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07-11-16 CC Mtg - A4. Vacation Rentals Policy Discussion
Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Wendy Thomas, Director of Community Development SUBJECT: Vacation Rental Code Development and Community and Commission Priorities for FY 2017 MEETING DATE: July 11, 2016 AGENDA ITEM TYPE: Action RECOMMENDATION: Consider the approved City Commission priorities for FY 2017 and the relationship of the development of a Vacation Rental or Short Term Rental program in relation to other priorities. ISSUE STATEMENT: Short Term Rentals (STR) have transformed from services provided by leasing agents and realtors to computer based listing and reservation systems starting in the mid- 1990s. VRBO was started in 1996, Homeaway in 2005 and Airbnb in 2008. These companies, along with others, radically changed the way travelers find lodging for short or interim rentals. Communities are concerned that STRs will have an adverse impact on housing supplies, housing affordability, and neighborhood vitality. EXECUTIVE SUMMARY: Key recommendations to the discussion of short term rentals (vacation rentals/extended stay lodging): 1) Define the scope of the issue and points of concern prior to beginning drafting of any regulation. Significant education and public outreach should be part of this scoping process. 2) Gather and analyze data. Reliable data is hard to find and there are few clear cut impacts, although in extremes STR can have substantial impacts on neighborhoods. 3) Conduct a review of existing regulations and their applicability prior to drafting new regulations. The Health Department requires licensing and inspection of STRs and has provisions for enforcement and penalties. There is opportunity here to partner to create a comprehensive licensing and inspection of STRs. 4) Undertake extensive legal review of state regulations and case law prior to undertaking the drafting of ordinances. Many regulations for STR fall under the jurisdiction of the health department. 5) Adopt regulations after giving serious consideration to enforcement viability and resource allocation. The more complex the regulation the higher the cost for compliance monitoring. 419 Existing Requirements for Licensing and City Approval The three areas of regulation are business licenses, permitted uses within the Unified Development Code and the requirements for licensing or inspection through the City County Health Department. Business License: In response to the need to create a data source for STRs, the city started a new category in the business license program for vacation or short term rentals. The city requires that each location obtain a business license. At this time, there are currently 42 licensed STRs in the city limits. The business license requirement has ensured that owners and property managers acquire the proper license. A business license application is reviewed by planning for zoning compliance, the police department and the fire department. Through this process some license applicants have subsequently applied for a conditional use permit to operate an STR in the R-1 or R-2 zone district. At this time, STRs are classified as home based businesses. The fee for a business license for a home based business is $10.00. No fee is charged for the fire inspection of the property. Unified Development Code: The Unified Development Code (UDC) has a definition for extended stay lodging, which is the City of Bozeman term used for short term rentals. It is recommended that the terms in the UDC be amended to be consistent with terms used within the vacation rental industry. This change would result in a facilitated code search process for property owners or managers who are seeking information on city requirements. Sec. 38.42.1040. - Extended stay lodgings. Guest rooms intended or designed to be used, or which are used, rented or hired out to be occupied, or which are occupied for sleeping purposes for guests and contain kitchen facilities for food preparation, including, but not limited to, such facilities as refrigerators, stoves and ovens. Generally an individual guest will not exceed 30 days stay. This definition includes dwelling units used, rented or hired out for vacation homes. The definition is clear in defining this use as one which includes a kitchen. Therefore, if a property owner were to list a bedroom for rent, but not the entire house, by definition this would not be an extended stay lodging. The following table shows where the UDC allows extended stay lodging as a permitted use and as a conditional use. The information in a map form is provided as an attachment to this memo. Zone District Permitted Use Conditional Use RS R-1 R-2 R-3 R-4 RO HMU REMU UMU B-2 B-3 420 City County Health Department: Fire Chief Josh Waldo has been instrumental in facilitating coordination between the health Department and the City for inspections for STRs. His analysis of the process of certification and inspection has resulted in greater communication and coordination between the agencies. Based on information shared by the Health Department, there are currently 84 properties with a Bozeman address approved for STR. A map of these properties is attached for your reference. Public Accommodations are defined by the health department as: • Bed and Breakfast • Hotels • Motels • Rooming/Boarding Houses • Tourist Homes/Rentals The Health Department examines the following prior to approving public accommodations: • Location and detail of storage rooms used for extra bedding and furnishings; • Location and detail of janitorial facilities; • Specifications for the water supply to serve the establishment unless the water supply has been previously approved by the GCCHD; • Specifications for the sewage treatment and disposal system to serve the establishment unless the sewage treatment and disposal system has been previously approved by the GCCHD; • Location and detail of laundry facilities including description of equipment, floor and wall finish material, and a flow chart indicating the route of laundry through sorting, washing, drying, ironing, folding and storage; • Name of approved sanitary landfill which will receive solid waste from the establishment; • For a continental breakfast complete a food service application; • The establishment must have adequate equipment and/or procedures to properly collect and dispose of fats, oils and grease. Grease separation must follow local and municipal ordinances. A grease separation unit must meet minimum standards as addressed in the Uniform Plumbing Code. The GCCHD must approve the location, size, and type of grease separation unit. • Evidence of approval by the building authority; • Evidence of approval by the fire authority; and • Any other information requested by the DPHHS or the GCCHD. • Specifications for pools and /or spas that serve the establishment must be approved under separate plan review. Failure to adhere to the requirements of the Health Department are subject to state criminal laws and civil penalties: Violations of State Criminal Laws Any person violating any provision of this chapter or regulation made hereunder, except MCA 50-51-107, is guilty of a misdemeanor and upon conviction thereof shall be punished by a fine of not less than $50 or more 421 than $100 for the first offense and not less than $75 or more than $200 for the second offense and for the third and subsequent offenses not less than $200 and by imprisonment in the county jail not to exceed 90 days. MCA 50-51- 106 Civil Penalties 1. An establishment that violates this chapter or rules adopted by the Department (DPHHS) pursuant to this chapter is subject to a civil penalty not to exceed $500. 