HomeMy WebLinkAboutPlanning 2018-06-28 ITEM 4 - ZONING CODE AMENDMENTS: SHORT TERM RENTALS - STAFF REPORTCity of Tukwila
Allan Ekberg, Mayor
Department of Community Development - Jack Pace, Director
STAFF REPORT TO THE PLANNING COMMISSION
PREPARED JUNE 19, 2018
FILE NUMBERS: L18-0045 Short Term Rental Code Amendments
REQUEST: Review and revise Tukwila's regulations relating to the use of property for the
purposes of short term rental, hold a public hearing and make a
recommendation to the City Council.
LOCATION: City wide
PUBLIC NOTICE: Hearing notice was published in the Seattle Times June 14, 2018. A postcard
was mailed to the owners and tenants of LDR Zoned parcels and the owners of
MDR and HDR parcels. Emails were sent to the interested parties list, the
contacts for Residential Rental Business Licenses and contacts within the short
term rental industry.
STAFF: Nora Gierloff, Deputy DCD Director
Charlotte Archer, City Attorney
ATTACHMENTS:
A. Tukwila and neighboring jurisdictions' current rental standards
B. Policy Brief, City of Seattle Short Term Rental Regulations
C. Proposed Amendments to the Tukwila Municipal Code
BACKGROUND
During the City Council update to accessory dwelling unit (ADU) regulations the Council requested a
review of regulation of short-term (defined as a period of less than thirty days) residential rentals. This
would not include commercial properties used for the purposes of short-term and extended -stay
housing, such as motels, hotels, and extended stay motels. This review was intended to focus on the
rental of single-family and multi -family residences, as well as ADUs via an online marketplace such as
HomeAway, Vacation Rental By Owner ("VRBO") or Air BnB. The intention was to assess the impact of
the City's current regulations and determine if new regulations are needed to meet the City's policy
goals.
Tukwila City Hall • 6200 Southcenter Boulevard • Tukwila, WA 98188 • 206-433-1800 • Website: TukwilaWA.gov
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Tukwila's current standards for short term rentals' include the following:
• Multi -family dwellings shall not be used for a rental tenancy of less than one month. See TMC
18.06.247.
• Dormitories defined as "a residential building or use which provides housing for students
attending an affiliated school or housing for members of a religious order." See TMC 18.06.237.
• Boarding House defined as "a residential building which provides housing on a short-term
commercial basis for tenants" is a conditional use in the MDR and HDR zones. See TMC
18.06.073.
• Bed and breakfast facilities defined as "an owner occupied dwelling unit that contains guest
rooms where lodging is provided for compensation," are permitted in the LDR, MDR and HDR
zones as conditional uses (for up to twelve guests), and guests shall be limited to a 14 -day
maximum length of stay. Tukwila has never received an application for a bed and breakfast
conditional use permit. See TMC 18.06.063 and Table 18-6 n.5.
There is no restriction on the use of single-family dwellings or mobile homes in mobile home parks as
short-term rentals. The draft Accessory Dwelling Unit ordinance currently being considered by the
Council prohibits rental of ADUs for less than 30 days.
Tukwila's Residential Rental Business License and Inspection Program, codified at Chapter 5.06 of the
Tukwila Municipal Code (TMC), establishes an annual rental licensure requirement for all "units"
intended for rent. Each dwelling unit must be inspected for life safety issues every four years and a
Certificate of Compliance is issued by the City for those units that meet all requirements. The code is
silent about whether it applies to short-term rentals; in practice, the City has received no rental license
applications for short-term rentals.
DISCUSSION
The issue of whether the use of dwelling units for short-term rental purposes is having a net positive or
negative impact on housing affordability and rental stock is currently being debated in many jurisdictions
in Washington in light of the dramatic recent growth of the short-term rental industry, as well as the
housing crisis in the greater Seattle area. Seattle recently adopted new regulations to prevent property
owners from operating large-scale, short-term rentals in a commercial manner, as part of a larger effort
to ensure an adequate supply of long-term rental stock for the City's permanent residents. A table
comparing Tukwila's current rental standards to neighboring jurisdictions is included as Attachment A.
Staff's research and citizen complaints indicate that there is an existing marketplace for the short-term
rental of single- and multi -family dwellings in the City.
