Agenda Item Wording:
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Short-Term Rental Regulation Discussion - Discussion and direction on potential recommended changes to the Zoning Ordinance Section 17.32.166 Short-term rental permits.
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Deadline for Action: 2/20/2024
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, Planning and Community Preservation Director, paul.bernal@visalia.city <mailto:paul.bernal@visalia.city>, (559) 713-4025
Department Recommendation:
Staff recommends that the City Council receive the staff report, staff presentation, and public comments. Based on the information received, the City Council may direct staff to initiate further zone text amendment changes to the recently adopted Short-term Rental ordinance (Section 17.32.166) as outlined in the report below. Revisions to be considered as part of the Zone Text Amendment process related to Short-Term Rentals may be subject to a future work session discussion with City Council based on staff’s analysis of the potential changes.
Summary:
On October 16, 2023, the City Council introduced the first reading of Zoning Text Amendment (ZTA) No. 2023-01. The ZTA ordinance established codified performance standards regulating short-term rentals occurring in all residential zones (i.e., R-1 and R-M zones) within the city. The ordinance took effect on December 6, 2023. During the adoption of the STR ordinance, the City Council directed staff to return within 60 to 90 days for further discussion on potential revisions to the ordinance. The information provided below are potential changes to the SRT ordinance the City Council may consider.
STR Ordinance Adoption Discussion:
During the introduction and first reading of Ordinance No. 2023-11 (STR Ordinance), 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 ordinance, additional statements were made that further consideration on potential changes to the STR ordinance 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.
Potential STR Ordinance Revisions for City Council’s Consideration:
1. Establishment of an Annual STR Permit Renewal Process:
Implementation of an annual renewal permit process can be enacted and would be consistent with other permit types the City issues. Procedurally, language can be drafted that clarifies STR Permits are valid for one-year and the permits are automatically void upon expiration, unless renewed with City. Permits may be renewed subject to the provisions and restrictions that could be outlined in a revised STR ordinance. Proposed modifications to clarify the STR Permit annual renewal application process, requirements, and limits would need to be drafted for consideration.
Staff would seek input from the City’s Business Tax Division to establish the 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 a Business Tax Certificate to operate and are required to submit their transit occupancy tax with the Finance Department. Establishing an annual renewal STR permit process ensures that operators of SRTs are fully aware and in compliance with the adopted regulations. Failure to comply with all adopted codified requirements may result in non-renewal of the STR permit.
If desired, the City Council may direct staff to incorporate revisions to the STR ordinance to codify duration of Short-Term Rental permits and draft language on annual renewal application processes, requirements, and limits.
2. Consideration of Buffer / Spacing Requirements:
As stated in previous work sessions, consideration of a buffer / spacing requirement could be considered. Similar to the City’s Smoke Shop establishment ordinance, an established buffer or spacing requirement (e.g. 500-ft., 1,000-ft.) could be further analyzed if directed to pursue this requirement. Please note this requirement would need to be supported in the record prior to adoption. Challenges to SRT regulation have compared the transitory nature of an SRT to allowed usage such as small group homes or transitional/supportive housing and argued that similar types of transitory uses should be permissible and constitutional protections for equal protection should apply. Given that over 80% of the City’s General Plan land uses are dedicated to residential land uses, establishing the necessary mapping and tracking mechanisms could be difficult to regulate if a buffer or spacing requirement were considered.
Furthermore, buffering requirements could be challenged if uses such as bed and breakfast inns or boutique hotels are not subject to spacing requirements from residential uses, under the argument that similar uses should be treated in the same manner under the zoning ordinance. Buffers, by their nature, must be tracked by staff, which would require additional internal review.
Staff, with the help of the GIS Division, conducted a mapping exercise implementing a 1,000-foot buffer within designated residential land use areas. Currently, there is a total residential land use area of approximately 820,234,917 square feet (18,830 acres). When applying the 1,000-foot buffer to the total residential land area, it resulted in approximately 261 “lots”, or potentially only providing for approximately 261 short-term rental permits. Please note this number should be considered hypothetical because it is not likely that each buffer’s center aligns perfectly with a residential land use.
If desired, the City Council may direct staff to further research buffering / spacing requirements for STRs and report back to the Council on potential codified language that could implement spacing requirements from STRs within neighborhoods.
