City Council Report 915 I Street, 1 st Floor Sacramento, CA

Transcription

1 City Council Report 915 I Street, 1 st Floor Sacramento, CA File ID: August 14, 2018 Discussion Item 18 Title: Ordinance Amending Various Sections of Chapter of the City Code Relating to Short-Term Rentals (Passed for Publication 07/31/2018; Published 08/03/2018) Location: Citywide Recommendation: Pass an Ordinance amending various sections of chapter of the Sacramento City Code relating to certain matters concerning Short-Term Rentals including: 1) allowing multiple permits for permittees who reside in the City; 2) expressly subjecting permittees to the applicable rules and regulations of neighborhood Covenants, Conditions, and Restrictions ( CC&Rs ); and 3) prohibiting advertising for more than six guests on hosting platforms Contact: Brad Wasson, Revenue Manager, (916) , Department of Finance Presenter: Brad Wasson, Revenue Manager, (916) , Department of Finance Attachments: 1-Description/Analysis 2-Background 3-Ordinance (Redline) 4-Ordinance (Clean) Susana Alcala Wood, City Attorney Mindy Cuppy, City Clerk John Colville, City Treasurer Howard Chan, City Manager Page 1 of 11

2 File ID: Discussion Item 18 Description/Analysis Issue Detail: On April 24, 2018, the Law and Legislation ( L&L ) Committee directed staff to amend the Sacramento City Code ( City Code or Code ) to address the following concerns: 1. Permittees that provide lodging to more than the authorized number of lodgers in violation of the City Code. (City Code section ) 2. Permittees that advertise lodging more than the authorized number of lodgers in violation of the Code. 3. Allowing permittees to hold multiple permits if their primary residence is in the territory of the City. The attached Ordinance amends the City Code to address these concerns, as well as those expressed by neighbors of Short-Term Rental ( STR ) operators within the neighborhood. The proposed Ordinance: 1. Allows multiple permits to be held by a permittee whose primary residence is in the territory of the city; 2. Limits one STR permit per lot as defined in Title 17 of the Code, when the permittee s primary residence is not within the territory of the city; 3. Limits the number of guests per lot to six, wherein the permittee s primary residence is not on the lot; 4. Expressly subjects STR permits to the rules and regulations of neighborhood CC&Rs; and 5. Prohibits any advertisement in violation of the Code. Lastly, to assist with the identified concerns and those expressed by neighbors of STR operators, the City has started interviewing the top three consulting companies to assist with the City s enforcement of the STR permit program. A redlined and clean version of the ordinance has been attached (see Attachments 3 and 4). The City Charter requires that the ordinance be passed for publication of title prior to adoption. (City Charter section 32(c).) Staff recommends that Council pass for publication the Ordinance title and continue the item for consideration of adoption. Policy Considerations: The recommended Ordinance will increase the City s effectiveness in enforcing violations of the STR permit program, which is consistent with Council s support of compliant permittees. Economic Impacts: None. City of Sacramento August 14, 2018 powered by Legistar Page 2 of 11

3 File ID: Discussion Item 18 Environmental Considerations: This action is not a project subject to California Environmental Quality Act ( CEQA ) because it involves administrative matters and will not result in new physical development, direct changes to the physical environment, and any reasonably foreseeable indirect physical change in the environment. (CEQA Guidelines section 15378(b)(5).) Sustainability: Not applicable. Commission/Committee Action: On December 12, 2017 and April 24, 2018, the L&L Committee discussed and directed staff to return with the proposed Ordinance. On June 12, 2018, the L&L Committee, by a vote of 3 ayes, zero noes, and one absent, voted to forward the proposed Ordinance to City Council for consideration. Rationale for Recommendation: The following includes a summary of the rationale for the approval of the recommended Ordinance: Primary Residency in the City. Proximity of the permittee to the STR property directly affects the permittee s ability to control activity occurring at the rental. Most complaints are regarding noise and parking. If the host is at the location, it is much easier for neighbors to contact them, and hosts to rectify or explain the situation. The best oversight occurs when the permittees primary residence is on the same lot as the STR. Arguably then, such oversight is not lessened by additional STR permits for the same lot. Consequently, staff recommends that these permittees be allowed to hold more than one permit for the same lot, if the permittee desires. Additionally, the next best oversight is when the permittee s primary residence is in the city, although not on the same lot. As the concerns noted above are remedied here, except that it is not as immediate as when the host lives on the property. Accordingly, staff is recommending that if the permittee resides within the territory of the City, then that permittee should be allowed to hold more than one STR permit per lot. However, because six guests are the maximum per permit, staff recommends that these permittees be limited to a maximin of six guests per lot. In this situation with the host not living on site, but close by in the city limits it makes sense to allow them multiple permits for secondary dwelling units but holding them to the six-guest limit to the property. Expressly subjecting STRs to CC&Rs. Currently, the City Code does not address neighborhood CC&Rs as it relates to STRs. STR operators and neighborhood associations have questioned CC&Rs applicability to STRs given City regulations. This ordinance seeks to clarify this matter and provide homeowner s associations with an assurance that the City s STR program should not conflict with the City of Sacramento August 14, 2018 powered by Legistar Page 3 of 11

