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HomeMy WebLinkAbout07.08.24CITY OF ST. JOSEPH www.cityofstjoseph.com 75 Callaway Street East | Saint Joseph, Minnesota 56374 Email: cityoffices@cityofstjoseph.com | Phone: 320.363.7201 | Fax 320.363-0342 St. Joseph Planning Commission Monday, July 8th, 2024 6:00 PM St. Joseph Council Chambers 75 Callaway St E **The meeting will also be available through Zoom** 1.Call to Order 2.Pledge of Allegiance 3.Public Comment 4.Agenda Review and Adoption 5.Approval of June 10th, 2024 minutes 6.New Business 7.Old Business a.Short-term rental discussion b.Honeybee discussion c.General updates 8.Other Business a.None 9.Adjourn ZOOM INFORMATION Join Zoom Meeting https://us06web.zoom.us/j/87642407431?pwd=bXlkL3NlM2VKNXVMdmk2MC91blYxUT09 Meeting ID: 876 4240 7431 Passcode: 797162 One tap mobile +19292056099,,87642407431#,,,,*797162# US (New York) Dial by your location Find your local number: https://us06web.zoom.us/u/kblhxKat7W June 10th, 2024 Page 1 of 2 Pursuant to due call and notice thereof, the Planning Commission for the City of St. Joseph met on Monday, June 10th, 2024, at 6:00 PM in the St. Joseph City Hall opening with the Pledge of Allegiance. Planning Commission Members Present: Commissioners Keith Louwagie, Adam Scepaniak, Jon Hazen, Isabella Margl, Mark Thompson, Gina Dullinger Absent: Carmie Mick Staff Present: Community Development Director Nate Keller Public Comments: None. Agenda Review & Adoption: Hazen made a motion to approve the agenda review and adoption. The motion was seconded by Thompson and passed unanimously. Approval of May 13th, 2024, minutes: Scepaniak made a motion to approve the May 13th minutes. The motion was seconded by Hazen and passed unanimously. New Business: a.Public Hearing – Interim Use Permit 409 College Ave N Keller provided an overview of an Interim Use Permit received from KMKM LLC. The IUP would allow the continuation of a residential rental in an existing single-family home located at 409 College Ave N. The property is in a B-2 Highway Commercial district. The IUP is allowable for a maximum term of five years or less pending approval from the City Council and review and recommendation from the Planning Commission. A public hearing is required. Louwagie opened the public hearing at 6:02PM. Scepaniak asked if there are any changes to this application compared to the one originally submitted. Katie Willenbring, Cold Spring; daughter of property owner; Diane Schneider: Willenbring replied there have been no changes to the application. Louwagie closed the public hearing at 6:03PM. Hazen made a motion to approve Resolution 2024-IUP Adopting Findings of Fact recommending the City Council issue an Interim Permit renewal for five years. The motion was seconded by Dullinger and passed unanimously. O ld Business: a.Short-term Rental Discussion Keller shared the short-term rental discussion at a PC meeting a few months ago focused on short term rentals in the downtown district. At a more recent city council workshop, there was interest in expanding short term rentals to other districts in the city. Keller gave an overview of items for the Planning Commission to consider as this discussion develops over the coming months. The Planning Commission and staff discussed regulating short term rentals versus not regulating them, how short-term rentals may impact housing availability, their impact on individual districts, and collecting lodging tax. Consensus was to continue working towards developing goals which will help define an approach on regulatory framework. b.Honeybee Discussion Keller shared that staff is looking for the PC’s input and discussion on regulating and allowing residents to have honeybee hives in residential areas. In May the Council held a workshop and after a brief discussion June 10th, 2024 Page 2 of 2 regarding honeybees the Council showed interest in supporting ordinance amendments to potentially permit the use. Commissioner Scepaniak provided information and insight into beekeeping as his wife is a beekeeper. Staff and the Planning Commission discussed potential regulations including: •Setbacks of hives. •Number of hives per residence. •Permitting process. •Potentially limiting the breed of bees. •Personal use vs selling honey and licensing as a home occupation. •Potential signage on property providing notice of beehives. •Regulating potential nuisance violations. •Providing public information regarding honeybees/hives/beekeeping. The Planning Commissions consensus was to support beekeeping withing city limits, to regulate setbacks, and limit number of honey beehives per lot size. Keller will provide a drafted language for the ordinance at the next PC meeting. c.General Updates Keller provided the following updates: •The May PC items were approved by the Council except the text amendment. •The text amendment was approved at the next Council meeting after limiting the language of the text amendment to apply to “Industrial Districts”. •The House of Hern project is planning to break ground after the 4th of July. •The Hansen & Companies project is planning to break ground near the end of June. •The Joint Planning Board is planning to meet either July 9th or August 13th. Other Business: a.None. Adjourn: Thompson moved to adjourn the meeting at 6:57PM. The motion was seconded by Dullinger and the motion carried. Minutes approved by: Nate Keller Community Development Director Planning Commission Agenda Item 7a MEETING DATE: July 8th 2024 AGENDA ITEM: 7a Short -term rental discussion SUBMITTED BY: Community Development STAFF RECOMMENDATION: Discussion only at this point PREVIOUS PLANNING COMMISSION ACTION: Brief discussion last month. BACKGROUND INFORMATION: Staff would like continued input and discussion on short-term rentals (STR’s). The purpose of this discussion is to provide some direction/goals on STR’s to help draft a regulatory framework (ordinance). Some general goals/notes that have been discussed or which I have heard from individual PC members include: •Ensuring STR’s pay the appropriate lodging tax. This likely will require a licensing or permit process to ensure the STR’s are accounted for, tracked,etc. •Protect existing residential areas/neighborhoods and character. For example, limiting the quantity of STR’s allowed in an area (no matter the district). •Ensure parking does not become an issue. •Cap the number of guests allowed in STR’s •Make the ordinance as simple as possible so it is easy to understand •Open to allowing the use in all Zoning districts Included from the last meeting are the notes from the memo on STR’s. An amendment to the ordinance to allow STR’s would likely result in amending the existing rental