HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 08/20/2019 - FIRST READING OF ORDINANCE NO. 108, 2019, AMENDINGAgenda Item 21
Item # 21 Page 1
AGENDA ITEM SUMMARY August 20, 2019
City Council
STAFF
Ginny Sawyer, Policy and Project Manager
Chris Van Hall, Legal
SUBJECT
First Reading of Ordinance No. 108, 2019, Amending Article XVII, Section 15 of the Code of the City of Fort
Collins Relating to Short Term Rentals.
EXECUTIVE SUMMARY
The purpose of this item is to codify regulations addressing existing short-term rental (STR) licenses in multi-
family buildings, to decriminalize short-term rental offenses, and to clarify that the thirty-day limit in Section 15-
646 was intended to be calendar days. These actions come after multiple work sessions and outreach.
STAFF RECOMMENDATION
Staff recommends adoption of the Ordinance on First Reading.
BACKGROUND / DISCUSSION
Between 2015-2017, the City, Council, and the community went through a multi-year process to develop a
regulatory framework and licensing program for STRs (rentals of less than 30 days). At the time, due to the
popularity of online sites such as Airbnb and VRBO, STRs were on the rise and there was concern from
residents for neighborhood quality issues and concern from the hospitality industry for an even playing field in
terms of taxes paid.
Through the outreach and policy development process a customized licensing framework was created based
on the community needs and desires. This framework includes:
• Delineating between Primary and Non-Primary STRs.
o Owners must live in a home at least 9 months of the year to have a Primary STR.
o Owners do not need to live in a Non-Primary STR.
• Limiting both STR types by zone and prohibiting the use in any low-density residential neighborhoods.
o Primary STRs are allowed in zones that already allowed small (6-beds or less) Bed &
Breakfasts.
o Non-Primary STRs are allowed in zones that allow hotels, motels, and B & Bs of any size.
• Requiring STR sales tax and lodging tax licenses.
o The STR license is $150 with an annual $100 renewal fee.
o Sales and Lodging tax licenses are free.
• Restricting STR licenses to owners-only (no tenants.)
• Requiring a self-certify safety checklist.
• A grandfathering protocol was also developed to allow those properties that had been utilized prior to the
adoption of regulations to be licensed.
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Item # 21 Page 2
• Staff also developed an enforcement program that includes:
o Utilizing Host Compliance, a vendor that scrubs over 20 on-line listing sites to help identify
addresses and send notifications.
o A part-time hourly position in zoning assists with notification, research, and appeals. Existing
Code Compliance staff are utilized for field investigations and serving violations. Existing sales
tax staff process applications.
The STR licensing program has been in full operation since November 2017.
Licensed STR numbers in July 2019 show:
Total Licenses: 400/ 213 grandfathered
Primary STR: 239/ 99 grandfathered
Non-Primary STR: 161/ 114 grandfathered
Multifamily Concern
The STR licensing framework addresses tax collection, limitations through zoning, and basic safety
assurances. However, it does not specifically address the Building and Fire codes specific to buildings that
have three or more dwelling units including typical triplexes, 4-plexes, condos, and apartments. These
requirements are difference then when applied to property-line townhomes or duplexes.
When considering multi-family buildings, the Building Department and Poudre Fire Authority utilize the
International Building Code (IBC) which categorizes these buildings into two types of “occupancies”:
• R-1 Occupancy Buildings: These include hotel/motel type buildings that have transitory occupancy defined
as less than 30-days.
• R-2 Occupancy Buildings: These are multifamily buildings (condos/apartments) where residents are non-
transitory (more than 30-days.)
Each of these occupancies have specific code requirements with the R-1 (transient dwellings) requiring
additional safety standards since transient occupants are likely to be less familiar with the building layout and
emergency safety measures than permanent residents. More stringent standards include fire safety (fire
sprinkler systems and alarms), egress signage and lighting, and accessibility standards.
Based on Council direction at work sessions, STR licenses will only be allowed in R1 multifamily buildings
going forward.
