TO:
Honorable Mayor and Members of the City Council
THROUGH:
Talyn Mirzakhanian, City Manager
FROM:
Masa Alkire, AICP, Community Development Director
Adam Finestone, AICP, Planning Manager
Jaehee Yoon, AICP, Senior Planner
SUBJECT:Title
Conduct a Public Hearing to Consider Temporarily Allowing Short-Term Rentals Outside of the Coastal Zone During the 2026 FIFA World Cup (Not Budgeted) (Community Development Director Alkire).
(Estimated Time: 1 Hr.)
INTRODUCE ORDINANCE NO. 26-0001
Body
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RECOMMENDATION:
Staff recommends that the City Council consider introducing Ordinance No. 26-0001, allowing short-term rentals (STRs) on a temporary basis outside of the Coastal Zone in preparation for the 2026 FIFA World Cup.
FISCAL IMPLICATIONS:
The fiscal implications associated with this item are limited to expenditure of staff time in preparing the staff report, drafting the proposed ordinance and coordinating with other Departments to ensure the program is implemented as intended, if the City Council chooses to adopt Ordinance No. 26-0001. Additional revenues generated by temporarily lifting the ban outside of the Coastal Zone may provide opportunities to fund City services needed to manage event-related impacts to public safety, sanitation, and traffic management, as well as offset the added administrative and processing costs from additional STRs.
STR operators are required to obtain a business license and collect and remit the City's 14% Transient Occupancy Tax (TOT) from visitors. To obtain a business license, an operator must pay a one-time $76 Zoning Business Review Fee and the current base tax of $313.88 (plus $2.80 per $1,000 in excess of the first $91,661 of gross receipts). The Zoning Business Review Fee is based on cost recovery and not subject to proration.
Without concrete metrics at this time, it is difficult to project the potential increase in business license tax and TOT revenues if STRs are temporarily allowed Citywide. Given a hypothetical example of 450 new STR operators with a half-year prorated business license tax, the City could anticipate approximately $70,623 in business license tax revenues. An additional $13,500 would be generated by the 100-foot radius mailing fee that would be assessed for the neighborhood notification requirement proposed. The half-year prorated business license is to capture the timeframe beyond the actual allowance period of six-weeks for the STR operator to start posting for the rental in advance with a City-issued business license.
TOT revenues are difficult to quantify due to various rental rates charged by each STR operator, the duration of stays, and the number of properties actively listing. For reference, the City currently has 191 licensed STR operators in the Coastal Zone, with about 89 actively operating and remitting TOT. The City collected approximately $1.7 million in TOT revenue for STRs in Fiscal Year 2024-25.
BACKGROUND:
Currently, the rental or lease of a single- or multi-family residence for a period of less than 30 days is prohibited outside of the Coastal Zone.
On September 16, 2025, the City Council considered several preparation and participation strategies for the upcoming 2026 FIFA World Cup and the 2028 Summer Olympic/Paralympics Games that will take place in the Los Angeles region. The discussions included potential changes to the STR policies, as a significant influx of visitors for the global sporting events is anticipated. According to a report by Micronomics Economic Research and Consulting, 180,000 out-of-town visitors are expected in Los Angeles during the 2026 FIFA World Cup alone and generate economic impacts of $594 million across various industries. Following discussions, the City Council directed staff to explore temporarily modifying the STR ordinance by first conducting community surveys to gauge the public’s input on the matter.
On December 16, 2025, staff presented the results of the two community surveys (True North Community Opinion survey and FlashVote) that indicated that temporarily allowing STRs outside of the Coastal Zone during the global sporting events was supported by a majority of City residents (66% and 50% support, respectively). After discussions, the City Council directed staff to return with an ordinance to allow STRs on a temporary basis, subject to the following considerations:
• Limit the temporary ordinance to the 2026 FIFA World Cup only
• Establish a cap on the number of STRs allowed
• Conduct additional outreach and receive input
• Include a provision to notify neighboring properties of a licensed STR
• Provide information on enforcement plans for after-hours and weekends
• Research similar efforts being carried out by other jurisdictions
• Develop a communication plan to educate and inform the community of the temporary ordinance
DISCUSSION:
Community Meeting
On January 6, 2026, the City hosted a community meeting to inform the public and receive additional input on temporarily allowing STRs outside of the Coastal Zone for the upcoming 2026 FIFA World Cup. The event was attended by approximately 30 members of the public, including at least three who represent different STR management companies that operate in the region. There were concerns noted regarding potential noise, safety, parking, trash, the City’s responsiveness to addressing complaints, and why STRs were completely banned 10 years ago, while other feedback received supported temporarily allowing STRs.