2. Penalties may not be assessed against a guest ranch or outfitter and guide facility unless the guest ranch or outfitter and guide facility receives a written notice of a violation and fails to correct the violation within 30 days. 3. Civil action to impose penalties, as provided under this section, does not bar injunctions to enforce compliance with this chapter or to enforce compliance with a rule adopted by the Department (DPHHS) pursuant to this chapter. MCA 50-51-401 The Health Department charges the following fees for review and approval of STRs: $120 for plan review and $120 for site visit/inspection. There is an additional fee of $60/hr for hours in excess of the base rate. When the Fire Department is contacted to make an inspection for an STR, they confirm that a city business license has been issued prior to going on site. The business license process then ensures that the STR is located in a zone district in which an STR is a permitted use or planning contacts the applicant to discuss the conditional use process. Impacts of Short Term Rentals: To date the City Commission has acted on the following STR Conditional Use Permit applications: • Z-12290, 2421 Creekwood Drive, Approved April 1, 2013 • Z13084, 1005 Boylan Road, Approved June 24, 2013 • Z13237, 708 N Rouse, Approved December 2, 2013 • 15-380, 624 S. Willson, Approved September 28, 2015 • 16-134, 304 W Cleveland, Approved May 16, 2016 Nuisance Complaints: Based on concerns voiced at the public hearing, the application for 1005 Boylan Road was given approval for a period of two years. The City Commission directed the Director of Community Development to conduct an analysis of impact to the neighborhood. Upon completion of the investigation it was found that no reports or complaints were filed with the Police Department for the property. The CUP approval was then granted for the duration of use of the property. For properties that have been used as vacation rentals where the owner is made aware of city requirements and applications for approval have been made, planning staff has not found an instance where the Police Department has been contacted to address complaints about the use of the property or noise issues associated with the property. A memo from the Police Department regarding calls to dispatch for STRs within the greater Bozeman area is attached. 422 Neighborhood Vitality: Across the country concerns surrounding STRs have focused on the issue of impact on neighborhoods, in particular the concern that STRs are inhabited largely on a periodic or sporadic basis. Empty homes have an impact on the vitality of a neighborhood. However, without good data on the number of STRs in the community and the ratio of STRs to number of units it is difficult, if not impossible, to make a determination of the impact of STRs on neighborhood vitality. There are considerably different intensity of impacts from a commercialized full time STR in contrast to one where the primary occupant occasionally offers their property. A tiered approach may be appropriate. Housing Availability: STRs where the owner has a room for rent are different functionally and with regard to neighborhood vitality from ones where the entire home is rented. Recognition of that is clear through the definitions in the UDC, as mentioned above. It is critical to note that the City does not have data on the number of entire homes that are available for use as an STR. An initial review of the three primary listing sites, we estimate that within the city limits approximately 450 homes are listed as STRs. Based on conversations with neighbors over the last two years, a primary concern expressed to me is the impact of empty houses on neighborhood vitality. Residents see their neighborhoods as losing the vitality that comes with being surrounded by other full time occupants. The rate of second home ownership within Bozeman has an impact on housing availability and housing use rate, regardless of use as STRs. Second home owners often live in a home for weeks rather than months in a year. Dark homes have an impact on a streetscape and the perception of vitality in a neighborhood. Based on an initial analysis of the listings on the internet, it does not appear that multi-household units are being sublet as STRs. Sublets or purchase of multi-household units for STRs has had an impact on housing availability in larger cities. BEST PRACTICE: Planning, legal, and police staff participated in a webinar on short term rentals (STR) on June 6th. The webinar was presented by the American Planning Association Planning and Law Division. Public outreach and education is a key component of addressing this issue. Outreach focused on those thinking about STRs should include information on ensuring owners know about their legal responsibilities with regard to use of the property for short term rental including: taxes, licensing, insurance, ADA accessibility, anti-discrimination, and safety inspections. In addition, a diversity of private restrictions may already limit the use of STR including liability insurance, mortgage terms, covenants, condominium rules. For your use, we’ve attached a publication from the American Planning Association that explores the issues and options regarding STRs. How communities have addressed STRs varies greatly. The first step for each program is to gather data and then to engage the public. If the Commission feels there is the need, an emergency ordinance can be brought before you for action as the data gathering and public outreach efforts commence. It is important to note that only five applications for CUPs for establishment of STRs have been processed through the City Commission. An emergency ordinance could address all STRs in all zone districts; however gathering the personnel to