Board lowers STR cap in residential zones
The Hot Springs Board of Directors lowered the cap on vacation rentals in areas zoned for residential use, voting Tuesday to limit the number of shortterm residential rental business licenses in a calendar year to 400.
The 6-1 vote came after the board had twice tabled the ordinance. The regulatory scheme the board adopted last year and amended numerous times set the annual cap at 500, a number some directors said affected the availability of affordable housing and the character of neighborhoods where short-term rentals have proliferated.
The new cap will take effect next year. City Manager Bill Burrough told the board about 350 licenses in residential zones have been issued or are pending approval. Applications for 2022 licenses submitted before Nov. 1 will be considered for renewal in 2023, even if the number of 2022 licenses in residential areas exceeds 400 on the Nov. 1 cutoff for 2022 applications.
The ordinance gives renewal of licenses priority over applications for new licences.
District 1 Director Erin Holliday opposed lowering the cap, telling the board that discouraging STRs in residential areas would hurt neighborhoods in need of revitalization. Her district comprises Park and Whittington avenues, areas she said have benefited from STRs.
Converting vacant, dilapidated homes on the verge of condemnation and demolition into STRs have helped preserve housing stock in downtown adjacent neighborhoods, she told the board, explaining that properties renovated into vacation rentals could eventually become owner-occupied homes or made available for long-term renters.
“There is a much greater risk to the availability of affordable housing when the house does not exist,” she said. “That is what’s happening right now inside the city. We are removing one of the only mechanisms by which the inner city of Hot Springs has the opportunity to revitalize structures that are at risk in favor of areas that may have other opportunities.
“There are mechanisms in place where those neighborhoods can protect themselves.”
Holliday was referring to bills of assurances and deed restrictions neighborhoods could use to prohibit STRs. City Attorney Brian Albright told a citizen who addressed the board that the city’s STR regulations are inferior to a bill of assurance that prohibits vacation rentals.
“An STR license doesn’t supersede your bill of assurance or deed covenants, however, it is a private covenant for you as property owners to enforce,” he said.
John Bomar told the board he and his neighbors were surprised to learn the city had issued STR licenses for several residences at the end of their Ledgerwood Road neighborhood.
“Everybody in my neighborhood is incensed as what they see as a lack of due process,” he told the board. “None of us knew this was coming. Now we have four motel houses down at the end of our road, and we never even knew it was coming. If that’s not a lack of due process, I don’t know what is.”
The STR scheme the board adopted last year delegated the administrative policy for issuing special use permits, which are a prerequisite to obtaining a STR business license in a residential area, to the city manager. The policy’s notification provision
requires a sign with a QR code providing a link to information about the application, approval and appeal process be posted on properties approved for special use permits.
Adjacent property owners are to be notified by mail if the city’s ruling on a special use permit has been appealed to the Board of Zoning of Adjustment. A notice is also published in the newspaper.
The STR ordinance the board adopted last year initially required a conditional use permit instead of a special use permit, a process the city created specifically for STRs. Conditional uses, or dispensations for land uses that aren’t granted by right in a zoning district, have a more rigorous notification requirement than the STR process.
According to the zoning code, notification that a conditional use application has been filed is mailed to all property owners within 200 feet of the proposed location. Albright told the board Tuesday that appeals notices for special use permits are only mailed to property owners contiguous to the proposed location.
The city board is the venue for appeals of conditional uses granted by the planning commission. Keeping the board out of the appeals process was one of the rationales for replacing the conditional use with the special use process. But the ordinance the board adopted Tuesday allows Board of Zoning Adjustment rulings on special use permits to be appealed to the board. BZA appeals went directly to circuit court prior to the change.
Several property owners have criticized the appeals process, telling the board the BZA’s review is limited to the actions of the administrative officer who issued the special use. It’s unclear if the board will have more latitude.
“I say no. You don’t,” Albright, responding to Holliday asking if the board would be able to consider a STR’s compatibility with the neighborhood, said. “Quasi judicial is an application of the law to the applicant that’s coming. You have an ordinance that is your law. It’s not legislative. You’re not changing the law. You’re applying the law.”
Albright said the standard of review is limited.
“So at the end of the day, assuming staff and BZA are well within the code, there’s no other decision we’d be in a position to make, because the code is the code,” Holliday told the board. “It’s not based on factors outside the code or our opinion about the appellant or our opinion about the applicant or whether or not, quite frankly, there’s too many in a neighborhood, because that’s not in our code.”
Albright has told the board the quasi-judicial capacity it assumes when hearing appeals from the planning commission and BZA prohibits directors from soliciting or receiving information about the appeal outside of board chambers.
Board members who violate the prohibition on ex parte information are required to recuse from the hearing. During the run-up to Tuesday’s vote, several directors said removing the board from the appeals process made it unaccountable to constituents.
Holliday was the lone director to vote against inserting the board into the appeals process, telling her colleagues it will prevent them from talking to constituents.
“My fear is we’re shirking our responsibility in being able to be an advocate and communicate with people in our neighborhoods,” she said. “It’s a huge conversation we don’t get to talk about. We need to protect our ability to vote, which means we really can’t talk about it all. That’s not something I want to do in my neighborhood.
“I feel like it’s going to remove my ability to communicate with my constituents about something that’s incredibly impactful in my district.”