In terms of establishing a cap on the number of STRs allowed, staff initially identified a potential maximum of 450 STRs outside of the Coastal Zone. This number is consistent with the percentage (i.e., 4%) of licensed STRs in the Coastal Zone when compared to the total number of housing units. At the community meeting, numerous members of the public suggested that a greater number should be allowed due to the temporary nature of the allowance. That said, one of the STR management company representatives at the meeting stated that 450 may be sufficient given how much work is necessary to start an STR operation and the short time frame during which it would be allowed. If an alternative cap with a higher allowance is desired, the City Council may consider utilizing the community survey responses as a guide, where one of the questions asked about the respondents’ interest in renting out their property during the global sporting events. The responses provided as part of the surveys were significantly different, with 11.8% expressing interest in the True North survey and 23% in the FlashVote survey. Taking a conservative approach with 11.8% applied to the total number of housing units outside of the Coastal Zone (11,230 units), it would result in a potential cap of 1,325 STR licenses that may be issued during the temporary program.
Temporary Ordinance
The proposed language in the temporary ordinance is based on factors noted in previous staff reports, City Council direction, community input, and research of other jurisdictions. If adopted, the temporary ordinance (Attachment 1) would allow STRs outside the Coastal Zone for a limited period of time and apply regulations applicable to those STRs temporarily allowed. Once the temporary ordinance sunsets, the City’s existing prohibition in MBMC Chapter 4.88 will resume and the City will work with its STR monitoring vendor to ensure the temporary listings are no longer advertised on hosting platforms. It should be noted that the STR monitoring vendor will continue to identify listings before and during the allowance period for those that do not have a STR business license. Below is a summary of the provisions being introduced for the City Council’s consideration:
1. STR Allowance Period Outside the Coastal Zone (MBMC Section 4.88.020.B)
The new provision specifies that STRs would be allowed outside of the Coastal Zone for a six-week period, starting on June 5, 2026, and ending on July 17, 2026. This is consistent with the City Council’s direction to consider allowing STRs from one week before to one week after the World Cup games held in Los Angeles, with the first match on June 12, 2026, and the last on July 10, 2026. The draft ordinance would allow marketing and advertising of the availability of STRs during this period to commence at such time when the STR operator has obtained the necessary license from the City.
2. STR Requirements Outside the Coastal Zone (MBMC Section 4.88.025)
The STR cap would be established by Area District to avoid over-concentration of STRs in any specific district. The cap, currently proposed as approximately four percent of all housing units outside of the coastal zone, would be distributed in a manner consistent with the ratio of total housing units outside of the Coastal Zone per Area District as below.
|
Area District |
License Cap Percentage |
Assuming 450 Licenses |
|
1 |
35% |
157 |
|
2 |
55% |
247 |
|
3 |
10% |
46 |
As proposed, STR licenses would be issued on a first-come, first-serve basis for each Area District.
A. Eligibility
In addition to requiring a business license from the property owner or an authorized representative, the provision lists types of units prohibited (e.g., accessory dwelling unit, recreational vehicle, guest house, etc), and limits issuance to one license per property to prevent an over-concentration in multi-family residential properties.
B. Operational requirements
Several provisions are proposed to ensure potential adverse impacts and concerns associated with STRs can be addressed, as follows:
• Clear marketing and advertising requirements on hosting platforms, including the City-issued business license number to enable easy verification
• Maximum occupancy limited to two persons per bedroom plus two additional persons with a maximum of eight persons total per STR
• Acknowledgement by the renter that they will be in compliance with applicable City regulations during their stay.
• A local emergency contact, available 24/7 to respond to complaints in a timely manner must be posted on-site
• On-site parking availability (minimum of two spaces)
• Adequate waste management be provided
• Prohibition of outdoor activities from 10:00 p.m. to 7:00 a.m.
• Prohibition of commercial activities and special events at any time.