ordinance. Included in packets is that ordinance with drafted language and notes in red on how language could lay out and what could be included. Staff is also looking for feedback in terms of public input (to what extent, methods of input, etc,) as the process around a STR ordinance begins to form. ATTACHMENTS: Redlined copy of Rental Ordinance Report from National League of Cities Ordinance from City of Proctor Ordinance from City of La Crescent REQUESTED PLANNING COMMISSION ACTION: 1.Discussion and input only. Goal is to start developing agreed to goals for STR’s. From there staff can continue tweaking ordinance draft for continued discussion. Notes from June’s memo and packet 1)Determine areas where the use would be appropriate (allowed Zoning districts) a)Downtown Commercial District b)Highway Commercial District c)R-1 Single Family District d)R-2 Two Family District e)R-3 Multi-Family District f)R-4 Townhouse/Patio Home District g)RR Rural Residential District i)If allowed in Residential 1.Owner occupied A)Supports protection of long-term housing and not losing dwelling units in 2.Non-owner occupied A)Limiting or not allowing. Concerns on losing some housing units in the city if allowed to be non-owner occupied 3.CAPS on the total number allowed A)Percentage of the total housing units in the city or for multi-family structures percentage of the total units. This is to protect long-term housing units from being converted into short-term and further depleting the housing supply in the city ii)If allowed in Commercial 1.Limits on the sole use being STR. Similar to how long-term rental is regulated through an Interim Use permit 2.Encourage use to be a mixed use? 2)Determine method to allow for each Zoning district i)Via license (like an annual rental type license) 1.Proof of proper lodging license through the State and County? ii)Via Interim Use permit iii)Via Conditional Use permit 3)Definitions a)Defining what is a STR (unit rented out between 1-27 days) b)Primary residence or owner occupied (requiring an affidavit of residency) 4)Limits on the allowed number of units that can be rented in a dwelling a)Multi-family CAPs (typically a percentage of the overall building) b)Duplex and Tri-plex CAPS (typically maxed at 2 per structure) c)Single Family CAPS (typically maxed at 1 per structure) d)Limits on the number of rooms e)Limits on the number of guests 5)Other regulations to consider a) Parking 1.Ensuring adequate parking is available on-site and matches the quantity of units being rented within the space b)Signage 1.Limits on size, type, location, etc. 2.Posting of owner contact info and displaying of permit stating the unit is a STR c) Events 1.Limits or language stating not allowed d)Violations (three strike policy? Fines? Etc) 1.Suspension and revocation language 2.3 strike policy? 3.Impacts to renewal e)Enforcement (who, what, how, etc.) and Inspections 1.Responsible parties 2.How often inspections are needed (group in with annual rental license inspections?) 3.What resources are needed and staff time f)Noise and Nuisances g)Number of occupants 1.Limits on the total maximum number h)Collection of lodging tax 1.Consider how lodging tax would apply 2.Require proof that the STR has obtained proper lodging license through the State ORDINANCE 2024- AN ORDINANCE AMENDING ORDINANCE 505.03 AND ORDINANCE ADDING SECTION 505. 13 TO ORDINANCE 505 New language is underlined and in red font The City Council for the City of St. Joseph, HEREBY ORDAINS that City Code Section 505.03 hereby adds the following definitions: Short -term rentals (STR) – any home, cabin, condominium, or similar building that is advertised as, or held out to be, a place where sleeping quarters are furnished to the public on a nightly, weekly, or for less than a 27-day time period and is not a bed and breakfast, resort, hotel, or motel. The City Council for the City of St. Joseph, HEREBY ORDAINS that City Code Section 505 hereby adds the following section pertaining to Short-Term Rental Units: Section 505.13: LICENSING AND REGULATIONS OF SHORT-TERM RENTAL (STR) UNITS Subd. 1. License and Registration Required. No person shall operate a STR in the City for which a written application for a license has not been properly made and filed with the City and a valid license has not been obtained from the City. Subd. 2: Application for STR License. A license fee for each STR dwelling shall be due at the time of the initial and/or renewal application as determined by the City of St. Joseph Fee Schedule. The license application shall be on a form prescribed by the City and shall include all required information. Subd. 3: License Procedures. Application shall be made on form(s) provided by the City. Applicants shall provide requested information on the application form(s) which shall include the following, but is not limited to: b)Owner shall include two emergency contact numbers with names. These numbers should be available at any time should emergency or issues with the STR arise. c)Street address of the STR property and the number of dwelling units, and the number of bedrooms in each dwelling unit. d)The number of paved off-street parking spaces available. e)Maximum number of people per rental dwelling. f)Additional information as deemed necessary by the City g)The license shall be displayed at the STR unit which states that the unit is a licensed STR within the City and shall be displayed by the front entrance of the STR unit. Emergency contacts shall be posted with the license and include names and phone numbers of two emergency contacts. A good neighbor guide shall also be displayed next to the license and shall highlight relevant expectations and standards of the STR unit tied to: noise regulations, nuisance regulations, parking regulations, occupancy regulations, trash and cleanliness regulations. Subd. 4: Registration/License Term and Renewal. All STR licenses shall expire on August 1st of each year. An owner who is operating a STR property after the license has expired is operating an unlicensed STR property. Registration and License renewal as required by this Ordinance shall be made by the owner or agent of the rental property completing and submitting to the City the required application form(s) furnished by the City, along with the fee as established in the City’s Fee Schedule. A STR renewal registration and license shall be applied for at least 30 days prior to expiration of the license. Subd. 5. INSPECTIONS. All STR properties are required to be licensed pursuant to the provisions of this Ordinance, and will be inspected by the Code Official as follows: a)License Issuance. No license shall be issued under this Ordinance unless the STR conforms