Sentinel staff report–
The Citrus Heights City Council will hold a public hearing Thursday on a draft ordinance targeted at regulating and ensuring the collection of occupancy taxes from owners of short-term rental properties.
Short-term rentals, as defined in the ordinance under consideration, include units or rooms rented out for a period of 30 days or less, often arranged through a service like Airbnb or VRBO. Such rentals would be required to obtain a general business license each year at a cost of around $100 for the first year, with annual renewals charged at around $80.
As previously reported, an associated 12% “Transient Occupancy Tax,” or TOT, is already required to be paid by hotels and any short-term rental, but the city estimates it is losing out on between $43,000 and $75,000 in tax revenue each year, without a current way of tracking short-term rentals.
Licenses for short-term rentals are required by the cities of Sacramento, Elk Grove, Rocklin, and Roseville, but Rancho Cordova and Folsom do not require licenses.
According to a staff report during a City Council study session on short-term rentals in September of last year, a licensing requirement would help ensure collection of the tax by letting the city know where the rentals are located. The draft ordinance includes a provision allowing for a short-term business license to be revoked for failure to remit the tax.
A staff report included in the council’s March 24 agenda packet says the license would also give the city contact information for the rental’s operator, in the event of enforcement issues arising at the property. The report said 13 out of 52 short term rental properties identified in the city had generated at least one call for service from the Police Department over the past two years, although staff said “not all calls were able to be verified as caused by an STR tenant.”
The report also noted that one of the properties generated 11 calls, which were verified to be caused by short-term rental tenants. Councilman Bret Daniels has criticized the proposal as being a “solution looking for a problem,” citing there being less than 70 short-term rentals in the city compared with more than 15,000 rental units city-wide.
Related: Councilman criticizes proposed rental regs as ‘a solution looking for a problem’
The proposed ordinance allows for short-term rentals in a wide range of homes, townhomes and condos, but specifically excludes newer accessory dwelling units and low-income housing from being used as STR’s.
“Accessory dwelling units constructed after January 1, 2021, inclusionary housing units, or other income-restricted housing units are prohibited from being used as a short-term rental,” the draft ordinance reads.
Proposed regulations are relatively short, but impose a cap on the number of guests allowed, and specify that the rental can’t have an adverse affect on the neighborhood:
- Short-term rentals shall not be used by more than two guests per bedroom plus two additional guests between the hours of 10:00 p.m. and 7:00 a.m.
- Short-term rentals shall not adversely affect the residential character of the neighborhood nor shall the use generate noise, vibration, glare, odors, or other effects that unreasonably interfere with any person’s reasonable enjoyment of his or her residence. To this effect, the short-term rental activity shall comply with all provisions of the City of Citrus Heights Municipal Code.
- No person shall advertise any short-term rental without an issued short-term rental business license.
- The host shall fully comply with all the requirements of Chapter 86 (Transient Occupancy Tax) and any successor sections.
The council is slated to hold its public hearing on the ordinance during its March 24 council meeting, which begins at 7 p.m. at City Hall.
If adopted by the council, the regulations would become effective on May 14, 2022. Those interested in sending comments directly to the City Council members can do so by emailing citycouncil@citrusheights.net.
The draft ordinance can be viewed in full on the city’s website. (click here)