The City has 60 STR licenses in multifamily buildings that are subject to an R-1 occupancy. Since the previous
work session, Building and Fire Authority staff have inspected 36 of these units to better gauge building safety
features and to inform the ordinance language to allow continued STR operation of these units. Sprinklered
units were not inspected and may continue as they currently exist because they are 18 units.
The Ordinance provides:
• Units on first and second floors will require direct exits to the outside, adequate fire separation ratings, and
adequate egress windows
• Units three stories and above with corridor exiting will require adequate fire rated corridor exiting, fire alarm
systems, fire rated doors and egress windows
Of the units inspected the majority meet the new requirements. Three units are on third floors and will need to
achieve either a fire alarm system (2) or a fire rated corridor (2).
Ten units are in need of adequate egress windows. Staff has researched these buildings (1950-60 era) and
cannot find documentation or reasoning as to why inadequate egress windows were allowed.
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The recommended ordinance proposes those units needing additional safety modification have until the next
license renewal period (June 30, 2020) to comply. Compliance will be verified by inspection. If units do not
meet the requirements the license will not be renewed.
Those units that were not inspected during our outreach efforts will be required to have an inspection prior to
license renewal to ensure all requirements are met.
The STR licenses that are allowed to continue through the end of the current license term will not be
transferrable and will not be renewable following the sale of the unit or any lapse in licensing.
Decriminalization
Upon further analysis and review of the STR enforcement process, procedure around service of criminal
summons vs. civil citation has been clarified and updated. Therefore, staff is no longer recommending
decriminalization of the ordinance at this time.
Section 15-646 Thirty Day Limit
Section 15-646(e) allows a new property owner of a licensed STR that existed prior to the City Code STR
regulations thirty days in which to apply for a license to continue STR rental activity. The change clarifies the
original intent that the thirty days are calendar days, not business days.
Outreach
Staff has been in contact with STR license holders and the public through meetings, emails, and the fcgov.com
website throughout this process.
In the latest contact with license holders, staff shared that there was some desire to limit the number of guests
(advertised). Generally, there was support of 2 per bedroom plus an additional two as being reasonable. There
was some disagreement to a number cap solving any potential or specific issues.
In a review of local listings:
• 34 listings offer room for 10 or more guests
• 18 of these advertise more than 2 per bedroom plus 2.
ATTACHMENTS
1. Powerpoint presentation (PDF)
August 20, 2019
Short Term Rental - Multifamily Buildings
Ginny Sawyer
ATTACHMENT 1
Purpose
Consider Code Amendments to:
§ Address existing short-term rentals (STRs) in multifamily
(R2) buildings
§ Decriminalize STR offenses
§ Clarify Sec. 15-646 that “30 days” intends 30 calendar
days
2
STR Licensing Background
2014-2017
• Outreach, Council work session/hearings, focus on neighborhood
quality and regulatory framework
• Licensing effective March, non-conforming use finalized in October
2018
• Development and maturing of systems (licensing, enforcement, staff)
• Emergence of R1/R2 concern
2018-2019
• Outreach, research, Council engagement, option development
3
Direction
§ STRs only allowed in R1 rated multifamily buildings
§ Determine minimum safety requirements for existing STRs in
multifamily
§ Allow until next license renewal period to comply (June 30, 2020)
§ Licenses that are allowed to continue will be non-transferable and
non-renewable following any lapse in licensing
4
Existing STR
§ Sprinklered & adequate egress-continue as is (18 units)
§ Units on 1st and 2nd floors will require direct exits to the outside,
adequate fire separation ratings, and adequate egress windows
§ Units 3 stories and above with corridor exiting will require adequate
fire rated corridor exiting, fire alarm systems, fire rated doors and
egress windows
5
Additional Items
Decriminalizing:
• Can issue citation immediately
• Can issue via posting and mailing (not personal service)
Sec. 15-464 30-day clarification
