6405ORDINANCE NO. 6405
AN ORDINANCE OF THE CITY OF ANAHEIM AMENDING
CHAPTER 4.05 (SHORT-TERM RENTALS) OF TITLE 4
(BUSINESS REGULATION) OF THE ANAHEIM MUNICIPAL
CODE RELATING TO SHORT-TERM RENTALS AMENDING
SECTION 4.05.180 RELATING TO THE TERMINATION AND
AMORTIZATION OF CERTAIN SHORT-TERM RENTALS
AND FINDING AND DETERMINING THAT THIS
ORDINANCE IS NOT SUBJECT TO THE CALIFORNIA
ENVIRONMENTAL QUALITY ACT (CEQA) PURSUANT TO
SECTIONS 15060(C)(2), 15060(C)(3) AND 15061(B)(3) OF THE
STATE CEQA GUIDELINES, BECAUSE IT WILL NOT
RESULT IN A DIRECT OR REASONABLY FORESEEABLE
INDIRECT PHYSICAL CHANGE IN THE ENVIRONMENT,
BECAUSE THERE IS NO POSSIBILITY THAT IT MAY HAVE
A SIGNIFICANT EFFECT ON THE ENVIRONMENT AND
BECAUSE IT IS NOT A PROJECT, AS DEFINED IN SECTION
15378 OF THE CEQA GUIDELINES.
WHEREAS, by the adoption of Ordinance No. 6299 on May 13, 2014, the City Council
of the City of Anaheim ("City Council") added Chapter 4.05 (Short -Term Rentals) to Title 4
(Business Regulation) of the Anaheim Municipal Code (the "Code") for the purpose of
establishing a permit program for owners of residential dwelling units who rent, offer to rent, or
advertise for rent said dwelling units to a person or group of persons for occupancy, dwelling,
lodging or sleeping purposes for a period of less than thirty (30) consecutive calendar days, i.e.,
"Short -Term Rentals"; and
WHEREAS, Chapter 4.05 (Short -Term Rentals) is known and referred to as the "Short -
Term Rentals Ordinance"; and
WHEREAS, the Short -Term Rentals Ordinance, as subsequently amended by the
adoption of Ordinance No. 6317 on March 3, 2015, permitted the short-term rental of dwelling
units within the Single -Family Residential Zone, the Multiple -Family Residential Zone and the
Mixed Use (MU) Overlay Zone, and established standards and regulations relating to the
issuance of permits for Short -Term Rentals; and
WHEREAS, by the adoption of Ordinance No. 6317 on March 3, 2015, the City Council
also added "Short -Term Rental Units," as defined in Chapter 4.05 (Short -Term Rentals) of the
Code, as a permitted use within the Mixed Use (MU) Overlay Zone subject to a short-term rental
permit as provided in the Short -Term Rentals Ordinance; and
WHEREAS, on September 15, 2015, the City Council adopted Ordinance No. 6343, an
urgency ordinance pursuant to California Government Code Section 65858 for the purpose of
imposing a temporary 45 -day moratorium, expiring on October 30, 2015, on the commencement,
establishment and/or operation of new Short -Term Rentals and on any applications for renewal
of Short -Term Rental Permits existing on the date of adoption of Ordinance No. 6343, pending
completion of the city's study of the potential impacts and regulation of Short -Term Rentals, and
possible amendments to the city's zoning ordinance and related provisions of the Code to ensure
that adequate development standards and implementation regulations, including possible repeal
of the Short -Term Rentals Ordinance and related provisions of the Code, were in effect to protect
the public peace, health, safety and/or welfare prior to any decision on future applications for
Short -Term Rentals; and
WHEREAS, on October 20, 2015, the City Council adopted Ordinance No. 6347 for the
purpose of extending all of the terms and provisions of Ordinance No. 6343 for a period of one
hundred eighty-six (186) days so that the interim measure would expire at 11:59 p.m. on
Tuesday, May 3, 2016; and
WHEREAS, on April 12, 2016, the City Council adopted Ordinance No. 6369 for the
purpose of extending all of the terms and provisions of Ordinance No. 6343 for an additional one
(1) year period so that the interim measure would expire at 11:59 p.m. on Wednesday, May 3,
2017; and
WHEREAS, on July 12, 2016, the City Council adopted Ordinance No. 6374 for the
purpose of revising the permit and regulation program for Short -Term Rentals and for the
purpose of establishing, with limited exceptions, that Short -Term Rentals will no longer be
allowable uses in certain zoning districts; and
WHEREAS, on July 12, 2016, the City Council adopted Ordinance No. 6375 for the
purposes of providing for the ultimate termination of Short -Term Rentals in certain zoning
districts and providing for a reasonable period of time for the owners of such Short -Term
Rentals to amortize their investments in Short -Term Rentals; and
WHEREAS, termination of short-term rental uses does not prohibit reasonable use of the
dwelling units for all other purposes allowed under applicable laws, rules, and regulations
because only short-term rental uses are prohibited and the affected properties may still be used
for other uses, including permanent residence, rentals in excess of 30 days, lease, sale and other
permitted or conditionally permitted purposes; and
WHEREAS, the City Council determined pursuant to Ordinance No. 6375 that the
owners of properties with Pre -Moratorium Short -Term Rentals would be provided with a
reasonable period of time within which to recoup the costs they reasonably invested for short-
term rental use to the extent such costs could not already have been reasonably recouped during
the period of short-term rental use of the property or recouped once the short-term rental use is
