Short-term rental amendments proposed; two proposed zoning overlays would dictate operations, siting

The amendments are scheduled to go before the planning commission again next Wednesday, Nov. 10, during a special session. If approved, they will go before city council for a final vote. Board Chair Greg Hohensee said additional public comments will be gathered by the city council once the recommendations are up for a vote.

Should the proposed amendments garner the planning commission’s approval and later satisfy the city council’s desire to employ a set of regulatory tools on the local short-term rental market, it could signal an approaching conclusion to the moratorium on new short-term rental permits and construction, which has been in place since Sept. 1.

Key changes under consideration by the planning commission include:

• The introduction of two short-term rental planning overlays — one which would be located within the downtown commercial core, and another within a defined “walkable residential” area, which each have different rules determining how short-term rentals are operated and sited;

• Restrictions on how long a short-term rental can be operated each year within and outside the residential overlay;

• Automatic expiration of a short-term rental permit after five consecutive years of operation within a short-term rental overlay. Following a permit’s expiration, an owner would be required to resubmit a permit application, and approval would be based on a lottery system which would be beholden to a maximum threshold of allowable units within a given short-term rental overlay. Permits would be issued on a first come first serve basis until the maximum threshold has been reached, at which point pending applications would be approved at random as permits become available. If and when the lottery is established, “all active applications shall be notified of each available drawing as it becomes available;”

• Short-term rental applications outside the overlays would require a conditional use permit;

• A requirement that permit-holders must place signage on the property indicating the name of the short-term rental establishment, the name of the owner or representative and phone number, the city’s contact information and how someone can register a complaint, subject to approval by the planning administrator.

The planning commission discussed the facets of the amendments at length last week, which would more strictly regulate the ability of a homeowner to convert their property to short-term rental use, depending on the geographical location of the property.

According to the proposed amendments, subject to change before a vote, the downtown commercial overlay would give unrestricted access to the number of short-term rentals a person can operate, the number of days out of the year a short-term rental can be in operation, and would be exempt from owner-occupancy requirements.

The proposed downtown overlay would also institute a cap of 50% of residential units within a building that can be converted into short-term rental use.

Under the proposed amendments, an owner-occupied residence is limited to one short-term rental permit within the proposed “walkable residential” overlay, and the amendments would cap the number of units to 10% of total residential units within the overlay. The cap would drop to 5% of residential units outside the overlay. Accessory dwelling units would be subject to a conditional use process within and outside of the residential overlay.

At the meeting, the commission formed a concurrence to exclude the short-term rentals within the downtown overlay from a cap on the number of rentals.

“It should be looked at differently than residential,” said Commissioner Tom Stevenson. “I just don’t want to give it a complete free-reign because I want to continue to be looking at it a bit skeptically, just realistically.”

Following a conversation regarding the amendments, City Planner Brendan Conboy said the commission will reconvene at the next meeting to further discuss potential modifications to the proposed residential overlay, proposed rules relating to short-term rentals bound to the conditional use permitting process, and a proposed process to grandfather in certain short-term rentals currently in operation.