to the Ordinances of the City of St. Joseph and the laws of the State. An inspection of the STR unit shall be conducted and verified by the Code Official prior to issuance of the license and renewal license. If the license application is incomplete, or the applicant does not meet the requirements of the licensing process, including the inspection requirements, within 30 days of the submittal date, the application will be canceled. b)Access for Inspection. Every applicant for and/or holder of a STR license shall permit the Code Official and/or his or her authorized representatives, either voluntarily or pursuant to an administrative or other warrant, to enter upon the premises for the purpose of conducting inspections to verify compliance with this Ordinance. No license shall be issued or renewed under this Ordinance unless the owner of the STR unit(s) agrees in their application to permit inspections to determine compliance with City Code during the effective period of the rental license. The submission of a license application, or the possession of a license issued by the City, shall constitute the express consent of the owner to grant free access and entry to the structure or premises under the owner’s control for inspection pursuant to this chapter. If any owner refuses to permit or schedule free access and entry to the structure or premises under their control for such inspection, or refuses to be present during any such inspection when requested by the Code Official, the application for a new or renewal STR license shall be immediately denied or an existing license may be revoked for such refusal. If at any other time the Code Official seeks entry to a licensed STR unit for inspection and the Code Official is refused free access and entry, the City may pursue any remedy at law, including, but not limited to, securing an administrative search warrant for the property, revoking or suspending the rental license, or seeking such other remedies provided by law. c) All STR units will be inspected in accordance to the standard rental license checklist and code requirements. Subd. 6: COLLECTION OF LODGING TAX. All STR units shall pay the City of St. Joseph Lodging tax. Collection of the lodging tax shall include: A)The owner of the STR submitting receipts to the City which document the days the STR was rented over the quarterly period and include the applicable submission of the lodging tax to the City. B) Subd. 7: SPACE, OCCUPANCY AND USE STANDARDS. Any STR unit or portion thereof, or the premises on which the same is located, which does not comply with the conditions referenced in this section to an extent that endangers the life, limb, health, property, safety or welfare of the public or the occupants thereof, shall be deemed and hereby declared to be an unsafe structure, equipment or use. Failure to comply with any of these standards and conditions shall be adequate grounds for the denial, refusal to renew, revocation or suspension of a rental license. A)Owner-occupied. All STR units that are zoned residential shall be owner-occupied. STR units in Commercial zoned districts do not need to be owner-occupied. b)Space and Occupancy. No STR unit shall be occupied by more than the number of persons for which the unit is approved, based on International Residential Code (IRC) or International Building Code (IBC) requirements, which number shall be designated in conjunction with the issuance of the rental license. c)Minimum Ceiling Height. Habitable rooms or spaces shall have clear ceiling height of not less than 7 feet. If any room in a building has a sloping ceiling, the prescribed ceiling height for the room is required in only one-half the area thereof. In calculating the floor area of such rooms, only those portions of the floor area with a clear ceiling height of 5 feet or more shall be included. d)Room Area. Every living room shall contain at least 120 square feet and every bedroom or sleeping room shall contain at least 70 square feet. e)Width. No habitable room other than a kitchen shall be less than seven (7) feet in any dimension. SUBD 8: LICENSE SUSPENSION, REVOCATION, DENIAL AND FINES A)Suspension B)Revocation 1.If a license holder fails to correct a violation or receives three (3) violations within any twelve (12) month period the STR license will be revocked upon approval of the City Council of St. Joseph. Notice shall be provided to the owner of the STR to inform the owner of the revocation and inform of the right to appeal the decision of the City Council. C) Denials. The City may deny the issuance or renewal of a STR license for the following reasons: 1) The applicant fails to provide any information required on the City’s form(s), or provides false or misleading infor mation; 2) The applicant has real estate taxes and/or special assessments levied against the rental property and/or other fines, fees, charges, or other financial claims owed to the City or the State of Minnesota that have not been paid; 3) The STR unit fails a property inspection; 4) The applicant has outstanding building, fire, or property maintenance standards violations, fines, penalties, or delinquent utility charges owed to the City. D) FINES E) APPEALS 1) Owner of a STR license may appeal a suspension, revocation, or denial to the City Council of St. Joseph. Such appeal shall be filled with the City within ten (10) days after date of issuance of written suspension, revocation, or denial. A hearing on the appeal shall be held within thirty (30) days of receipt of the request. Notice of the hearing shall be provided to the owner of the STR at least ten (10) days prior to the date set for the hearing. SUBD 9: ZONING 1) STR’s shall only be permitted in the following Zoning Districts: _________________________ This ordinance becomes effective from and after its passage and publication. Passed by the City Council of St. Joseph, Minnesota this _______ of August, 2024. Rick Schultz, Mayor ATT EST David Murphy, City Administrator This amendment was published on , 2024. Document drafted by: City of St. Joseph 75 Callaway St E St. Joseph, MN 56374 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/ 1 AN ORDINANCE OF THE CITY OF PROCTOR, MINNESOTA CONCERNING THE PERMITTING OF SHORT-TERM VACATION RENTALS The City Council of the City of Proctor does ordain as follows: Section 1. Purpose: The purpose of this ordinance is to ensure that the short-term rental of dwelling units within the City is conducted, operated and maintained in a manner so as to protect the public health, safety and welfare of the citizens of the City of Proctor, and so as to not become a nuisance to the surrounding neighborhood. Section 2. Definitions: The following terms, as used in this Section, shall have the meanings stated: 1. “Dwelling.” Any building or portion thereof which is designed for or used for residential purposes. 