TO: Mayor and City Council
THROUGH: Krishna Namburi, City Manager
FROM: Dan Atchison, City Manager
SUBJECT:
title
First Reading of Ordinance No. 4-25 amending SRC chapter 38 - Salem Tourism Promotion Area (STPA) to include Accessory Short Term Rentals and Short Term Rentals (“short term rentals”) in the STPA and to modify the remonstrance procedure to allow operator objections based on their number of available rooms.
Ward(s): All Wards
Councilor(s): All Councilors
Neighborhood(s): All Neighborhoods
Result Area(s): Good Governance; Strong and Diverse Economy; Welcoming and Livable Community.
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SUMMARY:
summary
Ordinance Bill No. 4-25 would amend SRC chapter 38 to include Accessory Short Term Rentals and Short Term Rentals in the STPA, requiring them to collect the STPA fee from guests. The ordinance will also modify the process for raising objections to the continuation of the STPA to provide that an operator’s number of objections will be based on the number of rooms available for rent. A public hearing on the proposed changes will occur at the November 24, 2025 City Council meeting. If objections are received from operators totaling 33% or more of available rooms, the STPA will be terminated.
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ISSUE:
Shall City Council advance Ordinance Bill No. 4-25 to second reading after a public hearing?
RECOMMENDATION:
recommendation
Advance Ordinance Bill No. 4-25 to second reading after a public hearing.
body
FACTS AND FINDINGS:
The Salem Tourism Promotion Area (STPA) was created by City Council in 2019 at the request of Travel Salem, the City’s destination tourism marketing organization and area hotel operators. The TPA imposes a 2% fee on overnight stays at hotels and other types of transient lodging. A TPA is a form of economic improvement district (EID), which are permitted under state law. When creating or renewing a TPA, state law requires the City to allow people subject to the fee an opportunity to remonstrate or object to the imposition of the fee. If more than 33% of persons subject to the fee object, the fee may not be created or renewed.
In 2019 when the STPA was formed, the Code was drafted with the intent that short term rental operators would be subject to the fee. However, due to ambiguity in the Code, short term rental operators were not required to collect the fee from their guests. In December 2024, the STPA was extended until 2029. At that time, the Code was amended to remove short term rentals from the STPA, with the intent that they would be added back with a modified remonstrance (objection) methodology to provide operators to have objections based on the number of available units.
The proposed ordinance will include short term rental operators in the STPA and provide a proportional remonstrance procedure to ensure fair and equitable administration of the STPA. Staff have worked with Travel Salem on the proposed amendments and recommend that the proposed ordinance be passed. Under the proposed remonstrance process, operators’ objections, including short term rental operators, will be based on the total number of rooms or units the operator has available. A hotel with 50 rooms will be entitled to 50 objections, whereas a short term rental operator with a single available unit will be entitled to one objection. If objections are received totaling more than 33% of the total number of potential objections from eligible operators, the STPA will be rescinded.
BACKGROUND:
The STPA has been in effect since 2019 and was renewed in 2024 for five years until 2029.
Dan Atchison,
City Attorney
Attachments:
1. Ordinance Bill No. 4-25
2. Exhibit A to Ordinance Bill No. 4-25