2024-017 Short Term Rentals ISR May 8,2024 Report No. 2024-017
INFORMAL STAFF REPORT
TO MAYOR AND CITY COUNCIL
SUBJECT:
Short-Term Rental Code Amendments
BACKGROUND:
Staff is preparing to bring forward proposed Code amendments relating to Short-Term Rentals to
the Planning and Zoning Commission and City Council at their May 29, 2024 and June 4 2024,
respectively. The Short-Term Rental Code amendments are the product of extensive discussion
with the Development Code Review Committee, completion of a Public Engagement Plan, and
research conducted by staff of the City's requirements against other recent legislation as well as
how other cities regulate the land use.
Following a continuance of the public hearing from their February 28, 2024 meeting, the Short-
Term Rental Code amendments were unanimously recommended for approval by the Planning
and Zoning Commission [7-0] at their March 20, 2024 meeting. However, due to continually
evolving litigation surrounding Short-Term Rentals, staff has determined it necessary to conduct
a broader public notification process for the Short-Term Rental Code amendments by providing a
mailed notice to property owners instead of following the standard legal notice published in the
newspaper as allowed by state law.
Therefore, staff is sending this item back to the Planning and Zoning Commission for public
hearingon n May 29, 2024. Staff has sent mailed notice of public hearing (See Attachment 3) for
both the Planning and Zoning Commission and City Council meetings to property owners within
all zoning districts, except Light Industrial, Heavy Industrial and Public Facilities as well as some
older Planned Developments,which do not allow for the use under current or proposed regulations.
A total of 29,371 notices were mailed to property owners.
A video recording of the February 28th Planning and Zoning Commission meeting may be found
here: Feb 28, 2024 Planning and Zoning Commission on 2024-02-28 5:00 PM - Denton,TX (swagit.com)
A video recording of the March 20"' Planning and Zoning Commission meeting may be found
here: Mar 20, 2024 Planning and Zoning Commission on 2024-03-20 5:45 PM - Denton,TX(swagit.com)
SUMMARY:
The following is a high-level overview of some of the more frequently asked questions related to
the proposed code amendments.
What is a Short-Term Rental?
A Short-Term Rental is defined as the rental of an entire dwelling unit for monetary consideration
for a period of time less than 30 consecutive days. This could be a house, an accessory dwelling
unit, or an individual apartment and is not considered the same as a bed and breakfast, boarding
May 8,2024 Report No. 2024-017
or rooming house, hotel, or motel. Short-Term Rentals are commonly advertised and rented
through sites such as AirBnB and Vrbo.
What is changing and why?
The purpose of the proposed DDC amendments is to allow Short-Term Rentals in all zoning
districts that allow residential uses, including adding the use to the Mixed-Use Downtown (MD),
Mixed-Use Regional (MR), Suburban Corridor(SC), Highway Corridor(HQ and General Office
(GO) districts. Additionally, the amendments are intended to provide additional clarification and
operational controls related to this use. The amendments being proposed balance current land use
rights, coupled with the desire of the community to preserve residential neighborhood character
yet allowing higher densities of short-term rentals within certain areas of the City.
Several of the proposed changes are designed to clarify and consolidate existing short-term rental
regulations, including better defining what classifies as a short-term rental and modification to the
registration process. Additionally, in order to limit the number of short-term rentals occurring in
residential neighborhoods, the City is introducing a 1,000-unit cap on the number of short-term
rentals that can be allowed in the City in residential zoning districts. Additionally, in residential
zoning districts,a minimum 100-foot distance separation is required between properties with short-
term rentals. Lastly, the new requirements will limit the number of short-term rentals allowed in
multifamily developments by limiting the allowable number of units to be registered as a Short-
Term Rental to 10%.
What is the 1,000 Unit Cap?
The 1,000 Short-Term Rental limit is a cap on the number of Short-Term Rentals that could be
allowed in residentially zoned districts (Rural Residential-Residential 7) in a given calendar year.
