Agenda Item Wording:
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Ordinance Adoption - A Public Hearing and Introduction of the first reading of Ordinance No. 2024-12 for Zoning Text Amendment No. 2024-04: A request by the City of Visalia to amend Visalia Municipal Code Title 17 (Zoning Ordinance), Chapter 17.32.166 Short-Term Rentals, Citywide.
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Deadline for Action: 11/18/2024
Submitting Department: Community Development
Contact Name and Phone Number:
Josh Dan, Senior Planner, josh.dan@visalia.city <mailto:josh.dan@visalia.city>, (559)713-4003 Paul Bernal, Community Development Director, paul.bernal@visalia.city <mailto:paul.bernal@visalia.city>, (559)713-4025
Department Recommendation:
Staff recommends that the City Council hold a public hearing and introduce the first reading of Ordinance No. 2024-12, amending Title 17 (Zoning Ordinance), Chapter 17.32.166 Short-Term Rentals to add language requiring applicants to reapply annually and to include fines for non-compliance, Citywide.
Background Discussion:
The City Council, in response to several inquiries regarding Short-term rentals, directed staff to explore potential options regarding the ability to regulate this use in residential zones. On October 16, 2023, the City Council introduced the first reading of a Zoning Text Amendment (i.e., ZTA No. 2023-01) that established codified performance standards regulating short-term rentals occurring in all residential zones (i.e., R-1 and R-M zones). During the public hearing, a majority of the Councilmembers expressed common agreement that the ordinance was a “good start” in establishing requirements to address STRs in the community. However, during the Council’s deliberation on the adoption of the ordinance, Council provided direction on potential changes to the STR ordinance to be discussed at a future Council meeting. The City Council requested that staff return in 60 to 90 days after the STR ordinance took effect for further discussion on potential revisions to the ordinance.
On February 20, 2024, staff presented an update on the STR ordinance and included additional information that could be further considered to help in getting STR owners/operators legally permitted. The following items were presented to the City Council for consideration:
1. Requirement for the short-term rental permit to be reapplied annually.
2. Consideration of a buffer or spacing requirement between STRs.
3. Other suitable limitations that other agencies have applied.
During the discussion of this work session item, a majority of City Council concluded that due to the limited data provided on STR application submittals, staff should return in six months to update the Council on the Ordinance’s implementation and to determine if additional measures would be merited to get STR owners/operators legally permitted.
On September 3, 2024, staff returned to the City Council with an update on the STR Ordinance “roll out” thus far. Staff presented the outreach performed to reach STR operators, how the implementation process returned only 45 applications by the time staff drafted the report, and lastly, presented alternative measures to ensure further compliance with the ordinance as Council had directed six-months prior.
Based on information received during the September 3rd meeting, Council directed staff to amend the STR Ordinance (Chapter 17.32.166) to address compliance fee assessment and incorporate annual permitting requirements, as well as approve staff to solicit software services that may help in capturing STRs that have not applied for the appropriate City permits and licenses. Zoning Text Amendment (ZTA) No. 2024-04 is the city-initiated request to address revisions as directed by the City Council.
Planning Commission Public Hearing:
On November 12, 2024, the Planning Commission held a public hearing for ZTA No. 2024-04. The Planning Commission had several questions regarding the proposed amendments to the Short-Term Rental Section of the Municipal Code (17.32.166) but were in agreement with the proposed changes as presented. No public comment was received and the Planning Commission voted 5-0, recommending the City Council adopt the proposed changes.
Proposed Revisions to VMC Section 17.32.166 Short-Term Rentals:
Compliance Fee Assessment
Section 17.32.166.E has been added to the STR Ordinance. This new section, in coordination with the Finance Department, identifies the need to include enforcement language that explicitly identifies the penalty fee to be assessed for owners/operators who fail to comply with the STR ordinance and/or fail to apply for all the necessary applications / permits.
Similar to the Solid Waste provisions of the municipal code, revisions to Section 17.32.166 Short-term rental permits will now explicitly list the penalty fines if a property owner/operator fails to comply with the STR ordinance. The penalty amounts noted in the STR Ordinance for noncompliance, after first notice, are $100, $200, and $500.
Section 17.32.166 will be revised as follows:
E. Enforcement:
The City, in its sole discretion, may take enforcement action pursuant to the administrative code procedure described in Chapters 1.12 <https://codelibrary.amlegal.com/codes/visalia/latest/visalia_ca/0-0-0-22524> and 1.13 <https://codelibrary.amlegal.com/codes/visalia/latest/visalia_ca/0-0-0-22540> of the Visalia Municipal Code.
Any person convicted of any infraction of this chapter shall be punished by:
1. A fine not exceeding one hundred dollars ($100.00) for a first violation;
2. A fine not exceeding two hundred dollars ($200.00) for the second violation of this chapter within one year; and
3. A fine not exceeding five hundred dollars ($500.00) for each additional violation of this chapter within one year. Each day a violation continues shall be regarded as a new and separate offense.
Annual Renewal Requirement
In addition to the inclusion of specifically noting the penalty fees in the STR ordinance, the ordinance will also include language informing property owners/operators that an annual renewal permit is required for all STR’s operating in Visalia. Establishing an annual renewal STR permit process ensures that operators of STRs are fully aware and in compliance with the adopted regulations. To determine how this process should be done, staff sought input from the City’s Business Tax Division to identify potential regulatory timeframes that may best coincide with the Business Tax Certificate renewal process, which is done bi-annually, given that STRs are required to have both a Business Tax Certificate and STR permit issued by the Planning Division. However, due to the bi-annual Business Tax Certificate renewal timelines, requiring the annual STR permit to coincide with their timeframes does not work given the STR permit issued by the Planning Division will be an annual permit.
