Response to 2024-25 Orange County Grand Jury Report, Long-Term Solutions to Short-*

Despite the increasing media coverage of Online Booking Agencies (OBAs), STRs are not a new phenomenon in Orange County. The City of Mission Viejo agrees with the finding.

The steady growth of STR usage in the last decade raises concerns of potential public nuisance. The City of Mission Viejo partially agrees with the finding. The City's Code Enforcement staff receive minimal STR complaints: typically, 3 to 5 complaints per year, generally related to excessive noise. The City's existing Municipal Code regulations address the STR-related complaints received by Code Enforcement.

Proactive home inspections of new and renewing STRs, which have been implemented in some Orange County cities, improve code enforcement and STR compliance with City ordinances. The City of Mission Viejo partially disagrees with the finding. The City does not have detailed information on practices in other Orange County jurisdictions regarding this finding. The City does not conduct STR inspections because noise, parking, and other potential STR nuisances have been minimal, typically not exceeding 5 complaints per year.

Direct remittance of taxes by OBAs does not capture all TOT for an STR because of direct booking practices. Civic Center • Mission Viejo, California 92691 949/470-3051 http://www.cityofmissionviejo.org FAX 949/859-1386 O Honorable Maria Hernandez Response to 2024-25 Orange County Grand Jury Report, Long-Term Solutions to Short-Term Rentals The City of Mission Viejo partially agrees with the finding and does not have comparable data from other jurisdictions and therefore cannot validate this finding. While the size of the direct booking market relative to platform-based bookings is unclear, the City acknowledges that direct bookings may occur. To support tax compliance in these cases, property owners/managers may register and remit TOT directly to the City via its Deckard Rentalscape STR platform.

Some cities in Orange County have outdated systems for tracking short-term rental TOT making the process less effective and more difficult for staff. The City of Mission Viejo partially disagrees with the finding and does not have comparable data from other jurisdictions and therefore cannot validate this finding. The City of Mission Viejo uses Deckard's Rentalscape STR platform to manage compliance. Rentalscape utilizes AI to analyze listings across multiple booking platforms and provides some identification, monitoring, and reporting tools. Rentalscape integrates STR registration and payment functions, streamlining compliance for property owners/managers. Furthermore, Rentalscape is continually updated to enhance functionality and improve efficiency.

In some cases, STRs are improperly recharacterized as long-term rentals to circumvent the collection of TOT and any applicable penalties. The City of Mission Viejo partially agrees with the finding. While the City is unaware of practices at other cities, the City of Mission Viejo uses Deckard's Rentalscape STR platform to manage compliance. While Rentalscape captures certain empirical data utilizing AI to analyze listings from various platforms to monitor listings and bookings, the City acknowledges that recharacterization of STRs as long-term rentals by property owners/managers does occur.

Online Booking Agencies in foreign languages are outside the current capabilities of Code Enforcement to monitor and track unpermitted STRs. The City of Mission Viejo partially disagrees with the finding based on its current policies and local data. The City of Mission Viejo uses Deckard's Rentalscape STR platform to manage compliance. Rentalscape scans all major booking sites which support listings in multiple languages. Although Rentalscape does not typically scan websites that operate exclusively in foreign languages, this is likely to have minimal impact on enforcement, as the majority of STR activity occurs on mainstream platforms. Furthermore, STRs listed on foreign-language-exclusive booking platforms are often also advertised on major booking platforms to reach a wider audience to maximize bookings.

Cities that fail to routinely review their STR waiting lists potentially lose TOT revenue and contribute to a greater prevalence of unpermitted STRs. The City of Mission Viejo partially disagrees with the finding and does not have comparable data from other jurisdictions sufficient to reach this conclusion. The City of Mission Viejo allows STRs citywide, with no specific cap or other limit on the number of STRs allowed. Therefore, there are no waiting lists in the City of Mission Viejo and no associated lost TOT revenue.

Locations that have hosted major events have reported an outsized increase in demand and pricing of STRs, a situation Orange County is likely to experience with the upcoming 2026 Los Angeles World Cup and 2028 Los Angeles Olympics. The City of Mission Viejo partially disagrees with the finding and does not have comparable data from other jurisdictions and therefore cannot validate this finding. The City employs adequate Code Enforcement Honorable Maria Hernandez Response to 2024-25 Orange County Grand Jury Report, Long-Term Solutions to Short-Term Rentals and Police Services personnel to address and resolve any potential fluctuation in the number of STR-related complaints associated with a major event.

City leaders have no regular communication with each other concerning STR issues, limiting opportunities to develop strategies and expertise to improve service. The City of Mission Viejo disagrees with the finding based on local and regional practices. City staff, including managers and directors, participate in regional forums (i.e. Planning Director's Association of Orange County), technical advisory committees (i.e. Orange County Council of Governments), and interagency meetings where STR policies and practices are routinely discussed.