Moab, Park City cry foul as Utah lawmakers target rules for vacation homes

Tourist towns worry that the Legislature will harm their efforts to ease the affordable housing crisis.

(Francisco Kjolseth | The Salt Lake Tribune) Homes hug the south shore of Bear Lake in Garden City on Thursday, June 30, 2022. A legislative measure would affect how Utah tourist towns could regulate vacation homes.

Attempts by some Utah cities to regulate where co-owned vacation homes are located within their boundaries have escalated into a major clash over property rights.

New zoning rules from places such as Park City, Moab and Springdale on these second homes are just a sliver of the state’s larger debate over the impacts of short-term rentals on its housing crisis, but even small steps in that direction have sparked a strong reaction.

A bill on Capitol Hill would bar counties, cities or towns from treating residential properties with shared or fractional ownership different from other homes — in terms of zoning and land use on such properties as well as potential sanctions against their co-owners.

It was one of several bills during the 2023 legislative session marking another round in the duel between the state and its cities over how short-term rentals offered by homeowners on sites such as Airbnb and Vrbo are regulated.

SB271 surfaced late in the session, which ends Friday, and, after one hearing and languishing for a while in the House Rules Committee, it emerged, was passed and now awaits the signature of Gov. Spencer Cox.

The argument for private property rights

In that one committee airing, several conservative lawmakers and backers of property rights said the very thought behind such municipal rules on co-ownership were misguided, unprecedented and that it violated basic protections in the Utah Constitution.

Among the “inherent and inalienable rights” enshrined in the state constitution, they noted, is the right “to acquire, possess and protect property.”

“What we’re trying to do is make sure it’s clear that folks can own properties together,” said Sen. Mike McKell, R-Spanish Fork. “This is a private property rights bill.”

City officials were also veering into “discriminatory” rules in some cases by trying to limit homes owned through trusts and limited liability corporations to primarily commercial areas, according to a representative from Pacaso, a California-based company that specializes in offering fractional ownership in luxury second homes.

Cities have the power to regulate land use, Kevin Heneghan, Pacaso’s vice president of legal affairs, said, “but when they do so, they need to enforce those land use codes equally. They cannot pick and choose certain property owners to be treated differently than others. And they don’t get to decide who can and cannot own property together.”

Chris Gamvroulas, president of Ivory Development who also heads the nonprofit Utah Property Rights Coalition, called the moves by cities “unconscionable” and turned away suggestions the state needed to study the issue further.

Response from Moab and Park City

Amid a widespread shortage of homes statewide, Utah’s many tourist and resort communities are dealing with a more desperate gap in affordable and workforce housing than most municipalities. They also have seen housing demand soar from the COVID-19 pandemic as increased remote work enabled more people to move to these scenic spots.

Those intertwining trends have left Moab “tremendously vulnerable,” according to Ben Billingsley, its chief operating officer. “As a newer model of vacation homeownership, it truly creates an existential threat for our community and other rural communities throughout the state.

“This market essentially has an unlimited supply of possible buyers,” Billingsley told a skeptical Senate committee. “The increased buying power of corporate ownership across all housing units in our community will restrict the availability of Moab’s homeownership for our workforce.”

Like a wider number of cities, these cities also struggled for ways to regulate the portion of their housing stock being gobbled up for short-term rentals. That’s a problem greatly complicated, city officials across Utah say, by state-imposed limits on how they are allowed offset the many impacts of lucrative rentals that span no more than 30 days.

Republican Gov. Cox has also weighed in on how these rentals are a major knot in solving the state’s housing crisis.

In a major last-minute alteration to SB271, the bill was rewritten so as to not hamper cities’ ability to regulate short-term rentals or add-on homes such as internal “mother-in-law apartments” or external accessory dwellings over garages.

Park City has labored for months on a plan for guiding co-owned homes to certain neighborhoods as part of a deeper study of its housing stock.

Park City spokesperson Clayton Scrivner told the Park Record that SB271 clashed with the city’s general plan for protecting primary residential neighborhoods while harming its middle-income and affordable housing stock.

“Residents and businesses,” Scrivner said in a written statement, “are victimized by ambush politics and shortsighted commercialization of neighborhoods.”