Faced with a choice between keeping its existing three-night-stay minimum or obtaining state permission for a cap on the total number of vacation rentals allowed in Encinitas, a majority of the City Council opted to stick with the current night-stay requirement.
“Three nights is absolutely where I think the city needs to be,” Councilmember Luke Shaffer said before the council’s vote Wednesday.
Shaffer said he couldn’t support the new state Coastal Commission requirement for a two-night minimum stay for a non-owner occupied property. Encinitas currently has a three-night limit on those types of units and Shaffer said he believes people who book two-night stays are more likely to host loud weekend parties that will result in neighborhood complaints.
The council’s vote not to accept a new ordinance that contains the state Coastal Commission’s requested modification, and instead stick with the city’s existing regulations, was 3-2, with Mayor Bruce Ehlers and Councilmember Joy Lyndes opposed.
Ehlers and Lyndes said they were willing to exchange the three-night minimum requirement for a two-night one in the short term, because the state was willing to grant Encinitas the ability to cap the total number of vacation rentals and allow it to ban non-owner-occupied, vacation rental properties from being less than 200 feet from each other.
Having an entire street become all vacation rentals is a “serious quality of life concern for our residents,” Lyndes said. Ehlers said that the city should accept the state’s two-night-stay request for now and then negotiate the issue in the months to come.
“I think we can make one heck of a good argument” for the night-stay change, he said, mentioning that the state has allowed Solana Beach to have a seven-night minimum and Del Mar just received a three-night one.
Encinitas began its current effort to amend its regulations regarding short-term rentals — places that are typically rented for less than 30 days — in 2021. The goal, council members said at the time, was to pursue limiting the total number of vacation rentals citywide, and particularly their concentration in the coastal region west of Interstate 5.
Ultimately, the City Council approved in late 2022 a new set of regulations stating that vacation rentals could constitute no more than 2.5 percent of the city’s total single-family housing inventory, and individual communities would have a 4-percent cap. Council members also decided that non-owner-occupied vacation rentals could not be within 200 feet of each other.
Part of Encinitas falls within the state Coastal Commission’s review zone, so these council-approved changes also needed state approval, a lengthy process that finished with a state Coastal Commission hearing earlier this year. At that hearing in February, the state commissioners added what city staff members described Wednesday as an “unexpected modification” regarding the night-stay minimums.
Commissioners indicated that they were adding this modification because they believed it would increase coastal area accessibly — a three-night stay costs more than a two-night one, city employees said Wednesday. Encinitas council members and several audience members said they thought the modification was unfair, given that Del Mar was granted a three-night minimum at that same February Coastal Commission meeting.
Encinitas currently has 319 city-permitted, short-term rental units, including 257 west of Interstate 5. Ones where the owners do not live on-site make up the vast majority of the city’s vacation rental units.
In addition to the permitted units, there are estimated to be about 200 that are operating without city permits and aren’t paying the city’s transient occupancy tax, commonly called the “bed tax.” Encinitas is planning to ramp up enforcement actions against them in the coming months, city employees said.
Interest in having vacation rentals is expected to spike during the next several years because several major world events, including the Olympics in 2028, are planned for the Southern California region.