On December 18, 2015, California’s Second District Court of Appeal upheld the City of Rancho Mirage’s (“City”) short-term rental ordinance in Harrison v. City of Rancho Mirage (Cal. Ct. App., Dec. 18, 2015, E062604) 2015 WL 9258957. The City’s ordinance requires that short-term rental agreements be signed by persons over the age of 30 and who agree to be responsible for the rental. Harrison challenged the ordinance on the ground that it violated California Unruh Civil Rights Act (“Act”), or rather, caused him to violate the Act, which prevents discrimination in housing on the basis of age.
The City opposed the complaint by demurrer, contending that the Act does not apply to the municipal legislation. The trial court granted the City’s demurrer without leave to amend and Harrison appealed to the Second District.
Brian Harrison, an owner of a condominium in the City, filed his complaint for injunctive relief after the City adopted Ordinance 1084, on July 31, 2014. The Ordinance modified the existing Rancho Mirage Municipal Code section 3.25 regulating short-term vacation rentals in the City, which provides that prior to occupation by a vacationer, a “Responsible Person” must sign an agreement to ensure that all occupants follow the rules and regulations in section 3.25. Ordinance 1084 increased the age of the “Responsible Person” from 21 years to 30 years, and became effective September 1, 2014. The Ordinance did not ban all persons under the age of 30 from occupying short-term rentals. The intended goal of the City’s short-term rental regulations is to minimize the negative effects of short-term renting in surrounding areas.
The City brought its demurrer on several grounds. First, the City relied heavily on Qualified Patients Association v. City of Anaheim (2010) 187 Cal. App.4th 734 to argue that the Act does not apply to municipal legislation. In Qualified Patients Association, California’s Fourth District resoundingly rejected the application of the Unruh Act to the City of Anaheim’s medical marijuana ordinance, stating that “[b]y its plain language, the Act bars discrimination based on ‘sex, race, color, religion, ancestry, national origin, or disability’ by ‘business establishments.’ Nothing in the Act precludes legislative bodies from enacting ordinances which make age distinctions among adults.”
The applicable portion of the Uhruh Act provides
All persons within the jurisdiction of this state are free and equal, and no matter what their sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever.
(§ 51, subd. (b).) Though section 51 of the Unruh Act does not include age as a category, section 51.2 specifically prohibits discrimination in housing on the basis of age, by providing that section 51 “shall be construed to prohibit a business establishment from discriminating in the sale or rental of housing based upon age." The Court noted that section 51.2 is intended to establish and preserve accessible housing for senior citizens and, within the parameters outlined in sections 51.2 and 51.3, to preclude such senior housing from the general proscription against age-based discrimination in section 51.
The City argued that it was well within its police power to enact the ordinance, and called attention to its powers as a charter City.
In opposition to the City’s demurrer, Harrison had argued that the Ordinance causes him to violate the Uhruh Act, in that he is required to discriminate on the basis of age against his short-term tenants. The City responded by arguing that Harrison could not be sued under the Uhruh Act as it contains a provision shielding business establishments that are acting in compliance with the law.
In its decision, the Court calls out that Harrison did not allege violation of Government Code section 65008, which prohibits zoning action by a local government that denies any person(s) the enjoyment of residence, or other land use because of sex, age, race or other protected status. Harrison had late-raised this argument in his opposition to the City’s demurrer, and the trial court had invited Harrison to amend his complaint to properly bring the claim, but counsel for Harrison declined to do so. The City objected that the argument was late and that the ordinance was not a land use or zoning ordinance subject to Government Codes section 65008.
The Court ultimately affirmed the long history of case law, finding that the Uhruh Act does not apply to municipal legislation, and upheld the trial court’s order granting the City’s demurrer.
What this means for your City
Given the surge in short-term rentals in California, and some of the associated impacts being experienced in some cities, many are exploring options for regulating short-term rentals to minimize impacts in surrounding neighborhoods. This case will provide some helpful guidance on the parameters for developing local regulations. Though the City of Rancho Mirage focused on its powers as a charter city as authority for the enactment of its Ordinance, it is not clear that a general law city would be prohibited from enacting a similar ordinance. Finally, though Harrison ultimately did not amend his complaint to allege a Government Code section 65008 claim, the Court’s discussion provides some guidance to aid cities to avoid running afoul of Section 65008.
If you have any questions concerning this Legal Alert, please contact Maggie W. Stern or the attorney with whom you normally consult.