Title
Introduction of Ordinance Amending the Alameda Municipal Code by Adding Section 30-19 (Short Term Rentals) of Chapter 30 (Development Regulations) to Establish Zoning Regulations for Short Term Rental of Residential Property, Applicable Citywide.
This action is exempt from environmental review under Section 15061 of the California Environmental Quality Act (common sense exemption) because it would not result in any new construction or substantial change of use. (Planning Building and Transportation Department 20962710)
Body
To: Honorable Mayor and Members of the City Council
From: Gerry Beaudin, City Manager
EXECUTIVE SUMMARY
The Planning Board and staff recommend that the City Council adopt zoning regulations to implement Housing Element Policy H-19, which calls for limiting short-term rentals to increase the supply of long-term housing. These regulations would allow home sharing and vacation rentals in dwelling units and other habitable sleeping spaces that are part of the host's permanent residence. Units that have had a no-fault eviction or are subsidized or regulated as affordable units would not be eligible. Units constructed under an Accessory Dwelling Unit permit also would be ineligible. Most hosts operate through an online platform that collects and remits the City of Alameda’s (City) transient occupancy tax on visitors’ behalf, similar to commercial hotels. A business license is also required. Performance standards would apply to the hosts and visitors to minimize neighborhood impacts, including occupancy limits and prohibitions on large gatherings. The Planning Department would issue ministerial approval if all requirements are met.
BACKGROUND
The issue of preserving available housing stock and avoiding the conversion of housing into short term rental (STRs) - which are effectively hotel rooms - was raised during preparation of the City’s 2023-2031 Housing Element. The main interest was in bringing some regulation to Alameda’s STR activity, similar to surrounding jurisdictions, so that the use does not unreasonably displace housing units from the marketplace for long-term rental and ownership opportunities. The Planning Board conducted two workshops and a public hearing, at which local hosts and residents presented testimony.
City staff and a planning consultant provided the Planning Board with several alternatives to consider. The main issue was not whether to allow STRs at all, but instead under what conditions. A comparison of the regulations of other local jurisdictions revealed that most allow the activity in owner-occupied homes and in occupied long-term rentals that are “sublet” in whole or in part by the occupant. Owners are able to rent a portion of the main house and/or an accessory building / second unit on the property, but generally not an officially recognized Accessory Dwelling Unit (ADU), that is, a unit built under State-mandated and/or locally adopted zoning exemptions specifically for creating ADUs. Some jurisdictions regulate how many days per year a property can be used as a STR, and some prohibit STRs altogether.
There are approximately 250 to 300 STRs listed on major platforms in the City at any given time. A few are for long-term rentals, and some listings market conventional hotel rooms, but the vast majority are whole houses, apartments, cottages, or other detached units with one or two rooms available. A small percentage (roughly 10%) are rooms in houses or apartments, and very few are other spaces, such as boats and trailers. STRs are offered in every neighborhood in Alameda, with prices ranging from less than $100 up to $1,000 per night.
Community concerns expressed during the preparation of the ordinance centered primarily on external effects of the rentals, i.e. large/outdoor gatherings, the resulting noise, parking and refuse, and the general loss of a sense of neighborhood due to the rapid turnover of guests as compared to longer term residents. The City occasionally receives complaints in this regard that are investigated and enforced, as needed, under the applicable nuisance provisions of the Alameda Municipal Code. This ordinance would provide another layer of regulation that would communicate to the operators what our community expectations are and would give the code enforcement team another reference point as they bring violators into compliance with local standards. Health and safety standards would also be expressly stated in the ordinance and reinforced during the application review process.
At the Planning Board meeting, public comment was mostly from operators of STRs who will be limited in their rental activity if the ordinance was passed. Some commenters pointed out that they rely on STR income to supplement their own housing costs, or to maintain units that have been in their family for multiple generations. Some commenters expressed support for the STR ordinance proposals as a way to increase the housing stock and provide greater accountability to operators. Planning Board members expressed understanding of the various considerations and intended the local regulations to balance the hosts’ need for flexibility with the overall goal of stabilizing neighborhoods and preserving housing supply. The Planning Board also noted that allowing short term rentals while the primary owner was away on vacation would have a nominal impact on the neighborhood and would not displace long term housing. The Planning Board agreed that the one-year permits should be issued at a staff level, with an ability to appeal denials.
