HUNTINGTON BEACH - The state Coastal Commission on Tuesday rejected an Encinitas ordinance that would have banned new, short-term vacation rentals. The vote was 7-0.

"My fear is the coast is going to be divided into the very high-end hotels and low-end camping and hostel facilities," said Commissioner Sara Wan. "A family can go to one of these (vacation rental) places and rent a house for a much more reasonable rate than they could at a hotel."

The Coastal Commission, which oversees development and ensures access to the state's 1,100-mile coastline, also voted unanimously to reject a proposal from its staff that would prohibit new, short-term rentals east of Highway 101, where far fewer of them operate.

The proposal was offered to the city as a compromise, said Deborah Lee of the commission's San Diego office.

Commissioners denied city Planning Director Patrick Murphy's request to postpone action so that he could negotiate an "overconcentration clause" with Lee and her colleagues. The regulation would be akin to an existing Encinitas ordinance prohibiting bed and breakfast establishments from operating within 200 feet of one another.

Peter Douglas, the commission's executive director, told Murphy he could return later with such a proposal, if it is warranted.

First, Douglas said, the city must determine whether rules it enacted in July to regulate existing short-term rentals would address residents' complaints over disruptive behavior by short-term visitors.

The complaints led to regulations and fines of up to $1,000, as well as a separate, city-approved ordinance that would prohibit new, short-term rental units.

Because the ban would change city zoning law, it required the Coastal Commission's authorization, but the city didn't get it Tuesday.

More than 2,200 homes exist in Encinitas west of Highway 101, and if all of them were to become short-term rentals, residential neighborhoods would lose their flavor, Murphy told the commission.

He said 105 property owners have obtained 120 short-term rental permits. If problems arise, Murphy said, city code enforcement authorities could soon be overwhelmed.

"That's an administrative nightmare starting to snowball," he said.

Encinitas Councilwoman Maggie Houlihan told commissioners that rental rates of up to $9,000 a week are fueling speculation among investors who "are less inclined to care about the neighborhoods."

"What we're seeing is with these investment rentals, we have year-round residents being replaced by short-timers," she said. "They want to have fun. They want to party."

The 90-minute hearing renewed a debate that has placed residents fed up with rowdy visitors in one corner and landlords and property managers in another.

"I have a beautiful, 1-acre estate we use for weekly vacation rentals, and people come from all over the world to enjoy it," said Jill Seagren of Crest Drive, a landlord. "We need more vacation rentals that provide kitchens, so families can come and enjoy an affordable place to stay near the beach."

Some of those places rentals are virtual "flophouses," where rooms are rented by the day, said resident Irwin Rubenstein of Encinitas.

"We have bad actors in this community who are using their property to obtain great wealth," he said. "Please let the city regain control of its zoning."

Candace Kamada, a longtime resident of Fourth Street, told commissioners that short-term tenants have repeatedly deprived her and her husband of sleep because of late-night partying.

"On one particularly raucous night, a glass Johnny Walker bottle was forcefully hurled into our yard and broke into smithereens," she said. "Luckily, none of us were in the yard at that time."

Commissioner William Burke said he understood the residents' complaints, and that he once moved from a coastal home because of similar disturbances.

"But that's not what I'm here about," Burke said. "I'm about providing access. This is what Ms. Wan and I have been talking about for a long time, access for more people to the beach."

- Contact staff writer Adam Kaye at (760) 943-2312 or akaye@nctimes.com.