Park City Council on Thursday postponed a decision on proposed bylaws that would allow “fractional ownership” of single-family vacation homes in the same zoning districts that allow timeshare units and private residence clubs and prohibit them in neighborhoods mainly residential.
Councilors voted unanimously to pursue the case through Oct. 27 so they can get answers to questions about recommended changes to Park City’s land management code that would implement the proposal. The decision came after a public hearing on the proposed regulations.
Under the fractional ownership model, companies sell “fractions” of single-family homes in prime residential neighborhoods in the form of one-half to one-eighth shares, according to a Park City Planning Department report. Some owners buy more than one share in a property, which is used for vacations.
The report indicates that some companies form a limited liability company, or LLC, and then manage the property for multiple owners by providing furnishing, cleaning, maintenance and planning services.
The proposal would require companies that operate under the fractional ownership model to obtain an administrative permit, have an active business license and submit an annual list of properties they have purchased or managed. Homes that are already condominiums would be grandfathered.
Fractional ownership companies have offered the homes in Park City for the past two years, the report said. The city wants to be ready if the model, which is geared toward high-value single-family homes, becomes more mainstream.
“While fractional ownership may make vacation ownership more affordable for some users through a shared economy, it is important to strike a balance that protects Park City’s primarily residential zoned neighborhoods for full-time primary residents,” indicates the report.
Single family home condominium 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.
Planning officials are recommending that the city conduct a condominium study over the next two years. Based on the findings, they could recommend expanding the regulations to include duplexes and triplexes, according to the report.
Pacaso, a San Francisco-based company that owns 10 condominium homes in Park City, has called for units to be allowed in primarily residential zoning neighborhoods and some historic neighborhoods, but is open to a 30% cap on the number allowed. , the staff said the report.
The company buys luxury properties, sells the shares and acts as a property manager for a monthly fee paid by the owners. Pacaso – who stopped acquiring homes in Park City until members of the city council decide how they want to manage the condominium – does not retain ownership of a house after it is sold. Other companies may have different models.
The report said the top concerns expressed by residents about condominiums at an August open house at the Park City Library were the intensity of vacation home use, property maintenance and the transparency regarding ownership and number of owners.
Park City has regulated timeshares and private residence clubs for decades, but the new model of fractional ownership and use of single-family dwellings in prime residential neighborhoods is relatively new, the report said. City employees reached out to other communities, including Aspen, Colorado; Jackson, Wyo.; St. Helena, California; and Truckee, California – to gather information on their efforts to regulate single-family condominium ownership.
Many cities are working within their state code and land use regulations to find solutions that balance property rights and community quality of life, the report said.
Incidentally, Park City is one of the first communities among the western mountain states to implement land use regulations specific to fractional ownership of single family dwellings and other communities are observing the city process,” the report said.
At Thursday’s hearing, a resident who lives opposite a Pacaso house asked council to approve banning properties in residential areas. She noted that the company said that people buying homes wanted to be part of Park City, but she had never met any of the owners.
“People coming and going act like it’s a hotel,” she said. “It’s run exactly like a hotel and no one cares to be part of that area.”
Pacaso representatives urged board members not to pass the amendments. Sarah Filosa, public affairs manager, said requiring an administrative permit would “seriously impair” the company’s ability to purchase homes in Park City.
“It adds time to the acquisition process, which would prevent us from closing future properties,” she said.
In California, Pacaso is suing the city of St. Helena over a zoning ordinance that prohibits the creation of a timeshare project.
Jason Boren, Pacaso’s attorney, said the study recommended in the Park City staff report should be done before changing the land use code.
He added that the proposed order is a violation of owners’ rights because it treats them differently from other owners.
“Utah has always been a property rights state and regulating use is an accepted principle of land use, but regulating ownership through a land use code is not the is not,” he said.