COUNTY OF SAN MATEO

Inter-Departmental Correspondence

ENVIRONMENTAL SERVICES AGENCY

DATE:

July 12, 2004

Set Time:

9:45 a.m.

BOARD MEETING DATE:

July 27, 2004

TO:

Honorable Board of Supervisors

FROM:

Marcia Raines, Director of Environmental Services

SUBJECT:

Consideration of an Ordinance Establishing Permanent Regulations for the Short Term Rental of Rooms (Commonly Known as a Bed and Breakfast Inn) in Zoning Districts Outside the Coastal Zone

RECOMMENDATION

1.

Adopt an ordinance (Attachment A) amending the zoning regulations applicable outside the Coastal Zone to:

a.

Add a definition of bed and breakfast inn.

b.

Allow long-term (30 days and over) rental of rooms in any dwelling.

c.

Limit bed and breakfast inns to certain commercial districts, subject to a use permit.

2.

Determine whether to direct the Planning Commission to hold a hearing or hearings pursuant to Zoning Regulations Section 6134.1, Continuation of Non-Conforming Uses, to recommend to your Board whether use of existing residences as bed and breakfast inns, should be discontinued and converted to a use permitted under the zoning regulations as revised above within a prescribed period of time.

SPECIAL NOTICE

The public notice requirements for the bed and breakfast regulations are set forth in Government Code Sections 65853, 65856, 65090, 6061 and 65094. Most relevant are Sections 65856 and 65090, which specify that the hearing be noticed by an ad in the newspaper at least 10 days prior to the hearing. No neighborhood notice is required. A notice and staff report were sent to each person on the project mailing list and all affected homeowner associations.

VOTE REQUIRED

Majority.

BACKGROUND

A residence under construction last year at 1201 Selby Lane in the Sequoia Tract area of unincorporated Redwood City, commonly known as the Atherton Inn, brought to light the inadequacy of the County’s existing regulations governing the short term rental of rooms in residential districts, commonly referred to as a bed and breakfast inn. These facilities were established under the County’s then existing regulations governing the rental of rooms in residential districts, which make no distinction between short- or long-term rentals. The former regulations allowed the rental of up to five rooms in a single-family residence, provided there were no additional kitchen facilities.

Generally speaking, this has not proven to be problematic for long-term rentals, usually to individuals, as that is little different than the same number of individuals sharing a home. However, when relied upon for the establishment of a bed and breakfast, with its regular daily turnover of occupants and the potential introduction of activities and facilities more commonly associated with hotels and motels, conflicts with the primary residential character of the zoning district can result.

In response to those concerns, on December 16, 2003, your Board adopted interim zoning regulations for room rentals outside the Coastal Zone which created a distinction between long (30 days or more) and short (less than 30 days) term room rentals and established development and operational standards for the latter. Those regulations were subsequently modified slightly and extended to December 2004. Your Board also directed the Planning Commission to conduct hearings and make a recommendation with regard to permanent regulations.

The Planning Commission held hearings on March 24 and May 12, 2004 and recommended that your Board, with regard to areas outside of the Coastal Zone, prohibit the short-term rental of rooms in residential districts and limit bed and breakfast establishments to commercial zoning districts, subject to a use permit. The Commission also recommended that your Board consider amortization and conversion to standard residential occupancy of existing bed and breakfast establishments that would become non-conforming uses under those provisions. The Commission vote was unanimous.

DISCUSSION

1.

Prior Zoning Provisions

The prior zoning provisions governing the rental of rooms read:

SECTION 6400. The following accessory uses, in addition to those hereinbefore specified, shall be permitted in any “R” District, provided that such accessory uses do not alter the character of the premises in respect to their use for the purposes permitted in such respective districts.

a.

The renting of rooms and/or the providing of table board in a dwelling as an incidental use to that of its occupancy as a dwelling of the character permitted in the respective district, but not to the extent of constituting a hotel as defined in this Part, unless permitted in the district.

