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Steve:
Welcome back to another City of Running podcast. Today we talk about the difference between accessory dwelling units or use and short term rentals. One seems to have the community excited to build, and the other is a hot topic for Redding residential neighborhoods.

Katie:
Lily Toy Redding Planning Manager breaks down the rules and regulations behind both of these topics and helps dispel some common misconceptions.

Steve:
So if you're frustrated about a short term rental in your neighborhood, we're excited to start that backyard side hustle. This episode is for you.

Lily Toy:
Hi, I'm Lily Toy. I'm with the City Writing Planning Department, and I am the planning manager here with the city.

Katie:
Thanks, Lily. And we are here today to talk about ideas and short term rentals, the differences between those two and what they are and how the community is currently using each one and some of the rules and the regulations around those things. So first question, can you define what an EU is versus a short term rental? How are those two things different?

Lily Toy:
Yeah, I mean, they're alternative housing. One is more for your visitor, which is a short term rental and an accessory dwelling unit ADU is for long term, and those are typically smaller type dwelling units. That's typically on a property that already has a single family house. So one is short term, obviously short term rental and ADU is a long term, long term is considered 30 days or more. And so a short term rental is rented out for less than 30 days.

Steve:
Great. Thanks. And maybe we'll touch on ideas first and then go into short term rentals. With regard to ideas, what are some of the advantages for a homeowner when building an ad or when thinking about possibly constructing ADU?

Lily Toy:
Good question. Well, obviously, you have your main house and there's two types of adus. There's you can use a space within your existing house, such as a garage, an existing bedroom, something like that. And we have what we call a junior Adu. A junior Adu basically is something that you can use without a bathroom. By state regulations, you're not required to have a bathroom. You do have to have some sort of efficiency kitchen, and that's not even defined by space. Basically, efficiency kitchen could be as simple as a hot plate and a microwave, something to cook some food up on and or warm up food. And typically these type of junior use, let's say you use a garage, it is limited to 500 square feet. And typically those type of rentals are rented to somebody who you might know, because if you're not providing a bathroom, it might be just as simple as your grown child that's in the house. Right. But you want them to have some independence. A 480 accessory dwelling unit that's detached from the house is limited to 1000 square feet. And you can provide it has to have a full kitchen.

Lily Toy:
So it has to have some sort of cooking range, of course, sleeping quarters. Right. It could be as simple as a studio apartment. It depends on the layout you want, but it does have to have a bathroom and it does have to have a full kitchen limited to 1000 square feet here in the city. We want to give some incentive to homeowners to put in adus rather than there's a huge expense. Right? When you're doing something like that, you have to hire someone to draw plans and things like that. And we went ahead and got a grant from the state and we have five plans that's already gone through the plan stage. All we really ask for the homeowner is to pick one out that they like that fits on their lot. We have a variety of different sizes and they come in with a site plan and we make sure that it fits the setbacks as required and then we give them the plans and they can give it to a contractor to build. So there are five existing plans on our website under accessory dwelling unit under the building, the Vision Web page.

Katie:
And Lilly, I don't think I was aware that there was such a thing as a junior Adu, which is. So the junior is technically attached to a home, correct?

Lily Toy:
It has to be within the existing space of a home. So you wouldn't be able to add on a junior. Got it.

Katie:
So that wouldn't qualify as an ADU. But if you already had an existing space like a garage and you turned that into something that would be a junior.

Lily Toy:
Adu Right. Or if it was a den or something like that, you could make more private, you could convert that into a junior. Adu And the limit is 500 square feet.

Steve:
And you mentioned a little bit about there's five plans that have been approved by the city. Can you talk a little bit more about that? That seems like a great resource for folks. Is that a unique resource city writing offers or is that kind of the norm that cities offer with these pre-approved architectural plans? And how does that work cost wise and with also the cost for permitting and things of that nature?

