Loading...
HomeMy WebLinkAbout2 Staff Report for Short Term Rentals_Final1 JEFFERSON COUNTY PLANNING COMMISSION TO: Honorable Chair and Members of the Planning Commission FROM: Brent A. Butler, AICP, Chief Strategy Officer DATE: July 17, 2024 SUBJECT: Regulations governing rentals for less than 30 days STATEMENT OF ISSUE: This meeting is an opportunity to review the summary regulations proposed on July 3, 2024, and provide comment before staff drafts an ordinance. At the July 3, 2024 meeting, the Jefferson County Planning Commission (PC) reviewed the short-term rental (“STR”) input received at the three public workshops held on March 12, 13, and 14, 2024 and ultimately selected specific regulations that should be included in a draft ordinance in response to community concerns. BACKGROUND: Public outreach - Using the Planning Commission’s input and in consultation with the Board, the DCD Director, and the County Administrator, the Chief Strategy Officer (“CSO”) held three community sessions. One County Commissioner attended each session. Community members shared their comments, ideas, and provided examples of regulations that adequately address community concerns and quality of life issues related to STR. Several Planning Commissioner also attended and staff shared the results as part of the Planning Commission’s regular agenda on May 1 and 15, 2024. Scope of Action - Subject to the Planning Commission’s current review and analysis, STR are those rentals limited to less than 30 days in legally permitted Jefferson County housing and regulated in the Jefferson County Code (JCC), Chapter 18, United Development Code (UDC). The county’s STR regulations apply neither to STRs in the City of Port Townsend’s municipal boundaries nor STRs without an approved structure such as campsites. 1)2018 Comprehensive Plan The 2018 Jefferson County Comprehensive Plan (“CP”) states that the county shall: “Evaluate short- term rentals and consider policies to ensure a sufficient housing supply for year-round residents.” Furthermore, the CP’s Housing Action Plan’s Exhibit 3-7 specifically states: ❖“Evaluate short-term rentals using available local and state data sources. Determine if a registration program and limits on numbers, zones, or locations are appropriate to help ensure a sufficient housing supply for year-round residents.” 2 ❖ “Evaluate short-term rentals. To ensure such uses do not further restrict the housing supply for year-round residents, the County could examine the prevalence of short-term rentals and determine if a registration program and limits on numbers, zones, or locations are appropriate. 2) Moratorium on Short Term Rentals The June 10, 2024 Ordinance 03-0610-24 adopting a moratorium on STRs was confirmed at the regular meeting of the Board of County Commissioners (“BoCC” or “Board”) on July 8, 2024 continuing a limited term prohibition (moratorium) on new short term rental applications. This arises out of concern that the Department of Community Development (DCD) would receive a substantial number of STR permit applications during this research and review process. The BoCC established a five step workplan as set forth below: (1) Study the issues concerning short term rentals, (2) Prepare a draft ordinance with appropriate revisions, (3) Perform State Environmental Policy Act (SEPA) review of the ordinance, (4) Conduct a public review process. 3) Types of STRs Significant distinctions exist between transient rentals in structures for which a septic permit was designed and properly permitted and HIP Camp or glamping type accommodations, which may not include septic permit approvals unless permitted in accordance with the conditional use provisions of the Jefferson County Code (JCC). For purposes of this agenda item, HIP Camp type of short-term rentals are considered separately, and identified as transient rentals without structures. Considerations Affecting Both Types of Short-Term Rentals - The municipal research service center has broadly discussed the concerns associated with these types of uses and writes: 1. Lack of lodging and sales tax collection on these short-term rental stays; 2. Unregulated traffic, parking, and noise impacts on the surrounding neighborhood; and/or 3. Non-compliance with life/safety standards that are commonly applied to other types of lodging establishments (such as hotels, motels, and bed-and-breakfasts)?” You can access more information on this topic by going to: https://mrsc.org/stay-informed/mrsc- insight/february-2016/local-government-catching-up-with-airbnb 4) Short Term Rentals in Structures (STRS) Short term rentals, alternatively, are broadly permitted throughout the county in numerous zoning districts including: 1) Agriculture (AG), 2) Commercial Forest (CF), 3) Rural Forest (RF), 4) In- holding Forest (IF), 5) Rural Residential (RR):1:5, RR1:10, RR1:20 & 6) Rural Village Center (RVC). Master Planned Resorts - Jefferson County’s two master planned resorts, including the Port Ludlow Master Planned Resort and the Pleasant Harbor Master Planned Resort area in part 3 designed to accommodate short term rentals. In Port Ludlow, short term rentals are permissible in the RC/CF Zone. Additionally, the county code requires that at least 65% of the accommodations in the Pleasant Harbor Master Planned Resort consist of short-term rentals, as it is envisioned as a tourist destination. For specifics, please go to the Jefferson County Code Section 17.60.070 entitled, “Resort cap and residential use restrictions” and also JCC 18.15.123 entitled, “Allowable uses” Subsection (2) clearly states that short term visitor accommodations include but not limited to hotels, motels, lodges, and other residential uses…and shall constitute no less than 65% of rentals. It is also more broadly discussed in the definitions as permissible in Master Planned Resorts (see, 18.10.130 M definitions “Master Planned Resort”, and JCC 18.15.126 Requirements for master planned resorts) ANALYSIS At the July 3, 2024 Planning Commission meeting, members considered the regulatory schemes available in the seven core areas that were decided upon at May 15, 2024 Planning Commission meeting. Working with the Planning Commission, county staff distilled the concerns, comments, and ideas into seven subcategories as set forth the July 3, 2024 staff report as Table 1- Public Input Informed Research Matrix. Since some of the comments did not fall neatly within these seven areas, an eighth row entitled “other” is included. Table 1 is now amended to detail the PC preferences as identified at the July 3, 2024 PC meeting. To further inform the Planning Commission’s understanding of short-term rentals, county staff attached a copy of the National League of Cities’ Short Term Rental Regulations: A Guide for Local Governments, and also a June 2024 published study created by Rent Responsibly, which was transmitted to staff by a community member. According to Rent Responsibly’s website, Expedia Group, parent company of Vrbo, has been a long-time and valued partner of Rent Responsibly (see, https://www.rentresponsibly.org/about/ accessed online July 12, 2024). Highlights of Rental Responsibly’s findings are included as Attachment 1a along with the NLC’s guide as Attachment 1b. Additional research that the Planning Commission may undertake is the review of ordinances approved by local governments across the region, as thousands of varying approaches to the handling of short-term rentals is evident and no one size fits all. The Municipal Research Service Center (MRSC) writes: “While not going so far as Aspen, several Washington State cities have adopted plans and STR regulations that explicitly identify the impact on affordable housing as a major policy rationale. Examples include: • Chelan County Municipal Code Sec. 11.88.290(C) — This section on short-term rentals references affordable housing as one reason for regulation. • Kirkland Ordinance 4607— Cites housing affordability in the third ‘whereas.’ • Olympia Housing Action Plan— Strategy 2b states: “Adopt short-term rental regulations to minimize impacts on long-term housing availability.” • Walla Walla Municipal Code Sec. 20.139.010(B) — The purpose statement in the short-term rentals section cites regulation of STRs as “necessary to provide adequate housing opportunities to low- and moderate-income persons.” In addition to having a clear affordable housing policy statement, Chelan County has recently updated its STR regulations to provide more flexibility for owner-occupied units. These are categorized as “Tier 1” rentals and must meet one of the following characteristics: 4 1. Is a room in a dwelling in which the owner is personally present during the rental period; 2. Is a unit located on the same parcel as the owner’s principal residence and the owner is personally present during the rental period, or; 3. Is the entire dwelling, which is rented for no more than 15 total days in a calendar year provided that an on-site qualified person is there during the owner’s absence. STRs that don’t meet one of these three Tier 1 criteria are categorized as Tier 2 or Tier 3 and are more strictly regulated by the county, in large part due to affordable housing concerns. In fact, the Chelan County code requires that new short-term rentals deemed to be Tier 2 and/or Tier 3 “cannot be located in specified areas where short-term rentals make up more than the maximum share of the total housing stock in [those specifically identified] residential zoning districts...” For most of the specified areas in Chelan County, the maximum share is 6%, with two exceptions being the Manson urban growth area (UGA) at 9% and the Peshastin UGA at 0%. 5 July 3, 2024 Planning Commission Selection of Regulations Informed by the March 12, 13 and 14, 2024 Workshops TABLE 1: Public Input Informed Research Planning Commission Recommendation Matrix Subject Area March 12, 2024 Cape George March 13, 2024 Tri-Area March 14, 2024 Quilcene Enforceme nt In example 3, a jurisdiction limited numbers of cars and uses police to enforce parking violations In example 4, impose an immediate fine that’s removed upon compliance ✓ Questions 3 and 4. Using the county GIS see if there’s a permit(Customer Self Service Portal (CSS) is now live, so please go to the county landing webpage, https://jeffersoncountypublichealth. org/1729/Self-Service-Permit-Portal and; if there isn’t a permit, you should file a complaint or, alternatively, contact the Sheriff regarding a public nuisance ✓ Question 5 options – a) contract with a third-party, b) revising the code to require platform-based enforcement. In example 6, someone said we should have two enforcement procedures, ✓ one platform-based enforcement, and ✓ the other requirements for platform to post only those with valid permits County shall include two enforcement mechanisms, an example of which is set forth below, as Attachment 2. Limited Rentals 1) Question 6 options, ✓ population size-based cap, ✓ b) water availability-based cap, ✓ c) geography- and population-based caps (should not be based on number of houses but instead on population), ✓ d) STR permission conditioned upon long term rental(s) 4. Corporate Rentals ✓ Prohibit rentals for 1st two years, ✓ Require carbon-based life form to sign permit, ✓ Require annual permit renewal process 1) In example 1, an STR approval may have been conditioned upon a community benefit (in this case, a land dedication) 2) In Example 3, Cayucos, California approach to reduce density of STR is addressed by zoning. No two may be 100’ radius or 200’ linear feet from another ✓ In example 4, Portland, Oregon sets up a process akin to a CUP for larger STRs (6 or more) with six conditions for STRs with 5 or less occupants) ✓ NOT addressing one person owning multiple homes (Living in a house or adjacent to it is to remain although CK says yes, and MC says no) 1) In example 1, people residing near the forest may rely on rental income. 2) In example 2, someone said that caps unequally distribute the rental profits throughout the region. ✓ In example 3, someone suggested using limiting rentals to 10 percent of the housing stock (60 out of 600 homes in Quilcene), or requiring the owner to live nearby 6 3) Question 1 – if there’s a cap, should the county wait for the level to fall below the limit, wait for the next year’s annual permitting process (if adopted), 4) or offer to the next on a waitlist. 5) In question 2, someone said a Cap based on density should be adopted, e.g., ABC licenses in California are an example, when a census tract or block is oversaturated, then no alcohol serving businesses may be approved. ✓ In example 9, someone said that we should consider a requirement for carbon-based life forms to sign the agreement. A sample of West Hollywood’s approach to limiting corporate rentals is included as Attachment 3. Others are being reviewed, and will be included in a matrix. Owner Occupied versus other types ✓ In example 4, Portland, Maine, documents that they exempt both STR and long-term rentals that are landlord-occupied with fewer than five units (note: rental control is in place in this city) ✓ In example 8, someone shared that the tiered approach, which gives higher priority to resident- occupied housing should be prioritized. ✓ A copy of Chelan County’s ordinance is included as Attachment 4. Neighbor hood Impacts ✓ In example 1,-a Sedona, AZ homeowner shared his experience with a loss of community with a high concentration of STRs. ✓ In example 3, a community members shared concerns about speeding cars by STR occupants. 1) In question 7, someone suggested allowing unlimited rentals in areas not designated for residential use Tourism Balance 1) In question 4, someone asked about economic impacts, and income generated by platforms for which scant data is available. Education/ Outreach Notes: Since there are no specific public comments, the suggestions originate from the May 1 and 15, 2024 Planning Commission meetings 1) Commissioner Koan recommends and annual public outreach using social media and other media sources to share the requirements regarding STRs. Life Safety Notes: Since there are no specific comments documented regarding this, comments originate from the May 1 and 15, 2024 Planning Commission meetings 1) Commissioner Coker stated that the egress window requirements may benefit firefighters by enabling them to access the structures from the outside 2) DCD issues a permit with conditions to address specific life-safety requirements (see Attachment 1- Conditions addressing life safety requirements). Other ✓ Example 2 - Family related impacts (forced to move in high season) 1) In questions 3, staff researched what someone said about prices, namely that Airbnb increases housing prices. A survey of the literature suggests that this may be true. 1) In example 5, someone asked the impact of proposed leases on corporate rentals like Jefferson Healthcare 7 2) In example 7, someone shared the Sedona offers money if you provide short term rentals LEGEND ✓ Check marks that the regulations shall be incorporated in the proposed ordinance Strike-through denoted by strike-through means that they idea shall not be incorporated RECOMMENDATION: Confirm that Table 1 represents the regulations that shall be incorporated in a draft STR ordinance and direct staff to prepare an ordinance that shall be subject to a public hearing pursuant to JCC 18.45.090. ATTACHMENT 1a: Rent Responsibly’s Key Findings, and Report ATTACHMENT 1b: National League of City’s Short Term Rental Regulations: A Guide ATTACHMENT 2: Sample Enforcement Provisions in the City of Seattle ATTACHMENT 3: Corporate Rental Prohibition in City of West Hollywood ATTACHMENT 4: Chelan County’s Ordinance updated tiered approach to limiting rentals 8 ATTACHMENT 1a – Rent Responsibly’s Findings State of the STR Industry Report - June 2024 (rentresponsibly.org) https://www.rentresponsibly.org/wp-content/uploads/2024/03/State-of-the-STR-Industry-Report-June- 2024.pdf?utm_campaign=%5BRR%5D%20National%20Events&utm_medium=email&_hsenc=p2ANqtz-_iJqKM- oH2s4DBgAnlvri_mfgcPdpjiCoBPYYjYSCDGf4oauI5znFdNLRajvrp43ibNSJDf7AUFJVe0Wv1yOMyiE7rUdY_3mFuFaLc D3qDLLuJh0A&_hsmi=312078836&utm_content=312078836&utm_source=hs_automation Key Findings A Small-Business Industry ● On average, owners owned 1.9 properties, with more than two-thirds owning one. Nine in 10 owners self-manage their STR(s). ● More than seven in 10 respondents (71.8%) were 50 years old or older. ● Four in five STR owners use their property personally for some amount of time each year, and one in three STR owners use their property for more than short-term rentals only. ● STRs are a supplemental income source for a majority of owners (they rely on hosting for 27% of their income on average). About half of owners (44.1%) earned 41% or more of their income through short- term renting. One in four made no profit or lost money, while 47.8% made up to $24,999 in profit. ● The most common reason respondents elected to rent their homes was that they purchased or built a vacation home (42%), followed by the desire to host guests and travelers, purchasing or building a home for retirement, and covering the costs of improving a property. Local Economic Impact ● Locally owned and operated businesses were supported by 94.6% of the respondents via purchases and referrals, and the most common amenity hosts offer to their guests is personalized recommendations to local restaurants, attractions, and activities. ● Most STR operators (75%) catered primarily to families, followed by wellness travelers, public event attendees, and corporate travelers. ● 68% of managers employed full-time employees, and 72% employed part-time employees. ● A majority of government officials rank tourism as important to their local economies, and government officials rank guest spending as highly important to their jurisdiction, second only to property values. Furthermore, elected officials often cited the amount of guest spending driven by STRs as data that helps inform policy decisions. Housing ● 83% of government respondents reported their jurisdiction is facing an affordable housing shortage, citing the following as the top three factors having the biggest negative impact on their affordable housing supply: 1. Cost of building new housing 2. Real estate values 3. Lack of space to build new housing ● Across the various solutions that government officials have implemented to alleviate affordable housing 9 issues, those that were deemed most effective focused on increasing new housing supply in their jurisdictions. The three strategies that respondents ranked highest were: ● Opened new space to build new housing (55.3%) ● Supplemented the cost of or otherwise incentivized building new housing (50.5%) ● Created more favorable zoning policies (45.9%) Current STR Regulations ● Government officials have mixed views on STRs but lean positive with 48% reporting a favorable opinion, compared to 30.1% with an unfavorable opinion and the remainder neutral or unsure. Positive sentiment tended to drop with age, and respondents who had stayed in an STR more frequently reported positive sentiments than those who had not. ● Two-thirds of government staff reported less than 10 verified complaints against short-term rentals in the last 12 months, including one in five who reported zero. ● Around half of the respondents indicated their jurisdiction has an existing STR ordinance. ○ Of those with an STR ordinance, 22.4% thought it would be modified in the next 12 months. ○ Of those without an STR ordinance, more than half felt one was needed, and about one in four expected their jurisdiction to enact one in the next 12 months. 4 ● Of jurisdictions with STR ordinances, the top three ordinance provisions respondents said were working well for their communities were: 1. Permit or license requirements and fees 2. Local responsible party requirements 3. Parking management requirements The lowest-rated provisions were the requirement that the host lives on-site and density limits. Local STR Policymaking ● More than half of elected officials said STRs were an important issue but not their top legislative priority, and 82% of elected officials said they didn’t have an adequate amount of information on STRs to inform their policy decisions. ● Through multiple questions, both elected officials and government staff reported that the top challenge in managing short-term rentals was knowing where and how many were in their jurisdiction. ● More than 55% of STR operators want their local government to involve them more in the ordinance process, and more than 40% of all respondents plan to participate in advocacy in the next 12 months. 10 Attachment 1b: National League of Cities NATIONAL LEAGUE OF CITIES Short-Term Rental Regulations: A GUIDE FOR LOCAL GOVERNMENTS NATIONAL LEAGUE OF CITIES About the National League of Cities The National League of Cities (NLC) is the voice of America’s cities, towns and villages, representing more than 200 million people. NLC works to strengthen local leadership, influence federal policy and drive innovative solutions. NLC’s Center for City Solutions provides research and analysis on key topics and trends important to cities, creative solutions to improve the quality of life in communities, inspiration and ideas for local officials to use in tackling tough issues, and opportunities for city leaders to connect with peers, share experiences and learn about innovative approaches in cities. 2022 ©National League of Cities. All Rights Reserved. All photo credited to Getty Images, 2022. Authors Tina Lee, Senior Research Specialist, National League of Cities Lauren Lowery, Director, Housing & Community Development, National League of Cities Lena Geraghty, Director, Sustainability and Innovation, National League of Cities Kyle Funk, Program Specialist, National League of Cities Samantha Carr, Housing & Community Development Intern, National League of Cities Acknowledgments The authors wish to recognize Matthew Disler of the Harvard Berkman Klein Center for Internet & Society for his contributions to this report and Kristin Szakos for copy editing. The authors also wish to thank the city staff and elected officials who agreed to be interviewed to inform this report, including those from Fayetteville, AR, San Diego, CA, Charleston, SC, Lake Placid, NY, Columbus, OH, and Henderson, NV. Contents 4 Foreword 7 Introduction 8 Defining Short-Term Rentals 8 What is a Short-Term Rental? 9 What Can Communities Regulate? 