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Home My WebLink About10-16-23 Public Comment - C. Nylander - Comments for City Commission Meeting on October 17, 2023From:Charlie Nylander To:Agenda Subject:[EXTERNAL]Comments for City Commission Meeting on October 17, 2023 Date:Monday, October 16, 2023 3:59:45 PM Attachments:Odinance 2149 Provisional Adoption 2.pdf CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe. Please find my comments attached as a PDF Word document regarding tomorrow nights meeting of the City Commission. My attached comments are specific to the Agenda H. Item; i.e. Comments on Ordinance 2149,Provisional Adoption of the Short Term Rentals Text Amendment, Application 23281-George. Thank you forensuring that my comments are distributed in the City Commission packets. Thank you. Charles Nylander2164 W Ironwood View PlTucson, Arizona. 85742cdnylander@comcast.net505-470-7230 October 16, 2023 To: Bozeman City Commission From: Charles Nylander Subject: City Commission Meeting on October 17, 2023; Agenda Item H: Comments on Ordinance 2149, Provisional Adoption of the Short Term Rentals Text Amendment, Application 23281 I recommend that the City Commission not adopt the proposed amendments, or in the alternative adopt the following staff alternative regarding the subject agenda item, i.e: “Open and continue the public hearing on the application, with speciﬁc request to staff to supply additional information or to address speciﬁc items”. I offer the following reasons and personal insight to support this recommendation. Background I have enjoyed the summer use of Short Term Rentals (STRs) in Bozeman for the past eight (8) years. All of my STR rentals were located within walking distance of downtown on both the east and west sides of Main Street. The length of stay for my STR rentals started with one week, but gradually increased, with the last two years length of stay increasing to six (6) and seven (7) weeks in duration, respectively. My STR costs have ranged from as low as $1600.00/week to $6,000.00/month. At ﬁrst my STRs were simple, remodeled (1930’s era) cottages, but my last two STRs were much newer condominiums along Mendenhall and Bozeman Avenues. Reasons 1). I have read all of the online documents associated with the above subject, and wish to point out several facts contained in the Final Report “Short-Term Rental Assessment prepared by Economic & Planning Systems, Inc. August 1, 2023. There are a plethora of facts with strong implications in this report, most of which appear to not have been adequately considered in preparing ordinance amendments. For example: A) “In Bozeman, 55 percent of households are renters and 45 percent are owners.”… I would attribute the higher renter percentage to the presence of a population of university students and very modest local incomes that preclude home ownership. B) “The average rent in Bozeman is $1,900.00 per month…which has increased by an average of 4.0 percent annually.” Supply and demand results in increased rents, and employment salaries are too low, in addition to the present inﬂation. C) “In total, there are an estimated 568 short-term rentals currently in Bozeman. with about 22,500 housing units in Bozeman, this means that short-term rentals comprise 2.5 percent of the city’s total housing stock.” It would appear that the subject STR proposal represents targeted regulation resulting in Draconian regulatory measures applied solely to 2.5 percent of the housing units. It makes a person wonder if there is an alternative ambition or agenda at play. D) “Short-term rentals are classiﬁed into three types: 1) 19 percent of registered short-term rentals are classiﬁed as Type 1 2) 46 percent of registered short-term rentals are classiﬁed as Type 2 3) 35 percent of registered short-term rentals are classiﬁed as Type 3” The subject ordinance amendments would eliminate Type 3 and a large portion of Type 2 due to the increased owner 70 percent residency requirement. E) “On average, the assessed value of short-term rentals is 48 percent higher than housing units overall in Bozeman. The median assessed value of a short-term rental is also 49 percent higher than the median assessed value of a housing unit in Bozeman.” It would appear that STRs indeed pay an almost 50 percent higher amount of property tax in Bozeman than other housing units. How will approval of this ordinance proposal affect property tax revenue? F) “Short-term rentals are a signiﬁcant part of the lodging inventory. STRs comprise 43 percent of the overall bed base (in terms of room count), while hotels comprise 57 percent. In terms of units, STRs comprise 19 percent of the lodging inventory.” How will the shortfall of lodging inventory affect tourism and the local economy? G) “Tourism and lodging activity has increased substantially in Bozeman over the past decade. From 2012 to 2022, lodging tax revenue grew by 250 percent, although the vast majority of this growth occurred in 2012 and 2022.” Has the City Commission considered the economic impact of decreased property and lodging tax income, in addition to the lost business income from tourism? Has the City Commission considered the economic impact of lost employment that will result if the subject ordinance is approved? 2.) The 23281 Staff Report for the Short Term Rentals Text Amendment Ordinance 2149 only lists the ﬁscal effects as: “The proposed prohibition of Type 3 short term rentals in all zoning districts would result in a decrease in annual STR permit fee revenues, which currently go towards staff time used to review such permits and the annual cost of the STR software.” I would suggest that the staff be instructed to complete a more thorough ﬁscal impact analysis, that at a minimum, would include the impacts of: decreases in lodging tax; property tax; tourism; local business; employment opportunities; and sales tax revenue. The prohibition of Type 3 STRs and modiﬁcation of the owner residency requirements for Type 2 STRs will have a signiﬁcant ﬁscal and economic impact in Bozeman. 3.) After spending signiﬁcant time in Bozeman over the past eight (8) years, I have interacted with dozens of local residents, some of whom are good friends that permanently relocated to Bozeman. I have a full appreciation of the local economy, prevailing employment opportunities, and salary ranges. I deeply appreciate the sentiments of Bozeman residents who grew up in Bozeman and now ﬁnd it very difficult to afford to live in their own hometown. At the prevailing salary ranges in Bozeman, the increasing cost to purchase a home, and the increased cost of rentals, the local residents do indeed feel squeezed out of their own town. I have deep empathy for this feeling because I spent my life in Santa Fe, New Mexico, a city that depends on tourism and government for employment, much like Bozeman. I believe if the subject ordinance is approved, the affect on local residents will be mostly negative, not positive. STRs that make up 2.5 percent of the housing units in Bozeman are not causing the myriad of problems faced by the residents of Bozeman. Since governments regulate, it’s automatic to assume a revised regulation will solve the problem. But, what is the problem to be solved? The 2.5 percent of housing brings in tax income, sales income, employment, and wages. If these beneﬁts are eliminated or constrained, Bozeman will be the loser and the myriad of real Bozeman salary and property problems will not be solved. I request that you either don’t pass the subject proposal or you continue the public process and instruct staff to address the missing economic information highlighted above. After reading all the relevant documents, I believe this is an unnecessary and ill-justiﬁed regulatory amendment. If approved it will result in negative impacts for Bozeman, and most likely invite a class-action lawsuit by the STR Type 2 and 3 owners, who will most likely prevail. Please fully consider the resulting consequences if you do intend to approve such a targeted and unnecessary regulatory prohibition. Thank you for the opportunity to provide comments,