Summit County BOCC Meeting 10-26-2021

October 27, 2021

Summit County Board of County Commissioners Work Session | October 26, 2021

The Summit County BOCC met today to further discuss their short-term rental regulations. The agreed-on Type I having a max of 60 nights for the entire unit (no cap on one room), Type II would have a max of 120 nights of the year for the entire unit, and occupancy 2 per bedroom +2. All commissioners agree that grandfathering for current license holders will be through 4 years from September 2022, they will then need to move into compliance with the ordinance. The fees will be increased. The Host Compliance software won’t be able to update until mid-February to catch up to these changes, they didn’t formally decide but they weren’t in agreement with staff’s suggestion to continue the moratorium until Host Compliance caught up. Note below on information attributed to Expedia that is not correct – we can follow up with staff to make sure this is clarified.

STR Regulations Amendments

Staff Presentation

Bentley Hendersen begins the presentation noting that they hope to consider additional information and make some final decisions today. The survey has gone out and closed on 10/19/2021. They would be able to put the survey results on the website anytime, they will upload it as soon as possible. They can manipulate that data and get the commission anything they want.

They believe they’ve concluded that Type I would have a max of 60 nights for the entire unit (no cap on one room), Type II would have a max of 120 nights of the year for the entire unit, and occupancy 2 per bedroom +2.

The outstanding decision items are timing of compliance, confirmation of resort overlay zones and parameters for Type III.

They’ve created a matrix that shows their decisions for license types and overlay zone.

TableDescription automatically generated

In Sept. of 2022, every license must renew, this goes back to what category they will renew into. The 3,000 in the resort zone won’t have any change. The 1,500 remaining in the neighborhood would be up for discussion on what they renew as.

There are three options: 1. Full compliance at next renewal in Sept. 2022, 2. Grandfathering, we could have true grandfathering meaning the new license regulations wouldn’t apply to these properties, you’d get to continue your operation as normal prior to these new regs. And lastly, 3. Phased compliance would allow for current license holders to a timeline of grandfathering and then full compliance of the new regulations under the new types of licenses in 2023 or 2024. All the folks that are currently operating an STR would be able to select one of the types to continue to operate. A little over 50% says that there should be some drop dead date to transition to new regulations and just under 50% say they should be fully grandfathered. He moves to the breakdown of STR engaged or owner’s vs non STR owners or workers.

Type III would allow for new applications or existing STRs that choose this license type at time of compliance per BOCC decision. They discuss the proposal for single-family dwellings with the distance between the dwelling units of 100 feet, 150 was too extreme. If someone on Peak 7 wanted to get a Type III they’d have to go through an exhaustive application process. We’d look at lot size, parking, occupancy limits, etc would allow them to get a type III license. If it is a lot that is less than 40,000 sq. ft. there would be occupancy limitation, if larger, no occupancy limits.

There has been a lot of discussion around multi-family units or resort style buildings. There needs to be a minimum of 25 units in the HOA plus 2 more requirements: direct or private shuttle to the ski areas, significant on-site regulation, significant on-site resort style amenities. The HOA would need to sign off on the higher short term rental use. What happens if the HOA doesn’t want to get involved or if it does, we may be getting to the edges of what we as the BOCC can require but we can have those legal conversations.

He moves on to the number of STRs in specific neighborhoods. Utilization by neighborhood is 80% of the properties that are under 3,000 sq. feet. The lions share are less than 1 acre properties.

The last question we have is how do we define the resort overlay? The proximity to the ski areas is clear, Tiger Run is in a similar resort setting. Some of the outlying neighborhoods are Wildernest and Peak 7. They would be subjected to the conditional use valuation. Part of the rational for this was that the ownership continues to be high in local ownership, obviously the change in value we’ve looked at.

