In the short term

Fayetteville seeks regulations on rentals

Many of the voices in last week’s Fayetteville City Council discussion about new regulations for short-term rentals within the city — think Airbnb, VRBO and the like — called on city leaders to reject a proposed ordinance.

Nobody knows for sure how many homes or apartments in Fayetteville are being rented through an app- driven market made possible by the same kind of Internet-based technology that creates the gig economy. Similar applications are known for empowering ride services Uber and Lyft; food delivery services Grubhub and Doordash; car-sharing services Turo and Getaround; or dog-walking services Wag and Rover.

Such real estate apps have made it far simpler for property owners to reach potential customers. Indeed, if you can operate a smartphone, you can sign up and market a property to someone looking for a place to stay. City planners have estimated as many as 500 dwellings in Fayetteville are now part of the short-term rental market.

In last week’s discussion, it perhaps came as no surprise that those already using their residential properties as short-term rentals had this suggestion: Leave us alone.

Everyone likes to be left alone, especially when government involvement can mean additional paperwork, collecting taxes and other steps considered as regulatory headaches.

In Fayetteville, though, there’s a tricky thing about doing nothing: Short-term rentals are currently illegal in the city.

City government simply hasn’t caught up to online marketing of accommodations that can turn any house, apartment or condo into a business venture competing for customers who in the past had hotels and motels as their primary options. Among the questions in Fayetteville is first, how to make such transactions and property uses in residential areas legal, and second, perhaps, how to make sure neighborhoods aren’t overrun with short-term rentals.

Although it’s illegal, a lot of folks, for a while now, have been earning money by renting out homes or apartments for a night or two, or maybe a week. Fayetteville can draw people as a university town, or as good base location for exploring the Ozarks, or maybe for people who want to come to town to try out the ever-expanding mountain biking options in Northwest Arkansas.

When there’s a demand for something more than a standard hotel room experience and an online rental process that makes it easy, people will fill the need. For those who have been, the status quote appears far more attractive than new regulations.

Staying off the city’s radar was possible when Airbnb and similar services were a novelty, but their popularity is growing. Sure, some people just rent out a room or the second side of their duplex. But without question, short- term rentals fueled by online marketplaces is, for others, a full-scale business venture.

Businesses don’t generally get to operate in residential zones, at least not free of local government oversight.

The “leave us alone” mantra isn’t going to work. Local government has a duty to other homeowners to ensure they don’t suddenly face life next door to a revolving door business that provides housing for short-stay tenants.

But so far, there haven’t been a lot of neighborhood folks complaining, so here’s a legitimate question: What’s the problem? Which, of course, is easy to say unless you’re the one living next door to the one that’s the problem.

“I think we need to keep this as simple as possible if we’re going to do this,’ said Council Member Sarah Bunch. “It seems like people should be able to do whatever they want to, as long as they’re not befouling the neighborhood and creating a problem.”

City staffers said the goal of Fayetteville’s proposal was really to create minimal regulations, such as a basic safety inspection. But then the description turns to things like applying for a business license and circumstances that can force a property owner to appear before the planning commission to seek special permissions. For people who haven’t had any regulation, it can start sounding like a burden pretty quickly.

Real estate industry advocacy groups appear ready to offer up resistance if Fayetteville city government goes too far. Last week’s meeting included claims the effort could run afoul of the state constitution and its protection of property rights. Naturally, property rights is almost always at the center of municipal regulations such as zoning or uses allowed within neighborhoods. They should be a major consideration, but if current ordinances render shortterm rentals illegal, the trick is going to be finding the balance between what it takes to make them legal and infringing on property rights. It can get complicated quickly.

The City Council wisely postponed consideration of its shortterm rental ordinance until the first meeting in January. The conversation by then needs to turn from “leave us alone” to how the competing interests can be balanced so that short-term rentals can be operated legally.