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10-10-16 Council Work Session Agenda and MaterialsCITY COUNCIL WORK SESSION AGENDA Monday, October 10, 2016, at 7:00 p.m. City Hall Council Chambers, 201 First Avenue East A. CALL TO ORDER B. DISCUSSION ITEMS 1. Vacation Rentals By Owner C. PUBLIC COMMENT Persons wishing to address the council are asked to do so at this time. Those addressing the council are requested to give their name and address for the record. Please limit comments to three minutes. D. CITY MANAGER, COUNCIL, AND MAYOR REPORTS E. ADJOURNMENT UPCOMING SCHEDULE / FOR YOUR INFORMATION Coffee with the Chief — October 12, 2016, at 5:30 p.m. — Sykes Diner, 202 2❑d Avenue West Regular Council Meeting — October 17, 2016, at 7:00 p.m. — Council Chambers Council Work Session — October 24, 2016, at 7:00 p.m. — Council Chambers Reasonable accommodations will be made to enable individuals with disabilities to attend this meeting. Please notify the City Clerk at 758-7756. Page 1 of 1 PLANNING FOR THE FUTURE REPORT TO: SUBJECT: MEETING DATE: M01ff,ANA Doug Russell, City Manager PJ Sorensen, Planner Planning Department 201 V Avenue East Kalispell, MT 59901 Phone: (406) 758-7940 Fax: (406) 758-7739 www.kalispell.com/planning Work Session — Short Term Residential Rentals October 10, 2016 BACKGROUND: On September 12, 2016, the City Council held a work session regarding a proposal to allow short term residential rentals. There was concern over unintended consequences expressed at the meeting and an additional work session was scheduled to explore that topic. The proposal was originally part of a group of amendments that were discussed at a work session held by the Planning Board on March 8, 2016. A public hearing was held by the Planning Board on April 12, 2016. At that time, no comments were received, and the Planning Board sent a recommendation of approval to the City Council on a 7-0 vote. The City Council held a work session on April 25, 2016, to discuss the proposals. The Council then directed staff to present the proposals at the next regular meeting. At the May 2, 2016, meeting, the Council voted to separate the short term residential rental proposal from the other amendments and bring the short term residential rental zoning amendment to the Council during the next work session, which occurred on May 9, 2016. At the conclusion of that work session, the Council asked for additional information and requested another work session, which was held on June 27, 2016. The September 12, 2016, work session addressed questions from the June meeting. The Council alluded to several potential unintended consequences at the September 12, work session and was concerned that there may be other unintended consequences that had not been considered. Potential issues to consider would include the following: • Parking was identified as a necessary condition for short term rentals as parking is typically one of the first complaints voiced by an aggrieved neighbor. It was generally agreed that each short term rental should comply with the underlying zoning and there should be no grandfathering in of residences which, for example, do not have any off street parking. The unintended consequence could be that such properties, within established neighborhoods, might actually pave portions of their otherwise landscaped front or back yard to accommodate the now required parking. • These short term rental standards are being considered city wide as it is extremely difficult to differentiate neighborhoods or zoning districts. One unintended consequence of allowing short term rentals occurs in neighborhoods which may have strong objections to such use on a neighborhood wide basis. Neighborhoods which voice strong objections could be addressed through several options. o The neighborhood could adopt private covenants or amend existing covenants. This keeps regulation at the private level. o The adopting ordinance could specifically exclude certain subdivisions or neighborhoods. We do this with our downtown parking districts. However, this option also has many unintended consequences as well because it starts unraveling the consistency of our overall zoning ordinance. o We could develop a new zoning district which specifically excludes short term rentals. This could lead to a significant fracturing of our zoning districts as various neighborhoods vie to include and exclude specific uses in the future. • A concern that the short term rental ordinance may be interpreted as a gateway for some group homes or group rental housing arrangements has been voiced. Staff had discussed this issue early on in the process. When staff looks at a use to determine how it is classified for zoning purposes we look at the intent of the use and the management and operation of the use. Short term rentals do not have a specific client base, group homes do. Short term rentals do not provide on -site management, training, counseling, therapy or care of any kind. Group homes do. Short term rentals typically market and advertise differently. Our zoning ordinance does have a good set of definitions to give us guidance. Staff feels this issue is generally not a concern. • Another potential issue is housing affordability. Research has shown that housing affordability issues are more