Park City officials and staff members spent months crafting an ordinance that limits “fractional ownership” homes to certain zoning districts but a bill pending at the Utah Legislature could wipe out that effort.

Senate Bill 271 would prohibit a county or municipal legislative body from enacting or enforcing a land use regulation that regulates co-owned homes differently from other residential units or punishing anyone for owning or using the homes.

Park City spokesperson Clayton Scrivner said the legislation would conflict with the city’s general plan, which seeks to protect primary residential neighborhoods, and negatively impact middle-income and affordable housing stock.

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“Residents and businesses are victimized by ambush politics and shortsighted commercialization of neighborhoods,” he said in a written statement.

Under the co-ownership model, companies sell “fractions” of dwellings in the form of one-half to one-eighth shares, including within primary residential neighborhoods. Some owners buy more than one share in a property, which is used for vacations.

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With fractional ownership becoming more common, the Park City Council in October approved amendments to the municipal Land Management Code allowing the units in zoning districts that permit timeshares and private residence clubs, except for subdivisions that have petitioned the municipality to prohibit nightly rentals.

The ordinance added a new fractional dwelling unit use to the code and covers all types including co-owned single-family homes, duplexes, triplexes, and multi-unit residences.

Pacaso, a San Francisco-based company that has 10 fractional ownership homes in Park City, applauded the state legislation.

“Pacaso strongly supports property rights and the Utah Senate Bill 271, which empowers people to co-own homes without interference from local government,” company spokesperson Chrissy Bruchey said in a written statement. “We believe that governments should not infringe on the basic right of individuals, friends, or families to acquire, own, and use a home together.”

But Scrivner said the city has a successful history of embracing its resort short-term housing opportunities while maintaining a “remarkably consistent” primary housing percentage. The bill threatens that delicate balance, he said.

“It’s unfortunate that our residents, staff, and officials put so much time and effort into crafting a first-of-its-kind, pragmatic, community-led ordinance (which Pacaso celebrated as “a big step forward”) only to have the Legislature propose to remove our ability to reasonably accommodate this new commercial enterprise while managing impacts at a neighborhood level,” Scrivner said.

A fractional dwelling is co-owned by the shareholders. With a timeshare, people buy the right to use a property for a certain amount of time. A private residence club is defined by the Land Management Code as a single condominium dwelling unit shared by four to 12 owners or members with property management that provides a reservation system.

Pacaso buys luxury properties, sells the shares and acts as the property manager for a monthly fee paid by the owners. Other companies might operate under another model.

Residents have expressed concern about the turnover at the residences, their upkeep and the impact of the fractional homes on the quality of life in their neighborhood. Some liken the properties to nightly rentals or timeshares and say they don’t fit the character of a single-family home community.

But Pacaso says it already prohibits short-term rentals and the ordinance confirms its properties are not timeshares.

“Like many destination communities, Park City is experiencing a housing crisis as a result of unprecedented demand for second homes and a wasteful legacy model of whole second home ownership, which sees second homes sitting unused for about 90% of the year,” a posting on the company’s blog says. “Pacaso takes up to eight buyers and puts them in one home. Those buyers were looking for single family homes in the community. Instead, they share one luxury home.”

The code changes apply only to future co-owned residences. Homes that already are fractional ownership dwellings are excluded from the regulations.

S.B. 271, which is sponsored by Sen. Michael McKell, R-Spanish Fork, would allow homeowner associations to adopt rules governing fractional ownership homes.

The Senate Economic Development and Workforce Services Committee voted 4-3 Thursday to give the bill a favorable recommendation. Representatives from Pacaso, the Utah Association of Realtors and the Utah Property Rights Coalition spoke in favor of the bill. Moab Mayor Joette Langianes and the Utah League of Cities and Towns asked for further study of the measure.

Scrivner said there is a trend to take away local control from cities.

“Resort communities in Utah and across the country are looking to Park City on this issue as we led out as the first to craft a community-based ordinance,” he said. 

Park City Manager Matt Dias said at a Feb. 16 council meeting that with the economy still strong, legislators are “just emboldened.”

“They are particularly emboldened in the areas of land use, and taking away land use control from cities and towns,” Dias said.

He cited as an example Senate Bill 84, which could force Summit County to approve a proposed Dakota Pacific Real Estate project at the Park City Tech Center.

An existing contract limits what can be built at the Kimball Junction site to mostly tech-related buildings but the bill would amend provisions related to Housing and Transit Reinvestment zones that would give a landowner within one-third mile of a transit hub in a third-class county — one with a population of at least 40,000 but less than 175,000 — the right to build at least 39 dwelling units per acre on the property.

Summit County is the only county that falls under the bill.

“Cities and towns were very unhappy just with the precedent that was being set,” Dias said. “We were opposed to it like everyone else but had very little say or very little we could do about it.”

The legislation was introduced by Rep. Casey Snider, R-Paradise, as House Bill 446 and later adopted as a substitute to S.B. 84, sponsored by Sen. Wayne Harper, R-Taylorsville. The bill has been passed by both the House and the Senate, and opponents are calling on Gov. Spencer Cox to veto the measure.

Summit County Council Chair Roger Armstrong called the bills “a direct assault on local control” by the Legislature and said S.B. 84 targeted the county.

“A bill that restricts the ability to regulate fractional ownership and bills that restrict the ability to regulate nightly rentals are examples of being completely out of touch and legislating exactly the opposite of facilitating housing in communities,” Armstrong also said.

A Jan. 5 municipal staff report about Park City’s 2023 legislative policy platform had predicted challenges at the Legislature involving land use and local autonomy.

Those expected challenges include efforts to curtail local government’s authority to regulate the pace and scale of growth and development and new legislative methods purporting to make it easier to approve and construct housing but with a focus on housing supply and not necessarily focused on affordable housing, according to Dias, who wrote the report.