldawft
•
" ' � the Coastal Zone
} � `� �tk ` � ' ' '' ,r , - • A rox. 58% are located within
a 1 S a. ''..& r }—r` c� 1.1 ,E Y12 -�,
"� s wi�'�' s,�'-.,` 's_�a���t�`��` °= ��^r '���"-fit,' s n.-, ,
� Coastal Zone and adjacent
; '" ` '"��a 'gq(� p"}"c .^4:t`-xirzf t il4 �kta -0'
1,,,,
�� P43Y "� did#at'72ti$'1 wH
�� �t� a ' �� RMH A (Old Town/ wn y, "`-¢..� i O
C Lot)
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�4 tt r� - _ � t .-
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34
STR Revenue
TBID & TOT Received from STR Operators
April 2021 — December 2023
.. v
}
0. .X jy�, littira,s `g 3''� ° R p ; 2 y�•@ x 3w�- ,y ,.,440 ,'6.48, 2, -44'.1,,Vf;1.,,A-,,Sis*,At. 14,04,.., ...44w...".,,,,-ttg15,,t,,,,,,, . x
F ` Ey a a uT 4'0 ,, mac, 0. YY .. w u A
-7440,14%174411f 4.,'Non-,s...7e.„.otrzfiY:Iffeq tiriVrreAti.a.eitt4.7.9r..,T*17e VOZ*Stit.4,,,, ....t,..R1
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TBID Assessment 4/°I $253,3:13.��i° $484,330 $737,Y644
° � jq
(to VHB)r,
_x
TOT Tax $649,526 $.1 ,251 ,427 {: $1 ;900,953
(to General Fund)
Total STR Revenue $902,839 $1 ,735,757 ;: $2,638.,596
35
City STR TOT Revenue
By Calendar Year
$720
,
. f
, 698 344
000
i .. . ..
$620,000
f
. .
' $42%000 -- . , ..., • -
-
, . .
$32o 000 -
, , . .... .. ._...... ....,_. :,$298 316
•
'' .' r-clicv- -' morel •ikiN,',1'il" •• •,•0-,674.-m. .
$220,000 - . • - 1,711''.q;eji- '41'. 'i.il'--------
, ° Stt4.:,LIIA. • , ;?qPiZtri
° • tAw-,!Fill ft. .:e. °.1
$320,000
0 P:07%PI
$36,827 $63,640
ZZ,1177.71: 4;7P:'''L;C:74 7 *:'777:4'777:". •
$20/000
2021 2022 2023
Apr- Dec
Hosted 0 Unhosted
36
Unpermitted STRs
Number of Properties without STR Permits in 2022 & 2023
500 —
450
476
400 .—
350 343
300
286
250 265
19
200 95- ti
177 rvw
150 — — �e 152 —
'39 135
100 — -
50
0
,y'L y'L y'L �'1� tit' .y`L ,y'L tit' ,yL ,yL ,�L ,y'� 1? ,y3 i? ,y3 i> �3 w� w� ti�
Nac pep sec er�c aA �� \ v0 cpQ 0�� boa 40 ac 4,ce'p 4. v. ad ,�� ��� Te. cp 0°� +
January 2022 to December 2023
City contracts with 3rd party vendor GovOS to obtain unpermitted STR data
37
STR Complaints Against Permit Holders
160
140
140 _ . °
120 -- ® 2022 2023
100 - _--- . 98
. Vi71,4x7431
77.71.441
80 /1
60 .
40
- � .°: d.a® 25
20 _ _ 7. a.� _ . . .'1 �.a
a >, a �9®...=
0
Hosted Unhosted
38
Complaint Detail
STR Data 4/1 /2021 - 12/31 /2023
x x iw x,. .v �y..:. '. h... .--- m.,�): -..-- ,.,, . " T.6, : d „ _.. '�ava6,x r
: ' - ..: M xt4'* ur ': Y $?R4.,. .: , s"^ : w y-" , ri�1 {
`
:Ger „�, :- . 4 . ,„ : . .9 ''. apt 4• Fir .Iter r <4,. H�� - ra cA Q TED n NiOST . , �5? t;` _ ore a . is P a f
•
u ' w / = Ia % a I rr #.Cp r. .C: e id4Co a ts° >fir ed ations/ Co4 }edoaiy $ ,--:,,,,',...9.,-,--i pi®na .f;.
