FAYETTEVILLE -- Owners of short-term rentals have a month to get a permit from the city to operate legally. Otherwise, they must go before the Planning Commission for a hearing.
The City Council on Tuesday made a few more short-term rentals eligible to operate under city code.
The council voted 6-0 to make a couple of changes to the city's ordinance regulating short-term rentals, such as those listed on Airbnb or Vacation Rentals by Owner. Council Member Teresa Turk recused from the vote, saying she is part owner of a property that could be affected by the changes.
Short-term rentals are homes that property owners rent out on a nightly basis. Type I short-term rentals have full-time occupants living in them, with a room or addition rented out nightly. Type II rentals have guests only staying on a nightly basis, and have no full-time occupants at the property.
One of the changes makes it so multifamily buildings that have units owned by separate property owners, such as condominiums, are exempt from a cap on the number of allowed short-term rentals. Normally, only up to one unit or 10% of all units, whichever is greater, in a multifamily building can be a short-term rental. If the units are all owned separately, as opposed to all of them being under the same ownership and leased out, like in an apartment complex, there is no cap on how many can be short-term rentals.
The exempted properties still have to adhere to a set of structure-specific basic safety standards, such as firewalls between units, sprinklers and clear access to stairways.
Another change allows short-term rentals in zoning districts that don't list residences as an allowed use. Those districts include commercial, industrial and institutional zones. Institutional zones typically are for government buildings, churches and schools.
The changes also add a definition for an apartment or multifamily complex to city code, which previously did not exist.
Additionally, short-term rentals have until Feb. 21 to get a conditional use permit from city staff, rather than the Planning Commission. Normally the commission grants such permits, requiring a public hearing at a meeting. In November, the City Council extended the grace period in which owners could bypass the public hearing and get the permit administratively from staff instead.
Clock ticking
Jonathan Curth, the city's development services director, said as of Thursday the city had received 376 applications for short-term rentals to get their permit. Of those, 177 had been approved.
With the changes to the ordinance adopted, Curth said about 30 more applications could be approved. City officials estimate somewhere between 500 to 600 actually operate in the city.
To get a permit, short-term rental owners must apply for a business license and get a building safety inspection. City accountants check to make sure the property owners have their 2% hotel, motel and restaurant sales tax documents filed. Planning staff review insurance requirements and verify property ownership. Owners must also get on the city's landlord registry.
Short-term rental owners need to get through the whole process by Feb. 21, Curth said. Staff are not planning to ask the council for another extension of the deadline, he said.
From then on, the owners will need to get their permit from the Planning Commission or they will operate out of compliance with city code, Curth said. Violators will be handled on a complaint-driven basis, and staff do not intend to seek them out, he said.
It's possible staff may revisit the conditional use permit process in the future, Curth said.
"If that does turn out to be a problem, and short-term rentals themselves don't turn out to be a problem, it may be worth reevaluating what kind of process standard you put them through," he said. "After we see these for a year, maybe they don't need a conditional use permit, and they can all get business licenses."
Cleaning up the process
Logan Humphrey, owner of Cohobnb, a local company that manages several short-term rentals in Northwest Arkansas, said on one hand it's good the city now allows the rentals in just about any zoning district.
On the other hand, if they're allowed everywhere but still have to get a permit from the city, it's very likely applications will clog up Planning Commission meetings after the Feb. 21 deadline, he said.
Humphrey said if owners have to get a conditional use permit from planning commissioners, who will evaluate and vote on whether to approve them, there's no point in a density cap on short-term rentals. The city still limits the number of the rentals allowed in a multifamily building, and only a maximum of 2% of the city's total dwelling units can be a short-term rental. The 2% cap seemed fair in order for the city to maintain an affordable housing stock, he said.
It would make more sense procedurally and legally to allow short-term rentals in the same zoning districts that allow hotels, rather than going through the conditional use permit process, Humphrey said. He wondered what the legal implications might be if the commission denied a permit for a short-term rental in an area where hotels are allowed.
"Originally, the ordinance went through a rendition for over a year that was really moderate," Humphrey said. "It allowed places where hotels are allowed by right to just have short-term rentals allowed by right. Now, no short-term rentals are allowed by right anywhere."
Conversely, if planning commissioners end up essentially rubber-stamping applications, that would put the purpose of the ordinance in question, Humphrey said.
Elsewhere in Northwest Arkansas, Rogers has a similar procedure to Fayetteville. Owners of short-term rentals need to get a use permit from planning staff, undergo a building safety inspection and get a business license. The rentals are allowed only in zoning districts that allow residential uses. The city collects a 3% lodging tax on the rentals.
Officials estimate there are about 100 short-term rentals operating in Rogers; so far, 17 have gotten business licenses, according to a city spokesman.
Springdale, Bentonville and Fort Smith don't have ordinances specific to regulating short-term rentals.
Web watch
For more information or to apply for a business license for a short-term rental, go to: http://bit.ly/faySTRs