Avalon City Council Explores Options to Encourage Long-Term Rentals

Officials weigh incentives, policy changes as housing concerns grow on Catalina Island.

The Avalon City Council recently discussed potential strategies to encourage long-term rentals in Avalon, as housing availability and affordability continue to be a growing concern for residents.

The discussion, prompted by a local property owner, focused on balancing the demand for short-term rentals with the need to preserve year-round housing for the island’s workforce. No formal action was taken during the meeting, but several ideas were introduced for consideration.

According to the Catalina Islander, one proposal outlined in the city manager’s staff report involved offering financial incentives, such as grants, to property owners who commit to long-term rentals. Similar programs have been implemented in resort communities like Truckee, Mammoth Lakes, and South Lake Tahoe, where cities provide stipends to landlords in exchange for leasing units to local residents.

City Attorney Scott Campbell noted that these programs typically target low-to-moderate-income tenants and are funded through general fund allocations. He also suggested the city could explore modifying existing policies that may unintentionally discourage long-term rentals.

One such policy is Avalon’s current restriction that disqualifies property owners from obtaining a short-term rental license if their unit has been rented long-term within the previous two years. According to the Catalina Islander, city officials acknowledged that this rule may incentivize property owners to leave units vacant rather than rent them long-term, in order to preserve future short-term rental eligibility.

City Manager David Maistros indicated that revisiting this restriction could be one of the more immediate ways to bring additional units back into the long-term rental market.

The discussion also highlighted the financial challenges faced by property owners. Local landlord Marina Belsito, who raised the issue, said rising costs such as property taxes, insurance, and maintenance have made it increasingly difficult to sustain long-term rentals. According to the Catalina Islander, she noted that rental income often does not keep pace with those expenses, particularly for tenants who have lived in units for decades under lower rent structures.

Belsito emphasized that while tenant support programs can help residents, they do not necessarily address the financial pressures on property owners that can lead to the loss of long-term housing units. She also expressed concern that selling properties could displace multiple families at once, further tightening the local housing market.

Councilmember Mary Schickling acknowledged that full-time rental housing in Avalon has been steadily declining, while Mayor Anni Marshall raised questions about how similar programs are funded in other cities.

According to the Catalina Islander, estimates from comparable municipalities show landlord incentives ranging from approximately $2,000 to $18,000 annually, depending on the program and location. However, Avalon faces limitations on how funds can be allocated. Certain revenue streams, including voter-approved taxes and specific harbor-related fees, are restricted in how they can be used.

Councilmembers also explored alternative approaches, such as adjusting permit fees or redirecting existing funding sources, though many of these options would require voter approval or further legal review.

Additional ideas discussed included requiring short-term rental applicants to demonstrate prior long-term rental use or creating hybrid models that allow limited short-term rental use while maintaining long-term occupancy.

According to the Catalina Islander, city staff noted that Avalon’s unique geography and limited space for new development compound the housing challenge. At the same time, the city’s popularity as a tourist destination continues to drive demand for short-term rentals, creating a complex balance between economic opportunity and community sustainability.

Public feedback has reflected this tension. While residents have expressed a desire for more long-term housing options, many property owners rely on short-term rental income for financial stability. City officials indicated that any long-term solution will require a nuanced approach that considers both perspectives.

As the discussion continues, Avalon joins a growing list of coastal and resort communities grappling with how to maintain housing availability for residents while managing the economic realities of tourism-driven markets.