Peoria approves $100,000 affordable housing grant; blocks two short-term rental applications
PEORIA, ARIZONA — September 14, 2021

Peoria approves $100,000 affordable housing grant; blocks two short-term rental applications

Council meeting featuring major debate over short-term rental policy in historic neighborhoods with two applications denied, approval of affordable housing initiative, and new business relocation to downtown.

Peoria Council Denies Both Uplands Short-Term Rental Applications; Approves Affordable Housing, Keller Station BDD Agreement

The Peoria City Council took decisive action on September 14, 2021, to block two short-term rental applications in the historic Uplands neighborhood, despite unanimous planning commission approval, while endorsing a $100,000 affordable housing investment and moving forward with professional services for the Keller Station Business Development District. The meeting revealed sharp ideological fissures over the role of residential regulation, the primacy of neighborhood input, and the tension between commercial opportunity and community stability in older districts.

Short-Term Rental Dispute: The Central Conflict

Two applications for short-term rental licenses—at 1514 West Columbia Terrace and 1030 North Elmwood Avenue—became the focal point of a debate that transcended their individual merits. Both had received unanimous approval from the Planning and Zoning Commission. Both were denied by the full Council.

Councilmember Graham framed the issue in historical and philosophical terms:

"We must choose wisely and not repudiate decades old city policy for as long as i can remember of promoting single family home ownership in favor of the destabilizing commercialization of our residential neighborhoods. Previous mayors and city councils who have sat in this chamber have stood on the platform of the promotion of single family home ownership this is their legacy to us." — Councilmember Graham further argued that the approval of STRs would exacerbate existing enforcement challenges:

"With the approval of strs we would be dramatically escalating make no mistake about this the amount of supervision and demands already being placed on our struggling and overstretched peoria police department and code enforcement department how will these departments which are already understaffed effectively address transits who are rowdy noisy drunk disruptive or worse" — Councilmember Graham referenced neighborhood survey data and the fact that certain Peoria neighborhoods—Weaver Ridge, the Knolls, Edgewild, and Summerplace—already maintained bans on short-term rentals. He also pointed to a long-standing residential standard of no more than three unrelated adults per dwelling, a threshold that short-term rental operations could easily exceed.

Councilmember Jensen, who had fought during the STR ordinance debate to ensure that older neighborhoods would retain a special-use approval process rather than having STRs become a permitted use, seconded Graham's motion to deny:

"To ensure that we had a say and that all the neighbors had a say in the older neighborhoods is why i fought against having short-term rentals be a permitted use and some of you are on the horseshoe will remember it was a long battle and i worked really hard to at least get the protection of a special use for our older neighborhoods and this is exactly why the residents of the uplands have contacted us have given their input and they are opposed and for that reason i seconded the motion and i will be voting against allowing the short-term rental in the uplands" — Councilmember Jensen noted that seven letters or emails opposing the applications were included in the Council packet, along with results from an Uplands Residential Association survey showing strong neighborhood opposition—though she acknowledged that residents willing to consider STRs demanded restrictions that would be "very difficult for the city to enforce."

Zachary Oyler, by contrast, expressed frustration at what he characterized as the wholesale rejection of short-term rentals based on ideology rather than property-specific analysis:

"I guess i'm somewhat confused about this because it was councilman graham's motion i believe on short-term rentals that passed the council when we made the official decision and it sounds like the commentary here is wholesale opposition to short-term rentals when it was his motion that passed and that's somewhat confusing and frustrating to me" — Councilmember Oiler argued that STRs, when properly managed and monitored, offer significant advantages over standard rental properties:

"My opinion is that short-term rentals are a very well monitored and managed process that much more so than even a standard rental in our community and i believe offer many benefits over and above what the normal neighborhood rental offers in terms of having some type of a monitoring program and a rating system on these properties as well as the tenants that live there and the ability to make revenue off of those allows investment in those properties which will then be commented on these rating scales" — Zachary Oyler

John Kelly similarly voted against both denials, expressing skepticism about the weight given to a small sample of neighborhood input:

"I'd like to say first i agree uh pretty much with the councilman euler i am not crazy about i received two emails on this both opposed to it and i would not take those two emails as any sort of evidence as what the uplands wants to do i really have no idea what the uplands wants to do" — John Kelly noted that the Council had engaged in extensive discussion before adopting the STR ordinance and special-use framework, and expressed a preference to evaluate the policy's success in practice rather than preemptively deny applications:

"I think we agreed to give this a shot... if it doesn't work out we can reverse it then" — John Kelly further criticized the procedural approach:

"There's been zero discussion on the merits of these two specific pieces of property on the floor here tonight it's been all wholesale commentary on the merits of short-term rentals in areas of the city but nothing related to these two specific properties and so it appears that we are just going to go down the list and deny" — Zachary Oyler

Director Joe Dolan of Community Development provided staff context on the STR policy landscape. He explained that the special-use requirement was intentionally designed to solicit neighborhood feedback and give Council greater control over STR approvals in specific districts. He further noted that staff had received feedback suggesting that residents had concerns about the permanence of special-use approval—that once granted to a property owner, the approval would transfer indefinitely if the property were sold.

