At a special-called meeting of the Orange Beach City Council on Dec. 15, 2017, the council voted unanimously, 5-0, with Councilman Jeff Silvers absent, to establish a temporary moratorium on short-term rental licenses in residential neighborhoods.
The Ordinance reads as follows:
AN ORDINANCE ESTABLISHING A TEMPORARY MORATORIUM ON THE ISSUANCE OF SHORT-TERM RENTAL BUSINESS LICENSES
1. Orange Beach is a resort island community that attracts thousands of visitors each year. Tourism is an important part of the local economy, including vacation rentals at hotels, condominiums, and increasingly, in residential neighborhoods.
2. The City has heretofore adopted a license code requiring persons engaged in the rental of real estate to purchase a business license. Section 50-51 and section 50-79, Schedule X, Orange Beach City Code. Under the current license code, a distinction is made between long-term rentals short-term rentals.
3. Long term rentals are defined as “rental supplied to any one entity for a period of 180 continuous days or more;” short term rentals are defined as “rental supplied for a period of less than 180 continuous days.” Section 50-79, Schedule X.
4. In recent years, the density and frequency of rentals of less than 30 days in residential neighborhoods has been increasing, due in large part to the web-based marketing tools such as Airbnb, Vacation Rental by Owner, and the like.
5. The increase in transient occupancy has had an adverse impact on residential neighborhoods because they often generate excess noise, traffic, and trash. The Orange Beach Police Department has reported that calls to vacation rentals in residential neighborhoods have increased. Similar detrimental effects have been documented in numerous studies in cities around Alabama and the United States.
6. The Department of Community Development is in the process of studying the issue in order to make recommendations to the Council on the best approach for Orange Beach. The Department has been directed to provide a solution that will protect neighborhoods from the unwanted change in character that is part and parcel of the vacation rental business while accommodating those owners who have traditionally rented their properties.
7. Based on the foregoing, the City Council finds that issuing additional short-term rental licenses prior to the completion of the City’s study and evaluation of the impacts of such residential rentals would pose a current and immediate threat to the public health, safety, and welfare.
8. A temporary moratorium is a reasonable and necessary measure designed to protect the public interest in quality of life and the preservation of public order for residents.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ORANGE BEACH, ALABAMA, AS FOLLOWS:
1. That starting with the effective date of this Ordinance, no new short-term rental license shall be approved or issued for a period of six months, except as provided below:
a. Annual renewals of existing short-term rental licenses shall be permitted as allowed by Chapter 50 of the City Code.
b. New short-term rentals licenses shall be issued only to operators who submit to the Finance Department clear and convincing evidence that, as of the effective date of this ordinance: 1) the operator had made a substantial investment in expectation of operating a short-term rental at the residential dwelling for which the license is sought; and 2) operations related to short-term rentals will not be in violation of any other laws governing the use of the property.
c. No new licenses shall be issued pursuant to the exceptions listed above unless the applicant: 1) pays any fines and/or taxes owed for any operation of a short-term rental license; and 2) certifies that the operation of a short-term rental in the residential dwelling will not be in violation of law or other valid restrictions governing the use of the property, and that any HOA to which the property belongs has been notified of the application for a short-term rental permit, a copy of which notification shall be included with the application.
d. The Finance Director shall evaluate the evidence submitted by an applicant, and may ask for additional information deemed appropriate and shall refer a final decision as to the issuance of the license. Appeal may be made to the City Council.
2. SEVERABILITY. A determination of invalidity or unconstitutionality by a court of competent jurisdiction of any clause, sentence, paragraph, section or part, of this ordinance shall not affect the validity of the remaining parts to this ordinance
3. EFFECTIVE DATE. That this Ordinance shall become effective immediately upon its adoption and publication as required by law.
ADOPTED THIS 15th DAY OF DECEMBER, 2017.
PLANNING (COMMUNITY DEVELOPMENT) STAFF RECOMMENDATION
During the Orange Beach City Council’s Committee of the Whole meeting on Thursday, Jan. 4, 2018, the planning staff’s recommendation to the council was announced and after the recommendation was read by the director of community development, the floor was open for discussion, which lasted over two hours.
Following is the planning staff’s recommendation to the council, as presented on Jan. 4, 2018:
VACATION RENTAL LICENSE MEETING
It is recommended that the following would pertain to the municipal corporate limits with the exception of beachfront properties located east of the westerly 1200 feet of beachfront property abutting the Gulf State Park (Romar Beach).
Creation of Vacation Rental License and Allowable Districts
Create a new business license allowing rental of a single-family residence or duplex for 14 continuous days or less.
Long Term License Cost - $87
Short Term License Cost - $132
Recommended Vacation Rental License Cost - $1000
Prohibit the issuance of vacation rental licenses in RS [Residential] and SFR [Single-Family Residential]/duplex PUD [Planned Unit Development] zoning districts. Exception: Allow for vacation rental license issuance in SFR/duplex PUD zoning districts if specifically allowed by the approved PUD master plan.
Persons who currently have a short-term rental license at the time of the establishment of the short-term rental license moratorium are grandfathered in as a legally nonconforming use until ownership of the property has changed or the rental structure on the site is substantially damaged. It is recommended that a grace period be provided for acquiring the vacation rental license beyond the January 30th deadline.
Vacation rental license application will be routed through Planning & Zoning to determine whether the site is located in an RS or SFR/duplex PUD zoning district. A database will be maintained of vacation rental properties.
Failure to renew the annual vacation rental business license in RS and SFR/duplex PUD zoning districts would result in loss of legal nonconformity vacation rental status.
It is recommended that no building permits for additional sleeping rooms or an increase of sleeping room floor area be allowed for an existing legally nonconforming vacation rental. An expansion of the number or size of sleeping room/s would result in the termination of a vacation rental license if in a legally nonconforming status. Increase of intensity would allow for short-term and long-term rental only (greater than 30 days).
Persons with a current contract for the purchase of a house or duplex prior to the establishment of the short-term rental moratorium and the presence of an active short-term rental license for the house/duplex being purchased will be allowed to acquire a vacation rental license and be considered legally nonconforming.
Revocation of Legally Nonconforming Vacation Rental License
Any person who violates a provision of this ordinance would be subject to citation per Chapter 2 of the City Code of Ordinances.
In addition to the foregoing, the City may institute a civil action in the Circuit Court to restrain and enjoin any conduct that constitutes a public nuisance.
The city of Orange Beach plans to issue a six-month moratorium on new short-term rental licenses in residential neighborhoods this month, according to city officials. Short-term rentals are typically less than 30 days. The increase in transient occupancy has had an adverse impact on residential neighborhoods as they often generate excess noise, trafficand trash, according to the city's ordinance. The city plans to study the issue during the moratorium.