The zoning regulations define a hotel as containing six or more guest rooms, so the room rental provisions above were limited to five or fewer guest rooms. Note that the regulations make no distinction between long- or short-term rentals. It is under these provisions that bed and breakfast operations have been established.

2.

Interim Zoning Regulations

The interim regulations adopted on December 16, 2003, and subsequently modified and extended, on January 27, 2004, created a distinction between long- and short-term room rentals and established development and operational standards for the latter. They did not reduce the number of guest rooms allowed (five) nor change the districts in which such uses were allowed. A copy of the interim regulations adopted on January 27, 2004, appears as Attachment B. Those regulations remain in effect.

3.

Planning Commission Review

As directed by your Board, staff presented draft permanent regulations for the short-term rental of rooms to the Planning Commission. Those were essentially identical to the interim regulations adopted by your Board last December and modified in January. The Commission held hearings on those draft regulations on March 24 and May 12, 2004. While there was some support for allowing bed and breakfast establishments in residential areas, the majority of the testimony favored limiting such uses to commercial zones. That approach was supported by a survey of nearby jurisdictions, which showed that few allow this use in residential districts. The results of that survey appear in Attachment C.

The Commission concluded that no compelling argument had been presented as to the necessity or benefit to the community of bed and breakfast establishments in residential areas, but that substantial information was presented as to the adverse effects such uses could cause. Those included traffic and parking congestion, noise, security and safety issues and the creation or introduction of facilities, uses and activities not in keeping with the traditional zoning requirements, cited above, that room rentals be accessory and incidental to the primary use of the building as a residence and not alter the character of the premises as a dwelling. The Commission’s conclusion was that it would be very difficult for the modern conception of a bed and breakfast as a small hotel, to meet that standard. Their preference was that such uses be treated as small hostelries, and limited to commercial districts where hotels are allowed.

Another way of looking at the Commission’s recommendation is that, following their review of the draft permanent regulations, which would allow bed and breakfast establishments in residential districts but attempt to control their impacts, the Commission concluded that the better way would be to avoid those impacts altogether by limiting those uses to zoning districts where the impacts would be more acceptable.

The Commission also recommends that bed and breakfasts, where allowed, be subject to a use permit. This would give the County added control over their establishment, design and operation. Staff concurs with this recommendation, especially given the proximity of most of our unincorporated Bayside commercial districts to residential areas. It would also assure that the use and the impacts associated with a proposed bed and breakfast are the subject of public notice and review before construction or occupancy and thereby avoid the added controversy that can ensue when a use of this type comes to public attention only after its construction or establishment.

4.

Draft Ordinance

In summary, the proposed ordinance would allow long-term room rentals in any residential district, but would preclude short-term room rentals in residential districts outside the Coastal Zone. It would also establish a new definition of bed and breakfast inn for those areas outside the Coastal Zone and limit that use to H-1 (Limited Highway Frontage), C-1 (Neighborhood Commercial) and C-2 (General Commercial) districts outside the Coastal Zone, subject to a use permit. Those are the districts where hotels are now allowed. It would not add bed and breakfast inns to the list of allowed uses in the C-1/NFO (North Fair Oaks) and C-1/WMP (West Menlo Park) districts, because they do not allow hotels.

Room rental regulations in the Coastal Zone would remain unchanged. Simply put, the rental of up to five guest rooms in a dwelling is allowed in any residential district in the Coastal Zone, without distinction as to whether the rental is long- or short-term, subject to a Coastal Development Permit. When your Board considered the interim regulations in December, you deliberately excluded the Coastal Zone from any changes because you concluded that Coastal Act and County policy strongly supported the establishment of visitor serving facilities there, unlike policy for Bayside residential areas.

5.

Amortization of Existing Bed and Breakfast Establishments

The Commission also recommended that your Board consider establishing provisions for the amortization of existing bed and breakfast uses that would become non-conforming uses under the Commission’s proposal. Amortization provides a period of time during which a non-conforming use may continue to operate before it must be converted to a use conforming to the zoning regulations. This allows the owner to realize a reasonable return on his or her investment before being required to convert to a use allowed by the regulations.