terminated, and
WHEREAS, at the time of the adoption of Ordinance No. 6343, which established a
temporary moratorium on new short-term rentals, the City Council determined that there was an
ever increasing number of residential dwelling units being operated as short-term rentals, which
are essentially commercial uses in residential zones, and residents living in close proximity to the
locations of short-term rentals had concerns about excessive noise, disorderly conduct,
2
overcrowding, traffic congestion, illegal vehicle parking and the accumulation of refuse that
required an escalation in responses from police, Code Enforcement and city services; and
WHEREAS, to date, the use of residential dwelling units within the City of Anaheim as
short-term rentals for lodging or sleeping purposes for periods of less than thirty (30) consecutive
days has escalated the demand for city services and has created adverse impacts to surrounding
residences, including but not limited to incidents involving excessive noise, disorderly conduct,
fear of vandalism, overcrowding, traffic congestion, illegal parking of vehicles, accumulation of
refuse, and code violations; and
WHEREAS, the City of Anaheim views the operation of short-term rentals as essentially
businesses conducted within residential areas, akin to motels or hotels, though motels and hotels
are not permitted in such residential neighborhoods, thus creating an incompatibility with
surrounding residential uses; and
WHEREAS, short-term rental occupants are frequently on vacation visiting the tourist
destinations offered within the City of Anaheim and can include large gatherings and/or groups
in one place, frequent parties, entertaining, use of outdoor pools and spas, and activities that that
may be acceptable to neighbors on an occasional basis but which are perceived to be a nuisance
when they occur frequently, or on a regular basis, resulting from different vacationing groups
occupying a short-term rental unit for short periods throughout the year; and
WHEREAS, residents have expressed concerns relating to the stability and integrity of
their neighborhoods when numerous nearby residences have become short-term rental units
resulting in a continuous transition of occupants with people that they do not know, and have not
formed neighborly relationships with resulting in the impression that they no longer have a stable
neighborhood; and
WHEREAS, residents have similarly expressed concerns relating to the perceived loss of
security when unfamiliar persons appear in their neighborhood as a result of the presence of
short-term rentals, and existing residents are unsure whether these persons pose a danger, thus
undermining the sense of safety the residents have previously come to know and expect in their
neighborhood; and
WHEREAS, this City Council acknowledges the validity of the comments made by a
California appellate court, in the case Ewing v City of Carmel -By -The- Sea (1991) 234
Cal.App.3d 1579, which articulates why a public entity and its residents might disfavor STR
uses, stating:
It stands to reason that the "residential character" of a neighborhood is
threatened when a significant number of homes — at least 12% in this case,
according to the record — are occupied not by permanent residents but by a
stream of tenants staying a weekend, a week, or even 29 days. Whether or not
transient rentals have the other "unmitigatable, adverse impacts" cited by the
council, such rentals undoubtedly affect the essential character of a
neighborhood and the stability of a community. Short-term tenants have little
3
interest in public agencies or in the welfare of the citizenry. They do not
participate in local government, coach little league, or join the hospital guild.
They do not lead a scout troop, volunteer at the library, or keep an eye on an
elderly neighbor. Literally, they are here today and gone tomorrow — without
engaging in the sort of activities that weld and strengthen a community. (234
Cal.App.3d at 1591.)
; and
WHEREAS, another California appellate court, in the case of Watts v. Oak Shores
Community Assn., (2015) 235 Cal.App.4t 466, 470, commented that short-term renters cause
more problems than owners or their guests, including parking, lack of awareness of the rules,
noise, more intense use of common facilities, and abuse of the facilities, and lack of concern with
long-term consequences of abuse; and
WHEREAS, another appellate court, in the case Los Angeles v Gage (1954) 127 Cal.
App.2d 442, 460, has provided guidance concerning amortization of non -conforming uses,
stating:
The distinction between an ordinance restricting future uses and one requiring the
termination of present uses within a reasonable period of time is merely one of
degree, and constitutionality depends on the relative importance to be given to the
public gain and to the private loss. Zoning as it affects every piece of property is
to some extent retroactive in that it applies to property already owned at the time
of the effective date of the ordinance. The elimination of existing uses within a
reasonable time does not amount to a taking of property nor does it necessary
restrict the use of property so that it cannot be used for any reasonable purpose.