Staff has concluded that the Business Tax Division will continue to notify their customers regarding business tax bi-annual renewals as they currently do while the notification requirement of STR operators to reapply for their STR permit will fall on the Planning Division. The requirement for annual renewal will be one calendar year from the date the STR application is approved, with a 30-day deadline for applications to be submitted as detailed below:
F. Annual renewal:
1. A Renewal Short-Term Rental Permit application accompanied by the Short-Term Rental Permit renewal fee and all supporting materials, verifications, and signatures required by said application, shall be submitted to the Planning Division of the Planning and Community Preservation Department annually prior to expiration of the Short-Term Rental Permit. Renewal applications shall be submitted no earlier than the 60 calendar days prior to expiration and shall be accepted up to 30 calendar days after the date of expiration of the existing Short-Term Rental Permit.
2. If a Renewal Short-Term Rental Permit application is received prior to the expiration of the issued Short-Term Rental Permit, and in no case later than 30 calendar days after the expiration of the Permit, expiration of the issued Short-Term Rental Permit shall be stayed until the Renewal Short-Term Rental application is acted on by the Director or their designee. If the renewal application is approved, the issuance month and day for the Short-Term Rental Permit shall be the same as the issuance month and day of the previous Short-Term Rental Permit; for example, if the previous Short-Term Rental Permit was issued on January 1, 2025, the renewal Short-Term Rental Permit issuance date shall be January 1, 2026.
3. If a Renewal Short-Term Rental Permit application is not received prior to the expiration of an issued Short-Term Rental Permit, or in no case later than 30 calendar days after the expiration of the Permit, all short-term rental activities at the property must cease, and a New Short-Term Rental Permit shall be required for continued or future use of the unit as a Short-Term Rental, and all requirements of a New Short-Term Rental Permit shall apply.
The fee to be assessed for the annual STR permit renewal will be the Home Occupation Permit-change of location fee, which is currently assessed at $19.00 as identified in the City of Visalia August 2024 fee schedule. During the next fee update, staff will amend the fee schedule to specifically note both the “Short-term Rental permit fee-new” and the Short-term Rental permit fee-renewal” as their own fees in the fee schedule. Please note both of these fees will be the same fee used for Home Occupation permits and will be subject to annual increases based on the Consumer Price Index.
Fiscal Impact: None.
Prior Council Action:
• May 1, 2023, City Council Work Session: The City Council, on a 5-0 vote, directed staff to analyze potential operational standards for short-term rentals, and begin a Zoning Text Amendment.
• October 16, 2023: The City Council, on a 3-2 vote, approved the first reading of Zoning Text Amendment No. 2023-01 (Ordinance No. 2023-11), proposing to provide the framework for staff to implement a registration and permitting process for all short-term rentals occurring in all residential zones (i.e., R-1 and R-M zones) within the city.
• November 6, 2023: The City Council, on a 4-1 vote, approved the second reading of Ordinance No. 2023-11 was held and served as the final action the City Council took in order for Zoning Text Amendment No. 2023-01 to take effect 30 days following adoption of the second reading.
• February 20, 2024: Staff presented an update on the STR ordinance and included additional information that could be further considered to help in getting STR owners/operators legally permitted. During the discussion of this work session item, a majority of City Council concluded that due to the limited data provided on STR application submittals, staff should return in six months to update the Council on the Ordinance’s implementation and to determine if additional measures would be merited to get STR owners/operators legally permitted.
• September 3, 2024: Staff presented an update on the outreach and permit implementation thus far, and presented additional measures by which staff could get STR operators into compliance as Council had directed six-months prior. At the conclusion of the meeting, Council had approved the recommendation of staff to amend the STR Ordinance (Chapter 17.32.166) to address compliance fee assessment and incorporate annual permitting requirements, as well as approve staff to solicit software services that may help in capturing STRs that have not applied for the appropriate City permits and licenses.
Other:
• August 28, 2023: The Planning Commission received a presentation and informative report regarding short-term rentals which included a synopsis of staff’s previous presentation to the City Council and explanation of directives received. The Planning Commission expressed agreement with Council’s directives.
• September 25, 2023: The Planning Commission voted 5-0 to recommend approval of Zoning Text Amendment No. 2023-01, to the City Council.
• November 12, 2024: The Planning Commission voted 5-0 to recommend approval of Zoning Text Amendment No. 2024-04, to the City Council.
Alternatives:
The City Council may, in lieu of the recommended motion, consider any of the following alternatives:
1. Refer all parts of the ordinance back to the Planning Commission for further review; or
2. Direct staff to not process any amendments to Visalia Municipal Code Section 17.32; or
3. Continue the matter of a future City Council hearing for additional information.
Recommended Motion (and Alternative Motions if expected):
recommendation
I move to introduce the first reading of Ordinance No. 2024-12 for Zone Text Amendment No. 2024-04.
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Environmental Assessment Status:
The project is Categorically Exempt from the California Environmental Quality Act (CEQA) pursuant to the Code of Regulations Section 15061(b)(3).
CEQA Review:
The requested action is considered exempt under Section 15061(b)(3), Per Section 15061(b)(3) of the State Guidelines for the California Environmental Quality Act (CEQA). A Notice of Exemption has been prepared for the project because Section 15061 (b) (3) states that the project is exempted from CEQA if the activity is covered by the commonsense exemption that CEQA applies only to projects that have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. The proposed text amendment to establish performance standards for smoke shops will not have a significant effect on the environment.
Attachments:
Attachment 1 - Ordinance No. 2024-12
Attachment 2 - Revised Short-Term Rental Application
Attachment 3 - Planning Commission Staff Report dated November 12, 2024