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HomeMy Public PortalAbout2021.12.17 Special Meeting MinutesMINUTES McCall City Council Special Meeting McCall City Hall -- Legion Hall VIA TEAMS Virtual December 17, 2021 Ca11 to Order and Roll Call Work Session CALL TO ORDER AND ROLL CALL 1 Mayor Giles called the Special meeting of the McCall City Council to order at 9:00 a.m. Mayor Giles, Council Member Maciaszek, Council Member Nelson, and Council Member Nielsen all answered roll call. Council Member Callan was absent City staff members present were Bill Punkoney, City Attorney; BessieJo Wagner, City Clerk; Erin Greaves, Communications Manager; Michelle Groenevelt, Community Development Director; Brian Parker, City Planner; Vlatko Jovanov, Network Administrator; Meredith Todd, Assistant City Planner; John Powell, Building Official, Amanda Payne, Local Option Tax Administrator Also, in attendance were Garrett DeJong, Fire Chief; Julie Thrower Council Member Elect; Casey Quinn and Kelly Hill, Representatives of DoneRight Property Management Company WORK SESSION 1 AB 21-294 Permitting and Regulating Short Term Rentals Community and Economic Development (CED) Director Michelle Groenevelt presented stating that the purpose of the work session was to review the current permitting and regulations process for Short Term Rentals (STRs). The work session discussions were focused on how to better permit and regulate STRs based on experience from administering existing codes and looking to other communities like Sandpoint, Idaho for ideas on how to improve the process and implementation. The topic areas would ultimately affect Title 4 and Title 3 as permitting and regulating STRs is a collaboration between the Clerk's Department and Community and Economic Development Department. The intent of this work session was to understand and discuss the topic areas at a high level to help inform any change in policy needed. The intention of the Memorandum distributed to Council was to review the existing short-term rentals' licensing process and regulations and outline the ongoing issues that are not being addressed with current process and regulations. This is the first of three touches on the subject. The City of McCall first started regulating large STRs that sleep 20 or more people by requiring a conditional use permit. This was to address some of the existing large STRs that were creating issues in neighborhoods. As the number of STRs increased, it became apparent that all STRs MCCALL CITY COUNCIL Page 1 of 7 December 17, 2021 Special Meeting needed to better manage secondary impacts. Therefore, the following additional permit standards for STRs were established in January 2020: 3.13.09: PERMIT STANDARDS FOR DWELLING, STRS: (A) All STRs shall comply with this section and file with the Administrator, a signed declaration affirming that the property will be managed to adhere to the following requirements: 1. Parking: all parking for the unit is contained on the site and not more than one (1) parking space per bedroom is provided. All trailers shall be parked on a surfaced area, if space is provided, and shall not park on the right -of way. 2. Occupancy: STRs shall contain no more than four (4) people per bedroom. Total maximum occupancy of the short-term rental shall be based on the number of bedrooms times four (4). 3. Noise: Quiet hours from 10 pm to 8 am the following day are enforced. 4. Safety: Smoke, propane gas, and carbon monoxide detectors are installed within the premises. 5. A posting of the requirements set forth in 1-3 are posted in a visible spot on the premises and a copy provided to all renters. 6. Contact Information: The name and contact information for the property manager is identified and has been sent to all property owners within 300 feet of the location of the short-term rental. 7. No events are held that include additional guests beyond those staying at the short-term rental without first obtaining a conditional use permit. 8. If the short-term rental is located on a parcel that contains an accessory dwelling unit and a primary residence, then one of the dwellings must be owner occupied or a local housing, non - short -term rental, dwelling unit. 9. Camping shall comply with conditions set forth in 3.8.01 and shall not be used to exceed the number of tenants specified on the short-term rental business license. 10. Trash Service: Bear proof solid waste collection facilities shall be available on the site and adequate for the occupancy of the short-term dwelling unit. (B) STRs shall comply with the provisions set forth in this section by March 1, 2020. (C) No STRs within the City of McCall shall operate without obtaining a business license. STRs with a local property manager who maintains a physical office in the City of McCall or Impact Area may operate under the business license held by that local property manager. (D) Enforcement of the requirements set forth in this section shall follow the provisions pursuant to Chapter 17 ENFORCEMENT of this title. It has been a year since these codes were put into place. The McCall Fire Chief and McCall Building Official have had conversations about health and safety concerns related to STRs, especially the high occupancy rentals; both presented at the work session to provide additional background. Similarly, the impacts to neighborhoods with increased traffic, parking (too much or sometimes not enough) and noise can cause unreasonable impacts to residential neighborhoods. Staff from Community & Economic Development and the Clerk's Department have met several times to identify the problems and brainstorm solutions from a permitting and regulatory perspective. The