2. “Dwelling unit.” Any room or group of rooms located within a dwelling and forming a single habitable unit equipped and intended to be used for living, sleeping, cooking and eating. 3. “On-premise sign.” As defined in Proctor City Code, §1002.13. 4. “Operate.” To charge a rental charge for the use of a unit in a dwelling. 5. “Owner.” Any person who, alone or jointly or severally with others: (a) Shall have legal title to any dwelling or dwelling unit, with or without accompanying actual possession thereof; or (b) Shall have charge, care or control of any dwelling or dwelling unit, as owner or agent of the owner, prime tenant, or as executor, executrix, administrator, administratrix, trustee or guardian of the estate of the owner. Any such person thus representing the actual owner shall be bound to comply with the provisions of this Section, to the same extent as if such person were the owner. 6. “Person.” Any individual, firm, corporation, association or partnership. 7. “Recreational Vehicle.” The term “recreational vehicle” means any of the following: (a) “Travel Trailer” – vehicular, portable structure built on a chassis designed to be used as a temporary dwelling for travel, recreational and vacation uses, permanently identified “Travel Trailer” by the manufacturer of the trailer. 2 (b) “Pick-up Coach” – A structure designed to be mounted on a truck chassis for use as a temporary dwelling for travel, recreation and vacation. (c ) “Motor Home” – A portable, temporary building to be used for travel, recreation and vacation, constructed as an integral part of the self-propelled vehicle. 8. “Short-term rental.” The rental or lease of a dwelling unit, in whole or in part, for thirty (30) days or less. 9. “Short-term rental permit.” The permit issued by the City for the rental or lease of a dwelling unit, in whole or in part, for thirty (30) days or less. 10. “Solid waste.” Garbage, refuse or any other discarded solid organic or inorganic materials. 11. “Tenant.” Any person who is occupying a dwelling unit in whole or in part under any agreement (written or oral), lease or contract. Section 3. Exemptions. This Ordinance shall not apply to hospital units or rooms, nursing homes, retirement homes, hotels, motels, bed and breakfasts, or other similar rental space that is otherwise licensed by the State of Minnesota or the City of Proctor. Section 4. License Required. No owner shall undertake the short-term rental of any dwelling unit to a tenant or tenants unless properly permitted by state, county and any other governmental regulations, and as hereinafter provided. Section 5. Application. An owner desiring to undertake or allow the short-term rental of a dwelling unit in the City shall apply for a short-term rental license. The application shall be submitted by the owner. The permit application shall be on a form prescribed by the City and shall include all required information. Section 6. Lodging Tax. Short-term rentals are subject to lodging tax as provided for in the City of Proctor City Code. An application for a short-term rental license must be accompanied by a lodging tax form as prescribed by the City including all required information. A short-term rental permit holder is required to file monthly lodging tax reports. Section 7. Expiration of License. Short term rental license shall expire annually on December 31st of each year unless suspended or revoked as provided for in this Ordinance. Section 8. Renewal of License. Applications for renewal of an existing short-term rental license must be made at least sixty (60) days prior to the expiration of the current short-term rental license. All such applications shall be made to the City on forms provided by the City. 3 Section 9. Permitted Premises. Short-term rentals shall only be licensed for dwelling units located on conforming lots as defined in the City of Proctor Zoning Ordinance. All licensed premises must be hooked up to City water and sewer services. Section 10. Recreational Vehicles. The short-term rental of recreational vehicles parked or otherwise located on property outside of designated campsites within the City is prohibited. Section 11. Licenses Not Transferable. No short-term rental licenses shall be transferable to another person or another dwelling unit. Every person holding a short-term rental license shall give notice in writing to the City within five (5) business days after having legally transferred or otherwise disposed of the legal control of any dwelling unit for which a short-term rental license has been issued. Such notice shall include the name and address of the person succeeding to the ownership or control of such dwelling unit. Section 12. Registered Agent Required. No short-term rental permit shall be issued without the designation of a local agent. The agent must live and work within 30 miles of the dwelling unit. The agent may, but is not required to be, the owner. One person may be the agent for multiple dwelling units. At all times, the agent shall have on file with the City a primary and secondary phone number as well as current address. The agent or a representative of the agent shall be available 24 hours a day during all times that the dwelling unit is being rented as the primary or secondary phone number to respond immediately to complaints and contacts relating to the dwelling unit. The City shall be notified in writing within five (5) business days of any change of agent. The agent shall be responsible for the activities of tenants and the maintenance and upkeep the dwelling unit and shall be authorized and empowered to receive notice of a violation of the provisions of City ordinances and state law, to receive orders, and to institute remedial action to effect such orders, and to accept service of process pursuant to law. Section 13. Responsibility of Owners. No owner shall undertake or allow the short-term rental of a dwelling unit that does not comply with all applicable City ordinances, the laws of the State of Minnesota, and this Section. It shall be the owner’s responsibility to ensure compliance with the following: (a) Maintenance Standards. Every dwelling unit used for short-term rental shall conform to all building and zoning requirements of the City of Proctor and laws of the State of Minnesota. (b) Parking. All short-term rentals shall have its own designated off-street parking and own drive not shared with another dwelling or business. (d) Signs Prohibited. On-premise signs are prohibited. (e) Tenants. Owner or registered agents shall maintain a list of all current and prior tenants of each dwelling unit, including dates stayed at the dwelling units. The owner or registered agent shall make the list available to City staff and/or law enforcement upon request. 