HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 09/19/2017 - ITEMS RELATING TO SHORT TERM RENTAL ORDINANCE AMEN Agenda Item 16
Item # 16 Page 1
AGENDA ITEM SUMMARY September 19, 2017
City Council
STAFF
Ginny Sawyer, Policy and Project Manager
Brad Yatabe, Legal
SUBJECT
Items Relating to Short Term Rental Ordinance Amendments.
EXECUTIVE SUMMARY
A. Second Reading of Ordinance No. 127, 2017, Amending Chapter 15 of the Code of the City of Fort Collins
Regarding Short Term Rental Licensing Regulations.
B. Second Reading of Ordinance No. 128, 2017, Amending the City of Fort Collins Land Use Code Short
Term Rental Regulations.
These Ordinances, adopted on First Reading by a vote of 6 -1 (Nays: Overbeck) amend the City Code and
Land Use Code to allow short term rentals (STRs) that were in existence prior to March 31, 2017, but did not
acquire sales and lodging tax licenses to apply for a STR license. Two other proposed amendments were
removed on First Reading and will not be considered. A minor change to the recitals was made to reflect the
fact that the amendments only address the extension of the date by which Short Term Ren tal operators may
obtain City tax licenses.
STAFF RECOMMENDATION
Staff recommends adoption of the Ordinances on Second Reading.
ATTACHMENTS
1. First Reading Agenda Item Summary, September 5, 2017 (w/o attachments) (PDF)
Agenda Item 23
Item # 23 Page 1
AGENDA ITEM SUMMARY September 5, 2017
City Council
STAFF
Ginny Sawyer, Policy and Project Manager
Brad Yatabe, Legal
SUBJECT
Items Relating to Short Term Rental Ordinance Amendments.
EXECUTIVE SUMMARY
A. First Reading of Ordinance No. 127, 2017, Amending Chapter 15 of the Code of the City of Fort Collins
Regarding Short Term Rental Licensing Regulations.
B. First Reading of Ordinance No. 128, 2017, Amending the City of Fort Collins Land Use Code Short Term
Rental Regulations.
The purpose of this item is to consider Code amendment options to allow:
Short term rentals (STRs) that were in existence prior to March 31, 2017, but did not acquire sales and
lodging tax licenses to apply for a STR license.
A property in an allowable Primary STR zone to operate a Primary STR on an abutting property.
A grandfathering provision for tenants who were operating a STR prior to March 31, 2017, with the
property owner’s permission to apply for a STR license.
STAFF RECOMMENDATION
Staff recommends adoption of both Ordinances on First Reading.
BACKGROUND / DISCUSSION
The City of Fort Collins implemented a STR licensing program in March 2017. These regulations were put into
effect following a 2-year process involving ongoing public engagement, six Council work sessions, and two
Council hearings.
Following the adoption of the licensing program, the City contracted with Host Compliance, a vendor capable
of scrubbing and analyzing over 20 on-line websites. Host Compliance is able to capture listing details
including listing location and owner information on approximately 70-75% of all listings. Through Host
Compliance, the City issued a first notification letter to all identified listings in late April. The mailing went to
299 listings.
The licensing ordinance contains a grandfathering provision that allows lawful non-conforming STRs that were
operational prior to March 31 and that had City sales and lodging tax licenses to apply for a STR license. Soon
after the first notification mailing, staff and Council began to hear from numerous STR hosts who were
unaware of the regulations and/or the sales and lodging tax requirement. The bulk of these contacts fall into
the following categories:
Those who have been operating STRs long before the March 31 deadline and were completely unaware of
ATTACHMENT 1
Agenda Item 23
Item # 23 Page 2
the regulatory conversation and outcomes until they received the notification letter.
Those who were operating prior to the March 31 deadline and who believed they were collecting City sales
and lodging tax (due to language on the listing sites) but who did not have City licenses and were only
paying state taxes.
Those who had started either purchasing or remodeling homes with the express intent of operating a STR
without becoming aware of the ongoing the regulatory conversation or the March 31 deadline and
continued forward without obtaining sales and lodging tax licenses prior to the deadline. (Proposed
amendments do not address this group.)
City Council discussed the STR ordinance and licensing implementation at the July 11, 2017, work session
and requested staff return with code amendments for formal consideration.
Key Points
1. Extending grandfathering for existing units.
This amendment allows STRs in prohibited zones that were operational prior to March 31, 2017, to apply
for a license by October 31 (22 business days after effective date [September 29th]).
Licensees would be required to pay all back taxes.
