December 13, 2019
By Christina Sandefur
Yet another California city is being sued for
stepping on an essential property right—a homeowner’s right to share their home
with overnight guests. But recent court decisions may indicate that the tide is
turning in favor of the protection of home-sharing in the Golden State.
The city of Santa Barbara told James Fenkner
that he can’t offer his home as a short-term rental unless he converts it into
a hotel. But Fenkner wants his home to remain residential so he can live there
full-time after his kids are grown. That’s not unusual; as the cost of living
increases, it’s become common for Californians to use rental income to keep their
homes for later use by themselves or their children. Unfortunately,
California’s local governments are increasingly hostile to the right of
property owners to make such decisions. The good news is that California law
limits the ability of coastal cities such as Santa Barbara to block homeowners
from renting out their homes.
That’s because the California Coastal Act
requires local governments to get approval from the state’s Coastal Commission
before changing how land is used along California’s 800 miles of coastline.
And, fortunately for Golden State residents, the Commission recognizes that home-sharing plays a valuable role
in providing affordable access to the coast. It allows travelers an alternative
to pricey hotels, while reducing the need for new development and public
facilities. And, of course, it enables residents of coastal cities to make
extra money to pay their bills and maintain their property. While the Coastal
Commission has allowed cities to limit the number of vacation rentals when
necessary, 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 overregulating or banning the practice outright.
And courts have ruled that cities that try to ignore the Commission’s authority
and prohibit home-sharing are in violation of state law.
That’s what happened in the case of William
and Susan Hobbs. After Susan’s mother passed away,
the couple put considerable resources into fixing her Pacific Grove home to be
a short-term rental so that they could afford to keep it in the family until
they eventually move into it. They, along with Donald
and Irma Shirkey (who purchased a home in Pacific
Grove so their children and grandchildren could carry on the family tradition
of visiting the coastal town), sued Pacific Grove last year when the city suddenly
and arbitrarily deprived them of their right to offer their homes to overnight
guests. This summer, the Monterey County Superior Court ruled in their favor
and told Pacific Grove that its
actions violated the Coastal Act.
In a similar case in March, a Ventura County
Superior Court ruled that Santa
Barbara’s short-term rental ban was illegal, since, like Pacific Grove, the city didn’t get the necessary Coastal
Commission approval. Yet the City didn’t learn its lesson. It refused to back
down from its position that Fenkner could no longer rent his home, so he also
sued the city. But Santa Barbara still didn’t back down; instead it tried
to dismiss Fenkner’s case. But earlier this week, a trial judge denied
the city’s motion, meaning Fenkner will have his day
in court to defend his rights.
These recent
court decisions are sending an important message to California’s coastal cities:
Commission approval is required before depriving
homeowners of the right to allow visitors in their homes. If cities continue to
ignore state law and needlessly trample on property rights, we can expect to
see more lawsuits to come.
But there’s a better way. Instead of banning or overregulating
home-sharing, cities ought to address problems
that may arise by enforcing the anti-nuisance rules they already have on the
books. By doing this, they can protect neighbors from problem properties while
still embracing economic opportunity for local residents and businesses.
Christina
Sandefur is the Executive Vice President at the Goldwater Institute.
