Stillwater has moved a step closer to its goal of tracking short-term home rentals and collecting tax on them.
The City Council had an extended discussion before agreeing on the finer points of how Stillwater’s permitting process should work.
Ordinance 3435 was advanced by title only last week and city staff was asked to address remaining concerns and questions raised by various councilors when the ordinance came back for second reading Monday. City Attorney John Dorman and Assistant City Manager Paula Dennison gave the councilors several options to consider.
Dennison said staff checked how 11 other cities, in the region and in the Big 12, handle short-term home rentals.
They found that most cities treat owner-occupied home shares, short-term rentals of unoccupied homes and long-term rentals as separate things. The application fees range from $12-$500 with renewal fees ranging from $15-$300.
Only two of the cities require inspections and most of them don’t hold special hearings to review applications. Only a few of them hold hearings at all.
Parking requirements vary.
The council ultimately opted for a version that doesn’t distinguish between home shares and short-term rentals, because from the city’s perspective there is no functional difference. Permits will cost $100 and a $10 renewal fee will be required annually or when ownership of the property is transferred.
The permit must be held by the property’s owner. A tenant wouldn’t be allowed to get a short-term rental permit.
Stillwater will not require a Special Use Permit as originally planned, but property owners will have to apply for a permit.
Neighboring property owners within 300 feet will be notified of the application and their rights regarding objections and reporting complaints.
Mayor Will Joyce said it ultimately comes down to whether renting the properties is considered to be the property owner’s right.
“If it’s not a use by right, the neighbors have a right to know,” Councilor John Wedlake said.
A more streamlined application process was preferred but the council had concerns about how to handle complaints and violations that could lead to revocation of a permit.
Vice-Mayor Pat Darlington wanted the regulations to be as simple as possible and she asked for language that governs revocation based on the number of violations.
Dorman said a blanket policy allowing three offenses before the permit is revoked could create problems if something serious is happening at the house.
Although some of the issues could be simple nuisance complaints for noise or parking, issues like parties where alcohol is being served to minors or cases where there is illegal drug activity are something the City would want to shut down right away, Dorman said.
He also strongly advised the councilors against creating a specific list of situations that would justify revoking a permit.
“I think you want to give yourself as much latitude as possible to be sure your response matches the magnitude,” Dorman said. “... I think you have levels of violations. I mean, what if you’re cooking meth in that house? … You don’t want to tie your hands if it’s a serious issue.”
Councilor Amy Dzialowski noted that the nature of a short-term rental, which is defined as lasting 30 days or less, means there will be rotating renters who each create unique circumstances.
She said she was very concerned about ensuring the process for permitting and enforcement is fair and is applied fairly.
Dorman told the councilors that it’s better to address potential problems in the initial permit review.
“It’s harder to revoke a license than to not issue one on the front end,” he said. “You get into due process issues … It can escalate on you.”
The Council didn’t take action on the ordinance but will have a final version to vote on when they meet on July 8. Dorman said it’s important to get the new permitting procedures adopted as soon as possible so homes with rentals can permits before Oklahoma State University’s football season starts.
The City has extended its 4% hotel tax to home shares and short-term rentals beginning July 1.
In other business the Council accepted a grant from the Oklahoma Department of Emergency Management for a stationary emergency generator at the water treatment plant. Water Utility Engineering Director Bill Millis said the grant will cover 75% or up to $3.3 million of the project, which has an estimated total cost of $4.4 million.
Millis said having the generator is important because even a 30 minute interruption in delivering water to the plant could severely disrupt the water treatment process. The plant does not currently have a reliable back-up generator.
The Council also passed a resolution that bans the flying of unmanned aircraft systems over the crowd at Boomer Blast on July 4.