Nevada City Weighs New Short-Term Rental Rules

NEVADA CITY — Nevada City residents will get another look at a proposed short-term rental ordinance next week as city officials consider whether to ask voters to replace the city’s current rules. The proposed ordinance is still under review, but the latest public draft would make major changes to how the city regulates hosted rentals, whole-house vacation rentals, parking, safety requirements, neighborhood impacts, and permit renewals.

The city has scheduled a community meeting for Tuesday, June 30, from 5 PM to 6 PM at the Nevada City Council Chambers, 317 Broad Street. According to the city’s announcement, the meeting is intended to give residents, property owners, business owners, and other community members a chance to review the latest draft, hear a presentation on its key provisions, ask questions, and provide feedback before the City Council decides whether to place a measure on the November ballot.

The proposal comes after several years of discussion about the role of short-term rentals in Nevada City. City materials describe short-term rentals as both a housing and an economic issue, weighing concerns about long-term rental housing and neighborhood quality of life against tourism, local business activity, property rights, and transient occupancy tax revenue.

The current rules date back to the NC Hosts initiative, which the Nevada City Council adopted in December 2015. The ordinance allows hosted short-term rental of up to two units in a residential property, including rooms or dwelling units used for sleeping or living quarters.

Under the existing system, hosts must register annually with the city, maintain a business license, pay and report transient occupancy tax quarterly, notify nearby neighbors, and post good-neighbor conduct guidelines for guests. The owner or manager must live at the property or in Nevada County to ensure a timely response to police, code enforcement, or other city action related to the rental.

City officials say that, because it originated through the initiative process, the current ordinance cannot be amended by the City Council. The approach now being reviewed would ask voters to repeal the existing ordinance and replace it with a new framework. The draft ordinance states that, if voters approve the replacement measure, future amendments to the new short-term rental chapter could be made by the City Council.

The latest draft was prepared by the City Attorney’s Office in coordination with city staff. A May staff report on the ordinance was submitted by City Manager Carrie Wright and Planning Director Jessica Hankins to the Economic & Community Development Committee, whose members are Mayor Adam Kline and Councilmember Daniela Fernández.

One of the most significant proposed changes is the creation of two categories: “hosted short-term rentals” and “vacation rentals.” Nevada City’s current ordinance allows hosted short-term rentals of up to two units on a residential property, including rooms, dwelling units, or guest houses, but city application materials state that a homeowner may not register an entire house exclusively for short-term rental.

Under the draft framework, hosted rentals and vacation rentals would be regulated separately. The vacation rental category appears intended to address existing registered short-term rental operations that would fall under the new definition, while preventing the creation of new vacation rental permits. New whole-house vacation rentals would not be issued, and existing qualifying permits would phase out over time if they are not renewed, are revoked, or the property changes ownership.

Hosted rentals would be treated differently. The draft says there would be no overall cap on hosted short-term rental permits, but new hosted permits could not be issued for properties within 300 feet of an existing permitted short-term rental. New hosted permits also could not be issued for accessory dwelling units or junior accessory dwelling units, although the draft would allow existing short-term rentals in ADUs to continue with annual renewals if they remain in compliance.

Staff flagged several issues for further direction before the draft moves forward. One question is whether the ordinance should include occupancy limits, such as a maximum number of guests per bedroom. Another is whether the ADU approach is acceptable. A third involves parking, especially for older properties outside the General Business district that may not be able to provide modern off-street parking because of their lot layout or historic development pattern.

The draft parking rules would require one parking space for each hosted rental unit or guest room and one space for the homeowner. All parking would generally have to be provided on-site, with tandem parking allowed. Exceptions could be made within the General Business district if no onsite parking exists, but staff questioned whether other exceptions should be considered for legally nonconforming properties outside downtown.

The proposed ordinance also includes a longer list of operating standards. Operators would have to keep guest names, contact information, guest counts, and rent records for three years and provide them to the city within five days if requested. Each short-term rental would need a local contact person available by phone 24 hours a day.

Under the draft, the local contact person would have to respond by phone within 30 minutes when contacted by city staff or guests. If a citation, notice of violation, or fine had been issued in connection with the rental, the contact person would also have to be able to appear onsite within 60 minutes for the following year, although not more than once in a 24-hour period.

Noise, trash, fire safety, and guest conduct are also addressed. Guests would have to comply with the city’s noise rules, with stricter nighttime standards from 9 PM to 7 AM. Good-neighbor policies would have to be posted inside the rental and included in online or printed advertisements, along with information on noise, trash, dogs, parking, emergency routes, and possible penalties.

The draft would require smoke alarms, carbon monoxide alarms, fire extinguishers, visible address identification, and inspections by Nevada City Office of Emergency Services staff when a rental is first registered and once every two years after that. Rentals with wood-burning fireplaces or woodstoves would need posted safety instructions and a metal ash disposal container.

Several activities would be prohibited. The draft bans incidental camping at short-term rentals, including sleeping in tents, on decks, in travel trailers, or in recreational vehicles on the property. It also bans wood-burning pits, bonfires, campfires, charcoal grills, and special events such as weddings, corporate events, and commercial functions.

Enforcement provisions would allow the city to suspend or deny renewal of a permit for several reasons, including false statements on an application, delinquent taxes or fees, failed inspections, refusal to allow inspections, public health or safety threats, or more than three citations that are not overturned on appeal. If a vacation rental permit is revoked, no new vacation rental permit would be issued for the unit. City staff noted in May that reducing the number of short-term rentals or capping their growth could affect transient occupancy tax revenue.

The June 30 meeting is not the final decision point. Before any measure could appear on the November 3 ballot, the City Council would need to approve ballot placement. The May staff report identified August 7 as the deadline for the Council to adopt a resolution placing the measure before voters.