The 1,000 Short-Term Rental limit is a proposed cap on the number of Short-Term Rentals which
may be permitted in residential zoning districts,not an invitation to bring more Short-Term Rentals
into these areas. 1,000 units is approximately 3% of all residentially zoned parcels in the City of
Denton.
How many Short-Term Rentals exist in the City today?
There are estimated to be approximately 353 Short-Term Rentals in City. Of those, only 33 Short-
Term Rentals have registered with the City as required by the Denton Development Code and are
therefore legally conforming to current standards. Staff does not anticipate the proposed Code
amendments will affect the total number of Short-Term Rentals operating within the City;
however, one of the goals of the proposed amendments is to achieve greater compliance with the
DDC, and therefore the number of registered Short-Term Rentals is anticipated to increase.
What resources are available for those who have questions regarding the amendments?
City staff will be hosting a Town Hall on Thursday,May 23,2024,at 6:30 p.m. in the Development
Services Center to provide an overview of the proposed amendments and answer any questions
regarding the project.In addition,on the Discuss Denton webpage dedicated to Short-Term Rentals
individuals may access and review the proposed amendments, be notified of key upcoming dates,
and review F.A.Q.s related to the project. The Discus Denton webpage may be found here: Short-
Tenn Rentals I Discuss Denton
May 8,2024 Report No. 2024-017
When will the Short-Term Rental Code amendments be scheduled for Public Hearing?
The Planning and Zoning Commission will conduct a public hearing and make a recommendation
on the proposed amendments at their May 29, 2024, meeting. City Council will conduct a public
hearing and act on the proposed amendments at their June 4, 2024 meeting.
A more detailed summary of the proposed Code amendments and detailed information related to
the history of the project is included in this report below.
SUMMARY OF PROPOSED AMENDMENTS AND PROJECT HISTORY:
Summary of Amendments
A summary of the proposed modifications is included below; a redline draft of the relevant DDC
Sections with further discussion can be found attached to this report:
• Amend Table 5.2.A Table of Allowed Uses to allow Short-Term Rentals as a permitted use
in any Zoning District that allows residential uses by right or by Specific Use Permit; new
districts being added include Mixed-Use Downtown (MD), Mixed-Use Regional (MR),
Suburban Corridor(SC), Highway Corridor(HC) and General Office (GO).
• Amend Section 5.3 Use-Specific Standards by amending Subsection 5.3.1.D Maximum
Persons Occupying a Dwelling Unit to include Short-Term Rentals as an exempt land use
from this regulation. This amendment is consistent with recent court rulings as in the case
of Zaatari v. City of Austin, 615 S.W.3d 172, 199 [Tex. App. 2019]).
• Amend 5.3.5 Commercial Use Specific Standards, Subsection T. Short-Term Rentals as
follows:
1. Registration Requirements — amendments to this Section include: clarification that a
single bedroom or a unit may be listed as a Short-Term Rental,requirements to provide
management company information (when applicable), clarifies Local Emergency
Contact is a defined term in the DDC, and adds additional detail regarding registration
submittal requirements.
2. Registration Certificates—this section is a proposed addition to the Short-Term Rental
Use Specific Standards to address the results of the short-term rental preference survey,
reflecting a desire in residents to maintain the integrity of single-family areas while
allowing higher densities of short-term rentals within certain areas of the City. The
proposed amendments are differentiated between properties that are within residential
versus non-residential zoning districts, which are less likely to be disrupted by the
presence of Short-Term Rentals due to current density, and therefore,provide adequate
opportunities for this use to operate outside the City's residential neighborhoods. These
differences are outlined below:
Registration Certificates in Residential Zoning Districts (RR-R 7):
• One thousand (1,000)- Registration Certificates. The Department of
Development Services shall issue a maximum of one thousand (1,000) short-
term rental (STR) registration certificates per calendar year in Residential
Zoning Districts (RR-R7). Note for clarification: registration certificates are
per STR unit, and the registration certificate cap applies to all residential use
May 8,2024 Report No. 2024-017
types (single-family, duplex, three-and four plexes, multi family, etc) within
the RR-R7 zoning districts.
