Thursday, June 4, 2020

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Moab, UT

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    Despite moratoria, 38% more nightly rental units possible

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    Even if local governments stopped accepting applications for overnight rental developments, the Moab Valley could see up to a 38% increase in the number of available rooms and campground spots.

    The calculation was done by the Grand County Division of Community and Economic Development and assumes that all legally protected applications are eventually built and operated as proposed.

    This full buildout may not happen if some developers decide to repurpose their properties, are unable to spend the money necessary for construction, or if other circumstances arise. Whatever the case may be, the city and county would likely be in violation of state code if they attempt to prevent the developments from opening, and this gives the owners the right to move forward with their projects.

    Protections for existing operations

    According to the division, roughly 4,500 units are currently operating in the valley as overnight rental spaces. About 1,200 of these are RV and campground spots.

    According to Grand County Attorney Christina Sloan, these existing units are allowed by state law to continue operating, as long as the owners exercise “reasonable diligence” in continuing the validity of their initial land use application.

    “As to currently operating overnight rentals, they’ll either be granted rights via an overlay zone or they will be legally grandfathered in upon a showing of proof of the same,” Sloan said.

    Even if the city and county passed ordinances that eliminated the possibility of new overnight rental developments, the total number of rental units is likely to only increase due to the number of vested projects already in the development pipeline.

    What is a vested project?

    A vested overnight rental project is one that is under construction or not yet started but that, under protections of state law, is permitted to be operated as an overnight rental in the future. This allowance remains in effect even if there is a change to land use ordinances affecting the property.

    In Moab, the largest example of a vested project by number of rental units is the Henry Shaw Hotel, a development that will be located at 836 Main street and contain 222 hotel rooms.

    The development is not yet approved, but the developer submitted the application for the project prior to the city passing its overnight lodging moratorium, and this likely means it will eventually be built.

    If the city approves ordinances removing overnight rentals as a use by right where they are currently allowed, existing and vested overnight rental businesses such as the Henry Shaw project will be protected. These properties become what are known as legal nonconforming uses and are protected by state law. They have been “grandfathered” into the project pipeline.

    Because overnight lodging was a permitted use on the Henry Shaw property at the time the developer submitted the application, the city is obligated to approve it as long as it satisfies the building requirements that were on the books at the time. This is nearly identical to how things operate in the county.

    “An owner is entitled to approval of a land use application if it conforms to the requirements of the applicable land use regulations, land use decisions, and development standards in effect on the date the application is complete,” Sloan said.

    This means the application must be marked complete, as long as it is “in a form that complies with the requirements of applicable ordinances and all fees are paid,” according to Sloan. Once the application is approved, all bets are off.

    “The owner’s right to develop their property becomes vested upon approval by the county,” Sloan said.

    As long as an application is complete and follows the rules that were on the books when it was submitted, it will be accepted. Once the application is accepted, the development is vested and can be built and operated. This goes for all vested developments in the valley.

    The rules may be changing, as city and county officials have expressed an interest in removing overnight lodging as a use by right everywhere in the valley. However, the changes will be too late to stop a substantial increase in the number of overnight rental units in Moab.

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