Lincoln City City Council still trying to perfect being “a little bit pregnant” with vacation rentals.
A two hour city council meeting this week in Lincoln City revealed just how complicated things can get when cities fail to enforce the rules for vacation rentals, for years on end, and how it leaves a huge mess for someone else to clean up.
The problem facing the Lincoln City City Council is trying to come up with new vacation rental regulations that allows growth in the number of vacation rentals while weeding out the ones that were never operating legally to being with. Vacation rentals in the middle of normal single family home neighborhoods have, for years, plagued year round families with loud parties, trashy grounds and parking willy nilly. The city’s excuse was “we can’t afford to hire enough code enforcement officers.” But many residents never bought that argument and shot back that the city loves the millions of dollars they get in room taxes but still they don’t have the money to hire enough code enforcement officers. Raising fees for VRDs to enforce the law never comes up.
The heart of the matter is that many VRDs are operating way too many nights out of the year by violating city rules on the owner having to live in the dwelling most of the year. Renting it to others is legally supposed to be just a “side-line” income stream for the owner.
Another element that is seldom mentioned is state law that requires cities (mostly) to provide an adequate mix of housing – from low income to the top .1%’ers. The more vacation rentals a city approves, that’s less available land for affordable housing. And affordable housing is in crisis mode from one end of Oregon to another. In fact more than half the country is suffering from it to some degree.
City Attorney Richard Appicello reminded the council that the last two vacation rental laws that addressed a method to gradually solve the problem was voted down by the voters last May. There are many in the community who contend the issue was too complicated for the average voter to understand, and so a majority voted no. So now, the council is right back to where it was four years ago.
Monday’s discussion tried to generate some progress on what to do about vacation rentals that have been operating illegally since the day they opened. What seems to matter more is that the owners of these rentals have invested in the community and it would seem unfair to destroy their investment simply because of the illegal way they did it. And then, of course, there is a not-so-little-matter that the city is collecting vacation rental room taxes on some or most of them – a clear example of a city having a conflict of interest with itself.
But we push on.
City Manager Richard Chandler laid out a strategy that closely resembles what many no-doubt confused Lincoln City voters turned down last May. The proposal is to acknowledge that, under city law, vacation rentals cannot be commercially run as unlimited “house-hotels” within regular single family dwelling neighborhoods – EXCEPT if they are all granted “prior use exception.” In other words, making that which is illegal suddenly legal for purposes of trying to solve a near impossible problem. But to be fair, there appeared to be an assumption, if not a likelihood, that the city would provide enough code enforcement officers and apply sufficient law enforcement pressure to make sure noisy, trashy or excessively rented VRDs comply with city codes and that the maximum number of rental nights would be substantially reduced.
To allow such continued technically illegal operation of non-complying VRDs the council would have to offer those VRD owners what’s called a “safe habor” designation. A “safe harbor” designation would allow its continued operation until such time their right to operate is sunsetted or the VRD is sold – which would mean the homes are no longer VRDs – since the VRD license goes with the owner, not the house. Any new owner would have to apply for his/her own VRD license. And if the house can’t qualify under the new rules, the home reverts to a regular single family dwelling. No longer a “house-hotel.”
The council also agreed to keep talking about commercial VRD zones in areas of town closest to the ocean. Any home within that zone automatically qualifies to be a VRD with unlimited room rental nights.
Mayor Don Williams, who owns vacation rentals in Lincoln City, was very consistent throughout the discussions. He stated repeatedly that the “free market” should dictate the rules of the road for VRDs. He said restricting room-nights is not practical and would be downright harmful to Lincoln City’s economy. He said there is a limit to the number of vacation rentals Lincoln City could support. He admitted he didn’t know where that limit is, but he remained confident that it would cause the growth in VRDs to level off “at some point” and thereby solve its own problem.
The next work session on vacation rentals is set for 3pm, November 30th at city hall.