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City council targeting Airbnb’s in new proposed ordinance

Mar 07, 2018 05:17PM ● Published by Justin Adams

The Sandy City Council is considering a new city ordinance that would impact short-term rental properties, such as Airbnb, within the city. (Pixabay)

Sandy residents operating a short-term rental out of their homes are about to face some new regulations from Sandy City. 

During the Jan. 23 city council meeting, council members began deliberating a new city ordinance that would target those who use their home to operate an STR (short-term rental) such as Airbnb or VRBO (vacation rental by owner). 

STRs are homes or apartments that can be rented out to individuals on a short-term basis. In recent years, they have become a popular option for vacationers who prefer to stay in a home over a traditional hotel. A search on airbnb.com returns about 300 such rentals within the city of Sandy. 

It’s not hard to see why someone would turn a house into a short-term rental property. They can be extremely lucrative for those who own them.

LeAnn Payne and her husband own a house that they have rented out on Airbnb for about a year. She said they make four times as much money from doing short-term rentals as they would from renting it out to a permanent resident. 

Unlike with a hotel, owners and operators of STRs don’t need to obtain a government-issued license or undergo regular safety inspections. “I was expecting lots of regulations when we started this,” said Payne. “I was really happy when I found out we didn’t have to do all that.”

While STRs may be a popular option for those staying in them and a lucrative opportunity for those owning them, they pose a danger to the community, at least according to Sandy City.

One of the concerns surrounding STRs is how they affect property values. Speaking at the city council meeting, Councilman Chris McCandless said he had recently learned of a woman in Sandy who had sold her house for $150,000 more than its market value. The buyer was from California and hadn’t visited the house before purchasing it. They then promptly turned it into a STR. McCandless said that cases like this can raise property values in the city and lead to a shortage of affordable housing.

Another concern for some is the competitive advantage that they hold over traditional hotels. Because STRs have most of the benefits of a hotel has without the high operational costs, they can be a threat to the business of both hotel chains and local bed and breakfast establishments.

Fran Hansen, for example, owns and operates the 1887 Hansen House Bed and Breakfast in Sandy, a renovated Victorian-style mansion of Sandy’s first mayor. 

Hansen said that letting people open up their home to anyone anywhere is an insult to the bed and breakfast owners like herself who put in a lot of work to meet all the requirements set by the state.

While she’s not completely opposed to the idea of STRs, Hansen said she just wishes they were held to the same standards and requirements as other hotels. “I wouldn’t begrudge anyone the right to make a living,” she said.

Despite the fees, licenses, inspections and taxes with which she must comply but STRs do not, Hansen said she hasn’t personally noticed any loss of business as a direct result of their rise in popularity.

Traditional hotels are also subject to something called a transient room tax. That tax helps fund the city government. In 2017, Sandy City received $3.3 million from this tax, according to its comprehensive annual financial report. However, that tax doesn’t appear to be taking much of a hit from STRs; Sandy’s revenue from the tax has increased 75 percent since 2010.

To address these concerns, the Sandy City Council’s draft ordinance proposes establishing new regulations for STRs. However, the ordinance is still in a draft stage, so there’s nothing set in stone yet. Some of the proposals that have been discussed include requiring STRs to undergo yearly inspections, setting a cap on the total number of STRs permitted in the city and requiring STR operators to claim the unit as their primary residence.

The current draft would also require owners of any STR to notify all neighbors within 300 feet that they are doing so. Some city council members suggested that those neighbors should then have an appeal process wherein if more than 50 percent of the neighbors submit complaints to the city that the person could possibly have their STR license denied.

Another consideration has been increasing the penalties and fines imposed on households that are cited for violating other city ordinances like noise limits. McCandless said the current fines are low enough that they’re not a real deterrent. “They just consider it an expense of doing business,” he said.

Kaye Le Cheminant, a Salt Lake City realtor, said she would like to have all STRs relegated to one specific area within each community that would be designated for that purpose. 

“I just believe that you have to protect the right of the people who have made an investment in something that they believed would be a nice quiet neighborhood,” she said. “I think they need to have one zone and one zone only in each community that allows Airbnb’s.”

For the Sandy City Council members, coming up with a solution that pleases everyone may not be possible, though they have said that they hope to find a balance between the two sides.

“On the one hand we have people who want to exercise their property right to the best of their ability, and if that includes renting their house out as they desire, they see that as a right. On the other hand, we have people who want a peaceful neighborhood and don’t want to be bothered by noisy parties at a neighbor’s short-term rental,” said Councilman Steve Fairbanks.

The city council expects to resume discussion of the proposed ordinance either on Feb. 27 or March 6. There is an allotted time each city council meeting during which residents can express their opinion on this or any other issue.   

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