A li ' ` ' ' j y `- : it' ? `, '- .'�y
IthitirW` ,5w' ,,, 61; _. „ i-d i ,x., w4",',}"'SAd, ^°; a 1 . 0lI:d a �.s §'^ ", F�--:. �"d1rGJ:'ems•' a ` '' «`-'Al'',U <�. h �rti 44.1 . .: t: . : -' . ` . ; ` xa � <.. " ` - , . � � 4 � r% � ' w ':_ a � � •''';.. ei � �� L, T ,d . . : , . .. i , 4 � x � -. ‘ �d � v %*5^:
oeOwner On it - ,. = 105 =i '49 (36 Addresses) .,i N/A 49 (36 Addresses) - 24%
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d �e ; 92 30 (19 Addresses) 19 (3 Addresses) 49 (22 Addresses) 24%
,7,51..
i; t �nn t ;'" ` r 28' _ 14_(12 Addresses)s) is 2 (2-Addresses)" i 16 (14 Addresses) i,-- = 8%
."-Jytf.--rimmi,-.4v, giartm
16 4 (4 Addresses) 2 (2 Addresses)" 6 (6 Addresses) , 3%
Cbn t,u 4,9,,..i �z , 29 . ` 6-(6 Addresses) 4(3 Addresses) 10(9 Addresses) i' 5% ° ' '
k ., ' ,, . a 31 11 (10 Addresses) 2 (2 Addresses) 13 (12 Addresses) 6%
,: 0
Airet
slt� _ 13 4 (4 Addresses) 0 4 (4 Addresses) 2%`
Il`C' fir` > 4 " ,
0 :; 46 8 (8 Addresses) 1 (1 Address) 9 (9 Addresses) 4%
*Multiple Violations at Same Address
39
Enforcement
• Total of $125,000 in Administrative Citations issued for violations
• Hosted:
- 11 properties cited for No Owner On-Site
- 2 properties cited for Not Responding Within 1 Hour
- 2 Properties cited for Causing Disturbance
• Unhosted: No citations issued
• 27 Permits cancelled by owner
• 1 Permit for HOSTED was revoked by the City
• STR violations can be reported 24/7 at 714-375-5155, option "3"
40
Summary
• STR permits are issued Citywide with higher concentration in Sunset
Beach and near Downtown
• 204 STR permits (December '23)
• Both hosted and unhosted STRs are generating revenue to City
($985,914 TOT collected in 2023)
• Unpermitted STRs have declined from 867 (in 2020) to 135 (in 2023)
• Complaints related to noise and no owner on site generate highest
number of complaints
• Complaints have declined from 180 (in 2022) to 123 (in 2023)
41
From: FLS,Cuthn
To: Aoenda Aierts
Subject: FW:51R Study Session 3/19/29
Date: Monday,March 18,2029 5.30.09 PM
Atatmenta: FILE 93399sx
From:Keith.Bohr<keith.bohr@gmail.com>
Sent:Monday,March 18,2024 5:24 PM
To:CITY COUNCIL(INCL.CMO STAFF)<city.council@surfcity-hb.org>
Cc:Parra,Eric(PD)<EParra@hbpd.org>;Villasenor,Jennifer<1Villasenor@surfcity-hb.org>;Backstrom,Alisa<Alisa.Backstrom@surfcity-hb.org>;Estanislau,Robin<Robin.Estanislau@surfcity-
hb.org>;Kelly Miller<Kelly@surfcityusa.com>;Gates,Michael<Michael.Gates@surfcity-hb.org>;Hopkins,Travis<thopkins@surfcity-hb.org>;Backstrom,Alisa<Alisa.Backstrom@surfcity-
hb.org>
Subject:STR Study Session 3/19/24
Hello Mayor,City Council&Staff,
I read the subject presentation stating City's revenue numbers of$287,570(10%TOT)for 54 non hosted permits for the full year of 2023.