Lastly is the operational side of things, we’ve been providing Host Compliance with the information as we go. It will take 8-10 weeks and their team won’t be able to start this work until Jan making the completion timeline in February. Mid to late February roll out is the application processing & software roll out. The options we have are to extend the moratorium or allow applications to apply once regulations are adopted and process applications manually. We’d need to amend the moratorium language for the allowance of existing reservations. We could craft language to allow for reservations to continue through special exemption. We could also allow it to end, process applications manually this isn’t the best alternative. It is highly dependent on host compliance. The evaluation itself it through the software. The ability for us to work on applications outside of Host Compliance is extremely challenging.

Commissioners Discussion

Comm. Lawrence references the table slide (above), commenting on the renewal fees vs new fees. If we were to go down the road of full grandfathering, then they would just renew next September but we do anticipate renewal fees to be increased along with all these changes. Comm. Lawrence asks if there is a legal reasoning for that? Could we stay with the medium high type II. The differentiation of fees is based on how hard it will be to enforce, the ones that have the most review time and cause the most complaints will have the higher fees.

Comm. Blanchard brings up the vernacular around designated areas within the primary residence. His intention would be to include those types of rentals, it is prescriptive and only allows one bedroom, I just want to make sure it isn’t a barrier. Comm. Lawrence agrees. Do we need to define partial? We can exclude other things rather than what we need to include. Comm. Blanchard trusts the staff and legal on how to craft this language.

Comm. Lawrence likes the renewal fee conversation, the renewal fee for the grandfathering shouldn’t stay the same. I do worry about the occupancy; I am looking more at a hybrid grandfathering model. Should occupancy change but nights rented not for grandfathering practices.

Comm. Pogue says they need to make decision today. She isn’t in support of extending the moratorium. She is supportive of everyone coming into compliance in 2024.

Staff asks Comm. Lawrence on her perception of the occupancy for grandfathering. He clarifies that the occupancy would remain the same under the current ordinance. They agree.

Comm. Lawrence would be supportive of a full grandfathering in perpetuity so long as it doesn’t change ownership. Comm. Blanchard asks about the property ownership change, family pass down would be property ownership change, do we want to consider these types of options? Staff responds that they’ve been looking at it as any change of ownership. We would need to work with legal to consider family ownership change and trusts etc. Legal comments that this isn’t really a legal nexus but that the policy they decide on is articulated equally across all categories. Comm. Lawrence believes this should be a change of ownership, she’s still in favor of grandfathering in perpetuity. She’s interested in conversations around complaints and if we want to set up guidelines for compliance. Do they lose their license after a certain number of complaints? Staff chimes in that we have a complaint system now, if an individual’s license is revoked, if you want to submit another application, you’d be subject to the new regulations. Mr. Vargo notes that they don’t need to make a final decision today, but a direction we can share with the planning commission who can support us with their opinion on the decisions.

Comm. Blanchard comments that if they are looking at perpetuity in grandfathering, we would run into situations of family ownership changes. If there was an expiration of grandfathering, that would be less likely. If there is a compliance issue with a revoke of license, it will turn some of the licenses into the new compliance. Comm. Blanchard isn’t comfortable with perpetuity. Can we get some feedback from the planning commission on what the timing should be? If not, I will suggest 3 or 5 years for my comfort level.

Comm. Lawrence comments that she’s concerned about the timeline of the planning commission. Staff comments that county wide planning commission is a bit different than town planning commissions. We are able to send them a number of options for feedback but the greater amount of details is best.

Comm. Pogue comments that she’s not married to two years but she feels like she’s made a commitment to the community to handle this and we don’t want to push it out too far. We made a commitment to handle workforce housing issue. Comm. Lawrence comments on the fact that this won’t actually get us to workforce housing units. Comm. Pogue requests that we agree on the data we need to collect moving forward and come back with the data in a year to consistently review. Comm. Lawrence says she’d be open to a 5-year phase plan then.

Staff shares that timing of compliance at 5 years is something staff can work on. The other piece we need is the evaluation of Type III licenses and the requirements. The nature of these criteria is for higher intensity use, are these in alignment with what you think. We also need to talk through the overlay locations.  

Comm. Lawrence asks about the distances from other lots. Comm. Blanchard comments that if we are collecting data with a review process, I’d be okay moving it up to 4-year phase in deadline. He also wants to talk about townhomes and condos. Staff confirms that the 4-year delay would only be for current license holders.