Lily Toy:
Yeah, no. I mean, I think we are somewhat unique. We've got ahead of the ball game and got these started. So we hired two architects and they came up with five plans. I think we have six more online coming soon. They're not done being planned checked right now. But yeah, they vary from I believe the smallest size is 560 square feet. And I think our largest one is just under 1000. There's one that even is two story. Two of them are very competitive, conventional construction, very affordable. The other three are more like not a standard. Petrov So it's a little bit more costly, but certainly, yeah, it is. You can look at the design and the floorplan of those on that web page, and if you're interested, we can show you more of the construction drawings here at the city reading at the building department, work out a site plan that might work for individual lots.

Katie:
And I just want to clarify kind of some of the advantages of an ADU other than having an additional space. Does this increase property value? Does it increase your property taxes? Why would somebody build an ADU on their property now? What makes it a good time to do that?

Lily Toy:
Well, a lot of it is the state really was behind pushing the rules for making it a requirement for each jurisdiction, California, to have some sort of ordinance for Adu, because it's just the housing. There's there's a lack of housing in California, not necessarily here in Redding, but all over in more the urban areas. But that drove the state to push for it. But even prior to the state requiring this in the city, Redding, we already had what we call the second dwelling unit ordinance, which is very similar. It was much more restrictive. You actually had to live on the property and be a homeowner, either living in the dwelling unit Adu or in the main house and have control of the property at all times. Currently through 2025, you can build one on an investment property and not have to live there and you're grandfathered in that way. It's not like in 2025, if that's lifted, you've got to move on to that property. So there are some advantages right now through the state that they want to provide and fill that gap of the housing need. As far as taxes, yes, I'm I'm not in the business of being the tax assessor, but everything you do when you improve your property increases the taxes. But also it's an income generator for the homeowner. If I bought one and put one on my lot, it would reduce that mortgage payment. Maybe my taxes might go up, but overall that mortgage payment would be reduced on my share. And so I think there's a lot of advantages to it. And so this is a win win, I think, for homeowners and also for renters, particularly today, where the cost of housing is very expensive and rent is going up. These units because of their size is affordable.

Steve:
Ellie, you mentioned that 80 users are more often than not used for long term rentals, and the short term rental situations are more for visitors. How does the city monitor and enforce that? I'm guessing that through the permitting process, your department is able to track what Adus are out there across the city. But how are policies enforced to ensure that those ideas are indeed being used for the long term renters versus the short term options?

Lily Toy:
So actually the state regulated the use of adus. They cannot be used for short term rentals and in the city ready to operate a short term rental, you actually have to come through planning to get a permit. It's called a discretionary permit. It's renewed annually. We have a company that we've hired that can monitor who is actually advertising short term rentals. So we know who is operating legally and who's operating illegally. We try to get those folks who are operating illegally to come in and get that permit. And if they comply with the rules and regulations and are able to fulfill those roles, then they are typically issued a permit. They pay their business license annually and they also pay into what we call the TOT, which is a transient occupancy tax fund in that the city the finance department manages.

Katie:
And that might be a good segue way to move into short term rentals and talk about that piece of things. So these are like Airbnbs or vacation rentals where people are just staying for a weekend or maybe a week at a time. And if those can't be adus, are those essentially like rental properties that are just short term rentals?

Lily Toy:
Well, I mean, a homeowner has a variety of choices now, right? They could say, I want to rent it out long term for 30 days or longer, go through a monthly lease or whatever or a year lease something like that. That is long term rental standard. We don't regulate that at all. It's if they start advertising and renting it for less than 30 days. So if they say 29 days or less, that is considered a short term rental. That's when you need to operate within the confinement of those short term rental rules, whether it's an ADU or not. Obviously, if it's one that was built prior to 2021, then they can use it for a short term rental if they want. However, most people would say, Well, can I, can I not? Our ordinance is very restrictive. As far as what can be used as a short term rental. It has to be a single family house. So our ordinance is restricts that Adu to be rented out as a full short term rental. They can operate, obviously, short term rental, that's the only thing they can do in that additional unit. If it was built prior to 2021, the state regulations are grandfathered in.

Steve:
And obviously short term rentals. That's kind of a hot topic statewide right now, maybe even nationwide, but especially here in California and some cities and some of the larger cities down south in LA and San Diego and San Francisco obviously have some pretty strict restrictions and policy changes around the short term rental industry. What's Redding's official policy on short term rentals, and do you see that changing, moving forward based on the current situation with the housing crisis here in California?

