A measure that would change how the city manages short-term rentals is on the November ballot.
If passed by voters, Measure T would reduce the number of short-term rentals in the city by half and would require renewal permits each year.
Priority would be given to homestays – rooms rented with the homeowner on site, where the property is defined as the owner’s primary residence. A lottery would be used to fill the remaining permit slots with investor-owned properties.
The measure would also shift the responsibility of paying the transitory occupancy tax to the hosting platforms, which would directly pay the city, and also require the city-issued permit number be included when advertising the property.
All short-term rentals would be listed in a registry with the address, the owners, agents, the hotel tax paid, and information to inform residents of the rentals in their neighborhood. Homeowners association rules would still apply in communities where short-term rentals are prohibited.
Residents Who Care About Dana Point, a political action committee, collected more than 2,500 signatures to put the initiative on the ballot.
The PAC is run by residents Buck and Betty Hill, who said they began focusing on the impacts on residents a year ago when the council passed new rules after getting approval from the California Coastal Commission to increase the number of available units from 115 to 230.
In the ballot argument for the measure, signed by Betty Hill, that it prioritizes “residents first.”
“The spread of hotel-like (short-term rental) businesses for investors in residential neighborhoods could cause problems concerning management, violations, safety, parking, noise, trash and partying. All neighborhoods should be protected,” the ballot argument says.
And by awarding the permits annually “all property owners can participate,” eliminating those short-term rentals that have been grandfathered in and favor inventors, the argument says.
The city has 174 permitted short-term rentals citywide; 60% are in the coastal zone, primarily on Beach Road and on Corniche Drive, and there’s a row of rentals near Niguel Road and Camino Del Avion, and 40% are inland. Rental rates in the city range from $160 to $2,300 a night.
City records show that about one-third of the permitted rentals are owned by residents, and two-thirds are listed with owners outside the city. City officials said short-term rentals brought in between $700,000 and $750,000 in taxes as of July.
By reducing the number of short-term rentals in the city by about half, the ballot argument in favor says it will “help preserve available housing, including for residents who rent.”
Mayor Jamey Federico signed onto a ballot argument opposed to Measure T, saying the city’s current ordinance, which was approved by the California Coastal Commission in 2023, already protects residents and neighborhoods.
As evidence of its effectiveness, Federico said during the first half of this year, the city received six complaints about short-term rentals. After an investigation, city officials found only two were validated: one for noise and one for trash cans. It also requires review with the California Coastal Commission every three years.
He also said Measure T and its replacement ordinance “will likely reduce city revenue by at least $450,000.” Last year, he said, short-term rentals generated $725,000 in transient occupancy tax for the city. He points out properties can be audited at any time to ensure they are paying the tax.
He criticizes the proposed lottery in his ballot argument, saying it could eliminate advance bookings and repeat guests while also causing uncertainty for people who own the properties being rented. This, he said, could turn into more illegal operators.
“Most important for voters to understand is that if this ballot measure passes, the new ordinance can never be adjusted without another election,” Federico said. “The proposed ordinance states that any changes in the future will require a vote in an election. This appears to mean the city cannot add a rule to tighten noise or parking restrictions, nor could it reduce the total number of permits.”
The impartial legal analysis that also appears with the ballot measure says if approved by voters, Measure T would then need approval from the California Coastal Commission, and any modifications the commission proposes would have to go before voters before being implemented.
A simple majority of voters in support would pass the measure.
