Kelly Hale Syer holds her cat, Tiggy, on Friday in one of two bedrooms on the second floor of her Fayetteville home she and her husband rent to visitors using Airbnb. Fayetteville planners have released the first draft of a proposal to regulate short-term rentals in the city. Go to nwaonline.com/200208Daily/ for today's photo gallery. (NWA Democrat-Gazette/Andy Shupe)

FAYETTEVILLE -- City planners hope neighbors, hosts and hospitality professionals will agree on proposed regulations for short-term rentals.

The Planning Commission on Monday will review the first draft of a proposal to regulate short-term rentals, such as those through Airbnb or Vacation Rentals By Owner. The City Council authorized planners last year to look into regulation after staff realized short-term rentals are technically against city code.

Web watch For more information, go to the city’s webpage on short-term rentals: bit.ly/fayshorttermrentals

The meeting What: Fayetteville Planning Commission When: 5:30 p.m. Monday Where: Room 219, City Hall, 113 W. Mountain St.

Planners estimate there are 500 such properties in the city. Through a hosting platform online, homeowners rent a room or entire property to travelers for a few days. The arrangement is similar to a hotel or motel, just at private property rather than a formal business.

The city classifies short-term rentals the same as hotels and motels, which are only allowed in commercial and mixed-use zoning districts. However, most of the 500 properties lie within neighborhoods.

Focus groups and members of the public started meeting in August to help planners draft regulations. Andrew Garner, city planning director, said the idea was to craft something competing interests could agree on.

Notes from the focus group meetings show consensus on different aspects of the regulations. The city released the first draft to its website last week, and more feedback has been rolling in, Garner said.

"On one hand, there are some people who think it's too stringent," he said. "Then we have some other people who think it's not stringent enough. I think we'll hear strong opinions either way."

Location, rules

Short-term rentals would be able to operate in any zoning designation where residences and hotels are allowed. That includes 25 zones, ranging from residential single family to multifamily and commercial.

Occupancy would be capped. A maximum of two people per bedroom plus two would be allowed, with a maximum total of eight people regardless of the number of rooms. Parking requirements would be the same as any residential zone.

City planners also aim to limit the number of short-term rentals in a neighborhood. No more than one rental would be allowed per eight homes on a block. None would be allowed on a block with fewer than four homes. No more than two units in an apartment complex could be a short-term rental. Only one of the units in a duplex, triplex or quadplex could be a short-term rental. However, short-term rentals operating now would be exempt from the caps.

The owner of the home wouldn't have to live there, but either he or a manager would have to be available by phone 24 hours a day and be able to get to the property within an hour.

Parties, special events or rentals of less than one night would be prohibited.

Fees, licenses, taxes

Existing short-term rental properties could continue to operate, but would need to get a business license from the city within six months of the council's adoption of the proposal. After that, they would be considered out of compliance.

"We weren't intending to shut any of the ones down that were already operating," Garner said. "We just want them to get their license."

Business license fees vary depending on if the applicant is home-based and when the application is submitted. The range for home businesses, which a short-term rental would fall under, is $15 to $30. Annual renewal is $15.

Garner Stoll, Development Services director, said he thinks the city will be able to process all the applications for business licenses for short-term rentals within the six-month time frame. There's already money in the budget to hire another planning staff processing person, he said.

To get a business license, applicants need to fill out a form online. The application for a home-based business is less strenuous than a brick-and-mortar establishment, said Vicki Hilliard, the city's business license clerk. The application asks for basic information, such as the home's square footage, number of employees (which could be one, if it's just the homeowner), parking spaces and fire alarms or sprinkler systems, she said.

Once the homeowner fills out the application, it goes to the Fire Department for safety review, the county for tax purposes and the city planning staff. After those entities sign off, it goes to the development review manager for final approval. Jonathan Curth serves that role for the city.