Use of a reasonable amortization scheme provides an equitable means of
reconciliation of the conflicting interests in satisfaction of due process
requirements. As a method of eliminating existing nonconforming uses it allows
the owner of the nonconforming use, by affording an opportunity to make new
plans, at least partially to offset any loss he might suffer. The loss he suffers, if
any, is spread out over a period of years, and he enjoys a monopolistic position by
virtue of the zoning ordinance as long as he remains. If the amortization period is
reasonable the loss to the owner may be small when compared with the benefit to
the public. Nonconforming uses will eventually be eliminated. A legislative body
may well conclude that the beneficial effect on the community of the eventual
elimination of all nonconforming uses by a reasonable amortization plan more
than offsets individual losses.
; and
WHEREAS, the Supreme Court of the State of California has ruled in the case of
Metromedia v. City of San Diego, (1980) 26 Cal.3d 848, 882-883, [reversed on other grounds by
Metromedia v. City of San Diego, (1981) 453 U.S. 490] as follows:
L'
The California cases have firmly declared that zoning legislation may validly
provide for the eventual termination of nonconforming uses without
compensation if it provides a reasonable amortization period commensurate with
the investment involved. [Citations omitted.] The determination of the length of a
reasonable period of amortization is not merely a matter of accounting. "It is not
required that the nonconforming property concerned have no value at the
termination date." [Citations omitted.] The determination instead involves a
process of weighing the public gain to be derived from a speedy removal of the
nonconforming use against the private loss which removal of the use would entail.
; and
WHEREAS, the public gain to be derived from removal of the short-term rental uses in
the City of Anaheim as rapidly as possible is of the highest magnitude given the factors
enumerated heretofore, including but not limited to the disruption occurring in the lives of
surrounding residents due to frequent interruption of the peaceful enjoyment of their own homes
and their loss of a sense of neighborhood and concerns over safety and security of their persons
and possessions; and
WHEREAS, the amortization provisions of this ordinance are geared to providing a
reasonable period of time to minimize the private loss and allow for a reasonable opportunity for
recoupment of private investment; and
WHEREAS, on August 12, 2016, nine (9) individual and corporate plaintiffs, including
the California non-profit corporation the Anaheim Rental Alliance (the "Plaintiffs"), filed suit
against the city in Orange County Superior Court, Case No. 30-2016-00869305-CU-WM-CXC,
Talmadge Price et al. v. City of Anaheim (the "Action"), on behalf of Pre -Moratorium Short -
Term Rental permit holders and tenants, challenging Ordinances Nos. 6374 and 6375 for alleged
violations of municipal, constitutional, statutory and common law, which Action continues to
pend in the Orange County Superior Court; and
WHEREAS, the Plaintiffs in the Action have asserted that as a result of their reliance on
the Short -Term Rentals Ordinance, permit holders collectively invested millions of dollars in
Short -Term Rental properties in the city, paid millions of dollars in transient occupancy taxes to
the city, and, with limited exceptions, diligently and earnestly used their best efforts to comply
with the city's Short -Term Rental regulations; and
WHEREAS, the City Council intends by this ordinance to ameliorate the disruption to
those owners of Pre -Moratorium Short -Term Rentals that might otherwise occur if those owners
were required to cease operations immediately or pursuant to the terms of Ordinance No. 6375;
and
WHEREAS, pursuant to the city's police power, as granted broadly under Article XI,
Section 7 of the California Constitution, this City Council has the authority to enact and enforce
ordinances and regulations for the public peace, health, safety and/or welfare of the city and its
residents; and
5
WHEREAS, pursuant to the California Environmental Quality Act (Public Resources
Code Section 21000 et seq.; herein referred to as "CEQA") and the State of California
Guidelines for Implementation of the California Environmental Quality Act (commencing with
Section 15000 of Title 14 of the California Code of Regulations; herein referred to as the "State
CEQA Guidelines"), the city is the "lead agency" for the preparation and consideration of
environmental documents for this ordinance; and
WHEREAS, the City Council finds and determines that this ordinance is not subject to
CEQA pursuant to Sections 15060(c)(2), 15060(c)(3), and 15061(b)(3) of the State CEQA
Guidelines, because it will not result in a direct or reasonably foreseeable indirect physical
change in the environment, because there is no possibility that it may have a significant effect on
the environment, and because it is not a "project," as that term is defined in Section 15378 of the
State CEQA Guidelines; and
WHEREAS, the City Council finds and determines that the regulation of Short -Term
Rental uses in accordance with this ordinance is a matter of city-wide importance and necessary
for the preservation and protection of the public peace, health, safety and/or welfare of the
community and is a valid exercise of the local police power and in accord with the public
purposes and provisions of applicable State and local laws and requirements.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ANAHEIM DOES
ORDAIN AS FOLLOWS:
SECTION 1. Section 4.05.180 of Chapter 4.05 (Short -Term Rentals) of Title 4
(Business Regulation) of the Anaheim Municipal Code shall be, and the same is hereby amended
and restated to read in its entirety as follows:
4.05.180 TERMINATION AND AMORTIZATION OF PRE -
MORATORIUM SHORT-TERM RENTALS.