following are some potential suggestions to better manage STRs in McCall. The specifics need to be more formally researched and vetted with the City Attorney but create a framework for Council discussion, so staff gets direction on how to proceed. Changing the Current STR Permit Process: • From Business License to Short -Term Rental Permit MCCALL CITY COUNCIL Page 2 of 7 December 17, 2021 Special Meeting • Requiring STR permit for each unit on each property • STR permit renewal to occur annually • Revise fee schedule to better cover administrative costs Suggested land use changes: • Ensure regulations address health and safety concerns • Clarify definitions of different types of accommodations • Limit occupancy of STRs to something that is more "residential" in nature • Reduce occupancy per bedroom • Use adopted codes from other communities as a template to better manage secondary impacts Questions for the Council: 1. Would you like us to change the permitting process and associated fees (as described) to manage the STR process? 2. Are you interested in a policy shift to better address the health/safety issues and impacts to residential neighborhoods? 3. Any other concerns or ideas? CED Director Groenevelt gave a brief history of the McCall City Codes regarding STRs and highlighted health and safety concerns that have been realized. Building Official John Powell commented on the concern about occupancy and the health and safety issues that larger occupancy STRs create. Fire Chief Garrett DeJong briefed the Council on how STRs effect emergency services and health and safety issues. STRs are classified as a single-family home in the state fire code which limits the input the local Fire Departments have on regulations. Chief DeJong noted that local fire departments and police departments are not built to handle emergencies in homes that have high occupancy. The main issue being that unlike bed and breakfasts and hotels, STRs have no one accountable to know who is sleeping in what room or exactly how many people are in the home. Chief DeJong recommends that the classification for use on STRs with an occupancy greater than ten (10) are looked at and the City ensures that fire safety, water supply standards and parking and access standards are met. City Clerk BessieJo Wagner gave Council an overview of the current permitting process for STRs. Mayor Giles asked what the City currently charges for the permitting process and what staff recommends being more in line with administering a permit. Clerk Wagner noted that the current fee is $125.00 for the initial application and a renewal fee of $25.00 annually or $100.00 for 5 years. Staff has been looking into how much staff time goes into processing STR applications as well as the cost of the software needed to manage the STRs. The price could go up to somewhere around $200 a year for each STR unit. Council Member Nelsen asked if there is any thought around how STRs can be regulated by location or density, using Sandpoint Idaho as an example. Fire Chief DeJong noted that state code exempts the City from even considering that type of regulation. City Attorney Bill Punkoney noted that Sandpoint does limit the maximum number of non -owner -occupied STRs in residential zones MCCALL CITY COUNCIL Page 3 of 7 December 17, 2021 Special Meeting to thirty-five (35). To clarify, Sandpoint is limiting the total number of permits that are allowed but not prohibiting short term rentals. Council Member Maciaszek believes the City should be looking at what the issues are and ways to help mitigate those issues. There should be clearly defined reasons why any changes are made, the fee change does make sense and can be backed up with the cost to process the application. Council Member Maciaszek also echoed the health and safety concerns heard from Chief DeJong. Council Member Nielsen echoed what Council Member Maciaszek commented. Clerk Wagner asked if there was a way to use definitions to separate a residential use from a bed and breakfast or a hotel? Can the occupancy be used to define that an STR is considered to no longer be a residential use and is now a commercial use? Attorney Punkoney noted that there is a significant amount of gray area with this topic, but definitions are one area that has been discussed with city staff. Council Member Maciaszek added that the traditional vacation home model has been in the area for a long time. People would rent out their vacation homes when they are not using them and add some public benefit in the way of additional beds in the area, but the owners were also still using the home. There has been a shift to a more commercial use to generate income, not just offset the cost during the time the owner is not using the home. Does the City look at this consideration and is it appropriate for commercial use in a residential zone? That is why we have zoning. Attorney Punkoney responded to Council Member Maciaszek noting that Idaho Code requires that STRs are classified as a residential land use for zoning purposes. Director Groenevelt commented that the models for STRs and even hotels are changing, especially with Covid, you don't have any interaction with the front desk these days. Clearly defining occupancy is really about how high occupancy is impacting health safety and secondary neighborhood impacts. Council Member Nelsen believes the City needs to push its regulation capacity within the state code to ultimately lead other communities to have greater teeth on the subject of STRs. The City should not be intimidated at the chance of running into possible court issues. Council Member Nelsen brought up the possibility of Homeowners Associations