enforce such a ban would require that resources be reallocated from existing enforcement and planning work. 423 NEXT STEPS: The following are next steps for Commission consideration. Interim/Emergency Zoning: The City Commission is authorized to adopt an interim zoning ordinance as an urgency measure. Sect. 76-2-306, MCA. The adoption of interim zoning must be based on clearly articulated needs to protect public safety, health or welfare. The Commission must make specific findings as to: (i) why the issue much be addressed through adoption of interim zoning; (ii) the nature of the urgency; (iii) why the use being regulated may “be in conflict with a contemplated zoning proposal [the commission] is considering, studying or intends to study”; and (iv) the time frame for studying the contemplated zoning proposal. The interim zoning statute provides a mechanism to put a zoning requirement in place “without following the procedure otherwise require prior to adoption of a zoning ordinance” such as a hearing before the Zoning Commission. The interim zoning ordinance requires only one read and is effective upon adoption. It can be in place for no more than six months; however, the Commission may extend the interim ordinance for an additional one year. Any extension requires a 2/3 majority vote. The initial vote to adopt the interim ordinance requires a simple majority vote. The hearing on the interim ordinance must be noticed at least once and no less than seven days prior to the public hearing. The protest provisions of state law related to adoption of zoning regulations apply. Review Existing Process: Licensing education should start with staff level coordination between the Health Department, Building Division, Fire Department and Planning. These lines of communication have improved immensely in the last six months thanks to the efforts of Chief Waldo, but we could improve how we coordinate and educate the public on STRs. By creating city/county materials we would better serve everyone’s purpose. In addition, staff should thoroughly examine the review and approval process to see if there are additional ways to coordinate between review agencies and between hosts and local government. Work with City County Health Department to establish a team for coordination of public information, further coordinate licensing process, and to map an enforcement plan. Community Engagement: Staff recommends the following 3-step process of community engagement to solicit input as the City discusses how to move forward with vacation rentals in Bozeman; • Public Outreach. Staff would use all current public outreach resources to let the community know the Commission is considering reviewing vacation rental housing in Bozeman. Resources include the City web presence, social media, traditional media, Nextdoor, INC distribution lists, and On-Line City Hall. This effort would clearly identify schedules, opportunities to participate and contact information of key staff for questions and further information. • Stakeholder Identification. We would work with the Commission and community to create a comprehensive list of key stakeholders and contributors. We would make personal contact to engage their participation in the process. • Public Conversations. Staff would facilitate two or more public forums focusing on constructive dialogue to engage all points of view. The input received at the forums would be collected, categorized, and presented to the Commission with key findings. 424 It is anticipated that this engagement effort would take a minimum of two weeks and up to four weeks. Timing with prescheduled advisory board meetings would have an impact on the schedule. It is important that groups such as INC are included in the stakeholder discussion. ALTERNATIVES: 1) Direct staff to begin public engagement and data gathering to commence community conversation regarding vacation rentals; or 2) Direct staff to prepare an emergency ordinance; or 3) Direct staff to commence action on alternative 1 and 2; or 4) As determined by the Commission. FISCAL EFFECTS: The primary expense at this time will be in staff time to facilitate public engagement, gather data and draft an ordinance. Drafting and processing of an ordinance is expected to require an estimated 45 hours of staff time, predominately from planning and city attorney staff. Attachments: Map: Vacation Rental by Review Procedure required by Zone District Map: Health Department Approved STRs Memo from Police Department regarding calls cross referenced with Health Dept. STR list American Planning Association, Zoning Practice, Short-Term Rentals Report compiled on: July 4, 2016 425 S 19TH AVE INT E R S T A T E 9 0 H W Y DURSTON RD STUCKY RD COTTONWOOD RD W MAIN ST FR O N T A G E R D W OAK ST N 7TH AVE DAVIS LN S3RD AVEN19THAVEHUFFINE LN E VALLEY CENTER RD SOURDOUGHRDW COLLEGE ST W BABCOCK ST S 11TH AVE E MAIN ST BAXTER LN W KAGY BLVD N ROUSE AVE B R I DGER DR HIGHLANDBLVDOAK ST SPRINGHILL RD EKAGYBLVD B R ID GER C A N Y O N RD W OAK ST W PEACH ST GRAF ST GOLDENSTEIN LN INTERSTATE90HWYN 7TH AVE S 3RD AVE FRONTAG E R D DAVIS LN INTER S T ATE90HWY BAXTER LN Legend CUP Necessary (RS, R-1, R-2, HMU) By Right (R-3, R-4, RO, B-2, B-3, UMU) Not Permitted Review Procedure by Zone District 0 1 2½Miles¤Revised: 7/6/2016 This map was created by theCity of BozemanGIS DepartmentIntended for Planning purposes only. 426 !. !. !.!.!. !. !. !. !. !. !.!. !.!. !. !. !. !. !. !. !.!. !. !.!. !. !. !. !. !. !. !.!. !. !. !. !. !. !. !. !.!. !. !. !.!. !. !. !. !.S 19TH AVE DURSTON RD INT E R S T A T E 9 0 H W Y STUCKY RD W MAIN ST COTTONWOOD RD FR O N T A G E R D W OAK ST N 7TH AVE DAVIS LN N19THAVEHUFFINE LN S3RDAVEW COLLEGE ST W BABCOCK ST S 11TH AVE E MAIN ST SOURDOUGHRDBAXTER LN W KAGY BLVD N ROUSE AVE HIGHLANDBLVDBRIDGER DR SWILLSONAVEOAK ST HARPERPUCKETTRDEKAGYBLVD W OAK ST SPRINGHILL RD W PEACH ST N FERGUSON AVE GRAF ST GOLDENSTEIN LN I N TERSTATE90HWY DAVIS LN N 7TH AVE DAVIS LN S 3RD AVE BAXTER LN B-2 R-1 PLI R-3 M-2 M-1 R-3 R-1 B-2 R-3 R-1 R-S R-3 R-2 PLI M-1 R-S PLI M-2 R-S PLI B-3 PLI B-2 R-2 R-2 R-1 R-3 PLI BP R-4 R-1 PLI R-4 B-2 R-4 PLI R-3 PLI REMU R-3 R-2 R-4 M-1R-O B-2 R-1 R-O PLI B-2 R-3 R-O R-3 BP R-3 BP R-S R-4 R-2 R-3 R-3 R-1 R-4 R-4 PLI R-4 R-4 R-3 R-O BP R-O R-3 R-4 PLI R-1 R-S R-4 R-1 R-MH R-2 R-2 R-S PLI BP M-1 R-1 B-2 R-2 R-4 HMU UMU R-2 R-3 R-1 BP BP R-4 R-4 R-1 R-MH R-3 R-4 R-2 R-1 R-S R-S R-4 B-2 B-1 B-2 R-2 R-4 BP B-2 R-3 R-O PLI R-3 R-S PLI R-1 R-4 PLI R-1 R-O BP R-3 R-4 R-3 R-2 M-1 R-3 R-4 R-O R-2 R-1 PLI R-4 R-2 R-4 R-2 R-4 R-OR-4 PLI R-4 R-2 R-4 PLI R-4 R-O R-MH M-1 R-4 R-O R-4 R-3 R-4 R-3 R-3 R-2 B-1 B-1 R-1 R-3 M-2 B-1 R-1 R-2 B-1 R-2 R-O R-4 R-2 R-3 R-4 R-S R-3 M-1 R-4 R-2 B-1 R-3 R-3 M-1 R-O R-4 B-1 R-3 R-1 R-1 R-S R-2 R-2 B-2 R-3 R-O R-4 