4 (f) Emergency Contact. The owner shall post within the dwelling unit the name, address, email and primary and secondary telephone number of the owner or any registered agent that can be utilized twenty-four (24) hours a day by tenants or their guests. (g) Noise Standards. Quiet hours shall be between 10 p.m. and 8 a.m. Any outdoor amplified sound during this time that can be heard by neighboring property owners is prohibited. (h) Solid Waste. Owner shall ensure that appropriate solid waste and/or recycling bins are available for use by tenants and guests and shall not be stored in public view. (i) Posted Notice. Owner shall post within the dwelling unit, notice of all use restrictions as set forth in this Ordinance. Section 14. Disorderly Conduct Prohibited. Disorderly conduct is prohibited on all permitted premises. It shall be the responsibility of the owner to ensure that all tenants occupying the permitted premises and their guests conduct themselves in such a manner as not to cause the permitted premises to be disorderly. For purposes of this section, disorderly conduct refers to any disorderly conduct violation under Minnesota Statutes or City of Proctor Ordinances. Section 15. Permit Revocation. Every short-term rental permit is subject to revocation for violations of this Section or any other provision of Minnesota or City of Proctor Ordinances. A. Violations. Violations of this Section shall be reported to the City Clerk’s Office and Orr City Council. The City Council shall review the violation and provide written notice to the permit holder of the violation and any necessary remedial actions. B. Revocation. If a license holder fails to correct a violation or receives three (3) violations within any twelve (12) month period, the City Council shall recommend revocation of the short-term rental license. The City Council and City Clerk shall provide written notice to the owner and any registered agent of the revocation. The notice shall inform the owner and agent of the right to appeal the decision of the Proctor City Council. C. Appeal. A license holder aggrieved by the revocation of a short-term rental license may appeal to the City Council. Such appeal shall be taken by filing with the City Clerk’s office within ten (10) days after date of issuance of the written revocation notice, a written statement requesting a hearing before the City Council and setting forth fully the grounds for the appeal. A hearing shall be held within thirty (30) days of receipt of the request. Notice of the hearing shall be given by the City Clerk in writing, setting forth the time and place of the hearing. Such notice shall be mailed, postage prepaid, to the permit holder at his/her last known address at least five (5) days prior to the date set for hearing. 5 D. Effect of Revocation. If a short-term rental permit is revoked, it shall be unlawful for anyone to thereafter allow any new short-term rental occupancies of the dwelling unit until such time as a valid short-term rental permit is issued by the City. No person who has had a permit revoked under this Section shall be issued a short-term rental permit for one year from the date of revocation. Section 16. Violation. Any person who undertakes or allows any violation of this section shall be guilty of a misdemeanor. Section 17. Zoning. Short-term rentals shall only be allowed uses in R-3 zones and up, and shall only be allowed pursuant to conditional use permits. Further, the conditional use permit issued to a licensed short term rental owner shall cease if the property is sold, either through a conveyance or through the conveyance of a controlling interest in a business entity. Section 18. Current Short-Term Rentals. Existing short-term rental properties which are not in an allowed zone shall only be permitted to operate as a short-term rental for an additional period of six (6) months after the passage of this ordinance. Existing short-term rental properties which are in zones permitted by this ordinance shall only be permitted as allowed herein, by obtaining a conditional use permit and licensure. ORDINANCE NO. __________ AN ORDINANCE OF THE CITY OF LA CRESCENT REGULATING SHORT TERM RENTALS IN THE CITY OF LA CRESCENT, MINNESOTA I. PURPOSE The purpose of this Section is to ensure that the short-term rental of dwelling units in the City is conducted, operated, and maintained so as not to become a nuisance to the surrounding neighborhoods or an influence that fosters blight and deterioration or creates a disincentive to reinvest in the community. II. SCOPE This section applies to the short-term rental of all dwelling units located within all zoning districts of the City of La Crescent. III. DEFINITIONS The following words and terms when used in this Section shall have the following meanings unless the context clearly indicates otherwise: Bedroom: A habitable room within a single-family dwelling which is used, or intended to be used, primarily for the purpose of sleeping, but shall not include any kitchen, dining room, or living room. Building Official: An employee of the City designated as the Building Official. The term Building Official also includes all City employees authorized to issue citations. Dwelling unit: One or more rooms physically arranged so as to create an independent housekeeping establishment for occupancy by one family with separate toilets and facilities for cooking and sleeping. Occupant: Any person who occupies a dwelling unit or part of the same. Owner: A person having legal or equitable interest in the dwelling unit or its premises. Off-street parking space: An area on the permitted premises or within a building on the permitted premises intended for the use of temporary parking of a motor vehicle which has a means of access to a public street. Permitted Premises: The platted lot or part of such lot or unplatted parcel of land on which a dwelling unit permitted as a short-term rental is located. Public waters: Any waters as defined in Minnesota Statutes § 103G.005, Subd. 15. Short-term rental: The rental or lease of a dwelling unit in whole or in part for thirty (30) days or less. Short-term rental permit: The permit issued by the City for the rental or lease of a dwelling unit for short-term rental. Tenant: Any person who is occupying a dwelling unit under any agreement, lease, or contract, whether oral or written, which requires the payment of money as rent for the use of the dwelling unit. Watercraft: Any