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Council will discuss tax on vacation rentals

CARLSBAD — A recent City Council agenda item has moved the topic of vacation rentals into the spotlight. Although the coastal town of Carlsbad does not have an official zoning for these types of rentals, there appear to be some vacation rentals that do exist from a transient occupancy tax activity, otherwise known as a hotel tax.

“Vacation rentals are not currently allowed through our zoning,” said Don Neu, city planner for Carlsbad. “The City Council is expected to consider that in the coming months as to what policy they would like to pursue with vacation rentals in the future.”

And that decision could include whether or not to have vacation rentals.

Neu said recent records from the city finance department indicated there were 15 submissions of a transient occupancy tax that were not from official businesses, such as hotels in the area. Staff suspects these are vacation rentals and there might be more out there.

By definition, Neu said, vacation rentals are furnished properties that are rented for less than 30 days and are subject to this special tax.

Regardless of these tax monies, single-family dwelling, townhome or condominium vacation rentals are not authorized by the city.

“If you look at our city zoning today, in none of our residential zones is there a permitted use or anything that would be similar to a vacation rental,” he said. “We have something, we think, coming up in the next couple months where the City Council is going to consider the issue of vacation rentals.”

Neu said even if someone wanted to officially have a vacation rental in way of a permit, for example, they’d be unable to do so because it’s not accepted by the city.

“The City Council may probably consider at one of their upcoming workshop sessions how they want to address vacation rentals,” he said, noting that council members have heard both the pros and cons from residents. “And I think we will be asked to provide a background to help them work through the issues and see what they want to do.”

Neu said neighboring cities have approached the vacation rental situations differently.  While some have regulated it, they have also required these sites to have special licensing agreements for noise disturbance and other issues. Conversely, other cities that have prohibited vacation rentals have amended their zoning.

Neu pointed out that there have been past instances where Carlsbad code enforcement received noise complaints from neighbors regarding a nearby vacation rental.

Neu said the city will be looking into the vacation rental situation in two parts: zoning and land use approval and the financial aspect of business licenses and the transient occupancy tax process.

As for the 15 vacation rentals that are filing their transient occupancy tax, Neu said, they won’t be addressed until a decision by City Council has been made or if code enforcement has been alerted for some particular reason.

“What the council wants to do is make a decision from a policy standpoint of do we want to allow vacation rentals under certain conditions and certain locations or is this something that we don’t think is appropriate in residential areas at all,” he said.