The City of Avalon is considering a new approach to managing its limited number of short-term rental licenses — a lottery system that would determine which property owners are eligible to apply once the city’s cap has been reached.
During an informal discussion at the City Council meeting on Oct. 7, 2025, councilmembers reached a consensus directing staff to return with a proposed ordinance that would create a lottery-based waitlist for transient rental licenses. Although no formal vote was taken, the council expressed support for the concept.
City Manager David Maistros presented the item, which followed recent changes to Avalon’s Municipal Code regarding short-term rentals. The council previously adopted an ordinance on Oct. 1 that set a cap of 410 transient rental units citywide. That number includes all grandfathered units, those with conditional use permits, and those with current transient rental licenses.
According to a staff report prepared by Maistros and Senior Management Analyst Devin Hart, the city has identified 386 compliant short-term rental properties, 91 of which are grandfathered and 23 “banked” for future use. Because the city is nearing the established limit, staff were directed to explore a fair process for considering new applications once the cap is reached.
Two options were presented: a traditional first-come, first-served waitlist or a lottery system. Maistros explained that a lottery would discourage speculative real estate purchases, since potential buyers could not assume they would automatically receive a license. Staff also suggested that if the city pursued a waitlist system, positions should not be transferable and should be forfeited if the associated property were sold or transferred. Property owners would also be required to keep their contact information updated with an annual fee.
To promote fairness, staff recommended a weighted lottery system that would assign additional points to applicants who own long-term rental properties or who have previously participated in a lottery without success. The Planning Commission endorsed this recommendation during its Sept. 17 meeting and proposed a 60-day application period for future lotteries.
During council discussion, Mayor Anni Marshall asked how the system would apply to duplex owners who live on-site but might want to apply for a transient rental license for one of the units. Maistros clarified that conditional use permits no longer transfer with the property and that the concept of “banking” a short-term rental license carries less value under the new framework.
Councilmember Mary Schickling sought clarification on license renewals, noting that transient rental licenses expire annually. Maistros confirmed that renewals would not be automatic but would only require additional Planning Commission review if the property had verified violations. Owners must demonstrate that the property is being rented at least 10 times per year, or the license could be revoked.
City Attorney Scott Campbell added that if a property owner commits fraud or fails to comply with licensing rules, they could be required to reapply and move to the back of the line, or, in severe cases, be barred from holding a license for a set period.
While some logistical questions remain about how rentals will be tracked, councilmembers expressed general support for the lottery approach. Councilmember Lisa Lavelle said she favored the lottery because it felt more equitable, giving all applicants an equal opportunity rather than favoring those who applied first. Schickling agreed, noting that the system would also provide greater fairness for homeowners seeking a chance to participate.
City staff will return at a future meeting with a finalized ordinance detailing how the lottery would operate and how it would fit within Avalon’s existing short-term rental framework.
