Fayetteville now has rules in place that legalize short-term rentals.
The City Council on Tuesday approved a set of regulations that allow property owners to rent their homes through services like Airbnb and VRBO.
Beginning next month, anyone who operates a short-term rental must obtain a business license and a safety inspection if the rental is not in one of the city’s districts where hotels are allowed.
The new rules categorize short-term rentals as either Type 1 or Type 2.
Type 1 rentals are homes that the owners live in, but sometimes rent out rooms or the entire house to guests when they’re out of town. Accessory dwelling units also count as Type 1 properties. Type 2 rentals are rented all year, and do not have any owners living in them.
Owners of both types of rentals must begin paying the city’s 2% hotel, motel and restaurant (HMR) tax each month, and are required to get short-term rental insurance coverage. They must also designate a representative who can be at the unit within three hours in case of a problem.
Type 2 owners must get a conditional-use permit from the Planning Commission if the rental is located in a residential neighborhood.
The new law includes an occupancy limit which states that a short-term rental can only house two people per bedroom plus two more. Special events – like parties, weddings, anniversaries and receptions – are not allowed. Parking is limited to the maximum number of vehicles allowed in the underlying zoning district.
The law also states that no more than 2% of all residential units in Fayetteville can be Type 2 rentals.
The regulations will sunset after 20 months, which means the council can either renew the ordinance or make changes to it if members decide not to let it expire.
The ordinance goes into effect May 21, but the council included a six-month start-up period for all operators to come into compliance without a Planning Commission hearing or paying the $100 conditional-use permit fee. That deadline is Nov. 21.