City weighs rules on residential rentals

Cap proposed on licenses for some short-term lodging in Hot Springs

HOT SPRINGS — The draft ordinance on regulating shortterm residential rental businesses that was presented to the Hot Springs Board of Directors earlier this month caps the number at 1,000 in the city’s five residential zoning designations.

Owner-occupied, shortterm rentals don’t count against the cap in residential zones, City Attorney Brian Albright told the board.

The city said it’s issued about 200 business licenses for short-term residential rental businesses. Most of the applications were submitted after the March 2 adoption of the ordinance establishing a more than four-month moratorium, effective May 30, on the issuance of short-term residential rental business licenses.

The city hopes to present regulations for ratification at the board’s May 18 business meeting. The enabling ordinance’s adoption would render the moratorium moot, as the more than four-month pause was intended to give the city time to develop a regulatory scheme for a business practice that occupies an ever-growing share of the area’s lodging portfolio. Hot Springs’ tourism agency said more than 1,000 are in Garland County.

The ordinance adopted last month prohibited short-term residential rental businesses, which the ordinance defined as accommodations offered for periods of not more than 30 days, from operating in the city without a business license and established an annual tax of $50 per bed.

A short-term residential rental business license isn’t required for bed-and-breakfasts, hotels, motels or timeshares, as they’re already regulated by the city code.

“We’re trying to focus in on protecting the affordable housing stock, protecting neighborhoods to the extent we can,” Albright, referring to the cap in residential zones, told the board. “To a large extent, the market is going to dictate that. There are certain areas of the city where these want to be. They want to be close to [Oaklawn Racing Casino Resort]. They want to be close to the trail heads. They want to be close to the lake. Those are the areas where it’s going to happen.”

The 1,000 cap in residential zones comes from the shortterm residential rental businesses ordinance for Santa Fe, N.M. Its ordinance also prohibits issuing permits for residential units within 50 feet of an existing short-term residential rental business. That provision wasn’t included in the draft ordinance presented earlier this week.

“I am more concerned about the number being arbitrary and capricious if it’s too low because the people who are going to sue are the people in the business, not the neighbors,” Albright told the board. “I’m going to have to defend this ordinance against a lawsuit claiming it was arbitrary and capricious. If we set it at 1,000, we’re not going to get there. You’re not going to get to 1,000 in the residential areas. The market won’t stand it.”

Comments made at the March 23 session included complaints about absentee owners who don’t respond to complaints about their guests. The draft ordinance requires an on-call local contact who can be on-site within an hour and take corrective action within 24 hours.

“I think the best part about the ordinance is the fact that we have to have an agent in our database we can contact who’s going to address the issue then,” City Manager Bill Burrough told the board. “We don’t have that now. We’re trying to get in touch with somebody who lives in New Jersey.”

Applicants would be required to get a certificate of occupancy, meaning their properties would be inspected for compliance with fire and building codes. Inspections wouldn’t be required for license renewals, but access would be provided upon request by the city in order to verify code compliance.

“On the renewal, they don’t have to go through inspection, but they have to affirm they’re still in compliance,” Albright told the board. “They do have to provide access and information to the chief building official and fire marshal as they might request to ensure that those health and safety guidelines are being followed.”

Several people who spoke at last month’s session complained about short-term residential rental businesses hosting dozens of guests in single-family homes. The draft ordinance sets the maximum number of guests at three per bedroom or one per 200 square feet of living space, whichever is greater.

Parking was also raised at last month’s forum, with speakers complaining about guests cluttering residential streets with their vehicles. The draft ordinance requires short-term residential rental businesses that aren’t owner-occupied to have off-street parking for guests, with one space per 800 square feet of living space. Those licensed before May 30 would be exempt from the parking requirement. Annual renewal of their license wouldn’t require compliance with the parking provision.

The draft ordinance also requires strict compliance with city solid waste and noise codes.

Licenses can be suspended or revoked if the place doesn’t meet sanitation and health standards of the neighborhood, according to the draft ordinance, and if the owner or agent fails to provide timely response to two or more complaints during a 12-month period.