VRBO ordinance passes

The first reading of an ordinance establishing regulatory standards for nightly vacation rentals was unanimously approved by the Hill City Common Council at its Jan. 24 meeting. The ordinance requires all nightly vacation rentals to have a sales tax license from the state and a home rental license from  the  State Department of Health. All rentals will also be required to “produce and disseminate up-to-date information” regarding the property such as parking spot locations, guest policies and emergency contact information. 

The city will be inspecting compliance with the above yearly. 

The ordinance also places an 8 percent cap on nightly vacation rentals in residential zones, grouped by street, in a separate resolution. Despite its passage many questions about the ordinance still linger.

During public comment resident Lonnie Feddersen wanted to know what would happen to a nightly vacation rental property located in a residential neighborhood when it is sold.

“If two neighbors are selling their homes and one is a nightly vacation rental who will have a higher valued property?” he asked of the council. Feddersen wanted the council to consider whether the conditional use permit (CUP) on a property to run a nightly vacation rental should remain with the property once it is sold.

This, in fact, was something the committee delving into nightly vacation rentals in residential neighborhoods had originally wanted to regulate. The committee also wanted an impact fee on these types of rentals, with collected money going toward workforce housing options in town. However, both of these wants were relinquished in order to move any regulation forward.

“It was a long, hard process,” said Ron Walker, who chaired the committee and is the chair of the Planning and Zoning Commission. “Passions ran pretty high at times.” 

Walker explained that the initial three recommendations were “scaled back” to one  “hinge pin recommendation” due to the intensity of emotions involved.

Aldermen listened to Feddersen’s logic. Alderman Carl Doaty made a motion to accept the ordinance with the condition that the CUP be terminated upon sale of the property. A split vote ensued with Doaty and Dale Householder in favor and Gary Auch and Jason Gillaspie against. Mayor Kathy Skorzewski broke the tie and the motion failed due to the CUP termination caveat. 

Ultimately, the council was in agreement and passed the original ordinance as it was presented.

Householder wanted to know why rentals would need to be inspected yearly. Householder had a “real probelm with property inspections,” calling them, in his opinion,  “discriminatory.” However, city administrator Brett McMacken explained that without inspections the city would be at the mercy of the word of  property owners. McMacken also stated that other commercial endeavors, such as liquor establishments, undergo city inspections, as do any properties requiring building permits. McMacken further argued that nightly vacation rentals are not “annually inspected by the state,” leaving the burden on local municipalities.

Another concern of council members was why some neighborhoods were not subject to the 8 percent cap that the ordinance calls for. Sunset Creek and Bull Run were specifically mentioned. Alderman  Jason Gillaspie wanted to know why these two subdivisions don’t fall under city jurisdiction. He wanted to know whether a planned unit development (PUD) trumps a city ordinance. 

The answers he got were unclear.

Bull Run has covenants prohibiting nightly vacation rentals. Sunset Creek has covenants that expressly permit nightly vacation rentals without a permit, according to McMacken.

He said both were PUDs and underwent a “different structure when they were approved.”

He explained that “at some point a developer asks for permission” and receives it. McMacken made clear, though, that when it comes to Sunset Creek “we don’t understand how the PUD was approved. We don’t have clear enough records.” He said that it is unclear if covenants were approved “as part of the plan unit development or outside the process.”

It is also unclear how residents in town feel, despite the multiple means of outreach the nightly vacation rental committee used to access opinions.  Gillaspie questioned how many people responded to the committee’s survey regarding nightly vacation rentals.

“I’m not sure,” McMacken said. 

Skorzewski  believed 14 percent of the population responded and McMacken believed it was more than 10 percent and less than 20 percent.

“Which is pretty high for a survey,” McMacken said.

The ordinance refers to the “city-wide survey” that “showed 62 percent of residents think there should be more done to regulate nightly vacation rentals” within residential neighborhoods.

Skorzewski  made her feelings known on the subject, imploring the council to put the measure up to a vote. She suggested a simple yes or no vote to the question of should Hill City allow nightly vacation rentals in residential neighborhoods? She urged the council to place the question on a June ballot. 

In a separate interview after the meeting, Walker expressed his pleasure with the passage of the ordinance but questioned Skorzewski’s ballot push.

“If there is gonna be a public vote I’d like it to be on the ordinance not necessarily yes or no. I think it would keep things clearer,” Walker said.

The next Hill City Common Council meeting is Feb. 14 at 5:30 p.m.