"A lot of the feedback and support for the particular short-term rentals had spoke to the property owner and more so than the actual having a short-term rental so one of the questions that we wanted to post to council um and is if for these particular special uses if we should put a make them non-transferable upon new ownership so if the property owner would sell it to a different property owner they would the special use would expire and they would have to come back before the planning and zoning commission and apply for additional special use" — Director Joe Dolan

Timeline

Opposition

Support

Project Details

1514 West Columbia Terrace (Case 21-274)

1030 North Elmwood Avenue (Case 21-275)

Vote Breakdown

Case 21-274 (1514 West Columbia Terrace)

Note: The transcript indicates "six ayes and five no's so the motion passes" but does not list individual names. The Council composition per roll call was: Dr. Rita Ali (Mayor), Dr. Andre W. Allen, Denis Cyr, Graham, Denise Jackson, Jensen, John Kelly, Oiler, Reagan Buck (or similar), Ruck Rigel (likely Timothy Riggenbach), and Valpula.

Case 21-275 (1030 North Elmwood Avenue)

Note: The transcript states "passes seven eyes four nays ali alan kelly and euler thanks" but the vote tally does not align with the individual names listed. Individual votes not definitively stated in transcript for all members.

Outcome & Next Steps

Both short-term rental applications were denied. However, the Council directed staff to prepare an ordinance amendment addressing the non-transferability of short-term rental special-use approvals. Under the proposed change, if a property owner sells a parcel for which an STR special use has been granted, the special use would expire upon sale, and a new owner would be required to apply to the Planning and Zoning Commission for a new special-use approval.

City Manager indicated that staff would take the non-transferability policy proposal to the Planning and Zoning Commission in October, followed by a return to the full Council for adoption. The stated intent is to address neighborhood anxiety about STRs by ensuring that each new property owner must undergo the special-use approval and neighborhood notification process.

Zachary Oyler expressed concern that this policy direction would effectively preclude STR approvals in older neighborhoods, rendering the STR ordinance a hollow exercise and undermining the Council's intentional prior decision to allow STRs under certain conditions.

No timeline for consideration of additional STR applications in other neighborhoods was provided.

Controversies & Context

Historical Background on STR Policy

The Peoria City Council had adopted short-term rental regulations within the prior 12 months, creating a licensing framework and designating certain districts (older, single-family residential neighborhoods) as requiring special-use approval. This decision was made after extensive discussion and represented a compromise: rather than outright prohibition, STRs would be permitted under managed conditions, with older neighborhoods receiving an additional layer of review.

The tension evident in the September 14 meeting stems from the gap between that policy choice and its execution. Councilmember Graham, who had indeed sponsored the STR ordinance motion, framed the special-use requirement as a "backstop" to protect legacy neighborhoods in case the broader ordinance proved misguided. Councilmembers Oiler and John Kelly, by contrast, viewed the ordinance as a genuine policy endorsement and the special-use denials as a procedural subversion of Council intent.

Neighborhood Opposition and Data

The Uplands Residential Association conducted a survey of its members and reported "rather compelling" results. According to Councilmember Graham's paraphrase, the survey showed "a strong minority against and then those that might entertain the possibility of it wanted so many restrictions that frankly we would be stretched to even enforce."

The Council packet included seven letters or emails opposing the applications, all from Uplands residents. John Kelly and Oiler questioned whether this sample size was representative of broader neighborhood sentiment, particularly given that some residents might not have responded to surveys or written to Council, and given that the Uplands Residential Association itself does not speak for all residents in its geographic area (homeowner associations are not mandatory in Peoria, and many residents do not belong to them).

Enforcement and Operational Concerns

A recurring theme in the opposition testimony was the concern that the Peoria Police Department and Code Enforcement Division, already understaffed and overstretched, would struggle to manage complaints arising from STR operations—noise, parking, transient behavior, and property maintenance violations. Graham cited the difficulty of enforcing a parking permit program already in place in the Uplands.

Director Dolan acknowledged that parking enforcement on public streets is complex and neighborhood-specific; the city does have permit parking in some areas, but cannot unilaterally restrict public street parking city-wide. He also noted that the residential standard of three unrelated adults per dwelling might be one tool the city could apply to STR applications, though this would require modification to STR licensing criteria.

Three-Unrelated-Adults Standard

The traditional single-family residential occupancy standard in Peoria and similar cities limits occupancy to no more than three unrelated adults. A four-bedroom STR with nightly turnover could easily exceed this threshold, and the Council has not modified the STR ordinance to address occupancy caps. This became a focus point for identifying whether the special-use approval process could impose additional conditions (such as occupancy limits) on STR licenses.

