Lewis v. Monterey County – Nuisance, Constitutional Arguments, STR Ban is Upheld


The County Counsel and the Planning Department issued a County-Wide Interepretation of the existing law on July 9, 2015 stating unequivocally that STR’s are banned in the Coastal Zone, although permitted under some circumstances in the Inland areas.

See the entire document here: Mike Novo, letter County Counsel and Planning Commission Leter on Legality of STR’s

Subsequently the Lewis’, who operated an STR in Pebble Beach that also hosted special events like weddings,  sued the County to permit them to continue.  They lost.  Below is an article from the Monterey County Weekly that summarizes the filing of the lawsuit.

  • The Ordinances Banning Short-Term Rentals were upheld.
  • The Constitutional argument lost completely.
  • All arguments by the plaintiffs lost completely.
  • STR’s were held to be a Nuisance

Feb 4, 2016; Monterey County weekly; by Nick Rahaim

High-End Mischief

Pebble Beach couple battles short-term rental fine

A Pebble Beach physician and his wife are suing Monterey County after they were found to be illegally renting their vacant multi-million dollar home. The couple was forced to stop renting the property known as “Woods Hole” and were levied a fine that could reach $100,000 for violating county code.

While inland properties can be used as short-term rentals for no less than seven days, such rentals are not permitted in the unincorporated coastal zone. Nonetheless, William Lewis and his wife, Duncan, are crying foul.

“It’s not fair play. Why is the county allowing inland property owners to generate income from their property but not people on the coast?” says the Lewises’ attorney, Mark O’Connor of Carmel. “The county ordinance violates the equal protection clause of the U.S. Constitution.”

Located on the 14th tee of Pebble Beach Golf Links on 17-Mile Drive, Woods Hole is a 5,500-square-foot, six bedroom and seven bath estate that can accommodate parties of up to 100 people. The county found renting the estate could generate income up to $300,000 a year.

The Lewises have marketed Wood’s Hole as a high-end vacation rental and wedding venue managed by their son’s realty company.

For more than a decade, they have paid the appropriate transient occupancy taxes, O’Connor says.

On June 11 of last year, the county Resource Management Agency took action to stop the Lewises, after an inland property owner complained that the couple was in violation of county code. An administrative hearing was held Oct. 23, and the fine was levied. The Lewises filed suit Dec. 22.

“The ordinance is basically unenforceable,” O’Connor says. “The county only acts when a complaint is made. It seems that a property owner in Carmel Valley didn’t like competition.”

The Lewis case will make it first appearance in Monterey County Superior Court on April 26.

The court ruled in favor of the County’s interpretation in the Lewis vs. Monterey County case. 

  • The Ordinances Banning Short-Term Rentals were upheld.

  • The Constitutional argument lost completely.

  • All arguments by the plaintiffs lost completely.

  • STR’s were held to be a Nuisance

The Court Decision upholding the ban on STR’s in its entirety: Lewis v. Monterey County

Excerpts from the decision:

The only arguable allowable use under section 20.14.040 [CAP required] here would be that under subsection A, “The first single family dwelling per legal lot of record.” Both parties’ arguments assume that either a permit has been issued under this section or the existing residence is deemed an allowable existing use under this section. But a permit under this section does not permit the rental activities here, because of the definition of `dwelling’ in section 20.06.360, which allows dwellings only if “… occupied exclusively for non-transient purposes.” MCC

The commercial rental of the premises for wedding events would fall within the Section 20.06.310 definition of `development’ . . . a change in the intensity of use of the land
as well as of water. MCC 20.06.310, sub-sections 4 and 5. The latter section consequently does not exempt commercial rental for weddings from the permit requirement

. . .  transient rental in an area of geographic beauty and exclusive and expensive homes                  such as the coastal zone here would generate more traffic and higher populate the rented property because the expense of renting it would require the pooling of multiple individuals’ resources. lt could presume that transient renters are largely vacationing renters and would keep different and longer hours of activity than longer term residents. Such uses would be similar, but not identical, to long term residential use. They could have a significant impact on a neighborhood. See Ordinance 3911, Section 1, adding MCC 20.64.290, and in particular subsection A. 5, “Findings and Declarations.”

This form of zoning prescription — i.e., no use is permitted unless explicitly permitted — has been held lawful, and effective to prohibit uses not expressly listed. City of Corona v. Naulls (2008) 166 Cal.App.4th 418, 433; City of Monterey v. Carmshimba (2013) 215 Cal.App.4th 1068, 1094-1096 [upholding nuisance finding based upon similar scheme].

Accordingly, without first amending the Local Coastal Plan zoning under Title 20, County could not and did not enact for the Coastal Zone a transient residential permit ordinance. And such rentals were prohibited without such an enactment . .

The County here has maintained that the law prohibiting short term rentals in the coastal neighborhood is to preserve the residential character of the neighborhood and prevent the increased levels of traffic, noise, and parking demand that would come with allowing short-term rentals. The court in Ewing v. City of Carmel-By-The-Sea (1991) 234 Ca1.App.3d 1579, 1596 has held that such a purpose is rationally related to a law prohibiting the same type of short term rentals at issue here. Whether there exist cogent arguments that other desirable goals might be served by allowing such rentals, or other ways that the County’ s goals here could be served by allowing such rentals, does not justify overturning the eamest attempt to regulate them as County has done here.

Consequently, the ordinances in question are valid, the administrative hearing officer’s decision that they were violated rnust be upheld, and Petitioners are not allowed to engage in short term rentals or commercial use of the property for weddings without a permit under the current statutory scheme. Petitioners are allowed to apply administratively for a permit under the “assemblages” and “other similar uses” sections.

By Thomas W. Wills; Judge of the Superior Court; September 7, 2016


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