R-2 R-4 R-O B-2 R-3 R-3 R-S R-2 R-3 R-O R-2 R-4 R-O B-3 R-O R-4 R-4 R-O R-O R-3 R-1 R-2 R-4 B-1 M-1 R-3 R-3 R-1 R-2 R-O R-3 R-4 R-O R-1 R-2 B-1 B-1 R-2 R-4 R-O R-2 B-2 R-3 R-S R-2 R-O R-3 B-1 R-O R-2 M-1 R-3 R-2 B-1 R-O R-1 R-3 R-S R-2 B-1 R-S R-4 R-4 Legend !.Vacation Rentals City Limits R-S (Residential Suburban) R-1 (Residential Single-Household, Low Density) R-2 (Residential Single-Household, Medium Density) R-3 (Residential Medium Density) R-4 (Residential High Density) R-O (Residential Office) R-MH (Residential Mobile Home) REMU (Residential Emphasis Mixed Use) B-1 (Neighborhood Business) B-2 (Community Business) B-3 (Central Business) M-1 (Light Manufacturing) M-2 (Manufacturing and Industrial) BP (Business Park) UMU (Urban Mixed Use) HMU (Historic Mixed Use) PLI (Public Lands/Institutions) Bozeman Vacation Rentals with Current License Status as of 6/29/2016 0 1 2½Miles¤ Revised: 7/6/2016 This map was created by theCity of BozemanGIS DepartmentIntended for Planning purposes only. 427 DEPUTY CHIEF RICH MCLANE 615 SOUTH 16TH AVE BOZEMAN, MONTANA 59715 (406) 582-2013 RMCLANE@BOZEMAN.NET TO: Wendy Thomas FROM: Rich McLane RE: Vacation Rental Complaints DATE: July 5, 2016 On your request, I queried our Records Management System for public safety responses to 83 vacation homes licensed in Gallatin County. I checked for overall responses since January 1, 2013 (2.5 years). This database encompasses residences both in/out of Bozeman city limits. Of the 83, only 44 had one or more responses. Some of these may/may not be specific to the residence (i.e. a parking complaint, or barking dog). A vast majority of the calls are similar to those we receive whether the home is a vacation home or owner occupied. Establishment Name Police Department compliants since 010113 Call Nature Apple Treehouse 1 1 medical Barbara's Place 5 1 victim Vandalism, 1 animal, 2 camping on street, 1 parking Bear Creek Trailhead House 4 1 parking, 1 animal, 1 welfare check, 1 Trespass Blue Willow Guest House 6 1 parking, 3 animal, 2 911 hangup, Bozeman Country Carriage House 1 1 Carbon Monoxide alarm Bozeman Spruce House 1 1 parking Brackett Creek Inn 5 2 burn viol, 1 public assist, 1 loud noise, 1 fight Bridger Vista 1 1 medical Dyer Vacation Rental 1 1 water issue Family Comfort Retreat 2 1 animal, 1 loud noise Garage Apartment on Grand 4 1 parking, 2 loud noise, 1 911 hangup, Garaj Mahal Vacation Rental 2 2 parking Garden Cottage 2 1 garbage fire, 1 civil Green Mountain Ranch 1 1 fire alarm 428 Happy Trails Too Vacation Condo 7 1 vandalism, 1 public assist, 2 parking, 1 animal, 1 susp vehicle, 1 garbage violation Happy Trails Vacation Condo 1 1 parking Heart of Bozeman Retreat 2 1 Fraud, 1 missing person Home In The Heart Of Bozeman 1 1 trash can fire La Dolce Vita 5 1 Vandalism, 4 civil Legends Townhouse 2 1 parking, 1 burglary Lindley Place Cottage 2 1 parking, 1 vegetation nuisance Loft (The) 4 1 911 hangup, 1 Theft, 2 gas odor Lucky Dog Lodge 2 1 911 Hangup, 1 burglary Lynch Vacation Rental 1 1 parking Magpie Guest House 2 1 found property, 1 loud noise Maywood 1 1 parking Mendenhall Hide-a-way 3 1 medical, 1 parking, 1 suspicious Nelson Farm House 4 3 burglar alarms, 1 gas alarm Nineteen Fifteen (1915) Barn (The) 1 1 medical North Wallace Retreat 2 2 medical Northside Hideaway 1 1 animal Our Farm House 1 1 animal Painted Canyon Place 1 1 911 Hangup Peach Guest House 1 1 snow removal Quigley Vacation Rental 2 1 medical, 1 warrant arrest Quilt Cottage 1 1 theft Rendezvous on Ravalli 4 1 911 Hangup, 2 missing person, 1 snow removal Rockin' TJ Ranch 7 1 wildfire, 1 911 hangup, 2 animal, 2 civil, 1 harassment, Rocky Creek Ranch 1 1 fire alarm Silver Creek Cabins 1 1 medical Stover Vacation Rental 1 1 animal Three Suites Retreat 1 1 animal Twin Rivers Downtown 1 1 snow removal Waterman House 2 1 medical, 1 garbage nuisance 429 DOES YOUR COMMUNITY REGULATE SHORT-TERM RENTALS?ZONING PRACTICEAMERICAN PLANNING ASSOCIATION205 N. Michigan Ave.Suite 1200Chicago, IL 60601–59271030 15th Street, NWSuite 750 WestWashington, DC 20005–1503ZONING PRACTICE OCTOBER 2015 AMERICAN PLANNING ASSOCIATION 10 ISSUE NUMBER 10 PRACTICE SHORT-TERM RENTALS 01430 ZONINGPRACTICE 10.15 AMERICAN PLANNING ASSOCIATION | page 2 Peering into the Peer Economy: Short-Term Rental Regulation By Dwight H. Merriam, faicp You will recall, or if you are a millennial (18 to 34 years old), you might have read about the mantra that James Carville dreamed up for President Bill Clinton’s 1992 campaign: “It’s the economy, stupid.” Today, for planners, thanks to the entirely new perspective brought to us by the millennials, our theme must be “It’s the sharing economy, stupid.” It is called variously collaborative con- sumption, the peer economy, and the sharing economy. More than half of millennials have used sharing services. It is permeating our daily lives in many ways. This new ethic about our relationship to things, to transportation, to where we bed down, and even to other people has taken us away from owning and exclusively using, to not owning, not possessing, and not using alone. We see the sharing economy in three broad spheres—transportation, goods and services, and housing. While our focus here is on short- term rentals, it helps to understand the larger context for “home sharing.” RIDE-SHARING REVOLUTION Transportation may be the most obvious and most pervasive face of the sharing economy. Millennials own fewer automobiles than other age cohorts. Millennials purchased almost 30 percent fewer cars from 2007 to 2011 (Plache 2013). Why? Because they use short-term car rentals, public transportation, and ride-shar- ing services. They are less likely to get driver’s licenses. One-third of 16 to 24 year olds don’t have a driver’s license, the lowest percentage in over 50 years (Tefft et al. 2013). At the same time, so we don’t get too carried away with this trend, as the millennials age, they will buy more cars. Forty-three percent said they are likely to buy a car in the next five years (Kadlec 2015). Dwight Merriam, faicp, founded Robinson & Cole’s Land Use Group in 1978, where he represents land owners, developers, governments, and individuals in land-use matters. He is past president of the American Institute of Certified Planners and received his masters of Regional Planning from the University of North Carolina and his juris doctor from Yale. This four-bedroom colonial home in Wetherfield, Connecticut, rents for $385 per night, with a four-night minimum stay.Dwight H. MerriamRide sharing as a generic term encompass- es short-term rentals, making your car available to others, sharing rides, and driving or riding in taxi-like services brokered online through com- panies like Uber. Instead of owning a car, you can rent one on a short-term