Owners also would have to get a residential building inspection to get the business license. The fee for the inspection is $25. The inspection ensures the dwelling has basic safety features, such as functional doors and windows, balconies on platforms 6 feet or higher and working smoke detectors. Fire, hazard and liability insurance also would be required.

"That was one of the big issues we heard from almost everybody, that they felt like safety was a concern with these," Garner said.

If a property owner violates the rules for short-term rentals, the city would have the ability to revoke the business license, Garner said. Having a business license will allow the city to track where and how many short-term rentals there are. It also gives the city a legal pathway to shut down disruptive rentals, he said. There's an appeal process built in as well.

The property owner can request exceptions to the rules, which would require review and a permit from the Planning Commission.

Enforcement could be complaint-driven or more proactive, depending on what the City Council decides, Garner said.

Two state laws passed last year require owners of short-term rentals to collect and remit sales tax. Previously, hosts such as Airbnb had voluntary local agreements, but now the state requires it. The city's proposed ordinance reflects that, Stoll said.

"I don't know if everybody knows about it yet," he said. "But it went beyond the voluntary agreement at the last legislative session."

Short-term rental owners have to register with the Arkansas Department of Finance and Administration to receive a sales tax permit and collect taxes, according to a department spokesman.

Group reaction

Kelly Hale Syer runs the upstairs of her home as an Airbnb in the Mount Sequoyah neighborhood. She and other owners had some apprehension when the city announced it would pursue regulations, but participating in the focus groups eased many of those concerns, she said.

Syer said she wouldn't mind having a building inspection at her home. She operates a separate online business and understands running a business out of her home involves certain formalities, she said.

Holding everyone to the same standards evens competition, Syer said. An inspection also could prevent mishaps for which the owner would be held responsible, she said.

"Honestly, it protects the business owner as much as it protects the consumer."

The proposed regulations address many of the concerns hotel professionals historically have had with short-term rentals, said Narry Krushiker of KHG Hotels, a hospitality group operating several hotels in the region. Hotels are held to high safety and quality standards, and when short-term rentals operating out of a home go unchecked, it creates an unfair system, he said.

City planners listened to the hotel side and came up with a good compromise, Krushiker said.

"Hotels are hotels and are meant for short-term rental -- not residential places," he said. "But there has to be a happy medium for certain things."

Different strokes

Springdale, Rogers and Bentonville don't have ordinances specific to short-term rentals, but handle any issues with them in other parts of city code. For instance, all three have regulations on occupancy, noise control and property maintenance. Rogers classifies short-term rentals the same as a bed and breakfast.

Regulations for short-term rentals vary widely across the country.

Seattle, for example, requires homeowners to get a business license from the city and a license for short-term rentals specifically. Individual homeowners are allowed to operate a maximum of two short-term rental properties. All rental properties in the city require an inspection at least every 10 years to ensure basic safety standards, according to the city website.

Jersey City, N.J., passed a short-term rental ordinance in the summer after a nine-hour-long council meeting. Opponents certified a petition to put the ordinance to a vote. Voters approved the ordinance in November.

The ordinance bans any short-term rentals in buildings with more than four units, and phases out existing short-term rentals by next year. Property owners who don't live on-site can only rent out their properties for up to 60 days of a year. Property owners who live on-site can rent out their homes year-round. A short-term rental permit is required, which costs $250, and must be renewed annually, according to an article in the Jersey Journal.

Some cities, such as Santa Monica, Calif., ban most short-term rentals. Only homeowners who remain on-site while a guest is staying can lease their properties for fewer than 30 days, according to a report in the Los Angeles Times.

Planners tried to craft an ordinance right for Fayetteville, Garner said. After the Planning Commission reviews the proposed regulations and makes any changes, the City Council will take it up, he said. The city also has a web page set up with a portal for residential feedback.

"It's not a black and white planning issue," Garner said. "Many cities, many planners, many politicians have taken a lot of different perspectives on it. It just depends on what the community wants."

NW News on 02/09/2020