As in Miami Beach and Seattle, home-sharing has long been a way of life in Pacific Grove, a small coastal city in Monterey County, California. Indeed, the city’s own website boasts of the availability of local vacation rentals for tourists. Visitors do not travel to Pacific Grove to party on Spring Break; rather, they come there to relax and enjoy an idyllic oceanside town. Tourism revenue allows Pacific Grove to meet its pension obligations, pave its roads, and make other city improvements.
In February 2018, the city imposed a 15 percent density rule, limiting the number of homes that can be used for home-sharing. Previously, people could share their homes so long as they got a city permit. Permits were renewable indefinitely and were irrevocable unless there was substantial evidence showing specific types of misconduct or violation. But the new cap is far stricter. It does not automatically grandfather in homeowners who already have permits; instead, the city held a drawing on May 22 to determine at random who could and could not continue using their property as they wish.
The city actually set up a ping-pong ball lottery machine usually reserved for bingo games—only in this case, the “winning” numbers corresponded to 51 devastated homeowners who, after April 2019, will be prohibited from renting their homes unless and until some other homeowner gives up his or her right to rent.
The process for stripping people of their right to share their homes was not based on how long the homeowner had been renting the home, or whether they or their guests had caused disturbances. Instead, the drawing was random, meaning that owners who had racked up numerous complaints were allowed to keep their permits, while responsible homeowners were stripped of theirs.
The Law
The city’s lottery system is not just devastating to home-sharers and detrimental to local tourism—it also violates California law. The state’s Coastal Act authorizes the Coastal Commission to regulate development in the state’s coastal zone for the purposes of protecting the coastline, maximizing public access, and balancing utilization and conservation of resources. While the Commission often imposes heavy restrictions on property owners, even it recognizes that home-sharing plays an important role in providing affordable access to the coast, while reducing the need for new kinds of public facilities. Thus, the Commission has declared that bans on home-sharing are inconsistent with the Coastal Act. The Coastal Commission has supported limiting the number of vacation rentals when necessary, but it has also implored cities to adopt only “reasonable and balanced regulations that can be tailored to address the specific issues” of the community, rather than banning the practice outright. Indeed, many of the home-sharing regulations the Commission has approved in the past focus on abating disturbances through nuisance restrictions, parking requirements, occupancy limitations, and mandatory emergency contacts, or mechanisms for tax collection, instead of one-size-fits-all prohibitions.
The Coastal Act requires local governments to submit a “local coastal plan,” including any changes to government-imposed land use restrictions and zoning ordinances, to the Commission for certification before those changes can become effective. Pacific Grove officials did not submit their new anti-home-sharing system or lottery to the Commission for approval before stripping homeowners of their home-sharing permits. And the city’s regulations aren’t tailored to address specific problems; rather, they abruptly and arbitrarily deprive responsible property owners of their right to let people stay in their homes.
