Laguna Beach debates directing short‑term lodging revenue to housing and tightening in‑lieu fees

Laguna Beach council members revisited housing funding options during the strategic planning session on Jan. 28, debating whether to dedicate short‑term lodging revenues and how to adjust the city’s housing in‑lieu fee.

Council members noted the city already sets aside a portion of property‑tax overage to housing and that short‑term lodging revenues have been used in prior cycles. Several members supported redirecting more TOT to the housing fund to better leverage matching state funds; others emphasized the need to first show internal expense reductions before asking voters for new revenue.

Staff indicated an updated housing in‑lieu fee analysis has been completed by consultants and will be presented in the next 1–2 months; the current in‑lieu fee structure is square‑foot based and consultants reported a typical fee level in some cases around the mid‑six figures depending on unit size and formula. Council also asked staff to develop a monitoring and compliance program to ensure existing deed‑restricted units meet affordability covenants. Members asked staff to prepare options on using fee revenue for second‑story infill incentives and targeted programs such as the community land trust and senior housing upgrades.