3. Other Considerations (Establishing an Overall Number of STR Permits Allowed)
Staff reached out to multiple local agencies in California and the most responsive and helpful has been the City of Santa Rosa. Staff found that the City of Santa Rosa, through multiple revisions, has similarly implemented STR regulations to address STRs in their community. Key features to their approach, which the City’s current STR ordinance does not address are as follows:
1. Separate “Hosted” from “Non-Hosted” STR approvals.
a. Allow unlimited “Hosted” STRs.
i. A Hosted STR is defined as-a Short-Term Rental where, throughout the rental period, the host lives and sleeps in the dwelling unit or lives and sleeps in another legal dwelling unit on the same parcel, which is the owner’s principal residence. Hosted STRs may be limited to only the primary residence on any property containing more than one legal dwelling unit.
b. Limit “Non-Hosted” STRs.
i. A Non-Hosted STR is defined as a Short-Term Rental where the Host does not live and sleep in the dwelling unit or in another legal dwelling unit on the same parcel throughout the duration of the rental period.
2. Require permit renewals.
a. Provide a 60-day notice and 30-day deadline for STR application renewals.
3. Determine that Non-Hosted STRs not meeting the application deadline be eliminated from the overall permissible amount of Non-Hosted STRs permitted within the community.
Staff concludes the key items listed above could work in addressing the Council’s concerns. However, it should be noted that the City of Santa Rosa had a tally of existing Non-Hosted STRs prior to regulation based on metrics listed in their Business Tax records. Unfortunately, this information is not tracked under our current business tax certificate.
Staff researched the State Finance Department's website and information obtained identified that as of January 1, 2023, the City of Visalia has approximately 50,199 residences within the City. Based on prior research on the number of STRs currently operating in Visalia with that number fluctuating between 340-867 STRs in Visalia (as stated in previous staff reports and based on the Airbnb website).
Using the City of Santa Rose ordinance STR approach, the City Council may consider directing staff to draft language that limits the total number of STRs permitted within Visalia based on a percentage of the city’s total housing stock. As an example, capping the number of STR permits to 1% of the City’s housing stock would equate to approximately 500 units that could be eligible for an STR permit.
Furthermore, if directed to consider this option, the City Council would also need to consider whether or not STRs should be addressed in two types (Hosted and Non-Hosted), and if so, whether a total permissible STR figure be established for one or both types.
It should be noted that the City of Santa Rosa noticed that problems related to STRs permeated from the Non-Hosted rentals as opposed to Hosted. Additionally, the City of Santa Rosa opted to detail in their ordinance that no new Non-Hosted STRs would be accepted once the total was established and their total number would decrease through attrition when existing Non-Hosted STR permits were vacated or revoked, or when properties are sold or transferred. Further, the city admitted that additional full-time staff (one contract Planner, a Code Enforcement Officer, and an Administrative Assistant) were required to be hired to adequately address STRs in their jurisdiction.
Should staff be directed to address any of the above-mentioned items above, staff anticipates returning to the City Council within 90 days with a draft ZTA amending Section 17.32.166 Short-term rental permits.
Outreach and Notification:
Staff has worked to inform stakeholders and interested parties regarding proposed regulation and adopted changes to a short-term rental ordinance. Most recently, staff worked with the City’s Communication Division to get STR information listed within the recent 2024 Spring Live & Play Guide (see Attachment “3”). The Communications Division is also actively working to put together a social media information campaign to reach a larger population across multiple platforms. Staff continues to receive calls daily on the City’s SRT requirements and has provided the application material to individuals seeking to operate and/or legally permit SRTs in Visalia. One of the more common complaints received regarding the City’s SRT application process is the need for the property owner’s authorization signature, which staff informs individuals that the owner needs to be fully aware of the requirements, and that they are authorizing an SRT to be operated on their property.
Fiscal Impact:
N/A
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.
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.
Alternatives:
The City Council may, in lieu of the recommended motion, consider any of the following alternatives:
1. Receive the staff report and take no further action at this time.
2. Continue the matter to a future City Council hearing for additional information.
Recommended Motion (and Alternative Motions if expected):
recommendation
I move to direct staff to begin drafting revisions to the STR Ordinance based on the City Council’s desired options as follows:
1. Draft language that establishes STR permit duration and annual renewal requirements.
2. Draft language that establishes a cap on the total number of STRs permits allowed based on the City’s residential housing stock.
3. Add Hosted and Non-Hosted definitions and draft language that establishes the total permissible STRs allowed for Hosted and Non-Hosted STRs.
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Environmental Assessment Status:
No environmental assessment required at this time. The adoption of any ordinance changes will require environmental documentation pursuant to the California Environmental Quality Act (CEQA) to be completed by City staff.
CEQA Review:
The adoption of any ordinance changes will require environmental documentation pursuant to the California Environmental Quality Act (CEQA) to be completed by City staff.
Attachments:
1. Ordinance No. 2023-11
2. Short-Term Rental FAQ
3. Parks and Recreation Department - 2024 Spring Live & Play Guide - Pg. 10