DISCUSSION
It is worth restating and clarifying the purpose of adopting regulations for STRs. The primary purpose of the STR regulations is to prevent or minimize conversion of permanent long-term housing units to transient lodging to maintain the supply and affordability of Alameda’s housing stock. Other purposes of the STR ordinance include reducing speculative investment for purposes other than long-term housing, while also allowing residents of Alameda (including property owners and long-term renters) the opportunity to rent their residences to guests on a short-term basis, which can provide them with income, offsetting the price of owning or renting a home. It can also provide residents with flexibility for travel and remote or seasonal work and showcase Alameda to visitors seeking alternatives to hotel accommodation. Regulation can also help ensure neighborhood compatibility and minimize potential nuisance impacts on Alameda residents living near STRs and maintain the safety of residents and visitors. Clear regulations and procedures will enable straightforward compliance with planning, building, business, rent, and tax regulations.
Ordinance Structure
The framework for the regulations is as follows:
• Purpose and Intent - explains why the City is adopting these regulations
• Definitions - condense terms from a number of sources in one place
• General Provisions - lists who can host and what spaces can be rented as STR, including requiring building and fire code compliance
• Operational Standards - addresses host and visitor good neighbor practices and basic safety measures
• Permit Requirements - sets forth how permission to operate is granted and under what conditions
• Other - includes reference to other administrative regulations that may be adopted, fees that may be charged, and enforcement.
Considerations and Feedback
When crafting regulations for STRs, the City has considered several key issues and approaches that could meet its policy goals, achieve the purposes of the STR ordinance, and be most appropriate for Alameda. The following discussion summarizes how these considerations, discussed at the Planning Board meetings, have been addressed in the ordinance being presented at this time.
1. Owners and Renters Eligible
The ordinance allows owners and tenants to participate as hosts. Owners would be allowed to rent their own home or another space on the same property as their primary residence. Renters would be able to share their unit with visitors.
2. Residential Activity and Time Limits
The Planning Board (Board) considered various ways to phrase the types of allowable rentals. Staff recommended and the Board agreed to use the terms “home sharing” and “vacation rental” as an allowable use, which has been how permitted short-term leasing has been characterized to the general public in other jurisdictions. The premise is that one may share a home (primary residence) when one is also living there (home sharing) or when one is away for a period of time but will return to the location as one’s primary residence (vacation rental). This prevents the rental of multiple units and strictly commercial activity. The Board recommends and staff agrees that there is therefore no need for a time limit on the number of days per year a rental can be available.
3. Types of Buildings and Spaces
As noted above, single-family and multi-family units would be eligible under the proposed ordinance. Homeowners would be able to host visitors in units they do not reside in on the same property, and renters would be able to share their units (with the landlord’s permission). Other types of spaces, such as cottages, basement units, and live-aboard boats, would be eligible so long as they provide habitable sleeping quarters.
4. Tenant Protections and Affordable Housing
Overall, Alameda has roughly equal numbers of ownership and rental units. About 40% of the housing stock is detached single-family, and about 10% is attached single-family (condominium). The rest are in multiple-unit buildings under single ownership. While some of the single-family units are available for rent, most are owner-occupied. Conversely, only some of the multi-unit buildings are owner-occupied, e.g., larger homes converted to rentals may still have an owner in residence.
Tenants are protected by state and local law. Multi-unit buildings are fully regulated under the rent control program.
A unit that has had a no-fault eviction would be disqualified from being used as an STR, and properties that were subject to an Ellis Act eviction (permanently removing the unit from the rental market) would also be ineligible for a five-year period. However, if a unit is voluntarily vacated, it could legally be established as an STR if the property owner also lives on-site. The unit would be registered with the rent program as “exempt” while it is a STR. Rent-subsidized units also would be ineligible.
5. ADU and Junior Accessory Dwelling Unit (JADU) Rentals
Currently, state law prohibits State-mandated ADUs and JADUs (no larger than 500 square feet) created after 2017 from being used as a STR. (Government Code Sections 66323(a), 66333(g).) For other ADUs (i.e., ADUs created before 2017 and ADUs not meeting the definition of “state-mandated”), State law authorizes (but does not require) cities to impose short term rental restrictions. To encourage ADUs to be used as more affordable long-term housing options and to ensure they are included in the City’s Housing Element compliance, the proposed ordinance prohibits all ADUs constructed pursuant to State-mandated or locally adopted zoning exceptions created specifically for ADUs and JADUs from being used as STRs. An exception is made for those that are already in use as an STR, so long as the unit was created prior to 2017, when a State-initiated limitation was adopted.
6. Operating and Performance Standards
STR activity can result in nuisance impacts if not properly managed. The ordinance includes a series of requirements that hosts would agree to abide by, including maximum occupancy, no events or parties, compliance with the noise ordinance, trash collection, and general good neighbor practices, as well as liability insurance.
7. Health and Safety Compliance
Fundamental public safety interests would be protected with requirements that the space being used as a STR is designed for residential use, meets habitability standards, complies with the housing code, and is provided with safety equipment such as detectors and extinguishers.
