Politics

Park City considering fractional ownership rules amid Pacaso’s rise

PARK CITY, Utah — Companies selling fractions of single-family homes as vacation properties are on the rise, and Park City Municipal is looking to prohibit them in primarily residential neighborhoods.

At their meeting on Wednesday, the Park City Planning Commission has the option to recommend to the city council new land management code amendments that would restrict fractional ownership of single-family homes in certain zones.

Public comment submitted to the commission shows that residents are in support of the proposed rules.

The most notorious company known for pursuing this homeownership model is Pacaso, a startup founded by former Zillow executives that was valued at $1 billion within its first year of operation.

“What we set out to do was to try to democratize access to second homeownership so that it can be something that is not just a luxury available to the 1%, but hopefully it can be available to many tens of millions of other people around the world,” co-founder Spencer Rascoff previously told TechCrunch.

The company has made noise in resort communities across the country, from Avalon, New Jersey to Sonoma, California. Residents have been quick to express their displeasure —the website stoppacasonow.com includes templates for ‘Stop Pacaso Now’ lawn signs and letter templates for op-eds.

Pacaso’s model essentially creates a property LLC for each home, finds co-owners, and handles the sales operation. They also handle furnishing, repairs, utilities, and property management. Some homes are offered for half a share, and others 1/8.

The financing model for a 1/8 share of the Thaynes Canyon Dr. home pictured above. (Photo: Pacaso // screenshot)

At a previous May meeting, the planning commission expressed support for the new rules. Under the proposed amendments, single-family dwelling fractional ownership would be prohibited in the red areas, and would require a conditional use permit (planning commission review) in the zoning districts shown in green:

The zones where fractional ownership would be allowed are the same zones that allow timeshares and private residential clubs. (Park City Municipal Corporation)

The rules also establish that any fractional ownership would require an active business license. Staff is also recommending additional management standards, which include the prohibition of nightly rentals.

The planning commission is scheduled to meet at City Hall on Wednesday at 5:30 p.m. (Zoom link).

Full staff report

Parker Malatesta

Parker Malatesta recently graduated and came to Utah to work as a park ranger for the National Park Service at Glen Canyon. He previously was the news editor at The News Record, the student paper at the University of Cincinnati. He loves running, reading, and urban planning.

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