“The Faye Chateau” on Church Avenue is managed by Cohobnb Properties and listed on Airbnb / Photo: Todd Gill, Fayetteville Flyer
People who rent homes in Fayetteville through sites like Airbnb and VRBO have a few extra months to take advantage of a grace period to come into compliance.
The City Council in April approved an ordinance to legalize the short-term rental of homes, which had previously been illegal in Fayetteville. The council this week extended the start-up period for anyone who had a rental in place before the new law was passed. The start-up period allows people to get approved without having to go through a Planning Commission hearing or paying for a conditional use permit.
The new rules require anyone operating a short-term rental to get a business license and a safety inspection if the rental is not in one of the city’s commercial or mixed-used zoning districts where hotels are allowed.
Short-term rentals are categorized 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 have no owners living in them.
Owners of both types must pay the city’s 2% hotel, motel and restaurant (HMR) tax, and are required to obtain vacation rental or short-term rental insurance coverage. They must also designate a representative who can be at the unit within three hours in case of an emergency.
Type 2 owners have an additional requirement, which is to obtain a conditional-use permit from the Planning Commission.
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 ordinance went into effect May 21, but the council included a six-month start-up period for operators to come into compliance without going through the Planning Commission hearing process and paying the $100 conditional-use permit fee.
That six-month deadline was Nov. 21, but city staff asked the council to extend the start-up period by three months to Feb. 21, 2022. The council agreed, and the new extended date is now set.
Why an extension?
City planners estimate there are between 500-600 homes being used as short-term housing for visitors in Fayetteville, but as of Oct. 15, only 240 applications had been submitted, of which 69 had been approved. Of those, 199 are for Type 2 rentals, with only 59 having been approved.
Staff said during the first few months of the start-up period, a process was established for reviewing and inspecting short-term rental units, but many applicants either did not yet have the necessary insurance or ownership documents or didn’t fully comply with building safety standards which require things like smoke and carbon monoxide detectors, fire extinguishers, and other items.
“Addressing these issues has taken weeks or months in many instances,” a staff memo stated. “Given the large number of applications still in review, totaling over 70% of the total received, staff recommends affording applicants and staff additional time through a three-month extension of the start-up period, for a total of nine months.”
How to apply
Business licenses for short-term rentals may be applied for online at egov.fayetteville-ar.gov.
The following information is required:
- Physical street address of the rental property.
- The type and total number of dwelling units located on the lot containing the STR unit.
- If the owner is not the own agent, the owner-designated agent’s information, including legal name, mailing address, immediate contact phone number and immediate contact e-mail address.
- Documentation of approval of a life safety and egress inspection by the city’s Building Safety Division for the rental unit
- Proof of vacation rental or STR insurance coverage.
- Proof of application for remittance of the city’s hotel, motel and restaurant (HMR) tax, and verification that all sales, use, and HMR taxes are current.
- An approved conditional use permit for Type 2 units licensed (not required before Feb. 21, 2022).
All short-term rental operators also need to register with the city’s new Landlord’s Representative Registry.