• Clarifies the intent is to be 30 calendar days
• Applies to timeframe for a new homeowner to obtain a license for a
non-conforming STR
6
Purpose
Consider Code Amendments to:
§ Address existing short-term rentals (STRs) in multifamily
(R2) buildings
§ Decriminalize STR offenses
§ Clarify Sec. 15-646 that “30 days” intends 30 calendar
days
7
-1-
ORDINANCE NO. 108, 2019
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AMENDING ARTICLE XVIII, SECTION 15 OF THE CODE OF THE
CITY OF FORT COLLINS RELATING TO SHORT TERM RENTALS
WHEREAS, the renting of dwelling units for periods of less than thirty days (“Short
Term Rental” or “Short Term Rentals”) is an ongoing activity in the City requiring owners of
Short Term Rentals to obtain City sales and use and lodging tax licenses; and
WHEREAS, the City wishes to protect neighborhoods while accommodating an existing
and desired activity; and
WHEREAS, by utilizing existing zoning code provisions and applying additional
requirements on Short Term Rental activities, neighbors, renters, and traditional lodging
establishments can all be protected from unregulated activity; and
WHEREAS, there are a number of existing Short Term Rentals operating in multi-family
buildings within the City, which raises issues about what sanitation, mechanical, electrical,
structural, and fire safety requirements should be used to review these particular Short Term
Rentals; and
WHEREAS, City Council wishes to amend the current Short Term Rental regulations in
order to specify which sanitation, mechanical, electrical, structural, and fire safety requirements
apply to Short Term Rentals operating in multi-family buildings and to provide an alternative
method for currently existing Short Term Rental operating in multi-family buildings to meet
current fire safety requirements; and
WHEREAS, Council also wishes to make other amendments to the Short Term Rental
regulations to change a violation of these regulations to a civil infraction and to make other
appropriate edits; and
WHEREAS, these restrictions, requirements and regulations are in the public’s interest
and protect the health, safety and welfare of City residents and of individuals staying in a Short
Term Rental within the City.
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. That two new definitions are hereby added to Section 15-641 of the Code
of the City of Fort Collins, which new definitions shall read in their entirety as follows:
-2-
Multi-family dwelling unit shall mean a dwelling unit that is located in a structure that is
zoned for multi-family use.
R-1 Occupancy Building shall have the same meaning as the most recent International
Building Code adopted by the City of Fort Collins.
Section 3. That the definition “Short term non-primary rental” contained in Section
15-641 of the Code of the City of Fort Collins is hereby amended to read as follows:
Short term non-primary rental shall mean a dwelling unit that is not a primary
residence and that is leased, in part or in whole, in its entirety to one (1) party at
a time for periods of less than thirty (30) consecutive days. The term short term
non-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 15-642 of the Code of the City of Fort Collins is hereby
amended to read as follows:
Sec. 15-642. License required.
No person may lease to any person, or use, any dwelling unit may be utilized as a short term
primary rental or short term non-primary rental within the City unless a license to rent such
dwelling unit has been first issued as provided in this Article.
Section 5. 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.
. . .
(4) The property must conform to, and the applicant shall certify that the dwelling
unit proposed to be licensed as a short term rental complies with, specificapplicable
sanitation, mechanical, electrical, structural, and fire safety requirements in Chapter 5 of
the Code of the City of Fort Collins and listed in administrative regulations adopted
pursuant to § 15-651. The Director may inspect the dwelling unit proposed to be licensed
for purposes of verifying compliance with such requirements and refusal by the applicant
to allow such inspection shall be grounds for denial of the issuance of a license.
(5) The applicant must maintain and provide proof of liability insurance sufficient to
compensate renters for injuries that may be sustained in the dwelling unit proposed to be
rented within the coverage limits established in administrative regulations adopted
pursuant to § 15-651.
-3-
. . .
(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.
. . .
