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
Consideration of Temporarily Allowing Short-Term Rentals Citywide During the 2026 FIFA World Cup and 2028 Summer Olympic/Paralympic Games (Not Budgeted) (Community Development Director Alkire).
(Estimated Time: 1 Hr.)
DISCUSS AND PROVIDE DIRECTION
Body
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RECOMMENDATION:
Staff recommends that the City Council provide direction on whether to proceed with drafting a temporary ordinance with a sunset clause to allow short-term rentals (STRs) citywide in preparation for the 2026 FIFA World Cup. If directed to proceed, additional input is needed on: 1) the specific timeframe for which STRs would be allowed; and 2) operational requirements that should be included to address potential concerns.
FISCAL IMPLICATIONS:
The fiscal implications associated with this item are limited to expenditure of staff time in preparing the staff report, drafting the proposed amendments, and coordinating with other Departments to ensure the program is implemented as intended, if the City Council chooses to proceed with temporarily allowing STRs citywide. 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.
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 $73 Zoning Business Review Fee and the current base tax of $303.28 (plus $2.71 per $1,000 in excess of the first $88,562 of gross receipts), which are all subject to Consumer Price Index (CPI) increases for 2026. Pursuant to MBMC Section 6.01.070, the City may issue daily, weekly, monthly or annual business licenses where the tax due is prorated accordingly. 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 that if 50 new STR operators are added without prorating the business license tax, the City could anticipate approximately $15,164 in annual business license tax revenues ($3,791 if prorated as quarterly business licenses).
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 taxes. The City collected approximately $1.7 million in TOT revenue in Fiscal Year 2024-25.
BACKGROUND:
Currently, the rental or lease of a single-family dwelling unit or multi-family dwelling unit for a period of less than 30 days on a residential property outside of the Coastal Zone is prohibited in the City.
Historically, the City’s Municipal Code never expressly permitted STRs. Due to the increased use of hosting platforms, the City Council adopted Ordinance No. 15-0010 in 2015 to expressly reinforce the prohibition of commercial and transient uses, including STRs, in residential zones based on comments received from members of the public about potential negative impacts that may arise from renting residential properties for periods less than 30 days. The City strengthened the prohibition and the penalties in 2019 through the adoption of 1) Ordinance No. 19-0007 that established the MBMC Chapter 4.88 (Transient Uses Including Short-term Rentals); and 2) Resolution No. 19-0011 that amended the administrative remedies for related violations. However, on April 4, 2022, the California Court of Appeals issued an opinion that the City's ban on STRs does not apply to properties within the Coastal Zone (Keen vs. City of Manhattan Beach). As a result, MBMC Chapter 4.88 was amended in December 2022 via adoption of Ordinance No. 22-0010, to exclude properties within the City’s Coastal Zone in the prohibition, while the ban continued to apply elsewhere in the City. As of the writing of this report, there are 191 licensed STR operators in the Coastal Zone, of which 89 are actively operating and remitting TOT taxes.
Preparation for Global Sporting Events in Los Angeles
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. Following discussions, the City Council provided the following direction to staff to explore temporarily modifying the STR ordinance:
• Conduct outreach efforts to gauge the community’s input, including surveys from FlashVote and True North.
• If recommended, assess the number of current rentals, potential permit caps, and eligibility requirements.
DISCUSSION:
Per the City Council’s direction, two community surveys have been conducted to gauge the community’s support for temporarily allowing STRs during the global sporting events coming to the Los Angeles area in the next few years. City staff also conducted research on STR regulations in other coastal communities and neighboring jurisdictions to further inform the City Council’s discussion. Additionally, the City’s Code Enforcement Division has provided insights on how STRs are monitored for compliance, enforcement actions, and challenges the City may face with the temporary ordinance due to the nature of impermanence and the timeframe needed to effectively enforce regulations.
Survey Results
Two different surveys were conducted (Attachment 1) to gauge community interest and concerns associated with allowing STRs during the global sporting events. First, True North conducted the 2025 Community Opinion Survey that reached 588 adult residents using a mixed-method approach that employed multiple recruiting methods (email, text, and phone) and multiple data collection methods (phone and online) from September 29 to October 6, 2025. The survey measured resident satisfaction and gathered community input on budget and policy priorities, and included three questions on STRs. Based on the results of the True North survey, 58% (27.8% strongly support, 30.4% somewhat support) of the residents initially supported the idea. Upon learning that taxes generated through the limited STR program could help cover additional public safety services, support increased to 66% (32.9% strongly support, 33.1% somewhat support). Survey participants were additionally asked whether they were likely to rent their property on a short-term basis during the global sporting events and 11.8% responded yes.