8. Permits and Taxes
A streamlined process is proposed, whereby an applicant could obtain a business license and STR permit online through the City’s existing portal, similar to other home occupations. Written declarations would be required to place the onus on the operator to acknowledge and commit to compliance with the ordinance. Transient occupancy tax (TOT) would continue to be collected from visitors as a tax on their stay, with the tax remitted by the hosts or their listing platform. The City has a master agreement with Airbnb and others for this purpose.
The Planning Board and staff recommend a 90-day amnesty period during which existing operators would be able to come into compliance with the new regulations and obtain all necessary approvals. There would also be ongoing “legacy” exceptions for operators that can show they were in place at least one year prior to the adoption of the ordinance, i.e. they would not be subject to all of the disqualifications for owner occupancy and ADUs but would be subject to the registration and operating standards.
9. Appeals
Although the approvals would be considered at the staff level as a ministerial permit, similar to a building permit, and would be accompanied by a business license, an applicant would be able to appeal to the Planning Board if they believed an STR permit was denied or suspended/revoked in error (see below). Neighbors who believe the owner is not complying with their STR may file a code enforcement complaint.
10. Monitoring and Enforcement
Alameda already has a combination of rent control and tenant protections, local taxes and business licenses, and building and historic preservation programs, all enforced through several efforts coordinated by the Code Enforcement Division of the Planning, Building, and Transportation Department. These would remain available, with required corrective actions and/or penalties. No new investigative or enforcement program is recommended at this time. However, if complaints are received, there would be a progressive enforcement program with a warning, suspension and revocation occurring if there are repeated violations. Health and safety issues could result in immediate revocation and possible fines.
State Legislation
In 2025, the State legislature passed SB 346, which allows cities to request that each short-term rental facilitator report the assessor parcel number of each short-term rental during the reporting period, as well as any additional information necessary to identify the property, including, but not limited to, the physical address of the host property, listing identification number, and property type. The City recently opted into this program, which will provide an efficient process for collecting data to assess impacts on the long-term rental market, as well as a mechanism for better collection of TOT.
ALTERNATIVES
The Planning Board considered alternatives that were ultimately not recommended, including:
• Allow absentee landlords to operate STRs
• Allow certain ADUs to be used as an STR
• Allow more units on a single property to be used for STR
• Regulate the number of days per year a property can be used for STR
Staff and the Planning Board believe the recommended ordinance strikes a proper balance among the various interests: eligible hosts are afforded a broad range of options, neighbors are protected from nuisances, and the vast majority of the City's housing stock is preserved for long-term occupancy.
FINANCIAL IMPACT
There is no specific financial impact from regulating STRs. TOTs are already due from all STR operators. Some existing operators may be required to cease business because they do not qualify to operate under these regulations, and some possible future hosts may be hindered from beginning operations, in which case less TOT revenue would be collected. It seems that almost all existing operators would qualify for the ordinance's legacy exceptions and thus be able to continue operating. Additional tax revenue could come from new operators eligible under these regulations and/or from existing operators who may pay more taxes as they come into full compliance with existing business license requirements and the new zoning regulations. City permitting expenses are covered by existing processing fees, and code enforcement costs are generally covered by fines under Alameda Municipal Code (AMC) 1-7 and Administrative Citations for repeated violations.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
Strategic Priority HH9
General Plan / Housing Element: Policy H-19
AMC 3-61: Transient Occupancy Tax
AMC 5-2: Business License
AMC 6-58: Rent Program / Tenant Protections
ENVIRONMENTAL REVIEW
The proposed ordinance is exempt from environmental review under the California Environmental Quality Act (CEQA) under Section 15061 (common sense exemption) because the ordinance allowing the use of existing residential property for short-term rental would not have a physical effect on the environment, as it would not in itself result in any new construction. Performance standards would further limit the potential for incidental effects on the surrounding community such as noise, litter, and other nuisances.
CLIMATE IMPACT
There are no identifiable climate impacts or climate action opportunities associated with the subject of this report.
RECOMMENDATION
Introduce an Ordinance amending the Alameda Municipal Code by adding Section 30.19 (Short Term Rentals) of Chapter 30 (Development Regulations) to establish zoning regulations for short term rental of residential property, applicable Citywide, and determine the project is exempt from CEQA.
Respectfully submitted,
Abby Thorne-Lyman and Andrew Thomas, Acting Directors of Planning Building and Transportation
By,
Steven Buckley, Planning Services Manager
Financial Impact section reviewed,
Ross McCarthy, Finance Director
Exhibits:
1. Planning Board Resolution and Draft Ordinance
2. Community Feedback