Tenants lose to Airbnb, and Utah can’t be helped by cities, says Robert Gehrke

A buddy recently left Salt Lake City to work in Denver, leaving behind a coveted commodity – half the affordable, pet-friendly maisonette he’d rented.

But instead of becoming someone’s new home, a Utah County woman plans to rent both sides of the duplex and then sublet it to short-term renters. She now has five apartments that have been set up in what is known as “short-term arbitrage” and with low upfront costs you can see the potential for that.

The downside, of course, is that residential units like this join the hundreds of short-term rentals in Salt Lake listed on the Airbnb website rather than giving someone a place to stay.

And here’s the real kick: the vast majority of them are illegal.

That’s because in Salt Lake City and many other Utah cities, short-term rentals are prohibited by zoning ordinances in most residential areas. In Salt Lake City, that includes pretty much everything east of State Street, plus large swaths of Poplar Grove, Glendale, and Rose Park.

Short-term tenants are also supposed to have a business permit, but a considerable number of them – how many you cannot know – do not.

So why not just enforce the law and alleviate at least part of the city’s housing shortage?

Well, once again the Legislature of Utah has stripped cities across the state of the simplest means of enforcement. Because while it was easy for me to look at short-term rental offers and see which are illegally located, lawmakers passed a law in 2017 that bans cities from doing the same. The reason was that cities shouldn’t arbitrarily ban them if the short-term rental doesn’t bother anyone.

According to Blake Thomas, director of Salt Lake City’s Department of Community and Neighborhoods, cities can only respond after receiving a specific complaint from a neighbor, usually about noise or parking issues.

The city is currently investigating two dozen short-term rental enforcement cases, Thomas said. Half of the owners have the required business license.

In Park City, Mayor Andy Beerman said he warned lawmakers that if they tied cities’ hands to enforce short-term rents, things could get out of hand – and they have.

Today there are 3,500 short-term rentals in Park City, more than a third of all homes in the city. More than a thousand of them are not allowed, said the mayor.

“That just devastated some of our neighborhoods. I live in Old Town, right on Main Street, and I used to have neighbors, ”he said. Today most of the apartments are rented out on short notice.

“The bottom line is it has accelerated the loss of workforce housing, it has accelerated gentrification, it has given buyers the ability to justify high-end sales, which means it is driving house prices up and driving out tenants,” said he.

The average Park City home price exceeded $ 3 million this year. With only 600 affordable apartments in the city – around a quarter of what is needed – workers have to move and commute elsewhere, as my colleague Sara Tabin reported this week.

Many are choosing to find other jobs, letting Park City companies compete for workers by all means or, if they can’t find staff, reduce hours and even close on certain days, Beerman said.

Speaking to his fellow mayor at Colorado spas, he said the situation was so dire that they were expecting citizens’ initiatives to ban short-term rentals entirely.

Several cities in Utah have tried to cope with the situation.

Cottonwood Heights Mayor Mike Peterson said short-term rents in his city must be reported for apartment buildings or mixed-use areas and are either in a condominium project or planned development – which challenges very little from the city.

Looking at the listings in Cottonwood Heights, many appear to meet the zoning requirements, but a significant number of others do not.

The city can impose a fine of $ 250 for the first violation, which escalates to $ 1,000 each day for subsequent violations.

“I’m sure some people bought a home and decided to take advantage of our beautiful canyons and ski areas,” said Peterson. Almost always when the city receives a complaint, Peterson says, the owner or landlord says they didn’t know the rules.

Sandy City passed an ordinance in 2018 mandating short-term rental licensing and then capping the number of licenses issued in each neighborhood – a smart approach. Of the 294 available licenses, only 96 are in use.

But again, looking at the listings, there are more rental properties in some areas than licenses issued, and there’s not much the city can do about it unless other residents complain.

If all of this seems absurd, I agree.

Local governments understand their community’s needs and should be the ones to decide where to do so and not want short term rents. But then denying them the opportunity to actively enforce these regulations undermines the whole concept of local control.

“We want tools to regulate this,” said Beerman. “We want to determine which zones and neighborhoods [short-term rentals] are allowed.”

At the very least, the legislature should allow local governments to use the simplest tool – rental lists – as a starting point to determine who may be bypassing local building code regulations.

Local councils should consider limiting short-term arbitrage before it explodes and bleeds out long-term rentals.

And lawmakers could give resort communities like Park City or Moab the option to impose an additional tax or debit fee on short-term rentals, with the proceeds being used for affordable housing to offset the impact of short-term rentals.

If we did this right, we could convert hundreds, maybe thousands, of units back into affordable long-term rentals, alleviate a very real housing crisis, and preserve the integrity of our neighborhoods.

About Stephanie McGehee

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