In an effort to obtain additional community insights beyond the True North survey questions, a subsequent survey was conducted using another one of the City’s survey vendors, FlashVote. Additional questions were crafted with the goal of gaining more detailed insight into community opinions regarding STRs. The four FlashVote survey questions focused on the public’s knowledge of where STRs are allowed; the potential nuisances and benefits of STRs; and their stance on STRs during the global sporting events and beyond. The survey was released on December 8, 2025 for two days, gathering responses from 321 participants. The survey results showed that 33% of the respondents were aware of the STR ban outside of the Coastal Zone while 39% thought STRs are completely banned in the City. The most notable concerns with STRs were in noise (81%), parking (67%), and loss of neighborhood feel/vide (52%). (Note that respondents were able to select up to four areas of concern from a list of eight.) Although 36% of the respondents did not see any potential benefits from STRs, those that did identified having more visitors to support the local/small businesses (42%) and more tax revenue for the City (41%). Seventy-five percent of respondents plan to stay in town during the global sporting events. Twenty-three percent of respondents were open to considering renting out their property, compared to 55% that were not. In addition, there was more support (i.e., 50% versus 33%) to temporarily allow STRs, while a permanent lift on the ban received more opposition (i.e., 44% versus 24%). Written comments were also received that somewhat supported the temporary program if appropriate measures are in place to address concerns with potential negative impacts such as traffic, noise, community character, and enforcement.
Code Amendment Considerations
In addition to the input received from the community survey results, the City may consider policy precedents from other jurisdictions if a temporary ordinance to allow STRs is proposed. This is because the existing code language in the MBMC and MBLCP as it pertains to STRs is limited to specifying where it is prohibited, the implications for hosting platforms, and enforcement action by the City if a property is found in violation. Because the code is silent on the review criteria and operational requirements, staff conducted research on several jurisdictions (Attachment 6) that may help establish a basic framework for how to regulate STRs. Specifically, the City may consider including provisions in the temporary ordinance that address the following issues:
• Imposing a cap on the number of properties allowed
Limiting the number of STRs allowed in the City would assist with identifying the resources necessary to properly administer the program. The cap could be applicable based on geographic boundaries such as Area Districts and could take the existing number of licensed STRs into account to determine resources needed. Any cap that is established should, at a minimum, provide sufficient revenue (through TOT and business license tax fees) to cover the costs to administer the program and provide City services related to the global sporting events.
• Specifying the eligibility based on host presence on the premises
Commonly referred to as home sharing programs, requiring a host to be onsite throughout the duration of the short-term renters’ stay could assist in limiting potential nuisance issues. This is because the host would be more actively involved to ensure renters are in compliance with the rules and regulations. Furthermore, requiring host presence on-site could reduce the need for City staff to be involved in compliance activities.
• Ensuring an Accessory Dwelling Unit is not utilized as a STR
Per State housing law ADUs are prohibited from being used as STRs. The temporary ordinance should reiterate this prohibition. The City would need to verify that applicants comply with this provision by confirming the address and unit of the proposed STR is not an ADU.
• Enforcing clear performance standards
To mitigate potential negative impacts that may arise from STRs, the temporary ordinance should include operational requirements to preserve quality of life for the residential community and its residents. For example, standards may include, but not be limited to, establishing occupancy limits, on-site parking requirements, nuisance response plans to address complaints in a timely manner, restricted outdoor activity hours, and consequences of revoked permits.
It should be noted that none of the jurisdictions researched were actively contemplating an expansion or relief to their STR policies in preparation for global sporting events. However, earlier this year some jurisdictions (El Segundo, Santa Monica and Beverly Hills) temporarily waived STR permit fees and/or enforcement in response to the January wildfires to allow those affected to find short term housing.
Enforcement
In general, the City has not received a large number of complaints re STRs after the Keen decision. The complaints received occasionally relate to large parties causing noise impacts which the Police Department addresses, and to tenants posting STRs without the property owner’s knowledge which is a civil matter.