Lily Toy:
Yeah, short term rentals is a really big hot topic, right? Because some people view it as like a hotel. It's a commercial industry. Why would you even want that permitted in a residential neighborhood, particularly one that, let's say is a cul de sac? You've got kids playing around. Why would you want strangers coming through your neighborhood? This is a nationwide issue. I think it's coming up to everyone's top priority is like they want this address by their local jurisdictions. They feel that they don't they're uncomfortable with having this continual round the clock of unknown people in their neighborhood. And that's the number one concern, I think is safety. Right. And two is who's really policing this? The jurisdiction approves it, whether it's a discretionary permit or not. In some jurisdictions, it's just as simple as applying for a business license. As long as they're in the right zone, they get to pull out a business license, pay their tot and go ahead and operate. Other jurisdictions have gone the other way. They have outright prohibited. And so they're not interested in that because there's this balance of what other type of transient housing do they have. So let's say let's say Carmel, right. Carmel, you go visit. They have existing hotels around, but they really don't want this infiltrating into their neighborhoods. So they may have outlawed it. Right. I'm just using that as an example here in writing. How this all started was that there were illegal operations and this started probably about seven years ago. And the only thing that was similar to that type of use was the bed and breakfast in our code.

Lily Toy:
We didn't have anything that was a VRBO type of thing, and bed and breakfast where you actually serve breakfast, right? We've all stayed most of the state in those. And so we said, well, if they're going to operate illegally, we'd like them to at least pay their tot get a business license so they can be regulated. And so that's where the ordinance was developed for the short term rentals. And it hasn't changed too much since then other than we really want to regulate you and we want you to know what the rules are before you decide you want to operate. So we have a roll of something like 15 rules. One of them is for every bedroom that you have in your house, you have to have a parking space on your property for one car, right? So if you have a four bedroom house, you have to show us that you have space on your property to park for cars. If there is no way to accommodate for that, then you cannot operate short term rental. We only want you to apply until you figure that out. So let's say some people say, Oh, I wasn't going to use my garage. That's why I'm not counting those. I go, Well, if you really want this, you're going to have to clear out your garage and allow your tenants to park in your garage. So those are that's the biggest one, because the biggest complaint is they're parking all over the street. We have a neighborhood. Everybody should be parking on their on their property. And that becomes a policing thing.

Lily Toy:
And that was one of the issues that I think homeowners have in the neighborhood is why are we put in the place of policing these short term rentals? Obviously, if they're not a good operator and we continue to get complaints that they're not following rules, what the rules might is that they are not allowed to hold any type of parties outside than the owner posted party. So that means a tenant, a short term rental, cannot throw a party. And let's say they do. We get complaints continually about them operating parties. Then when it comes for their renewal, we don't renew their permit because they have not been a great operator. The other issue might be that they have all these guests that come well. Our rules are pretty defined about just having the tenants park on site, but we don't have any rule about visitors having to park on site. So if my sister was staying here at a short term rental and she says, why don't you come over and have dinner? Well, I've got four grown boys. We all go over. We're driving five carts, right? There's no rule about us having to park on the property. So we park on the street and anybody can park on the street. So that's some of the battle there is. There's just constant roll over a people don't know if they're bad people or not. And three, they're parking all over our street. Those are the three main complaints of why people are against short term rental. They feel that we have a hotel industry and they're taking away business from the hotel industry.

Lily Toy:
And but this is alternative housing. A lot of folks have two families that may rent a house and they're able to meet those roles of not exceeding two adults per room. So let's say it's a family of of four and another family of four, and they have a three bedroom house there. They're fulfilling their inside those rules of, oh, we have four adults, we don't have more than six adults in this house. So you have a conglomeration of families in there. So I understand the issues. And however, there are other things that we can probably suggest to council and we're thinking about those. Some communities have actually put a cap on the number of short term rentals allowed, permitted at any one time. And I've just kind of read other ordinance and how they're restricting it. And so I think that this is a evolving regulation as we work with it, work with this industry, how can we improve it? Do we outright prohibit them? Maybe we need to tighten up our belt and have more restrictions. And so maybe there's an equal balance, a win win for for everyone that's in our community. So we don't know where council might go with this, but certainly when we do or we're slated to be on their agenda in the next couple of months to report back to them about just the status of our short term rentals numbers. We have things like that and maybe some suggestions on how we can have a win win type ordinance that could meet some of the concerns of our constituents.