basis from companies such as Zipcar and Enterprise Rent-A-Car. Why own a car when you can conveniently pick one up curbside and use it to run errands for a few hours? Sharing a ride and splitting the cost is made easier with services like Zimride (also by Enterprise Rent-A-Car), which links drivers with riders at universities and businesses. You boom- ers will remember the ride-share bulletin boards on campus. Same thing. Got a car, not making much use of it, and interested in making some money? You can make it available to others on a short-term basis through peer-to-peer car-sharing services including Getaround, which presently operates in Portland, Oregon; San Francisco; San Diego; Austin, Texas; and Chicago. They will rent your car for you while you are away. Cars are covered with a $1 million policy, and they even clean it for you. RelayRides connects neighbors to let them rent cars by the hour or the day, and if you’re traveling more than 14 days, they will take your car at the airport, rent it for you, and pay you. You can even do it for boats with Boat- bound. With the help of Spinlister, you can con- nect with others and rent a bicycle, surfboard, or snowboard. 431 ZONINGPRACTICE 10.15 AMERICAN PLANNING ASSOCIATION | page 3 Want to make some money by driving others around in your car, or are you a rider who wants to be driven? Just about everyone has heard of Uber, the leader in this form of ride sharing, which includes other services such as Lyft and now Shuddle for ferrying children around and Sidecar for both people and packages. Wireless communi- cations, the Internet, and smartphones have made such ride-sharing and delivery services possible. This is a big deal. Lyft and Uber are worth $2.5 billion and $50 billion (more than FedEx and 405 companies in the S&P 500) respectively (Dugan 2015; Tam and de la Merced 2015). And want to be a driver but don’t have a car? You can rent one from Breeze just for that purpose. GOODS AND SERVICES PEER TO PEER Beyond transportation, the sharing economy extends to relationships between people and service providers. There is peer-to-peer or collab- orative consumption through services like Task- Rabbit and Skillshare which provide help, paid or bartered, or sometimes free. Instacart will grocery shop for you and claims it will deliver to your door in an hour. You can be a shopper and delivery person for them, making up to $25 an hour. NeighborGoods lets you share all those things you have but use so little, from leaf blow- ers, to pressure washers, to . . . well, take a look in your garage, that place where you used to park your car. If you live in Austin, Texas; Den- ver; Kansas City, Missouri; Minneapolis; or San Francisco, Zaarly seeks to create a marketplace to help freelance home-service workers connect with home owners. There seems no end to the sharing. Fon, touting over 7 million members, lets you share your home WiFi in exchange for access. The Lending Club connects borrowers and inves- tors, enabling, so they say, better rates than credit cards and more return for lenders than what banks offer. Over $11 billion has been borrowed since it started in July 2007, with investors earning a median of 8.1 percent. Poshmark lets you show your unneeded cloth- ing in a virtual closet and get linked with people who share your sense of style. You can even share your dog, or become a sitter, with DogVacay and Rover helping you find a local dog sitter to care for your dog at your home or theirs. The power of the Internet in facilitating collaborative consumption was probably best evidenced first when eBay and Craigslist pro- vided an online marketplace never experienced before. Today, we have web-based services like Freecycle where people can post things they don’t want, the remnants of our overconsump- tion, and others can take that flotsam and jet- sam for free. Yes, for free. It solves the donor’s solid waste disposal problem and provides free goods for the takers. SHARING THE ROOF OVER OUR HEADS That brings us to the subject matter of great- est interest to planners—the sharing of space. Maybe it began with the sale of timeshares in the United States in 1974. These fractional in- terests have proved difficult to sell. Short-term vacation rentals emerged as a better way for many, linking property owners with vacation- ers through companies like HomeAway and its numerous related entities, claiming over one million listings. FlipKey does much the same with what it says are over 300,000 listings in 179 countries. But Airbnb goes beyond vacation rent- als. You can rent a shared or private room for a night, a whole house, an apartment for your exclusive use for a week, a British castle (Airbnb says it has 1,400-plus castles), a tee- pee, an igloo, a caboose, or an eight-foot by 14-foot treehouse in Illinois ($195 a night) if you wish. The company, originally “AirBed & Break- fast,” was founded in 2008 by Brian Chesky, Joe Gebbia, and later Nathan Blecharczyk. It began when Chesky and Gebbia, to help pay their rent, rented sleeping accommodations on three air mattresses in their San Francisco apartment living room and made breakfast for the guests (Salter 2012). The company is now worth $25.5 billion and joins the ranks of the rest of the great ideas we wish we had thought of first (O’Brien 2015). GOOD OR BAD? Are short-term rentals good or bad for your com- munity? Like so many things, it depends. A second-floor condominium in this converted mansion in Denver’s Capitol Hill neighborhood offers a private bedroom and bath rental for $105 per night, with a two-night minimum stay.Brian J. Connolly432 ZONINGPRACTICE 10.15 AMERICAN PLANNING ASSOCIATION | page 4 Affordable Housing Short-term rentals (STRs) increase the stock of furnished, short-term accommodations. Be- cause many of the rentals involve renting a room in a permanently occupied dwelling, they are of- ten less expensive than commercial lodging. The benefit for home owners or long-term tenants who host STR guests is additional income, which can help offset mortgage or rent payments. Some contend that STRs may exacerbate the shortage of lower cost rentals because land- lords, attracted by the higher revenue stream from STRs, are taking apartments out of long- term rentals, especially in tight markets like New York and San Francisco (Monroe 2014; Moskowitz 2015). Others say high tenant de- mand and demographics are the cause of the problem, not STRs, which are a small share of the market (Lewyn 2015; Rosen 2013). Aging in Place Short-term rentals of rooms in homes and apart- ments not only provide additional revenue for those aging in place, but they may provide an opportunity for sharing of chores and bartering for services, just as accessory apartments do. This can enable