Consistency Across Districts

The Council discussed the fact that several Peoria neighborhoods already maintain blanket prohibitions on STRs (Weaver Ridge, Knolls, Edgewild, Summerplace). The question of why Uplands should be treated differently—whether the Council was creating inconsistent policy or appropriately allowing district-by-district variation—was implicit in the debate but not directly addressed.

Duration

Other Notable Items

Affordable Housing Grant (Case 21-259): East Bluff 30-Unit Development

The Council voted 10-1 to approve a $100,000 Home Fund grant to the Peoria Opportunities Foundation to construct 30 new affordable housing units in the East Bluff neighborhood. John Kelly cast the lone dissenting vote, stating that he believed the program would be "harmful to poor people in our community." John Kelly did not elaborate on his reasoning, and no Council member responded to his concern.

Timothy Riggenbach, a strong supporter of the project, provided context and praised the Peoria Opportunities Foundation's comprehensive community engagement:

"Peoria opportunities foundation has done an amazing job putting together the funding for this unfortunately some of the sewer in this part of town and they encountered some significant cost overruns the covert related expenses added to that so they had additional funding coming to them from ida the illinois housing development authority and now we're closing the final gap with this hundred thousand dollar of home funds which is excuse me a very logical use for those funds" — Timothy Riggenbach highlighted the Foundation's effort to support new residents with neighborhood resources:

"Pof has put together a coalition of partners throughout the east bluff including churches the schools other non-profits businesses and they put together a booklet that every single resident in those 30 houses is going to has received and is receiving it's got a map of the east bluff that identifies assets it includes the parks the churches again the schools all kinds of amazing things that many of us take for granted but if you're moving into a new neighborhood are going to be extremely helpful" — Councilmember Riggenbach

The grant was approved unanimously except for Kelly's dissent.

Keller Station Business Development District (Case 21-265)

The Council approved a professional services agreement authorizing the city to engage an attorney and economic development consultant to establish the criteria and enabling ordinances for a business development district (BDD) at Keller Station. The Kim Group, the developer leading the project, agreed to front $18,500 in legal fees, with the commitment that these costs would be reimbursed from future BDD revenues if the district is established.

Timothy Riggenbach, who removed the item from consent, explained the financial structure:

"The eighteen thousand five hundred dollars that we're um using to engage the um law firm and consultant here will be fronted by the kim group and then if this bda does materialize that is considered a reimbursable expense and they will get reimbursed from it at that time so rather than have the city put up the money the kim group is doing that they believe in this project" — Timothy Riggenbach

Councilmember Jensen raised concerns about the permanence of BDD benefits and the potential for the developer to transfer the special tax increment. She questioned whether the Council would impose a sunset clause (as is typical in Special Service Area agreements) to limit the duration of the developer's access to tax increment revenues.

Corporation Counsel Capusta clarified that the current ordinance was merely to engage professional services; the actual BDD establishment ordinance, which would address sunset clauses, transferability, and other terms, would come back to Council for separate approval after staff and legal counsel completed their analysis.

The Council voted 10-1 to approve the professional services agreement (only Denis Cyr voted no).

Illinois Police Officers Pension Investment Fund Relocation (Case 21-273)

The Council approved a lease agreement and budget amendment totaling $100,000 in leasehold improvements to accommodate the relocation of the Illinois Police Officers Pension Investment Fund (the statewide pension board for police officers throughout Illinois) to Twin Towers at 456 Fulton Street, Room 402. The Fund is expected to employ approximately 15 people.

Officer Sean Curry of the Peoria Police Department, who sits on the Fund's board, was credited with facilitating the recruitment. The lease includes modifications to room definitions, a three percent annual increase at renewal, and restrictions on subleasing without city approval.

The Council approved both the budget amendment and the lease unanimously.

Non-Transferable STR Clause Direction (Unfinished Business)

Following the denial of the two STR applications, the Council, led by Dr. Andre W. Allen, directed staff to prepare an ordinance amendment making short-term rental special-use approvals non-transferable upon the sale of the property. Under the proposed policy, if a property owner sells a parcel for which an STR special use has been granted, the special use would expire, and a new owner would be required to apply to the Planning and Zoning Commission for a new special-use approval.

City Manager indicated that the amendment would be presented to the Planning and Zoning Commission in October and returned to Council thereafter.

Dr. Kiran Velpula raised concerns about the adequacy of the non-transferability approach, noting that it addresses only one of three identified issues: occupancy/management of tenants, parking in public spaces, and transferability. He questioned whether limiting transferability would solve the underlying parking and occupancy problems likely to arise with future STR applications in older neighborhoods.

Councilmember Graham supported the non-transferability amendment as an additional protective layer for legacy neighborhoods.

Zachary Oyler expressed exasperation, arguing that the Council should step back and decide whether it was genuinely committed to allowing STRs under any circumstances before further narrowing the conditions of approval.