vessel, boat, canoe, raft, barge, sailboard, or any similar device used or useable for carrying and transporting persons on the public waters. IV. PERMIT REQUIRED No person shall undertake the short-term rental of any dwelling unit, or advertise such dwelling unit for rental, to a tenant or tenants unless properly permitted as hereinafter provided. Application: A person desiring to undertake or allow the short-term rental of a dwelling unit in the City shall apply to the Building Official for a short-term rental permit. The application shall by submitted by the owner. The permit application shall be on a form prescribed by the City and include all required information. Permit Fee: Each application shall be accompanied by payment in full of the required permit fee. The annual permit fee shall be determined by the City Council and set forth in the City fee schedule. The fee shall not be prorated. Issuance of Short-Term Rental Permit: 1. If the Building Official determines that an applicant has met the requirements for issuance of a short-term rental permit, the Building Official shall issue the applicant a short-term rental permit. 2. If the Building Official determines that an applicant has not met the requirements for issuance of a short-term rental permit, the Building Official shall endorse on such application his/her disapproval and his/her reasons for the same and provide the application and recommendation for denial to the City Administrator. The City Administrator may either: (i) deny the application and return the endorsed application to the applicant to notify the applicant that his/her application is denied and that no permit will be issued; or (ii) direct the Building Official to issue the applicant a short-term rental permit. Expiration of Permit: Except as otherwise provided in this Section, all short-term rental permits shall expire annually on December 31 of each year unless suspended or revoked earlier. Renewal of Permit: Applications for renewal of an existing short-term rental permit shall be made at least thirty (30) days prior to the expiration of the current short-term rental permit. All such applications shall be submitted to the Building Official on forms provided by the City and shall be accompanied by the required fee. Permit Not Transferable: No short-term rental permit shall be transferable to another person or to another dwelling unit. Every person holding a short-term rental permit shall give notice in writing to the Building Official within five (5) business days after having legally transferred or otherwise disposed of the legal control of any dwelling unit for which a short-term rental permit has been issued. Such notice shall include the name and address of the person succeeding to the ownership or control of such dwelling unit. Resident Agent Required: No short-term rental permit shall be issued without the designation of a local agent. The agent must live within 30 miles of the dwelling unit. The Agent may, but is not required to be, the owner. One person may be the agent for multiple dwelling units. At all times, the agent shall have on file with the Building Official a primary and a secondary phone number as well as a current address. The agent or a representative of the agent shall be available 24 hours a day during all times that the dwelling unit is being rented at the primary or secondary phone number to respond immediately to complaints and contacts relating to the dwelling unit. The Building Official shall be notified in writing within two (2) business days of any change of agent. The agent shall be responsible for the activities of the tenants and maintenance and upkeep of the dwelling unit and shall be authorized and empowered to receive service of notice of violation of the provisions of City ordinances and state law, to receive orders, and to institute remedial action to affect such orders, and to accept all service of process pursuant to law. Denial of Short-Term Rental Permit: Any applicant aggrieved by the denial of a short-term rental permit, or the non-renewal of an existing permit may appeal to the City Council. Such appeal shall be taken by filing with the City Administrator within ten (10) days after the date of issuance of the written denial, a written statement requesting a hearing before the City Council and setting forth fully the grounds for the appeal. A hearing shall be held within sixty (60) days of receipt of the request. Notice of the hearing shall be given by the City Administrator in writing, setting forth the time and place of hearing. Such notice shall be mailed, postage prepaid, to the applicant at his/her last known address at least five (5) days prior to the date set for hearing. V. RESPONSIBILITY OF OWNERS: No owner shall undertake or allow the short-term rental of a dwelling unit in a Residential Use District that does not comply with all applicable City ordinances, the laws of the State of Minnesota, and this Section. It shall be the owner's responsibility to ensure that all tenants, occupants, and guests comply with the following: Maximum Overnight Occupancy: The number of overnight occupants allowed for a short-term rental shall be limited as set out below. Children under three (3) years of age are not to be counted toward the limit. For lots of 1/2 acre or more if the livable square footage of the primary building is: ▪ Under 1,500 square feet: 6 occupants ▪ 1 ,500 square feet to 1,999 square feet: 8 occupants ▪ 2,000 square feet or more: 12 occupants For lots of less than 1/2 acre: ▪ Under 1 ,500 square feet: 4 occupants ▪ 1 ,500 square feet to 1,999 square feet: 6 occupants ▪ 2,000 square feet or more: 8 occupants Off-Street Parking: The permitted premises shall contain off-street parking spaces equal in number to the number of bedrooms contained in the dwelling unit. Mooring and Storage of Watercraft: 1. No more than two (2) restricted watercraft may be moored at the permitted premises at any one time. Any restricted watercraft moored at the permitted premises must be registered and owned by either the property owner or the current tenant. 