Utah Association of Counties CEO Adam Trupp [Photo courtesy of the Utah Association of Counties]

Cities and counties across Utah made it through the 2017 legislative session with the ability to still regulate owner-occupied short-term rentals, but they can no longer prevent people from listing overnight rentals on websites like Airbnb.

Gov. Gary Herbert signed House Bill 253 into law on March 24, enacting a provision that limits a municipality’s power to clamp down on those who place online advertisements for short-term rentals.

The focus on online listings is a major departure from a previous version of the bill, which would have prevented municipalities from prohibiting overnight and short-term rentals in cases where the property owner lives on-site.

Rep. John Knotwell, R-Herriman, was HB 253’s chief sponsor in the Utah House of Representatives, and he said that lawmakers changed course following a collaboration with stakeholders who took an interest in the bill.

“We removed a piece within the original bill that said no local entity could prohibit owner-occupied rentals,” Knotwell told the Moab Sun News.

As it moved back and forth between legislative committees – and even up until the minutes leading to a final vote – HB 253 underwent revisions to the point that the text of the final version is virtually unrecognizable from earlier drafts.

“Today, the bill says if you advertise on a short-term rentals website, that advertisement cannot be prosecuted,” Knotwell said. “They can’t say, ‘Oh, look, you’re not allowed to advertise’ … Advertising is considered to be free speech.”

The revised bill is not without its critics: Grand County Council member Curtis Wells said it enables property owners to market overnight rentals in certain areas where they might not be permitted under a local government’s zoning laws.

“It’s allowing someone to market a property as a nightly rental, even if it’s an illegal nightly rental,” Wells said.

Moab City Council member Rani Derasary said she can understand the controversy surrounding the issue of online advertising.

“Why would you technically allow something that your zoning doesn’t allow?” she asked.

Having said that, Derasary said she believes the bill that Herbert signed into law could be an improvement on the proposal that was originally under consideration.

“All in all, it might be better than what we would have gotten,” she said.

Moab City Council member Kalen Jones said the original version of HB 253 would have severely limited the ability of the city and other local governments to regulate short-term rentals.

“While this is a small limitation on what we could potentially do, it’s much, much better than the original bill, so I’m grateful to the sponsor and other legislators for making the modifications that they did,” Jones said.

Notably, he said, the enrolled version that is now law does not impede municipal regulations that aim to prevent the spread of short-term rentals in communities like Moab.

“Obviously, I’m concerned that illegal rentals may occur, but the bill does not actually restrict the ability of local government entities to enact zoning regulations,” Jones said.

Both Jones and Derasary said that Moab Mayor Dave Sakrison, along with the Utah League of Cities and Towns and other municipalities around the state, were instrumental in shaping the final bill. According to Derasary, they successfully made the case that every community in the state is different, and that each of them should have the ability to regulate overnight rentals in their own way.

“I get the impression that it would have been a much wider piece of legislation if certain communities hadn’t spoken up,” Derasary said.

Sponsor sees regulation of rentals as property rights issue

Knotwell said he began to study the issue a couple of years ago, after he read reports about municipal efforts to crack down on short-term rentals.

At the time, he’d never stayed at an Airbnb-type rental before, so he said he sought to better understand the issue – and understand why local government entities want to regulate them.

“I’ve always looked at short-term rentals as a private property rights issue,” he said.

On the other hand, some local elected officials view Knotwell’s efforts as an example of state interference in the local decision-making process. In February, the county council sent state lawmakers a letter which states that although nightly rentals play an important role in the local economy, they come with economic and social costs, as well as greater land-use planning challenges.

“If (the previous version of) HB 253 were to become law, it would convert our immense (affordable housing) challenge into an unfeasible task and would subsequently drag our community into disarray,” the letter says. “This is a perfect example of why local control is best.”

Since the original bill was focused narrowly on owner-occupied short-term rentals, Knotwell disagreed with past concerns that county council members and others have raised about the impacts it could have had on affordable housing in the community.

“I would say that I don’t agree that it would reduce (the availability of) affordable housing from that standpoint,” he said.

By some estimates, he said, the number of owner-occupied rentals statewide is as low as 2 percent, while others have placed that figure at somewhere between 5 to 7 percent.

“But either way, it’s in the single digits,” Knotwell said.

The niche of owner-occupied nightly rentals does not compete with workforce housing, Knotwell said, because employees don’t want to end up living side by side with a property owner.

“They’re looking for a private place – a space where they can be on their own,” he said.

Utah Association of Counties (UAC) CEO Adam Trupp said that as enacted, the bill is one that his association supports.

“We see this change as a minor, and reasonable, restriction of government authority over ‘advertising’ while preserving the ability to restrict actual use of property through zoning or other appropriate ordinance,” Trupp said in an email to the county council.

But he told the Moab Sun News that he expects the issue of overnight rentals will resurface at some point in the legislature’s future.

“There will be more dialogue on how this is handled,” Trupp said.

Derasary can also envision further legislative action on attempts to limit local control over short-term rentals.

“From the little bit I’ve seen in the course of a year, I would not be surprised if it came back,” she said.

As it is, Wells said that while the bill’s focus has changed, his unease about the issue remains.

“My concerns are still there, and this is not a good path for the state to go down in terms of allowing counties to regulate their own zoning ordinances,” he said.

HB 253 draws mixed reactions from city, county officials

While this is a small limitation on what we could potentially do, it’s much, much better than the original bill, so I’m grateful to the sponsor and other legislators for making the modifications that they did.