Proposed changes in licensing and fees for home-based businesses, food trucks and those who own nightly or short-term rental properties were discussed at the July 25 Moab City Council meeting.
A public hearing regarding those proposed changes will take place at the Aug. 14 council meeting, 217 E. Center St., at approximately 7:10 p.m.
The Utah State Legislature updates its various codes and regulations almost every year. Moab has dealt with those changes in the past by adjusting its municipal codes in a “piece meal” fashion to stay in compliance with state law, Moab City Manager David Everitt said. Discussion at the July 25 city council meeting was a step toward making municipal codes consistent with Utah code, Everitt said.
While a business license continues to be required of home-based business owners, if proposed changes are passed, there will no longer be a nominal fee attached to those licenses. A home occupation is defined as one that is conducted entirely within the dwelling, is secondary to the use of the dwelling for residential purposes, and does not change the residential character of the neighborhood.
A business license is not required for a business operated occasionally by someone under the age of 18; or for people who hold garage or yard sales no more than twice a year.
Another proposed city code change would affect property owners who operate nightly or short-term rentals. Under the city’s proposed changes, those who have short-term rental properties would be required to obtain a business license to be compliant with state rules and regulations. Under the current city code, a property owner does not need a business license if the rental house or apartment is being managed by a licensed property management business.
The city’s business license fee structure for nightly or short-term rentals is $45 per unit for the business license, plus an additional $4 per bedroom, said Lisa Church, city communications and engagement manager.
Grand County charges $100 for a business license for people operating short-term or nightly rentals. That fee is pro-rated; the fee would be $50 for people applying during the third quarter.
All new overnight or short-term rental owners must also pay a one-time $350 application fee, said Kaitlin Myers, Grand County community and economic development specialist.
“We’re strengthening requirements for nightly rental licenses,” Everitt said. “Each property owner must have their own business license and sales tax ID number so the city can keep track of all of them.”
Moab is simply “playing catch up” on how nightly rentals are overseen statewide, Everitt said.
“I come from Salt Lake City, where if you owned a property and rented it out (nightly), you had to have a business license,” he said. “It’s an important step for us to take.”
The county began enforcing licensing requirements a couple of years ago, Myers said. The number of property owners that are out of compliance has grown since she gave a presentation to city council a week ago.
“Currently we have 32 property owners who are out of compliance,” Myers said. “Four are in improper zoning, where it’s not allowed.” The remainder have not filed for business licenses.
Six properties are exempt from having to get a business license, while 349 owners are in compliance, she said.
Property owners who simply rent a room in a house are exempted from the business license requirement.
Kristie Whipple, a real estate agent with Anasazi Realty, said she doesn’t see anything wrong with requiring people who operate nightly rentals to get a business license. A lot of those property owners do not live in Moab, she said.
“They are competing with hotels, and if you’re running a business, that would be logical,” she said.
Charley Every, general manager at Red Cliffs Lodge, agreed. He said it’s only fair to require the property owners who rent houses on a nightly basis to be licensed.
“We pay our fair share. We pay a TRT (Transient Room Tax) tax, yet we have to compete with people who aren’t doing it fairly,” Every said. “Just because you can get a business license based on a zoning district, doesn’t mean you should.”
Every said entire neighborhoods have become displaced where homes that were originally built for residents have been turned into nightly rentals.
The proposed municipal code changes will also affect how the city deals with alcohol sales.
“The city is getting out of the business of licensing alcohol sales,” Everitt said. There are exemptions for special events.
The rule surrounding special events and street performers is being refined to make the permitting process clearer and more understandable for people applying for special event permits, Everitt said. The city has attempted to minimize duplicative or conflicting language in the code, he said.
“A lot of this is driven by a number of changes at the state level that dictate what we can and cannot do with licensing,” Everitt said. “We’ve updated the code to deal with food trucks and home occupations in a way that is compliant with state code.”
For example, a Moab food truck that passes a health inspection in another Utah town, will not be required to undergo an additional health inspection in Moab.
“We’re required to accept that inspection in our jurisdiction,” he said.
Moab will also be required to issue licensing fees that reflect expenses the city incurs to administer oversight of the businesses. Once city council approves the proposed changes Moab officials will do a fee study to determine its cost in administering the rules.
There will be a followup briefing before the Aug. 14 public hearing. Once community members have had an opportunity to give feedback, council will refer potential action to the next council meeting on Aug. 28.
Changes that would make city consistent with county, state also proposed for alcohol permits and home-based businesses
“We’re strengthening requirements for nightly rental licenses. Each property owner must have their own business license and sales tax ID number so the city can keep track of all of them.”