2. No watercraft shall be permanently or temporarily placed or stored within the side yard setback of the permitted premises. Maintenance Standards: Every dwelling unit used for short-term rental shall conform to all building and zoning requirements of the City Code, permits issued by the City, and the laws of the State of Minnesota. Rental Limit: No dwelling unit shall be rented out more than 120 times per calendar year. Occupants: The agent shall maintain a fully executed lease for all tenants and a list of all current occupants of each dwelling unit. The agent shall make the lease and list available to City staff and/or law enforcement upon request. In addition, a copy of the fully executed lease shall be kept available at the dwelling unit at all times during the lease term. Lodging Tax: The state legislature has authorized the imposition of a tax upon short-term-rental properties. The City has imposed such a lodging tax to provide funding to stimulating tourism within the community. The lodging tax is administered by the Minnesota Department of Revenue as per Ordinance No. __________. It shall be the responsibility of the owner and STR-permit holder to ensure that all lodging taxes are paid as required by the Minnesota Department of Revenue. VI. DISORDERLY CONDUCT: Disorderly Conduct Prohibited: Disorderly conduct is prohibited on all permitted premises. It shall be the responsibility of the owner to ensure that all tenants occupying the permitted premises and their guests conduct themselves in such a manner as not to cause the permitted premises to be disorderly. For purposes of this Section, disorderly conduct includes but is not limited to, a violation of any of the following statutes or ordinances: 1. Minn. Stat. §§ 609.75 – 609.76, which prohibit gambling; 2. Minn. Stat. §§ 609.321 – 609.324, which prohibit prostitution and acts relating thereto; 3. Minn. Stat. §§ 152.01 – 152.027, which prohibit the unlawful sale or possession of controlled substances; 4. Minn. Stat. § 340A.401, which prohibits the unlawful sale of alcoholic beverages; 5. Minn. Stat. § 340A.503, which prohibits the underage consumption of alcoholic beverages; 6. Minn. Stat. § 609.595, which prohibits damage to property; 7. Minn. Stat. §§ 97B.021, 97B.045, 609.66-609.67, and 624.712-624.716, and City Code Section 804, which prohibit the unlawful possession, transportation, sale, or use of a weapon; 8. Minn. Stat. § 609.72, which prohibits disorderly conduct, when the violation disturbs the peace and quiet of the other occupants of the permitted premises or other surrounding premises; 9. Minn. Stat. § 152.027, subd. 4, which prohibits the unlawful sale or possession of small amounts of marijuana; 10. Minn. Stat. § 152.092, which prohibits the unlawful possession or use of drug paraphernalia; 11. Minnesota State Fire Code 302 and 307-307.5, which limit recreational fires to no larger than 3' X 3' feet, natural wood only, attended until extinguished, conditions permitting; and 12. Minn. Stat. §§ 624.20-624.21 which prohibits exploding fireworks. Determination of Disorderly Conduct: 1. A determination that the permitted premises has been used in a disorderly manner as described in Article VI shall be made by the Building Official upon evidence to support such a determination. It shall not be necessary that criminal charges are brought to support a determination of disorderly use, nor shall the fact of dismissal or acquittal of such a criminal charge operate as a bar to adverse permit action under this Section. 2. Upon determination by the Building Official that a permitted premises was used in a disorderly manner, as described in Article VI, the Building Official shall notify the owner and agent by certified mail of the violation and direct the owner and/or agent to take appropriate action to prevent further violations. 3. If a second instance of disorderly use of the permitted premises occurs within one year of an incident for which notice in Article VI was given, the Building Official shall notify the owner and agent by certified mail of the violation and shall also require the owner and agent to submit within 15 days a written report of the actions taken, and proposed to be taken, by the owner and/or agent to prevent further disorderly use of the permitted premises. 4. If a third incident of disorderly use of the permitted premises occurs within one year after the second of any two previous instances of disorderly use for which notices were sent to the owner and agent pursuant to this subsection, the short-term rental permit may be revoked, suspended, or not renewed. An action to revoke, suspend, or not renew a permit under this Article VI shall be initiated by the Building Official in the manner described below. VII. PERMIT SUSPENSION OR REVOCATION: Procedure: 1. Every short-term rental permit issued under this Section is subject to suspension or revocation by the City Administrator for any violation of this Section or any other ordinance of the City or the law of the state. 2. The Building Official may recommend suspension or revocation of a short-term rental permit to the City Administrator. The City Administrator shall review the recommendation and the reasons supporting the recommendation and may suspend or revoke the permit. The City Administrator shall provide written notice to the owner and agent of the suspension or revocation. The notice shall inform the owner and agent of the right to appeal the decision of the City Administrator to the City Council. 3. Any applicant aggrieved by the suspension or revocation of a short-term rental permit may appeal to the City Council. Such appeal shall be taken by filing with the City Administrator within ten (10) days after date of issuance of the written suspension or revocation notice, a written statement requesting a hearing before the City Council and setting forth fully the grounds for the appeal. A hearing shall be held within thirty (30) days of receipt of the request. Notice of the hearing shall be given by the City Administrator in writing, setting forth the time and place of hearing. Such notice shall be mailed, postage prepaid, to the applicant at his/her last known address at least five (5) days prior to the date set for hearing. Effect of Suspension or Revocation: If a short-term rental permit is suspended or revoked, it shall be unlawful for anyone to thereafter allow any new short-term rental occupancies of the dwelling until such time as a valid short-term rental permit is restored by the City. Effect of Revocation: No person who has had a permit revoked under this Section shall be issued a short term rental permit for one year from the date of revocation. VIII. APPEAL The decision of the City Council to deny, suspend, or revoke a short-term rental permit following a hearing as provided can be appealed by petitioning the Minnesota Court of Appeals by a writ of certiorari. IX. POSTING The following language shall be posted at or near the entrance of every short term rental dwelling unit. The posting shall be printed in a minimum 18 point font. All short term rental of dwelling units shall comply with this ordinance. These posted regulations are a summary of a portion of the short term rental regulations. For additional information please refer to Ordinance No. ______ or contact City