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Sandy Journal

Sandy City Continues to Engage on the Evolving Issue of Short-Term Rentals

Jul 01, 2016 09:24AM ● By Chris Larson

By Chris Larson | [email protected]

The Sandy City Council banned short-term rentals outright in residential zones in Sept. 1998 after the courts ruled the city code at the time didn’t explicitly give the city powers to do so earlier that year.  

After making short-term renting a prohibited use, some thought the issue was resolved.

 Companies like Airbnb and HomeAway are now leveraging the internet and mobile technology to make short-term rental by owners more desirable for ideal tourist locations like Sandy City, bringing the conversation back into the limelight.

And it’s an issue that city leaders say they will approach.

Efforts by Rep. John Knotewell, R-Herriman, raised the issue statewide with attempts to address the ability of short-term housing platforms to remit state taxes with HB409 in this year’s legislative session. It also called for a moratorium on changes to city’s code on the issue. The bill did not pass, but Utah League of Cities and Towns, an association of city officials, said it and several other groups in the state will address the issue over the interim.

The issue surfaced for the city when Ramona Costanza of East 11660th South asked for the council to consider changing city code to allow short-term rentals during citizen comment at the April 26 city council meeting after a neighbor reported her to city officials. Costanza said she didn’t know about the code when she started her business and has been significantly impacted since its enforcement.

Councilmembers Chris McCandless, District 4, and Stephen Smith, At Large, offered their thoughts on the issue in the meeting.

McCandless said it’s unfortunate that homeowners and investors don’t do enough research into local regulations surrounding properties before attempting to use them for business.

“I bought my home to be used as a home,” McCandless said at the meeting. “I anticipate that other people would do the same thing.”McCandless also said in the meeting he would be opposed to any proposals that come to the council regarding short-term rentals in residential areas.

Smith suggested that the council not pick sides on the issue until there is legislation to debate over.

“While some may rigorously protest it, I don’t know I would rigorously advocate for it,” Smith said in the meeting. “I’m open to that question and have been for some time.”

Smith also said a highly independent spirit and a shifting “sharing economy” surrounding property rights will make it contentious issue.  

“I want to know what happened today that is different from yesterday,” McCandless said in an interview. “Why are we going backwards?”

Short-term rentals, properties rented for less than 30 days, initially drew the ire of the city and its residents, in part, because of complaints of bad behavior on the part of visitors using short-term rentals or “ski rentals” for housing for ski excursions — raucous parties, parking violations and trashed properties. The 2002 Winter Olympics in Salt Lake increased demand for these rentals and exacerbated the issue, according to Sandy City Communications Director Nicole Martin.

In the 1998 lawsuit the city contended that short-term rentals were not explicitly prohibited by city code and, thus, permissible while the city maintained short-term rentals were not listed as a “permitted use” and, therefore, not allowed, Martin said.

The courts ruled that Sandy City needed to explicitly forbid renting properties for short leases.

As an artifact of the lawsuit and the following code change, there are properties in Sandy City that were grandfathered to be used as short-term rentals, Martin said.

The complaints and lawsuit don’t provide city leaders positive experience to pull from when addressing the issue today, Sandy City Councilmember Steve Fairbanks said in an interview.

Martin said the city’s right to protect citizen’s property through zoning is fundamental and a way to protect “the biggest investment of [a citizen’s] life.”

Both Fairbanks and McCandless also shared sentiments that the city is the most appropriate entity to address the issue because municipal leaders are the best at finding city-unique solutions.

However, advocates and lobbyist for the short-term rental industry have focused their efforts on state lawmakers to pass “one-size-fits-all” legislation mandating cities to allow short-term rentals, a decision resented by many leaders.

“I don’t want to have the Airbnbs and the short-term rentals become another situation where we can’t do what the majority of our citizens would like us to do within the law because the law changes and takes away the ability as a government to take care of our municipality,” Fairbanks said.

Fairbanks compared short-term rentals to group homes that require the city to “reasonably accommodate” such projects despite complaints from neighbors.

Fairbanks, Martin and McCandless say the majority of constituents oppose short-term rentals and that they are protecting the property rights of the many as opposed to the rights of the few.