10 The Issue 12 Recommendations: Short-Term Rental Regulations 14 Understand the Landscape 14 Gather Data 15 Engage a Diverse Group of Stakeholders 18 Identify Policy Goal(s) 20 Develop and Pass Regulations 20 Apply a Racial Equity Lens 21 Pass Regulations Early 21 Craft Simple Regulations 24 Institute a Permit Requirement 25 Determine Fines and Fees 27 Establish a Clear Taxing Model 28 Negotiate an Agreement with Platforms 30 Enforcement 30 Dedicate Resources to Enforcement 32 Ensure Extensive Communication and Marketing 33 Move Registration and Administration Systems Online 35 Revisit and Adapt 35 Establish a Feedback Loop 37 Conclusion 38 Appendix 38 Voluntary Collection Agreements (VCAs) 40 Endnotes INTERACTIVE 4 Short-Term Rental Regulations: A Guide for Local Governments Foreword IN RECENT YEARS, short-term rentals have increased in cities, towns and villages across the United States. As a result of this growth, local leaders have had to grapple with competing benefits and challenges – in particular, how to ensure a healthy stock of affordable housing and how to support local tourism and economic development opportunities. One of the top priorities for city leaders today is to ensure that residents and visitors to their communities have access to safe, affordable lodging. These competing priorities make passing regulations difficult, which is why it’s not surprising that short-term rentals have become a common topic of discussion among our members at the National League of Cities (NLC). Members faced with these challenges often ask us: “What tools are available to assist me with regulating short-term rentals in my community?” This persistent question led NLC to research short-term rental regulations in cities across the country and ultimately produce Short-Term Rental Regulations: A Guide for Local Governments. Based on an analysis of 60 short-term rental ordinances, this action guide lays out a detailed overview of best practices for cities to develop and pass short-term rental regulations in their communities. While no two municipalities face the same opportunities and challenges when it comes to regulating short-term rentals, this research provides insight into how to chart a path forward successfully. This guide recommends local leaders create and enforce firm and fair regulations by focusing on clear policy objectives, centering racial equity as a critical component in their planning and actively engaging with relevant stakeholders throughout the process. Short-term rentals can open a swath of opportunity for homeowners looking to make additional dollars, while also providing economic development opportunities in neighborhoods that may not generally see high levels of tourism. By bringing community and industry leaders together, local leaders can create policies that work for both – and maximize the potential value of short-term rentals for hosts, guests and neighbors alike, all while protecting the affordability of neighborhoods. While short-term rentals are a prominent issue today, this challenge is not a new one for local leaders. There are often difficulties that come with maximizing economic growth while protecting community interests. Mayors, councilmembers and other local elected officials are well-equipped to help bring stakeholders together to understand and navigate potential trade-offs. Local leaders have an incredibly important role to play in capitalizing on the benefits of short-term rentals and minimizing potential negative impacts. I hope this resource will help your community make decisions about short-term rentals that are best for your residents. Clarence E. Anthony CEO AND EXECUTIVE DIRECTOR National League of Cities NATIONAL LEAGUE OF CITIES 7 Introduction THE RAPID GROWTH of short-term rentals in cities, towns and villages across the U.S. has caused much controversy. From contentious City Hall meetings where residents advocate for more stringent or more relaxed regulations to lengthy and expensive legal battles between cities and short-term rental platforms, cities can get caught in the cross-hairs of a complicated policy issue. Short-term rentals present no shortage of challenges for local leaders, as they can affect housing availability and affordability, local tourism and economic development, neighborhood wellbeing, and health and safety. However, many cities have learned important lessons in navigating these complex issues and offer some best practices for others to learn from. Regulation of short-term rentals has proven to be an important and effective tool in making short-term rentals work for all parts of the community. Regulations that define what short-term rentals are and have appropriate mechanisms in place should intervention be necessary have helped city leaders steer the conversation toward solutions and meeting community needs. The purpose of regulating short-term rentals is not to be overly punitive or to prohibit them, but to put safeguards and appropriate enforcement mechanisms in place for when problems arise. This Action Guide will not settle debates about the specific impacts of short- term rentals on each community. Instead, it aims to equip local leaders with appropriate information and tools to adopt or amend ordinances that serve their community best: policies that are equitable; that protect municipal interests such as health and safety and housing affordability; that preserve the residential quality of neighborhoods; and that enable responsible and eligible residents to earn some additional income. NATIONAL LEAGUE OF CITIES 9 9 What Can Communities Regulate? Regulations vary, depending on the needs of the locality issuing them. In a community where vacant properties are a problem, regulations might focus on upkeep and oversight. In a community where housing stock is scarce, regulations might be put in place to limit the number of properties lost to residential rentals. Generally, however, regulations include some combination of the following provisions: PROVISIONS DETAILS LOCATION AND USE Geographic limits: Cities can decide to limit the availability of STRs in specific areas of cities, such as particular residential areas or neighborhoods with specific historic character. Commercial-residential distinctions: Cities can establish different rules for properties in residential and commercial areas to account for the different interests of communities in each of these areas. TIMING Primary residence requirements: Cities can require that the STR is occupied by the host for most of the year, and/or that the rental is in or part of the owner’s primary residence. Day limits: Cities can include provisions capping the number of days per year that hosts can rent their STR. MANNER OF RENTAL Registration and licensing: Cities can require hosts to register their properties with the city and can require rental platforms (e.g., Airbnb, Vrbo, etc.) to ensure that properties listed on their sites are properly registered. Taxes: Cities can require that hosts pay transient occupancy taxes, which are taxes on what guests pay for temporary lodging in the city and are usually collected and remitted by hotels, motels and similar businesses. Cities can also work with STR platforms and other third-party providers to minimize the burden of tax remittance. Occupancy limits: Cities can limit the number of guests per stay, usually by establishing a guests-per-bedroom or per-property cap. Health and safety regulations: Cities can require STRs to have fire safety equipment and carbon monoxide detectors; display emergency information for guests; adopt measures to maintain a sanitary residence; and adopt plans for emergencies, among other requirements. Noise and event regulations: Cities can restrict the use of STRs for large gatherings and events, and they may explicitly require that guests comply with existing noise, trash and parking ordinances. Defining Short-Term Rentals What is a Short-Term Rental? In general, short-term rental (STR) refers to an activity in which one party, the “host,” agrees to rent out all or part of a home to another party, the “guest,” on a temporary, time-limited basis. The precise legal definition of a short-term rental varies by community. Most short-term rental ordinances include details on the following types of provisions that define short-term rentals for a particular community: LOCATION AND USE: Where and how many short-term rentals are allowed TIMING: How long short-term rentals can be rented for MANNER OF RENTAL: Additional requirements for hosts and guests NATIONAL LEAGUE OF CITIES 11 The Issue Short-term rentals are not a new concept. Companies like Vrbo, HomeAway, Couchsurfing and Craigslist have offered consumers short-term rental options since the late 1990s without much controversy.1 The meteoric growth of the short-term rental industry in the 2010s changed that. Companies like Airbnb, Vrbo, HomeAway and FlipKey grew in popularity while consumer appetite for more original, authentic and local experiences increased, driving demand higher. As short-term rentals become more accessible to both hosts and users, use skyrocketed over a short period. But the meteoric success of short-term rental platforms has not been welcomed unreservedly. Common complaints are that short-term rentals can drive up local rents, limit the availability of long-term residential rentals, attract an influx of tourists and create excessive noise.2 Local leaders attempting to chart the pathway forward for short-term rentals in their communities must respond to many competing interests, making passing regulations and balancing those interests difficult. Some of these issues that must be considered include: Housing The research is divided on whether short-term rentals contribute to the housing crisis. Regardless of whether the exact impact on the housing market is measurable, it is undeniable that many cities in the U.S. face a housing crisis – due to a shortage of affordable housing, steady decline in federal investment in low-income housing, wage growth stagnation, etc. – and that short-term rentals may contribute to housing unaffordability and unavailability. Tourism Short-term rentals outside of the typical tourism areas in cities can be a boon to local economies, spreading dollars across the cities in ways that traditional lodging accommodations do not. On the other hand, cities with high tourism rates face a greater share of the negative impacts of short-term rentals in communities. In high-tourism communities, large numbers of whole home rentals can affect neighborhood cohesion, as they may stand empty for weeks at a time or experience high turnover in guests. Preemption Preemptive state laws can limit cities’ ability to regulate short-term rentals. The impacts of preemptive laws can range from a complete inability to regulate, to restrictions on the kinds of regulations that can be imposed. Public Health and Safety Poorly regulated and unsupervised short-term rentals can threaten the safety of neighborhoods for residents and guests alike. Party houses have become a significant point of contention in some communities. Guests may ignore or be unaware of noise, trash and parking ordinances. For myriad reasons — both within and outside of city control — cities may find it difficult to enforce the regulations they do have. Some ordinances are difficult for hosts and residents to understand and difficult for the city to enforce because they are overly complicated or poorly publicized. In other instances, cities may have no systematic way to identify hosts who are not in compliance or to keep track of what properties are being used for short-term rentals, and when. Understanding the most common barriers to effective regulation — unclear rules and lack of data — is key to making sound policy choices. Despite the limitations and challenges that city leaders face, local leaders can pass regulations that effectively balance competing interests, fit community needs, and most critically, are enforceable. NATIONAL LEAGUE OF CITIES 13 THE NATIONAL LEAGUE of Cities analyzed 60 short-term rental ordinances to inform this report across 30 indicators, including the legal definition of short-term rentals, regulations and enforcement. At least one city, town or village was selected in each state, with two cities, towns or villages selected for the top ten states by population (California, Texas, Florida, New York, Pennsylvania, Illinois, Ohio, Georgia, North Carolina and Michigan) to ensure that a diversity of local context was represented in the analysis. The recommendation sections (Understand the Landscape, Develop and Pass Regulations, Enforcement, and Revisit and Adapt) are meant to build off each other and should therefore be executed in chronological order. They are detailed in the section below. Recommendations: Short-Term Rental Regulations This Action Guide will help local leaders break down the process of developing a short-term rental ordinance, provide relevant city examples and identify key tips. The following recommendations are a menu of policy principles and good practices that cities should explore when establishing or updating their regulations, based on research into short-term rental ordinances and policies across the country. UNDERSTAND THE LANDSCAPE DEVELOP AND PASS REGULATIONS ENFORCEMENT REVISIT AND ADAPT  ŠGather Data  ŠEngage a Diverse Group of Stakeholders  ŠIdentify Policy Goal(s)  ŠApply a Racial Equity Lens  ŠPass Regulations Early  ŠCraft Simple Regulations  ŠInstitute a Permit Requirement  ŠDetermine Fines and Fees  ŠEstablish a Clear Taxing Model  ŠNegotiate an Agreement with Platforms  ŠDedicate Resources to Enforcement  ŠEnsure Extensive Communication and Marketing  ŠMove Registration and Administration Systems Online  ŠEstablish a Feedback Loop NATIONAL LEAGUE OF CITIES 15 14 Short-Term Rental Regulations: A Guide for Local Governments UNDERSTAND THE LANDSCAPE Before passing regulations, understand the local short-term rental landscape. This should involve extensive information gathering and thorough engagement with relevant stakeholders. Be mindful of what issues are associated with short-term rentals in your community to determine the goals your policy should meet. GATHER DATA While anecdotes are powerful, they are not a proxy for actual data to estimate the number and location of short-term rentals operating in a community. In some cases, data may be available through third-party platforms such as Inside Airbnb or AirDNA. Knowing approximately how many units may be on the market is critical to understanding the scope of the issue. KEY DATA POINTS INCLUDE: How many short-term rentals are operating in your community? What is the breakdown between hosted room rentals vs. whole home rentals? Where are short-term rentals operating in your community? What neighborhoods are most affected? What is the average daily price of short-term rentals vs. hotels? What is the occupancy rate of short-term rentals vs. hotels? How much revenue are short-term rental properties generating vs. hotels? Additional data sources that can help supplement short-term rental-specific data to develop a comprehensive picture of the local landscape can include tourism, housing and complaint data. Connect with local tourism boards to gather information such as how much money visitors are spending, where visitors are spending their money, where they are staying, where they are spending their time and how long they are staying. Leverage data sources such as the American Community Survey to understand the breakdown in renter vs. homeownership BULLSEYE-POINTER rates, vacancy rates and demographic information in different neighborhoods to contextualize short-term rentals in the broader housing landscape. Records of noise and nuisance complaints (e.g., through 311 calls or similar complaint or service request software) can also help cities understand where these complaints are filed and what they are. ENGAGE A DIVERSE GROUP OF STAKEHOLDERS Engage a network of stakeholders, including but not limited to tenants, landlords/homeowners, hotel and motel industry representatives, neighborhood organizations, housing advocates, tourism agencies and short-term rental platforms. This mix will look different for each city, but identifying relevant stakeholders will be key to understanding the challenges and opportunities each city faces. Hold virtual or in-person town hall meetings, drop in on various group meetings (e.g., landlord associations, property owner groups, neighborhood associations, etc.) and solicit comments from members of the public to gauge the perceptions of short-term rentals directly from community members. Cities can, for example, work with neighborhood associations to map areas especially strained by short- term rentals or tourism. Residents have the closest ear to the ground. City leaders should leverage this knowledge to their advantage. Cities have a lot to gain by partnering with platforms, but the relationship-building process can be contentious at times. These relationships are more likely to be positive when cities come to the discussion table with a clear goal in mind and communicate it with the platforms. POTENTIAL STAKEHOLDERS INCLUDE: Motel and lodge union or association Hotels or hotel union or association Realtor groups or associations Restaurant associations City Council Local planning groups and organizations Existing short-term rental operators Platforms (e.g., Airbnb, Expedia, etc.) Neighborhood associations Housing advocates Tourism agencies BULLSEYE-POINTER NATIONAL LEAGUE OF CITIES 17 16 Short-Term Rental Regulations: A Guide for Local Governments CITY SPOTLIGHT: SAN DIEGO, CA While drafting its short-term rental ordinance, the City of San Diego engaged a wide variety of stakeholders including: C ITY SPOTLIGHT: FAYETTEVILLE, AR In 2018, the City of Fayetteville’s Sustainability Department worked with the University of Arkansas’ Public Policy Department to explore short-term rentals. The students leveraged data sources such as AirDNA to gather the following information: ŠActive rentals ŠAverage booked properties ŠOccupancy rate ŠAverage booking rate per night ŠAverage Airbnb private room price (Fayetteville) ŠAverage hotel room price (Fayetteville) ŠAverage Airbnb private room price (Downtown Fayetteville) ŠAverage hotel room price (Downtown Fayetteville)3 Based on this information, the students generated maps of short-term rental locations in the Fayetteville area, noting a large concentration of Airbnb rentals in the downtown area. This analysis was presented to city staff and elected officials in December 2018 to inform their discussion on short-term rentals in Fayetteville. ŠUnite Here, a union for motel/lodges ŠNeighborhood groups ŠHotel stakeholders, including the hotel/motel association ŠRealtor groups and associations ŠThe restaurant association ŠCity Council ŠLocal planning boards and organizations ŠPre-existing STR operators ŠExpedia Group and Airbnb A staff member from the San Diego City Council conducted meetings with the stakeholders. The meeting format and length varied. The city representative sometimes met stakeholders individually or invited them to speak at public meetings. Those interested in engaging longer-term were invited to a permanent stakeholder group. The stakeholder group continues to provide input on short-term rental regulation implementation. Compromise was eventually reached, most notably in the form of a memorandum of understanding (MOU) between Unite Here and Expedia Group. Through the MOU, these two major stakeholders with different perspectives agreed to partner to help regulate the short-term rental market. The MOU also laid the foundation for the regulations that the city would push forward when engaging with other stakeholder groups. Following this engagement process, the ordinance was presented to the public, Planning Commission, mayor and Coastal Commission. The city found that putting the time in to build relationships and establish trust between the municipality and short-term rental platforms was essential to the ordinance’s success. Further, going into the process with a clear goal, while being mindful of what compromises could be made, allowed the city to achieve buy-in from a diversity of stakeholders. NATIONAL LEAGUE OF CITIES 19 18 Short-Term Rental Regulations: A Guide for Local Governments CITY SPOTLIGHT: CHARLESTON, SC The City of Charleston began regulating short-term rentals in 2012, when it adopted regulations that allowed commercially zoned properties to be rented as short-term rentals in the Cannonborough Elliotborough neighborhood. The goal of the regulation was to bring reinvestment into vacant, abandoned and distressed properties in the neighborhood. In subsequent years, the city saw an increase in the number of short-term rental units in Cannonborough Elliotborough and throughout Charleston. With a growing number of short-term rentals and an incoming mayor interested in revisiting short-term rental regulations, the policy moved to the forefront of Charleston’s agenda again. In 2016, the mayor and City Council began the process of updating short-term rental regulations by appointing a committee of local citizens to study and provide recommendations on short-term rentals. The committee included residents, representatives of the city’s preservation and historical societies, and tourism interests. Over time, a consensus was built around the goal to preserve the historic nature of downtown Charleston and allow short-term rentals to contribute to the local tourism economy, but only in such a way that did not alter the character of the city and negatively affect residents’ quality of life. Based on this consensus, the city developed a category-based short-term rental permitting system that requires most short-term rentals to be owner- occupied, and details additional requirements for properties located in downtown Charleston or in properties listed with the National Register of Historic Places. IDENTIFY POLICY GOAL(S) Develop a clear and concise policy goal for the short-term rental ordinance, driven by the city’s overarching goals and community input. Review strategic city plans (e.g., comprehensive housing plans, 5- and 10-year city visions, master plans) and identify top city priorities that may dovetail with priorities for short- term rentals. For example, a city may have a broader goal to advance housing affordability and may choose to focus on preserving the stock of affordable housing as a policy goal. Or a city may have the broader goal to attract more tourism and choose to focus its regulations on enabling short-term rentals with appropriate guardrails in place as the tourism industry continues to grow. Cities should be intentional about setting a goal or priority before drafting regulations. Without a clear “end goal,” cities can pass regulations that may not align with community priorities, and do not have effective mechanisms to accomplish them. By deciding on a policy and community goal, cities can craft a simpler and more targeted ordinance. Common goals, based on NLC’s analysis of 60 cities, include: ŠPrevent the loss of rental housing stock ŠSlow or prevent the overgrowth of STRs ŠBalance the needs and rights of property owners and neighbors ŠSupport tourism in a balanced way ŠCapture tax revenue ŠPreserve the residential quality of neighborhoods ŠCombat displacement ŠEnsure health and safety for guests and residents ŠAllow economic gain for residents KEY CONSIDERATION Balance competing expectations. By their nature, short-term rentals can be a contentious issue, with strongly vested interests on all sides. Each stakeholder will have to make concessions from their vision of “ideal” regulations, so helping the community and STR platforms understand that compromise is needed is critical to setting realistic expectations. Having a clear policy goal will also help coalesce stakeholders around the city’s broader vision and help justify policy