Planning commission recommends caps on vacation rentals

The Sisters Planning Commission is forwarding to the City Council for their consideration several recommendations regarding regulation of vacation rental properties in Sisters.

Taking into consideration concerns regarding vacation rental impacts on neighborhoods and housing stock availability, the Planning Commission is making three recommendations for primary parameters regarding vacation rentals.

• Caps - Creation of a maximum number of vacation rental units in residential zones. A maximum of eight percent of total housing units was discussed.

• Approval - Vacation rental approval is tied to the applicant/owner of a property and not transferable when properties are sold, with the exception of property transfer to family members.

• Safety and Licensing - Need for licensing structure (i.e. annual vacation rental licensing and fees); inclusion of requirements for liability insurance; and proper posting of vacation rental approval, rules/regulations, emergency contact information, egress, etc.

At the request of the Council, at the September, October, and November Planning Commission meetings, the Commission reviewed the existing vacation rental regulations, reviewed data, and provided feedback to City staff on possible modifications.

The key vacation rental issues the Planning Commission identified were impacts related to neighborhood quality of life (residential neighborhood character) and housing stock availability for permanent and long-term residents. There are reports of local long-term renters being displaced when the rental property becomes a vacation rental.

At the request of the Planning Commission, staff provided data regarding vacation rentals in Sisters to assist the Commissioners in their deliberations. Forty-five vacation rentals are currently permitted or under review within the city limits. They make up approximately 3.5 percent of the existing residential units (approximately 1,300 existing residential units in total). Staff reports they are receiving multiple calls a week with inquiries about creating vacation rentals.

With approximately 236 lodging units and 45 vacation rentals, the vacation rentals constitute 16 percent of the available lodging and vacation rental units combined. The vacation occupancy rate averages 46 percent, determined by nights available/nights rented.

The annual transient room tax collected in fiscal year 2016/17 was approximately $475,000 for lodging units and $65,000 for vacation rentals.

At this point in time, the vacation rentals don't appear to be creating significant problems in the city. However, both the Council and the Planning Commission want to act proactively before problems develop like those recently faced by Bend and a number of other cities across the country.

Currently, the program in Sisters defines a vacation rental as "the use of a residential dwelling unit by any person or group of persons entitled to occupy for rent for a period of less than 30 consecutive days per month and that is rented in such a manner for more than 10 days in a calendar year."

All vacation rentals must have a business license and pay transient room tax. They are allowed in the residential, multi-family residential, and Sun Ranch residential districts as a permitted use with special provision. The special provisions are laid out in Sisters Development Code Section 2.15.2700. Vacation rentals are permitted outright in the downtown commercial and highway commercial districts.

Applications for a vacation rental are a Type 1 review process with an additional neighbor notice requirement that is not found in other Type 1 processes. The decision by staff is appealable to the Planning Commission, which may revoke the permit. There is a $250 application fee.

Code amendments that were identified as needed include: Vacation rental special provision applicability which would clarify that the special provisions in 2.15.2700 (vacation rentals) apply to all residential units including when located in a commercial district, except that the maximum number of units allowed would only apply to the residential zones.

Other parameters and issues for consideration by the Council may include but are not limited to: limiting the number of days allowed to be used as a vacation rental; limitations on number of occupants; requirements for additional onsite parking; and having a responsible party available (i.e. 24 hours/day via phone, lives within 30 miles).

A City Council workshop to discuss vacation rental policies is tentatively scheduled for November 29. The Council input will be incorporated by staff, who will create draft text amendments for a public hearing by the Planning Commission during which comments from the public will be taken. The Planning Commission will then make any necessary changes and send their final recommendations to the City Council, which will probably occur in early 2018.