If you’re purchasing a home in the residential zone of Pacific Grove don’t expect to be renting it out as a short-term rental in the near future. 

Pacific Grove beach house located in the now restricted Short Term Rental area

After months of city council debates, a citizens’ initiative and a controversial lawsuit, on Nov. 6 the voters of Pacific Grove passed Measure M, an initiative that limits short-term rental restrictions within the city.

The measure, titled “The Initiative to Preserve and Protect Pacific Grove's Residential Character,” was brought forth by the public action committee Pacific Grove Neighbors United. 

It was created to limit short-term vacation rentals in the city's residential zone, however rentals will still be allowed in the coastal zone and commercial districts. It also won’t affect homeowners occupying their homes while renting out a room. 

P.G. resident and one of the initiative’s committee members Thom Akeman said the measure passed because of over 10 months of hard work on behalf of those that want to keep their neighborhoods residential.

“We stuck to the plan from the beginning and gave honest information to the voters of Pacific Grove,” he said. 

His fellow resident Luke Coletti along with residents Elinora Susan Mantovani and Karin T. Locke introduced the proposed initiative back in January. It was then officially certified for election in late May after easily collecting over 1,600 signatures. In June, the City Council approved it for the November ballot.

Akeman said the STR issue was actually a zoning issue all along. 

“Our City Council stopped paying attention to the residents and gave more attention to the out-of-town investors and so we had no choice but to do a ballot initiative,” he said. “The community won.” 

Those behind the measure included residents who view STRs and their tenants as disruptive and overrunning their small town and changing its character. There are also organizations like the Pacific Grove Chamber of Commerce concerned that such vacation rentals are negatively affecting the town’s inns’ and hotels’ business.

Those against the measure have been mostly property owners expecting to use their property as they choose, some wanting or needing the income from STRs to pay their bills and rent or mortgages.

Others have taken the view that short-term rentals and the guests they welcome allow the city's scenery and charm to be shared more widely and that keeps the town a more vibrant destination.

The program was originally created as a short-term experiment but as it evolved, so did opinions from both sides of the aisle. Multiple planning commission and council meetings took place to address resident complaints. That's while property owners still wanted to maximize economic use of their properties and made the point that STR users could be better for a neighborhood than certain renters were.

Still, actions were taken to reduce the concentration of STRs, streamline the licensing process and improve code enforcement. Eventually, the council set a cap on licenses at 250 and limited the number of STRs in each residential block to no more than 15 percent. A “zone of exclusion” was also established to ensure no single STR was allowed within 55 feet of a parcel on which any other STR was located.


Tension Continues in Pacific Grove Over Measure M

Despite the revisions and current policy, tensions continued to grow between residents. For the city, the STR program means anywhere from $1.5 to $2.2 million in transient occupancy tax and associated fees. It’s badly needed revenue for a city with infrastructure improvement needs and mounting pension costs.

“We have a plan if “Yes” wins and if “No” wins,” said P.G. resident Joy Colangelo, on election night, noting that if “Yes” did win, those for STRs would write another initiative in a year or so to try to get STRs back. 

Since Pacific Grove first started allowing short-term rentals in 2010, officials have adopted five separate ordinances to regulate them. The council even held a lottery when earlier this year the city had issued 289 STR licenses, which was over the 250 cap. 

While the council felt it was the most fair and equitable way to determine which STRs would lose their licenses, those who lost them thought it was the antithesis to fairness. Colangelo called the process “tragic for a lot of people” and described its similarity to Russian roulette. 

“That's not how to administrate,” she said. Still, the city had become obligated to conduct the process after the lottery became part of the amended ordinance in February.

Meanwhile, residents on both sides decided to take matters into their own hands.

Pacific Grove Neighbors United succeeded in getting Measure M on the November ballot. That's while the group StrongPG, of which Colangelo was a member, filed a lawsuit in April seeking a motion for a preliminary injunction that would have stopped the May lottery from occurring while an earlier complaint filed against the city in regards to the revised STR ordinance was being investigated.

On May 11, Monterey County Judge Marla Anderson ruled that the rights of landowners are subordinate to governments having the right to make decisions for the good of the community.

Then, LandWatch Monterey County, a non-profit devoted to land use policies endorsed “Yes on Measure M” as did the Monterey County Hospitality Association, the Monterey Bay Action Committee, the Monterey County Business Political Action Committee, the Monterey Peninsula Renters United and Unite Here Local 483.

That's while the Monterey Bay Central Labor Council (the local arm of the AFL-CIO) came out against the measure, noting that if it passed it would eliminate hundreds of service jobs in Pacific Grove and negatively affect the area’s tourist industry and hospitality workers.

Time will tell what impact the measure passing will have on America's Last Hometown.