choices. BULLSEYE-POINTER NATIONAL LEAGUE OF CITIES 21 20 Short-Term Rental Regulations: A Guide for Local Governments DEVELOP AND PASS REGULATIONS As the short-term rental industry continues to mature, it has become clear that complex regulations are not only cumbersome for hosts and residents of the city but are also unenforceable. Policies with clear goals, fair implementation and mechanisms for enforcement will help everyone. APPLY A RACIAL EQUITY LENS One of the most commonly cited benefits of short-term rentals is that they allow hosts to generate extra income from existing assets. While this may be true, hosting is most commonly available to those who own a home. Homeownership is inseparable from race and inequality in America. According to the latest estimates from the U.S. Census Bureau, the homeownership gap between White and Black households was 30 percent in 2020.4 According to NLC’s ordinance analysis, only 38 percent of cities surveyed specifically allowed tenants to host a short-term rental. Even then, cities that do explicitly state that tenants are allowed to host require them to acquire written consent from their landlords or a have a rental contract that allows them to sublet their unit. Tenants face a high barrier to host even in the minority of cities that allow them to. The ability of short-term rentals to democratize the tourism industry is overstated when a majority of Black, Indigenous and People of Color (BIPOC) do not have access to homeownership. Given the divide in homeownership in America, the direct economic benefit of short-term rentals may exacerbate existing inequality. There is also evidence that hosts may discriminate based on race and ethnicity. A 2017 study of Airbnb data found that “applications from guests with distinctively African-American names are 16 percent less likely to be accepted relative to identical guests with distinctively White names.”5 Airbnb has since made moves to fight bias and discrimination, including changing when guest pictures are shown to a host in the booking process.6 The city of Columbus, OH, passed a discrimination clause in its ordinance stipulating that a host shall not decline a potential guest, impose different terms or conditions, or discourage or indicate a preference for or against a guest based on race, gender, sexual orientation, gender identity or expression, color, religion, ancestry, national origin, age, disability, familial status or military status.7 KEY CONSIDERATION Recognize the role that short-term rentals play in exacerbating housing unaffordability. Consider dedicating some portion of STR permit or tax revenue towards affordable housing funds or homeownership opportunities, or earmarking general fund dollars for similar programs. Boulder, CO stipulates in its ordinance that “after administration expenses are met, any additional funds shall be placed in the city’s affordable housing fund."8 PASS REGULATIONS EARLY The short-term rental industry is rapidly growing. Given the complexity of the policy and regulatory space, be proactive and establish regulations before short-term rentals have a negative impact on the community. Establishing regulations gives cities the power to intervene when necessary. It is much easier to limit the spread of short-term rentals before they have proliferated than it is to retroactively remove them from the market. Establishing regulations also becomes increasingly controversial as more stakeholders have a vested interest in seeing them maintained. Even cities that have not yet faced the negative impacts of short-term rentals should pass regulations to regulate the STR market before they proliferate. KEY CONSIDERATION A common hurdle that cities face is what to do with pre-existing short-term rentals once a new ordinance is passed. In 58 percent of the cities reviewed in the NLC ordinance analysis, cities required existing hosts to comply with regulations or apply for a permit or license. Cities must communicate early and clearly with existing hosts about their responsibilities under a newly passed or revised ordinance to give them time to meet new regulations. CRAFT SIMPLE REGULATIONS Craft simple ordinances that are clear about policy goals. This will better equip leaders to engage in conversation with platforms, residents, property owners and other stakeholders invested in the ordinance outcome. Below is a list of common goals found in the ordinance analysis, and key ordinance elements to achieve those goals. BULLSEYE-POINTER BULLSEYE-POINTER 38% of cities surveyed specifically allowed tenants to host a short- term rental. NATIONAL LEAGUE OF CITIES 23 22 Short-Term Rental Regulations: A Guide for Local Governments Policy Levers to Pull to Achieve Common Policy Goals POLICY GOAL POLICY LEVERS PREVENT THE LOSS OF RENTAL HOUSING Prevent long-term rental properties from being converted to short-term rentals. Adopt a permit requirement and institute a host residency requirement, which should prevent homeowners from renting properties solely as short-term rentals and prevent properties from being purchased for the sole purpose of operating as short-term rentals. SLOW OR PREVENT THE OVERGROWTH OF STRS Prevent residential neighborhoods from being “overtaken” by guests to the detrimental of the neighborhood and residential feel of a neighborhood. Adopt a permit requirement and set a specific quota (number or percentage) on the number of short-term rental permits that will be distributed in a particular geographic area (e.g., neighborhood, census tract, ZIP code, etc.). COMBAT DISPLACEMENT The presence of short-term rentals can be particularly contentious in certain neighborhoods (e.g., neighborhoods that are experiencing displacement). Adopt a permit requirement and set a quota on the number of short- term rentals that are allowed to operate in a specific zoning district or neighborhood, particularly areas of the city that are at risk of, or are currently experiencing displacement pressure. Beware that such quotas can limit existing low-income homeowners’ ability to earn revenues from their homes. Therefore, consider how to equitably distribute permits. Consider dedicating some revenue generated from permit fees or taxes to affordable housing or home-ownership programs. Explicitly restrict affordable housing units from being rented out as short-term rentals. PRESERVE THE RESIDENTIAL QUALITY OF NEIGHBORHOODS Limit problem properties such as party houses or houses with complaints. Adopt a permit requirement and include a limit to the number of people that can stay in a short-term rental. This limit can be tied to the number of bedrooms in a short-term rental, or a total cap on the number that can stay in any type of property. A common limit that cities institute is two adults per bedroom. Require that short-term rental hosts provide their guests with a “Good Neighbor Guide” that summarizes all ordinances that guests are required to comply with during their stay (e.g., noise, trash, parking, etc.). Set restrictions on the number or percentage of short-term rentals that are allowed to operate in a particular neighborhood (or other geographic areas, such as census tract, ZIP code, etc.). BALANCE THE NEEDS AND RIGHTS OF PROPERTY OWNERS AND NEIGHBORS While lawful hosts have the right to rent their properties out, they should not infringe on the rights of neighbors. Enable hosts to rent out their homes while also ensuring that residents know where and how to file a complaint. Adopt a permit requirement and establish a process for revoking permits from properties in violation, such as a “three strikes” rule. If three verified complaints are filed within a certain time, the city can revoke a host’s permit. Establish a 24/7 hotline that residents can phone to report non-emergencies without calling the local police department or law enforcement. Require short-term rental permit hosts to list a local contact who can be reached should an issue arise.9 POLICY GOAL POLICY LEVERS ENSURE HEALTH AND SAFETY OF GUESTS AND RESIDENTS Ensure the safety of guests and residents, including minimizing public safety risks and noise and trash complaints. Adopt a permit requirement that requires each listing to include a local contact who can be reached at any time. Use this emergency contact if a complaint is filed. Stipulate that if the registered contact is not responsive, the host’s permit risks being terminated. Institute a permanent residency requirement. City leaders report that most complaints come from non-owner-occupied units. Hosts may be more invested in their property if they, too, call it home. Require that short-term rental hosts provide their guests with a “Good Neighbor Guide” that summarizes all ordinances that guests are required to comply with during their stay (e.g., noise, trash, parking, etc.). Require an inspection, or, if the city cannot carry out inspections, stipulate that the city has the right to inspect a property should sufficient suspicion arise that the property is not up to code. Institute a process for revoking permits from properties in violation, such as a “three strikes” rule. If three verified complaints are filed within a certain time, the city can revoke a host’s permit. CAPTURING TAX REVENUE Ensure that revenue is being collected. Adopt a permit requirement that will make it easier to identify whether hosts are complying and paying the appropriate taxes. Use permit and tax revenue to either hire additional staff or a third-party provider to help monitor compliance. Reach an agreement with platforms that requires them to automatically collect and remit taxes back to the city. Be wary of the transparency of the tax remittance process and ensure that the city’s enforcement powers are not stifled. SUPPORT TOURISM IN A BALANCED WAY Tourism is a key component to many local economies and short-term rentals can play a role in facilitating tourism without impacting residents if done in a balanced way. Adopt a permit requirement and set an annual permit reapplication. Make clear that applications can be denied if regulations change. Adopting a formal permit requirement will not deter hosts from participating, so long as the permitting process is not overly cumbersome. Ensure the permit fees are reasonable and tied to the cost of administering the permit program. ALLOW FOR ECONOMIC GAIN FOR RESIDENTS Short-term rentals can support wealth building for community members, although city leaders must pay attention to who is eligible to host. Adopt a permit requirement. The permit system should be simple and easy to navigate, particularly if the city is trying to encourage more permanent residents to host on a part-time basis. If the administrative burden is too high, few will be willing to put in the effort. NATIONAL LEAGUE OF CITIES 25 24 Short-Term Rental Regulations: A Guide for Local Governments INSTITUTE A PERMIT REQUIREMENT Enforceable short-term rental ordinances require owners who want to host short- term rentals to acquire a permit before renting. In general, a permit requirement allows local governments to create and maintain a database of units and contact information for properties that are operating as short-term rentals. The information provided in an application is key to enforcing the ordinance, allowing the city to have a point of contact to check in with when a property is not in compliance.10 Without information on who is operating short-term rentals, cities are effectively rendered helpless in enforcing their regulations. Having an active database of short-term rentals in operation is key to moving from a reactive to a proactive approach to enforcement. To ensure that hosts are acquiring permits, the city must have a mechanism to check to ensure compliance. Some cities, like San Francisco, have negotiated agreements with platforms that require the platform to put a permit number on the host listing.11 In other cases, cities have hired third-party platforms to aid their enforcement efforts. The City of Nashville, TN, uses Granicus’s Host Compliance, a short-term rental compliance monitoring platform, to support enforcement efforts. According to Nashville officials, the Code Department was struggling to enforce its regulations when they were relying on a complaint-based process. The city was manually identifying STR addresses. With more than 60 active rental websites and private addresses and contact information, it proved to be too herculean an effort to maintain. Host Compliance’s online portal enables the city to identify illegal operators before there is a complaint, moving from reactive to proactive enforcement. Since implementing Host Compliance, Nashville has more than doubled its compliance rate to 91 percent.12 KEY CONSIDERATION Without a clear and streamlined application or licensing process, applications may backlog. This leads to an unhappy and distrustful community and may encourage illegal rentals to operate while they are in the process of being considered for a permit. In some cases, operators will purposely and continuously file for permits and operate while under consideration. Always tie the permit to the person, not the parcel. This will allow for natural attrition over time (e.g., someone sells their home, and the new owner must reapply for a short-term rental permit). BULLSEYE-POINTER DETERMINE FINES AND FEES Many cities adopt fine structures to incentivize compliance by short-term rental hosts. According to NLC’s analysis, fines range from $200 a day to $2,000 per violation, which may escalate each day. Beyond deciding the fine structure, cities must have adequate staff and resources to identify hosts who are not in compliance and communicate to hosts how to stay in compliance and avoid violations. Fines should be proportionate to or more than the economic gains that potential violators can realize from breaking the rules, and should escalate for repeat violators, including the threat of revocation of a permit or license. Host Compliance offers the following fines and fees schedule for cities to consider: Example Fine Schedule 1st violation 2nd violation 3rd violation 4th violation Fine for advertising a property for short-term rent (online or offline) without first having obtained a permit or complying with local listing requirements $200 per day $400 per day $650 per day Upon the fourth or subsequent violation in any twenty- four month period, the local government may suspend or revoke any permit. The suspension or revocation can be appealed.Fine for violating any other requirements of the local government’s short-term rental regulation $250 per day $500 per day $750 per day Notes: a. Any person found to be in violation of this regulation in a civil case brought by a law enforcement agency shall be ordered to reimburse the local government and other participating law enforcement agencies their full investigative costs, pay all back-owed taxes, and remit all illegally obtained short-term rental revenue proceeds to the local government. b. Any unpaid fine will be subject to interest from the date on which the fine became due and payable to the local government until the date of payment. c. The remedies provided for in this fine schedule are in addition to, and not in lieu of, all other legal remedies, criminal or civil, which may be pursued by the local government to address any violation or other public nuisance. Source: Host Compliance NATIONAL LEAGUE OF CITIES 27 26 Short-Term Rental Regulations: A Guide for Local Governments CITY SPOTLIGHT: LAKE PLACID, NY The Village of Lake Placid collaborated with its justice court to define a short-term rental fine structure based on other successful cases. Lake Placid’s short-term rental fines range from $350 to $1,000 for the first violation plus the costs that the village has incurred for enforcement (e.g., staff time and attorney fees). Each week that the violation is not remedied constitutes a separate offense. The second violation that occurs within five years will incur a fine of between $1,000 and $3,000. Short-term rental violations can be appealed within 30 days to the joint Town of North Elba/ Village of Lake Placid Short-Term Rental Appeals Board by either the short- term rental property owner or the complainant.13 In most cases, hosts do not intentionally violate regulations, and disputes are often settled without the host incurring a fine. ESTABLISH A CLEAR TAXING MODEL Be mindful that there are multiple ways to capture revenue. In most cases, the owner/host is responsible for remitting taxes back to the city; however, several cities are trying to move the collection burden from hosts to the platforms. According to NLC’s analysis, 82 percent of surveyed cities require the host to remit taxes directly to the city, while just 5 percent require the platform to collect and remit taxes on their behalf. Cities like Annapolis, MD, and Charleston, SC, require platforms to remit taxes back to the city on behalf of hosts, automatically collecting tax revenue from a booking when it is made. While it may be easier for cities to require platforms to remit taxes, beware that there is some ongoing controversy around whether cities get back all the taxes they are owed. Several cities in South Carolina, including Charleston, are suing platforms, alleging that they are not remitting full taxes.14 In addition to the transient occupancy tax, some city councils may add an additional tax or surcharge on short-term rentals. For example, Chicago, IL, passed a 4 percent surcharge in 2016 and another 2 percent surcharge in 2018.15 The surcharge funds supportive homelessness services and enforcement of the ordinance.16 KEY CONSIDERATION Be mindful of how difficult it may be for hosts to remit taxes to the city. If a host has to remit taxes directly, consider how to make that process as simple and streamlined as possible. This not only makes it easier for hosts but ensures that the city is capturing more of the tax revenue it is owed. Include clear and concise instructions on how to remit taxes on the city’s webpage and a user-friendly platform to make payments. Consider sending notifications to all short-term rental hosts about upcoming tax payments. BULLSEYE-POINTER 82% of cities require the host to remit taxes directly to the city, while 5 percent require the platform to collect and remit taxes of hosts behalf. NATIONAL LEAGUE OF CITIES 29 28 Short-Term Rental Regulations: A Guide for Local Governments NEGOTIATE AN AGREEMENT WITH PLATFORMS Cities have had varying success in building helpful agreements with platforms. Cities have a lot to gain by partnering with platforms; however, the relationship-building process can be contentious at times. These relationships are more likely to be positive when cities come to the discussion table with a clear goal in mind and communicate it with platforms. Cities may have the opportunity to negotiate agreements with platforms, such as voluntary collection agreements (VCAs) or memorandums of understanding (MOUs). Voluntary Collection Agreements A Voluntary Collection Agreement (VCA) typically involves a short- term rental platform agreeing to collect and remit transient occupancy taxes on behalf of its hosts. Agreements generally allow local governments to audit the platform, rather than the operator, but do not allow local governments to access information that could identify operators outside of the terms of the agreement. Many short-term rental platforms have agreements with local governments. As of March 2019, Airbnb had more than 350 VCAs with state and local governments in the U.S.17 While VCAs allows local governments to receive a steady stream of transient occupancy taxes, officials in several states have expressed concerns that these agreements allow platforms to remit less to governments than they owe, a problem compounded by VCA provisions that hinder tax authorities’ ability to audit platforms.18 See the Appendix for more information on VCAs. Memorandum of Understanding A memorandum of understanding (MOU) typically focuses on issues such as disclosing data, posting property registration numbers and removing illegal listings. Be aware that an MOU can include provisions that limit cities’ enforcement power or create additional duties for cities. For example, in its draft MOU with the City of Denver, Airbnb included provisions that would have made the MOU confidential and require the city to resort to arbitration to resolve disputes. Together, these provisions would have limited transparency and hampered the city’s ability to use the courts for its enforcement actions. Denver rejected the draft.19 MOUs may create additional duties for cities, such as when an MOU requires a platform to take down listings for unregistered properties but places the burden on cities to inform the platform about suspicious properties — a resource-intensive task. Cities may attempt to shift some of these burdens onto the platform. In one settlement with New York City, Airbnb agreed to automatically provide information for certain listings that met specific criteria.20 In the City of Portland, OR’s MOU with Airbnb, the two parties share duties: Airbnb is responsible for regularly reporting data about hosts and properties, and Portland is responsible for using the information it receives to verify that hosts have properly registered.21 KEY CONSIDERATION Approach negotiated agreements well informed and with a clear policy goal in mind. Because VCAs and MOUs tend to be offered with standard language and provisions that benefit platforms and hinder city oversight efforts, cities should be prepared to analyze the agreements and decide whether and how to negotiate more favorable conditions. BULLSEYE-POINTER Voluntary Collection Agreement (VCA): A VCA typically involves a short-term rental platform agreeing to collect and remit transient occupancy taxes on behalf of its hosts. Memorandum of Understanding (MOU): A MOU typically focuses on issues such as disclosing data, posting property registration numbers and removing illegal listings. NATIONAL LEAGUE OF CITIES 31 30 Short-Term Rental Regulations: A Guide for Local Governments ENFORCEMENT The purpose of regulations should not just be to capture additional revenue but to minimize and mitigate the negative side effects associated with the uncontrolled growth of short-term rentals. Cities need to move away from reactive to proactive enforcement when possible. Effective enforcement is key to an ordinance’s success. Without regulations that clearly define what a short-term rental is, a database of units being operated, and contact information for those units, cities are effectively rendered helpless in enforcing their regulations. DEDICATE RESOURCES TO ENFORCEMENT Dedicated resources, time, staff and money are necessary for successful enforcement. Short-term rental regulation enforcement can be revenue neutral or positive for municipalities when license, permit and tax revenue offsets costs.22 In some cases, cities can also leverage existing resources such as 311 service to take in short-term rental complaints. Some examples of key enforcement components that require dedicated resources include: ŠHiring additional code enforcement officers to identify and flag repeat offenders ŠHiring a third-party platform to help