Residents on Newport Beach’s Balboa Island, the peninsula and in Corona del Mar say they worry that homes under fractional ownership – typically where eight owners share the cost and use of a home, often for vacation purposes – will bring extra congestion and noise to their neighborhoods.
The City Council will consider banning fractional ownership properties at its meeting Tuesday, March 14, which is what the city’s Planning Commission has recommended. If a council majority isn’t in support of prohibition, planning commissioners recommend at least putting a cap on these properties and allowing them only in areas of town where there are already duplexes and apartments. At present, there is no moratorium on these properties in the city.
Fractional ownership is not new, but is being seen more around the country with multiple owners partnering to purchase a property and splitting its use, usually based on their percentage of ownership.
The council first heard the topic in November 2021. At that time, there were four fractionally owned homes in Newport Beach, officials said. The number has since increased to a dozen. In that time, city officials held community workshops and city staff hired a consultant to look at the impacts of these properties in other cities where they’re allowed.
“We will set a framework about what we want staff to prepare for,” Councilmember Erik Weigand said. “It’s possible we’ll discuss regulations or outright bans, but there’s nothing we’ll decide tomorrow that will make it the rule of the land.”
Planning commissioners are recommending that fractional ownership should be viewed as something similar to a timeshare and, as a timeshare use, fractional homeownership would effectively be prohibited in all residential zoning districts. Commissioners found that this designation was similar to what other jurisdictions in California are doing including Palm Desert, Truckee, St. Helena and Sonoma.
Planning commissioners…
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