.010 Notwithstanding anything to the contrary in Chapter 4.05, which may
allow Pre -Moratorium Short -Term Rentals as described in paragraph B of Section
4.05.020, subject to the hardship provisions that are further detailed in subsection
4.05.180.020, all such Pre -Moratorium Short -Term Rentals are prohibited in
zones where residential uses are a permitted or conditionally permitted use after
February 11, 2018. The purpose of so deferring the termination of Pre -
Moratorium Short -Term Rentals is to provide a reasonable amortization period to
the owners of properties with Pre -Moratorium Short -Term Rentals within which
they may recoup the costs they reasonably invested for short-term rental use to the
extent such costs could not already have been reasonably recouped during the
period of short-term rental use of the property and cannot be recouped once the
short-term rental use is terminated. The provisions of this section shall supersede
any other provisions of this code relating to the continuation or amortization of a
non -conforming use. The provisions of this section, including without limitation
the foregoing amortization period, shall not be applicable to those short-term
0
rentals within the C -G General Commercial Zone that have been authorized
pursuant to a conditional use permit approved in accordance with the provisions
of this code prior to the adoption of the moratorium on September 15, 2015.
.015 In the event an owner believes that termination of the short-term rental
use within the period provided in subsection .010 of this section will not provide
the owner a reasonable period of time within which to recoup the costs the owner
reasonably invested for short-term rental use, and that such costs cannot be
recouped once the short-term rental use is terminated, the owner may apply to the
Planning Director for an eighteen (18) month affidavit extension. The Planning
Director shall approve the affidavit extension for the additional eighteen (18)
months (until August 11, 2019) if the owner (i) has paid any applicable filing fee
for the affidavit extension, (ii) has a short-term rental permit or valid pending
application and/or has applied for and/or received any applicable renewal permit,
(iii) is not the subject of a revocation proceeding in connection with the short-
term rental property, (iv) has passed or is awaiting final inspection for the first
renewal inspection following the adoption of Ordinance No. 6374 addressing
compliance with building standards and health and safety codes concerning the
short-term rental, (v) has paid all known applicable transient occupancy taxes for
the short-term rental, (vi) has paid any fines relating to notices of violations or
citations that are final for the short-term rental, and (vii) signs a declaration under
penalty of perjury that the owner cannot recoup the costs reasonably invested for
short-term rental use of the property if the short-term rental use is not allowed
after February 11, 2018, and (viii) completes, submits and signs under penalty of
perjury the form provided by the city for the affidavit extension which makes a
prima facie showing of the facts set forth in subparagraph (vii). Unless extended
by the Planning Director, the application for an affidavit extension shall be filed
by May 22, 2017. The duties and responsibilities of the Planning Director under
this section may be performed by the Planning Director's designee.
.020 In the event an owner believes that termination of the short-term rental
use within the periods provided in subsections .010 and .015 of this section will
not provide an owner a reasonable period of time within which to recoup the costs
an owner reasonably invested for short-term rental use, and that such costs cannot
be recouped once the short-term rental use is terminated, an owner may apply to
the Planning Director for a hardship extension. The duties and responsibilities of
the Planning Director under this section may be performed by the Planning
Director's designee. The application for a hardship extension shall be made,
processed, and acted on in accordance with the following provisions:
.0201 Not later than April 10, 2017, unless the Planning Director, in his or
her sole discretion, extends the deadline for filing such an application, an owner
with a short-term rental permit or valid pending application may file an
application with the Planning Director for the hardship extension, along with such
fee or fees as may be established by the City Council by resolution. The owner
shall sign the application under penalty of perjury. The application, which the
7
owner may continue to supplement with additional information and documents
until the effective date of Ordinance 6405 , shall set forth the amount of
additional time that the owner contends is necessary, beyond the period provided
in subsection .010 of this section, to recoup the costs the owner reasonably
invested for short-term rental use which cannot be recouped once the short-term
rental use is terminated. The application shall fully set forth the owner's
justification for such additional time and shall also include the following
information:
(a) The date the property was acquired by the owner, the price and
other terms of the acquisition that materially affected the price, and the purpose
for which the property was acquired by the owner. If the property was acquired
by a means other than an arms -length purchase (including without limitation a gift
or inheritance), then the owner shall provide information concerning the most
recent arms -length purchase involving the property.
(b) Each use the owner has made of the property since the owner's
acquisition and the period of each such use.
(c) A detailed listing of expenditures made by the owner for
capital improvements to the property for the purpose of putting the property to
short-term rental use, since it was acquired, including the purpose of each
expenditure, the amount, the date, the payee, and any other relevant information
for each expenditure. The owner shall provide receipts, executed construction
contracts and/or other written proof of each expenditure.
