Last Monday at its first regular session of the year, the City Council passed new regulations on short term rentals operating within city limits, intended to address the city’s ongoing housing crisis. Before passing ordinance 2022-016, Council Member Mike Calhoon introduced an amendment to strike all language pertaining to Office Residential zoning. A similar amendment to remove language regarding other principally commercial districts was made when Council held a joint session with the Planning & Zoning Commission prior to their regular session Monday evening. With the passage of the amendments, the ordinance imposes the following restrictions, effective in principally residential districts:
•Properties that have been historically operating as a short-term rental can continue to do so and can be sold as a short-term rental property. These properties will be considered a non-conforming use in code and if the property ceases to be a short-term rental, they will no longer be able to continue to do so.
•No [new] whole house, short-term rentals in residential zones are allowed.
•Whole house, short-term rentals are allowed in commercial zones if they are in a multi-family structure.
•Owner occupied (traditional BnBs) are allowed in residentials zones up to 50 percent of bedrooms, with a maximum of three.
•Single family structures that are currently not operating as a short-term rental may not be converted to a short-term rental in commercial zones.
• In a commercial district, if a multifamily property is not operating as a short-term rental and it is purchased, the purchaser must wait four years to apply for a short-term rental permit.
•If someone owns an undeveloped property with plans for a short-term rental (that would be non-conforming), they must do so in two years.
•Short Term Rental Insurance will now be required by code
•There will be a fee associated with each individual short-term rental unit (on the fee schedule) to help with processing and compliance costs.
The passing of these additions to city code marks the culmination of months of work by Community Development Director Jason Bickling and the Planning & Zoning Commission. Also passed at the meeting, owners of short-term rental businesses will now be required to pay a $50 permit fee for each separate rental listing.
“This is separate from the regulation, but it’s a standard industry practice that short-term rental permits fees is one night’s lodging as an annual price,” Bickling told Council. “We’re not trying to make money on this, but this fee is for $50 per unit that you rent out, for that annual fee. If you have a five-unit plex, that would be $250 for that annual fee. If you have a bed-and-breakfast in your house, that would be one unit. That’s $50.”
Originally on the consent agenda, the resolution was removed by Council Member Mike Calhoon, who voiced his objection to additional lodging industry fees.
“Our lodging businesses in town create a lot of revenue, and they are up against lodging businesses outside of town that don’t pay any of the same fees,” he said. “I’m just not in favor of adding another fee onto our lodging industry, quite honestly. They pay a $30 fee for life safety inspection. They pay a $30 business fee, a business license for the city. They create a lot of bed tax, a lot sales tax, and I just see it as another chop on them when they’re trying to compete with a lot of the lodging businesses outside the city.”
Community Development Director Bickling responded by stating the fees will fund $6,000 per year in compliance services and the establishment of an online short-term rental business application portal.
“We’re not trying to make money,” he said. “We’re just trying to recoup some of the expenses that are involved in maintaining the short-term rental business piece.”
The Council passed the resolution in a 4-3 vote, with Council Member Bob Barnwell, Council Member Kevin Finch, Vice Mayor John Osenga and Mayor Sue McClure coming out in favor, and Council Members Mike Calhoon, Liz DeMoss and Randy Wells voting against. The resolution took effect immediately upon enactment.