item ph5 - wilmington, nc

ITEM PH5

OFFICE OF THE CITY MANAGER (910) 341-7810 | FAX (910)341-5839

TDD (910)341-7873

1/22/2019 City Council City Hall Wilmington, North Carolina 28401 Dear Mayor and Councilmembers: Attached for your consideration are two alternative ordinances that would amend the Land Development Code (LDC) to: (1) ban whole-house lodging in residential districts or (2) provide regulations for whole-house lodging in residential districts. A case summary follows the ordinances. The first ordinance amendment would ban all whole-house lodging uses within the R-20, R-15, R-10, R-7, R-5, R-3, HD, HD-R, HD-MU, MHP, and MF districts. A one-year amortization period would be allowed for conforming uses existing today. After one year, such conforming uses shall terminate. The second amendment would allow whole-house lodging in all of the R-20, R-15, R-10, R-7, R-5, R-3, HD, HD-R, HD-MU, and MF districts as a use permitted with prescribed conditions. If the proposed amendment is approved, specific regulations would be created for these uses. If neither proposed amendment is approved, effective March 1, 2019, the minimum rental period for whole house rentals would become 30 days as long-term rentals. The Planning Commission held a public hearing on proposed changes to short-term lodging regulations on December 6, 2017, and voted to continue the item to the January 2018 meeting. Despite reaching a general consensus on the matter of homestays in residential districts, the Planning Commission was unable to reach consensus on a recommendation. A joint work session of the Planning Commission and City Council was held on March 16, 2018, to review draft changes as presented to the Planning Commission. In July 2018, City Council approved changes to the code to allow homestays in residential and commercial districts and whole-house lodging in some non-residential districts. City Council then held work sessions on whole-house lodging regulations in October 2018 and January 2019. Staff recommends consideration and adoption of one of the two attached Land Development Code amendments with an effective date of March 1, 2019. Respectfully submitted, Sterling B. Cheatham, City Manager

Ordinance City Council City of Wilmington

North Carolina

Date: 1/22/2019 Introduced By: Sterling B. Cheatham, City Manager

Ordinance Amending the Land Development Code Chapter 18, to Ban Whole-House Lodging in Residential, Historic, and Multi-family Districts

(LDC-1-717B)

LEGISLATIVE INTENT/PURPOSE:

WHEREAS, NCGS Section 160A-385 authorizes local governments to amend ordinances regulating land use within their jurisdiction; and

WHEREAS, the amendment set out below is made in accordance with NCGS Section

160A-364 and Article 3, Section 18-117 of the Land Development Code; and

WHEREAS, City Council finds that it is important to maintain the residential character of the neighborhoods within the city. Whole-house lodging, as opposed to homestay lodging, introduces commercial uses to and disrupts a neighborhood, the primary and overarching purpose of a neighborhood being first and foremost a residential community, where people actually live, not a place of short-term occupancy. Access to housing is not the same as access to homeownership, and inordinate reductions in the supply of housing available for standard rentals for the citizens of Wilmington could have a destabilizing effect on housing affordability; and

WHEREAS, recognizing the impacts associated with whole-house lodging and the need to maintain the residential character of neighborhoods by limiting short-term lodging, thereby curbing the potential of neighborhoods to become predominantly places for short-term tenants, only homestay lodging uses shall be permitted in residential zoning districts; and

WHEREAS, the amendment set out below is intended to promote the public health,

safety, and welfare by amending the Land Development Code to include regulations for whole-house lodging. THEREFORE, BE IT ORDAINED:

SECTION 1: Chapter 18, Article 6 of the Land Development Code is hereby amended to add: Sec. 18-331. Whole-house lodging is not permitted in residential, multifamily, and historic districts.

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Whole-house lodging uses shall be prohibited in the R-20, R-15, R-10, R-7, R-5, R-3, HD, HD-R, HDMU, MHP, and MF districts. Any establishments existing at the time of the adoption of this ordinance and conforming with the regulations effective prior to adoption of this ordinance shall have a one-year amortization period. Any such establishment shall register with temporary registration with the city manager pursuant to Sec. 18-330(1). After this amortization period, the use of the property as lodging shall be terminated.

SECTION 2: That any person violating the provisions of this ordinance shall be subject to the penalties set forth in Article III, Section 18-52 of the Land Development Code.

SECTION 3: That all ordinances or parts of ordinances in conflict with this ordinance are hereby repealed to the extent of such conflict.

SECTION 4: That if any section, subsection, paragraph, sentence, clause, phrase or portion of this ordinance is for any reason held invalid or unconstitutional by any court of competent jurisdiction, such portion shall be deemed severable and such holding shall not affect the validity of the remaining portions hereof.

SECTION 5: That this ordinance shall be effective on March 1, 2019.

Bill Saffo, Mayor

APPROVED AS TO FORM: ATTEST:

Penelope Spicer-Sidbury, City Clerk City Attorney

Adopted at a ________________ meeting on ____________________ 2019

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Ordinance City CouncilCity of Wilmington

North Carolina

Date: 1/22/2019Introduced By: Sterling B. Cheatham, City Manager

Ordinance Amending the Land Development Code Chapter 18, to Allow Whole-house Lodging in Residential, Historic, and Multi-family Districts as a Use Permitted with

Prescribed Conditions (LDC-1-717B)

LEGISLATIVE INTENT/PURPOSE:

WHEREAS, NCGS Section 160A-385 authorizes local governments to amend ordinances regulating land use within their jurisdiction; and

WHEREAS, the amendment set out below is made in accordance with NCGS Section 160A-364 and Article 3, Section 18-117 of the Land Development Code; and

WHEREAS, City Council finds that the sharing economy that is being nationally embraced is a growing trend by the public to provide accommodations in their homes to travelers. Council finds the provision of such lodging accommodations can be beneficial under certain circumstances and, if properly regulated, peer-to-peer lodging can provide a means of assisting property owners to keep properties in good repair, which, in turn, stabilizes home ownership, maintains property values, and strengthens the economy of the city; and

WHEREAS, it is important to maintain the residential character of the neighborhoods within the city. Absent appropriate controls on the number and manner and places of operation of whole-house lodging, neighborhoods stand to be harmed by undue commercialization and disruption to the primary and overarching purpose of a neighborhood being first and foremost a residential community, where people actually live, not a place of short-term occupancy. Access to housing is not the same as access to homeownership, and inordinate reductions in the supply of housing available for standard rentals for the citizens of Wilmington could have a destabilizing effect on housing affordability; and

