Item 10 - Receive and File - Orange County Grand Jury’s Investigative Report, Findings, and Recommendations Regarding Long-Term Solutions to Short-Term Rentals

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Long-Term Solutions to Short-Term Rentals Cities Without a Specific STR Ordinance Some cities without an STR ordinance have operated on the assumption that because STRs are not defined by an ordinance, they are banned. However, when an STR operator challenges a citation, these cities have often discovered that the subsequent court ruling goes against the city, as evidenced by recent cases described below. Cities often respond to these losses by drafting new ordinances and amendments, but sometimes a new STR operator will find another legal gap, and the "whack-a-mole" game continues. Multi-unit apartment complexes may also host unpermitted STRs in cities that have bans. Photos used in online advertising often make complexes easy to find, but identifying specific units may be difficult. Property managers are more familiar with the units and can sometimes help CE track these down. Some properties without permits are advertised on foreign-language websites. Image searches may uncover these host sites, but the Grand Jury did not identify any solution yet for this challenge. How Cities Collect Complaints Many Orange County cities provide an online complaint portal as well as a telephone hotline; these services are staffed by a third-party platform or by city staff. In cities that allow STRs, Code Enforcement will reach out to the STR emergency contact to initiate complaint resolution. Issues with STR Code Enforcement Most STR operators want to avoid citations and fines. Neighbor complaints can lead to notices of violation, fines, and ultimately revocation of the STR operating permit. With effective enforcement, STRs that violate city codes receive a citation and/or fine. This can result in improved behavior on the part of the STR operator. In the fifteen cities that allow STRs, neighbors face hurdles in complaint resolution. This, along with laxity in enforcement, may explain why fewer than ten percent of STRs record a complaint in a given year, a number that fails to reflect the frustration of STR neighbors. Tracking and confirmation of complaints is often difficult. In order to enforce STR ordinance rules, code or law enforcement must first substantiate that the source is an STR. In some cities that permit STRs, Code Enforcement works only during regular business hours. Nuisance reports often occur in the evening or early morning, when CE may not be on duty. Therefore, residents or other complainants do not receive a timely response and the problem is not resolved at the time of the actual nuisance, if ever. 2024-2025 Orange County Grand Jury Page 9