Enforcement action proactively taken by the City on STRs mainly includes ensuring that STRs posted online have a valid business license with the City and identifying those that do not. This is carried out by utilizing outside vendors to monitor STRs on various platforms such as AirBnB and VRBO. The City’s current vendor cross-examines over 15 million listings across more than 10,000 rental websites in real time by tracking listings, bookings, and rental activities. The process involves the City’s Code Enforcement Division compiling STR business license data from the Finance Department and sharing that information with the vendor who will then map out which properties are either outside of the Coastal Zone or do not have a valid business license. After verifying the information from the vendor, Code Enforcement staff mails out a Notice of Violation that provides the operator with a reasonable period of time to correct the violation. Per the MBMC Section 1.06.030(C)(1)(Administrative citations), a reasonable period of time is 10 days or such longer period as may be authorized by the Code Enforcement Office.
Based on available data between summer 2023 and spring 2024, there were approximately 120 code enforcement cases opened related to STRs. A vast majority of the cases were the result of there being no valid business license associated with the STR. In such instances, most operators were not aware of the City’s regulations and were cooperative in obtaining a business license in a timely manner to bring their STRs into compliance.
Due to the multiple steps and personnel involved in the process, it can take several weeks for the Code Enforcement Division to issue a Notice of Violation and the operator to take action accordingly. As such, enforcement challenges should be taken into consideration if a temporary ordinance is adopted to allow STRs for a limited duration. Timing and resources required at different stages to identify, notify, and correct the violations within the limited period of allowance may be problematic and should be addressed proactively through the ordinance language, to the extent feasible. City staff can work with its STR monitoring vendor to identify appropriate measures. It should be noted that the City has recently transitioned to a new vendor to monitor STRs and use of their service is anticipated to be up and running by the end of this year.
Temporary Ordinance
If the City Council desires to move forward, staff will come back at the January 20, 2026, City Council meeting with proposed code language to introduce a temporary ordinance with a commencement clause and a sunset clause, stating that the provisions would be in effect for a limited time, determined by the City Council. When determining the allowable timeframe, two weeks before and after the 2026 FIFA World Cup can be considered based on information from Tourism Economics, a provider of global travel data, which estimated that international travelers will stay for an average of 12 days. After the temporary ordinance sunsets, the existing ordinance in MBMC Chapter 4.88 will be effective immediately and the City will work with the STR monitoring vendor to ensure the temporary listings are no longer advertised on hosting platforms. Furthermore, staff will report back on the fiscal implications, effectiveness of the program, and lessons learned from the process to determine if a subsequent temporary ordinance should be introduced ahead of the 2028 Olympic/Paralympics Games.
DIRECTION NEEDED
If directed to proceed with a temporary ordinance to allow limited STRs citywide, direction is needed from the City Council on the following matters:
1) The specific timeframe for which the temporary ordinance would be effective.
2) Provisions that should be included to regulate operations and address potential concerns.
Taking no action on this item would maintain the status quo, meaning STRs would continue to be prohibited outside of the Coastal Zone. In addition, the Code Enforcement Division will continue monitoring and taking enforcement action on unpermitted STRs with the assistance of the new monitoring vendor that is anticipated to be implemented by the end of this year.
PUBLIC OUTREACH:
Consideration of this item was noticed through the City’s various social media channels (e.g., Instagram, website, etc.) after the agenda was posted on December 10, 2025, to inform the public of the scheduled discussion before the City Council. If the City Council provides direction to staff to proceed with developing a temporary ordinance, a notice of public hearing will be published in The Beach Reporter and posted on the City website, at City Hall and other City locations, at least 10 days prior to the regularly scheduled City Council meeting, pursuant to Government Code Sections 65090 and 65091. Additionally, the community was surveyed via True North and Flash Vote.
ENVIRONMENTAL REVIEW:
The City has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the discussion and direction from Council is not a “Project” as defined under Section 15378 of the State CEQA Guidelines; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA.
LEGAL REVIEW:
The City Attorney has reviewed this report and determined that no additional legal analysis is necessary.
ATTACHMENTS:
1. Community Survey Results (True North and Flashvote)
2. MBMC Chapter 4.88 (Transient Uses Including Short-Term Rentals)
3. Ordinance Nos. 15-0009 and 15-0010
4. Ordinance No. 19-0007 and Resolution No. 19-0011
5. Ordinance No. 22-0010
6. Short-term Rental Regulations in Other Coastal Jurisdictions
7. September 16, 2025, City Council Staff Report (Weblink Provided <https://manhattanbeach.legistar.com/LegislationDetail.aspx?ID=7655832&GUID=BD0A1C23-A41D-4631-BCDC-A2F49ED55B55>)
8. PowerPoint Presentation