Salt Lake City bulks up its enforcement on short-term rentals

March 8, 2024 by Evan Curtis
Housing

Salt Lake City bulks up its enforcement on short-term rentals

by Luke Garrott, Building Salt Lake. Article Link

If you rent out your property short-term using a platform like Airbnb or Vrbo within Salt Lake City boundaries, it just got harder to avoid getting shut down by the city.

The City Council this week passed a budget amendment that, as part of $9.2 million in new spending on 21 items, allotted $49,000 for new data-gathering software to enforce the ban on short-term rentals in the city.

Any rental period under 30 days is considered short term.

The only short-term rentals allowed are hotels, motels, rooming houses, bed-and-breakfasts, etc. Those uses are restricted to certain zones and have specific business license requirements.

But the city has struggled to enforce its own ordinances. It should be easy —just check the rental platforms online. But an explicit call-out in state code, under the rubric of prohibiting restrictions on free speech (10-8-85.4), states that legislative bodies cannot “punish an individual solely for the act of listing or offering a short-term rental on a short-term rental website.”

That means a property’s listing on Airbnb or Vrbo can’t be used as evidence that it’s being rented out.

Currently, complaints from neighbors usually start an enforcement action. Yet proving a dwelling unit is being used as a short-term rental “can be very challenging,” according to city officials.

Context: Housing shortage

City Hall’s policy response to the housing shortage has been legalization of added density across all residential districts in the city. While making ADUs legal in all zones where dwelling units are allowed, the City Council also retained an owner-occupancy requirement if the main dwelling on the property is a single-family home.

Although the city wants homeowners to build an ADU, it insists that the unit not become a short-term rental. And with its owner-occupant requirement, it doesn’t want to entice institutional investors to buy up single-family homes, add an ADU, and rent both units short-term.

What’s the new enforcement tool?

The budget item didn’t get much public discussion, and was mere drops in the $9.2 million pool of funding being reviewed.

The request came from the Department of Community and Neighborhoods, which houses the Civil Enforcement Division.

The purpose: “to identify rental properties used and marketed as short-term rentals accurately. Inspectors are tasked with sifting through large amounts of data to identify a potential non-compliant property manually.”

CAN Director Blake Thomas told Building Salt Lake that “The software documents how many short-term rental bookings were made in a given month and can act as an enforcement tracking system. This significantly streamlines the time spent by staff engaged in the enforcement process.”

How will it avoid violating the limits set on enforcement in state code? Thomas explained, “Utah Code prohibits local jurisdictions from fining property owners for the sole act of advertising short-term rentals online. The software is a data-gathering tool and will be an aid for investigating and documenting how a property is actually being used for short-term rentals, not just advertised as such.”

The software contract is expected to cost $39,000 a year, and comes with a three-year contract. $10,000 is allotted to keeping inspectors trained on the “latest enforcement trends,” per the budget request.

What types of short-term rentals are legal in SLC?

• First, there’s no legal land use category for “short-term rental” (i.e. under 30 days). Any lodging rental under 30 days is considered a hotel, which has location restrictions and specific business licensing. There’s no business license for renting your dwelling unit for periods shorter than a month.
• You can rent out a room in your dwelling, for whatever period of time, with no business license.
• Units with a “self-contained kitchen and bathroom” in residential zoning districts, including ADUs, can be rented out legally, with a business license, for periods of a month or more.