The Coastal Commission is taking a flexible stance on short-term rentals, conceding that there isn't a one-size-fits-all solution; however, there is tension with local communities when it comes to regulation. As for low-cost lodging, the Commission sees a need for below market-rate rooms and is looking at ways to encourage more low-cost alternatives. We sat down with Stanley Lamport, a partner at law firm Cox, Castle & Nicholson, for an exclusive interview to discuss the Commissions stance on short-term rentals and lodging.
GlobeSt.com: What is the Coastal Commission's stance on short-term rentals?
Stanley Lamport: With respect to short-term rentals, there is tension between local opposition to short term rentals and the Commission's position that regulations prohibiting short-term rentals in the coastal zone are policies that must be approved by the Commission before they can be implemented. The two most common local objections to short-term lodging are its effect on local residential communities in the coastal zone and its potential to reduce the availability of housing in the coastal zone. The Commission has been flexible in its response and has recognized that one size does not fit all when it comes to regulating short-term rentals. A number of coastal communities have developed very interesting regulatory schemes that allow short term rentals, but in a manner that does not allow them to overwhelm an existing residential community. But there is tension between efforts to open up more short term lodging in the coastal zone and increasing housing opportunities in the coastal zone that will need to be resolved.
GlobeSt.com: How is this different than its policy on low-cost overnight lodging?
Lamport: Low cost overnight lodging is a different story. The Commission has defined the need at a price point far below what can be delivered by the marketplace in many of the more popular locations on the coast. Land and entitlement costs typically price out all but the most expensive products. To date, the Commission has been working with models that generally involve having more expensive rooms subsidize affordable rooms in some fashion. For example, a market rate hotel project may be required to concurrently provide a low cost lodging product, where the higher room rate for the more expensive project subsidizes the low cost rooms. There are inclusionary approaches, where units within a project are cost restricted. There are also in lieu fees, where the high room rate essentially subsidizes the fee. There has been discussion at the Commission about significantly increasing these fees.
What are the concerns about these types of lodging in coastal communities?
Lamport: The concern is that these programs only work in marketplaces that command room rates that allow for the subsidy, and that they will discourage lodging development rather than promoting it. Some form of subsidy is likely necessary for the state to meet the affordable lodging demand, such as through the acquisition and leasing of publicly owned land or through low cost renovation or operating loans. Of course, finding the money is the key question. In that regard, the park bond going on the next statewide ballot may include a fund for low cost lodging that could be used in this area.
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Kelsi Maree Borland
