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HomeMy WebLinkAbout01-22-2018 Council Work Session PacketOrono City Council Work Session Monday, January 22, 2018 Council Chambers 6:00 p.m. AGENDA 1. Short Term Rental Regulation Annual: • Budget: Part of June, All of July, August and October. • City Administrator & Police Chief Update (3 times per year for 15 minutes) Additional topics: • Variance Training Previous Work Session Topics November 13, 2017 • Open Meeting Law • Enterprise Funds October 23, 2017 • Wetland Buffer / Setback Clarification September 11, 2017 • Discuss and Prepare 2018 Budget CITY OF ORONO MEMORANDUM DATE: January 22, 2018 TO: Orono City Council FROM: Jeremy Barnhart, AICP Community Development Director RE: Short Term Rental Regulation 1. Purpose. The purpose of this work session item is to review potential drafts of an ordinance that would prohibit rental of residential property for periods less than 30 days. 2. Background. The City Council directed staff in November to prepare an ordinance that would require licensing of all rental residential property, prohibit rental for periods less than 30 days and allow persons to rent up to 1 bedroom of their homesteaded, owner occupied home for no more than 2 people. Staff has developed two ordinances, Option A, and Option B. Option A addresses the requirements of the City Council. Option B is the same as Option A, though the licensing requirement is removed. Staff does not recommend requiring licensing for all rental properties; a need has not been identified to support the investment necessary to initiate a housing licensing process which would include additional clerical and inspection priorities. Enforcement of an ordinance remains an issue for staff. Steve Tallen, prosecuting attorney for the City has provided comments based on these two ordinance drafts, and a third which has been withdrawn by staff because of prosecutorial concerns. Mr. Tallen's comments are attached as Exhibit C. He will be at the workshop to discuss the issue. Staff is not confident that the ordinances proposed will satisfactorily address the issues heard previously: lack of neighborhood investment and cohesion, parking, noise, parking, trespassing, and inappropriate behavior. Attachments Exhibit A: Ordinance requiring licenses and prohibition Exhibit B: Ordinance not requiring license Exhibit C: Prosecuting Attorney letter dated January 10, 2018 CC Exhibit A (1-22-18) ORDINANCE NO. , THIRD SERIES CITY OF ORONO HENNEPIN COUNTY, MINNESOTA AN ORDINANCE AMENDING THE ORONO MUNICIPAL CODE BY ADDING ARTICLE IV TO CHAPTER 26 AND AMENDING SECTION 26-31 REGARDING RENTAL LICENSING AND A PROHIBITION OF SHORT TERM RENTALS THE CITY COUNCIL OF ORONO ORDAINS: SECTION 1. Section 26-31 Definitions of the City of Orono Municipal Code is hereby amended by adding the following text: Rent shall mean, for the purpose of this definition, leasing, subleasing, letting etting or hiring for occupancy. Short-term rental shall mean the rental to a person or group of persons a residential unit for a period of less than thirty (30) consecutive calendar days in a zoning district where residential uses are allowed. Short-term rental property means a parcel of real property and includes the premises upon which a short-term rental unit is located and the parking areas, driveways, landscaping, accessory structures, fences, walls, swimming_ pools, hot tubs, and spas. SECTION 2. Article IV. — Rental Dwelling License Requirements of the City of Orono Municipal Code is hereby added by adding the following text: Section 26-80 — Purpose The City of Orono finds that to promote the health, safety, and welfare of the general public, assure preservation of the existing housing supply, help maintain property values, work toward eliminating substandard and deteriorating rental housing, maintain a living environment that contributes to healthful individual and family living, it is in the best interest of the residents of Orono to require a license for all residential rental property. Section 26-81 — License required (a) License . No person, firm, or corporation shall operate a rental dwelling unit without first havinc obtained a rental dwelling license to do so from the city as provided for in this article. Each rental dwelling license shall be issued annually and expire one year after its issuance. Rental dwelling license renewal applications for the following year shall be filed on or before 30 days prior to the expiration of the then current license. Sixty days prior to the expiration of a rental dwelling license, the city shall notify the operator of the upcoming renewal deadline within which to file the rental dwelling license renewal application. Page 1 of 3 (b) Exceptions from rental licensing . (1) Rental property which is licensed as a nursing home or boarding care home by the State of Minnesota Department of Health shall be exempt from the license required under this article. This exception shall not apply if no services are provided to the tenants, or the services are incidental to, or independent of, the landlord/tenant relationship. (2) State licensed residential facilities. (3) A single-family dwelling or a dwelling unit in a duplex occupied by the owner for a minimum of six consecutive months per calendar year. Section 26-82 — License Standards (a) Regulation. No license may be issued unless all of the following are complied with: 1. The owner shall ensure that the occupants and ,guests of a rental unit do not create unreasonable noise or disturbances engage in disorderly conduct or violate provisions of the City of Orono Code or any State law pertaining to noise, disorderly conduct, overcrowding, the consumption of alcohol, or the use of illegal drugs. Owners are expected to take any measures necessary to abate disturbances including, but not limited to directing the occupants and guests of a short term rental unit to cease the disturbing conduct, removing the occupant and/ or guests or taking any other action necessary to immediately abate the disturbance. 