All commissioners agree that grandfathering for current license holders will be 4 years from September 2022, they will then need to move into compliance with the ordinance. The fees shouldn’t remain the same, they should be increased. The cost on our end isn’t being covered now. Everyone agrees.

Staff goes back to the slide regarding the parameters for Type III for new applications, nearly all properties are less than an acre right now. There would be a criteria in place for which type you can apply for right up front. You have a 24,000 sq ft lot on Peak 7 and you apply for a Type III you’d be required to have the distance between the dwelling units. If you are both within 15 ft of your property line as neighbors, you wouldn’t meet the Type III requirements. We went around and thought that 100 ft wouldn’t allow for any. Comm. Pogue asks between the class 2 and 4 review, the biggest difference is the notice vs the public meeting to discuss the proposal at that public hearing. Staff shares that the intention is to allow neighbors notice that you are applying for a license in close proximity and then be able to comment on it. Another staffer chimes in that 50 ft was also in conversation, there isn’t a great deal of data on the 100 ft proposal, it was just a number thrown out there. Anecdotally, we aren’t seeing a lot of houses with 100 ft between properties. We’d recommend reducing this limit if you want to increase STR licenses. Comm. Blanchard thinks that this would support hot time late night noise, public safety, etc, to the extent that we feel that the methodology is sound, I would support that. If we feel like we need to do a deeper dive in the data, this is something we could look at over the course of next year since all existing would be grandfathered in for that year.

Comm. Lawrence comments that the sheer number of properties in the ½ acre is large, she wants to find a more reasonable number to take into consideration of staff time. She is wary that this wasn’t a hard and fast proposal. Comm. Blanchard responds that this wasn’t a hard recommendation, we do want to take into consideration a high intensity STR for neighboring properties. Comm. Pogue comments that she is comfortable with 100 ft if this is one of the data points that we want to reassess in a year. The planning commission will look at this, and the BOCC will be making these final decisions for new applications and the grandfathering timeline in Dec. That will allow us to gather data for the next year. We are shooting for a final vote on Dec. 14th.

They will continue to determine solutions with Host Compliance and what that means from a staff perspective for the adoption of regulations and the expiration of the moratorium.

They move on to discussion around the multi-family staff suggestions. Comm. Blanchard likes the idea of requiring HOA letter of support, what was the minimum of 25 units and would one of these units be able to apply without HOA letter of support? Staff comments that 25 wasn’t a data-based number but they wanted to lessen the impact on smaller buildings. The class 2 would allow for them to understand what is happening. Finally, if the HOA doesn’t provide a letter, they could possibly provide a letter of units that are most affected, aka all immediate neighbors. She notes that the class 2 discission have been removed.

Comm. Pogue asks if they have gotten any feedback from HOAs on this proposal, staff confirms that no they have done no outreach or public engagement. She asks about some larger HOAs that will start to build out shuttles in an effort to meet the requirements, she comments that this isn’t where it needs to be. Comm. Blanchard agrees, the vision is to support neighborhoods, I want to consider what we do moving forward here. Staff suggests we push this into the planning committee and seek their feedback while at the same time doing HOA outreach to those who will be impacted. This is all a work in process as we work through the planning process. Some of these final decisions will come at the tail end of this process. Comm. Pogue says she’s comfortable with moving forward with the process, but she’s not comfortable with asking neighbors to write a letter. That doesn’t seem like a fair and unbiased process.

Staff shares that Expedia has shared information with them that very few STRs exceed 120 nights in use a year (note: this is not correct; we can follow up on this.)  In these resort style buildings, we could just move forward with a Type II license, knowing that many of the units wouldn’t need to access the Type III night number anyway. Comm. Pogue is comfortable with that, limiting Type III licenses but she wants it all to be clear as people buying real estate. Comm. Blanchard supports HOAs being transparent on their support or lack thereof of STRs.

I think that those are the primary items we needed comments on. Nov. 1 and Nov. 8 is when the planning commission will meet. We will be back in front of you after that.