Morro Bay bans new secondary dwelling vacation rentals 

In an effort to preserve a supply of affordable housing, the Morro Bay City Council on June 28 introduced an ordinance that prohibits the use of secondary dwelling units as vacation rentals, with exceptions to units that were already licensed with the city as vacation rentals prior to March 1, 2016, as long as those units don’t change owners or get enlarged.

The vote was 3-0, with Mayor Jamie Irons recusing himself because he owns a secondary dwelling unit and Councilmember John Headding absent.

A secondary dwelling unit is defined in the municipal code as “attached, detached, or located within the residential dwelling unit, which provides complete independent living facilities for one or more persons.”

Of the 50 secondary dwelling units in Morro Bay, only five are licensed as vacation rentals and will be exempt from the ordinance, according to the city.

The vacation rental prohibition is designed to make the rental market for secondary dwelling units more available to local renters like students, said Scot Graham, Morro Bay community development director.

The policy has received mixed reactions from the public. While the ban opens up options for affordable housing, it limits the income homeowners can earn from their guesthouses.

Mayor Irons stood against the ordinance as a citizen for that reason. Irons submitted a written public comment opposing the ordinance for the June 28 meeting.

“I ask that council consider a different course of action in proceeding forward with the proposed Secondary Unit Ordinance,” Irons wrote. “… The current vacation rental ordinance allows someone to rent out a bedroom [Airbnb], yet someone is not allowed to rent out a guest house as an Airbnb with the proposed secondary unit ordinance; both are bedrooms.”

In April, the council ditched a complete ban on secondary dwelling units as vacation rentals and asked the Planning Commission to amend the ordinance to include the grandfather clause.

“Some folks may have purchased homes and had secondary units [as vacation rentals] to make them financially viable,” Graham told New Times. “We didn’t want those folks to lose their houses, so why don’t we grandfather the ones we already have [licensed]?”

The ordinance is part of a larger effort to update “old and outdated” policies for secondary part dwelling units, Graham said. A comprehensive review of vacation rental policies is also on the horizon as Morro Bay works on a new General Plan.