Agenda Date: 11/17/2020
Subject:
Title
Ordinance 41-2020: An ordinance on second reading adding Chapter 23, entitled Short-Term Rentals, to Title 3 Business Regulations of the Littleton City Code
Body
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Prepared by: |
Reid Betzing, City Attorney Jennifer Henninger, Community Development Director |
PURPOSE:
To consider a new section to Title 3: Business Regulations related to the licensing of short-term rentals
PRESENTATIONS:
Staff Presenter(s): Reid Betzing, City Attorney and
Jennifer Henninger, Community Development Director
Additional Presenter(s): N/A
SUMMARY:
The proposed ordinance creates new definitions for short-term rentals (STRs), outlines application requirements, details license requirements and restrictions, and sets forth grounds for revocation of the license. Staff also created a Good Neighbor Guidelines Handout for all STRs to post inside the property as well as a Good Neighbor Letter that will be distributed to neighbors adjacent to an STR by the STR license holder.
PRIOR ACTIONS OR DISCUSSIONS:
Since the proposed STR regulations from 2019 were denied by Council, staff has planned on STRs being addressed as part of the Unified Land Use Code (ULUC) process. Since January and February of 2019, a citizen group has met and provided several different ideas that could be addressed in future STR regulations. Among the items addressed by the citizen group was the recommendation STRs which are owner occupied be treated differently than STRs not occupied by a property owner.
At Council’s February 2020 workshop, a request was made to evaluate what actions could be taken on STR regulations prior to the formal adoption of the ULUC. In July of this year, staff proposed a phased approach to STRs that included creation of a Good Neighbor Handout for owners, users, and neighbors of STRs and drafting new STR business license regulations.
City Council held the first reading on Ordinance 41-2020 regarding short-term Rentals on the 20th of October. Since the first reading, staff received a number of different comments regarding the proposed ordinance from both Council members as well as individuals involved in the STR citizen group. A summary of those comments as well as how staff handled each of the comments is attached.
ANALYSIS:
Staff Analysis
The city currently has 47 registered STRs, shown in the attached map. The proposed STR business license ordinance is an initial effort towards regulating STRs in the City of Littleton as policy direction unfolds through the ULUC process. Currently, there is no specific definition of STRs in the Littleton Code, nor are there specific licensing requirements. The proposed ordinance provides the following:
Definitions
Short-Term Rentals are categorized as either primary or non-primary. Short-Term Primary Rental, is defined as:
a dwelling unit that is a primary residence of which a portion is leased to one (1) party at a time for periods of less than twenty-eight (28) consecutive days. A dwelling unit of a duplex or two-family dwelling, as defined in the Littleton City Code, that is not a primary residence is eligible to be a short-term primary rental and may be licensed as a short-term primary rental if the connected dwelling unit is a primary residence and both dwelling units are located on the same lot. The term short-term primary rental shall not include the rental of a dwelling unit to the former owner immediately following the transfer of ownership of such dwelling unit and prior to the former owner vacating the dwelling unit.
Short-Term Non-Primary Rental is defined as:
a dwelling unit that is not a primary residence and that is leased, in part or in whole, to one (1) party at a time for periods of less than twenty-eight (28) consecutive days. The term short-term non-primary rental shall not include the rental of a dwelling unit to the former owner immediately following the transfer of ownership of such dwelling unit and prior to the former owner vacating the dwelling unit.
License Application Requirements
The regulations proposed are tailored to the two different types of STRs. Both license types need to provide proof of ownership, liability insurance, contact information for a local person that can physically respond to a call within two hours, and have a business and sales/use tax license. At this time, the two types are being handled identically. However, it is intended through the ULUC process, that more of a differentiation will be created.
License Denial, Renewal, and Revocation
There are several methods outlined as to how a short-term primary rental needs to be verified. If primary residence status cannot be proven, a short-term primary rental license will be denied. The same applies for a short-term non-primary rental with the ordinance outlining grounds for denial. Renewal requirements are outlined as well as circumstances that cannot occur or else a license can be revoked by the City.
License Requirements and Restrictions
At the time of the writing of this ordinance, STRs will not be permitted in any Accessory Dwelling Units (ADUs) as ADUs will be further addressed in the ULUC. The ordinance also places a limit on the amount of STR renters to two per bedroom, identified as part of an STR license application with a maximum of eight total renters in any STR. There were two comments regarding number of persons and if children counted towards that number. At this time, staff recommends no differentiation between adults and children and that the maximum number of persons remain at 8. Comments were also received regarding parking requirements. Council also explored this option at the study session and the direction was to keep it as is. The ordinance originally required all STRs to provide one parking space per bedroom. In response to the comments received, the parking language has been changed to the following:
“All short-term rentals shall provide a minimum of two (2) off-street parking spaces. Any advertisements or listing of the short-term rental shall provide the number of parking spaces available for use by the renter, and the location of such parking spaces (driveway, garage).” The number of bedrooms for rent may not exceed the number of available parking spaces.
One additional change that did occur between first reading and second is removing language from 3-23-4(3) that would theoretically allow a leaseholder to operate an STR. This language was removed to require that it be the owner.
Informational Handouts
Each STR must display the Good Neighbor Handout that includes the licensee's contact information, a local responsible party's contact information, and any necessary emergency contact information. The Good Neighbor Handout will also provide information pertinent to the neighborhood where the STR is located including, but not limited to, parking restrictions, restrictions on noise and amplified sound, trash collection schedule, relevant water restrictions, fire evacuation routes, and any other information, as required by the Director, applicable to the short-term rental and the surrounding neighborhood. Comments received requested language be added to the ordinance as well as the handouts describing where the informational material should be posted in an STR. This series of comments has been addressed with a revised handout (attached).
Council Goal, Objective, and/or Guiding Principle
STR regulations are part of Goal 1-Quality Community, Objective 1 Unified Land Use Code and Objective 2 Additional Code Enhancements.
Fiscal Impacts
Currently, there is no fee for STR business licenses, and the license is not required to be renewed annually. Instituting STR business license regulations will cause more staff time to be required on processing these licenses and enforcing the regulations associated with the license. Staff is recommending a fee of $200 for the initial license and an annual renewal fee of $200. This fee will help recover administrative costs necessary to process applications as well as the code enforcement time necessary to ensure applicable city regulations are being met. This fee is included in the 2021 Fees Resolution (72-2020) which passed on October 20th. Comments were received requesting there be a three-year term for the license and a lower annual renewal fee. At this time, staff does not recommend a three-year term limit due to the ever changing nature of the STR market as well as the fact that the City’s regulations are new and will need to be monitored and evaluated on an ongoing basis.
Alternatives
Council may decide not to approve the proposed ordinance and either table the issue indefinitely or direct staff to wait till the ULUC to adopt any new regulations pertaining to STRs.
STAFF RECOMMENDATION:
Staff recommends approval of Ordinance 41-2020 regarding proposed licensing regulations for STRs.
PROPOSED MOTION:
Proposed Motion
I move to approve Ordinance 41-2020 on second reading adding Chapter 23, entitled Short-Term Rentals, to Title 3 Business Regulations of the Littleton City Code.