Steve:
And within that policy, are there things in place with regard to short term rentals around schools or places where children gather? Do some policies address that piece of it? As far as location of short term rentals within the city limits?

Lily Toy:
No. A short term rental ordinance just basically says it's allowed in a single family house in any unit in the downtown area. So there's no distance to schools or any type of sensitive type uses.

Katie:
And only this feels like it's kind of a nightmare to regulate from the city's perspective. Are you mainly just getting complaints from neighbors that are alerting you to either somebody using their housing as a short term rental and maybe they aren't permitted to do so? Or somebody who's permitted to do so but isn't using it wisely or their guests are are not being good tenants. How is the.

Lily Toy:
City.

Katie:
Is it mainly just complaints that that's alerting the city to issues? Or do you have some kind of proactive enforcement?

Lily Toy:
We have complaints on both ends, right. Because we don't all know maybe their advertising on some new website that our contractor isn't looking at. And they might say, hey, I want to report that there's this constant flow of people we look up to see if they're even in our system. And we go, Okay, well, we'll go in and contact the neighbor and we'll see. We'll contact the property owner and see what's going on. So those those are some complaints. And other complaints are part of our process is that these neighbors know that there's a short term rental because part of our process, when they apply for a permit, we send out a notice before we even consider a decision on it is that we send out a notice to property owners within 300 feet of that proposed short term rental and let them know that Mr. So-and-so is applying for a short term rental. Have any questions? Concerns, please call us. So that's what we get. A flood of calls, a site where they object to it. Or they might say, Oh yeah, I know they've been operating already. So we get gather more information and that's that's helpful. But once it is approved, they know that the short term rental is operating in their neighborhood. And so they say, well, who do I call if I have a question? And that's one of our ordinance regulations, is that they actually have to have a site manager. So we actually have to give them that information. It has to be public information. So they call Mr. Smith, they have a phone number and the site manager takes care of it.

Lily Toy:
The one criteria within our audience is that that site manager can't be out of town. They have to literally have ability to get to the site within 60 minutes. So if they live in Chico, that's not going to work, right? You can't get to site in 60 minutes, so it has to be somebody local. We have a lot of outside applicants that are running short term rentals, but they hire some local site manager to manage. I would say predominantly I'm just going to throw out a number kind of out of touch with without knowing what the status is. But, you know, probably about 90% of our short term rentals are permitted. We don't have any issues because I think deep down at heart, most people want to comply with the regulations because this is their business. Right? They don't want to get run out of town, have their business shut down. So they all want to comply. It's the other 10% that are not monitoring their sites very well. They don't have a great site manager maybe. Right. And maybe they're new to the business and they haven't quite learned the business yet. So we there's a learning curve with those. And and then maybe there are a few, you know, probably the 2% that just are bad operators. And those are the ones that we just say, you know, if it's bad enough, we can revoke that permit. And so it doesn't have to come up to that one year mark where we wait until their permit comes for.

Steve:
And Lily, what type of numbers are we looking at? If you had to ballpark on how many short term rentals are within city limits?

Lily Toy:
When we first started, when we started regulating this, it was around probably 90 short term rentals. And then we have right now issued permits that can operate just about 200 legal operating short term rent if we hit our website today and the contractor that we use if we look at that website. At any one time. There's hovering around 300 short term rentals. So we know that there are 100 out there that's operating illegally. And so those are the ones that we go proactive and we send them letters and we say, we know that you are operating a short term rental. These are the regulations in the city writing please comply or further enforcement will proceed upon this property. So we do that proactively because we all want everyone to play by the same rules and so they have to pay their I think it's about $1,000 for their permit every year if they want to continue to operate and pay their business license and their totes.

