BACKGROUND:
On January 26, 2022, the City Council conducted a study session on possible amendments to Chapter 5.96 Short Term Vacation Rental Units. The January 26, 2022 agenda report presented 14 revisions proposed by Staff and 15 revisions suggested by former members of the previous STVR Task Force.
The City Council considered the presentation and public testimony and provided Staff direction on amendments to the code.
On February 8, 2022, the City Manager and Code Compliance Manager met with former STVR taskforce members to receive further input on their suggested revisions. The meeting focused on four topics, which are noted in this report.
The City Attorney’s Office also conducted a comprehensive review of Chapter 5.96 and made additional revisions to provide clarity, support revisions made and/or provide additional enforcement tools.
On March 23, 2022, the City Council conducted a public meeting and considered an ordinance amending Chapter 5.96 Short term vacation rental units.
During Introduction and First Reading, Staff advised the City Council that, subsequent to the distribution of the agenda packet and draft ordinance, a new section (section
5.96.035.G) was proposed to be added that read:
Section 5.96.035(G). “Properties that are fractionally owned may not be used as short-term vacation rentals.”
The City Council was advised of a minor typographical correction to the first and second lines of Section 5.96.050(A) on agenda packet page 269, which should read, in part, as follows:
Section 5.96.050(A). “The owner and/or owner’s authorized agent or representative shall use to ensure that the property used for Short Term Vacation Rental is used….”.
The City Council also adopted a Resolution establishing revised penalties and fines for violation of STVR regulations.
The March 23, 2022, agenda packet included the following attachments:
(1) An Ordinance amending Chapter 5.96 Short term vacation rental units with redlines (2) An updated chart of Staff’s proposed changes from the January 26, 2022 study session
(3) An updated chart of Resident’s suggested changes from the January 26, 2022 study session
(4) A Resolution establishing penalties and fines for violation of the STVR regulations DISCUSSION:
The revisions discussed in the March 23, 2022, Agenda Report are those where direction was given at the study session meeting to make changes, and also those substantive changes made by the City Attorney.
Section 5.96.020 Definitions.
The definitions were amended to add definitions for “advertise”, “booking service”, “good neighbor brochure”, “hosting platform”, “managing agency or agent”, “multiple rentals”, owner’s authorized agent or manager”, and “transient occupancy tax”. These changes support a new section (5.96.080 Unpermitted/Unlicensed Short Term Vacation Rentals) added to hold hosting platforms accountable for advertising and operating of STVR properties.
The definition of “home sharing or home share” was revised to state that the portion being rented is not to exceed fifty percent (50%) of the total bedrooms on the property.
Section 5.96.035 Permits required for short term vacation rental units; termination of short term vacation rentals, exceptions.
Section 5.96.035(D) Termination of existing permits is revised to provide more clarity regarding termination of STVR permits on January 1, 2023, in that permittees must discontinue advertising and offering the property for short term rentals.
Section 5.96.035(E) prohibits subletting and was moved from Section 5.96.040.
New Section 5.96.035(F) clarifies that each STVR property is required to have its own permit number.
Section 5.96.040 Short term vacation rental / home share permit required application and fee.
Permit application. Section 5.96.040(E) lists the items required to be submitted for a permit. Subsections 8, 9, 10, and 11 are items that are already part of the application and are proposed to be added to the Chapter.
Findings for denial of a permit. Section 5.96.040(N). The section has been revised so that the findings apply to both new and renewal permits.
Finding for denial #2 of Section 5.96.040(N). The concern raised during the study session was that the wording of this finding, that a renewal permit would be denied if a citation had been issued in the last 12 months, supplants the suspension and/or revocation process written into the code. The City Attorney’s office has reviewed this provision and proposes to delete the wording calling for denial based upon a citation having been issued in the last 12 months. The remainder of the finding would remain.
This topic was discussed with the resident group on February 8, 2022. The group asked that a 7th finding be added that allowed for a permit to be denied if based on the totality of the enforcement record demonstrating the owner or representative was not using prudent business practices to ensure the STVR was operated in compliance with the regulations. The City Attorney’s office did not recommend adding this language.