(d) A detailed listing of expenditures made by the owner for
capital improvements to the property other than those made for the purpose of
putting the property to short-term rental use, since it was acquired, including the
purpose of each expenditure, the amount, the date, the payee, and any other
relevant information for each expenditure. The owner shall provide receipts or
other written proof of the each expenditure.
(e) A detailed listing of all expenditures incurred by the owner for
the purpose of putting the property to short-term rental use, other than capital
expenditures, including the purpose of each expenditure, the amount, the date, the
payee, and any other relevant information for each expenditure. The owner shall
provide receipts or other written proof of each expenditure.
(f) A detailed listing of all gross receipts received in connection
with the use of the property for short-term rental purposes during such time as it
was lawful to use the property for such purposes.
(g) For each short-term rental use that has been made of the
property since such uses were permitted, the owner shall provide details on the
duration of the rental, the amount of rent and other payments made to the owner
for the rental, and the expenses directly associated with that rental (including but
not limited to commission fees). The owner shall provide the date the property
first was used as a short-term rental, the number of days that the property has been
occupied as a short-term rental since that use commenced, and the average rent
paid per day for short-term rental use since that use commenced. The owner shall
state whether during the period that short-term rental use has been allowed for the
property, the property has been put to any other uses (including without limitation
residential use by the owner or others) and, if so, detail the number of days for
each such use and any income generated from each such use.
(h) A detailed projection of the income and expenses that are
anticipated if the requested hardship extension is approved.
(i) An identification and description of any contracts with third
parties that commit the property to a future short-term rental use to a third party,
including the dates of the committed use, the rental to be charged for the use, and
any other relevant information relating to the contracted future use. The owner
shall provide written evidence of the contacts identified.
0) An identification and description of any long term
commitments, whether leases, mortgages, or other commitments, that have been
made by the owner in reliance on the ability to use the property for short-term
rental purposes. The owner shall provide written documentation for each such
commitment.
(k) The fair market value of the short-term rental property as of
August 11, 2016, had there been no prohibition on short -term -rentals in zones
permitting or conditionally permitting residential uses compared to the fair market
value of the short-term rental property as of August 11, 2016, if sold for non -
short -term rental use. The owner shall provide the factual basis and analysis
substantiating these values, including comparable sales information, income
approach elements and/or cost approach elements.
(1) Whether there has been or will be an increment in value
accruing to the property as a result of the ban on new short-term rental properties
that became effective on August 11, 2016, which ban limits the number of short-
term rentals available in the city, and the factual basis and analysis substantiating
that increment in value.
(m) Whether there has been or will be an increment in potential
monthly rental income that the short-term rental property could generate from
short-term rental use for the remaining period of allowed short-term rental use, by
having a pre -moratorium right to short-term rental use while other properties (in
zones permitting or conditionally permitting residential uses) could not be used
for short-term rental purposes, other than those properties that benefitted from the
pre -moratorium right to short-term rental use. If so, the owner shall provide the
0
factual basis and analysis substantiating the increment in potential monthly
income for the period of permitted use.
(n) The amortized or depreciated value of the short-term rental
property used for tax purposes.
(o) A financial analysis demonstrating the amount of time that will
be required for the owner to recoup the costs reasonably invested for short-term
rental use to the extent such costs could not already have been reasonably
recouped during the period of short-term rental use of the property and cannot be
recouped once the short-term rental use is terminated. The analysis should
identify reference sources for each item of data included and set forth the basis for
all assumptions made. The Planning Director may provide the owner with a
requested form and/or format for the financial analysis, and if provided, such form
and/or format shall be completed and submitted by the owner.
After receiving a timely filed application, the Planning Director may
request any additional information reasonably necessary to ascertain relevant facts
and circumstances; and if requested, the owner shall provide the requested
information within thirty (30) calendar days of the Planning Director's request,
unless the Planning Director provides for a longer period. The Planning Director
may deem an application to be incomplete, and return it to the owner for
additional information, if the information set forth in the application is not
provided in a manner that is comprehensive and understandable and that
demonstrates how the factual information provided leads to the conclusion that
the requested hardship extension is necessary. If an application is returned as
incomplete, the owner shall correct the deficiencies and provide the requested
information within thirty (30) calendar days of the Planning Director's request,
unless the Planning Director provides for a longer period. The Planning Director,
in his or her sole and absolute discretion, may waive one or more of the items
listed above if he or she determines the purpose and intent of the amortization
provisions of this section can be adequately achieved without the submittal of
such item(s), but no waiver shall be effective unless in writing and signed by the
Planning Director.