1 The following are considered outside the scope of this project, as they do not involve the use of a residential dwelling unit
for short-term rental purposes: Assisted Living Facilities (TMC 18.06.058); Continuing Care Retirement Communities (TMC
18.06.170); Convalescent/Nursing Homes (TMC 18.06.173); Correctional Institutions, including transitional housing (TMC
18.06.178); Extended -Stay Hotel or Motels (TMC 18.06.287); Hotels (TMC 18.06.440); Motels (TMC 18.06.585); Secure
Community Transitional Facilities (TMC 18.06.706); Senior Citizen Housing (TMC 18.06.708); and Shelters (TMC 18.06.743).
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From a policy perspective, short-term rentals can bring benefits to those who operate them, their
visitors, and the surrounding neighborhood. Some homeowners use short-term rentals to help offset
the cost of their home, including renting out a room or the entire home. Kent, for example, adopted
regulations to allow the rental of ADUs "[t]o make homeownership more affordable because it will be
easier to buy both new and existing homes with the help of an accessory dwelling unit." SeaTac likewise
currently permits the use of ADUs for rent to "increase opportunities for home ownership and allow
older homeowners to remain in their homes and obtain extra income, companionship, and security."
Some jurisdictions find that ADUs may increase the supply of affordable rental units and may provide a
variety in affordable rental units. Additionally, short-term rentals may provide a greater return on
investment for homeowners as short-term rental rates often outpace rates for rentals on a long-term
basis. For visitors, short-term rentals may cost less than traditional hotels or motels, which in turn
provides a means to bring tourists and their spending power to Tukwila.
Some jurisdictions who have recently studied the rise in the use of rental properties as short-term rentals
have concluded that there are negative impacts to communities throughout Washington. For example,
Seattle recently studied the impact short-term rentals had on affordable housing within the City and
found that the commercial use of short-term rental platforms (by commercial operators, rather than
traditional single-family homeowners) has resulted in the removal of houses, condos and apartments
from the long-term housing market. See Attachment B. The significant impact of short-term rentals on
affordable housing availability was also the subject of a Harvard Law and Policy Review article2, which
concluded:
So long as a property owner or leaseholder can rent out a room on Airbnb for
cheaper than the price of a hotel room, while earning a substantial premium over
the residential market or rent -controlled rent, there is an overpowering incentive
to list each unit in a building on Airbnb... In tight housing markets with near -zero
vacancy rates, a sudden reduction in supply naturally increases rents, particularly
because neither the market nor the public sector can swiftly add to the housing
stock.
In addition, some jurisdictions have found that some short-term rentals can attract disruptive
vacationing visitors to residential areas, which may have a negative impact on property values. A study
commissioned by the hotel industry indicated some short-term rentals may have negative impacts on
the hotel/motel industry. Short-term commercial rentals are likely subject to the City's business
licensure and tax requirements, but they often do not pay thereby circumventing traditional lodging
taxes. There is also some evidence in the aforementioned studies that short-term rentals may also
contribute to creating a transient community and create an increased parking demand in residential
areas.
Policy Options
1. Prohibit the use of residentially -zoned property for short-term rentals.
2 Full article available at http://harvardlpr.com/wp-content/uploads/2016/02J10.1 10 Lee.pdf.
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The City could expand the prohibition on multi -family rentals to include the short-term rental of
entire single-family residences, rooms within owner -occupied single-family residences, ADUs,
and mobile and manufactured homes in the Low, Medium and High Density Residential Zones.3
2. Permit the use of residentially -zoned property for short-term rentals, with or without
additional restrictions.
Alternatively, the City could opt to permit the use of residential dwelling units as short-term
rental properties. To accomplish this, the City could expressly grant that right to single-family
dwellings (either as entire -house rentals, or partial -house rentals), and remove the prohibition
on the use of multi -family dwellings for short-term rental purposes.
A. Require owner -occupancy.
Some of the negative effects cited by opponents of short term rentals (including but not
limited to noise, parking and refuse) may be mitigated by requiring owner -occupancy and
prohibiting whole house rentals. This requirement would be similar to the restriction
placed on ADUs and would face the same enforcement challenges. This option would
prevent units from being removed from the long-term rental market.