Understanding the concerns of the resident group, it will be incumbent on Staff to monitor STVR properties and take action as allowed in the Code when warranted.
Timeframe to reapply. New section 5.96.040(O) clarifies that when a permit is denied the applicant can apply again after 12 months from the denial date.
Mailed notification of new/renewed permits. Staff will continue to mail out notices on both new and renewed permits as required by Section 5.96.040(R), which was also conveyed to the resident group when we met on February 8 th. After further review, Staff is proposing to change the mailing radius to property owners within 150 feet of the subject property as opposed to 300 feet. The reduction is for efficiency purposes and given that many notices are returned undeliverable. Should the Council desire to maintain a 300-foot notification radius, the distance can be changed back.
Section 5.96.050 Standard operational requirements and conditions.
Occupancy limits. Section 5.96.050(C) has been revised to state that children two years of age or younger do not count towards the occupant maximum.
Trash collection. Section 5.96.050(G) has been revised to exempt home shares and STVRs in common interest developments with communal bins from the requirement of obtaining additional trash receptacles and walk-up yard service.
Submittal of URLs. Section 5.96.050(K) has been revised so that URLs are no longer required to be submitted monthly. When Staff met with the resident group, the group understood Staff’s reasoning for a yearly submittal with the application, as opposed to each month. They did request consideration for submittal twice a year. Instead, Staff recommends that it is collected with the initial or renewal permit application and that the owner submit updated information within 14 days of a change in the URL.
Noticing on suspended or revoked permits. 5.96.050(S) is deleted as it belongs in Section 5.96.070 (Violations, notices, remedies and penalties), which also revises the notification requirements and is discussed later in this report.
Producing identification upon request. Section 5.96.050(P) allows for issuing a citation to an owner when the owner or owner’s agent refuses to provide their government ID upon request. It also states that the owner shall be cited if the responsible person refuses to provide a government ID. Staff proposes to change the “shall” to “may” as the responsible person’s information can be obtained from the Informational Form and the responsible person issued a citation. This revision does not preclude the ability to cite the owner if the Informational Form does not include this information.
Section 5.96.070 Violations, notices, remedies and penalties The code has been revised to provide for two types of suspensions:
(1) An automatic six-month suspension upon issuance of a third citation within 12 months. An appeal can only be filed as it relates to the duration of the suspension.
(2) Allows for the City Manager/designee to recommend suspension based on health, safety and general welfare considerations. A hearing is held by a hearing officer to determine the suspension.
In both instances the ability to file civil proceedings remains.
Currently, there are three STVR permits with three citations. For these three properties, it is appropriate to not suspend the permit unless a fourth citation is issued.
The noticing requirements are also proposed to be revised as follows:
(1) Notice that a permit has been suspended will be provided to property owners within 150 feet of the STVR property.
(2) If there is an appeal, the proposed revisions allow for notice of the appeal to those persons that filed a complaint within the preceding 12 months and provide for the opportunity to provide written statements for the hearing officer’s consideration.
Section 5.96.080 Unpermitted / Unlicensed Short Term Vacation Rentals.
This section is new. It clarifies that any owner operating a STVR while under suspension is deemed operating without a permit and subject to penalties and fines for operating or marketing an unpermitted STVR.
Sections (B) and (C) puts hosting platforms on notice that they are prohibited from facilitating and advertising unpermitted short term vacation rentals. While Section (D) also states that owner and or managing agents are prohibiting from operating or marking an unpermitted STVR.
Resolution Establishing Penalties and Fines
A Resolution establishing updated penalties and fines for violation of short-term vacation rental regulations is attached. It has been revised to delete the higher fines for advertising regulations and making them consistent with all other operational and permitting violations. Advertising violations will escalate at $1,000/$3,000/$5,000 and suspension of the permit within a 12-month period.
The Resolution also includes the fines and penalties assessed to Hosting Platforms for violation of the regulations.
FISCAL IMPACT:
Staff and City Attorney costs have been incurred in drafting and reviewing of the Ordinance and Resolution.