This amendment only allows existing units to be grandfathered and it does not open the door to new STRs
in prohibited zones.
2. Abutting property STRs.
This allowance was considered early on in the STR regulatory conversations.
This provision would only apply in zones that allow primary STRs and “abutting” is clearly defined as
sharing a physical property line.
3. Grandfathering provision for tenants.
This provision is only applicable to those STRs that were operational prior to March 31, 2017.
Licensing Update
As of August 17, 2017:
273 - Applications
126 - Licenses Issued
141 - Licenses Pending
6 - Licenses Denied
Of the 273 applications:
144 - Primary STR / 82 Grandfathered (Potentially)
129 - Non-Primary / 108 Grandfathered (Potentially)
CITY FINANCIAL IMPACTS
The City will pursue back taxes from those STRs that have been operational without City sales and lodging tax
licenses. How much this would be is unknown.
BOARD / COMMISSION RECOMMENDATION
The Land Use Code amendments were considered by the Planning and Zoning Board at its August 17, 2017,
regular meeting. There was much discussion and deliberation on all proposed amendments. Draft notes are
attached.
Agenda Item 23
Item # 23 Page 3
1. Extending grandfathering for existing units. The Board did not support extending the grandfathering
extension (5-2.) The Board noted this was more in line with a Council policy decision and were
hesitant to support with no letters or speakers in favor of the amendment.
2. Abutting property STRs. The Board supported this amendment (4-3.) There was concern regarding the
potential for situations where an owner could buy all abutting properties for STR use.
3. Grandfathering provision for tenants. The Board did not support this amendment (5-2.) While
recognizing this would impact very few STRs there was concern that this was “managing by exception”
and that the previous public outreach and the existing ordinance were clear that STRs only be allowed
by property owners.
PUBLIC OUTREACH
Emails detailing both the July 11 work session and the September 5 regular Council meeting were sent to the
STR listserv which has 110 subscribers. Letters with Council dates and information were also drafted for Host
Compliance as they continue to send notification letters to STR listings.
ATTACHMENTS
1. Planning and Zoning Board minutes, August 17, 2017 (draft) (PDF)
2. Powerpoint presentation (PDF)
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ORDINANCE NO. 127, 2017
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AMENDING CHAPTER 15 OF THE CODE OF THE CITY OF FORT COLLINS
REGARDING SHORT TERM RENTAL LICENSING REGULATIONS
WHEREAS, licensing regulations regarding the rental of dwelling units for p eriods of
less than thirty days (“Short Term Rental” or “Short Term Rentals”) were adopted into Chapter
15 of the Code of the City of Fort Collins on second reading by Council on March 21, 2017,
concurrently with Short Term Rental regulations adopted into the Land Use Code; and
WHEREAS, subsequent to the adoption of the Short Term Rental regulations, the need
for additional changes has arisen including for an extension of the date by which Short Term
Rental operators may obtain City tax licenses in order to obtain a Short Term Rental license for a
dwelling unit deemed to be a lawful nonconforming use; and
WHEREAS, such an extension was changes were discussed at the July 11, 2017, Council
work session and City staff was directed to prepare amendments for Council consideration; and
WHEREAS, Council is concurrently considering similar amendments to the Short Term
Rental regulations adopted into the Land Use Code.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF
FORT COLLINS as follows:
Section 1. That the City Council hereby makes and adopts the determinations and
findings contained in the recitals set forth above.
Section 2. The changes adopted herein to the Short Term Rental licensing regulations
contained in the Code of the City of Fort Collins are in the best interests of the citizens of Fort
Collins and are adopted for the purposes of promoting the health, safety, morals, and general
welfare of the community.
Section 3. That Section 15-641 of the Code of the City of Fort Collins is hereby
amended to read as follows:
Sec. 15-641. - Definitions.
The following definitions shall apply to this Article:
. . .
Short term primary rental shall mean a dwelling unit that is a primary residence of which a
portion is leased to one (1) party at a time for periods of less than thirty (30) consecutive days. A
carriage house, as defined in the Land Use Code, that is not a primary residence is eligible to be
a short term primary rental and may be licensed as a short term primary rental if it is lo cated on a
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lot containing a primary residence. A dwelling unit of a two -family dwelling, as defined in the
Land Use Code, that is not a primary residence is eligible to be a short term primary rental and
may be licensed as a short term primary rental if the connected dwelling unit is a primary
residence and both dwelling units are located on the same lot. The term short term primary rental
shall not include the rental of a dwelling unit to the former owner immediately following the
transfer of ownership of such dwelling unit and prior to the former owner vacating the dwelling
unit.