Staff has conducted further research on this issue since the Commission hearings and has determined that the County Zoning Regulations already contain provisions that address the Commission’s concern. Section 6134.1 addresses the continuation of non-conforming uses and reads as follows:

Continuation of Non-Conforming Uses. A non-conforming use may continue provided all other provisions of this Chapter are met.

The Board of Supervisors, upon recommendation of the Planning Commission at a public hearing, can require that any non-conforming use (except residential) be removed or converted to a permitted use within a prescribed period of time, as allowed by law, and upon findings that (1) the non-conforming use is detrimental to the health, safety or public welfare of the surrounding area and (2) it degrades the neighborhood character.

If the Board concurs with the Planning Commission’s request that bed and breakfast establishments that become non-conforming under the new regulations be amortized and then converted to an allowed use, staff recommends that your Board refer the matter to the Commission for the hearing and recommendation specified in Section 6134. To date, the only bed and breakfast operation that has been identified that would not conform to the proposed regulations is the Atherton Inn at 1201 Selby Lane, but additional research would be done to ensure any other such operations are identified.

It is important to note that, under the prior zoning regulations any bed and breakfast operation was required to be converted in a structure that conformed to the regulations for single-family dwellings. At issue in any amortization proceeding would be its incidental and accessory use for the short-term rental of rooms. It is only that use, not the building itself, that would be amortized and discontinued. The building could continue to function as a single-family residence.

The Commission would hold a hearing to determine if that non-conforming use was detrimental to the health, safety or public welfare of the surrounding area and if it degrades the neighborhood character. County Counsel has advised that relevant factors in determining the reasonableness of any amortization period would include, among other things, amount of investment or original costs, present actual or depreciated value, amortization for tax purposes, and remaining useful life. If the Commission concluded that it is/does, then it would recommend to your Board that it be converted to a conforming use (presumably as a residence) and a period of time within which that must happen. Your Board would then hold a hearing to consider the Commission’s recommendation and determine if the use is to be converted and within what time period that is to occur.

6.

Environmental Review

Adoption of these regulations is exempt from review under the California Environmental Quality Act under 14 California Code of Regulations Section 15061(b)(3) because there is no possibility that the regulations, which impose further restrictions on development and use of property, will have the potential for causing a significant effect on the environment, in that they are more protective of the environment than prior regulations.

7.

Alternatives

Alternatives to the recommendation with regard to bed and breakfast establishments in residential districts would be to (a) allow them but to set standards for their development and operation, much like the interim regulations, or (b) to allow them subject to a use permit or (c) a combination of the two.

With regard to bed and breakfasts in commercial districts, the alternatives would be to (a) allow them subject to a pre-defined set of standards, like the interim regulations, but no use permit, (b) allow them subject to predefined standards plus a use permit or (c) allow them by right with no pre-defined standards and no use permit.

With regard to amortization of non-conforming bed and breakfasts, the option would be not to pursue amortization of existing bed and breakfast operations.

VISION ALIGNMENT

Adoption of these regulations would serve the Commitment of Redesign our urban environment to increase vitality, expand variety and reduce congestion and the related goal of Land use decisions consider transportation and other infrastructure needs as well as impacts on the environment and on surrounding communities. They would also serve the Commitment of Responsive, effective and collaborative government and the related goal of Government decisions are based on careful consideration of future impact, rather than temporary relief or immediate gain.

FISCAL IMPACT

None.

OTHER REVIEWING AGENCIES

County Counsel

COPIES

Atherton Inn

Concerned Sequoia Tract neighbors

Unincorporated Bayside homeowner associations

ATTACHMENTS

A.

Draft ordinance.

B.

Interim regulations.

C.

Table showing regulations in other jurisdictions.

D.

Correspondence.