Park City Council unanimously passed an ordinance on Thursday allowing “fractional ownership” homes in zoning districts that allow timeshares and private residence clubs, except for subdivisions that have requested the municipality of prohibit overnight rentals in their neighborhood.
The ordinance creates a new fractional housing unit use in Park City’s land management code and covers all types of dwellings – including single-family condominiums, duplexes, triplexes and multi-unit residences .
Condominium ownership distinguishes fractional ownership from timeshares and private residence clubs.
With a timeshare, people buy the right to use a property for a certain period of time. A private residence club is defined by the Land Management Code as a single condominium unit shared by four to 12 owners or members with property management that provides a reservation system.
Under the condominium model, companies sell “fractions” of housing in the form of one-half to one-eighth shares, including in prime residential areas. Some owners buy more than one share in a property, which is used for vacations.
Properties are usually, but not always, managed by a third party. Condominium companies can set up a limited liability company (LLC) for each home and then provide planning, furnishing, maintenance and cleaning services. These homes could also be co-owned by unrelated individuals without an LLC, according to a report from Park City Planning Department staff.
“Split-use ownership is not new to the community,” the report said. “The city has been regulating timeshares and private residence clubs for decades. However, this new model of fractional ownership or joint ownership and use of housing in prime residential neighborhoods is relatively new.
Noting that Park City’s overall plan supports a balance of residents and visitors, planning officers recommended changes to protect core residential neighborhoods for full-time residents and to direct condominiums to zoning districts where the timeshares and private residence clubs are permitted.
Another recommendation was to consider incentives to keep primary residents located in Old Town, which is not in an area that allows timeshares.
Zoning districts where fractional housing units may be located include Historic Recreational Business, Historic Business, Regional Recreational and Commercial Business.
Staff members will conduct further study of three other areas where fractional ownership is permitted under the ordinance – residential development, medium-density residential development and general retail – and then report to city council. No condominium applications will be processed for these areas until the end of the evaluation, which will take no more than six months.
A blog post from Pacaso, a San Francisco-based company that owns 10 condo homes in Park City, says its model gives buyers more options to reduce the cost and hassle of owning a second home. .
The company buys luxury properties, sells the shares and acts as a property manager for a monthly fee paid by the owners. Pacaso – who had stopped acquiring homes in Park City amid a City Council decision on how to manage condominium was on hold – does not retain ownership of a home after it is sold. Other companies may have different models.
Park City is experiencing a housing crisis due to unprecedented demand for second homes and has an “unnecessary inheritance model” of owning entire second homes that sit unused for about 90% of the year, Pacaso claims on his blog.
“There’s a better way,” the post said. “Pacaso takes up to eight buyers and places them in one home. These buyers were looking for single-family homes in the community. Instead, they share a luxury home.
Park City is the first municipality to “recognize and regulate” Pacaso’s condo model, the blog says.
“It’s bigger than Pacaso,” the blog post reads. “Condominium ownership is an established practice in Park City and across the country. Pacaso modernizes the process and brings buyers together.
Changes to the Land Management Code only apply to future condominium residences. Homes that are already condominiums, including Pacaso’s 10 properties in Park City, are excluded from the regulations.
The ordinance prohibits short-term rentals and requires that a maintenance plan for each property be filed with the city. Pacaso already prohibits short-term rentals and maintains accommodation.
Community members, however, have expressed concerns about turnover in holiday homes, property maintenance and the possible impact on the quality of life in their neighborhoods.
On Thursday, Eric Moxham, a Friends for Responsible Development leader for Greater Park City, said condominium properties are like overnight rentals and don’t fit the character of a single-family home community.
“They allow people to buy part of Park City for less than they would if they bought a single family home themselves,” Moxham also said. “It only increases prices. »
As the price of the most expensive houses increases, there is an “upward gravitational pull” on the next level of residences and eventually the cost of housing stock has increased across the board, he said. he declares. Then even the cheapest homes will go up in price, making the shortage of affordable housing worse, he said.
The staff report says the code changes would not prevent friends or family from entering into relationship-based agreements to buy and share property or to employ a property management company or shared housekeeper. On the contrary, he says, the amendments specifically regulate the business management model of simplified and fractional sale of vacation properties and fractional use.