• The Department of Development Services shall process applications in the
order of receipt and shall issue new registration certificates in the order that
complete applications are received.
• If the number of registration certificates reaches the one thousand (1,000)-
registration certificates limit, then the Department of Development Services
shall stop processing applications and add applicants to a waiting list.
• A maximum of two (2) STR registration certificates may be issued per parcel.
• A short-term rental unit cannot be within 100 feet of an existing short-term
rental unit, measured at the property boundary. This does not apply to units on
the same parcel.
Registration Certificates in Non-Residential Zoning Districts:
• Registered Short-Term Rentals (STR) in Non-Residential Zoning Districts do
not count toward the 1,000-registration certificates cap,regardless of what type
of residential dwelling the STR is located within.
• For multifamily developments, no more than 10% of the units within a given
development may be registered as a Short-Term Rentals.
• At least two (2) Short-Term Rentals shall be registration certificates per
multifamily development.
• Short-Term Rentals within Non-Residential Zoning Districts are not subject to
the 100-foot separation rule.
3. Operation—amendments to this section include: clarification of parking requirements
for Short-Term Rentals, specification that Short-Term Rentals may not be advertised
as party venues, refinement of language to provide reference to enforcement
regulations within the DDC, clarification that a Short-Term Rental may only be
operated in a permanent structure, and consolidates existing language.
4. Writing Briefing and Safety Features — amendments to this section are to clarify an
owner's or management's responsibilities to provide safety information to guests in
writing.
S. Notification of Approval of Short-Term Rental Registration—amendments to this
section are to clarify when notification of an approved Short-Term Rental shall occur
and what information shall be included within the notification.
6. Registration Term, Fees, and Revocation—amendments to this section are to revise
and clarify the circumstances under which the Director may revoke a Short-Term
Rental permit and specify the appeals procedure for such revocation.
7. Right to Inspect Premises—amendments to this section are to specify the
circumstances under which a inspection of a Short-Term Rental may occur.
• Table 7.9-I:Minimum Required Off-Street Parking—amendments to this section are to
specify the maximum number of vehicles allowed on premise for a Short-Term Rental
shall be based upon the number of spaces available on-site.
• Section 9.2 Definitions — amendments to this section are to revise definitions for Short-
Term Rental and Local Emergency Contact:
May 8,2024 Report No. 2024-017
o Short-Term Rental—this definition is amended to clarify the duration of stay for a
Short-Term Rental shall be not less than 24 hours and not greater than 29
consecutive days, as well as allow for a bedroom to be a Short-Term Rental.
o Local Emergency Contact — this definition is amended to clarify and consolidate
the requirements for Local Emergency Contact.
Project History
At the beginning of 2023, City staff began reviewing the standards set forth in the Denton
Development Code(DDC)regarding Short-Term Rental uses in response to the 5th Circuit Court's
decision in the case of Hignell-Stark v. City of New Orleans. In this case, the 5th Circuit held that
the City of New Orleans' regulation requiring Short-Term Rental applicants to demonstrate that
the Short-Term Rental dwelling unit was their primary residence was unconstitutional under the
dormant federal Commerce Clause. In reviewing this court decision, staff determined that a DDC
requirement that a Short-Term Rental be the applicant's primary residence could be legally
challenged and initiated the Code amendment process to remove this requirement from the DDC;
this change was adopted by City Council on July 25, 2023.
During that same time, staff reviewed the City's requirements against other recent legislation as
well as how other cities regulate the land use. In addition to the change noted above as a result of
the 51h Circuit's decision, staff identified several areas where there was a need for clarification and
consolidation of existing language in the DDC relating to Short-Term Rentals including addressing
the Use-Specific Standards due to the potential for application or enforcement challenges. While
many of these changes began with the intent to clean up and clarify items within the Code,
throughout the process additional legislative issues came to light through court cases involving the
cities of Arlington, Fort Worth, and Dallas that helped inform staff recommended changes. The
history of the process as well as a summary of the proposed changes are provided below.