B. Allow a local property manager in lieu of owner occupancy.
Requiring owner -occupancy would require the prohibition of entire -house short-term
rentals so another option would be to allow a local property manager to be designated
and available to respond to complaints. Kirkland, for example, requires a property
manager located within City -limits at all times the property is being used as a short-term
rental.
C. Place Restrictions on Occupancy, Parking and Quiet Hours.
A few jurisdictions in Washington have adopted heightened restrictions on the number
of occupants, noise (quiet hours), off-street parking, and other issues in order to address
concerns raised by existing short-term rentals. For example, San Juan Island County
places a cap on the number of renters at no more than three per bedroom, and requires
additional off-street parking for properties used as short-term rentals.
To the extent these concerns are documented, the City could utilize these regulations to
directly remedy problem -properties utilized as short-term rentals. Ongoing requirements
such as additional parking spaces would need to be verified through an inspection
process, possibly as part of a licensing procedure.
3 It should be noted that any proposed amendments to the TMC pertaining to the City's existing regulations for short-term
rentals will need to heed two concerns that would likely necessitate an exemption from any proposed prohibition on transient
accommodations. First, adult family homes (AFH) could arguably be considered residential properties used for rental
purposes; however, state law prohibits the City from enacting regulations that put up a road -block to the placement of AFHs
in all areas zoned for residential purposes. RCW 70.128.010. Second, the same analysis would likely apply to a residence
used to house people with disabilities, including the recovery from a drug addiction. See RCW 36.70.990.
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Enforcement of occupancy limits would be difficult absent admissions by the properties'
owners. Producing evidence to prosecute a violation would require observation by the
City's Code Enforcement Officers, likely after-hours. Noise complaints are handled by the
Police Department and it may be difficult to enforce stricter regulations than the
standards in the existing Noise Ordinance.
3. Permit the use of residential units in mixed use zones for short term rentals.
The adjacency of commercial uses may make neighbors in zones such as Neighborhood
Commercial Center and Regional Commercial Center less sensitive to noise and parking impacts
associated with short term visitors. Any zone that permits hotels and motels would seem to also
be appropriate for short term rentals.
4. Require a License to operate a Short -Term Rental.
Tukwila requires that businesses, including home occupations, obtain a business license to
operate in Tukwila and that landlords obtain an annual rental license for all "units" intended for
rent — this is not currently utilized for short-term rental properties. Currently short-term rental
operators are not obtaining either license.
Incorporating short-term rentals into the Residential Rental Business License and Inspection
Program would allow the City to monitor the use of residential properties for this purpose, and
to ensure that the subject properties are adequately addressing life safety issues. However,
currently the traditional "roommate" arrangement (e.g., long term rental of a single -room within
an owner -occupied dwelling unit) is not subject to the City's Residential Rental Business License
and Inspection Program; yet the majority of short-term rentals currently advertised in the City
involve the short-term rental of a single -room within an owner -occupied dwelling unit.
It may make more sense to require home occupation business licenses for short term rentals as
they are more closely related to operating a business than an ongoing living arrangement. It may
be a challenge to enforce this requirement as the City relies on self -reporting of rental properties
in order to achieve compliance, and it is difficult to track -down non-compliant properties but for
the complaints received from neighbors.
5. Clean up existing regulations to remove ineffectual provisions.
Currently, the City has no permitted Bed and Breakfast facilities. The definition of Bed and
Breakfast facility appears to be somewhat antiquated and ineffectual, with the rise of AirBnB and
other online alternatives. Staff would recommend removing Bed and Breakfast facility and all
related regulations from the TMC.
Similarly, the City is aware of a few Boarding Houses within the City and there are ongoing code
enforcement complaints relating to un -permitted Boarding Houses in the LDR zoning district
(where this use is prohibited). The existing definition of a Boarding House makes this regulation
difficult to enforce, given its use of undefined terms like "short-term" and "commercial basis."
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Similarly, there is no cap on the number of tenants that may reside in one Boarding House, no
requirement that the Boarding House is owner -occupied, and there are no other relevant
regulations such as higher parking standards.
Staff would recommend the amendments to the TMC depicted at Attachment C to address
these issues.
REQUEST
Hold the public hearing on the proposed changes, review each proposed change, and recommend
policy options to the City Council. Staff will incorporate these decisions into a draft ordinance for City
Council review.
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