.0202 The burden shall be on the owner to establish the need and grounds
for a hardship extension and to establish the reasonableness of the requested
duration of the extension. Any alleged hardship that is based upon action or
expenditures not reasonably taken or made in light of the circumstances, shall not
be grounds for an extension. Any expenses for modifications or improvements to
the short-term rental property incurred after August 11, 2016 shall be presumed
not to be reasonably incurred unless (i) the owner proves that they were
reasonably necessary to operate the short-term rental in a way that would
ultimately reduce the duration of the extension otherwise necessary, because the
modifications or improvements will allow for quicker recoupment of the owner's
qualifying costs, or (ii) the expenditures were incurred in order to satisfy fire -
10
safety requirements that were not in place before August 11, 2016, or (iii) the
expenditures were incurred in order to satisfy a requirement of the city on the
continued use and operation of the property. If there is a sale of the short-term
rental property after August 11, 2016, the costs to be considered for purposes of a
hardship extension shall be those of the owner prior to August 11, 2016, and the
new owner's purchase price and costs shall not be a basis of qualifying for a
hardship extension. The Planning Director shall approve an extension upon
determining that the owner has shown that since the commencement of the use of
the owner's property as a short-term rental property, the owner has not had and
will not have, within the time limit set forth in Section .010 above, plus any
affidavit extensions provided under Section .015 above, a reasonable period of
time within which to recoup the costs the owner reasonably invested for short-
term rental use, and that the costs cannot be recouped once the short-term rental
use is terminated. In the event an extension is approved, the Planning Director
may not approve an extension of time longer than is necessary to allow the owner
a reasonable time for recoupment of such costs. The determination of the
extension of time permitted includes a process of weighing the public gain to be
derived from a speedy removal of the nonconforming use against the private loss
which removal of the use would entail.
.0203 In determining whether the owner has had and will have a
reasonable period of time for recoupment of costs, the Planning Director shall
consider the period of time that the owner has had for short-term rental use since
the owner began to incur such costs as well as the time available for continued
short-term rental use under Section .010 above along with the available affidavit
extension. In addition to the information contained in the application submitted
by the owner, the Planning Director may consider such additional competent and
relevant information that the Planning Director may obtain by staff investigation
or from other sources as the Planning Director may choose to consult or obtain;
however, the Planning Director shall not be obligated to conduct any independent
investigation or to seek information outside the scope of the owner's application.
Upon request of the Planning Director, the owner shall be reasonably available to
respond to questions or to review and discuss relevant information.
.0204 In considering the application and making a decision, the Planning
Director may take into account all relevant information that relates to the
determination of whether the owner has had or will have a reasonable period of
time to recoup the costs the owner reasonably invested for short-term rental use,
and that the costs cannot be recouped once the short-term rental use is terminated,
including but not limited to any of the following matters he or she deems relevant:
(a) The information submitted in the owner's application.
(b) The period of time that the owner has had for short-term rental
use since the owner began to incur such costs.
11
(c) The amount of investment or original cost incurred by the
owner.
(d) The fair market value of the short-term rental property as of
August 11, 2016, had there been no prohibition on short -term -rentals in zones
permitting or conditionally permitting residential uses compared to the fair market
value of the short-term rental property as of August 11, 2016, if sold for non -
short -term rental use.
(e) The increase in value that the property benefitted from due to
the market for real estate in the area, independent of any added increase that may
have occurred as a result of the availability of the property for short-term rental
use.
(f) Any increment of value that the property received by having a
pre -moratorium right to short-term rental use while other properties (in zones
permitting or conditionally permitting residential use) could not be put to short-
term rental use, other than those that benefitted from the pre -moratorium right to
short-term rental use.
(g) Any increment in potential income that the property could
generate from short-term rental use by having a pre -moratorium right to short-
term rental use while other properties (in zones permitting or conditionally
permitting residential use) could not be put to short-term rental use, other than
those that benefitted from the pre -moratorium right to short-term rental use.
(h) The income potential of the property since it was allowed to be
used for short-term rental purposes and the income actually received by the owner
from short-term rental use since it was allowed to be used for short-term rental
purposes.
(i) Any amortization or depreciation of the improvements to the
property that has been prepared for tax purposes.
0) The extent of the owner's investment that is unique to the
short-term rental use and does not serve any conforming use of the property.
(k) The extent of the owner's investment that will not be
recovered on sale of the property.
(1) The owner's investment -backed expectations in light of current
and pending regulation at the time that the investment was made.
(m) Replacement cost of improvements that might have been
made that only serve the short-term rental use; and the length of time that the
owner has had the benefit of the investment before the termination of the use.
12
(n) Any other information that bears upon the reasonable period of
time for the owner of a Pre -Moratorium Short -Term Rental to recoup the costs
reasonably invested for short-term rental use to the extent such costs could not
already have been reasonably recouped during the period of short-term rental use
of the property and cannot be recouped once the short-term rental use is
terminated.