Hall. ▪ No person shall undertake the short-term rental of any dwelling unit without a City permit. ▪ A copy of the lease shall be available at the dwelling unit at all times during the lease term. ▪ Every permitted premises shall have an agent within 30 miles available during all times the unit is rented, 24 hours a day at the following phone numbers: and/or to respond immediately to complaints and contacts relating to the dwelling unit. ▪ The Maximum Overniqht Occupancy for this dwelling unit is: occupants. Not counting children under three (3) years of age. ▪No watercraft shall be permanently or temporarily placed or stored within the side yard setback of the permitted premises. ▪Disorderly conduct is prohibited. All disorderly conduct will be reported to the property's agent and the La Crescent Police Department. ▪Increased noise regulations are in place between the hours of 10 p.m. and 7 a.m. ▪Littering is prohibited. ▪Recreational fires are limited. Please check with the City to determine what prohibitions exist for current conditions. ▪Any violation of this Section shall constitute a misdemeanor. X.Compliance If the City has reason to believe that any provisions in this Section are not being complied with, the City has the authority to require the submittal of an executed lease or other information needed to establish compliance. XI. PENALTY Any person who undertakes or allows any violation of this Section shall be guilty of a misdemeanor and shall, upon conviction thereof, be punished by a fine or by imprisonment, or both, in accordance with the provisions of Minnesota State Statutes. Planning Commission Agenda Item 7b MEETING DATE: July 8th, 2024 AGENDA ITEM: 7b Honeybee discussion SUBMITTED BY: Community Development STAFF RECOMMENDATION: Discussion on drafted language PREVIOUS PLANNING COMMISSION ACTION: PC discussed the topic at the June meeting. Overall support was expressed to permit residents to house honey bees. BACKGROUND INFORMATION: Staff would like continued discussion and input on regulatory framework to formally allow residents to have honeybee hives in residential areas. Following up from last discussion staff has drafted some potential language and would like input on the draft. Language is drafted to permit honeybees in all residential areas minus the R-3 Multi-Family District. If more than two hives are proposed it will trigger a permit. The permit would be similar to a Zoning permit and be an Administrative review and approval. ATTACHMENTS: Please also see these resources for ideas on ordinance language: •The University of Minnesota sampling of City Policies on beekeeping: https://beelab.umn.edu/ordinances •Model Ordinance from MNBeekeepers: https://mnbeekeepers.com/wp -content/uploads/MHBA- Model-Ordinance-2018.pdf REQUESTED PLANNING COMMISSION ACTION: 1.Discussion and input on drafted language ORDINANCE 2024- AN ORDINANCE AMENDING ORDINANCE 502, SECTION 502.04 AND SECTION 502.12 ADDING SUBDIVISION 19 New language is underlined and in red font The City Council for the City of St. Joseph, HEREBY ORDAINS that City Code Section 502.04 hereby adds the following definitions: 1. That the following definitions shall be added to Section 502.04: Apiary: any place or location where one or more colonies of honey bees are kept. Beekeeper: a person who owns or has charge of one or more colonies of bees. Colony: an aggregate of honey bees consisting principally of workers, one queen, and at times drones, brood, combs, and honey. Flyway barrier: a barrier that raises the flight path of bees as they come and go from a hive. Hive: the receptacle inhabited by a colony that is manufactured for that purpose. Honey bee: all life stages of the common domestic honey bee, apris mellifera species. The City Council for the City of St. Joseph, HEREBY ORDAINS that City Code Section 502.12 Subdivision 19 is hereby added: 1. That Section 502.12 Subdivision 19 shall read as follows: Subd. 19: Beekeeping a) Hives are allowed in areas zoned as Agricultural (AG), Rural Residential (RR), Single-Family Residential (R1), Two Family Residential (R2), and Townhouse-Patio House Residential (R-4) provided the Hives adhere to the following requirements: 1. Each beekeeper shall ensure a convenient source of water is available within twenty-five feet of the Hive. 2. Hives made out of wood shall be painted, sealed, or stained. 3. Hives shall be setback a minimum of ten feet from any property line and are only permitted in the rear yard. If the beekeeper wishes to place the hives closer then twenty-five feet from property lines then the beekeeper must install a flyaway barrier at least six feet in height. Flyaway barrier must meet the following requirements: a) Flyway barrier must consist of a wall, fence, or dense vegetation. b) If vegetation is used the initial planting may be a minimum of four feet in height but the vegetation must reach a height of at least six feet within two years. c) If a fence or wall is used the fence or wall must adhere to the Fence Ordinance in City Code 506. d) Flyway barrier must continue parallel to the lot line of the apiary site for at least ten feet in both directions from the hive(s) e) A flyaway barrier is not required if the adjacent property is zoned Agricultural, or Rural Residential. 4. A sign identifying the site as housing Honey Bees shall be posted at entrance and exit points of all Hive enclosures. Sign shall not exceed four square feet. Sign shall consist of a yellow background with black bolded letters. The language on the sign shall state: Honeybees Kept on the Premises. 5. Colony Density and Permit Requirements. Permit requirements and maximum quantity of colonies kept on a lot shall adhere to the following: Size of lot Maximum number of colonies Permit Requirements One half acre or smaller 2 colonies No permit Larger than ½ acre but smaller than ¾ acre 4 colonies Permit required Larger than ¾ acre but smaller than 1 acre 6 colonies Permit required One acre but smaller than 5 acres 8 colonies Permit required Larger than 5 acres No restriction No permit Properties that are zoned Agricultural or Rural Residential are also exempt from permit requirements a) Permits are not required to be renewed if no change to the density occurs. If proposed changes include an increase in density the permit shall be submitted for renewal prior to installation of more colonies. This ordinance becomes effective from and after its passage and publication. Passed by the City Council of St. Joseph, Minnesota this _______ of June, 2024. Rick Schultz, Mayor ATTEST David Murphy, City Administrator This amendment was published on , 2024. Document drafted by: City of St. Joseph 75 Callaway St E St. Joseph, MN 56374