WHEREAS, there are many different built environments of neighborhoods within the city of Wilmington. Within the 1945 Corporate Limits, neighborhoods are generally dense, have narrower vehicular lanes, and limited off-street parking and are more impacted by commerce and tourists than other neighborhoods within the city. These circumstances require careful consideration if the residential character of these neighborhoods is to be protected; and

WHEREAS, the regulations set forth in this section recognize the different characteristics and built environments of different neighborhoods within the city by maintaining the residential character of neighborhoods by limiting the number and location of whole-house lodging, thereby curbing the potential of neighborhoods to become predominantly places for short-term tenants; and

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WHEREAS, the amendment set out below is intended to promote the public health, safety, and welfare by amending the Land Development Code to include regulations for whole-house lodging.

THEREFORE, BE IT ORDAINED:

SECTION 1: Chapter 18, Article 5 of the Land Development Code, Section 18-177. R-20. Residential District (c) is hereby amended to add:

(12) Whole-house lodging





SECTION 4: Chapter 18, Article 5 of the Land Development Code, Section 18-180. R-7. Residential District (c) is hereby amended add:






SECTION 7: Chapter 18, Article 5 of the Land Development Code, Section 18-184. Multifamily Residential Districts (c) is hereby amended to add:


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SECTION 8: Chapter 18, Article 5 of the Land Development Code, Section 18-187. HD, Historic District (c) is hereby amended to add:


SECTION 9: Chapter 18, Article 5 of the Land Development Code, Section 18-188. HD-MU, Historic District-Mixed Use (d) is hereby amended add:


SECTION 10: Chapter 18, Article 5 of the Land Development Code, Section 18-189. HD-R, Historic District-Residential (d) is hereby amended to add:


SECTION 11: Chapter 18, Article 6 of the Land Development Code is hereby amended to add:

Sec. 18-331. Whole-house lodging uses in the residential, multifamily, and historic districts.

1. Within the R-20, R-15, R-10, R-7, R-5, R-3, MF, HD, HD-R, and HDMU districts, whole-house lodging establishments are permitted subject to the following conditions. Whole-house lodging is not permitted within the MHP district.

2. Each whole-house lodging establishment shall meet the minimum separation distance from any other residentially-zoned whole-house lodging establishment or any properly permitted bed and breakfast lodging also within a residential zoning district, as measured from parcel line to parcel line. In the case of a duplex, triplex, quadraplex or multifamily development, this shall be measured from the parent parcel lines. The total number of permitted uses shall be limited by a cap.

The separation distances and caps shall be:

Within the 1945 Corporate Limits: 250 feet, with a cap of no more than 2% of the total number of residentially-zoned parcels within the 1945 Corporate Limits being eligible for use as whole-house lodging establishments.

Outside the 1945 Corporate Limits: 400 feet, with a cap of no more than 2% of the total number of residentially-zoned parcels outside of the 1945 Corporate Limits being eligible for use as whole-house lodging establishments.

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3. Such uses shall require a local operator, available 24 hours per day, within 25 miles of the subject property.

4. Registration.(a) The property owner shall register each establishment annually with the city of

Wilmington. (b) The owner shall provide proof of possession of the registered premises.(c) A registration number shall be assigned to each registered establishment, which shall

be clearly noted along with any advertisement for lodging. (d) Registration is limited to natural persons only and no person shall be eligible for more

than one registration for a whole-house lodging in any residential district. (e) Active registrations shall not expire; however, all property owners shall renew

registration on an annual basis. Registrations not renewed on an annual basis shall deem the use terminated by the property owner.

(f) Registration does not vest the premises or the property owner with any rights. Registration terminates upon the transfer of the property.

(g) Only one registration may be issued per property, either whole-house lodging or bed and breakfast lodging, at any given time.

(h) For the initial registration process, a lottery method shall be utilized based on the cap and separation requirements. Subsequent registrations will be processed by the city manager on a first-come, first-served basis.

5. A minimum of one off-street parking space, of an all-weather surface, per bedroom is required. Within HD, HD-R, and HDMU districts, only curb cuts existing at the time of the adoption of this ordinance may be used to provide off-street parking. If off-street parking is not available on site, shared parking or rented spaces in a private or municipal parking deck or lot may be used to satisfy this parking requirement. Proof of a shared parking plan or rental of spaces shall be included with annual registration. A shared parking plan will be enforced through written agreement among all owners of record. An attested copy of the agreement between the owners of record must be approved by the city attorney and submitted to the city for recordation on forms made available in the office of the city attorney. Recordation of the agreement must take place before issuance of a registration for any short-term lodging use to be served by the off-site parking area. A short-term lodging registration shall be revoked if required off-street parking spaces cannot be provided.

6. The use provisions of this section are not subject to variance by the board of adjustment.

7. The definition of “family” and the restriction of a minimum thirty (30)-day rental period in the MF districts shall not apply to property registered whole-house lodging uses.

8. Any use for which there are three (3) final determinations of violations of the City Code and/or criminal convictions related to the premises within one (1) year, shall constitute a violation of the terms of registration and shall terminate registration. Offenders shall include property owners as well as lessees, tenants, guests, and occupants.

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For any registration that terminated due to code/criminal violations, the property owner shall be ineligible for registration for a period of three (3) years.

9. A property owner who terminates registration shall be ineligible for registration for a period of three (3) years at that address.

10. Any property owner registering a whole-house lodging shall 1) be responsible for ensuring compliance with all federal, state, and local laws, including, but not limited to tax code, building code, fire code, and environmental health regulations for the level of occupancy of the lodging and 2) not allow any party, event, classes, weddings, receptions, or other large gatherings on the premises.

(a) Property owners registering a whole-house lodging are responsible for keeping in full force and effect during all times the unit is used as a whole-house lodging commercial general liability insurance with a total limit of not less than $500,000 each occurrence for bodily injury and property damage.

11. Registration shall terminate upon any one of the following: discontinuance of use for a period of one hundred eighty (180) days or more, failure to renew annual registration, transfer of the property.