2. The owner shall ensure that the property comply with all applicable codes regarding fire, building, and safety. 3. The owner shall provide a twenty- four (24) hour emergency contact that will be available to respond to issues at the rental property within sixjy (60) minutes to complaints regarding the condition, operation, or conduct of occupants of a rental unit. 4. The rental property must have a visible house number easily seen from the street day and night. 5. All advertising for the rental shall include the City issued license number. 6. The primary overnight and daytime occupant of a rental unit must be an adult eighteen 18 years of age or older. This adult must provide a telephone number to the owner and shall be accessible to the owner by telephone at all times. 7. Two off street parking spaces shall be provided at minimum. The maximum number of vehicles allowed at a rental property shall be limited to the number of available off street parking spaces. 8. The owner of a rental propertyshall hall provide sufficient trash collection containers and service to meet the demand of the occupants. 9. The City may conduct an inspection of the rental property as deemed necessary or prudent including without limitation based upon any complaints or violations that occur or prior to a renewal of a permit. 10. The owner will be required to provide the city and any guests with the name and telephone number of a contact person who can be at the property in n 60 minutes. The contact person can be the owner. (b) License period. Licenses shall expire December 31 of each year. Page 2 of 3 Section 26-83 — Short Term Rentals prohibited al Short Term rentals prohibited. No person may rent for a term less than 30 days- a. ama. Exception. A rental license may be issued and used for rental terms less than 30 days if all of the following are true: i. The home is homesteaded ii. The portion of the home to be rented is no more than 1 bedroom and for no more than 2 persons over the a _ eg of 5 years. iii. All standards as outlined in Section 26-84 are met. SECTION 3. EFFECTIVE DATE: This ordinance shall take effect immediately upon its passage and publication. ADOPTED this day of nays by the City Council of Orono, Minnesota. ATTEST: Anna Carlson, City Clerk 2018 on a vote of _ ayes and Dennis Walsh, Mayor Ordinance published in The Laker and The Pioneer newspapers the week of , 2018. Page 3 of 3 CC Exhibit B (1-22-18) ORDINANCE NO. _, THIRD SERIES CITY OF ORONO HENNEPIN COUNTY, MINNESOTA AN ORDINANCE AMENDING THE ORONO MUNICIPAL CODE BY ADDING ARTICLE IV TO CHAPTER 26 AND AMENDING SECTION 26-31 REGARDING A PROHIBITION OF SHORT TERM RENTALS THE CITY COUNCIL OF ORONO ORDAINS: SECTION 1. Section 26-31 Definitions of the City of Orono Municipal Code is hereby amended by adding the following text: Rent shall mean, for the purpose of this definition, leasing, subleasing,letting etting or hiring for occupancy. Short-term rental shall mean the rental to a person or group of persons a residential unit for a period of less than thirty 30) consecutive calendar days in a zoning district where residential uses are allowed. Short-term rental property means a parcel of real property and includes the premises upon which a short-term rental unit is located and the parking areas, driveways, landscaping, accessory structures, fences, walls, swimming pools, hot tubs, and spas. SECTION 2. Article IV. — Rental Dwelling License Requirements of the City of Orono Municipal Code is hereby added by adding the following text: Section 26-83 — Short Term Rentals prohibited al Short Term rentals prohibited. No person may rent for a term less than 30 days. a. Exception. A rental license may be issued and used for rental terms less than 30 days if all of the following are true: i. The home is homesteaded ii. The portion of the home to be rented is no more than 1 bedroom and for no more than 2 persons over thea age of 5 years. iii. All standards as outlined in Section 26-84 are met. SECTION 3. EFFECTIVE DATE: This ordinance shall take effect immediately upon its passage and publication. Page 1 of 2 ADOPTED this day of nays by the City Council of Orono, Minnesota. ATTEST: Anna Carlson, City Clerk 2018 on a vote of _ ayes and _ Dennis Walsh, Mayor Ordinance published in The Laker and The Pioneer newspapers the week of , 2018. Page 2 of 2 TALLEN and BAERTSCHI Attorneys at Law STEVEN M. TALLEN PAUL D. BAERTSCHI steve(a)tablawmn.com 920 2nd Avenue South paul@tablawmn.com Suite 1540 Paralegal: Marijo Witte MINNEAPOLIS, MN 55402-2224 mwittena inteera.net 612-349-3900 MEMORANDUM TO: Jeremy Barnhart, Orono Community Development Director FROM: Steven M. Tallen, Orono Prosecuting Attorney DATE: January 10, 2018 RE: Short Term Rental Licensing Issues Mr. Barnhart: You have provided me with three proposed ordinances addressing short term rental licensing that you have been directed to prepare for consideration by the Orono City Council. I will address my concerns with each proposed ordinance in turn, starting with what you have labeled as Exhibit A. Exhibit A allows short term rental, but requires a license to do so. On page two under the section labeled Section 26 -82 -License