P.G. lottery for short-term rental licenses is a go after judge rules against owners.

A group of Pacific Grove short-term rental owners named STRONGpg may not have as strong a legal case against the city over its rental ordinance as they were contending, Monterey County Superior Court Judge Marla O. Anderson said Friday, May 11.

It was at least not strong enough to persuade Anderson to grant an injunction against the short-term rental license lottery the city is now planning to hold on May 22.

The owners—Joy Colangelo, Kevin Delaney, William Harder, Alka Joshi, Kathryn Kranen and Spencer Tall—filed suit April 5, hoping to stop the lottery that could mean some existing license holders lose out on renewing for another year.

In the hearing May 11, Anderson pointedly asked STRONGpg attorney David Lanferman several times to show her where in the case law that short-term rental license holders have a vested right in renewing their licenses, no matter what changes the city made to its ordinances.

Lanferman named some cases, at least one of which focused on situations in which developers received permits to build, only to have the government agency change zoning or building ordinances.

Anderson rejected his arguments and told Lanferman the cases did not apply in the Pacific Grove situation.

She stated that property owners do not have vested rights in licenses that will expire, because those rights are null once the expiration date hits.

Lanferman also tried to argue that his clients had expended large amounts of money to improve their properties, but Anderson suggested they had invested the money at their own risk.

Pacific Grove City Attorney David Laredo argued that any home upgrades have continuing value. 

He also argued that since the properties are located in residential zoning areas, the owners don't lose use of the property.

“None of the petitioners have an asset they cannot use, they just can’t use it in the way they like,” Laredo said.

Anderson made two rulings at the end of the hearing. The first was based on the contention made by the plaintiffs that their case could win on its merits.

The judge firmly stated it could not, in part because governments have the right to make decisions for the good of the community, and that the rights of landowners must be subordinate to the good of society.

She also denied their request for an injunction to stop the lottery.

City officials wasted no time Friday, sending out letters within hours to short-term rental owners letting them know the lottery is taking place 3pm, May 22, in City Council chambers.

Two groups of owners received letters—those who are not be subject to the lottery, and those who are, because their properties are located on blocks the city has identified as too dense with short-term rentals.

Laredo says the city ordered a ping-pong ball machine to make the picks.

Staff will start the meeting by explaining the lottery rules, followed by a few mock drawings to show everyone how it works.

STRONGpg’s lawsuit against the city’s ordinance will continue through the court system. A hearing is scheduled for 9am, July 31.

In related news, on May 3, a group of residents called Pacific Grove Neighbors United submitted to Monterey County Elections double the number of signatures needed to place a measure on the Nov. 6 ballot.

That measure would restrict short-term rentals, phasing them out of residentially zoned neighborhoods within 18 months.