12. Written notice shall be conspicuously posted inside each short-term lodging unit setting forth the following information:

(a) The name and telephone number of the operator. (b) The address of the lodging, the maximum number of overnight occupants permitted,

and the day(s) established for garbage collection. (c) The non-emergency phone number of the city of Wilmington Police Department. (d) The annual registration number. (e) That parties, events, classes, weddings, receptions, and large gatherings are not

permitted.

13. The operator shall ensure that all refuse is stored in appropriate containers and set out for collection on the proper collection day and the carts removed from the street or alley on the scheduled collection day, in accordance with Sections 10-14 of the City Code.

14. Preparation and service of food by operators for guests shall be prohibited. No cooking shall be permitted in individual bedrooms.

15. Any establishments existing at the time of the adoption of this ordinance and conforming with the regulations effective prior to adoption of this ordinance for which registration cannot be accommodated due to the cap or the separation requirements shall have a one-year amortization period. If, after this amortization period, the whole-house lodging establishment is unable to properly register, the use of the property as whole-house lodging must be terminated. Any such establishment shall register with temporary registration with the city manager pursuant to Sec. 18-330(1).

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SECTION 12: That any person violating the provisions of this ordinance shall be subject to the penalties set forth in Article III, Section 18-52 of the Land Development Code.

SECTION 13: That all ordinances or parts of ordinances in conflict with this ordinance are hereby repealed to the extent of such conflict.

SECTION 14: That if any section, subsection, paragraph, sentence, clause, phrase or portion of this ordinance is for any reason held invalid or unconstitutional by any court of competent jurisdiction, such portion shall be deemed severable and such holding shall not affect the validity of the remaining portions hereof.

SECTION 15: That this ordinance shall be effective on March 1, 2019.

Bill Saffo, Mayor

APPROVED AS TO FORM:ATTEST:

Penelope Spicer-Sidbury, City Clerk City Attorney

Adopted at a ________________ meetingon ____________________ 2019

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City Council 1/22/2019

LDC-1-717-B Christine Hughes, 910-341-5885, [email protected]

Staff Recommendation Approval Planning Commission 1/29/18, No recommendation City Council Scheduled for public hearing 1/22/19

Request Code Section(s) Amend City Code Chapter 18, Article 5 and/or Article 6 to either ban or to

allow “whole-house lodging” as uses permitted with prescribed conditions in R, H, and MF districts

Request To either ban or allow for whole-house lodging in residential and historic districts

Applicant City of Wilmington

BACKGROUND / ANALYSIS

In late 2015, the City Manager directed planning staff to review the existing code regulations related to short-term lodging, operating as peer-to-peer rentals via online platforms, and to review benchmark cities that have recently addressed or are addressing the issue of short-term lodging. Since that time, City Council has been presented with a detailed review of best practices from across the country, including an in-person presentation from planners from Asheville, Raleigh, and Cornelius, North Carolina.

What is included in this proposed amendment reflects months of research, discussion among City Council members, three Planning Commission work sessions, public input, best practices, and the most recent assessment of legal issues. This case summary represents the second component of a two part process and addresses only “whole-house” lodging, whereby there may not be a principal resident on the property during the lodging period in single-family and multi-family residential and historic districts only. Regulation for homestay (hosted) lodging and whole-house lodging within commercial and mixed-use districts were adopted by City Council on July 17, 2018, and as such, this proposed amendment does not address whole-house lodging within commercial districts, nor does it address homestay lodging.

Proposed amendments for whole-house lodging were considered by the Planning Commission in January 2018. The Planning Commission did not pass a recommendation. Two versions of a proposed ordinance are included in this report, one that bans whole-house lodging in residential districts and one that allows whole-house lodging in residential districts with a cap and a separation requirement.

The proposed amendment allowing whole-house lodging, in summary, would:

LAND DEVELOPMENT CODE AMENDMENT

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mailto:[email protected]

2 LDC-1-717B Short-term Lodging

• Require registration for all types of whole-house lodging, limiting registration to one pernatural person;

• Allow whole-house lodging in the R, H, and MF districts;• Amortize short-term lodging establishments existing and operating legally (seven-day

minimum rental period and no more than three unrelated occupants).

The following table is a very brief summary of the proposed code changes.

Whole-house Lodging Districts permitted R-20, R-15, R-10, R-7, R-5, R-3, MF, HD, HD-R, and HDMU districtsRegistration required Yes, one per person Permitted unit type Single-family detached; multifamily dwelling units Cap and separation requirements

2% of all residentially-zoned and used parcels and 250 feet separation between uses within 1945 Corporate Limits 2% of all residentially-zoned and used parcels and 400 feet separation between uses outside of 1945 Corporate Limits

Operator Local operator within 25 miles with 24-hour availability Insurance, inspections and life safety

Required

Off-street parking required

1 space per bedroom

Maximum number of bedrooms

None

Amortization One year for any short-term lodging operating legally at the time of adoption of the ordinance

Benchmark Cities Research – Updated May 2018

The benchmark research shows that there are no clear best practices or standards for addressing the issue of peer-to-peer rentals. While many cities are working towards developing regulations, other cities have adopted standards and are working on amendments to those standards.

Alexandria, VA Not regulated Annapolis, MD • Regulations adopted in 2011

• Whole-house rentals allowed• Rental of bedrooms is considered a boarding house and not

permitted• License required ($100 fee)• Units rented for up to 6 months/year• No minimum rental period• Registration exception for certain specific events

Asheville • Regulations adopted November 2015; amendments approvedin January 2018

• Homestay permitted – up to 2 guest rooms• Whole-house rentals prohibited in residential zoning and

downtown (January 2018 amendment); allowed in districtswhere lodging is a permitted use

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• No grandfathering with exception of 11 historic vacationcottages and those operating downtown prior to 2018

• Full-time staff position added to handle complianceCarolina Beach Not regulated Chapel Hill Not regulated; the definition of “dwelling unit” is used to govern

duration of stay of one week or longer Charleston, SC • Regulations adopted in 2012; amendments adopted April 2018

