Short-term rentals are still illegal in Manhattan Beach and will soon be punishable with hefty fines.

A citywide ban remains after officials debated for more than a year about lifting a 2015 prohibition, which many called a failure.

But, in a move residents applauded, city council voted to double down on the short-term ban at its meeting on March 6 and focus on enforcement.

The city will add language to its code making it a violation to even list short-term rentals online. Violators will be fined $1,000 fine per night, according to city staff.

“By adding the language to make it a violation to list will help. Then we can cite people for listing,” Community Development Director Anne McIntosh said at the March 6 meeting.

To up enforcement efforts, the city also recently signed a contract with Host Compliance, McIntosh said.

She explained the company, which specializes in short-term rental assistance for municipalities and also works with Hermosa Beach, will locate addresses offering short-term rentals online, notify the listers that the short-term offerings are illegal and offer a 24/7 hotline for residents to report infractions.

The $19,068 contract with Host Compliance lasts from March 2019 to March 2020 and can be renewed on an annual basis, McIntosh said in a March 7 email.

McIntosh added the relationship with Host Compliance and how it works with the city has yet to be fully fleshed out.

But, the city will also be looking into financing a Thursday through Monday code enforcement officer as part of its next budget review, according to officials.

Per Councilmember Richard Montgomery’s suggestions at the meeting, council will also review the ban in six-months to ensure it is being enforced. That's an accountability, he said, that was missing from the previous legislation.

The hope going forward, city officials expressed, is to avoid the mistakes of the past.

“We failed in enforcement, we were lax in it,” said Mayor Steve Napolitano, who has advocated upholding the ban since last March.

“I would...maintain a total ban...strengthen it...and then enforce it to maintain our sense of community and the values that we have here.”

Many Manhattan Beach residents agreed.

“I just don’t see how allowing short-term rentals in our city preserves our small town feel,” said 36-year resident Paul Beswick. “That just doesn’t really fit with the flavor of our community.”

Councilmembers voted unanimously to uphold the ban.

“This is one of the biggest issues in what will determine the future character of this community,” Napolitano said. 

Hotels in place of short-term rentals

But, without short-term rentals, where will visitors stay?

“One way of keeping short-term rentals out of neighborhoods is hotels,” said Mike Grannis, a commercial real estate broker with Highland Partners at the March 6 council meeting. “We need an alternative—or else we might as well just put gates up on the city and not let anybody come in.”

To draw more hotels to the city, specifically to the Sepulveda Boulevard corridor, council approved a flexible height standard - up to 40 feet, with an additional five feet for HVAC and elevator shafts - for new hotels at certain sites on the street. 

Hotel sites must meet the minimum requirements of 135 feet in depth and 20,000 square feet lot size.

New hotel proposals will still have to go through the city’s conditional use permit process, community outreach and an environmental impact report.

But, the hope, according to city staff, is to draw more hotels to Manhattan Beach without causing disruption to residential areas.

“Sepulveda seems to be a perfect location for visitors to stay,” McIntosh said in a Feb. 7 interview with The Beach Reporter.

She added the city would be interested in seeing “one or two more hotels” on the commercial corridor to gain revenue from the city’s transient occupancy tax—especially given the recent increase.

As part of the March 5 election, voters weighed in on Measure A, or Manhattan Beach’s Quality of Life Measure, which sought to raise the transient occupancy tax from its current rate of 10 percent to 12 percent by next April.

That measure looks to be passing by a whopping 76 percent so far, with Los Angeles County yet to finalize the election results.

If Measure A passes, the city could gain $1 million a year, according to city staffers.

Mayor Napolitano and Councilmember David Lesser dissented in the 3-2 vote to make the exception in the city's 30-foot height limit for hotels, while Councilmembers Amy Howorth, Nancy Hersman and Richard Montgomery favored the change. 

“A hotel is a very desirable thing to lure into the city because of the (tax) it brings,” Howorth said at the March 6 meeting. “I think it’s an appropriate increase to the area,” she added of the flexible height standard.

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