older people to stay in their homes longer before transitioning to an inde- pendent or assisted living facility. Commercial Lodging The only possible benefit of STRs with regard to existing commercial lodging is that it may stimulate competition and lower prices for the consumer. The negatives are several. Short- term rentals may reduce commercial lodging revenues. In many situations STRs have an advantage over commercial lodging because the STRs do not pay the occupancy taxes paid by commercial lodging. Short-term rentals generally do not need the service workers employed in commercial lodging. Unions and service workers often oppose STRs. State and Local Government Revenues to state and local government may go down as a result of STRs because, as noted, such rentals usually do not pay the occupancy and other taxes levied on commercial lodging. Airbnb does provide 1099 forms to hosts to report their income, and it has begun collect- ing and remitting hotel and tourist taxes in San Francisco; San Jose, California; Chicago; and Washington, D.C. (Hantman 2015). Health and Safety Much of the STR market today is unregulated. Those who rent typically do not have their prem- ises inspected to determine compliance with health, building, housing, and safety codes. For its part, Airbnb does clearly state in its terms of service that some localities have zoning or administrative laws that prohibit or restrict STRs and that “hosts should review local laws before listing a space on Airbnb.” Airbnb also provides a guide to respon- sible hosting on its website, and what they do address is good guidance for local planners and regulators, and thus worth reading. How many hosts read and follow up on the suggestions is another matter. Airbnb’s list is still a good start- ing point for local action. Many STR hosts do not have home own- ers and liability insurance to cover losses that may result from occupancy. There is a life safety issue here, and in the event of death, injury, or property damage, there may not be insurance coverage or sufficient assets available to cover the liability. AN OUNCE OF PREVENTION IS WORTH A POUND OF CURE So said Benjamin Franklin, and it is apt here. You need only take a few relatively easy steps to get out ahead of the potential problems with STRs and capitalize on the good that such rent- als can provide your community. Moratorium This is not a recommendation, but something worth considering. As you work down this list of This three-bedroom home near Miami’s Coconut Grove rents for $325 per night, with a five-night minimum stay.Sorell E. NegroThis condo hotel in downtown Honolulu includes owner- and long-term renter-occupied units, privately owned units available for daily rental through the building’s hotel operator, units owned by the hotel operators, and privately owned units available for short-term rental through Airbnb and similar sites.Robert H. Thomas433 ZONINGPRACTICE 10.15 AMERICAN PLANNING ASSOCIATION | page 5 steps you will have the sense that you need to do six things at once. You do. One way to get a grip on it is take a “planning pause” moratorium on all STRs for, say, six months, during which time no one can rent. However, given that the number of such rentals in many places is still relatively small, it is unlikely that much harm will come from letting them continue on while you plan and prepare to regulate. It may not be worth the effort to have a moratorium. A morato- rium takes time—for drafting, maybe some legal advice, and the expenditure of political capital in most cases—and may cause some pushback from those already renting, all of which may cost more than the planning pause is worth. Morato- ria sometimes serve only to delay the inevitable hard work and are often extended. Back to Ben Franklin: “Don’t put off until tomorrow what you can do today.” Education Learn what is available out there now by going to all of the websites and services that you can find, most of which are identified here. Look online to see what STRs are being offered in your community. You may be surprised at how many of your friends and neighbors are already in the STR business. Don’t forget to check Craigslist as well, and use an online search engine, such as Google, with a few key terms, like “rentals Anytown” and “house-sharing Anytown,” to find other STR activity. Conduct educational sessions in your com- munity (“Everything You Need To Know About Short-Term Rentals”) even before trying to regu- late, to sensitize present and potential hosts to the need for proper code compliance, fire prevention, emergency response, following rules for rent controlled units, first aid, protecting privacy (e.g., disclosing security cameras), insur- ance coverage, parking, noise, smoking, pets, childproofing, operation of heating and ventilat- ing systems (including fireplaces and heating stoves), safe access, occupancy limits, deciding what to tell neighbors, home owners association approval, tax obligations, and any required zon- ing approvals. These sessions may also provide an opportunity to learn who is renting and to connect with them. Consider establishing a section of your municipal website as a resource portal. You will not have all the answers to all the questions as you start, but you need to start. Planning Yes, planning. The rational planning model in its simplest terms is what do you have, what do you want, and how do you get it. You need to know who is renting and what is being rented to whom for how long. You need to determine what you may expect in the future. What do you think the demand is for STRs, in what mix of accom- modations, and for what length of tenancy? This will prove useful to deciding whether you need to limit the number of units available for STR and to regulate the length of occupancy. Regulate Regulation probably will come in two forms: licensing of individual hosts to insure code com- pliance and general regulation (either through zoning or licensing standards) as to location, number of units, and terms of tenancy. You will have to draw the line somewhere as to what is an STR and what is simply an unregulated rental. Austin has separate application forms for Type 1 primary, secondary, and partial STRs. All of these forms include owner and property identification information as well as insurance information, number of sleeping rooms, occu- pancy limit, and average charge per structure. To qualify as a Type 1 primary STR, the unit must be owner occupied at least 51 percent of the time and can only be rented out in its entirety and for periods of 30 days or less. To qualify as a Type 2 secondary STR, the unit must be accessory to an owner-occupied principal residence and can only be rented out in its entirety and for periods of 30 days or