.0205 A decision by the Planning Director to deny an application for a
hardship extension, in whole or in part, or to limit the duration of an extension to
a shorter period than requested by the owner, may be appealed by the owner
pursuant to the provisions established in Section 4.05.150 (Appeals and
Administrative Hearing Procedure for Administrative Determinations) of this
chapter, subject to the following additional provisions. At the city's option and
expense, the hearing may be conducted by (i) the Employee Hearing Officer, or
(ii) the City Hearing Officer, as defined in paragraph .0 10 1 of subsection .010 of
Section 1. 12.110 of the code, or (iii) an economist or accounting professional who
is experienced in accounting methodology and practice, or, if the parties stipulate,
to such other person as may be mutually agreeable (each of these is hereinafter
referred to as the "Hearing Officer"). The Hearing Officer shall conduct the
hearing, receive evidence and make the final decision on behalf of the city. The
deadline for filing an appeal shall be thirty (30) calendar days after the date the
written notice of the Planning Director's decision is mailed (via first class
delivery) to the owner. Such an appeal may be filed only if the owner timely
submitted a complete application to the Planning Director for a hardship
extension. The Hearing Officer shall conduct a de novo appeal hearing; however,
the owner may not submit information to the Hearing Officer other than that
which was submitted to the Planning Director in connection with the owner's
application for hardship extension, except to the extent the information could not
have reasonably been provided to the Planning Director with the application or to
the extent that the information is necessary to rebut or respond to information
submitted by the city or any other person to the Hearing Officer. The Hearing
Officer's decision shall be based on all relevant information, including the
categories of information set forth in paragraph .0204 of subsection .020 of
Section 4.05.180. The burden shall be on the owner to establish the need and
grounds for the hardship extension and to establish the reasonableness of the
requested duration of the extension. Any hardship that is based upon actions or
expenditures not reasonably taken or incurred in light of the circumstances shall
not be grounds for an extension. Any expenses for modifications or improvements
to the short-term rental property incurred after August 11, 2016, shall be
presumed not to be reasonably incurred unless (i) the owner proves that they were
reasonably necessary to operate the short-term rental in a way that would
ultimately reduce the duration of the extension otherwise necessary, because the
modifications or improvements will allow for quicker recoupment of the owner's
qualifying costs, or (ii) the expenditures were incurred in order to satisfy fire -
safety requirements that were not in place before August 11, 2016, or (iii) the
13
expenditures were incurred in order to satisfy a requirement of the city on the
continued use and operation of the property. If there is a sale of the short-term
rental property after August 11, 2016, the costs to be considered for purposes of a
hardship extension shall be those of the owner prior to August 11, 2016, plus
those subsequently incurred costs, if any, authorized by this paragraph, and the
new owner's purchase price and costs shall not be a basis of qualifying for a
hardship extension.
.0206 An owner may designate in a hardship extension application filed
in accordance with subsection 4.05.180.020.0201, or by other written notice to the
Planning Director, filed prior to the deadline for filing a hardship extension
application, that the owner is applying for a hardship extension pursuant to a
"capped extension" process. If an owner timely does so, and the owner is granted
a hardship extension for an additional two (2) years beyond August 11, 2019 (i.e.,
until August 11, 2021) pursuant to the capped extension process, the owner
waives the right to claim a hardship extension beyond that period. The Planning
Director shall not be obligated to grant any extension pursuant to a capped
extension process. If the Planning Director (or his/her designee) does not grant an
extension for an additional two (2) years beyond August 11, 2019, the decision
shall not be appealable, and the owner's application shall be processed pursuant to
the otherwise applicable hardship extension application process. In such case, the
owner shall have a right to supplement the owner's hardship extension application
within 30 days of being provided notice that the requested two (2) year extension
has not been granted pursuant to the capped extension process. The Planning
Director or his/her designee may grant an extension for an additional two (2)
years beyond August 11, 2019 pursuant to the capped extension process if the
Planning Director or his/her designee determines that the hardship extension
application contains substantial evidence to establish that the owner has not had
and will not have, prior to August 11, 2021, sufficient time within which to
recoup the costs the owner reasonably invested for short-term rental use, and that
the costs cannot be recouped once the short-term rental use is terminated.
.0207 Upon the conclusion of the amortization period, including any
hardship extension or affidavit extension, the Pre -Moratorium Short -Term Rental
use shall cease. Thereafter, the owner's property may be used as a long-term
residence, a long-term residential rental, or for any other lawfully permitted or
conditionally permitted use in the zone.
SECTION 2. SEVERABILITY.
The City Council of the City of Anaheim hereby declares that should any section,
paragraph, sentence, phrase, term or word of this ordinance be declared for any reason to be
invalid, it is the intent of the City Council that it would have adopted all other portions of this
ordinance independent of the elimination of any such portion as may be declared invalid. If any
section, subdivision, paragraph, sentence, clause or phrase of this Ordinance is for any reason
held to be invalid or unconstitutional, such decision shall not affect the validity of the remaining
portions of this Ordinance. The City Council hereby declares that it would have passed this
14
Ordinance, and each section, subdivision, paragraph, sentence, clause and phrase thereof,
irrespective of the fact that any one (or more) section, subdivision, paragraph, sentence, clause or
phrase had been declared invalid or unconstitutional.
