A friend recently left Salt Lake City for a job in Denver, and in the process, he left behind a sought-after product – half the affordable, pet-friendly duplex he was renting.
But instead of becoming someone’s new home, a Utah County woman is considering renting both sides of the duplex and then subletting it to short-term tenants. She now has five apartments set up in what’s called “short-term arbitrage” and with little upfront costs you can see the potential for take-off.
The downside, of course, is that instead of giving someone a place to live, units like these will join the hundreds and hundreds of short-term rentals in Salt Lake that are listed on the Airbnb site. .
And here’s the real kicker: the vast majority of them are illegal.
This is because in Salt Lake City and many other towns in Utah, zoning ordinances prohibit short-term rentals in most residential areas. In Salt Lake City, that includes pretty much everywhere east of State Street, as well as big chunks of Poplar Grove, Glendale, and Rose Park.
Short-term tenants are also supposed to have a business license, but a considerable portion of them – there’s no way of knowing how many – don’t.
So why not just enforce the law and alleviate at least part of the city’s housing crisis?
Well, once again, the Utah legislature has deprived the cities of the state of the simplest means of execution. Because while it was easy for me to look at short-term rental listings and see which ones are located illegally, in 2017, lawmakers enacted a law prohibiting cities from doing the same. The reasoning was that, if someone else’s short-term rental doesn’t bother anyone else, cities shouldn’t arbitrarily ban it.
Cities can only respond after receiving a specific complaint from a neighbor, usually about noise or parking issues, according to Blake Thomas, director of the Salt Lake City Department of Community and Neighborhoods.
Currently, the city is investigating two dozen short-term rental law enforcement cases, Thomas said. Half of the owners have the required business license.
In Park City, Mayor Andy Beerman said he warned lawmakers things could get out of hand if they tied cities’ hands over enforcing short-term rentals – and they did.
Today, there are 3,500 short-term rentals in Park City, more than a third of all structures in the city. More than a thousand of them are unlicensed, the mayor said.
“It has just devastated some of our neighborhoods. I live in the old town, just off the main street, and I had neighbors, ”he said. Now most of the homes are for short term rentals.
“Ultimately, it accelerated our loss of housing to the workforce, it’s accelerated gentrification, it gave buyers tools to justify high-end sales, which means it does drive up house prices and drive out tenants, ”he said.
The average home price in Park City has exceeded $ 3 million this year. With only 600 affordable housing units in the city – about a quarter of what is needed – workers have to move elsewhere and commute, as my colleague Sara Tabin reported this week.
Many choose to find other jobs, leaving Park City businesses to compete tooth and nail for workers or, unable to find staff, reduce their hours or even close on certain days, Beerman said.
When speaking to fellow mayors of resort towns in Colorado, he said the situation was so bad that they were anticipating citizen initiatives to ban short-term rentals altogether.
Some local towns in Utah have attempted to deal with the situation.
Cottonwood Heights Mayor Mike Peterson said short-term rentals in his town must be zoned for multi-family or mixed-use housing and be either in a condo project or in a planned development – leaving very little of the eligible city.
Looking at Cottonwood Heights listings, many appear to comply with zoning requirements, but a considerable number of others do not.
The city can impose a fine of $ 250 for the first violation, up to $ 1,000 each day for a subsequent violation.
“I’m sure some people have bought homes and decided to take advantage of our beautiful canyons and ski resorts,” but are not in compliance, said Peterson. Almost always, when the city receives a complaint, Peterson said, the owner or owners say they didn’t know the rules.
Sandy City passed an ordinance in 2018 requiring short-term rentals to be allowed, then capped the number of licenses issued in each neighborhood – a smart approach. Of the 294 licenses available, only 96 are in use.
But again, looking at the ads, there are more rentals available in some neighborhoods than permits issued, and there isn’t much the city can do unless other residents complain.
If this all sounds absurd, I agree.
Local governments understand the needs of their community and should be the ones deciding where they want short term rentals or not. But then depriving them of the ability to actively enforce those regulations undermines the whole concept of local control.
“We would like tools to regulate this,” Beerman said. “We would like to determine which areas and which neighborhoods [short-term rentals] are allowed.”
At a minimum, the legislature should let local governments use the simpler tool – rental listings – as a starting point to identify who might bypass local zoning ordinances.
Local boards may want to consider restricting short-term arbitrage before it explodes and bleeds long-term rental properties.
And lawmakers could give resort communities like Park City or Moab the option of charging an additional tax or impact fee on short-term rentals with the dedicated affordable housing proceeds to offset the effects of short-term rentals.
If we do this right, we could convert hundreds, if not thousands of units into long-term affordable housing, alleviate a real housing crisis, and maintain the integrity of our neighborhoods.
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