with data collection and enforcement ŠHiring a web developer to create a “one-stop-shop” website for STR hosts and residents ŠHiring additional staff to set up and service a complaint hotline ŠInstituting (re)inspections for violating properties CITY SPOTLIGHT: COLUMBUS, OH The most recent ordinance amendment in the City of Columbus allows the licensing department to deny, revoke or suspend a permit if there are three or more emergency calls made on a specific property in the previous 12 months (i.e., “three-call rule”). To help facilitate this system, the city’s technology department created an internal database that connects the 311 service with the city’s computer-aided dispatch software to allow enforcement to search the address on the map and know what type of emergency service was requested. City staff reference this database when an application is made or when a complaint about a property is filed. This allows the city to identify properties that have violated the ordinance or have passed the “three-call rule.” 32 Short-Term Rental Regulations: A Guide for Local Governments ENSURE EXTENSIVE COMMUNICATION AND MARKETING Transparent and clear communication and marketing are critical to the success of an ordinance. Clear communication will support the ordinance’s success (e.g., hosts, guests and residents know what the rules and regulations are) and is key to preventing community backlash when an ordinance is established or revisited. Consistent contact with landlord associations and property owner groups allows the city to convey to hosts how to remain in compliance. This may be an opportunity to develop relationships with trusted voices in key groups who can serve as a liaison with the broader community and as a spokesperson for good hosting etiquette. Regular contact with residents means that cities can convey the best way to file nuisance and safety complaints should there be a violation at a short-term rental. This helps communities feel like they have a trusted partner in the city to ensure community safety. KEY CONSIDERATION Consider hiring or assigning specific city staff to be liaisons with the community. Doing so may help establish trust among hosts, residents and the city, making room for more constructive conversations should something go awry. In addition, developing relationships with specific community members (e.g., hosts or residents) can help broaden the city’s reach into the community. For example, hosts who have good relationships with the city can promote good hosting etiquette in the community. BULLSEYE-POINTER MOVE REGISTRATION AND ADMINISTRATION SYSTEMS ONLINE To the extent possible, cities should limit the administrative burden on city staff and platform users. Moving registration or licensing systems online (while keeping the paper application option open) makes the process more seamless for hosts and less cumbersome for city staff who process those applications. Beyond moving the registration or licensing system online, consider launching a centralized, accessible and easy-to-use webpage with all relevant short- term rental information. One common complaint that cities receive is that short-term rental regulations are difficult to understand. In most cases, it is not that the regulations themselves are too complex, but that regulations are not transparent and explained in an accessible way. Launching a webpage that is regularly updated keeps the community informed. According to a recent 2022 report and survey from Rent Responsibly and the College of Charleston, 49 percent of surveyed short-term rental hosts got information from government websites about local regulations that affect short-term rentals.23 Furthermore, this webpage can serve as a resource for city staff who are not experts on short-term rentals but may be required to liaise with the public about them. NATIONAL LEAGUE OF CITIES 35 34 Short-Term Rental Regulations: A Guide for Local Governments CITY SPOTLIGHT: HENDERSON, NV The City of Henderson set up an easily navigable webpage with information on short-term rentals, including application materials and answers to frequently asked questions.24 This webpage serves as a “one-stop-shop” for hosts, residents and staff. The short-term rental webpage has the second-highest number of hits on the Henderson website. On the webpage hosts can: ŠFind the most up-to-date short-term rental ordinance and state laws that apply to short-term rentals ŠRegister their short-term rental · Find city contact information to support them through the registration process · Find clear lists on how to apply and what documents are needed · Find application forms that are easy to download or file online ŠRenew their short-term rental registration ŠPay their transient lodging tax and fees · Find tax forms that are easy to download On the webpage residents can: ŠFind relevant short-term rental regulations, including the city ordinance and state laws that apply to short-term rentals ŠLocate the complaint phone hotline to report any illegal short-term rental or to file noise, trash, parking, occupancy or other nuisance complaints ŠAccess the complaint website to submit a complaint online REVISIT AND ADAPT The short-term rental market is consistently in flux, meaning regulations may have to change to meet the market and evolving community needs. Regularly revisit your ordinance to ensure that it still has the right balance of competing expectations and alignment with city goals. ESTABLISH A FEEDBACK LOOP Particularly when first passing an ordinance, be intentional about setting metrics of success that align with policy goals. These qualitative and quantitative policy goal-aligned metrics will determine how performance is evaluated. Setting a dedicated evaluation period following the passage of a short-term rental ordinance will allow for better evaluation and help generate ideas of how to improve an ordinance. Make sure the public and the hosts understand that the regulation may change at the end of the evaluation period. Build in a recurring check-in with relevant stakeholders to determine whether the short-term rental ordinance is meeting the city’s originally stated goal, and if not, what needs to be adjusted. This is where the feedback loop is particularly important. Keep an open line of communication with relevant stakeholders (e.g., landlord associations, property owners, residents, housing advocates, community groups, hotels, tourism agencies, etc.) to better understand how the implementation of the ordinance is playing out. In Fayetteville, AR, the city authorizes a 20-month sunset clause in its ordinance, allowing city leaders to conduct regular review and reauthorization of the ordinance.25 Some adjustments have been made following these regular review periods, including increasing the occupancy tax rate to better fund the cost of enforcement, adjusting the cap on the number of short-term rentals allowed in the community and requiring a unit inspection. KEY CONSIDERATION If there is a recurring evaluation period for the ordinance, tell the community early on. Transparency is key to making sure hosts and residents know that regulations may change in the future. This may limit the potential backlash of changing regulations after passing them. BULLSEYE-POINTER NATIONAL LEAGUE OF CITIES 37 Conclusion SHORT-TERM RENTALS ARE here to stay and, when regulated with care and the proper safeguards in place, can be integrated into the fabric of a community. STRs can enhance tourism, stimulate economic growth in targeted neighborhoods and give residents a way to supplement their income, but can also exacerbate racial inequity, put pressures on affordable housing and disrupt neighborhoods. With proper regulation, cities can enjoy the benefits of STRs and limit their negative impacts. Regulating short-term rentals is not about limiting their potential, but about enacting the appropriate mechanisms to keep competing priorities and interests balanced. As cities consider regulations to address short-term rentals in their communities, it is important that they act promptly, remain focused on a clear policy objective, consider racial equity, actively engage with relevant stakeholders, develop and enforce clear regulations, and provide continuous review of ordinances. The resources found in this Action Guide can help our communities find the proper balance to effectively support and regulate this growing industry. 38 Short-Term Rental Regulations: A Guide for Local Governments NATIONAL LEAGUE OF CITIES 39 Appendix Voluntary Collection Agreements (VCAs) COMMON PROVISIONS THINGS TO WATCH OUT FOR COLLECTION AND REMITTANCE Platforms agree to collect transient occupancy taxes from guests and remit the amount collected to the government taxing authority. Without this provision, the platform may refuse to collect the tax, arguing that hosts are responsible for collection. Even with the provision, some platforms have been accused of under delivering taxes remitted to cities. REPORTING AGGREGATE INFORMATION The platform agrees “reasonably to report aggregate information” related to its collection and remittance of transient occupancy taxes to the tax authority. Aggregate information includes the total amounts of receipts, exemptions, adjustments and so forth, but does not include individualized information for specific properties. Aggregate information does not allow cities to gather individualized information on particular properties. DETERMINING LIABILITY FOR TAXES The platform agrees to be held legally responsible for failure to report, collect or remit the transient occupancy taxes, and the tax authority agrees not to hold individual hosts responsible for reporting, collecting or remitting taxes on their property. WAVIER OF LOOK-BACK The tax authority agrees not to pursue any actions to recover unpaid taxes that had been due before the date the agreement went into effect. If the city has not yet received payments from a large proportion of STRs, then waiving all claims on taxes owed before the VCA’s implementation will result in the city potentially forfeiting a significant amount of tax revenue. On the other hand, a city may not have the capacity to go after back taxes, and be mostly concerned with collection of future taxes, making waiver of past tax liability a lower priority. NOTIFICATION TO HOSTS AND RENTERS The platform agrees to notify hosts and renters that it will be collecting and remitting transient occupancy taxes for their transactions. COMMON PROVISIONS THINGS TO WATCH OUT FOR AUDITING The tax authority agrees to audit the platform on the basis of its tax returns and supporting documentation, rather than on audits of individual renters or hosts. Some VCAs also state that the tax authority cannot audit individual renters or hosts until it has finished auditing the platform and a tax issue remains unresolved. All transaction and tax data reviewed by a city tax authority must be anonymized. If the city suspects wrongdoing on the part of a specific host, it must first audit the anonymous data, then pick out suspicious transactions, and then finally obtain a subpoena to get identifiable data from the platform. The tax authority agrees to limit the number of times it will audit the platform (e.g., to only audit the platform once every two years, and to only audit transactions conducted over a 12-month stretch.) This may limit the tax authority’s access to data and ability to audit individual hosts and affect city efforts to enforce home-sharing laws. Cities such as Culver City, CA, have negotiated alternative provisions ensuring that they can continue to audit individual hosts if they receive information about the property’s violations from another source.26 Anonymized data may mean that cities can only use aggregate information, which prevents cities from investigating individual cases of violation. For example, Snowmass, CO, states that it will audit “on an anonymous numbered account basis,” suggesting that disaggregation is not required.27 Cities can also suggest alternative kinds of privacy protection that allow for individualized reports, such as pseudonymizing information. VCAs typically provide that all information about hosts and guests will remain anonymous unless the city has completed an audit of the platform and served the platform with a subpoena or similar legal process. Cities may want to negotiate changes to this provision to allow them to ensure that properties are registered. For example, if cities have already passed ordinances requiring registration, their audits might request information about the registration number. Cities can negotiate limits on audit frequency to allow for more frequent and tailored enforcement efforts. For instance, the audit frequency in Pacific Grove, CA, is once every 36 months; although this period may still be too long for many cities to effectively audit home- sharing, it does indicate that VCAs’ time provisions can vary.28 40 Short-Term Rental Regulations: A Guide for Local Governments NATIONAL LEAGUE OF CITIES 41 Endnotes 1 The history of short-term rentals (n.d.). Keycafe Blog. https://web.archive.org/ web/20220310191702/https://blog.keycafe.com/the-history-of-short-term-rentals/ 2 Barron, K., Kung, E., & Proserpio, D. (2020, March 4). The effects of home-sharing on house prices and rents: Evidence from Airbnb. Marketing Science, 40(1), 1 – 191. http://dx.doi.org/10.2139/ssrn.3006832 3 Resolution: 172-19 A Resolution to Request That City Staff Study and Develop an Ordinance to Regulate Short-Term Rentals in the City of Fayetteville (2019, July 16). Fayetteville City Code. https://web.archive.org/web/20220310192617/https://www.fayetteville-ar.gov/ DocumentCenter/View/19304/Short-Term-Rentals-Study-SIGNED-RES-172-19 4 U.S. Census Bureau. (n.d.). Quarterly homeownership rates by race and ethnicity of householder for the United States: 1994-2020. https://www.census.gov/housing/hvs/data/charts/fig08.pdf 5 Edelman, B., Luca, M., & Svirsky D. (2017). Racial discrimination in the sharing economy: Evidence from a field experiment. American Economic Journal: Applied Economics, 9(2), 1–22. https://doi.org/10.1257/app.20160213 6 Airbnb. (2019, September 2019). An update on Airbnb’s work to fight discrimination. https://news.airbnb.com/an-update-on-airbnbs-work-to-fight-discrimination/ 7 Chapter 598 Hotel/Motel and Short-Term Rental Operations (2018, January 30). Columbus City Codes. https://library.municode.com/oh/columbus/codes/ code_of_ordinances?nodeId=TIT5BURELICO_CH598HOMOSHRMREOP 8 Chapter 15 - Short-Term Rental Tax: Legislative Intent (2015, September 1). City of Boulder, Colorado Charter and Revised Code. https://library.municode.com/co/boulder/ codes/municipal_code?nodeId=TIT3RETA_CH15SHRMRETA_3-15-6--3-15-12RE 9 Binzer, U. (n.d.). A practical guide to effectively regulating short-term rentals on the local government level. Host Compliance. https://web.archive.org/web/20220317135940/https:// www.cityofsantacruz.com/home/showpublisheddocument/57754/636177355568470000 10 Binzer, U. (n.d.). Home-sharing & short-term rentals regulations FAQs. Granicus. https://granicus.com/pdfs/Home-Sharing-Short-Term-Rentals-FAQ.pdf 11 San Francisco’s registration process: Frequently asked questions. (n.d.). Airbnb. https://www. airbnb.com/help/article/1849/san-franciscos-registration-process-frequently-asked-questions 12 Nashville, Tennessee: How the codes department achieves 90%+ compliance with Host Compliance. (n.d.). Granicus. https://granicus.com/how-the-codes- department-achieves-90-compliance-with-host-compliance/ 13 A Local Law “Amending the Village of Lake Placid/Town of North Elba Land Use Code to Add Regulations Pertaining to Short-Term Rentals (2020). Village of Lake Placid/Town of North Elba Land Use Code. http://www.northelba.org/files/TownLocalLawSubmissiontoNYSDOS.pdf 14 Brown, A. (2021, July 1). SC cities sue Airbnb and other short-term rental companies for not paying local taxes. The Post and Courier. https://www.postandcourier.com/ business/real_estate/sc-cities-sue-airbnb-and-other-short-term-rental-companies-for- not-paying-local-taxes/article_f44f0f60-9bb9-11eb-a4b5-636eb8976c0f.html 15 Amendment of Municipal Code Section 3-24-030 Regarding Surcharge Associated with Vacation Rentals and Shared Housing Units (2018, June 27). Municipal Code of Chicago. https://www.civicfed.org/sites/default/files/o2018-4988.pdf 16 Reuters, T. (2016, November 3). Chicago passes short-term rental ordinance. Hospitality Lawyer. https://hospitalitylawyer.com/chicago-passes-short-term-rental-ordinance/ 17 Martineau, P. (2019, March 20). Inside Airbnb’s ‘guerrilla war’ against local governments. Wired. https://www.wired.com/story/inside-airbnbs-guerrilla-war-against-local-governments/ 18 Bucks, R. D. (2017, March). Airbnb agreements with state and local tax agencies. A formula for undermining tax fairness, transparency and the rule of law. https:// www.ahla.com/sites/default/files/Airbnb_Tax_Agreement_Report_0.pdf 19 Swanson, C. (2020, February 14). Frustrated Denver officials reject deal with Airbnb. The Denver Post. https://www.denverpost.com/2020/02/14/denver-airbnb-agreement 20 Martineau, P. (2019, May 24). Airbnb and New York City reach a truce on home-sharing data. Wired. https://www.wired.com/story/airbnb-new-york-city-reach-truce-on-home-sharing-data/ 21 Templeton, A. (2019, September 4). Portland reaches rental data sharing agreement with Airbnb. Oregon Public Broadcasting. https://www.opb.org/ news/article/portland-airbnb-reaches-rental-data-sharing-agreement/ 22 Binzer, U. (n.d.). Home-sharing & short-term rentals regulations FAQs. Granicus. https://granicus.com/pdfs/Home-Sharing-Short-Term-Rentals-FAQ.pdf 23 Rent Responsibly & College of Charleston. (2022, January). 2022 report state of the short-term rental community. https://www.rentresponsibly.org/wp-content/ uploads/2022/01/2022-State-of-the-STR-Community-Report-January-2022.pdf 24 City of Henderson, NV. (n.d.). Short-term vacation rentals. https://www.cityofhenderson.com/ government/departments/community-development-and-services/short-term-vacation-rentals 25 Short-Term Regulations (2021, April 20). Fayetteville City Code. https://www.fayetteville- ar.gov/DocumentCenter/View/23281/Ordinance-6427-Short-Term-Rental 26 Voluntary Collection Agreement for City of Culver City, California, Transient Occupancy Tax (2018, September 25). https://www.culvercity.org/files/assets/public/documents/ city-manager/short-term-rentals/vca-agreement-with-airbnb_1.pdf 27 Voluntary Collection Agreement for Town of Snowmass Village Sales and Lodging Taxes (2016, November 30) http://nwccog.org/wp-content/ uploads/2018/07/AIRBNB-Voluntary-Collection-Agreement.pdf 28 Mayberry, C. (2017, October 19). Pacific Grove’s new short-term rental policy includes agreement with Airbnb. Monterey Herald. https://www.montereyherald.com/2017/10/19/ pacific-groves-new-short-term-rental-policy-includes-agreement-with-airbnb/ 11 Attachment 2 Sample Platform-based Enforcement Regulations CITY OF SEATTLE ORDINANCE __________________ COUNCIL BILL __________________ AN ORDINANCE relating to the regulation of short-term rental businesses; adding a new Chapter 6.600, Short-Term Rentals, to the Seattle Municipal Code. WHEREAS, housing vacancy rates are at low levels, making it increasingly difficult for people to locate permanent housing; and WHEREAS, removal of residential units from the long-term housing market contributes to low vacancy rates; and WHEREAS, the conversion of long-term housing units to short-term rentals could result in the loss of housing for Seattle residents; and WHEREAS, the conversion of long-term housing units to short-term rentals could disproportionally impact people of color and low-income residents; and WHEREAS, limiting operation of short-term rental properties to property owners will reduce opportunities to convert long-term housing units to short-term rentals; and WHEREAS, it is in the public interest that short-term rental uses be regulated in order to conserve limited housing resources; and WHEREAS, the short-term rental platforms, as part of a new but growing industry, would also benefit from regulation to ensure good business standards and practices; and WHEREAS, short-term rental platform businesses depend upon participation and contact with local short-term rental operators; and WHEREAS, this ordinance provides standards for the operation of short-term rental platforms, short-term rental operators, and bed and breakfast operators who use short- term rental platforms; and WHEREAS, the City Council finds that this ordinance is necessary to protect and promote the health, safety, and welfare of the general public; NOW, THEREFORE, BE IT ORDAINED BY THE CITY OF SEATTLE AS FOLLOWS: Section 1. A new Chapter 6.600 is added to the Seattle Municipal Code as follows: Chapter 6.600 SHORT-TERM RENTALS 12 6.600.010 Scope and purpose This Chapter 6.600 applies to all short-term rental operators and short-term rental platforms that facilitate short-term rental operators to offer a dwelling unit, or portion thereof, for short-term rental use within The City of Seattle, and to all bed and breakfast operators who list a bed and breakfast unit on a short-term rental platform. The ordinance enacting this Chapter 6.600 is an exercise of the City&rsquo;s police power to license short- term rental platforms, short-term rental operators and bed and breakfast operators. The purpose of the ordinance is to preserve the City’s permanent housing stock, balance the economic opportunity created by short-term rentals with the need to maintain supply of long-term rental housing stock available at a range of prices, reduce any indirect negative effects on the availability of affordable housing, create a level playing field for all parties engaged in the business of providing lodging, and protect the livability of residential neighborhoods. 6.600.020 Application of other provisions The licenses provided for in this Chapter 6.600 are subject to the general provisions of the new Seattle License Code set forth in Chapter 6.202 as now or hereafter amended. In the event of a conflict between the provisions of Chapter 6.202 and this Chapter 6.600, the provisions of this Chapter 6.600 shall control. 