$287,570/54=$5,325 in TOT per permit,which equates to$53,254 in gross revenues per permitted non hosted unit(all in Sunset Beach).
Using the going overall HB Occupancy rate of 57%,i.e.208 days,results in an Avg Daily Rate(ADR)of$256.03.
$53,254/208=$256.03
That ADR is way under the market rate for non hosted units which range from$400-$3,200 a night in Sunset.
Assuming the City's non hosted$287,570 revenue number for 54 non hosted permits is correct,then one can only conclude the hosts are under reporting their revenues to the city by
approximately 64%l
So to the extent the City is considering allowing the issuance of non hosted permits outside of Sunset Beach,it should have an accurate estimate of the resulting TOT revenues.Please refer to
the spreadsheet below.
In short,even using conservative assumptions of an ADR of$420 and Occupancy at 57%,the resulting TOT to the City would be$8,736 per every operating un hosted unit.
$420 x 208 days(57%)=$87,360 in gross annual revenue to operator,$87,360 x 10%=$8,736 in TOT
100 Un Hosted Permits
100 x$8,736=$873,600 in new TOT annually
A less conservative,very achievable Oty TOT income stream is$10,000 per un hosted unit,208 days x$481 ADR=$100,048 x 1096=$10,004 TOT per unit
For every 100 unhosted permits
100 x$10,004=$1,000,400 TOT annually,not to mention 4%($400k)to VHB
The City has the data it needs to check these numbers.Take the 54 unhosted permits in Sunset Beach,excluding some the"outlier homes located on South Pacific(on the sand)like this one at
$3,195 per night)
QSunset Beach {0 55
May17-19(st) 6guests t
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Home in Huntington Beach *5.0(83) 3/19/2024
The Sands-Luxury family friendly beac... MeetingDate:
4 beds•3 bedrooms
May17-19 SS 2(24-185)
$3,195 night•57,777 total Agenda Item No;
and then look at the actual listings on Airbnb to determine the actual ADR's which range approximately from$400-$900.Please note,these are May weekend rates not heart of prime summer
season...
Sunset Beach
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Ct May 17 - 19 (±1) • 6 guests
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Townhouse in Huntington Be... * 5.0 (23)
PartialOceanViews-Steps2Sand-WIFI-E...
Playroom • Game console • Kids' bike
May16 - 18
$659 $587 night • $1,654 total
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Sunset Beach (,..' -
May 17 — 19 (±1) • 6 guests
Guest favorite - .,
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Condo in Huntington Beach * 4.97 (68)
Oceanfront Penthouse On Sand - Epic V...
3 beds • 2 bedrooms
May 17 - 19
$927 night • $2,371 total
QSunset Beach Cros9
May 17 -19 (±1) • 6 guests
Guest favorite ;' r
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Condo in Huntington Beach * 5.0 (23)
Searenity Suite-Peekaboo Ocean view,...
Playroom • Arcade machine • Kids' bike
May 17 - 19
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Home in Huntington Beach 4.91 (43)
March 10% Off - Beachfront House w/Sp...
4 beds • 2 bedrooms
may 16 - 20
$750 night • $ ,823 total
Guest favorite xE. 11.
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Home in Huntington Beach * 4.92 (79)
Cozy beach house steps from the sand
5 beds • 3 bedrooms
may 17 - 20
$425 night • $J,678 total
air tics
Aarket Details:Huntington Beach
[] Map fl Dashboard Sq Discovery
Overview Supply ADR Occupancy In
Occupancy Rate by Property Type
Daily Rate Revenue
6Q4
40%
San
0%
Entree Home Private Rams
Thank you for your consideration of this data.
Thank you,
Keith Bohr,Broker
TEAM Real Estate
Huntington Beach,CA.92648
CA DRE License M01216667
714-315-2143 cell
3/19/24 City Council Study Session STR Update City Data in -
Annual Days of Days of Days of
Annual #of TOT per Revenue Occupancy Nightly Occupancy Nightly Occupanc Nightly Avg.