limiting STRs using the Woodlands neighborhood as an example. Could the City require future building projects to limit STRs on the basis of safety concerns entering and exiting the neighborhood? Mayor Giles asked for direction from Attorney Punkoney and Director Groenevelt. Attorney Punkoney understood the question as asking if the City can require new subdivisions to have CC&Rs that would exclude STRs. The answer to that question is no, the City cannot do that within the current state code. Director Groenevelt commented that some new developers have volunteered to limit STRs in their CC&Rs. City Attorney Bill Punkoney clarified the difference between the City being able to require it and the developers offering it voluntarily. Director Groenevelt asked if the City could create an incentive in the code similar to the local housing deed restriction for STRs. Attorney Punkoney responded stating there is the approach of saying a developer cannot do something vs. the approach of the developer wanting something and the City allowing it if the developer follows specific conditions, and that specifying conditions is worth looking into. Mayor Giles commented that there are existing subdivisions with HOAs and if an owner within that association wants to operate a large STR, it is the Mayor's understanding that they can do it as long as they are operating within the limit of the City Code. Mayor Giles asked if it is a possibility for the existing HOA to MCCALL CITY COUNCIL Page 4 of 7 December 17, 2021 Special Meeting pass a bylaw that would prohibit large STRs. Attorney Punkoney noted that if all the owners agree that a restriction will be put in place, then the HOA can pass a new bylaw restricting uses. Requiring a restriction is one thing and having a restriction everyone agrees on is another. Council Member Maciaszek noted that using CC&Rs and HOAs are not in the City's toolbox unless it's a volunteered action by a developer or a HOA. Council Member Nielsen commented that there is no way to build out of the housing shortage in the community. The intention of this discussion is not how to turn STRs into long term rentals, but how is the City within the bounds of state code able to control when and where and how STRs happen. Director Groenevelt asked if the Council was comfortable with the changes related to the permitting process. Council Member Nelsen asked if the fee could be based on occupancy. Clerk Wagner clarified that when the City sets fees, it has to be recouping the cost to administer the permit. If a CUP was needed, the applicant would have to apply and pay for the CUP in addition to the STR permit. Council Member Maciaszek asked if the City has any obligation to approve a CUP application unless it truly meets all requirements? Attorney Punkoney clarified the City still needs to use standards that are in the City Code and abide by those but there is discretionary power built into the CUP process. Council Member Maciaszek shared appreciation for the DoneRight Management representatives interested in being present during the work session. Director Groenevelt recapped that Council is interested in pursuing land use regulations regarding health and safety. Council Member Nielsen commented on parking, stating that it is not only important to be able to accommodate all the parking and equipment but also having it structured in a way that if there was an emergency, EMS could still access the neighborhood. Director Groenevelt responded, clarifying that there is a fine balance of not restricting parking so much that parking on the right of way happens, but you also do not want large driveways and massive parking areas because that changes the nature of the neighborhood as well. Council Member Nielsen stated that changing the occupancy per bedroom might be able to help with the parking issues. Clerk Wagner noted that the CUP process happens when a STR is advertising for 20 or more occupancy, staff has talked about looking at what the capacity is and if the capacity is to house more than 20 it would be thrown into the CUP regardless of the occupancy it is advertised for. Council Member Nielsen noted that the City does not currently inspect STRs, and regulations are based all in good faith. Looking at the licensing fees and what the city staff time requirement is, the City really should have a higher fee for inspections if the City wants to actually regulate STRs or at least monitor them more effectively. That would also be reason to back up an increase in licensing fees. Director Groenevelt commented that staff have talked about potentially doing inspections and it could be something we will continue to talk about with Chief DeJong and Building Official Powell. Especially at a larger occupancy it could go a long way to ensuring compliance for a lot of the health and safety issues. That is a continued conversation and there might be thresholds based on occupancy for what STRs get inspected. MCCALL CITY COUNCIL Page 5 of 7 December 17, 2021 Special Meeting Council Member Maciaszek commented that it's like with a bed and breakfast, the definition is occupancy of ten (10) or more people. Inspections change when you become a bed and breakfast based on different building codes and fire codes. Chief DeJong went through the different code regulations and requirements for building, fire, and residential codes. Chief DeJong noted that code inconsistency is a problem, for example the State Park and Shore Lodge were required to build their STRs to commercial building code and these residential STRs are not required to do the same thing. The next step is coming up with a policy direction that includes inspections if over a certain