6.600.030 Definitions "Bed and breakfast" means a lodging use where rooms within a single dwelling unit are provided to transients by a resident operator for a fee by prearrangement on a daily or short-term basis. A breakfast and/or light snacks may be served to those renting rooms in the bed and breakfast. "Bed and breakfast operator" means any person who is the owner or resident manager of a bed and breakfast unit. "Bed and breakfast unit" means a room within a bed and breakfast that is offered or provided to a guest(s) by a bed and breakfast operator for a fee for fewer than 30 consecutive nights. "Booking service" means any reservation and/or payment service provided by a person or entity that facilitates a short-term rental transaction between a short-term rental operator and a prospective short-term rental guest, and for which the person or entity collects or receives, directly or indirectly through an agent or intermediary, a fee in connection with the reservation and/or payment services provided for the short-term rental transaction. "Dwelling unit" means a room or rooms located within a structure that are configured to meet the standards of Section 23.42.048 and that are occupied or intended to be occupied 13 by not more than one household as living accommodations independent from any other household. "Fee" means remuneration or anything of economic value that is provided, promised, or donated primarily in exchange for services rendered. "Guest" means any person or persons renting a short-term rental or bed and breakfast unit. "Household" means a housekeeping unit consisting of any number of related persons; eight or fewer non-related persons; eight or fewer related and non-related persons, unless a grant of special or reasonable accommodation allows an additional number of persons. “In Seattle” or “within Seattle” means in the Seattle city limits. "Local contact" means the operator or the operator’s representative who is the point of contact for any short-term guest(s) for the duration of the guest(s) stay in the short-term rental. "Operate a short-term rental platform within Seattle" means that a short-term rental platform is engaged in business in Seattle, including having agreements with short-term rental operators or other customers in Seattle who provide dwelling units, or portions thereof, located in Seattle for short-term rental use, regardless of whether the short-term rental platform is physically present in Seattle. "Owner" means any person who, alone or with others, has title or interest in any building, property, dwelling unit, or portion thereof, with or without accompanying actual possession thereof, and including any person who as agent, or executor, administrator, trustee, or guardian of an estate has charge, care, or control of any building, dwelling unit, or portion thereof. A person whose sole interest in any building, dwelling unit, or portion thereof is solely that of a lessee under a lease agreement shall not be considered an owner. "Person" means any individual, firm, corporation, association, governmental entity, or partnership and its agents or assigns. "Primary residence" means a person’s usual place of return for housing as documented by motor vehicle registration, driver’s license, voter registration, or other such evidence as determined by Director’s rule. A person may have only one primary residence. "Principal" means a principal or governing member of any business entity, including but not limited to: LLC member/manager, president, vice president, secretary, treasurer, CEO, director, stockholder, partner, general partner, or limited partner. "Short-term rental advertisement" means any method of soliciting use of a dwelling unit for short-term rental purposes. 14 "Short-term rental" means a lodging use, that is not a hotel or motel, in which a dwelling unit, or portion thereof, that is offered or provided to a guest(s) by a short-term rental operator for a fee for fewer than 30 consecutive nights. A dwelling unit, or portion thereof, that is used by the same person for 30 or more consecutive nights is not a short-term rental. A dwelling unit, or portion thereof, that is operated by an organization or government entity that is registered as a charitable organization with the Secretary of State, State of Washington, and/or is classified by the Internal Revenue Service as a public charity or a private foundation, and provides temporary housing to individuals who are being treated for trauma, injury or disease and/or their family members is not a short-term rental. "Short-term rental operator" or "operator" means any person who is the owner of a dwelling unit established under Title 23, or portion thereof, who offers or provides that dwelling unit, or portion thereof, for short-term rental use or a person who is the tenant of a dwelling unit, or portion thereof, who offered or provided a short term rental as set forth in subsection 6.600.040.B.2. "Short-term rental operator registry" means record of information detailing short-term rental transactions, maintained by the short-term rental operator. "Short-term rental platform” or "platform” means a person that provides a means through which an operator may offer a dwelling unit, or portion thereof, for short-term rental use, or which a bed and breakfast operator may offer a bed and breakfast unit, and from which the person or entity financially benefits. Merely publishing a short-term rental advertisement for accommodations does not make the publisher a short-term rental platform. 6.600.040 License required A. Platforms. It is unlawful for any person to operate as a platform within Seattle without a valid platform license issued pursuant to this Chapter 6.600. B. Operators. It is unlawful for any person to operate as a short-term rental operator within the City without a valid short-term rental operator license issued pursuant to this Chapter 6.600. A short-term rental operator license permits an operator to offer or provide a maximum of one dwelling unit, or portion thereof, for short term rental use, or a maximum of two dwelling units if one of the units is the operator’s primary residence, except for the following: 1. An operator who offered or provided a short-term rental outside of the locations described in subsections 6.600.040.B.2 or 6.600.040.B.3 prior to September 30, 2017, may obtain a short-term rental operator license allowing that operator to continue to operate up to two dwelling units for short-term rental use, subject to the requirements of 15 subsection 6.600.040.B.4. Upon renewal of the license after one year of operations, the operator may obtain a license allowing that operator to: continue to operate the two units; and add a third dwelling unit if the unit is the operator’s primary residence. 2. An operator who offered or provided a short-term rental in the Downtown Urban Center, south of Olive Way and north of Cherry Street, as established in the Seattle Comprehensive Plan (2016), prior to September 30, 2017, may obtain a short-term rental operator license allowing them to continue to operate those units and to offer or provide up to one additional dwelling units for short-term rental use, or a maximum of two dwelling units, if one of the units is the operator’s primary residence, subject to the requirements of subsection 6.600.040.B.4. 3. An operator who offered or provided a short-term rental in any dwelling units within a multifamily building constructed after 2012 that contains no more than five dwelling units established by permit under Title 23 and is located in the First Hill/Capitol Hill Urban Center, as established in the Seattle Comprehensive Plan, prior to September 30, 2017, may obtain a short-term rental operator license allowing them to continue to operate those units and to offer or provide up to one additional dwelling units for short-term rental use, or a maximum of two dwelling units, if one of the units is the operator’s primary residence, subject to the requirements of subsection 6.600.040.B.4. 4. If the license applicant wishes to continue operating a short-term rental in a location described in subsections 6.600.040.B.1, 6.600.040.B.2, or 6.600.040.B.3 the applicant must provide the Director with the following evidence of prior short-term rental use: a. A business license tax certificate issued by the Department of Finance and Administrative Services for the short-term rental use, in effect on prior to September 30, 2017; and b. Records demonstrating collection and remittance of all applicable local, state and federal taxes within the 12-month period prior to September 30, 2017; and c. A registry identifying the dates the dwelling unit was used as short-term rental within the 12-month period prior to September 30, 2017. d. Certification that, if the applicant is a renter, the owner has authorized the tenant’s operation of the dwelling unit as a short-term rental. If requested by the Director, the applicant shall provide documentation demonstrating that the owner has provided that authorization. C. Bed and breakfast operators. It is unlawful for any bed and breakfast operator within Seattle to use a platform to list a bed and breakfast unit without possessing a valid bed and breakfast operator’s license issued pursuant to this Chapter 6.600. 16 6.600.050 License applications A. Platforms. Platform licenses are issued by the Director and may be obtained by filing with the Director a platform application in a format determined by the Director. B. Operators. Operator licenses are issued by the Director and may be obtained by filing with the Director a short-term rental operator license application in a format determined by the Director and by submitting a signed declaration of compliance attesting that each dwelling unit, or portion thereof, offered for short-term rental use satisfies the requirements of Section 6.600.070. C. Bed and breakfasts. Bed and breakfast licenses are issued by the Director and may be obtained by filing with the Director a bed and breakfast operator application in a format determined by the Director. D. All platform, operator, and bed and breakfast licenses shall expire one year from the date the license is issued and shall be renewed annually. 6.600.060 Short-term rental platforms general provisions All platforms operating in Seattle shall comply with the following: A. Possess a valid platform license issued pursuant to this Chapter 6.600. B. Prior to providing booking services, require that all operators and bed and breakfast operators using the platform either submit an application for an operator license or bed and breakfast operator license through the platform and include a license number in any listing, or, include a license number in any listing for a short-term rental or bed and breakfast unit on the platform. C. Remove any listings for short-term rentals or bed and breakfast units from the platform upon notification by the Department. The Director shall develop, by rule, processes and procedures for the removal of any listing. D. Provide the following information in an electronic format determined by the Director to the City on a quarterly basis: 1. The total number of short-term rentals, and bed and breakfast units in the City listed on the platform during the applicable reporting period; and 2. The total number of nights all short-term rentals and bed and breakfast units rented through the platform during the applicable reporting period. E. Inform all operators, including bed and breakfast operators, who use the platform of the operator’s responsibility to collect and remit all applicable local, state, and federal taxes unless the platform does this on the operator’s behalf. 17 F. Provide a copy of the summaries prepared by the Director pursuant to Section 6.600.065 to all operators, including bed and breakfast operators, for which the platform provides booking services. When notified to do so by the Director, provide written notification to all short-term rental operators and bed and breakfast operators of changes to local regulations. Upon request, the platform shall provide documentation to the Director demonstrating that the required notification was provided. G. Upon request by the Director, permit the Director access to review records that are required to be kept under this Chapter 6.600, in a manner consistent with federal law. 6.600.065 Summaries of short-term rental regulations The Director shall, as soon as practicable after passage of the ordinance introduced as Council Bill 119081, and as the Director shall deem necessary thereafter, prepare a summary of this Chapter 6.600 and any other applicable regulations or identified best practices for operating a short-term rental. 6.600.070 Short-term rental operator general provisions A. All operators who offer dwelling units, or portions thereof, for short-term rental use in Seattle shall comply with the following: 1. Possess no more than one operator license issued pursuant to this Chapter 6.600. 2. Be a principal or spouse of a principal in no more than one operator license issued pursuant to this Chapter 6.600. 3. Offer or provide no more than the maximum number of dwelling units, or portions thereof, as provided in subsection 6.600.040.B. 4. Post the Department-issued operator license number for the short-term rental on every listing advertising or offering the dwelling unit, or portion thereof, for use as a short-term rental. 5. Comply with all standards provided in Section 23.42.060. 6. Provide local contact information to all short-term rental guests during a guest’s stay. The local contact must reside in King County, Washington and be available to respond to inquiries at the short-term rental during the length of the stay. 7. Comply with the requirements of the Housing and Building Maintenance Code in subsection 22.214.050.M and the Rental Registration and Inspection program. 8. Comply with RCW 19.27.530 by ensuring that all dwelling units have working smoke detectors and carbon monoxide alarm(s) in every bedroom and on all habitable floors and a properly maintained and charged fire extinguisher. 18 9. Post the following information in a conspicuous place within each dwelling unit used as a short-term rental: a. Emergency contact information for summoning police, fire, or emergency medical services.; b. Short-term rental street address; c. Floor plan indicating fire exits and escape routes; d. Information about how a guest can contact The City’s Customer Service Bureau to report any concerns or complaints; e. Maximum occupancy limits; and f. Contact information for the operator or the designated local contact; 10. Maintain liability insurance appropriate to cover the short-term rental use in the aggregate of not less than $1,000,000 or conduct each short-term rental transaction through a platform that provides equal or greater insurance coverage. 11. Remit all applicable local, state, and federal taxes unless the platform does this on the operator’s behalf. 12. Upon request by the Director, provide documentation and a signed declaration of compliance attesting to compliance with subsections 6.600.070.A.1 through 6.600.070.A.11. 6.600.080 Bed and breakfast operator general provisions All bed and breakfast operators who advertise or offer a bed and breakfast unit on a platform in the City, shall comply with the following: A. Possess no more than one valid bed and breakfast operator license issued pursuant to this Chapter 6.600. B. Post the Department-issued bed and breakfast operator license number issued for the bed and breakfast on every listing advertising or offering a bed and breakfast unit on a platform. C. If operating within a single-family zone, comply with all standards provided in Section 23.44.051. If operating within a multi-family zone, comply with all standards provided in subsection 23.45.545.G. D. Remit all applicable local, state, and federal taxes unless the platform does this on the bed and breakfast operator’s behalf. 6.600.090 License fees 19 A. Short-term rental platform license fees. The fee for a platform license issued pursuant to this Chapter 6.600 shall be a quarterly fee based on the total number of nights booked for short-term rental use through the platform. Platforms shall pay $0 per night booked. The per night fees shall be calculated and paid on a quarterly basis. If a platform fails to provide complete information as required by subsection 6.600.060.D, the Director may estimate the quarterly per night license fee. B. Short-term rental operator license fees. The fee for an operator license issued pursuant to this Chapter 6.600 shall be $75 per dwelling unit annually, paid at the time the application is submitted to the City. C. Bed and breakfast operator license fees. The fee for a bed and breakfast operator license issued pursuant to this Chapter 6.600 shall be $75 per bed and breakfast, paid at the time the application is submitted to the City. D. The Director shall review annually any of the licensing fees in subsections 6.600.090.A, 6.600.090.B and 6.600.090.C and shall make any necessary adjustments in a Director’s Rule to ensure the fees achieve full cost recovery of the Director’s administrative, enforcement, and other regulatory costs and no more, after consideration of the following factors: 1. The projected costs and annual budget allotted for administrative, enforcement and regulatory costs across the short-term rental industry; 2. The need for increased enforcement to reduce illegal activity; 3. The total number of nights booked in City limits across the short-term rental industry; and 4. The administrative burden of issuing additional platform or operator licenses. E. License fees are non-refundable and non-transferrable. 6.600.100 Enforcement and rulemaking The Director will adopt rules pursuant to Chapter 3.02 to implement the provisions of this Chapter 6.600. The Director is authorized to enforce, promulgate, revise, or rescind rules and regulations deemed necessary, appropriate, or convenient to administer the provisions of this Chapter 6.600, providing affected entities with due process of law and in conformity with the intent and purpose of this Chapter 6.600. 6.600.110 Short-term rental platform - Violations and enforcement A. Violations. It is a violation of this Chapter 6.600 for any person or platform to: 1. Operate a short-term rental platform within Seattle without possessing a valid short- term rental platform license issued pursuant to this Chapter 6.600. 20 2. Fail to require that any operator or bed and breakfast operator using the platform, prior to providing booking services, either submit an application for an operator license or bed and breakfast operator license through the platform and include the license number in any listing, or, include a license number in any listing for a short-term rental or bed and breakfast unit on the platform pursuant to subsection 6.600.060.B. 3. Fail to remove any listings for short-term rentals or bed and breakfast units from the platform pursuant to subsection 6.600.060.C. 4. Misrepresent any material fact in an application for a platform license or submit inaccurate information to the Director when the Director requests information pursuant to this Chapter 6.600. 5. Fail to comply with any requirements of Chapter 6.600 applicable to short-term rental platforms. B. Enforcement 1. Investigation and notice of violation a. The Director is authorized to investigate any person or platform the Director reasonably believes does not comply with the provisions of Chapter 6.600 applicable to platforms. b. If, after investigation, the Director determines that any provisions of Chapter 6.600 applicable to platforms have been violated, the Director may issue a notice of violation to the platform or other person responsible for the violation. c. The notice of violation shall state the provisions violated, necessary corrective action and the compliance due date. d. The notice of violation shall be served upon the platform, agent or other responsible person by personal service or regular first-class mail addressed to the last known address for the platform, agent, or responsible person. e. Nothing in this Section 6.600.110 limits or precludes any action or proceeding to enforce this code, and nothing obligates or requires the Director to issue a notice of violation prior to the imposition of civil or criminal penalties. f. Unless a request for review before the Director is made in accordance with subsection 6.600.110.B.2, the notice of violation shall become the final order of the Director. 2. Review by the Director a. Any person aggrieved by a notice of violation issued by the Director pursuant to subsection 6.600.110.B.1 may obtain a review of the notice by requesting such review in writing within ten business days of the date of the notice. When the last day of the period 21 so computed is a Saturday, Sunday or federal or City holiday, the period shall run until 5 p.m. on the next business day. Within 15 days of the request for review, the aggrieved person may submit additional information in the form of written material to the Director for consideration as part of the review. b. The review will be made by a representative of the Director who is familiar with the case and the applicable ordinances. The Director&rsquo;s representative will review all additional written material received by the deadline for submission of information. The reviewer may also request clarification of information received. After review of the additional information, the Director may: 1. Sustain the notice of violation; 2. Withdraw the notice of violation; 3. Continue the review to a date certain for receipt of additional information; or 4. Modify the notice of violation, which may include an extension of the compliance date. c. The Director shall issue an order of the Director containing the decision and shall cause the same to be mailed by first-class mail to the person or persons requesting the review and the persons named on the notice of violation. d. Extension of compliance date. The Director may grant an extension of time for compliance with any notice or order, whether pending or final, upon the Director&rsquo;s finding that substantial progress toward compliance has been made and that the public will not be adversely affected by the extension. An extension of time may be revoked by the Director if it is shown the conditions at the time the extension was granted have changed, the Director determines a party is not performing corrective actions as agreed, or if the extension creates an adverse effect on the public. The date of revocation shall then be considered the compliance date. 4. Penalties a. In addition to any other sanction or remedial procedure that may be available, any person violating or failing to comply with any of the provisions of Chapter 6.600 applicable to platforms shall be subject to the following cumulative penalties per violation for each listing from the date the violation occurs until compliance is achieved: 1) $500 per day for each violation for the first ten days, and 2) $1,000 per day for each violation for each day beyond ten days of non-compliance until compliance is achieved. b. In cases where the Director has issued a notice of violation or order of the Director, the violation will be deemed to begin, for purposes of determining the number of days in 22 violation, on the date that compliance is required on the notice of violation or order of the Director. 5. Civil actions. Civil actions to enforce subsection 6.600.040.A, Section 6.600.060 and subsection 6.600.110.A shall be brought in the Seattle Municipal Court, except as otherwise required by law or court rule. The Director shall request in writing that the City Attorney take enforcement action. The City Attorney shall, with the assistance of the Director, take appropriate action to enforce subsection 6.600.040.A, Section 6.600.060 and subsection 6.600.110.A. In any civil action for a penalty, the City has the burden of proving by a preponderance of the evidence that a violation exists or existed. The issuance of a notice of violation or an order following a review by the Director is not itself evidence that a violation exists. 