pronounced with larger numbers of short term rentals and those with specific housing affordability programs in place. For example, Breckenridge, Colorado, had a population of 4540 people in 2010 with 6911 housing units. Only 28% of the units were occupied by residents and 4965 units were for short term rentals. The resulting crunch was part of the reason (in addition to the high cost of real estate vs wages in ski resort communities) that the average sales price of a home was twice what was deemed to be affordable. Other communities have concerns about pulling a large number of homes off of the rental market with the resulting increase in rental costs from supply and demand. The number of short term rentals currently within Kalispell (approximately 47) would not have a significant impact on housing affordability, and it is not anticipated that there would be a substantial increase in those numbers to a point where it would have that effect. There are about 9800 housing units within the city. Fifty short term rentals represent about half of one percent (0.5%) of the housing units. It is interesting to note that, through the end of September this year, 112 new single family residences/duplexes have been constructed in the city, which is more than double the number of short term rentals over only a nine month period. RECOMMENDATION: It is recommended that the City Council direct staff to bring the proposed ordinance to the next regular Council meeting for consideration. The proposed zoning ordinance amendment would allow short term residential rentals with an administrative conditional use permit subject to certain conditions outlined in the ordinance. FISCAL EFFECTS: There are no anticipated fiscal impacts at this time. Annual costs of enforcement are covered through annual renewals of the permit. ALTERNATIVES: Deny the request, which would mean that short term rentals would continue to not be allowed under the zoning ordinance. ATTACHMENTS: Proposed ordinance Report compiled: September 28, 2016 c: Aimee Brunckhorst, Kalispell City Clerk DRAFT SHORT TERM RENTAL ORDINANCE Recommended by Kalispell Planning Board As an amendment to the Kalispell Zoning Ordinance Modified After City Council Work Sessions 27.20.095 Short Term Residential Rental Standards. A residential dwelling unit, whether in a residential or commercial zone, may be rented for a period shorter than thirty days provided that the following performance standards are met: (1) The property owner shall first obtain an administrative conditional use per= mit from the Planning Department (See Chapter 27.33). (2) The number of units rented shall not exceed the allowable density for the zon- ing district where the property is located. (3) The administrative conditional use permit review shall include: (a) Proof of an inspection by the Building Department showing that all life safety requirements are met, including, but not limited to, smoke and car- bon monoxide detectors, egress windows out of sleeping areas, handrails, hot water temperature, exposed electrical wiring, and ground faults with- in six feet of sinks/tubs; (b) Proof of a State of Montana public accommodation license for a tourist home, which is administered by the Flathead City -County Health De- partment and is subject to annual inspections; (c) Verification that the property is appropriately registered and meets re- quirements for state bed tax purposes; (d) The property owner shall provide their name and phone number or of a local contact person that shall be res onsible for handling any issues that arise with the property. The contact shall be available to address any is- sues 24 hours a day and seven days a week. The contact information shall be included in the notice sent to property owners within 150 feet as pro- vided for in the administrative conditional use permit process; and (e) Each short term rental shall have access to the minimum required park- ing for a residential unit in the zoning district (no non -conforming status). (4) There shall be no signage indicating the short term rental of the property. (5) Prior to April 1 each calendar year, a property owner that wishes to continue to provide short term residential rentals shall submit for an annual renewal of the administrative conditional use permit, including payment of a fee equal to the administrative conditional use permit fee then in effect. The renewal shall include verification of all of the information listed under Section 27.20.095(3). Any updated contact information shall be provided to property owners within 150 feet. (6) Violations of the terms of the administrative conditional use permit or the provisions of this section may subject the property owner to an enforcement pursuant to the terms of this ordinance. Noise and similar issues may be en- forced through the Police Department. 27.37.010: Definitions. (1-5960) Residential. Regularly used by its occupants as a permanent place of abode, which is made one's home as opposed to one's place of business and which has housekeeping and cooking facilities for its occupants only. In situations where a dwelling is rented or leased, a residential use would involve lease periods of one month or more unless the provisions of Section 27.20.095 relating to short term residential rental standards are met.