4 File ID: Discussion Item 18 residential quality and standards for their community by requiring STR operators to comply with CC&Rs. Advertising in violation of the Code. Lastly, in managing the STR program, staff has found that some permittees advertise lodging in an amount that is in excess of the City s maximum limits. Such lodging could affect the residential quality of the neighborhood. One way to address this matter is to make it a violation of City Code to advertise for activity that does not comply with the Code s provisions. The recommended ordinance will also increase staff s ability to monitor the number of guests that lodge at STRs and take the necessary enforcement action if the guest limit is exceeded. Financial Considerations: Civil penalties for non-compliant STR operators is provided for in the Code at no less than $250 but no more than $25,000 for each day the violation continues (City Code section (C)). The City collected $46,295 in transient occupancy tax (TOT) in Fiscal Year (FY) 2016/17 from STRs. In September of 2017, Airbnb initiated collection of TOT on behalf of their hosts. Airbnb has remitted $381,006 from September 2017 through March 2018 to the City. Of this 1/6 th ($63,500) was transferred to the General Fund. The remaining TOT funds remain in the Community Center Fund (Fund 6010) pursuant to the TOT Ordinance. It is estimated that there are 600 STRs, both permitted and unpermitted, operating in the City. To date, the City has issued 149 STR permits. Local Business Enterprise (LBE): Not applicable. City of Sacramento August 14, 2018 powered by Legistar Page 4 of 11

5 Background: Since the passage of the STR ordinance in January of 2016, issues with enforcement have increased and staff has continued to research best practice regulations. The Department of Finance has been working closely with staff in Code Enforcement, Planning, the Rental Housing Inspection Program (RHIP) and the Police Department to: Address 311 complaints regarding unpermitted STRs. Increase compliance of STRs by considering all noise, guest occupancy, and secondary dwellings complaints during the renewal process. Evaluate RHIP self-reporting properties to determine if a purported rental property should comply with either the STR program or RHIP. Address structural issues related to secondary dwelling units operating as STRs by verifying that the proper building permits have been obtained. Staff has researched the following cities to establish best regulation practices related to STRs. Many cities are facing the same challenges in enforcing STR regulations. San Francisco resolved unpermitted hosts by enacting legislation that requires the hosting platforms (e.g., Airbnb) to ensure the STR operators or hosts follow local permitting requirements. San Diego currently has no STR ordinance and only collects transient occupancy tax from property owners. Napa restricts the overall number of permits to 60 owner occupied and 41 nonowner occupied properties. South Lake Tahoe has moved away from violation warnings and issues monetary citations starting at $1,000 charged to the property, the property owner, and/or the guest. City staff will notify neighbors within 300 feet of the proposed Vacation Housing Rental (VHR) property and schedule a hearing with the Zoning Administrator before a permit is issued. If members of the community provide written objection to the VHR application, a public hearing will be held to provide an opportunity to discuss concerns before proceeding. If no objections are filed, the Zoning Administrator will review the application. The Zoning Administrator will review the application, information from the onsite inspection, and compliance with City s VHR Code in determining whether to approve or deny the application; or require special conditions before issuing a VHR permit. Las Vegas requires all STRs to undergo an inspection by the Planning Department prior to issuing permits. Page 5 of 11

6 ORDINANCE NO. Adopted by the Sacramento City Council [Date Adopted] AN ORDINANCE ADDING AND AMENDING VARIOUS SECTIONS OF CHAPTER OF THE SACRAMENTO CITY CODE RELATING TO SHORT-TERM RENTALS BE IT ENACTED BY THE COUNCIL OF THE CITY OF SACRAMENTO: SECTION 1. Section of the Sacramento City Code is amended to read as follows: Definitions. For purposes of this chapter, the following definitions apply: Advertisement means any method used to solicit interest in the rental, including internet-based listing or hosting services. Applicant means the person applying for a short-term rental permit. City manager means the city manager or designee. CC&Rs (also known as covenants, conditions, and restrictions ) means limitations and rules placed on a group of homes by a builder, developer, neighborhood association, or homeowner association. Dwelling has the same meaning as in section Dwelling unit has the same meaning as in section Lodger means a person to whom a permittee is providing lodging for compensation. Lot has the same meaning as in section Permittee means the person to whom a short-term rental permit is issued. Primary residence of the permittee means the dwelling unit in which the applicant or permittee resides for at least one hundred eighty-four (184) days during the calendar year. 1 Page 6 of 11

