On Thursday, Park City became the first city in the country to legally define co-ownership of homes and regulate its use.
The Park City Council voted unanimously to approve an ordinance that regulates fractional ownership of homes. That follows months of debate and community input about the impact of heavily-used vacation homes on residential neighborhoods.
The ordinance rejects the claim that fractional ownership is a timeshare. Many residents have claimed during the council’s deliberations that fractional ownership is synonymous with timeshares. But existing timeshare rules and neighborhood CC&Rs didn’t apply to co-owned homes, and that pushed the city’s planning department to create a new definition so that they could regulate property that is jointly owned.
In 2020, the company Pacaso, founded by former Zillow executives, started offering a way for people to buy portions of multi-million dollar homes - from ½ to ⅛. Pacaso sets up an LLC and then offers property management services to buyers.
Thursday’s vote confines Pacaso’s use to a small area of the city, but the company said it was “a big step forward,” because its use was found to be different than a timeshare.
"A lot of thought, analysis, and discussions have gone into crafting a policy that considers a broad spectrum of factors when contemplating this new commercial model," City Manager Matt Dias said in a statement.
"To protect our neighborhoods, the city worked hard to strike a legislative balance that best serves the entire community."
The ordinance takes effect immediately. It permits fractional ownership in the same zones as timeshares and private residence clubs. It also starts a six-month study of various zones, in order to determine whether the use should be allowed there or not.
The new rules also establish a department level review process for any new applications for fractional ownership in the city, which will involve noticing neighbors. It also requires management companies like Pacaso to have an active business license with the city.
A map of where co-ownership will be allowed, and what zones are being studied, can be found here.
Pacaso also said it appreciated that the ordinance reflects its policies around parking, noise, trash collection, and snow removal. Additionally the ordinance prohibits short-terms rentals in co-owned homes, which was already a rule for Pacaso.
