Orange Beach establishes new short term rental category with license fees
National & state realtor associations, Councilman Jeff Silvers oppose the new ordinances
By John Mullen
A determined mayor and Orange Beach City Council began the effort to limit expansion of vacation rentals in residential areas in December. And, that determination did not wane through meeting after meeting and opposition from national and state Realtor organizations.
On April 3, two new ordinances breezed through with hardly a whimper with no speakers in opposition but two surprise votes against from Councilman Jeff Silvers. The measures, one to establish a short-term rental category of 14 days or less and another to establish a $500-per-year business license to operate one, each passed 5-1.
Also, during the following work session, the city revealed final plans for landscaping in the medians along Alabama 182, or beach road.
“You’re opposed to it?” Mayor Tony Kennon asked Silvers. “The vacation rentals we’ve been talking about for two months?”
“I’m opposed to it,” Silvers answered.
After the meeting, Silvers said he’d like to see more policing of the problem properties and perhaps even pulling licenses of repeat offenders rather than restricting vacation rentals in neighborhoods. The new ordinance restricts new licenses in neighborhoods but those already operating will be allowed to continue but under closer scrutiny, council members said.
“I just think that we should reinforce the three strikes you’re out or maybe two strikes and you’re out,” Silvers said. “I believe you have some bad apples but I don’t think the bad ones should penalize the good folks that are managing their properties responsibly.”
City Attorney Wanda Cochran informed the council that the moratorium on vacation rental licenses voted into effect needed to be repealed.
But Councilwoman Joni Blalock asked if it could be kept in place until some areas of town that are planned unit developments with single-family residences in them could be included in the restricted areas. Four zoning districts in the city are restricted from adding vacation rental properties, three residential designations and mobile home subdivisions. PUDs were not included in the restriction.
“There were clearly some places that wanted to be included in this and were not,” Blalock said.
Cochran answered that the moratorium didn’t just cover vacation rental licenses in residential sections but over the entire city. Someone who recently bought a condo and wants to use it for short-term rentals couldn’t get a license as long as the ban was still in place.
“If that moratorium stays in place it will impact people outside the residential neighborhoods,” Cochran said.
One particular case was the Beaver Creek subdivision on the city’s western edge off of Canal Road. Community Development Director Kit Alexander said that subdivision was considered multi-family because of the conditions of the PUD when it was first developed.
Blalock said residents there want and in other PUDs across the city wanted to be placed in the restricted zone. Kennon said because of their PUD status the property owners associations in those developments need to address it in their covenants and restrictions.
The current short-term license, which will remain in place for all other vacation licenses, is for rentals of six months or less and cost $132 a year. In 2017 Orange Beach generated about $2.4 million on all business licenses in the city with about $830,000 coming from short-term rental licenses. Short-term rentals in neighborhoods brought in $38,000 of that number.
In 2009, Gulf Shores voted in a special district for short-term rentals in the beach area. The city also allows short-term rentals in areas zoned general business or multi-family outside of that district.
“The city adopted what is called single family and duplex short-term rental overlay district,” City Planner Andy Bauer said. “That overlay district is in the beach area primarily down West Beach. All other areas of the city zoned single family and duplex are not allowed to rent.”
A short-term rental in Gulf Shores is considered 180 days or less and yearly license fees are based on receipts gathered the year before on the unit. Fees range from $180 if gross receipts are 0-$49,000 with an additional $45 fee for each unit.
The city’s table for all business licenses goes up to $75 million in gross receipts, but the highest in the short-term rental category was $200,000-$249,000 which cost the license holder $590 and a fee of $45 for each unit. Gulf Shore generated more than $580,000 on short-term rental licenses in 2017 with another $180,000 generated by the $45 per unit fee.
Gulf Shores revenue on all business licenses was about $2.3 million in 2017.
Beach Road Landscaping
City Administrator Ken Grimes said the Public Works Department will start landscaping the medians built in the first phase of the U-turn project after spring break ends on April 7.
“Our process will include digging out six to eight inches of sand,” Grimes said. “Then we’ll have to put in sprinklers. The boring is done and the waterline is in. That will take a couple of weeks to get all the pipes in. we’ll fill that in with topsoil with plants on the ends and sod. You’ll see that go in, we think, in about five weeks.”
Kennon said the end result will concentrate on keeping city crews safe during installation and upkeep.
“We want to know what can we do with the least amount of maintenance because of safety,” Kennon said. “The main concern is maintenance and safety of maintenance personnel in the summer.”
The city will start with a minimum effort to spruce the area up and after the initial phase takes root decide if more is needed, Kennon said.
“We’re going to sod everything and on the endcaps, we’re going to do juniper and African iris,” Kennon said. “Get it watered out, growing, established. Then we’ll all talk about how much do we want to spend on beds and trees and do we even want to do any more after we see what it looks like.”
With spring break over, Grimes said, the work on the second phase of the U-turn median project will move to the center of the road to begin building new median areas.
In other business during the regular session, the council:
• Passed a resolution buying an SUV for the Police Department to for $25,998.
• Passed a resolution authorizing the execution of a land swap agreement with the State of Alabama Department of Conservation and Natural Resources. Initially the city’s new sewage treatment plant was built one lot further to the west on state park land and the city swapped land to the east of the new plant to the state.
• Postponed transferring land on Canal Road to the Baldwin County Board of Education until the April 17 council meeting. The transfer was first proposed in the Dec. 12 council regular session and has been postponed in every meeting since. Baldwin County wants to build a seventh-through-12th-grade school at the site of the former sewage plant.
• Removed a request for rezoning four lots at the corner of Alabama 161 and Bonito Drive for the purpose of building a Zaxby’s restaurant. The applicant pulled the applicant.