7 SECTION 2. Property owner means the owner of the property on which the short-term rental dwelling unit exists, or their agent authorized to lease the short-term rental dwelling unit. Short-term rental has the same meaning as in section D. Short-term rental dwelling unit means the dwelling unit that is subject to a short-term rental permit. Section of the Sacramento City Code is amended to read as follows: Short-term rental permit required Consent required. A. No person shall operate a short-term rental unless there is a short-term rental permit in effect for thethat dwelling unit. B. Upon demand of a peace officer or city employee authorized to enforce this chapter, every person operating a short-term rental shall present the short-term rental permit that is in effect for that dwelling unit. C. No person shall operate a short-term rental without the consent of the property owner. D. No person shall operate a short-term rental in more than one dwelling unit on the same lot, unless the person s primary residence is in the city. SECTION 3. Section is added to the Sacramento City Code to read as follows: Compliance with CC&Rs. No person shall operate a short-term rental in violation of applicable CC&Rs or similar regulations. SECTION 4. A. Subsection B of section of the Sacramento City Code is amended to read as follows: B. All persons operating a short-term rental shall identify the city short-term 2 Page 7 of 11

8 rental permit number in any advertisement for that rental. For purposes of this subsection, advertisement means any method used to solicit interest in the rental, including but not limited to internet-based listing or hosting services. B. Except as amended by subsection A above, all provisions of section shall remain unchanged and in full effect. SECTION 5. Section of the Sacramento City Code is amended to read as follows: SECTION Occupancy limit. A. No permittee shall, for compensation, provide lodging for rent to more than six people at any time in a per short-term rental dwelling unit. B. Notwithstanding subsection A, if the permittee s primary residence is not on the same lot as the short-term rental, the permittee shall not rent to more than six people per lot. Section is added to the Sacramento City Code to read as follows: Advertising in violation of this chapter. No person shall make, print, publish, or disseminate an advertisement for any activity that violates this chapter. 3 Page 8 of 11

9 ORDINANCE NO. Adopted by the Sacramento City Council [Date Adopted] AN ORDINANCE ADDING AND AMENDING VARIOUS SECTIONS OF CHAPTER OF THE SACRAMENTO CITY CODE RELATING TO SHORT-TERM RENTALS BE IT ENACTED BY THE COUNCIL OF THE CITY OF SACRAMENTO: SECTION 1. Section of the Sacramento City Code is amended to read as follows: Definitions. For purposes of this chapter, the following definitions apply: Advertisement means any method used to solicit interest in the rental, including internet-based listing or hosting services. Applicant means the person applying for a short-term rental permit. City manager means the city manager or designee. CC&Rs (also known as covenants, conditions, and restrictions ) means limitations and rules placed on a group of homes by a builder, developer, neighborhood association, or homeowner association. Dwelling has the same meaning as in section Dwelling unit has the same meaning as in section Lodger means a person to whom a permittee is providing lodging for compensation. Lot has the same meaning as in section Permittee means the person to whom a short-term rental permit is issued. Primary residence means the dwelling unit in which the applicant or permittee resides for at least 184 days during the calendar year. 1 Page 9 of 11

10 SECTION 2. Property owner means the owner of the property on which the short-term rental dwelling unit exists, or their agent authorized to lease the short-term rental dwelling unit. Short-term rental has the same meaning as in section D. Section of the Sacramento City Code is amended to read as follows: Short-term rental permit required Consent required. A. No person shall operate a short-term rental unless there is a short-term rental permit in effect for that dwelling unit. B. Upon demand of a peace officer or city employee authorized to enforce this chapter, every person operating a short-term rental shall present the short-term rental permit that is in effect for that dwelling unit. C. No person shall operate a short-term rental without the consent of the property owner. D. No person shall operate a short-term rental in more than one dwelling unit on the same lot, unless the person s primary residence is in the city. SECTION 3. Section is added to the Sacramento City Code to read as follows: Compliance with CC&Rs. No person shall operate a short-term rental in violation of applicable CC&Rs or similar regulations. SECTION 4. A. Subsection B of section of the Sacramento City Code is amended to read as follows: B. All persons operating a short-term rental shall identify the city short-term rental permit number in any advertisement for that rental. 2 Page 10 of 11

11 B. Except as amended by subsection A above, all provisions of section shall remain unchanged and in full effect. SECTION 5. Section of the Sacramento City Code is amended to read as follows: SECTION Occupancy limit. A. No permittee shall rent to more than six people per short-term rental. B. Notwithstanding subsection A, if the permittee s primary residence is not on the same lot as the short-term rental, the permittee shall not rent to more than six people per lot. Section is added to the Sacramento City Code to read as follows: Advertising in violation of this chapter. No person shall make, print, publish, or disseminate an advertisement for any activity that violates this chapter. 3 Page 11 of 11