Lodging ban could face legal challenges, city officials warn

A construction crew works on the Wingate Wyndham on Highway 191. Proposals to ban future lodging developments have gained traction among elected officials and the public as the city and county grapple with future land use plans during a moratorium on lodging. Photo by Carter Pape

During a discussion of future land use plans regarding lodging in Moab, multiple members of the city staff expressed concern with an idea among the Moab City Council and public to remove overnight rentals as a protected use within city limits.

Planning Director Nora Shepard told the city council during a regular meeting Tuesday, June 11, that “somebody could sue [the city]” if it adopted a ban on new lodging developments.

City Manager Joel Linares told the council that the idea presented legal vulnerabilities for the city. He added that the risk could be mitigated if the city made plans and showed intentions to re-establish lodging as a protected, conditional use within a short timeframe (for example, six to twelve months), but a longer timeline would mean more legal risk for the city.

In response to a question from Council Member Karen Guzman-Newton, Linares said, “The question you’re asking is: ‘How long can we go with balanced growth, option five, before we have to actually adopt an overlay or permit some type of overnight rentals to come into the fold.’ That’s a great question. I don’t have the answer.”

The “option five” he mentioned refers to the fifth choice presented by planning and zoning consultant Landmark Design during a public meeting in May regarding future land use plans for regulating lodging in Moab.

Grand County Attorney Christina Sloan said that the city and county “can’t prohibit [overnight accommodations] from the city or the county,” but that they could legally prevent lodging developments where they do not already exist by removing them as protected uses from general commercial zones.

“We can’t remove all [overnight accommodations] as a use by right and grandfather-in existing uses,” Sloan said. “However, we can regulate them by defining new base zones or overlays that allow [overnight accommodations] only on those properties that are already vested as nightly rentals. We can also regulate expansions, conversions, etc.”

Banning lodging is ‘walking into an unknown’

Linares said earlier in Tuesday’s meeting that, were the city to remove lodging completely as a use by right within city limits, the council would be “walking into an unknown.”

Linares told The Times-Independent that courts have historically ruled against municipalities that pass ordinances to ban certain types of developments. The particular example is sexually oriented businesses, such as strip clubs and similar operations.

When cities have attempted to ban sexually oriented businesses from being developed, courts have required that the restrictions be reasonable, according to the Municipal Research and Services Center, a nonprofit that provides legal guidance to local governments in Washington state.

“While it is unlikely that local governments may totally ban sexually oriented businesses, location and licensing restrictions may be imposed since the courts recognize that communities are entitled to protect themselves against the ‘secondary effects’ of such businesses,” the organization said on its website.

Linares pointed to this body of case law regarding sexually oriented businesses as a reason for his concern that a total ban on lodging in Moab could face legitimate legal challenges.

Linares noted as an aside that, under current Moab land use codes, sexually oriented businesses are permitted in any commercial zone in Moab.

Handling the edge cases

One open question, according to Shepard, is how to handle existing developments that are currently permitted to operate as lodging businesses.

As of June 1, a business license is required to operate short-term rentals in Moab. Shepard said that this new requirement has been helpful in inventorying where those businesses are located, but she had objections to using business licenses as the main method for regulating where lodging is a permitted use.

“I don’t believe business licenses are the best way to regulate land use,” Shepard said.

Shepard said there are potential alternatives for granting legal status to these existing developments, such as maintaining lodging as a protected use in the city’s C2 zone, where many of the developments in question are located.

“I think there are some alternatives to look at those existing areas and make them legal somehow, and I don’t know how today, but I think there are some options that we want to forward to the planning commission,” Shepard said.