Bill limiting local restrictions on short-term rentals fails in Arkansas House committee

(File Photo/Arkansas Democrat-Gazette/Thomas Metthe)
(File Photo/Arkansas Democrat-Gazette/Thomas Metthe)

A bill that aims to limit local government restrictions on short-term rentals failed to advance from a House panel on Wednesday.

Senate Bill 197 by Rep. Brit McKenzie, R-Rogers, failed in a voice vote in the Committee on City, County and Local Affairs. The vote came after the panel heard testimony for roughly six hours on the measure earlier this month.

Following the meeting, McKenzie said he was still optimistic about advancing some version of his bill.

"I don't believe the bill is done," he said. "We're trying to figure out what if anything needs to happen to the substance of the bill for it to run and get it through committee."

Before the vote, McKenzie presented an amendment that would allow local governments to require short-term rental owners or managers to obtain a permit costing no more than $50 per rental before accepting guests.

Local governments under the amendment could require owners or managers to take a short-term rental offline for up to 30 days if they are adjudicated of violating the same local ordinance three or more times during a 180-day period.

McKenzie said the amendment aims to suspend rentals for up to a year if the owner or manager violates a local ordinance and is found to have contributed to the serious physical injury or wrongful death of a person due to purposely reckless conduct. The amended bill also intends to prohibit the use of short-term rentals to house sex offenders, sell illegal drugs or alcohol, or house an adult-oriented business.

The bill wouldn't affect the ability of municipalities to collect taxes or impact the ability of homeowner associations to enact policies on short-term rentals, McKenzie said.

He presented his bill as a measure intended to preserve the property rights of all Arkansans guaranteed by the state Constitution.

Earlier this month, several homeowners and local government officials raised concerns that short-term rentals -- especially those listed on online marketplaces run by Airbnb and other large companies -- could devalue properties, cause disturbances for long-term residents and restrict housing availability. Opponents also said the bill would limit local control.

McKenzie has said nuisances such as loud music and parking control sometimes associated with people staying in short-term rentals also could be caused by long-term renters or residents. The way municipalities should address these concerns, he said, is through their police powers. McKenzie noted that long-term rentals may be located in residential areas and argued that short-term rental properties should not have to be located in commercial zones.

When considering housing shortages, McKenzie said local governments should focus on reducing regulation instead of limiting the rights of current property owners.

Property owners and real estate agents spoke in favor of the bill, saying it would protect the rights of landowners and prohibit local government overreach.

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