At its work session Tuesday, the Lawrence City Commission will review a draft of regulations for short-term rentals.
The city’s zoning code regulations currently prohibit short-term rentals, which are leased through online platforms such as Airbnb. At their work session, commissioners will discuss a draft of an ordinance that would set out rules and limitations on the use of short-term rentals.
Mayor Leslie Soden said for her, there are two main drivers to regulating short-term rentals: tax collection and the impact on the cost of housing. Soden said it’s important to ensure that all such rentals are charging their lessees the city’s 6 percent transient guest tax, which all hotels are required to charge.
“I think making it a little more of an even playing field might be good,” Soden said.
Airbnb, one of the most popular platforms for short-term rentals, announced in January that it had made an agreement with the Kansas Department of Revenue to collect and remit taxes via its website. For Lawrence, that includes both a local sales tax and the guest tax. However, there are various other platforms that don’t automatically charge local taxes.
The staff-proposed ordinance would regulate short-term rentals through zoning code changes and policies that mitigate the potential negative impacts, according to a city staff memo to the commission. In addition, the ordinance would require that short-term rental hosts be responsible for ensuring that all applicable taxes are collected and remitted.
Hosts that rent the entire property as a short-term rental, as opposed to just a bedroom, can make significantly more per month than traditional landlords. Soden’s other concern deals with the impact of short-term rentals on property values and rental rates.
“I think it can have a real negative impact on our affordable housing problem, where people might buy investment properties,” Soden said.
Although the ordinance doesn’t specifically refer to affordable housing, it does differentiate between rentals that are occupied by owners and those that aren't.
As currently drafted, the ordinance would permit short-term rentals in single and multi-dwelling districts, but would regulate nonowner-occupied rentals differently. Specifically, staff is recommending that nonowner-occupied rentals be required to follow the existing regulations for bed and breakfast operations, which requires a special use permit from the city.
Owner-occupied rentals would not have to obtain a permit, but would have to meet the requirements in the ordinance. In addition to the tax requirements, those rentals would need to be inspected and licensed annually, provide proof of insurance, conform with current occupancy standards and provide notification to neighbors.
The City Commission will convene at 5:45 Tuesday at City Hall, 6 E. Sixth St.