(effective July, 2018)• Four types of lodging:

o Commercial (no resident, full-time lodging) STRpermitted only in commercial and mixed-use districtswithin the short-term rental overlay zone

o Residential (owner-occupied and owner must sleep atthe home during the rental period) has 3 categories Category 1 – in the Old and Historic District Category 2 – within the Old City District but

outside the Old and Historic District Category 3 – off the peninsula

• Permit required• Bed and breakfast use deleted and replaced with “residential

short-term rentals”• Each residential STR permittee allowed to rent/list only one

unit• Off-street parking required• Commercial type only allowed within the single overlay district

and not permitted in any unit designated as workforce housingunit

Charlotte Not regulated; B&B and boarding houses regulated Chattanooga, TN • Regulations adopted in 2009; amendments adopted 2017 (the

Tennessee General Assembly is currently considering a banon local regulation of short-term lodging)

• Registration required• Owner-occupied rentals allowed in an overlay district• Non-owner occupied (including rentals while the owner is away

from home) allowed in overlay district and upon request forregistration, a sign is posted on the property and letters sent tocouncilmembers and neighbors within 300 feet and a 30-daywaiting period is required – if opposition is received, theproperty owner must appeal to city council for approval

• Allowed in a primary dwelling unit and/or an accessory dwellingunit

• Rental period of 1 – 29 days• Natural person must be designated to be responsible for daily

operations, must be customarily present at a location within thecounty, and must be responsive to contact at all times

Durham Not regulated; decided not to pursue regulations New Bern Not regulated Raleigh Regulations under consideration since 2014; to date, the city council

has rejected all proposed regulations brought forward for consideration

Task force created to study issue and draft ordinance; City Council

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declined to vote on task force recommendation in June 2017. St. Augustine, FL • Regulations adopted in 2010

• One or two-family dwelling units rented for a period of one week or more, but less than 3 months

• Permitted in 2 residential zoning districts • Registration required • Large gatherings prohibited • No grandfathering of nonconforming uses • Enforcement staff dedicated specifically to short-term rentals • Florida legislature currently considering state-wide preemption

regulations San Francisco, CA

• Regulations adopted in 2014 • Rental of all or a portion of a dwelling unit for 1-30 nights • Only permanent residents (owners/tenants who spend at least

275 nights/year in the unit) permitted to rent short term • Within multi-unit buildings, only the unit within which the

registered host resides can be used for short-term rentals (cannot live in one unit and rent out another)

• Registration as a business and as a certified host required • Life safety inspection and liability insurance required • If a unit in a multi-tenant building is used for STR, the entire

property, including all other dwelling units, must be code compliant and not subject to code enforcement

• Quarterly reports required to be filed with city • Created office of Short-term Rentals with staff of 6

Santa Fe, NM • Regulations adopted in 2009; amended in 2016 • Cap of 1,000 residential permits citywide • Rental period of up to 30 days; only one rental period every 7

days • Requires a business registration and a short-term rental permit

or registration • Permit required within residentially-zoned area; registration

required within a non-residentially zoned area – both are non-transferable

• Requires applicant to notify neighbors within 200 feet with owner/operator contact information, contact information for the code enforcement staff person for that area

• Requires proof of property ownership, proof of insurance, site plan showing parking and buildings, and proof of compliance with accessory dwelling unit regulations (if applicable)

• Zoning and water conservation inspection required Savannah, GA • Regulations adopted 2014; amendments adopted 2017

• Rental period of up to 30 days • 20% per ward cap applicable to non-owner occupied parcels in

the historic district, conservation, and residential zoning districts (no cap for owner-occupied properties) and non-owner occupied parcels within the Victorian district located in the 1-R, 2-R, and 3-R districts (owner-occupied properties exempt from cap); waiting list for capped wards

• Limited to 2 adults per bedroom

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• Registration required• Rental agent required (must be natural person able to appear

on the premises within 2 hours)• Permitted in limited business, mixed-use, historic, and

residential districts (caps only within historic districts)• All adjacent property owners must be notified before issuance

of a permit• 3 strikes/you’re out for code violations• Permitted in accessory dwelling units within one district,

provided that the principal dwelling unit is owner occupiedWrightsville Beach, NC

Not regulated

PROPOSED AMENDMENTS

1. Ban on whole-house lodging in residential districts

Following is the proposed amendment to the Land Development Code. Additions are underlined and deletions are in strikethrough.

Article 6. Add Sec. 18-331.

Sec. 18-331. Whole-house lodging is not permitted in residential, multifamily, and historic districts.

Whole-house lodging uses shall be prohibited in the R-20, R-15, R-10, R-7, R-5, R-3, HD, HD-R, HDMU, MHP, and MF districts.

Any establishments existing at the time of the adoption of this ordinance and conforming with the regulations effective prior to adoption of this ordinance shall have a one year amortization period. Any such establishment shall register with temporary registration with the city manager pursuant to Sec. 18-330(1). After this amortization period, the use of the property as lodging shall be terminated.

2. Allow whole-house lodging in R, H, and MF districts

Due to the extensive nature of the proposed amendments, the full text is included as an attachment to this report.

Uses – add regulations for whole-house lodging (residential districts)

Code Section

Proposed Changes (additions underlined, deletions in strikethrough)

Add regulations for whole-house lodging in the residential and historic districts

18-331 Sec. 18-331. Whole-house lodging in residential, multifamily, and historic districts.

1. Within the R-20, R-15, R-10, R-7, R-5, R-3, MF,HD, HD-R, and HDMU districts, whole-houselodging establishments are permitted subject to thefollowing conditions. Whole-house lodging is not permitted within the MHP district.

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2. Each whole-house lodging establishment shallmeet the minimum separation distance from anyother residentially-zoned whole-house lodgingestablishment or any properly permitted bed andbreakfast lodging also within a residential zoningdistrict, as measured from parcel line to parcel lineIn the case of a duplex, triplex, quadraplex or multifamily development, this shall be measured from the parent parcel lines. The total number of permitted uses shall be limited by a cap.

The separation distances and caps shall be:

Within the 1945 Corporate Limits: 250 feet, with a cap of no more than 2% of the total number of residentially-zoned parcels within the 1945 Corporate Limits being eligible for use as whole-house lodging establishments.

Outside the 1945 Corporate Limits: 400 feet, with a cap of no more than 2% of the total number of residentially-zoned parcels outside of the 1945 Corporate Limits being eligible for use as whole-house lodging establishments.

3. Such uses shall require a local operator, available24 hours per day, within 25 miles of the subjectproperty.

4. Registration.(a) The property owner shall register each

establishment annually with the city ofWilmington.