2023 10%TOT Permits Permit Per Permit (50%) Avg. Rate (57%) Avg. Rate y(64%) Rate
Hosted $698,344 150 $4,656 $46,556 182 $255.80 208 $223.83 234 $198.96
0
Non Hosted I $287,570 I 54 I $5,325 I $53,254 182 I $292.60 208 I $256.03 234 I $227.58
Green Better Represents True Market Values
Annual Days of
Annual #of TOT per Revenue Nightly Occupanc
2025 10%TOT Permits Permit Per Permit Avg. Rate y(57%)
Non Hosted $471,744 54 I
$287,570
184,174
Increase of 64.04%
$873,600 100 $87,360 $420
$1,747,200 200 $8, $87,360 $420
$2,620,800 300 $8, $87,360 $420
$3,494,400 400 $8, $87,360 $420 208
From: Levin.Shannon
To: Suoolementalcomm(asurfcity-hb.orq
Subject RN: STR Study Session 3/19/24 TOT/TBID Collection and Remittance
Date: Tuesday,March 19,2024 8:47:41 AM
Attachments: Logo for Aoole Email.onq
From: Kathryn Levassiur<levassiurk@gmail.com>
Sent:Tuesday, March 19, 2024 8:39 AM
To:CITY COUNCIL(INCL. CMO STAFF)<city.council@surfcity-hb.org>
Cc: Parra, Eric(PD) <EParra@hbpd.org>;Villasenor,Jennifer<JVillasenor@surfcity-hb.org>;
Backstrom,Alisa<Alisa.Backstrom@surfcity-hb.org>; Estanislau, Robin <Robin.Estanislau@surfcity-
hb.org>; Kelly Miller<Kelly@surfcityusa.com>; Gates, Michael <Michael.Gates@surfcity-hb.org>;
Hopkins,Travis<thopkins@surfcity-hb.org>
Subject:STR Study Session 3/19/24 TOT/TBID Collection and Remittance
Dear Mayor Van Der Mark and HB City Council Members,
In anticipation of today's STR study session for council consideration, I plan to mention in my public
comments about how current TOT/TBID STR totals are underreported to the city.The process
requires STR operators to manually collect taxes from their guests and remit them to the city. For
many permit holders,this is a daunting request.They simply don't know how to do it properly, or
even how to collect the taxes at all.
There is a solution to automate the collection process for operators who list on major booking
platforms, like Airbnb and Vrbo, so that the 14% is automatically collected during booking
transactions and sent to operators as an additional payouts. For Airbnb, it is done
through Professional Host Tools. Operators would then make the quarterly payments to MuniRevs.
Educating people about how to do this could be a partnership between our alliance,the City of HB
and VHB to conduct workshops on how to set up the process in the operator's listing settings to
automatically collect the 14%TOT/TBID taxes,generating more tax revenue.
I have not spoken to VHB about this idea yet, but the upside is that the city and VHB would receive
more taxes on the existing STRs and collect even more taxes if council expands the current
ordinance to include allowing some unhosted STR operators in Huntington Beach to apply and
qualify for unhosted permits. I encourage the city and VHB to seriously consider this idea.
As an active City of HB STR permit holder, I am well qualified to share information on how operators
can automate tax collection,with someone from the city sharing information about submitting
payments to MuniRevs and VHB hosting and promoting workshops with its allotted budget for STRs.
I can also send an email splash through Airbnb to ALL Huntington Beach/Sunset Beach hosts to
promote workshops,which could be held on an annual and/or quarterly basis at VHB or in a meeting
room in the council chambers.
In closing, I also want to ask that you consider getting an Airbnb City Portal,which are available to
city governments and DMOs like VHB. The City of Orange got an Airbnb City Portal last year. I
encourage you to reach out to the City of Orange City Manager for further information about its
Airbnb City Portal and what services Airbnb offers to Orange.
Thank you for your consideration of what I think is a winning strategy for all STR stakeholders in
Huntington Beach.
Sincerely,
Kathryn Levassiur
Huntington Beach Short-Term Rental Alliance
Cell: 714.343.7931
Email: jnfo@hbstra.org IWebsite: https://www.hbstra.org/