6. Appeals to Superior Court. Final decisions of the Seattle Municipal Court on enforcement actions authorized by subsection 6.600.110 may be appealed pursuant to the Rules for Appeal of Courts of Limited Jurisdiction. 6.600.120 Short-term rental operator and bed and breakfast operator - Violations and enforcement A. Violations. It is a violation of this Chapter 6.600 for any person to: 1. Offer or provide a dwelling unit, or portion thereof, for short-term rental use without possessing a valid operator’s license for that dwelling unit, or portion thereof, issued pursuant to this Chapter 6.600. 2. Offer a bed and breakfast unit on a platform without possessing a valid bed and breakfast operator’s license issued pursuant to this Chapter 6.600. 3. Misrepresent any material fact in any license application or other information submitted to the Director pursuant to this Chapter 6.600. 4. Fail to comply with any requirements of Chapter 6.600 applicable to operators or bed and breakfast operators. B. Enforcement. If after investigation the Director determines that any of the provisions of Chapter 6.600 applicable to operators or bed and breakfast operators have been violated, the Director may issue a civil citation to the operator, bed and breakfast operator, or other person responsible for the violation. 1. Citation. The civil citation shall include the following information: (1) the name and address of the person to whom the citation is issued; (2) the address of the short-term rental or bed and breakfast unit involving the violation; (3) a separate statement of each provision violated; (4) the date of the violation; (5) a statement that the person cited must respond to the civil citation within 15 business days after service; (6) a space for entry of 23 the applicable penalty; (7) a statement that a response must be sent to the Hearing Examiner and received not later than 5 p.m. on the day the response is due; (8) contact information for the Hearing Examiner where the citation is to be filed; (9) a statement that the citation represents a determination that a violation has been committed by the person named in the citation and that the determination shall be final unless contested as provided in this chapter; and (10) a certified statement of the Director&rsquo;s representative issuing the citation, authorized by RCW 9A.72.085, setting forth facts supporting issuance of the citation. 2. Service. The citation shall be served by first-class mail, addressed to the operator, bed and breakfast operator, or other person responsible for the violation. Service shall be deemed complete three days after the mailing. If a citation sent by first class mail is returned as undeliverable, service may be made by posting the citation at a conspicuous place on the property where the violation occurred and service shall be complete on the date of posting. The citation may also be served in person. 3. Response to citations a. A person cited must respond to a citation in one of the following ways: 1) Paying the amount of the monetary penalty specified in the citation, in which case the record shall show a finding that the person cited committed the violation; or 2) Requesting in writing a mitigation hearing to explain the circumstances surrounding the commission of the violation and providing an address to which notice of such hearing may be sent; or 3) Requesting in writing a contested hearing specifying the reason why the cited violation did not occur or why the person cited is not responsible for the violation, and providing an address to which notice of such hearing may be sent. b. A response to a citation must be received by the Office of the Hearing Examiner no later than 15 calendar days after the date the citation is served. When the last day of the appeal period so computed is a Saturday, Sunday, or federal or City holiday, the period shall run until 5 p.m. on the next business day. c. Failure to respond. If a person fails to respond to a citation within 15 calendar days of service, an order shall be entered by the Hearing Examiner finding that the person cited committed the violation stated in the citation, and assessing the penalty specified in the citation. 4. Hearings a. Mitigation hearings 24 1) Date and notice. If a mitigation hearing is requested, the mitigation hearing shall be held within 30 calendar days after written response to the citation requesting such hearing is received by the Hearing Examiner. Notice of the time, place, and date of the hearing shall be sent to the address specified in the request for hearing not less than ten calendar days prior to the date of the hearing. 2) Procedure at hearing. The Hearing Examiner shall hold an informal hearing that shall not be governed by the Rules of Evidence. The person cited may present witnesses, but witnesses may not be compelled to attend. A representative from the Department may also be present and may present additional information, but attendance by a representative from the Department is not required. 3) Disposition. The Hearing Examiner shall determine whether the cited person’s explanation justifies reduction of the monetary penalty; however, the monetary penalty may not be reduced unless the Department of Finance and Administrative Services affirms or certifies that the violation has been corrected prior to the mitigation hearing. Factors that may be considered in whether to reduce the penalty include whether the violation was caused by the act, neglect, or abuse of another; or whether correction of the violation was commenced prior to the issuance of the citation but that full compliance was prevented by a condition or circumstance beyond the control of the person cited. 4) Entry of order. After hearing the explanation of the person cited and any other information presented at the hearing, the Hearing Examiner shall enter an order finding that the person cited committed the violation and assessing a monetary penalty in an amount determined pursuant to subsection 6.600.120.B.5. The Hearing Examiner’s decision is the final decision of the City on the matter. b. Contested hearings 1) Date and notice. If a person requests a contested hearing, the hearing shall be held within 60 calendar days after the written response to the citation requesting such hearing is received. 2) Hearing. Contested hearings shall be conducted pursuant to the procedures for hearing contested cases contained in Section 3.02.090 and the rules adopted by the Hearing Examiner for hearing contested cases, except as modified by this Section 6.600.110. The issues heard at the hearing shall be limited to those that are raised in writing in the response to the citation and that are within the jurisdiction of the Hearing Examiner. The Hearing Examiner may issue subpoenas for the attendance of witnesses and the production of documents. 3) Sufficiency. No citation shall be deemed insufficient for failure to contain a detailed statement of the facts constituting the specific violation which the person cited is alleged to 25 have committed or by reason of defects or imperfections, provided such lack of detail, or defects or imperfections do not prejudice substantial rights of the person cited. 4) Amendment of citation. A citation may be amended prior to the conclusion of the hearing to conform to the evidence presented if substantial rights of the person cited are not thereby prejudiced. 5) Evidence at hearing. The certified statement or declaration authorized by RCW 9A.72.085 shall be prima facie evidence that a violation occurred and that the person cited is responsible. The certified statement or declaration authorized under RCW 9A.72.085 and any other evidence accompanying the report shall be admissible without further evidentiary foundation. Any certifications or declarations authorized under RCW 9A.72.085 shall also be admissible without further evidentiary foundation. The person cited may rebut the Department of Finance and Administrative Services’ evidence and establish that the cited violation(s) did not occur or that the person contesting the citation is not responsible for the violation. 6) Disposition. If the citation is sustained at the hearing, the Hearing Examiner shall enter an order finding that the person cited committed the violation and impose the applicable penalty pursuant to subsection 6.600.120.B.5. The Hearing Examiner may reduce the monetary penalty in accordance with the mitigation provisions in subsection 6.600.120.B.4.a.3. If the Hearing Examiner determines that the violation did not occur, the Hearing Examiner shall enter an order dismissing the citation. 7) Final decision. The Hearing Examiner&rsquo;s decision is the final decision of the City. c. Failure to appear for hearing. Failure to appear for a requested hearing will result in an order being entered finding that the person cited committed the violation stated in the citation and assessing the penalty specified in the citation. For good cause shown and upon terms the Hearing Examiner deems just, the Hearing Examiner may set aside an order entered upon a failure to appear and schedule a new contested hearing date. 5. Citation penalties a. First violation. The first time a person is found to have violated one of the provisions referenced in subsection 6.600.120.A the person shall be subject to a penalty of $500. The Director may, in an exercise of discretion, issue a warning to the person responsible for the violation if that person has not been previously warned or cited for violating this Chapter 6.600. b. Second and subsequent violations. Any second or subsequent time a person is found to have violated one of the provisions referenced in subsection 6.600.120.A within a five (5) year period, the person shall be subject to a penalty of $1,000 for each subsequent violation. 26 d. Collection of penalties. If the person cited fails to pay a penalty imposed pursuant to this subsection 6.600.120.B, the penalty may be referred to a collection agency. The cost to the City for the collection services will be assessed as costs, at the rate agreed to between the City and the collection agency, and added to the penalty. Alternatively, the City may pursue collection in any other manner allowed by law. e. Each day a separate violation. Each day a person violates or fails to comply with one of the provisions referenced in subsection 6.600.120.A, may be considered a separate violation for which a civil citation may be issued. 6.600.130 Alternative criminal penalty Any person who violates or fails to comply with any of the provisions in this Chapter 6.600 and who has had at least two or more citations, or two or more notices of violation issued against them for violating this Chapter 6.600, within the past three years from the date the criminal charge is filed shall be guilty of a misdemeanor subject to the provisions of Chapters 12A.02 and 12A.04, except that absolute liability shall be imposed for such a violation or failure to comply and none of the mental states described in Section 12A.04.030 need be proved. The Director may request the City Attorney prosecute such violations criminally as an alternative to the citation and notice of violation procedures outlined in this Chapter 6.600. 6.600.140 Additional relief The Director may seek legal or equitable relief to enjoin any acts or practices when necessary to achieve compliance. 6.600.150 Denial, revocation, or refusal to renew license A. The Director may deny, revoke, or refuse to renew the license of any platform for violating or failing to comply with any applicable provision of this Chapter 6.600 or for any reason set forth in Section 6.202.230. B. The Director may deny, revoke or refuse to renew the license of any operator or bed and breakfast operator for violating or failing to comply with any applicable provision of this Chapter 6.600 or for any reason set forth in Section 6.202.230. C. No license issued pursuant to Chapter 6.600 may be renewed unless all outstanding penalties assessed against the licensee and all past and present license fees are paid in full to the Department of Finance and Administrative Services. Section 2. Council requests that the Department of Finance and Administrative Services provide a written status update to Council’s Planning, Land Use and Zoning Committee by June 1, 2018, on any progress made implementing the short-term rental regulatory license requirements, and the short-term rental tax enacted by the ordinance introduced 27 as Council Bill 119083. This should include updates on: (1) the resources needed for implementing and administering the regulatory license requirements and the tax (including costs already incurred); (2) the status of developing rules, procedures and processes; and, (3) any new data obtained on the anticipated number of short-term rental operators and the estimated number of nights booked for short-term rental use in Seattle through short- term rental platforms. In addition, using the information described above, the Department should review the fee structure for short-term rental platform companies and make a recommendation to the City Council on whether the structure should be modified. Specifically, the Department should consider if the fee structure should be: (1) a per-night fee calculated based on the number of nights booked for short-term rental use through the platform each quarter, as proposed in Council Bill 119081; or (2) a graduated annual fee, with tiers based on the number of listings on a platform or other factors identified by the Department; or (3) an alternative fee structure identified by the Department. Section 3. The provisions of this ordinance are declared to be separate and severable. The invalidity of any clause, sentence, paragraph, subdivision, section, or portion of this ordinance, or the invalidity of its application to any person or circumstance, does not affect the validity of the remainder of this ordinance, or the validity of its application to other persons or circumstances. Section 4. Section 1 of this ordinance shall take effect and be in force on January 1, 2019, to ensure there is adequate time for rule-making and any adjustments in business practices. Section 5. This ordinance shall take effect and be in force 30 days after its approval by the Mayor, but if not approved and returned by the Mayor within ten days after presentation, it shall take effect as provided by Seattle Municipal Code Section 1.04.020. Passed by the City Council the ________ day of _________________________, 2017, and signed by me in open session in authentication of its passage this _____ day of _________________________, 2017. ____________________________________ President ____________ of the City Council Approved by me this ________ day of _________________________, 2017. ____________________________________ Jenny A. Durkan, Mayor Filed by me this ________ day of _________________________, 2017. ____________________________________ Monica Martinez Simmons, City Clerk 28 (Seal) 29 ATTACHMENT 3 – Corporate Rental Prohibition https://weho.granicus.com/MetaViewer.php?view_id=31&clip_id=2989&meta_i d=122283 30 31 32 33 35 ATTACHMENT 4 – Chelan County, Short Term Rental Regulations ORDINANCE NO. 2019-1571 Page 1 Ord2019-1570 Short Term Rental Regulations ORDINANCE NO.2019-1571 AN ORDINANCE OF THE CITY OF CHELAN, WASHINGTON ADDING A NEW CHAPTER 17.77, ENTITLED “SHORT-TERM RENTALS” TO THE MUNICIPAL CODE, AND AMENDING MULTIPLE SECTIONS OF THE EXISTING MUNICIPAL CODE RELATED TO SHORT-TERM RENTAL BUSINESS OPERATIONS AND ZONING WHEREAS, short-term rentals for vacationing and other short term uses has become a widespread form of business in Lake Chelan area; and WHEREAS, without regulation, the nature of short-term rental business creates dangers to public health and safety both to year-round residents of the City and to rental guests; and WHEREAS, unregulated short-term rental markets can result in a loss of affordable year- round housing; and WHEREAS, pursuant to RCW 36.70A.130, the City has authority to regularly review and evaluate its comprehensive land use plan and development regulations and make changes to the same as needed; and WHEREAS, the City has held stakeholder meetings regarding including regulations of short-term rentals on October 24, 2018, May 15, 2019, and August 21, 2019; and WHEREAS, the City Planning Commission held workshops regarding regulations of short-term rentals on May 15, 2019, July 17, 2019, September 19, 2019, and October 16, 2019; and WHEREAS, the City Council at a public hearing on November 26, 2019, considered and approved code amendments regarding short-term rentals, attached hereto as Exhibit A, and instructed staff to prepare an adopting ordinance; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CHELAN, WASHINGTON, DO ORDAIN AS FOLLOWS: Section 1. Incorporation of Recitals. The foregoing Recitals are incorporated into this Ordinance. Section 2. Code Adoption and Amendments. The zoning code and related codes sections shall be revised as set forth in Exhibit A, attached. Section 3. Identification of Comprehensive Plan. The City’s Comprehensive Plan adopted June, 25, 1998 pursuant to Ordinance No. 98-1110, as amended from time to time, is ORDINANCE NO. 2019-1571 Page 2 Ord2019-1570 Short Term Rental Regulations further amended by the zoning code amendments regarding short-term rentals identified herein. In the event of conflict between the provisions of the ordinances containing the provisions of the City’s Comprehensive Plan, the provisions of the later ordinance shall govern. Section 4. Severability. If any section, sentence, clause or phrase of this ordinance should be held to be invalid or unconstitutional by a court of competent jurisdiction, such invalidity or unconstitutionality shall not affect the validity or constitutionality of any other section, sentence, clause or phrase or word of this ordinance. Section 5. Corrections by City Clerk. Upon approval of the City Attorney, the City Clerk is authorized to make necessary technical corrections to this ordinance, including the correction of clerical errors; references to other local, state, or federal laws, codes, rules, or regulations; or section/subsection numbering. Section 6. Effective Date. Upon passage, this ordinance shall be published in the official newspaper of the City and shall take effect and be in full force thirty (30) days after publication. PASSED by the City Council of the City of Chelan, Washington, this 17th day of December, 2019. APPROVED: By: Mike Cooney, Mayor AUTHENTICATED: By: Peri Gallucci, Clerk ORDINANCE NO. 2019-1571 Page 3 Ord2019-1570 Short Term Rental Regulations APPROVED AS TO FORM: By: Quentin Batjer, City Attorney FILED WITH THE CITY CLERK: Bold Font PASSED BY THE CITY COUNCIL: Bold Font PUBLISHED: Bold Font EFFECTIVE DATE: Bold Font ORDINANCE NO.: Bold Font 1 Short-Term Rental Regulations December 2019 | City of Chelan Zoning Amendments ............................................................................................................................. 1 Short-Term License Code ....................................................................................................................... 7 Attachment A: Good Neighbor Guidelines.......................................................................................... 18 Attachment B: Self-Certification Checklist............................................................................................ 19 Zoning Amendments Add section 17.77 Short-term Rentals 17.77 Short-term rentals 17.77.010 Basic Provisions. All short-term rentals are subject to licensing requirements, health and safety standards, and fees set forth in Chelan Municipal Code 5.15. 17.77.020 Land Use Districts. Short term rental licensees may be issued in the land use districts listed herein or otherwise governed by applicable development agreements on file with the City of Chelan Community Development Office. Local Homeowner Associations bylaws and/or tenant/landlord lease agreements may further redistrict short term rentals beyond the city’s license and zoning requirements. • Downtown Mixed Use (DMU) (CMC 17.14) • Tourist Mixed Use (TMU) (CMC 17.14) • Highway Service Commercial (C-HS) (CMC 17.36) • Waterfront Commercial (C-W) (CMC 17.40) • Tourist Accommodation (T-A) (CMC 17.48) 17.77.030 Violations of Land Use. Operators of short-term rental units in land use districts that do not permit them shall be subject to enforcement procedures in Title 2.80 and required to terminate all rentals agreements immediately upon notice. Failure on behalf of the owner to cancel rentals agreements shall constitute a criminal misdemeanor charge and subject to fines established by the City Council. Assume that the PUD approval and development agreement address the use in The Lookout. 