Standards, these are my concerns: (a) regulation. Number one requires that the owner "ensure" that the occupants and guests of a rental unit do not create unreasonable noise or disturbances, engage in disorderly conduct or violate the provisions of the Orono City Code or State law pertaining to noise, etc. It is probable a violation of the due process provisions of the Minnesota and the United States Constitutions to make an owner responsible for criminal behavior of a tenant. Certainly if the owner was participating in the disturbance, they could be prosecuted, but if an owner rents their house to someone for 30 days, the owner leaves the State for some reason, and the renter then violates a law, we would not be able to hold the owner criminally responsible for that behavior. Perhaps an owner could be held civilly responsible, meaning they could face some sort of civil penalty if their tenants disturb the peace, etc. Any such provision would require that the owner have a right to a hearing probably before the city council or an administrative law judge before any such penalty could be imposed. Likewise, requiring the owner to remove an occupant or guests necessary to abate the disturbance might very well run afoul of the landlord -tenant law which would require an unlawful detainer eviction action rather than the owner summarily evicting someone who is renting under some sort of lease. Number three requires that the owner provide a 24 hour emergency contact available to respond within 60 minutes to complaints. I do not see an issue with requiring the owner to provide an emergency contact, but the question becomes what if the emergency contact requires more than 60 minutes to respond. Would that be a criminal offense punishable by up to 90 days in jail and/or a $1,000.00 fine, or would the council wish to make that some sort of civil penalty not punishable by jail, but which the council, after a hearing, might impose? I have a similar concern with number six requiring the renter to be accessible to the owner by telephone at all times. I think number 7 is probably enforceable, number 8 would be enforceable, number 9 seems reasonable, number 10 seems to be identical to number three. I don't' have any issues with Section 26-83 which prohibits rentals of less than 30 days with certain exceptions. In terms of Exhibit B, which prohibits short term rentals: this would obviously be the easiest of the proposals to enforce; however, there still would be evidence and proof issues regarding the investigation and collection of evidence necessary to prove a short-term rental had occurred. This would no doubt require cooperation from the renter, and might require police department or other investigative agency to prepare search warrants to get copies of cancelled checks, to look for rental agreements, and to be able to bring witnesses back for trial, if necessary, assuming that most short-term rentals are going to be made by people who do not live in the Twin City Metropolitan area. Exhibit C seems to be a bit of a compromise between A and B. Under the terms of Exhibit C, an owner would have to obtain a short-term rental license, and under Section 2(c) regulation, again the proposed ordinance would proport to put criminal liability upon the owner to ensure that the renter and guests behave appropriately. I have the same concerns with the provision as I did as discussed above. Number two requires the owner to provide a 24-hour emergency contact available to respond within 30 minutes. Again, the 30 -minute time period gives me concern. Are we going to prosecute an owner criminally if it takes their emergency contact 45 minutes to respond? I think it's reasonable to require that an emergency contact be given, but if we are going to go with a provision such as this, I believe we should have language such as "within four hours, or a reasonable time" because, depending on the time of day and the situation of the "emergency", what might be reasonable in one circumstance, might be too long or too short in another. Number 4 discusses requiring that the renter be 25 years of age or older and that that person provide a phone number to the owner and be accessible "at all times". By setting a minimum age of 25 years, I think the City holds itself out for a possible equal protection argument, and to enforce this, we would be required to prove why someone 25 years of age or older would qualify, but someone 21 years of age or older would not. My suggestion would be that the City simply make it 21 years of age, which is regarded in Minnesota as an adult for all purposes. I believe the City is within its rights to regulate rental properties. My concern is that by making violation of the ordinance a criminal offense under the City Code, as opposed to an administrative violation that could be punished by either a fine or possible revocation of the rental license, the City would be creating enforcement issues that it would be very difficult, if not impossible, to overcome. In addition, the amount of resources required for proper investigation and preparation of a criminal charge may require more resources than the City has to commit given the other responsibilities of the police department and/or the administrative staff. Thank you for going over this with me. I am more than happy to appear at the council's work session on January 22, 2018, if you and Soren believe it would be helpful. For now, I am planning to come. Please let me know the exact time you would like me there, unless you determine that you would prefer to have that session without me. SMT/mw cc: Soren Mattick Chief Farniok