Park City rental owners check in with worries about bill
February 27, 2016
A bill aiming to make it easier for people to start small businesses in their homes has racked up the support of many Utah legislators — but it has some at City Hall and in the Park City rental property business booking their complaints.
H.B. 132, sponsored by Rep. Jacob Anderegg, R-Lehi, would make it illegal for municipalities to force many home-based businesses that don’t have a large impact on their neighborhoods to pay fees to receive business licenses. Other in-home businesses that are operated only occasionally — as many online rental properties are — would be able to forego licensure altogether.
Anderegg said the bill, which earned approval from the Utah House of Representatives and is awaiting a vote in the Senate, is directed at easing the burdens of small, in-home businesses whose cities or counties impose unfair licensure fees.
"If you’re a computer programmer working out of your home, there’s just no reason for licensure," he said. "I was trying to just say, ‘Let’s get out of the way of very small businesses.’"
But in Park City, the bill could mean that many people offering their homes for nightly rental through websites such as VRBO and Airbnb may no longer have to get business licenses. That has sparked concerns in town that those renters, who have become increasingly common here, would have an unfair leg up on brick-and-mortar rental businesses that would still have to maintain licensure.
According to Cherie Wellmon, business license inspector for Park City Municipal, rental properties — including online rentals — operating in Park City must obtain nightly rental licenses. Those licenses cost $149 plus $28.74 per bedroom and must be renewed annually. Additionally, licensed rental businesses must pay transient room taxes equal to 10.95 percent of nightly revenues, in addition to state and federal taxes.
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Jim Bizily, owner of Park City Rental Properties, which operates two offices in the area and would not be exempt from licensure if the bill passes, said that nightly rentals not subjected to regulation would have a head start on his company. One of his chief concerns is that it might be easier for unlicensed rentals to get away with not paying the proper taxes.
He said the savings from not paying licensing fees or taxes would allow those businesses to charge lower prices.
"It doesn’t make any sense for people to skate under the radar without paying taxes or without the nightly rental licenses," he said. "The playing field needs to be level so it’s fair for everybody."
Wellmon echoed many of Bizily’s concerns.
"We would end up charging hotels and (some other) businesses for their licenses," she said. "Yet everybody else wouldn’t have to pay anything. We don’t want to make things difficult for the people who are trying to do things right. I can understand them feeling like they’re being (hurt) because they made the right phone call when everyone else around them didn’t. We want it to be fair. Everybody needs to follow the same rules."
For his part, Anderegg wasn’t targeting rental properties when he sponsored the bill, and he doesn’t believe it would actually hurt brick-and-mortar renters. He said vacationers don’t choose where to stay based on whether a business is licensed or not, and that some businesses having to pay a licensure fee while others don’t isn’t going to have much of a measurable impact.
"I’m not saying that if one has to pay a fee and the other doesn’t isn’t some sort of advantage," he said, "but it’s not a very big one."
Park City’s critics of the bill argue, however, that the problems caused by unlicensed rental properties are already prevalent in town and would only worsen if the legislation passes. Bizily said illegal, unlicensed competition has become a thorn in his side in recent years, as services such as VRBO and Airbnb have become popular in town.
"Right now, it seems like there are already so many Airbnb’s and VRBO’s that are running illegally," he said. "I can’t imagine all of these people have the nightly rental licenses and pay taxes like we do. I look at the list of nightly rental licenses, and then I look at the list of properties on VRBO, and it’s like, ‘Gee, there’s twice as many VRBO listings as there are nightly rental licenses.’"
Wellmon estimated that there are currently about 1,500 to 1,800 licensed rental companies in town, and she agreed that hundreds more are operating without licenses. Illegal rental properties have become so common, in fact, that City Hall hired an employee last fall to comb through online listings and match them with nightly rental licenses. City Hall then contacts unlicensed renters and urges them to get licensed.
"It’s scary for me," Bizily said, "because it impacts my business with a bunch of unregulated, independent owners who aren’t following the rules."
Apart from trying to level the playing field, Wellmon has other concerns about the bill, as well. For instance, it could remove City Hall’s ability to regulate things such as parking and garbage collection at unlicensed rentals. Additionally, those properties would not have to undergo the safety inspections that are standard before the city doles out nightly rental licenses.
"We have a lot of older homes that have a lot of things that need to be brought up to more current code in order for it to be considered safe," Wellmon said. "One of the things I find all the time is a gas-fired appliance in a closet in a bedroom. If you don’t have weather stripping and a door closure to make sure there’s a tight seal, and if you don’t have a CO detector in that room, and something goes wrong, there’s no way to prevent it. It doesn’t take very much CO to actually kill someone. The safety is a huge concern."
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