SECTION 3. CERTIFICATION
The City Clerk shall certify to the passage of this ordinance and shall cause the same to
be printed once within fifteen (15) days after its adoption in the Anaheim Bulletin, a newspaper
of general circulation, published and circulated in the City of Anaheim.
SECTION 4. EFFECTIVE DATE
This ordinance shall take effect and be in full force thirty (30) days from and after its
final passage.
THE FOREGOING ORDINANCE was introduced at a regular meeting of the City
Council of the City of Anaheim held on the21 st day of March , 2017, and thereafter
passed and adopted at a regular meeting of said City Council held on the 2 5 th day of
April , 2017, by the following roll call vote:
AYES: Mayor Pro Tem Vanderbilt and Council Members Murray,
Kring, and Faessel
NOES: Mayor Tait and Council Members Moreno and Barnes
ABSENT: None
ABSTAIN: None
ATTE T:
CITY CLERK TF THE CITY OF ANAHEIM
CITY OF ANAHEIM
By: ell /
MAYOR OFT E CITY OF ANAHEIM
15
CLERK'S CERTIFICATE
STATE OFCALIFORNIA )
COUNTY OFORANGE \ ea.
CITY OFANAHEIM \
1, LINDA ANDAL, City Clerk of the City of Anaheim, do hereby certify that the foregoing is the
original Ordinance No. 6405 introduced at aregular meeting ofthe City Council ofthe City of
Anaheim, held onthe 21st day ofMarch, 2017.and that the same was duly passed and adopted
@t@regular meeting ofsaid City Council held nnthe 25thday CfApril, 2O17'bythe following vote
ofthe members thereof:
AYES: Mayor Pro Tern Vanderbilt and Council Members Murray, KhDQ.and FaeOGe|
NOES: Mayor Tait and Council Members Moreno and Barnes
ABSENT: None
ABSTAIN: None
IN WITNESS WHEREOF, I have hereunto set my hand this 27th day of April, 2017.
4 P, / wxq ViA 4 WN6 64, J-�
05
AFFIDAVIT OF PUBLICATION
STATE OF CALIFORNIA, )
) SS.
County of Orange )
I am a citizen of the United States and a resident
of the County aforesaid; I am over the age of
eighteen years, and not a party to or interested in
the above -entitled matter. I am the principal
clerk of the Anaheim Bulletin, a newspaper that
has been adjudged to be a newspaper of general
circulation by the Superior Court of the County
of Orange, State of California, on December 28,
1951, Case No. A-21021 in and for the City of
Anaheim, County of Orange, State of California;
that the notice, of which the annexed is a true
printed copy, has been published in each regular
and entire issue of said newspaper and not in any
supplement thereof on the following dates, to
wit:
May 4, 2017
"I certify (or declare) under the penalty of
perjury under the laws of the State of California
that the foregoing is true and correct":
Executed at Santa Ana, Orange County,
California, on
Date: May 4, 2017
Signature
Anaheim Bulletin
625 N. Grand Ave.
Santa Ana, CA 92701
(714)796-2209
PROOF OF PUBLICATION
CITY OF ANAHEIM
ORDINANCE NO. 6405.
OF THE CITY OF ANAHEIM AMENDING
(SHORT-TERM RENTALS) OF TITLE 4
DIRECT OR REASONAB
PHYSICAL CHANGE IN
ATI
NED
1, Linda N. Andal, City Clerk of the City of Anaheim, do hereby certi-
fy that the foregoing is a summary of Ordinance No. 6405 which ordi-
nance was introduced at a regular meeting of the City Council of the
City of Anaheim on the 21St day of March, 2017 and was duly passed
and adopted at a regular meeting of said Council on the 4th day of
April, 2017 by the fol lowing roll call vote of the members thereof:
AYES: Mayor Pro Tem, VanderbiltandCouncil Members
Murray, Kring, and Paessel
NOES: Mayor Tait and Council Members Barnes and Moreno
ABSENT: None
ABSTAIN: None
The above summary, is a brief description of the subject matter con-
tained in the text of Ordinance No. 6403, which has been Prepared pur-
suant to Section 312 of the Charter of the City of Anaheim. This sum-
mary does not include or describe every provision of the ordinance
and should not be relied on as a substitute for the full text of the ordi-
nance.
To obtain a copy of the full text of the ordinance, please contact the
Office of the City Clerk, (714) 765-5166, between 8:00 AM and 5:00 PM,
Monday through Friday. There is no charge for the copy.
121930vl/LHM . Publish: Anaheim Bulletin May 4, 201710942301