Avalon proposes 410 TRL cap and a lottery to allocate openings under the cap

Planning staff reported the city council set a flat cap of 410 transient rental licenses (TRLs) and explained why council chose a single numeric cap rather than geographically divided subcaps. Staff said the cap was based on a current inventory count and an existing waiting list and that the city aims to avoid a growing, multiyear queue that is difficult to manage.

Staff provided inventory numbers: 386 compliant short‑term rental properties identified, of which 91 were grandfathered and 22 were in banked status. "We were able to clearly identify a total of 386 compliant short term rental properties," staff said, and explained that the 410 cap leaves room for a modest number of openings while the city processes existing applications.

To allocate openings, staff proposed a modified lottery system modeled on other cities. Under staff's plan, when five or more TRLs become available the city would open a fixed application window, accept complete applications, and an independent vendor would run a random lottery to rank valid applicants. Staff said the lottery could be adjusted to give additional chances to applicants who meet policy goals (for example, properties with long‑term tenants could receive extra entries).

Commission discussion focused on transferability at sale and ways to prevent gaming (for example, selling a property with a queued position). Staff said the city would generally forfeit eligibility on sale and require reapplication, and noted limitations in tracking ownership changes when properties are held by corporations or trusts. Staff will draft detailed lottery procedures and bring them back to the commission before the first allocation.