Decision Comes in Short-Term Rental Ordinance Litigation

California’s Unruh Civil Rights Act, which prohibits a business establishment from discriminating in housing or other accommodations, does not apply to an ordinance enacted by a city, a California appellate court held last week. The Fourth District Court of Appeal upheld a law requiring a person over 30 years old to sign any short-term rental agreement, holding that a city enacting legislation is not operating as a “business establishment” for purposes of the Unruh Act.

In Harrison v. City of Rancho Mirage, the City passed an ordinance requiring a “responsible person” to sign any contract for a short term rental, and defining responsible person as someone older than 30. The City intended the ordinance to reduce the negative secondary effects of the short-term rental boom, with sites like Airbnb and VRBO facilitating an explosion in home rentals, and attendant code enforcement issues including parking problems, noise violations, excessive trash and a degradation of residential character of neighborhoods. Plaintiff Brian C. Harrison owned a condominium in the City and sued alleging the ordinance would require him to discriminate on the basis of age.

The City contended that the Unruh Act did not apply to legislative enactments of a local government and the trial court agreed. The City clarified that the ordinance does not prohibit all persons under the age of 30 from occupying a vacation rental, but simply requires that one responsible person over the age of 30 sign the short-term rental agreement. The appellate court agreed, finding that nothing in the Unruh Act precludes legislative bodies from enacting ordinances that make age distinctions among adults. Because the City was not acting as a “business establishment,” but was rather amending an existing municipal code section to increase the minimum age of a responsible person, the Unruh Act did not apply and the ordinance was allowed to stand.

This case affirms the authority of local governments to enact age-based distinctions without fear of prosecution under the Unruh Act. Legislative enactments do not constitute business activities for purposes of the Unruh Act, and cities acting in a legislative capacity are not “business establishments” bound by the Act’s requirements. Additionally, Harrison sheds light on the effectiveness of age-based distinctions in cities looking to regulate or reduce the propagation of short-term rentals in their jurisdictions. While many paths exist to address the concerns posed by short-term rentals, Rancho Mirage’s strategy has now withstood judicial challenge at the appellate level, and cities who wish to ensure a level of maturity among short term renters in their jurisdiction might consider this another arrow in their regulatory quiver.