By Nathaniel Smith • The Times-Independent
The Moab City Council drew criticism from property owners throughout the city for its decision last month to pass Ordinance 2018-01. The ordinance made numerous changes to the city’s municipal code, but one change in particular drew the ire of residents: the removal of overnight lodging establishments under 10 units as a permitted use in the C-2 zone.
During the citizens to be heard portion of the regular city council meeting on Tuesday, Dec. 11, numerous residents spoke out against the city’s decision and the lack of transparency in communicating its intentions. Following those comments, the council unanimously voted to adopt a revised ordinance that reaffirmed overnight lodging as a permitted use in the C-2 zone.
Mayor Emily Niehaus and the council members accepted the blame for the lack of transparency and apologized for the issues it caused. “I think it’s clear we may have acted a little bit in haste and in the interest of transparency and better consideration of all interests concerned, I think it’s important we reconsider this ordinance,” said Council Member Kalen Jones.
“This council has acknowledged that the omission of lodging establishments under 10 units likely did not receive adequate noticing in the agenda title,” added Niehaus. The mayor then thanked those who spoke about the ordinance for expressing their concerns without being aggressive.
“We certainly could have been better about involving the public and giving them adequate notices; part of that was my fault and I look forward to rectifying that in the future … I do apologize for that and I will strive to do better next time,” said Council Member Mike Duncan.
Jones also apologized, saying, “I am sorry, as well, for the stress that this has caused, and I really appreciate the thoughtfulness of all your communications to me.”
Council Member Karen Guzman-Newton commended people for their courage to speak before the council and said, “This says a lot about our community because we are in this together. I promise none of us were trying to screw over anyone.”
The decision to remove overnight lodging was originally made at a planning commission public hearing on March 8. Since the C-2 zone is supposed to be a buffer between commercial and residential areas, the council decided a less intensive type of overnight lodging was fitting. They settled on allowing bed and breakfasts to replace overnight lodging establishments under 10 units.
When the ordinance passed in November, it was titled as a removal of conditional uses. Because overnight lodging was a permitted use, property owners were caught off-guard and felt a major change to zoning laws happened overnight. Furthermore, the change had a negative impact on property values, so people were very frustrated at the decision.
The neighborhoods best represented at the council meeting were the Cottonwoods at Williams Way and the Entrada at Moab Townhomes.
Real estate agent Rachel Moody spoke on behalf of the Cottonwoods Homeowners Association and the Association of Realtors. She said, “The last few weeks have been very stressful and emotional for the stakeholders of C-2 property … I regret the lack of diligence, transparency and fairness that was given to this situation. I will not state that it was intentional, but I will not defend it as being unintentional.”
Moody noted that the homes in the 32-unit twin home complex of the Cottonwoods “were not designed to bed and breakfast standards.” Instead they were designed for “permanent residents… short-term rentals, retiree housing and housing for hospital needs.”
She continued, “When Ordinance 2018-01 passed … our owners who had not been in the short-term rental market experienced an instant real estate value depletion of an estimated $150,000, plus their initial added investment, plus a loss of potential future appreciation and annual income.”
Moody estimate that “25 to 30 percent” of owners at the Cottonwoods do not use the property for short-term rentals, but that they all purchased the property knowing the added value that use provides. For those that did participate in that use, Moody said, “Our short-term rental owners were all immediately grandfathered in as legal nonconforming uses with not one notice to our owners nor guidance from the city on how to protect our ownership’s investments.
“The loss of our use by right to all of our owners is impossible to calculate, but we will speculate more than tens of millions.”
The statement on behalf of the Cottonwoods HOA included the request that the council enact an overlay district that would “protect” the development from any changes to the C-2 zone.
Reading a statement from the Association of Realtors, Moody said, “To change a permitted use in a designated zone is a very serious matter with the potential for devastating consequences to the property owners within that zone … Because a change affects current property owners, careful consideration with input from the property owners and stakeholders should be considered.”
She continued, “We recognize the issue of short-term rentals is a growing one across the state of Utah. Our hope is that municipalities or the state legislature can reasonably balance private property rights with the desire to regulate this type of use while providing certainty to the property owner.”
Moody concluded by saying the council should protect commercial zones as much as it protects residential zones. She suggested the council reconsider the ordinance and said, “In anything you do from this point forward, please vow to proceed with due process, transparency, fairness, balance and good policy.” Moody was met with a round of applause from the audience at the end of her statement.
Theresa King commended the council for putting the ordinance back on the agenda at the first meeting following its passage and suggested it was a good idea to reconsider the ordinance.
Ruth Dillon noted that she thought the council’s “intentions were pure,” but said “there needs to be a compelling reason to take nightly rentals out of the C-2 zone.” Dillon added that in her own assessment, she couldn’t find any benefits from the change.
Other property owners, including Adam Black, Scott Howard and Bob Wood emphasized the negative impact on property values caused by the ordinance and asked for more clarity going forward.
Niehaus concluded the discussion by asking for people to serve on the planning commission to advise the council on issues such as Ordinance 2018-01.