capacity because safety issues do happen including propane explosions and fires. A good inspection process could prevent those events from happening. Council Member Maciaszek asked what the difference was in regard to a bed and breakfast and a hotel? What is the other layer of a hotel as far as inspections or compliance that they are required to do? Chief DeJong noted the difference is having a monitored sprinkler system and monitored alarm system, so the Fire Department gets instant notification. Alpine Village is an example of a mixed -use building, commercial on bottom with living area above, that has to meet the higher standard of the building code rather than the residential code. Being built to building code makes the building that much safer for people to sleep in. Council Member Nielsen asked Attorney Punkoney what the threshold of a commercial operation is and how the City can define that within the confines of state regulations. Attorney Punkoney noted that the classifications across state code is not consistent. Determine what the City's objections are and define them in a way that can be defensible in court. An important part of how STRs is approached is making the distinction between residential and commercial use for the purpose of STRs in the City of McCall. Council Member Maciaszek questioned how traditional single-family residences apply whether there is a large family or not, is there ever ten people living in a house? Director Groenevelt clarified that staff discussion of an occupancy of ten being a standard was based on the building code. The current occupancy of nineteen came from regulating the few large STRs that were in the City at the time that code was written. Council Member Maciaszek stated that it is not necessarily that an applicant can't have an occupancy of more than ten but there are requirements. An applicant can have a high occupancy for STRs, however, if it's in the city limits and it's over nineteen, then it's going to need a conditional use permit and from a fire and other standpoint, it's going to need to meet these requirements related to health and safety. The process needs to follow the same rules as everybody, and it does not currently. Mayor Giles believes that Council has given enough input and has confidence that staff will come up with a good plan that will address the items discussed. Council Member Nielsen commented that if the City can start making meaningful steps into the permitting and changing how STR operations are perceived, the City might have some luck down the road with changing the current legislation. Council Member Maciaszek gave a personal experience example of a process in Joshua Tree to set up an STR. The application process for STRs in the area is lengthy and the application fee was over $500.00, and the cabin they were trying to get permitted as an STR did not meet the physical inspection requirements, so it was denied. So, when the Council is talking about $200.00 in administrative costs, it seems reasonable. Council Member Nelsen agreed that the fee seems reasonable. There is a need in the community for greater capacity travel accommodations. Council Member Nelsen asked Kelly Hill of MCCALL CITY COUNCIL Page 6 of 7 December 17, 2021 Special Meeting DoneRight Management what the need in the community is from a property management perspective. Ms. Hill responded noting an issue with lack of enforcement and praised the idea of individual home permits. One, it would allow the city to restrict certain rentals if there is a problem, placing enforcement on that individual rental and not all rentals as a whole. Second, the administrative fees should allow for additional enforcement. Health and safety is a huge concern to DoneRight Management which is why they participate in the Vacation Rental Management Association. The City can make regulations and rules all day long but if there is no enforcement it is useless. Ms. Hill agrees with the entire discussion at this meeting and the focus of health and safety. Mayor Giles thanked Ms. Hill for making the effort to show up and making comment. Clerk Wagner asked Attorney Punkoney how Fair Housing plays into the larger occupancy STRs, are there any Fair Housing laws that would prevent limiting occupancy? Attorney Punkoney stated it is a complex question. Yes, there may be an element of Fair Housing involved but maybe not with STRs specifically. If the City were to broaden the scope and start limiting the number of related people that can live in a home, the City would get into hot water quickly. Council Member Nelsen noted that there are places like Park City where three families are living in a two -bedroom condo due to lack of affordable housing. Building Official Powell noted his understanding of the Fair housing Act applied to units of 4 or more and does not apply to single family housing. Council Member Nielsen asked if the City could implement a Local Option Tax specifically on STRs. Clerk Wagner stated that the question was asked the last time LOT went through and the understanding was that STRs could not be taxed differently than a Hotel is taxed. Attorney Punkoney confirmed that is still the case. Director Groenevelt appreciates all the feedback and believes staff can move forward with the information from this discussion. Council Member Nelsen shared appreciation for City Staff. Director Groenevelt shared her experiences from STR panels including the Mountain Town Planners. ADJOURNMENT 1 Without further business, Mayor Giles adjourned the meeting at 10:45 a.m. ATTEST: BessieJo Wagn ;'7ity Clerk II pp1/H0 1 > Iobert S. O 0* es, Mayor MCCALL CITY COUNCIL December 17, 2021 Special Meeting Page 7 of 7