17.14.020 Regulating plan – Land use districts and site orientation standards. C. Overlay District Uses and Dimensional Standards. December 2019 City of Chelan | Short-Term Rental Regulations 2 2. Permitted Uses. b. Permitted Use Table. Table 1. Permitted use table. Downtown Land Use Districts DMU TMU DMR DSF Public RESIDENTIAL USES Dwelling, single-family P16 P P P Dwelling, two-family (Duplex) P P P5 Dwelling, three-family (Triplex) P P Cottage housing P Townhouse P7 P P Dwelling, multi-family P7 P P Fractional ownership condominiums and seasonal rentals P7 P Accessory dwelling unit (ADU) P7 P P P Senior assisted living facility or nursing home P7 P P Family day care homes1 P7 P P P Mini day care centers3 P7 P P P Day care centers P7 P P3 P3 Home occupation P P P2, 3 P2, 3 Bed and breakfast P7 P C3 C3 Hotel/motel, condotel, and other transient accommodations P P Short-term rental P P COMMERCIAL USES Retail, small scale (< 2,000 sf building footprint) P10 P10 P6 Retail, medium scale (2,000 – 20,000 sf building footprint) P10, 13 Retail, large scale (20,001 – 50,000 sf building footprint) C Retail, regional (> 50,000 sf floor area) Restaurants, bars, tasting rooms, and brewpubs3 P10 P10 P6 Professional office P8 P Real estate office P14 P Banks P Personal service establishments P P11 P6 General services establishments P Gasoline station and auto service3 P7 Mini-storage and warehouse facility December 2019 City of Chelan | Short-Term Rental Regulations 3 Downtown Land Use Districts DMU TMU DMR DSF Public Commercial use providing drive-through service P15 P General industrial4 P7, 12 Heavy industrial Marijuana retail outlet C C SPECIAL USES Parks and playgrounds including park buildings C C C C P Community recreational facility C C C C P Conference center P8 Private sports club P8 P Government office/structure3 P C C C P Medical clinic/office, medical facilities P7 C Hospital3 C C C Mortuary P7 C Veterinary clinic or hospital3 P7 Church3 P C C C P Places of public or private assembly (including theaters) P P School C7 C C C P Museum P P P Boat launching facilities, marinas and similar facilities P P P Parking lot or structure P7 P P3 P Public utility facility9 C C C C C 17.36.010 Permitted uses. Permitted uses are as follows: A. Any use permitted in the R-L Residential District, R-M Residential District, or T-A Tourist Accommodation District. Single- and multi-family dwellings, including townhouses, shall be subject to the relevant provisions of Chapter 17.24; B. Public and commercial automobile parking lots and garages and appertaining uses; C. Mortuaries; D. Advertising signs; provided, that they meet the setback requirements of this district; E. Veterinary hospitals; F. Automobile sales lots, repairs, bus and truck terminals; G. Machinery and farm equipment sales and services, tire recapping and similar businesses; December 2019 City of Chelan | Short-Term Rental Regulations 4 H. Lumberyards, basic construction materials, fuel, livestock feeds and similar uses; I. Boat building and sales; J. Plumbing, heating or electrical shops; K. Manufactured home parks subject to Chapter 17.54; L. Restaurants, and drive-in restaurants; M. Liquor stores, taverns, cocktail lounges, and nightclubs; N. Radio and TV studios; O. Transient businesses; P. Grocery stores; Q. Clinic; R. Barber or beauty shops; S. Office, business or professional; T. Bakery, candy store, or confectionery store, provided all products which are produced are sold only at retail on the premises; U. Shoe sales or repair; V. Radio, television and small appliance sales and service, provided all storage is contained within the structure; W. Photographic and musical studio, sales and service; X. Tailor and upholstery shop; Y. Bank or other financial institution; Z. Apparel; AA. Parking lot; AB. Locksmith; AC. Newspaper, printing or lithography establishment; AD. Florist; AE. Self-service laundry; AF. Arts and crafts; AG. Family day care homes, subject to licensing requirements of the Washington State Department of Social and Health Services and fire code requirements as set forth in Chapter 212-54 WAC; AH. Radio and TV studios; AI. Private educational institutions; AJ. Special event as defined in and pursuant to the provisions of Chapter 5.50, as the same exists now or may hereafter be amended. U. Short-term rentals. December 2019 City of Chelan | Short-Term Rental Regulations 5 17.40.010 Permitted uses. Permitted uses are as follows: A. Residential Uses. 1. Mixed-use developments that include water-dependent and water-oriented commercial uses together with single-family or multi-family uses while promoting public access for significant numbers of the public and/or providing an ecological restoration resulting in a public benefit; 2. Existing legal residential developments as of the date of this subsection are permitted; B. Boat building; C. Service stations with appertaining uses; provided, that no vehicle shall be repaired, painted, rented, built or sold upon or from the premises; D. Commercial or public water transportation facilities, which may include a protected aboveground tank as an accessory use, subject to the conditions set forth in Section 17.40.020(D); E. Industrial docks with appertaining machinery, which may include a protected aboveground tank as an accessory use, subject to the conditions set forth in Section 17.40.020(D); provided, that no product is manufactured on the premises; F. Boat servicing and fueling facilities which may include a protected aboveground tank as an accessory use, subject to the conditions set forth in Section 17.40.020(D); G. Radio and TV studios; H. Transient businesses; I. Marina facilities, which may include a protected aboveground tank as an accessory use, subject to the conditions set forth in Section 17.40.020(D); J. Adult entertainment facilities subject to the provisions of Section 17.04.125; K. Boat sales, including the display and sale of not more than three motor vehicles at any time as an accessory use to the principal permitted use of boat sales under the following minimum conditions: 1. The display and sale of motor vehicles is permitted only when operated as an accessory use to the principal permitted use of the premises when that principal use is boat sales; 2. No more than three motor vehicles shall be displayed for sale on the subject premises at any time; 3. All motor vehicles for sale shall be maintained in an operable condition at all times that such motor vehicles are located on the subject premises; 4. Motor vehicles for sale shall be licensed and registered with the state at all times that such motor vehicles are located on the subject premises; 5. Motor vehicles and motor vehicle parts shall not be stored, painted, repaired, dismantled, built, restored, or modified in any way on the subject premises; 6. The renting and leasing of motor vehicles is not permitted; 7. The motor vehicle sales activities shall be owned and operated by the owner of the boat sales business located on the subject premises and shall not be delegated or otherwise conveyed to other individuals or entities; and December 2019 City of Chelan | Short-Term Rental Regulations 6 8. Termination of the boat sales activities located on the subject premises shall terminate any motor vehicle sales business operated on the premises; L. Parks and playgrounds, including park buildings; M. Temporary construction offices within the tract or subdivision on which buildings are being erected and only for the duration of active construction; N. Family day care homes, subject to licensing requirements of the Washington State Department of Social and Health Services and fire code requirements as set forth in Chapter 212-54 WAC; O. Home occupations that involve no customers or other business-related visitors to the home business, no signs or other outward appearance that a business exists in the home, no delivery trucks, and no more than one individual residing within the home who is active in the home occupation business; provided, that if the planning director is given satisfactory proof of a physical disability of the individual wishing to engage in a home business or occupation, a volunteer or employee may assist in the home occupation. In addition, the home occupation must comply with the conditions for home occupation set forth in Section 17.56.060 and the fees for a home occupation permit as established by resolution of the city council must be paid; P. Restaurants, exclusive of drive-ins; Q. Office, business or professional; R. Bakery, candy store, or confectionery store, provided all products which are produced are sold only at retail on the premises; S. Special event as defined in and pursuant to the provisions of Chapter 5.50, as the same exists now or may hereafter be amended; T. When located outside of shoreline jurisdiction, or if considered part of a water-oriented development: *** U. Short-term rentals. 17.48.010 Permitted uses. Permitted uses are as follows: A. Single-family, two-family, three-family and multi-family dwellings, including townhouses; B. Motels, hotels, lodges and similar resort accommodation operations; C. Restaurants, exclusive of drive-ins; D. Barber or beauty shops; E. Travel agencies and tourist bureaus; F. Souvenir and gift shops; G. Bookstores and newsstands; H. Boat launching facilities, marinas and similar facilities; I. Professional offices; J. Special event as defined in and pursuant to the provisions of Chapter 5.50, as the same exists now or may hereafter be amended; December 2019 City of Chelan | Short-Term Rental Regulations 7 K. Per Chapter 17.47, low intensity, moderate intensity, and high intensity agri-tourism uses are allowed in the T-A Overlay. L. Short-term rentals. Short-Term License Code Note: Create a new chapter in Title 5 to provide for a short-term rental specialty license to address license criteria, inspection, and enforcement. CHAPTER 5.15 SHORT TERM RENTAL OPERATING LICENSE 5.15. 010 Purpose A. The purpose of this chapter is to establish regulations for the operation of short-term rentals within the city of Chelan. This chapter also establishes a short-term rental permit and license. B. The provisions of this chapter are necessary to promote the public health and safety by: Protecting year-round residents’ enjoyment of their homes and neighborhoods by minimizing the impact of short-term rentals on adjacent residences and minimizing the impact of the commercial character of short-term rentals. Benefiting residents and the community by supporting homeownership costs and the city’s tax base. Fully recovering the cost of code implementation and enforcement. Ensuring fairness in the regulation of short-term similar to other forms of allowed transient accommodations. Providing for short-term rental guest well-being by enforcing fire, building, parking, and sanitation standards. . 5.15. 020 Definitions A. “Short term rentals” means residential units, or portions of residential dwelling units, that are rented out on a nightly basis for not more than 30 days to individual guests. They are commonly referred to as vacation rentals. They are a form of tourist or transient accommodations. Short-term rental units may be whole house rentals, apartments, condominiums, or individual rooms in homes. For the purpose administration and enforcement of this ordinance, the terms “overnight rental”, “nightly rental”, and “vacation rental” are interchangeable with short-term rentals. Subleasing or subletting of units for short term rental is prohibited if the underlying zone prohibits such use. B. “Authorized agent” means a property management company or other entity or person who has been designated by the owner, in writing, to act on their behalf. The authorized agent may or may not be the designated qualified person for purposes of contact for complaints. C. “Family” means one or more persons (but not more than five unrelated persons) living together as a single housekeeping unit. For purposes of this definition and notwithstanding any other provision of this code, persons with familial status within the meaning of Title 42 United States Code, Section 3602(k) and December 2019 City of Chelan | Short-Term Rental Regulations 8 persons with handicaps within the meaning of Title 42 United States Code, Section 3602(h) and RCW 35A.63.240 will not be counted as unrelated persons. [Per Chapter 19.10, but abbreviated.] D. “Owner” means the natural person or legal entity that owns and holds legal and/or equitable title to the property. If the owner is a business entity such as a partnership, corporation, limited liability company, limited partnership, limited liability partnership or similar entity, any person who owns an interest in that business entity shall be considered an owner. E. “Advertise” or “offer” includes through any media, whether written, electronic, web-based, digital, mobile or otherwise. F. “Qualified person” means the owner, authorized agent, or a designated property representative contact person who is at least 21 years of age and who resides within 30 minutes of the property and is available to respond to short-term rental tenants, neighbors, and the City regarding complaints or other operational conditions of the short-term rental unit. G. “Administrator” means the planning and community development director or his/her designated representative. 5.15. 030 Applicability A. Short-term rentals are allowed when specifically authorized by Title 17 Zoning. B. All allowed short-term rentals defined in CMC 15.15.020 must be licensed consistent with CMC 5.15.040. 5.15. 040 Annual Short-Term Rental Operating License Required A. Operating License: No owner of property within the Chelan city limits may advertise, offer, operate, rent, or otherwise make available or allow any other person to make available for occupancy or use a short-term rental without a valid short-term rental operating license. Annual renewal is required. B. Business License: All short-term rental owners or authorized agents shall obtain a valid City business license and State UBI # and annually renew it. C. Short-Term Rental Operator Records and Advertisement: The short-term rental operating license registration number shall be listed on all short-term rental advertisements. 5.15. 050 Application and Fee A. Application Required. Applications for an operating license shall be on forms provided by the City, demonstrating the application meets the standards required by this chapter. The owner or authorized agent shall certify the following information to be true and correct: B. Incomplete Application. If a license application does not include all required materials, the application will be considered incomplete and the City will notify the applicant, in writing, explaining the information required. If the applicant provides the missing required information within 30 days of the date of the notice, the application will be reviewed. If the applicant does not provide the required information, the application will be deemed withdrawn and the City will refund the application fee. C. License Fee. The fee for application for a short-term rental operating license or license renewal shall be in an amount to recover the City’s actual average costs of reviewing and issuing the license December 2019 City of Chelan | Short-Term Rental Regulations 9 application or license renewal application, including a fee for a late application, investigation, and any required inspections, as established by resolution of the City Council. 5.15. 060 Term of Annual License and Transferability A. Term. A short-term rental operating license shall be issued for a period of one year, with its effective date running from the date the application is due as set forth in 5.15.070 and shall be renewed annually by the owner or authorized agent provided all applicable standards of this chapter are met. B. Transferability. The operating license shall be issued in the name of the property owner and is not transferable. Although not transferable, the new owner or authorized agent shall have 60 days to update owner and contact information to continue operation until the annual application deadline. New owners must apply for a new operating license by the annual deadline. The operating license shall terminate and be deemed void if the new property owner does not update contact information within 60 days of sale when the license holder sells or transfers the property. 5.15. 070 Operating License and License Renewal A. License Must Be Obtained. An operating license and number shall be obtained and/or renewed as required in this section. The ability to operate a short-term rental in the City shall be discontinued for failure to obtain or renew a license to operate as provided in this chapter. B. Application and Renewal Application Process. A person engaging in a short-term rental who has not yet obtained an operating license, or who is required to renew an existing operating license, shall do so as follows: 1. Time for Application. a. New Permits. For new operating licenses applied for after the effective date of this chapter, license applications must be submitted by November 1 for the following operating year. b. Renewals. Renewal forms of licenses of registered STRs shall be submitted by December 1 for the following operating year, and annually every year thereafter. C. Sale of the Property. Upon change in ownership, a property subject to a short-term rental operating license, it is the obligation and responsibility of the new owner or authorized agent to obtain a new operating license to operate the short-term rental by the annual deadline. The new owner or authorized agent may operate for the remainder of the calendar year provided that the new owner shall have 60 days from the date of ownership (closing of the sale) to update owner and contact information on file with the City. D. Notice – Late Applications. If the license application or renewal application is not received by the expiration date, the City shall send notice of expiration to the owner and authorized agent, if known, of any property for which a timely application has not been received, advising the owner that they have 30 days to respond. An application will be considered timely submitted if the City receives a completed application, accompanied by the required fees, within the 30-day late period. E. License Timelines 1. Expiration. All operating licenses will expire Dec. 31 of each year. December 2019 City of Chelan | Short-Term Rental Regulations 10 2. Renewals. Renewal applications shall be received by December 1st. If fees are not paid by Feb. 1st, the operator has until March 1st the ability to operate shall be discontinued and the City will commence revocation of the license pursuant to the procedures in CMC 5.15.100. a. The City will review an application for operating license renewal and issue a renewal provided all the criteria of approval in Chapter 5.15.080 continue to be met. If not met, or documented nuisances or complaints are on file regarding the Short Term Rental, the City reserves the right to deny the renewal of the operating license and the property shall not be used as a short-term rental. b. A decision on an operating license application or renewal may be appealed as provided in CMC 5.15.120. 3. License transfer. For transfer of property to new owners, once the 60-day grace period to update owner and contact information for a current license expires as referenced in subsection (B)(1)(c) of this section, or the new application deadline lapses, the ability to operate shall be discontinued with no further action by the City. 5.15. 080 Application Requirements and Criteria for Approval A. Operational Requirements. The applicant has the burden of proof to demonstrate compliance with each applicable criterion for approval or renewal of the operating license. The approval criteria also operate as continuing code compliance obligations of the owner. Staff may verify evidence submitted and the applicant shall cooperate fully in any investigation. Required criteria include: 1. Owner Information. Owner’s name, permanent residence address, permanent residence telephone number and electronic mail addresses, and the short-term rental address and telephone number. The application must also include the names, mailing addresses, electronic mail addresses, and telephone numbers of all persons holding an ownership interest in the property, or holding an ownership interest in the entity that owns the property. 2. Qualified person Information. If the owner does not permanently reside within the Chelan City limits or is not always available when the property is being rented, the owner shall provide the name, telephone number and email of a qualified person (which can be a person or company) who can be contacted concerning use of the property and/or complaints and can respond to the property within 30 minutes to complaints related to the short-term rental consistent with definitions and requirements in CMC 5.15.020 and 5.15.080 respectively. 3. Zoning Compliance. The applicant shall identify the zoning district applicable to the short- term rental property by providing parcel number and physical address. 4 Parking. The owner shall provide off-street parking spaces in compliance with standards set forth in CMC 25.9. Where off-street parking requirements cannot be met, the number of rented bedrooms shall be limited to the ratio set in the development standards. Specific requirements are as follows: a) A parking diagram of the approved parking spaces for tenant vehicles shall be required for licensing application. b) The tenant parking areas shall be designated and signed, or otherwise made visible to the tenant in a prominent location within the short-term rental dwelling. December 2019 City of Chelan | Short-Term Rental Regulations 11 Exception: Short-term rental license operators operating with a current business license within a conforming land use zone who cannot meet the parking requirement at the time of this ordinance adoption shall be granted legal non-conforming use status with regards to parking and be permitted to operate. 5. Occupancy. Occupancy limits and number of bedrooms. The maximum number of occupants permitted to stay overnight shall be two people for each double bed or larger, excluding up to four children under the age of six. Properties that want to accommodate more than 10 tenants may need to comply with additional health and safety regulations as deemed necessary by the building official and be greater than 2000 square feet gross floor area to comply with the International Residential Code, as it exists now or future amendments thereto. Existing legal short- term rentals in effect prior to adoption of this code that do not meet the square footage requirement shall be granted legal non-conforming status. a. A scaled floor plan must be submitted depicting the location of each sleeping area and square footage, labelling doors and windows. b. All sleeping areas must comply to the habitable space requirements of 70 sqft and 50 sqft per person of International Residential Code as adopted by the City. 6. Good Neighbor Guidelines1. Acknowledgment of receipt and review of a copy of the good neighbor guidelines. Evidence that the good neighbor guidelines have been effectively relayed to short-term rental tenants, by incorporating it into the rental contract, including it in the rental booklet, posting it online, providing it in a conspicuous place in the dwelling unit, or a similar method. 7. Health and Safety. a. Fire and Emergency Safety. Prior to approving the initial operating license, the City shall perform a life-safety inspection. After the unit is approved for rental, a completed self- certification checklist for health and safety (fire extinguishers, smoke alarms, carbon monoxide detectors, appropriate egress, etc.) shall be required with each annual operating license renewal consistent with forms provided by the Administrator. [See example in Attachment B.] b. Owner Responsibility. It is the owner’s responsibility to assure that the short-term rental is and remains in substantial compliance with all applicable codes regarding fire, building and safety, health and safety, and other relevant laws. 1 Guidelines may be subject to change via administrative decision. Updated guidelines shall be made available annually. [See Attachment A.] December 2019 City of Chelan | Short-Term Rental Regulations 12 c. Exception. Within the first year of adoption of this code, the City shall provisionally approve licenses for a period of six months upon receipt of the self-certification checklist. Compliance with Fire and Safety requirements must be met by the renewal date thereafter. 8. Waste Management. Weekly solid waste collection service shall be provided. Trash must not be visible from public view and must be in proper containers on collection day. 9. Noise. Noise shall not be in violation of CMC Chapter 8.31, Public Disturbance Noises. 10. Nuisances. The property and operation shall be free from nuisances per CMC Chapter 8.26. 1. Character of Structure. Occupancy and operation shall be compatible with the surrounding neighborhood character. The short-term rental shall not give the appearance of being a business. Factors upon which compatibility will be judged include but are not limited to: noise, traffic, solid waste management, signage, and light and glare. 12. Verification of Neighborly Notice. Applicants must provide evidence that neighborly notifications in Section B6 below have been met. 13. Other. Such other information as the Administrator deems reasonably necessary to administer this chapter. 14. Insurance. State requirements for liability insurance for coverage of no less and $1 million. 