less. To qualify as a Type 1 partial unit, namely a room rental, the unit must provide ex- clusive use of a sleeping room and shared bath- room access. Only one partial unit can be rented out at a time, to a single party of individuals, and for periods of 30 days or less. Owners must be present for the duration of the rental. The annual licensing fee for STRs in Austin is $235. Applicants must also pay a one-time notification fee of $50. Of course, as with all regulation there are those with schemes to beat the regulation. There are sites online that advise potential STR hosts to avoid posting on Craigslist, use Airbnb’s community and social features to screen the reservations (presumably to avoid enforcement types), “hide your home” by using Airbnb’s public view that only shows a large circle within which the unit is located, use word of mouth (or social networking sites) to rent the unit, and “get lost in the crowd” in that there are thousands of listings in large places like Austin (but not in the rural counties, suburbs, and small towns). This advice to those interested in breaking the law suggests that it will not always be easy for code enforcement to find the STRs. Perhaps some notice to all property owners, maybe a note with the tax bill, telling them of the need to register would help. Free, simple, online registration might increase compliance. The critical issue is life safety—you need to find all of these STRs to make sure they are safe. San Francisco has an Office of Short-Term Rental, and in 2014 the city adopted major revisions to its planning codes for STRs. Those amendments include some useful definitions of hosting platform, primary residence, residential unit, short-term residential rental, and tourist or transient use. The code requires registration, occupancy of the unit by the owner not less than 275 days a year, maintenance of records for two years, certain insurance coverage, payment of transient occupancy taxes, compliance with the Conduct educational sessions in your community even before trying to regulate, to sensitize present and potential hosts to the need for proper code compliance. Is an STR a rental of less than 30 days or 90 days, or some other somewhat arbitrary number of days, and everything else is just an unregu- lated rental? It is for you to decide. You will also want to consider whether owner-occupied STRs might be regulated less strictly, given that the owner is present during the STR. Austin, Texas, has a robust program with licensing. They carve out three types of STRs: owner-occupied single-family, multifamily, or duplex units (Type 1); single-family or duplex units that are not owner occupied (Type 2); and multifamily units that are not owner occupied (Type 3). There is a three percent limit by census tract on the Type 2 single-family and duplex STRs, a three percent limit per property on Type 3 STRs in any noncommercial zoning district, and a 25 percent limit per property on Type 3 STRs in any commercial zoning district. Howev- er, each multifamily property is allowed at least one Type 3 STR, regardless of these limits. 434 ZONINGPRACTICE 10.15 AMERICAN PLANNING ASSOCIATION | page 6 housing code, posting the registration number on the hosting platform’s listing, and a clearly printed sign inside of the front door with the locations of all fire extinguishers in the unit and building, gas shut-off valves, fire exits, and pull fire alarms. The application fee and renewal fee every two years is $50. The hosting platform has numerous responsibilities, and there are fines for violations. It is a good model from which to start. Isle of Palms, South Carolina, regulates STRs through zoning, defining an STR to be three months or less. The city’s STR standards limit the number of overnight occupants to six and daytime occupants to 40 (can we assume a wedding party or the like?), set a minimum floor area per occupant, and establish off-street park- ing requirements. Monterey County, California, also regulates STRs in its zoning code, defining STRs as rentals between seven and 30 consecutive calendar days. The county considers stays of less than seven days to be a motel/hotel use. The regula- tion provided for administrative approval of all STRs in operation at the time of its adoption in 1997 if the property owners applied within 90 days. Most of the existing, legal STRs date from that initial round of approvals. Since then, there have been some discretionary approvals, and many STRs are believed to be operating without the required permits. San Bernardino County, California, permits STRs, defined as rentals of less than 30 days, by zoning in the “Mountain Region” by special use permit exempting multifamily condominium units in fee simple and timeshares with a previ- ous land-use approval. The development stan- dards include code compliance, maximum oc- cupancy based on floor area per occupant and the number of beds, off-street parking require- ments, and signage specifications. Conditions of operations address the contents of the rental agreement, posting of the property within the unit with all the conditions of use, and details of fire safety and maintenance, even including a prohibition on the use of extension cords. Miami Beach, Florida, prohibits STRs in all single-family homes and in many multifamily buildings in certain zoning districts. Registering all these STRs can be burden- some. Since May 1, 2015, Nashville has issued 1,000 permits, and staff estimates the city still has 800 illegal hotels and motels (Bailey 2015). Wait times for all types permits went from 30 minutes to four hours because of all the STR registrations (Bailey 2015). THE MAKINGS OF WORKABLE PROGRAM Overarching issues to consider include the nature of the activity you aim to regulate, the management structure of the STR, and the limits on STR use. What Is the Nature of the Activity You Will Regulate? Presumably, hosting a STR is a private enterprise and almost certainly not a commercial lodging business. It is a type of lodging that is largely advertised online, through social media, and on bulletin boards. How will you draw the line between that modest, private activity and a commercial operation? How Is It Managed? Does the host have to be the owner, and does the host need to be there during the rental? If not, will you regulate differently in terms of num- bers of units allowed, number of days per year, or terms of occupancy? What Is the Limit of Use? Will you require the host to live in the residence at least some minimum number of days per year? Will you limit rentals to some maximum number of days per year? Will you define STR as a rental of 30 consecutive days or less and not regulate longer rentals in any way? Will you regulate whole-house, exclusive-use