Section 4. That Section 15-644 of the Code of the City of Fort Collins is hereby
amended to read as follows:
Sec. 15-644. - Licensing requirements.
(a) The following are the minimum requirements that must be satisfied by the applicant for
the issuance of a short term primary rental license.
. . .
(8) The dwelling unit must be located in a zone district that allows short term primary
rentals as specified in the Land Use Code. Alternatively, the dwelling unit must satisfy
the requirements contained in § 15-646.
. . .
(b) The following are the minimum requirements that must be satisfied by the applicant for
the issuance of a short term non-primary rental license.
. . .
(8) The dwelling unit must be located in a zone district that allows short term non -
primary rentals as specified in the Land Use Code. Alternatively, the dwelling unit must
satisfy the requirements contained in § 15-646.
Section 5. That Section 15-646 of the Code of the City of Fort Collins is hereby
amended to read as follows:
Sec. 15-646. - Licensing of short term primary and non-primary rentals existing prior to
Land Use Code restrictions.
(a) A dwelling unit used as a short term primary or non-primary rental that is located in a
zone district in which the Land Use Code prohibits such use is eligible for a license pursuant to
this Article provided that such dwelling unit was actually utilized as a short term primary or non -
primary rental prior to March 31, 2017, and a valid sales and use and lodging tax license was
obtained prior to October 31, 2017, for such dwelling unit in accordance with Chapter 25, Art.
IV, of the Code of the City of Fort Collins.
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(b) In addition to satisfying (a) above, the applicant must satisfy the requirements set forth in
§ 15-644 in order to be eligible for a license. License applications submitted pursuant to this
Section on or before October 31, 2017, do not need to comply with the parking requirements in
Land Use Code § 3.2.2(K)(1).
(c) In order to be eligible for a short term rental license pursuant to this Section, subject to
(e) below, the applicant must submit an application for a license pursuant to this Article on or
before October 31, 2017. No application submitted after October 31, 2017, shall be eligible for a
license pursuant to this Section unless submitted pursuant to (e) below.
. . .
(f) Any license issued pursuant to this Section shall correspond to the type of short term
rental conducted, either primary or non-primary, prior to March 31, 2017.
Introduced, considered favorably on first reading, and ordered published this 5th day of
September, A.D. 2017, and to be presented for final passage on the 19th day of September, A.D.
2017.
__________________________________
Mayor
ATTEST:
_______________________________
Deputy City Clerk
Passed and adopted on final reading on the 19th day of September, A.D. 2017.
__________________________________
Mayor
ATTEST:
_______________________________
Interim City Clerk
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ORDINANCE NO. 128, 2017
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AMENDING THE CITY OF FORT COLLINS LAND USE CODE
SHORT TERM RENTAL REGULATIONS
WHEREAS, on December 2, 1997, by its adoption of Ordinance No. 190, 1997, the City
Council enacted the Fort Collins Land Use Code (the "Land Use Code"); and
WHEREAS, at the time of the adoption of the Land Use Code, it was the understanding
of staff and the City Council that the Land Use Code would most likely be subject to future
amendments, not only for the purpose of clarification and correction of errors, but also for the
purpose of ensuring that the Land Use Code remains a dynamic document capable of responding
to issues identified by staff, other land use professionals and citizens of the City; and
WHEREAS, Land Use Code regulations regarding the renting of dwelling units for
periods of less than thirty days (“Short Term Rental” or “Short Term Rentals”) were adopted on
second reading by Council on March 21, 2017, concurrently with Short Term Rental licens ing
regulations adopted into Chapter 15 of the Code of the City of Fort Collins; and
WHEREAS, subsequent to the adoption of the Short Term Rental regulations, the need
for additional changes has arisen including for an extension of the date by which Short Term
Rental operators may obtain City tax licenses in order to be deemed a lawful nonconforming use;
and
WHEREAS, such an extension was changes were discussed at the July 11, 2017, Council
work session and City staff was directed to prepare amendments for Council consideration; and
WHEREAS, the Fort Collins Planning and Zoning Board at its August 17, 2017, regular
meeting considered the proposed amendments to the Short Term Rental regulations and
recommended that Council:
1. Not extend the date by which Short Term Rental operators may obtain City tax
licenses on a 5-2 vote;
2. Not allow renters of Short Term Rentals to operate Short Term Rentals deemed to be
lawful nonconforming uses on a 5-2 vote; and
3. Allow abutting dwelling units to be considered as primary Short Term Rentals on a 4-
3 vote.