(b) The owner shall provide proof of possession ofthe registered premises.

(c) A registration number shall be assigned toeach registered establishment, which shall beclearly noted along with any advertisement forlodging.

(d) Registration is limited to natural persons onlyand no person shall be eligible for more thanone registration for a whole-house lodging inany residential district.

(e) Active registrations shall not expire; however,all property owners shall renew registration onan annual basis. Registrations not renewed onan annual basis shall deem the use terminated by the property owner.

(f) Registration does not vest the premises or the

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property owner with any rights. Registration terminates upon the transfer of the property.

(g) Only one registration may be issued perproperty, either whole-house lodging or bedand breakfast lodging, at any given time.

(h) For the initial registration process, a lotterymethod shall be utilized based on the cap andseparation requirements. Subsequentregistrations will be processed by the citymanager on a first-come, first-served basis.

5. A minimum of one off-street parking space, of anall-weather surface, per bedroom is required.Within HD, HD-R, and HDMU districts, only curbcuts existing at the time of the adoption of thisordinance may be used to provide off-streetparking. If off-street parking is not available on site,shared parking or rented spaces in a private or municipal parking deck or lot may be used to satisfy this parking requirement. Proof of a shared parking plan or rental of spaces shall be included with annual registration. A shared parking plan will be enforced through written agreement among all owners of record. An attested copy of the agreement between the owners of record must be approved by the city attorney and submitted to the city for recordation on forms made available in the office of the city attorney. Recordation of the agreement must take place before issuance of a registration for any short-term lodging use to be served by the off-site parking area. A short-term lodging registration shall be revoked if required off-street parking spaces cannot be provided.

6. The use provisions of this section are not subject tovariance by the board of adjustment.

7. The definition of “family” and the restriction of aminimum thirty (30)-day rental period in the MFdistricts shall not apply to property registeredwhole-house lodging uses.

8. Any use for which there are three (3) finaldeterminations of violations of the City Code and/or criminal convictions related to the premises within one (1) year, shall constitute a violation of the terms of registration and shall terminate registration. Offenders shall include property owners as well as lessees, tenants, guests, and occupants. For any registration that terminated due to code/criminal violations, the property

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owner shall be ineligible for registration for a period of three (3) years.

9. A property owner who terminates registration shallbe ineligible for registration for a period of three (3) years at that address.

10. Any property owner registering a whole-houselodging shall 1) be responsible for ensuring compliance with all federal, state, and local laws, including, but not limited to tax code, building code, fire code, and environmental health regulations for the level of occupancy of the lodging and 2) not allow any party, event, classes, weddings, receptions, or other large gatherings on the premises.

(a) Property owners registering a whole-house lodgingare responsible for keeping in full force and effect during all times the unit is used as a whole-house lodging commercial general liability insurance with a total limit of not less than $500,000 each occurrence for bodily injury and property damage.

11. Registration shall terminate upon any one of thefollowing: discontinuance of use for a period of one hundred eighty (180) days or more, failure to renew annual registration, transfer of the property.

12. Written notice shall be conspicuously posted insideeach short-term lodging unit setting forth the following information:

(a) The name and telephone number of theoperator.

(b) The address of the lodging, the maximumnumber of overnight occupants permitted, and the day(s) established for garbage collection.

(c) The non-emergency phone number of the cityof Wilmington Police Department.

(d) The annual registration number.(e) That parties, events, classes, weddings,

receptions, and large gatherings are not permitted.

13. The operator shall ensure that all refuse is storedin appropriate containers and set out for collection on the proper collection day and the carts removed from the street or alley on the scheduled collection day, in accordance with Sections 10-14 of the City Code.

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14. Preparation and service of food by operators forguests shall be prohibited. No cooking shall be permitted in individual bedrooms.

15. Any establishments existing at the time of theadoption of this ordinance and conforming with the regulations effective prior to adoption of this ordinance for which registration cannot be accommodated due to the cap or the separation requirements shall have a one year amortization period. If, after this amortization period, the whole-house lodging establishment is unable to properly register, the use of the property as whole-house lodging must be terminated. Any such establishment shall register with temporary registration with the city manager register pursuant to Sec. 18-330(1).

18-17718-17818-17918-18018-18118-18218-18418-18718-18818-189

Add whole-house lodging under “uses permitted under prescribed conditions” in the R-20, R-15, R-10, R-7, R-5, R-3, MF, HD, HD-R, and HDMU districts

CONSISTENCY WITH ADOPTED PLANS

While the Create Wilmington Comprehensive Plan does not address short-term lodging specifically, there are several relevant policies and considerations. The plan is designed to provide a framework for considering the “big picture,” looking beyond a parcel-by-parcel approach to a broader framework. The current reliance on a 1980s, suburban-style separation of uses forces inefficient development patterns and a heavy reliance on motor vehicle mobility. The use of “zoning districts with highly specific land uses has fallen out of sync with desired development patterns and Wilmington’s modern development needs” and does not align neatly with the modern sharing economy (Policies, Chapter 1, p 3-16). The following analysis examines the proposal relative to the policies of the City’s Comprehensive Plan. Policies that most pertain to the proposed amendment are provided below. Not all policies carry equal weight, and depend on the specifics of the proposal.

Strong Support Modest Support Modest Non-support Strong Non-support

Policies 1 Development & City Building Neighborhood Conservation, Infill, and Redevelopment

1.7.1 Growth should be accommodated in the city through mixed-use neighborhoods with a variety of housing types and price points.

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1.7.2 Revitalization and stabilization of neighborhoods at risk should be facilitated through grants, loans, housing rehabilitation efforts, commercial investment programs, capital improvements, public-private partnerships, and other actions.

1.7.3 The need to increase housing supply, neighborhood commerce, and to mature as a city should be balanced with the need to protect desired neighborhood character, preserve historic resources, and protect the natural environment.

1.7.4 Unique character areas that have become marked by vacant or abandoned buildings, underutilized older buildings, and low occupancy rates should be priority areas for rehabilitation and adaptive reuse.

1.7.5 Historic and unique neighborhoods with an abundance of desired character should be protected and conserved through the use of zoning, reinvestment, and other tools.