On March 13, 2023, staff presented to the Development Code Review Committee (DCRC) their
findings regarding the City's current regulations related to the Short-Term Rental land use,
discussed reasons why the Code amendments are needed, shared how other cities regulate Short-
Term Rental uses, and recommended proposed Code amendments. Throughout the Spring of
2023, the DCRC continued to discuss the proposed Code amendments related to Short-Term
Rental uses at a series of meetings.
After completing their review and providing staff direction on proposed Code amendments, the
DCRC and staff determined it necessary to prepare a Public Engagement Plan in order to receive
input from the community related to the proposed Short-Term Rental regulations before initiating
the formal public hearing process associated with DDC amendments. As part of the Public
Engagement Plan, staff held two Town Hall Meetings (one in person and one virtually) in August
2023 and conducted an online survey regarding Short-Term Rentals.
The online survey was published on Discuss Denton on Friday, August 18, 2023, and closed on
Monday, September 11, 2023, and a total of 224 individuals participated. The survey consisted of
20 questions, which ranged from general questions related to Short-Term Rentals, to specific
questions related to possible DDC amendments.
May 8,2024 Report No. 2024-017
The full survey results report is attached to this report.
During the DCRC meeting on September 25, 2023, staff sought direction from the DCRC on how
to proceed with maximum densities/distance separations for Short-Term Rentals given the survey
results indicated a desire in respondents to maintain the integrity of single-family areas while
allowing higher densities of Short-Term Rentals within certain areas of the City. Discussion
centered around exploring different density thresholds for Short-Term Rentals and considering
imposing a maximum number of allowable Short-Term Rentals within the City.
In the Fall of 2023, the DCRC revisited the density limitation and distance separation discussions
considering the survey responses and explored various options for implementation. Over the
course of these discussions, staff presented the potential implementation of a maximum number of
Short-Term Rental permits issued per year in residential zoning districts. Conversations related to
a maximum number of Short-Term Rental permits issued in residential zoning districts focused on
the appropriate number of allowable units, separation distances between registered units, and a
maximum allowable number of units that may be registered within multifamily buildings.
The DCRC directed staff to move forward with a maximum number of Short-Term Rental permits
which may be issued per year in residential zoning districts and agreed upon a cap of 1,000 permits.
It was also agreed that there should be a limitation on the number of units allowed to be registered
as Short-Term Rentals within multifamily buildings, and the Committee agreed to a cap of 10%
of all units within an individual multifamily development. In addition, a minimum distance
separation of 100 feet between registered Short-Term Rentals in residential zoning districts,
measured property line to property line, was agreed upon to further address the density concerns
in single-family residential areas.
On January 8, 2024, after consensus was reached on proposed amendments, and due to the
continually evolving litigation surrounding Short-Term Rentals, staff presented research on the
City of Arlington's Short-Term Rental regulations, including a summary of their adopted
regulations and a comparison of Arlington's regulations versus the proposed amendments being
considered for Denton. Following discussion, the DCRC directed staff to bring the proposed
amendments before the Planning and Zoning Commission and City Council for public hearing and
consideration. As mentioned earlier in this report, the Planning and Zoning Commission
unanimously recommended approval [7-0] of the proposed amendments at their meeting on March
20, 2024 (following a public hearing continuance from their February 28, 2024 meeting).
ATTACHMENTS:
1. Short-Term Rental Survey Results
2. Draft Redline Markups
3. Mailed Notice of Public Hearing
STAFF CONTACT:
Angie Manglaris, AICP
May 8,2024 Report No. 2024-017
Development Review Manager
angie.manglaris@cityofdenton.com
(940) 349-8381
REOUESTOR: Staff Initiated
STAFF TIME TO COMPLETE REPORT: 4 hours
PARTICIPATING DEPARTMENTS: Development Services