Steve:
And what is that further enforcement you mentioned of those? So you send a letter and they still aren't compliant. What happens then?

Lily Toy:
If they ignore us, then we report them straight to our code enforcement division that's run out of our city attorney's office. And then they they can cite them, actually. And I don't know what that citation is, but they can cite them for every day that they've rented the unit out. And we have ability to know what that is. So they might send them a citation and then it usually gets their attention typically because nobody likes to pay money, right? And so they go, Oh, I should have taken this earlier. And so then that's when they apply for the permit. Others might ignore us entirely. So code enforcement could say, All right, we're going to continue to fight you. Let's say the first time. It's just a one time citation. The next time they might go back and look at the past quarter and see how many times they rented it and they can cite them for every single day. So it could be thousands of dollars. At some point they take them to administrative hearing board and that is a whole different department. But definitely I think people do pay attention when the code enforcement division starts getting involved because from the planning we're just sending out letters saying, oh, by the way, these are the rules. It's a really fine line sometimes because these apps are really user friendly for those operators. They can turn and turn off their short term rental, their advertising just by a finger of a thumb flip on and off. And if they come into compliance one day, they say, Oh, yeah, I shut down. They the next day they could just turn that right back on. And it's just a cat and mouse thing that we play sometimes with them. But certainly once we get code enforcement involved, they tend to pay attention a little bit more.

Katie:
And if we could just take kind of like a high level overview, maybe you can break down some misconceptions. What are the biggest misconceptions about 80 use and what are some big misconceptions about short term rentals.

Lily Toy:
For 80 you? I would say that most people would think that, oh, I can't fit in 80 you on my property. And I would say that's true back in the day. But right now the state regulation allows a building that's 16 feet or less to be as close as four feet to the property line. And so the poor feed is I'm tall, I'm five, five. So I mean, that's pretty short. So four feet, you can probably barely squeeze through right on a side proper line. So I think that's the number one misconception is it could be a lot closer to a side property line than most people think. As long as you stay to a lower height of a building and the ones we have a few that has been already pre-approved that are 16 feet or lower for misconception for short term rental, I would think that they say that I got no one to call. And you do you can call the city and you can obtain also the site manager's information. So they complain that, hey, I can't call you because you're closed at ten at night, there's no one to call. And so that's a misconception, is that there is someone to call and immediately you can call the city and leave a message and tell them, tell us that you're having a problem with the site. But also the immediate need is, I need this party shut down, there is someone to call. And so not necessarily the police just say, oh, there's a party next door unless it's really loud and so forth. The police are not going to show up right away if they've got other issues that they've got to deal with. So I think that's the number one misconception of short term rental.

Steve:
Lily, is there anything else that we haven't covered either for use or short term rentals that you want to ensure we discussed today?

Lily Toy:
Yeah, I think that all this information is is online, but I do want to put a plug in for the use. Right, because I know that they don't know that we have pre-approved plans. And so that's it's online. The other thing that's available online is that on our GIS map, we also have the ability for anyone to look on our map to see if there's a short term rental, where are they? And we have two types of short term rental. I didn't mention the other short term rental. It's a hosted home state and a hosted home state is not for the entire house. You can rent out up to two rooms, not more than 180 days total of the year. But the room can be rented for less than 30 days as a short term rental hosted homestay means there is a host in the house, which means that the property owner or the tenant that the property owner has rented the house to has permission to operate the hosted homestay. And obviously they have to have the parking onsite. That still applies, but it is not the full house, it's only up to two bedrooms. So on that website we've broken it down to whether it's a hosted homestay, I believe it's the color is blue and a short term rental for short term rental is yellow. So you can see where all the short term rentals are on. There even has some information about when it's going to expire. So I have one in my neighborhood. I didn't know I was looking on the map and there it is. Oh, it expires August 20, 22. So and I might say, oh, they've been a horrible operator. I know the permit is going to come up. I'm going to report to the city X, Y and Z. So those are things that even an outsider across the world can monitor because it's on.

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