Policies 3 Housing Fair Housing, Universal Design, and Aging in Place

3.4.1 Universal design and lifecycle housing should be encouraged to facilitate the ability of homeowners and neighborhood residents to age in place in their homes and neighborhoods.

3.4.3 Housing rehabilitation programs that assist elderly homeowners to repair, modernize, and improve the energy efficiency of their homes should be supported.

Policies 5 Economic Development Neighborhood Reinvestment

5.2.1 In partnership with neighborhood groups, focused reinvestments to make safe, attractive, and walkable neighborhoods and attract skilled workers to Wilmington should be encouraged. A mix of housing types and price points should be encouraged to diversify neighborhoods, particularly around business clusters and schools.

Business Development 5.3.5 In collaboration with businesses and neighborhoods, issues and conflicts that

inhibit economic growth and neighborhood development should be addressed in order to help grow and expand job opportunities and provide a healthy economic base.

5.3.10 Low-impact, home-based businesses and “cottage industries” should be supported, where appropriate.

Tourism and Hospitality 5.6.3 Diverse and accessible lodging and accommodations to support tourism

growth should be supported through partnerships with developers, investors, and other local organizations.

Policies 11 Historic Preservation Wilmington’s Historic Identity

11.1.2 The city’s historic resources and heritage should be recognized and promoted as an economic asset. As the city grows and redevelops, stewardship of neighborhoods, places, landmarks, historic districts, and landscapes should be fostered.

Housing, Adaptive Reuse, and Rehabilitation 11.3.1 Adaptive reuse of historic buildings and sites should be encouraged to support

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the goals of housing diversity and affordability, economic development, environmental sustainability, parks and recreation, and urban design, particularly in areas with a strong historic context.

11.3.4 Reuse and rehabilitation of existing dilapidated homes should be encouraged and supported for use as scatter-site workforce housing units. The minimum housing code should be applied in a manner that ensures historic preservation.

The issue of regulating uses that have become increasing popular in the new sharing economy has been difficult for cities all over the world to navigate and requires an understanding that these uses require a different regulatory response than more traditional uses. Allowing an entire segment of the economy to remain illegal “forces that economic activity underground, where it is more difficult to understand that nature of the economic activity. Instead, regulations must be “reimaged to achieve the same purpose of the regulations first written for the traditional industry, as well as the new markets created by the sharing economy1.” The city plays an important role in shaping the livability of neighborhoods and promoting a high quality of life for all residents. Short-term lodgers can bring income to a neighborhood, by payments to operators and by patronizing neighborhood businesses. Those same visitors, in abundance, can disrupt a quiet neighborhood and fail to provide the social cohesion expected in a neighborhood, undermining neighborhood character and simple infrastructure, such as adequate on-street parking, and public health and safety measures, such as limiting crowding and noise. The proposed regulations attempt to balance these competing interests in a fair and equitable manner.

The goals of this proposal are to: 1. Ensure the safety, welfare and convenience of renters, owners, and neighboring property

owners throughout Wilmington.2. Balance the legitimate livability concerns with the rights of property owners to use their

property as they choose.3. Recognize the need to limit short-term lodging options within the neighborhoods to

ensure compatibility, while recognizing the benefits of short-term lodging in economic development, business, film, hospital-related short stays, and transitional housing.

4. Help maintain the city’s needed housing supply for residential use, balanced with the need to evolve with current economic realities.

5. While one of the primary purposes of the homestay regulations and the type I whole-house lodging regulations is to help residents offset the costs associated with owning or renting their home, one of the goals of the type II regulations to help limit the proliferation of residential space to tourist use, as well as to protect the supply of affordable housing stock in the city.

6. Protect the character of the neighborhoods by limiting the number and concentration of short-term rentals in residential zones. The transient rental of dwelling units has the potential to be, but is not necessarily, incompatible with surrounding residential uses, as transient occupants do not engage in community-building activities.

7. To balance the regulation of dwellings listed for transient occupancy necessary to ensure that these uses will be compatible with surrounding residential uses, will not materially alter the neighborhoods in which they are located and in a manner that is enforceable and equitable.

1 Miller, Stephen R., First Principles for Regulating the Sharing Economy, University of Idaho College of Law, 2015

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CONCLUSION / RECOMMENDATION

Relative to the adoption of either ordinance presented in this report, staff recommends an effective date of March 1, 2019, which would be consistent with the regulations adopted for homestays and whole-house lodging in non-residential districts.

NEIGHBORHOOD CONTACT Planning Commission City Council

Advertisement Date(s) 12/29/17 / 1/25/18 1/11/19 & 1/18/19

City Council held work sessions on this issue in October 2018 and January 2019. Both ordinances reflect discussion at those work sessions.

The Planning Commission held work sessions to discuss proposed amendments on July 12 and August 23, 2017 and a third work session in October 18, 2017, where public input was heard.

Public input meetings were held on March 17, 2016 and March 14, 2017. Online and paper surveys were conducted in March 2016.

Staff presented the issue to City Council in May, June, October, and November 2016 and again in February, April, May 2017 and November 2017.

Detailed information from public input meetings, surveys, and presentations to City Council can be found online at www.wilmingtonnc.gov/rentals

ACTIONS TO DATE

City Council Scheduled for public hearing, 1/22/19 Work session on part B – 1/7/19 Work session on part B – 10/26/18 Part A amendments approved on second reading, 7/17/18 Part A amendments approved with modifications, first reading, 6/17/18 Work session on parts A &B – 4/30/18 Joint work session with PC and CC on parts A & B – 3/16/18

Planning Commission Tie vote, no recommendation, 1/29/18 Continued to 1/3/18 meeting (subsequently rescheduled to 1/29/18 due to inclement weather) Public hearing on 12/6/17 Work sessions were held with the Planning Commission on 6/7/17, 7/12/17, 8/23/17, and 10/18/17

Information from January 7, 2019 City Council work session: Staff presented an overview of the process to date and highlighted those areas related to whole-house lodging in residential districts where there appeared to be general agreement. Also presented were various options employed by other cities across the country to ban, allow, and/or regulate these uses. At the conclusion of the discussion, City Council asked staff to come back with possible language for two options: a ban these uses and allowing these uses with a cap and separation requirement.