“Whose private property rights are we talking about?” McCandless said. “The guy with a commercial property next to a residential property?”

Libertas Institute Policy Analyst Josh Daniels said that impinging on any homeowner’s property right is neither right nor reasonable, and believes the use of short-term rentals is a fundamental right of a property owner.

“The idea is that you can have a normal home rental as long you are renting your home for more than 30 days. But as soon as it less than 30 days you fall into this special category for which the city code can discriminate against you,” Daniels said. “I think that’s sort of arbitrary.”

The Libertas Institute is a state-based think tank that focues on issues surrounding free enterprise, property rights and individual liberty.  

 Daniels said the use of the home is the same regardless of the length of the lease and claims this is a false dichotomy around the nature of residential and commercial uses given by city officials to protect the hospitality industry from competition.

“So for [city officials] to say someone resides in the home for a short period of time turns it into a commercial use of the home doesn’t make any sense,” Daniels said. “We’re not talking about someone operating a Kentucky Fried Chicken out of the home; we’re just talking about someone living in the home.”

McCandless said in an interview a possible “unforeseen outcome” of short-term rentals in residential areas is a loss of business to the local hotel industry and, thus, a loss of jobs to Sandy residents.  

Daniels said that applying the same concepts of short-term rentals found in areas zoned for hotels to short-term rentals in residential areas is inconsistent because of the demands of the different businesses on the community because of utilities consumption, traffic and number of occupants.

Cities are already in the right and well equipped to deal with any nuisance behavior that future short-term rentals could cause, Daniels said. Sandy City, like many cities, already has regulations regarding noise, upkeep of property, parking and occupancy to protect neighborhoods from bad behavior, Daniels said.

“We need to be focusing on actual nuisance-related problems and not on general things we think that might lead to a nuisance,” Daniels said. “Instead, they impose the preemptive carte blanche prohibition on all short-term rentals with no real basis on the city’s traditional jurisdiction of health, safety and welfare.”

The Utah Association of Realtors CEO Chris Kyler also said that the city should focus on regulating nuisance behavior rather than preempting a housing option in an emailed statement:

“We support a wide variety of housing choices to satisfy market demands. We encourage local government to responsibly provide for all housing options with as little government regulation as possible. Many local governments have figured out how to allow short-term rentals and provide happy neighbors by dealing with parking, noise and garbage concerns.”

Martin and McCandless, however, do admit there is a possible scenario where short-term rentals could be permissible in Sandy City.

McCandless said he sees short-term rentals allowed case-by-case for properties in non-ideal locations, like along 10600 South. He sees this as a way of supporting struggling property owners with similar location problems.

“I think it’s never appropriate nor wise to simply say, “This is the way it is and we’re never going to look at it again,’” Martin said. “That’s not what Sandy is saying.”

Martin said the question facing the city is thus: “Is this ordinance serving us well?”

Sandy Mayor Tom Dolan and previous leaders have been heavily involved with the Utah League of Cities and Towns. The league has taken on trying to find consensus between cities, the legislature, homeowners and the short-term rental industry.

Dolan is listed as a former president the Utah League of Cities and Towns and is currently listed as a voting member of the League’s 232-member 2015–2016 ULCT Legislative Policy Committee roster. Fairbanks is also a former president and is currently listed as a voting member of the policy committee, along with Deputy Mayor John Hiskey.

Former council members Dennis Tenney and Bryant Anderson, current council member Chris McCandless, Communications Director Nicole Martin and City Attorney Rob Wall are currently listed as non-voting members of the policy committee.

Martin said the league accepts that “disruptive technologies” have changed the nature of short-term rentals and that clear arguments on both side of the equation make the issue worth talking about.

“What we are looking at with the league now [is to] bring all the stakeholders together ... and seeing what kind collaborative effort can we put forward to come up with a solution that looks at both sides of the equation and tries to find a fair and equitable solution,” Martin said.

Daniels said the league needs to make sure that cities do not stand in the way of individual property rights. But he is also cautious of the league’s actions.

“Whether or not a city regulates short-terms rentals ought to be a decision of the elected city leaders in that city, not a decision of a trade association to which the city is a member of,” Daniels said.     λ