C. Neighborhood notification
Properties within 100 feet of the STR property would be notified when a business license is issued. The notice would include information on the temporary ordinance and the local emergency contact information in case complaints arise from the STR.
3. Hosting Platform Responsibilities (MBMC Section 4.88.020.B)
The new provision reiterates that the City-issued business license number must be included in the STR listing and that no booking transactions may occur for unlicensed STRs, as well as outside of the allowed six-week period.
Enforcement Plan
The City has been strategically preparing for the significant increase in visitors and related incidents that may occur during the global sporting events through inter-departmental and inter-agency meetings. The Police Department is planning to provide appropriate levels of staffing based on the time of day, day of week, and expected activities. While the local emergency contact for the STR may be sufficient in most cases to timely respond to disturbances, a Trespass Letter of Authorization from the STR operator allowing for the Police Department to enter the property may also be obtained as part of the business license application to streamline their process if certain enforcement actions are necessary. In previous instances Trespass Letters of Authorization have proved useful for local businesses when the Police Department has been unable to contact a responsible party for a business afterhours, and similar remedies could be applied in the same manner for violations related to STRs.
In addition, the Finance Department is in the process of preparing updates to the municipal code related to business license revocations which are tentatively scheduled to be presented to the City Council in February 2026. The same process proposed to streamline the revocation would apply to the temporary STR business licenses to timely prevent such hosts from continuing their operations during the temporary period in the event of significant nuisance complaints. Until the business license is revoked, the City may issue administrative citations.
Research of Other Jurisdictions
Subsequent to the December 16, 2025, City Council meeting, staff conducted additional research on neighboring jurisdictions and other coastal communities to determine if similar efforts are being pursued to provide relief on STRs in preparation for the global sporting events. While some jurisdictions indicated that they had internal discussions, none were taking action to make policy changes. However, staff found that the City of Brea recently introduced a pilot program until December 2029, allowing up to 100 STRs in an effort to generate revenue, provide a legal framework to better regulate illegal STRs, and prepare for an influx of tourists from the global sporting events and the expansion of neighboring visitor-attracting facilities that will result from the large scale DisneylandForward and OCVibe development projects.
PUBLIC OUTREACH:
A notice for this hearing was published in The Beach Reporter, emailed to interested parties, and posted on the City website, at City Hall and other City locations, on January 8, 2026. Additionally, this report will be uploaded to the City’s dedicated webpage for STRs (www.manhattanbeach.gov/str <http://www.manhattanbeach.gov/str>). In addition, a notice for the Community Meeting was posted on the City’s website on December 18, 2025, and included in The Beach Reporter on December 25, 2025, and January 1, 2026. Furthermore, consideration of this item and the Community Meeting were noticed through the City’s various social media channels (e.g., Instagram, website, etc.).
Moving forward, the City will conduct an educational campaign to inform residents and property owners about the new temporary ordinance. The campaign will utilize multiple channels including the City’s website, social media platforms, and email notifications to explain the key provisions of the ordinance. City staff will also provide resources such as an informational guide and FAQs to help property owners understand their obligations under the temporary ordinance, while emphasizing that short-term rentals will only be permitted during the designated World Cup timeframe and will revert to a prohibited status (if outside of the Coastal Zone) once the event concludes. The outreach effort will include clear communication about penalties for violations and a dedicated email for residents to ask questions or report concerns during the temporary program.
ENVIRONMENTAL REVIEW:
The City has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the temporary ordinance is Categorically Exempt.
LEGAL REVIEW:
The City Attorney has reviewed this report and determined that no additional legal analysis is necessary.
CONCLUSION:
Staff recommends that the City Council conduct a hearing and introduce Ordinance No. 26-0001 to establish temporary STR allowances outside of the Coastal Zone for the 2026 FIFA World Cup.
ATTACHMENTS:
1. Ordinance No. 26-0001
2. Community Meeting Presentation and Mentimeter results
3. September 16, 2025, City Council Staff Report (Weblink Provided)
4. December 16, 2025, City Council Staff Report (Weblink Provided <https://manhattanbeach.legistar.com/LegislationDetail.aspx?ID=7779630&GUID=9810A993-C6C9-4637-B48A-F66CEC8B3C0B&FullText=1>)
5. PowerPoint Presentation