rent- als differently, for example by only regulating when the house is rented for less than a week or two weeks? And will you regulate renting of rooms on a different schedule, for example by including room rentals only if they are less than one month and otherwise not regulating longer room rentals, which may be covered by zoning anyway, possibly under the definition of a rooming house? There are so many questions to be answered and so many lines to be drawn. A checklist of considerations for hosts and public officials for planning, regulation, and operation might include current zoning require- ments; applicable codes (sanitation, health, building, occupancy among many); business licensing; business organization (none, limited liability corporation, general or limited liability partnership, Subchapter S, etc.); home owners association covenants and restrictions; other easements, covenants, restrictions on the land; lodging to be offered (room, whole house, host- occupied, length of stay); 911 marking at the street; emergency notifications; food service (permitted? licensed?); federal, state, and local taxes; safety inspections; fire, smoke, CO2, and other detectors; fire extinguishers; child safety; parking; insurance; emergency notifications; water and septic; safe hot water temperature; electrical and plumbing in good repair; pest/ver- min-free (especially bed bugs); ventilation, heat, air conditioning adequate; no hazards; no mold or excessive moisture; working doors, windows, and screens; adequate means of egress; linen sanitation; and pool and spa maintenance. YOU’VE MADE YOUR BED . . . So goes the idiom from the French as early as 1590: “Comme on faict son lict, on le treuve” (As one makes one’s bed, so one finds it). In plan- ning for and regulating STRs, you will indeed be the ones making the bed, and you will have to lie in it. There are benefits and burdens in how you permit STRs and many considerations to be weighed. If you start with life-safety issues first, you can be quite certain the most important aspect of this rapidly emerging sharing economy phenomenon will be addressed. After that, it is the usual planning and politics. This building in downtown Boston includes a two-bedroom loft apartment that rents for $245 per night, with a seven-night minimum stay.Karla L. Chaffee435 ZONINGPRACTICE 10.15 AMERICAN PLANNING ASSOCIATION | page 7 Cover image by Susan Deegan; design concept by Lisa Barton. REFERENCES Airbnb. 2015. “Responsible Hosting.” Available at www.airbnb.com /help/responsible-hosting. Airbnb. 2015. “Terms of Service.” Available at www.airbnb.com/terms. Austin (Texas), City of. 2015. “Vacation Rental Licensing.” Available at http://austintexas.gov/str. Bailey, Phillip. 2015. “Council Panel Gets Earful on Airbnb Proposal.” Courier-Journal, August 5. Available at http://tinyurl.com/nkaxf23. Dugan, Kevin. 2015. “Lyft Value Soars to $2.5 Billion.” New York Post, March 12. Available at http://tinyurl.com/pwj5g44. Hantman, David. 2015. “Working Together to Collect and Remit in Washington D.C. and Chicago, Illinois.” Airbnb Public Policy Blog, January 28. Available at http://tinyurl.com/q36hht7. Isle of Palms (South Carolina), City of. 2007. Ordinance 2007-2. Avail- able at http://tinyurl.com/q38aj7x. Kadlec, Dan. 2015. “Turns Out (Gasp) Millennials Do Want to Own Cars.” Money, January 20. Available at http://tinyurl.com/oyrn9sp. Lewyn, Michael. 2015. “Airbnb and Affordable Housing.” Planetizen, April 21. Available at http://tinyurl.com/nju7yst. Montgomery (California), County of. 2015. Code of Ordinances. Title 21: Zoning Ordinance. Chapter 21.64: Special Regulations. Section 21.64.280: Administrative Permits for Transient Use of Residential Property for Remuneration. Available at http://tinyurl.com /oae2tqw. Miami Beach (Florida), City of. 2015. “Vacation/Short-Term Rentals.” Available at http://tinyurl.com/o233g7z. Monroe, Rachel. 2014. “More Guests, Empty Houses.” Slate, February 13. Available at http://tinyurl.com/mbn6266. Moskowitz, Peter. 2015. “Why Airbnb Could Be Making It Even Harder to Find Affordable Housing.” Daily Dot, July 27. Available at http:// tinyurl.com/qd97gv3. Nashville-Davidson (Tennessee), Metropolitan Government of. 2015. “Short Term Rental Property.” Available at http://tinyurl.com /pnvn34s. O’Brien, Sara Ashley. 2015. “‘Crazy Money’—Airbnb Valued at Over $25 Billion.” CNNMoney, June 27. Available at http://tinyurl.com /oeus4ar. Plache, Lacey. 2013. “Millennials in Reverse: Why New Car Sales To The Youngest Generation of Drivers Slowed In 2013.” Edmonds. com, November 1. Available at http://tinyurl.com/nfn5qyc. Rosen, Kenneth. 2013. “Short-Term Rentals and the Housing Market.” Urban Land, November 22. Available at http://tinyurl.com /pwfah33. Salter, Jessica. 2012. “Airbnb: The Story Behind the $1.3bn Room- Letting Website.” Telegraph, September 7. Available at http:// tinyurl.com/nkfes8t. San Bernardino (California), County of. 2015. Code of Ordinances. Title 8: Development Code. Division 4: Standards for Specific Land Uses and Activities. Chapter 84.28: Short-Term Private Home Rent- als. Available at www.amlegal.com/library/ca/sanbernardino .shtml. San Francisco (California), City and County of. 2015. “Office of Short- Term Rental Registry & FAQs.” Available at www.sf-planning.org /index.aspx?page=4004. Tam, Pui-Wing and Michael J. de la Merced. 2015. “Uber Fund-Raising Points to $50 Billion Valuation.” New York Times, May 9. Avail- able at http://tinyurl.com/pawed6a. Tefft, Brian C., Allan F. Williams, and Jurek G. Grabowski. 2013. Timing of Driver’s License Acquisition and Reasons for Delay among Young People in the United States, 2012. Washington, D.C.: AAA Foundation for Traffic Safety. Available at http://tinyurl.com/qjlu44y. VOL. 32, NO. 10 Zoning Practice is a monthly publication of the American Planning Association. Subscriptions are available for $95 (U.S.) and $120 (foreign). James M. Drinan, jd, Executive Director; David Rouse, aicp, Managing Director of Research and Advisory Services. Zoning Practice (ISSN 1548–0135) is produced at APA. Jim Schwab, aicp, and David Morley, aicp, Editors; Julie Von Bergen, Assistant Editor; Lisa Barton, Design and Production. Missing and damaged print issues: Contact Customer Service, American Planning Association, 205 N. 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Printed on recycled paper, including 50-70% recycled fiber and 10% postconsumer waste. 436 DOES YOUR COMMUNITY REGULATE SHORT-TERM RENTALS?ZONING PRACTICEAMERICAN PLANNING ASSOCIATION205 N. Michigan Ave.Suite 1200Chicago, IL 60601–59271030 15th Street, NWSuite 750 WestWashington, DC 20005–1503ZONING PRACTICE OCTOBER 2015 AMERICAN PLANNING ASSOCIATION 10 ISSUE NUMBER 10 PRACTICE SHORT-TERM RENTALS 01437