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http://www.wilmingtonnc.gov/rentals


Information from October 26, 2018 City Council work session: Staff presented an overview of the process to date and highlighted those areas related to whole-house lodging in residential districts where there appeared to be general agreement. Also presented were various options employed by other cities across the country to ban, allow, and/or regulate these uses. Information from June 19, 2018 City Council meeting: City Council considered “Part A” amendments only – homestays in residential districts and homestays and whole-house lodging in commercial and mixed-use districts only. Twenty-six people elected to speak on the proposed amendments. Among the opinions expressed were a desire to ban whole-house lodging in residential districts, a desire to allow whole-house lodging in residential districts, a desire for a cap on the number of homestays permitted, concerns about the residential parking program close to downtown, and concerns about the impacts of whole-house lodging on neighborhoods. City Council discussed the need to bring forward the proposed changes related to whole-house lodging in residential districts in a prompt manner. After further discussion focusing primarily on the issues of considering both duplexes and accessory dwelling units as homestays, whether the cap on the number of bedrooms on homestays in residential districts should be two or three, a prohibition on short-term lodging on all ground-floor, street-facing facades in all of the permitted commercial and mixed-use districts (and not just within the CBD), and a delayed effective date, City Council voted 4-2 to approve the amendments as proposed, with three changes: a ban on short-term lodging on ground-floor, street-facing facades for all applicable commercial and mixed-use districts except in properly permitted single-family, duplex, triplex, quadraplex, and multifamily buildings existing at the time of adoption, the inclusion of accessory dwelling units within the definition of homestay, and an effective date of March 1, 2018. The ordinance is amendment to reflect these changes. City Council also directed staff to bring forward the proposed changes related to whole-house lodging in residential districts at their first meeting in October. Information from the April 30, 2018 City Council work session: Staff presented the proposed amendments in three parts. Part A was homestays in residential districts, Part B was homestays and whole-house lodging in commercial and mixed-use districts, and Part C was whole-house lodging in residential districts. Council’s discussion focused on parts A and B, and directed staff to schedule those two components for public hearing, with part C to follow shortly thereafter. There was some discussion about using the university area parking overlay standards as a model for the homestay off-street parking standards. That section of the code is included as an attachment. Information from the March 16, 2018 joint Planning Commission and City Council work session: Staff reviewed the proposed amendments as presented to Planning Commission at their January 29, 2018 meeting. After extensive discussion, points on which there appeared to be general agreement were outlined, including allowing homestays as proposed and allowing whole-house lodging in commercial and mixed-use districts. Council directed staff to separate the proposed amendments into three parts (homestays in residential districts, homestays and whole-house lodging in commercial and mixed-use districts, and whole-house lodging in residential districts) and to present the revised draft at a future work session.

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Information from the January 29, 2018 Planning Commission meeting: After a lengthy discussion, a motion was made to recommend approval of the proposed amendment, striking the off-street parking requirements. That motion failed 2-4. A second motion was made to recommend approval of the proposed amendment, striking the off-street parking requirements, the 400/650-foot separation requirements between type II whole-house rentals, and striking the limit on registration for whole-house lodging to natural persons. That motion failed 3-3. A third motion was made to recommend approval, striking the off-street parking requirements and the 400/650-foot separation requirements for type II whole-house lodging. That motion also failed 3-3. Because no motion was approved, no recommendation was made. Information from the December 6, 2017 Planning Commission meeting: Twenty-seven people elected to speak during the public hearing. Citizens spoke about the proposed separation requirements being too onerous, against allowing whole-house rentals in any residential districts, in support of allowing whole-house rentals with more flexibility, the lack of data to support the proposed amendments, and the potential negative impacts of allowing or disallowing whole-house rentals in residential districts. Overall, there seemed to be general support for the proposed allowance of homestay lodging and whole-house lodging within the commercial and mixed-use districts, while the issue of whole-house lodging within residential districts remained contentious. The public hearing was closed. After some discussion, the commission voted 7-0 to continue the item to the January 3 meeting, with a special start time of 4:00 PM. Information from the October 18, 2017 Planning Commission work session: Following a presentation from staff, the Planning Commission heard public input on the issue. There were several speakers in favor of and in opposition to short-term lodging. Following the public input session, the Planning Commission directed staff to make revisions to the July draft ordinance and to schedule the proposed ordinance for public hearing at the December Planning Commission meeting. Information from the August 23, 2017 Planning Commission work session: Following a presentation from staff, the Planning Commission continued to discuss specific issues related to enforcement, on-site supervision, increased flexibility for homestay lodging, and separation requirements for whole-house lodging. Information from the July 12, 2017 Planning Commission work session: Following a presentation from staff, the Planning Commission discussed parking issues, separation requirements, grandfathering, and the distinctions between allowing short-term lodging in commercial districts versus residential districts. Information from the June 7, 2017 Planning Commission work session: Following a presentation from staff, the Planning Commission discussed enforcement issues, alternative way to limit the number of short-term lodging uses (such as allowing one per every 20 homes rather than one per 650 feet), the possibility of allowing homestays without restriction, and what is driving the need for a code amendment at this time. It was suggested that whole-house rentals be permitted without a separation requirement if there is proximate supervision.

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ATTACHMENTS

1. Complete draft of proposed code changes, including approved “part B” regulations 2. Planning Commission recommendation form (dated 1/29/18)

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LDC-1-717B Attachment 1 – Draft code changes

PROPOSED AMENDMENT

Following are the proposed amendments to the Land Development Code. Additions are underlined, deletions are in strikethrough.

Chapter 18, Article 5. Division II. District Regulations.

***

Sec. 18-177. R-20 Residential District.

(c) Uses permitted under prescribed conditions. The following uses are permittedprovided that they meet all requirements of this section and all other applicablerequirements established in these regulations:

***


Sec. 18-178. R-15, Residential District.

(c) Uses permitted under prescribed conditions. The following uses are permittedprovided that they meet all requirements of this section, Article 6, and all other applicablerequirements established in these regulations:

***



(c) Uses permitted under prescribed conditions. The following uses are permittedprovided that they meet all requirements of this section, Article 6, and all other applicablerequirements established in these regulations.