WHEREAS, pursuant to Colorado Revised Statute §31-23-301, the City has been
specifically granted the power to regulate the use of buildings for trade, industry, residence, or
other purposes for the purposes of promoting health, safety, morals, or the general welfare of the
community; and
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WHEREAS, Council is concurrently considering similar amendments to the Short Term
Rental licensing regulations adopted into the Code of the City of Fort Collins.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF
FORT COLLINS as follows:
Section 1. That the City Council hereby makes and adopts the determinations and
findings contained in the recitals set forth above.
Section 2. The Land Use Code changes adopted herein are in the best interests of the
citizens of Fort Collins and are adopted for the purposes of promoting the health, safety, morals,
and general welfare of the community.
Section 3. That Section 3.2.2(K) of the Land Use Code is hereby amended to read as
follows:
3.2.2 - Access, Circulation and Parking
. . .
(K) Parking Lots - Required Number of Off-Street Spaces for Type of Use.
. . .
(k) Short term non-primary rentals and short term primary rentals: The minimum
number of off-street parking spaces required are as follows:
Number of Bedrooms Rented Number of Off-Street Parking Spaces
1—2 1
3—4 2
5—6 3
The number of additional off-street parking spaces required for more than six (6)
bedrooms rented shall be calculated in the same manner used in the above chart (e.g. 7-8
bedrooms rented requires four (4) off-street parking spaces).
Short term rentals licensed pursuant to the Code of the City of Fort Collins § 15 -646 and
for which the license application was submitted prior to October 31, 2017, are exempt
from compliance with these parking requirements so long as such license remains
continuously valid. Subsequent licenses issued pursuant to § 15-646 shall comply with
these parking requirements.
. . .
Section 4. That Section 3.8.34 of the Land Use Code is hereby amended to read as
follows:
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3.8.34 - Short Term Rentals
. . .
(F) Nonconforming Use. A dwelling unit utilized as a short term primary or non-primary
rental that is located in a zone district where such use is prohibited, and s uch short term
rental was a lawfully established use as defined in (3) below, is deemed to be a
nonconforming use. Such nonconforming use shall correspond to the type (either primary
or non-primary) of short term rental conducted prior to March 31, 2017.
(1) In addition to complying with the nonconforming use regulations in Land Use
Code Division 1.5, the owner of the dwelling unit must obtain a license pursuant
to the Code of the City of Fort Collins § 15-646 and continuously maintain such
license to maintain nonconforming use status. Failure to apply for such license by
October 31, 2017, shall be considered abandonment of the nonconforming use.
Should such license be revoked, not be renewed, or lapse for any period of time,
the nonconforming short term rental use shall be considered abandoned or
otherwise terminated.
. . .
(3) To be deemed a lawful use, a dwelling unit must have been actually utilized as a
short term primary or non-primary rental prior to March 31, 2017, and valid sales
and use and lodging tax licenses for such dwelling unit must have been obtained
prior to October 31, 2017, in accordance with Chapter 25, Art. IV, of the Code of
the City of Fort Collins.
Section 5. That the definition “Short term primary rental” contained in Section 5.1.2
of the Land Use Code is hereby amended to read as follows:
Short term primary rental shall mean a dwelling unit that is a primary residence of
which a portion is leased to one (1) party at a time for periods of less than thirty (30)
consecutive days. The term party as used in this definition shall mean one (1) or more
persons who as a single group rent a short term primary rental pursuant to a single
reservation and payment. A carriage house that is not a primary residence is eligible to
be a short term primary rental if it is located on a lot containing a primary residence. A
dwelling unit of a two -family dwelling that is not a primary residence is eligible to be a
short term primary rental if the connected dwelling unit is a primary residence and b oth
dwelling units are located on the same lot. The term short term primary rental shall not
include the rental of a dwelling unit to the former owner immediately following the
transfer of ownership of such dwelling unit and prior to the former owner vacat ing the
dwelling unit. Short term primary rental is a distinct use from short term non -primary
rental under the Land Use Code.
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Introduced, considered favorably on first reading, and ordered published this 5th day of
September, A.D. 2017, and to be presented for final passage on the 19th day of September, A.D.
2017.
__________________________________
Mayor
ATTEST:
_______________________________
Deputy City Clerk
Passed and adopted on final reading on the 19th day of September, A.D. 2017.
__________________________________
Mayor
ATTEST:
_______________________________
Interim City Clerk