15. UBI. Registration with Department of Revenue (DOR) in the form of a Uniform Business Identification. B. Approval Criteria. To receive approval or renewal, an applicant must demonstrate that all approval criteria listed below have been satisfied: 1. Operational Criteria: Shall be met per subsection A above. 2. Renewals. All short-term rentals must operate under a current license regardless of non-use. If a property has not been rented in a 12-month period, renewal of license criteria must still be met to maintain license. 3. Operating License Revocation. If an owner lapses in renewing the annual licenses or fails to provide adequate renewal criteria, an operating license shall be revoked by the City under CMC 5.15.100. The exception to these criteria for continuation of an operating license is a temporary hardship exception, which includes submission of proof, acceptable to the City, that: (a) a medical condition of the owner or family member jeopardizes the ability of the owner to operate the short-term rental; or (b) the death of the spouse or family member jeopardizes the ability of the owner to operate the short-term rental; or (c) structural integrity of the short-term rental deems it uninhabitable for tenants and is not self-imposed. The City may attach a time limit to this hardship exception. A time limit may be set by the Administrator but shall not exceed six months. A one- time extension may be approved upon request if one of the conditions of this section still applies. 4. Contact Information. The owner or authorized agent has provided information sufficient to verify a qualified person will be available consistent with definitions in CMC 5.15. 020. The owner or qualified person shall be available to be contacted by telephone to ensure a response to the short-term rental address at all hours (24 hours a day, seven days a week) and within 30 minutes while the dwelling unit is occupied for rent. The designated qualified person may be December 2019 City of Chelan | Short-Term Rental Regulations 13 changed from time to time throughout the term of the license. To do so, the license information shall be revised with the City at least 14 days prior to the date the change takes effect, except when the failure to do so is beyond the owner or authorized agent’s control. In an emergency or absence, contact forwarding information to a qualified person may be provided for the owner or representative. 6. Notice to Neighbors. a. New Applications: The owner or authorized agent shall either: (a) provide an annual mailing or otherwise distribute by hand, a flier to neighbors within a 250-foot radius of the short-term rental property address containing the owner and/or qualified person contact information, or (b) post a small placard or sign as permitted by Chapter 17.58 Signs, near the adjacent street advising neighbors and tenants of the same information where it can be seen from the public right-of-way. The purpose of this notice is so that adjacent property owners and residents can contact a responsible person to report and request resolution of problems associated with the operation of the short-term rental. If the permanent contact information changes during the license period, the new information must be mailed or distributed again, or changed on the placard or sign. b. Renewals: Renewal applications may provide evidence of placard in lieu of annual mailings or distribution. c. Electronic Availability. In addition, the City will make a database electronically accessible within which any person can enter in an address of a short-term rental and obtain the owner/authorized agent and/or qualified person’s name and telephone number. 7. No Pending Actions or Violations. At the time of application, the owner of a short-term rental shall not have received a civil citation regarding compliance of the subject short-term rental property with any provision of the Chelan Municipal Code. A voluntary assurance of compliance, negotiated compliance agreement, or deferred sentence agreement will satisfy the requirement that there be no pending actions or violations. 8. Good tax and legal standing. The owner shall be in compliance with the Chapter 3.36, Special Excise Tax on Lodging, and other local sales taxes and state hotel/motel and sales taxes in accordance with the Department of Revenue. The owner must be in good standing with Code Enforcement including no active cases or unresolved issues. C. Mandatory Postings. The short-term rental license issued by the City shall be displayed in a prominent location within the interior of the dwelling adjacent to the front door. The license will contain the following information: 1. A license number or other identifying mark unique to the short-term rental operating license which indicates the license is issued by the City of Chelan, with the date of expiration; 2. The name of the owner or qualified person and a telephone number where the owner or qualified person may be contacted; 3. The number and location of approved parking spaces; 4. The maximum occupancy permitted for the short-term rental; December 2019 City of Chelan | Short-Term Rental Regulations 14 5. Any required information and conditions specific to the operating license; 6. The property address; and 7. The City of Chelan official logo. 5.15. 090 Additional Operational Requirements A. Response to Complaints. The owner or qualified person shall respond to neighborhood questions, concerns, or complaints in a reasonably timely manner depending on the circumstances. 1. Complaints. The owner or qualified person shall maintain a record of complaints and the actions taken in response to the complaint, if relevant, in an electronic or written manner deemed reasonable to document the interaction. This record shall be made available for City inspection upon request to investigate under subsection (A)(3) of this section. 2. City Authority. a. Certain types of complaints are subject to the City’s regulatory authority under other sections of the Chelan Municipal Code (noise complaints, nuisance, disorderly conduct, etc.). Other complaints related to occupancy and on-site parking are subject to the City’s code enforcement authority pursuant to this chapter. It is not intended that the owner, agent or qualified person act as a peace officer or code enforcement officer or put themselves in an at-risk situation. However, reasonable initial inquiries or complaints related to noise, disturbances, occupancy or parking may first be made to the owner or qualified person. b. Complaints specifically related to the good neighbor guidelines, or the condition, operation or conduct of occupants of the short-term rental, should first be made to the owner or qualified person. If there is a failure to respond or a clearly inadequate response by the owner or representative, a complaint may be submitted to the City on a form provided by the City and the City will respond or investigate as needed. The City will first seek voluntary compliance or resolution, but if the City finds substantial evidence supports further action given the complaint(s), the City will follow the warning procedures set forth in Chapter 2.80. 3. Records. On request and in compliance with the public records law, the City shall provide the owner, authorized agent and/or qualified person with the information in the complaint. 4. Grounds for Warning. Repeated failure of the owner or qualified person to timely and reasonably respond to a complaint(s) relayed by City staff is considered grounds for a warning and potential revocation under CMC 5.15.100. Issuance of a noise citation to a tenant may be grounds for a warning to the owner, only if under the circumstances in the reasonable judgment of the Administrator, the owner should be held responsible. Issuance of a public nuisance citation may be grounds for a warning in the appropriate circumstances. 5. Administrative Rules. The Administrator shall have the authority to establish administrative rules and regulations consistent with the provisions of this chapter for the purpose of interpreting, clarifying, carrying out, furthering, and enforcing the provisions of this chapter. A copy of such administrative rules and regulations shall be on file in the office of the City Clerk and be posted on the City website. December 2019 City of Chelan | Short-Term Rental Regulations 15 5.15. 100 Revocation Procedure A. In addition to the penalties described in CMC 2.80.160, the following provisions apply to violations of this chapter: 1. Failure to renew an operating license as set forth in CMC 5.15.070 is grounds for immediate revocation of the operating license. 2. Failure to meet the criteria required by 5.15.080 is grounds for immediate revocation of the operating license. 3. The discovery of material misstatements or providing of false information in the application or renewal process is grounds for immediate revocation of the operating license. 4. Such other violations of this chapter of sufficient severity in the reasonable judgment of the Administrator, so as to provide reasonable grounds for immediate revocation of the operating license. 6. Other violations of this chapter, including but not limited to City initiated investigation/sustaining of complaints, shall be processed as follows: a. For the first violation within a 12-month period, the sanction shall be a warning notice. b. If the same offense continues to occur or a second similar offense occurs at any time during a 12-month period, the City may either send a second warning notice or suspend the operating license for 90 days, depending on the severity of the offense. c. If a third similar offense occurs at any time during a 12-month period, the penalty shall be revocation. B. Notice of Decision/Appeal/Stay. If the operating license is suspended or revoked as provided in this section, the Administrator shall send written notice of suspension and revocation to the owner stating the basis for the decision. The notice shall include information about the right to appeal the decision and the procedure for filing an appeal. The owner may appeal the Administrator’s decision to revoke the operating license to the Hearing Examiner per CMC Chapter 2.15. Upon receipt of an appeal, the Administrator shall stay the suspension or revocation decision until the appeal has been finally determined by the Hearing Examiner. 5.15. 110 Violations – Penalties A. In addition to the revocation procedure of CMC 5.15.100, any person or owner who uses, or allows the use of, property in violation of this chapter is subject to the enforcement authority of CMC Chapter 2.80. B. The following conduct also constitutes a violation of this chapter and is a civil infraction: 1. Representing a dwelling as available for occupancy or rent as a short-term rental where the owner does not hold a valid operating license issued under this chapter, or making a short-term rental available for use, occupancy or rent without first obtaining a valid operating license. Evidence of operation includes but is not limited to advertising, online listings or calendars of availability, guest testimony, online reviews, rental agreements or receipts; 2. Advertising or renting a short-term rental in a manner that does not comply with the standards of this chapter; and December 2019 City of Chelan | Short-Term Rental Regulations 16 3. Failure to comply with the substantive standards of CMC 5.15.070 and 5.15.080. C. Notwithstanding the application of the uniform code enforcement procedures in Chapter 2.80, the business license fee and any assessed late charges shall constitute a debt to the city and may be collected by court proceedings in the same manner as any other debt in like amount, which remedy shall be in addition to all other existing remedies. D. Termination of Water Service. In addition to the methods of code enforcement in Chapter 2.80, the administrator may terminate the provision of water service to the applicant or licensee. Note: C and D are from Business License regulations, CMC 5.13.090. 5.15. 120 Appeals of Short-Term Rental Operating License Determinations A. Filing Requirements – Notice. The owner or authorized agent may appeal a short-term rental operating license revocation to the Hearing Examiner. B. Authority to Decide Appeal. The Hearing Examiner shall be responsible for determining an appeal of a decision approving or denying an application or renewal application for an operating license, or revoking or suspending an operating license, in any zone. C. Time for Filing. An appellant is required to file a written notice of appeal including the basis for the appeal within fourteen calendar days of the license determination being appealed. D. Fee for Appeal. The City Council may establish by resolution a fee for filing an appeal. The fee shall be sufficient to recover the average or actual costs of mailing notice of hearing and conducting the hearing. E. Procedures. The Administrator may establish administrative procedures to implement the appeal procedures provided in this section, including any required forms. The Hearing Examiner may adopt procedures for hearings consistent with CMC Chapter 19.30. F. Hearing. Within 30 days of receiving the notice of appeal, the Administrator shall schedule a hearing on the appeal before the Hearing Examiner. At the hearing, the appellant shall have the opportunity to present evidence and arguments as may be relevant. G. Standard of Review and Decision. The Hearing Examiner shall determine whether the City’s decision was based on a preponderance of the evidence. A decision of the Hearing Examiner shall be based on the evidence received. The Hearing Examiner may determine not to suspend or revoke the license, or to revoke or suspend the license. If the Hearing Examiner upholds the decision to revoke the operating license, the Hearing Examiner shall order the owner to discontinue use as a short-term rental. H. Finality. The Hearing Examiner’s decision shall be final on the date of mailing the decision to the appellant. The Hearing Examiner’s decision is the final decision of the City and is appealable only to Superior Court. 5.15. 130 Discontinuance of Short-Term Rental Occupancy A. After Revocation. After a short-term rental operating license has been revoked, the dwelling unit may not be used or occupied as a short-term rental unless a new short-term rental operating license and business license are granted, and the owner of the property to which the license applied and whose December 2019 City of Chelan | Short-Term Rental Regulations 17 license has been revoked shall not be eligible to reapply for a short-term rental license for short-term rental occupancy of the same property for a period of 12 months from the date of revocation. B. After Expiration. If a short-term rental operating license expires, the dwelling unit may not be used or occupied as a short-term rental, except for the 60-day grace period for new owner(s) of property during which time they may apply for a new operating license. New operating licenses on properties wtih expired licenses shall comply with application procedures, criteria, inspections, and requirements in this chapter and any future conditions or requirements pertaining to Short term rentals. 5.15. 140 Remedies Not Exclusive The remedies provided in this chapter are in addition to, and not in lieu of, all other legal remedies, criminal and civil, which may be pursued by the City to address any violation of this code or other public nuisance. December 2019 City of Chelan | Short-Term Rental Regulations 18 Attachment A: Good Neighbor Guidelines Short Term Rental Operating License - Good Neighbor Guidelines The Good Neighbor Guidelines (GNG) were created to educate Short-Term Rental (STR) owners and tenants/guests on the importance of being a good neighbor. ▪ 24-Hour Contact Information. If at any time you have concerns about your stay with regards to the unit’s health, safety, overall cleanliness, or concerns from your neighbors, please call the 24-hour contact number listed here: Qualified Contact Person’s Name: Daytime Number: _____________________Evening number: email: text number: My qualified person’s contact is also listed in the rental lease agreement, and posted in the unit, and distributed to my neighbors. In the event of an emergency, please call 911. ▪ General Respect for Neighbors. Be friendly, courteous, and treat your neighbors like you want to be treated. Respect your neighbors and their private property by not trespassing ▪ Noise. The City of Chelan prohibits nuisance noise during hours of rest. Please be considerate of the neighborhood, and your neighbor’s right to the quiet enjoyment of their home and property, especially after 10 p.m. Noise complaints generated from your party may result in a civil penalty and/or the owner’s rental license revocation. ▪ Maintenance of Property. Be sure to pick up after yourself and keep the property clean, presentable and free of trash. ▪ Garbage Disposal. Place trash and recycling containers at the appropriate place and time for pickup. Return trash and recycling containers to the designated location within 12 hours after pickup. Cigarette butts should be properly extinguished and disposed of in the garbage. ▪ Parking & Traffic Safety. Refer to the parking diagram posted in the unit and park in the designated visitor spots. You are allowed to have one car for every two bedrooms. Do not park on lawns or in a manner which blocks driveways, sidewalks, alleys, or mailboxes. Drive slowly through neighborhoods and watch for pedestrians and children playing. ▪ Pets. Promptly clean-up after your pets. Prevent excessive and prolonged barking. Keep pets in designated areas and obey local leash laws to avoid them from roaming the neighborhood. Control aggressive pets. Store pet food indoors and in a secure container to reduce the likelihood of unwanted pest problems. ▪ Tenant/Guest Responsibility. Approved guests and their visitors are expected to follow these Good Neighbor Guidelines. Be sure to read your rental agreement for additional terms and restrictions which may include consequences for violating the Good Neighbor Guidelines. December 2019 City of Chelan | Short-Term Rental Regulations 19 Attachment B: Self-Certification Checklist PROPERTY AND CONTACT INFORMATION Property Owner Parcel Number Parcel Address City, State, Zip Code Zip Code Mailing Address City, State, Zip Code Phone/Email Contact Phone: Email: QUALIFIED PERSON “Qualified person” means the owner, authorized agent, or a designated contact person who is at least 21 years of age and who resides within 30 minutes of the city limits of the city of Chelan and is available to respond to short-term rental tenants, neighbors, and the City regarding complaints or other operational conditions of the short-term rental unit. The owner or authorized agent or qualified person shall be available to be contacted by telephone to ensure a response to the short-term rental address at all hours (24 hours a day, seven days a week) while the dwelling unit is occupied for rent. Qualified Person Name City, State, Zip Code Phone/Email Contact Phone: Email: PARKING DIAGRAM The owner shall provide at least one off-street parking space, outside of the required setbacks for each two rented bedrooms. A parking diagram of the approved parking spaces shall be provided to tenants and be available in a prominent location within the short-term rental dwelling. December 2019 City of Chelan | Short-Term Rental Regulations 20 SHORT TERM RENTAL OPERATING LICENSE SELF-CERTIFICATION CHECKLIST The purpose of this form is to provide short-term rental property owners a guide when inspecting their properties to ensure compliance with the standards set forth in City of Chelan Short Term Rental Operating License, CMC Chapter 5.15. Multi-use buildings  For multi-use buildings with commercial and residential uses, please consult with building official before continuing with checklist. Life Safety  House numbers are installed and clearly visible from the street or common areas.  Exit stairs are in good repair and have proper landings and handrails/guardrails. Handrails required on all stairways at least one side.  Stairway width shall be minimum 36”, and rise (7 ¾” max)/run (10” min) are sufficient.  Door locks are present and operative.  Window locks are present and operative.  Windows in bedrooms must be present and have 5 sqft opening.  Porch, deck, or balcony are in good repair and have guardrails.  Exit/egress doors must be 32 inches in width, 78 inches height and hinged.  All sleeping rooms must be a minimum of 70 sqft and have a minimum wall length of 7’. Exit(s)  Exterior doors and/or door framework are in good repair.  Exit windows from sleeping rooms are provided and sufficient in area or dimension.  Exiting is sufficient in number, width, or access for the occupant load served. Fire  Operative smoke detectors and CO monitors in all sleeping rooms, outside of sleeping areas, and on each floor of dwelling.  Fire extinguishers in cooking areas present and clearly labelled  Appropriate storage, and lack of building clutter or other fire hazards. Electrical  Every habitable room contains at least two electrical outlets or one outlet and one light fixture.  All electrical equipment, wiring, and appliances have been installed and are maintained in a safe manner.  Ground fault circuit interrupters are installed in the bathrooms and kitchens.  Light fixtures, receptacles or switches are in working order. Plumbing, Heating, Ventilation, and Sanitation  Dwelling equipped with bathroom facilities consisting of a toilet, sink, and either a bathtub or shower and in sanitary condition.  Dwelling equipped with kitchen facilities consisting of a stove, refrigerator, and sink.  All plumbing fixtures connected to the sanitary sewer system and equipped with proper “P” traps.  All plumbing fixtures connected to an approved water supply and provided with hot and cold water necessary for their normal operation.  Dwelling is equipped with operable heating..  Any solid fuel burning appliances are installed per applicable codes and maintained in safe working condition and properly ventilated.  Dwelling has ventilation in all rooms  Temperature/pressure relief valve present on water heater.  Adequate and operative heating or mechanical equipment.  Dwelling is equipped with heating facilities in operating condition.  No signs of mold or mildew on wall surfaces.  No signs of infestation from rodents or insects.  Dwelling is equipped with adequate garbage and rubbish storage. Structural  Dwelling has no sags, splits or buckling of ceilings, roofs, ceiling or roof supports or other horizontal members due to defective material or deterioration.  No split, lean, list, or buckle of dwelling walls, partitions, or other vertical supports due to defective material or deterioration.  Fireplaces and chimneys are not listing, bulging, or cracking due to defective material or deterioration.  No evidence of decay or damage to exterior stairs or decks. Weather Protection  Dwelling has no broken windows or doors.  No broken, rotted, split, buckled of exterior wall or roof coverings that affect the protection of the structural elements behind them.