Park City considering regulations for co-owned vacation homes
With “fractional ownership” of vacation homes increasing, City Hall staffers have crafted proposed regulations designed to accommodate the arrangement while also protecting neighborhoods.
Use of residential units by multiple parties is not new to Park City, but companies have been modernizing the practice of co-ownership in the past few years by selling “fractions” of single-family dwellings in the form of one-half to one-eighth shares, according to a Park City Planning Department staff report. Some owners buy more than one share.
The report says some firms create a limited liability company, or LLC, and then manage the property for multiple owners by providing furnishings, maintenance, cleaning and scheduling services.
Fractional ownership regulations are in proposed amendments to the Park City Land Management Code.
“While fractional ownership may make vacation properties more affordable for some users through a shared economy, finding a balance that protects Park City’s primarily residential Zoning Districts for full-time residents is important,” the report says.
The Park City Council and Planning Commission are scheduled to hold a joint work session on Aug. 30 about the proposed amendments. No public comment will be taken at this meeting, which begins at 5:30 p.m. at the Marsac Building.
To attend virtually, go to https://parkcity.org/government/city-council/city-council-meetings/current-public-meeting-info-listen-live.
The City Council is scheduled to hold a public hearing Oct. 6, when a vote could be cast on the amendments.
Planning Director Gretchen Milliken said in an interview Park City wants to be ready if fractional ownership becomes more common.
“We just don’t know how popular this is going to be, what kind of impact it’s going to have, how many companies we’re going to be having in our community wanting to do this,” Milliken said.
Fractional ownership properties differ from timeshares and private residence clubs.
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.
What sets the current fractional ownership model apart is the shared ownership of a single-family dwelling for vacation purposes in a primarily residential neighborhood, a city report says.
The proposed amendments would permit fractional ownership of single-family homes in zoning districts where timeshares and private residence clubs are allowed.
The amendments would prohibit fractional ownership of single-family homes in primarily residential areas, including the historic residential zoning districts, single-family zoning district and estate zoning district. Homes that already are fractional ownership dwellings would be grandfathered.
At an open house on Tuesday at the Park City Library, municipal staff members, a Realtor and representatives from Pacaso, a San Francisco-based company that has 10 fractional ownership homes in Park City, answered questions about the practice.
Under its model, Pacaso purchases luxury homes, sells the fractional shares and acts as property manager for a monthly fee paid by the owners. The company – which has paused acquiring homes until the amendments are complete – retains no ownership in a property after it’s sold. Other fractional ownership companies might have different models.
Community members expressed concerns about turnover at the vacation homes, upkeep of the properties and the possible impact on the quality of life in their neighborhoods.
Vincent (Van) Novack, who lives in the Synderville Basin, said he worries if Park City allows fractional ownership in neighborhoods, Summit County will adopt similar rules. One reason he and his wife bought a home where they did was because they did not want to live around short-term rentals, he said.
Whitney Curry, Pacaso chief marketing officer, told The Park Record the company strictly prohibits short-term rentals and its staff members constantly patrol to ensure that rule is being followed.
Curry said co-ownership consolidates the demand for home ownership.
“You’re able to take eight homeowners who are previously shopping for a single home and bring them together into one home that is typically more expensive than a home that they could afford if they were shopping individually,” she said.
Moving buyers upmarket who were otherwise shopping for a home closer to the middle tier leaves more inventory with less competition for Parkites who are looking for a home, Curry said. Pacaso homes in the Park City area have a median price of $5.86 million, she said.
In addition, fractional ownership “right sizes” purchases, Curry said. The average vacation home is used just 11% of the year, while the average Pacaso home is occupied 91% of the year, she said.
“Our owners love Park City and they want to be a part of the community,” Curry said.
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