(4) The property must conform to, and the applicant shall certify that the dwelling unit
proposed to be licensed as a short term rental complies with, specificapplicable
sanitation, mechanical, electrical, structural, and fire safety requirements in Chapter 5 of
the Code of the City of Fort Collins and listed in administrative regulations adopted
pursuant to § 15-651. The Director may inspect the dwelling unit proposed to be licensed
for purposes of verifying compliance with such requirements and refusal by the applicant
to allow such inspection shall be grounds for denial of the issuance of a license.
(5) The applicant must maintain and provide proof of liability insurance sufficient to
compensate renters for injuries that may be sustained in the dwelling unit proposed to be
rented within the liability coverage limits established in administrative regulations
adopted pursuant to § 15-651.
. . .
Section 6. 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.
. . .
(e) Should ownership of a dwelling unit licensed pursuant to § 15-646 be transferred, and such
license was continuously valid until the transfer of ownership, the new owner is eligible for a
license identical in scope to the previously issued license provided: (1) the new owner applies for
a license within thirty (30) calendar days of the transfer of ownership; (2) the dwelling unit
complies with the parking requirements in Land Use Code Section 3.2.2(K)(1)(k); and (3) any
license issued pursuant to § 15-646 is continuously maintained. Should a license issued to the
new owner under this Section be revoked, not be renewed, or lapse for any period of time, the
new owner shall no longer be eligible for a license for such dwelling unit pursuant to this
Section.
. . .
Section 7. That Section 15-647 of the Code of the City of Fort Collins hereby
amended to read as follows:
Sec. 15-647. Term of license and renewal.
-4-
. . .
(d) A short term primary or non-primary rental shall only operate in a multi-family dwelling
unit if the entire multi-family structure meets all sanitation, mechanical, electrical, structural, and
fire safety requirements applicable to an R-1 Occupancy Building.
(e) A short term primary or non-primary rental licensed prior to September 13, 2019, that
operates in a multi-family dwelling unit may continue to operate under and for the current terms
of such license if it meets the requirements in § 15-648(4) and continues to comply with all other
applicable requirements, and if the license has not lapsed for more than thirty (30) days.
If the owner of a short term primary or non-primary rental operating in a multifamily dwelling
unit that is licensed prior to September 13, 2019, sells or otherwise transfers the multifamily
dwelling unit, then the short term rental license shall expire at the time of sale or transfer unless
the entire multi-family structure where the multifamily dwelling unit is located meets the R-1
Occupancy Building requirements in this § 15-647.
Section 8. That Section 15-648 of the Code of the City of Fort Collins is hereby
amended to read as follows:
Sec. 15-648. License regulations.
Upon issuance of a license pursuant to this Article, the following requirements must be met in
order for the license to remain valid. Failure to comply with any of the following regulations
may result in revocation, suspension, or non-renewal of the issued license pursuant to § 15-649:
. . .
(4) The licensee shall maintain compliance with all sanitation, mechanical, electrical,
structural, and fire safety requirements described in § 15-644. As a condition of renewal for the
year 2020 and subsequent years, a short term primary or non-primary rental licensed in a multi-
family dwelling unit prior to September 13, 2019, may only continue to operate as a short term
rental if the Building Official determines that the dwelling unit meets the following alternate
minimum fire resistance and safety requirements applicable to an R-1 Occupancy, as those terms
are defined by the International Building Code:
(a) The dwelling unit is sprinkled and has egress windows that are not less than the
equivalent fire resistance and safety requirements prescribed by the International
Building Code;
(b) The dwelling unit is on the first or second story of the building, has direct exits to
the outside, fire separation ratings and egress windows that are not less than the
equivalent fire resistance and safety requirements prescribed by the International
Building Code; or
-5-
(c) The dwelling unit is located above the second story of a building and has fire
rated corridor exiting, fire alarm systems, fire rated doors and egress windows that are not
less than the equivalent fire resistance and safety requirements prescribed by the
International Building Code.
. . .
Introduced, considered favorably on first reading, and ordered published this 20th day of
August, A.D. 2019, and to be presented for final passage on the 3rd day of September, A.D.
2019.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
Passed and adopted on final reading on the 3rd day of September, A.D. 2019.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk