Summary: In 1988, the city of Carmel passed an ordinance that prohibited rentals of less than 30 days, which is still on the books today.

The Rental Market: Carmel-by-the-Sea is a seaside community located on the southern bend of the Monterrey Peninsula. Short-term or “transient” rentals of 30 days or less are currently forbidden in areas zoned for single-family housing.

Timeline:

1981: The City of Carmel tried to enact an ordinance banning short-term rentals. They were thwarted by two property management companies and 20 owners who sued the city citing that the ordinance was unconstitutional because it violated property rights. A judge rules in favor of the property owners and imposed an injunction forbidding the city from enacting a short-term rental ban in the future.

December 7, 1988: Carmel City Council unanimously passed an ordinance banning rentals of 30 days or less. To get around the injunction, the city worded the ordinance differently and instead of banning short-term rentals straightaway, they prohibited short-term rentals in residential areas as to keep residential and commercial district separate.

Advocates for the Ban: Year-round residents.  Over 100 residents sent letters to city hall protesting short-term rentals.

Arguments:
• The city had received dozens of complaints about short-term renters.
• The Carmel charter states that the city is first and foremost a residential city.
• Permanent residents have no way of knowing who's living next to them from week-to-week.

Opponents of the Ban: Realty companies, absentee owners.

Arguments:
• The new ordinance is unconstitutional. It's basically the same ordinance that was rejected by the judge in 1981.
• We've never received complaints about noisy renters.
• All of renters are screened by owners and property management companies.
• Carmel vacation rentals aren't cheap. The rental rates alone should keep out the riff-raff.
• The city claims that vacation rentals aren't residential in nature, but renters are eating, sleeping, and cooking in the homes just like the permanent residents next door.
• Having renters in a home prevents crime.

Links:
Carmel-by-the-Sea Municipal Code

Sources:
"Carmel Bans Short-Term Home Rentals." The San Francisco Chronicle 08 Dec. 1988, sec. A6.

"CARMEL, CALIF., WOULD BAR 'TRANSIENTS'" San Francisco Examiner 18 Dec. 1988, Late ed., sec. 2A.

O'Neill, Ann W. "CARMEL LIMITS RENTALS COUNCIL BANS SHORT LEASES." San Jose Mercury News 07 Dec. 1988, sec. 1B.

O'Neill, Ann W. "CARMEL's NOT-FOR-RENT ORDINANCE PLAN WOULD OUTLAW LEASES OF LESS THAN a MONTH." San Jose Mercury News 06 Dec. 1988, sec. 1B.

Are there developments in your vacation rental market that others should know about? Please let us know.

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