***




***


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https://www.municode.com/library/nc/wilmington/codes/code_of_ordinances?nodeId=PTIIITECO_CH18LADECO_ART6SUDERE






***




***


Sec. 18-184. Multifamily Residential Districts (MF-L, MF-M, MF-MH, MF-H)

(c) Uses permitted under prescribed conditions. The following uses are permitted provided thatthey meet all requirements of this section, Article 6, and all other applicable requirementsestablished in these regulations.

*** (13) Whole-house lodging

Sec. 18-187. HD, Historic District.


***


Sec. 18-188. HD-MU, Historic District-Mixed Use.

(d) Uses permitted under prescribed conditions. The following uses are permittedprovided that they meet all requirements of this section, Article 6, and all other applicablerequirements established in these regulations.

***

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***

Sec. 18-189. HD-R, Historic District-Residential.

(d) Uses permitted under prescribed conditions. The following uses are permitted providedthat they meet all requirements of this section, Article 6, and all other applicablerequirements established in these regulations.

***


***

Article 6. Division I. Prescribed Conditions, Special Use Prerequisites, and Accessory Uses and Structures.

Sec. 18-331. Whole-house lodging in residential, multifamily, and historic districts.

1. Within the R-20, R-15, R-10, R-7, R-5, R-3, MF, HD, HD-R, and HDMU districts, whole-house lodging establishments are permitted subject to the following conditions. Whole-house lodging is not permitted within the MHP district.

2. Each whole-house lodging establishment shall meet the minimum separation distance from any other residentially-zoned whole-house lodging establishment or any properly permitted bed and breakfast lodging also within a residential zoning district, as measured from parcel line to parcel line. In the case of a duplex, triplex, quadraplex or multifamily development, this shall be measured from the parent parcel lines. The total number of permitted uses shall be limited by a cap.The separation distances and caps shall be:Within the 1945 Corporate Limits: 250 feet, with a cap of no more than 2% of the total number of residentially-zoned and used parcels within the 1945 Corporate Limits being eligible for use as whole-house lodging establishments.Outside the 1945 Corporate Limits: 400 feet, with a cap of no more than 2% of the total number of residentially-zoned and used parcels outside of the 1945 Corporate Limits being eligible for use as whole-house lodging establishments.

3. Such uses shall require a local operator, available 24 hours per day, within 25 miles of the subject property.

4. Registration.(a) The property owner shall register each establishment annually with the city of

Wilmington.

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(b) The owner shall provide proof of possession of the registered premises.(c) A registration number shall be assigned to each registered establishment, which

shall be clearly noted along with any advertisement for lodging.(d) Registration is limited to natural persons only and no person shall be eligible for

more than one registration for a whole-house lodging in any residential district.(e) Active registrations shall not expire; however, all property owners shall renew

registration on an annual basis. Registrations not renewed on an annual basis shalldeem the use terminated by the property owner.

(f) Registration does not vest the premises or the property owner with any rights.Registration terminates upon the transfer of the property.

(g) Only one registration may be issued per property, either whole-house lodging or bedand breakfast lodging, at any given time.

(h) For the initial registration process, a lottery method shall be utilized based on the capand separation requirements. Subsequent registrations will be processed by the citymanager on a first-come, first-served basis.

5. A minimum of one off-street parking space, of an all-weather surface, per bedroom isrequired. Within HD, HD-R, and HDMU districts, only curb cuts existing at the time of theadoption of this ordinance may be used to provide off-street parking. If off-street parkingis not available on site, shared parking or rented spaces in a private or municipal parkingdeck or lot may be used to satisfy this parking requirement. Proof of a shared parkingplan or rental of spaces shall be included with annual registration. A shared parking plan will be enforced through written agreement among all owners of record. An attested copy of the agreement between the owners of record must be approved by the city attorney and submitted to the city for recordation on forms made available in the office of the city attorney. Recordation of the agreement must take place before issuance of a registration for any short-term lodging use to be served by the off-site parking area. A short-term lodging registration shall be revoked if required off-street parking spaces cannot be provided.

6. The use provisions of this section are not subject to variance by the board of adjustment.

7. The definition of “family” and the restriction of a minimum thirty (30)-day rental period inthe MF districts shall not apply to property registered whole-house lodging uses.

8. Any use for which there are three (3) final determinations of violations of the City Codeand/or criminal convictions related to the premises within one (1) year, shall constitute a violation of the terms of registration and shall terminate registration. Offenders shall include property owners as well as lessees, tenants, guests, and occupants. For any registration that terminated due to code/criminal violations, the property owner shall be ineligible for registration for a period of three (3) years.

9. A property owner who terminates registration shall be ineligible for registration for aperiod of three (3) years at that address.

10. Any property owner registering a whole-house lodging shall 1) be responsible forensuring compliance with all federal, state, and local laws, including, but not limited to tax code, building code, fire code, and environmental health regulations for the level of occupancy of the lodging and 2) not allow any party, event, classes, weddings, receptions, or other large gatherings on the premises.

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(a) Property owners registering a whole-house lodging are responsible for keeping in fullforce and effect during all times the unit is used as a whole-house lodging commercial general liability insurance with a total limit of not less than $500,000 each occurrence for bodily injury and property damage.

11. Registration shall terminate upon any one of the following: discontinuance of use for aperiod of one hundred eighty (180) days or more, failure to renew annual registration, transfer of the property.

12. Written notice shall be conspicuously posted inside each short-term lodging unit settingforth the following information:

(a) The name and telephone number of the operator.(b) The address of the lodging, the maximum number of overnight occupants permitted,

and the day(s) established for garbage collection. (c) The non-emergency phone number of the city of Wilmington Police Department.(d) The annual registration number.(e) That parties, events, classes, weddings, receptions, and large gatherings are not

permitted.

13. The operator shall ensure that all refuse is stored in appropriate containers and set outfor collection on the proper collection day and the carts removed from the street or alley on the scheduled collection day, in accordance with Sections 10-14 of the City Code.

14. Preparation and service of food by operators for guests shall be prohibited. No cookingshall be permitted in individual bedrooms.

15. Any establishments existing at the time of the adoption of this ordinance and conformingwith the regulations effective prior to adoption of this ordinance for which registration cannot be accommodated due to the cap or the separation requirements shall have a one-year amortization period. If, after this amortization period, the whole-house lodging establishment is unable to properly register, the use of the property as whole-house lodging must be terminated. Any such establishment shall register with temporary registration with the city manager pursuant to Sec. 18-330(1).

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