Council signals preference for lottery‑based short‑term rental waitlist, asks staff to draft policy

Staff presented options for filling the city’s 410‑unit cap on short‑term rental licenses (TRLs): a traditional first‑come, first‑served waitlist or an annual lottery. The lottery model would open a finite application window, vet applications, then randomly select candidates (staff used a “ping‑pong ball” metaphor) and produce a ranked list for planning commission review, which would limit the creation of long multiyear wait lists and reduce speculative increases in property values tied to list position.

"We envision that if we have 30 applicants for 5 slots, you have 30 ping pong balls... and they get listed," the City Manager explained, describing features to incentivize long‑term rentals (extra entries for property owners who offer long‑term tenancies) and suggestions to require applicants to be property owners at time of filing. Council members raised operational questions: whether TRLs could be banked while an owner continues to occupy a unit (staff said TRLs would not transfer with property and would require annual renewal), how staff would verify minimum utilization (10‑night minimum and host‑compliance data can help detect suspected fraud), and neighbor notification procedures for planning commission hearings.

Council members generally favored the lottery approach as fairer and more administrable; several asked staff to return with a draft policy that includes renewal conditions, fraud detection and enforcement measures, incentives for long‑term rentals, and a standard annual cycle for applications. Staff will prepare policy language and return to council.