The Beverly Hills city council extended a 2021 ordinance banning fractional ownership of residential and commercial property on Tuesday night, signaling their continued commitment to making housing available only to those who would live in it full time.
Fractional ownership is the sale of property to multiple buyers whose names are deeded the home or commercial property. The owner’s shares may not all be equal, which means they may not get equal time to live in the dwelling unit throughout the year. However, it does essentially make much-needed apartment and single-family housing operate similar to a vacation timeshare property. City staff outlined a number of problems with this model, including that it would create a revolving door of transiency where none of the owners really build roots in the community and may never engage in civic affairs. It takes away potential housing for full-time residents, and, city staff argued, this ownership model would exacerbate our already troubling housing and affordability crisis.
“Essentially, these can function as short-term rentals,” said City Planner Timothea Tway. She added, “We’re requesting an extension of one year so we can study the issue and return with a permanent ordinance.”
“Why aren’t we ready to do a permanent ordinance?” asked Councilmember Bob Wunderlich.
“At this point, it’s staff’s opinion that this is a well-worded ordinance and appears to be effective,” conceded Tway. “One thing we would look at is, if there’s any way we can capture the unintended consequences,” she added, saying the time would also allow staff to look at other cities to see how they’ve effectively managed this type of ownership model.
“Timeshares are about the biggest scams out there, so I’m glad we’re doing this, and I would be willing to make it permanent too,” declared Councilmember John Mirisch.
“I don’t have any problem giving the Planning Commission a little time to think about what else they might want to do to it,” said Councilmember Julian Gold. “If they can make it better, that’s great, if not, we can bring this [version] back.”
The ordinance was extended on a unanimous 5-0 vote.