Lawrence City Hall, 6 E. Sixth St., Thursday, July 7, 2016

As the number of Lawrence short-term rental properties — such as Airbnb homes — rises well past 100, so has the call for the city to regulate the industry.

“What little data we’ve collected shows that there is an increase,” said Scott McCullough, director of planning and development services for the city. “With the universities and some of our amenities that draw in different large-scale events, we’re going to have a propensity to support short-term rental use.”

With that trend in mind, city staff recently began drafting regulations for short-term rentals, which currently aren’t permitted under city code. The range of potential regulations is broad. Some cities have gone beyond permit and safety regulations to limit the type or number of short-term rentals, but whether Lawrence will go that far is unclear.

Airbnb and websites like it provide a service somewhere between hotels and long-term rentals, but currently have no oversight from the city. Lawrence Airbnb properties range from one bedroom in an owner-occupied home to five-bedroom houses boasting capacity for 10 guests.

Not a passing trend

Though the number of listings fluctuates, the number of Airbnb properties in Lawrence has more than doubled over the course of a year, growing from about 70 last summer to about 165 today.

City Commissioner Matthew Herbert, who in addition to being a high school teacher runs a property management company, said the city needs to update its code to deal with short-term rentals, which he said are here to stay.

“We have to keep in mind that this isn’t a passing trend, and sometimes these things get treated like they’re a passing trend,” Herbert said. “The reality is that it’s here, it’s been here for a very long time, and (pretending that) saying that we ban short-term rentals means that we don’t have them is incredibly naïve.”

Michael Davidson, director of the city’s visitors bureau, said that he thinks short-term rentals and the sharing economy are disrupting the hospitality industry more than any other. As the popularity of short-term rentals such as Airbnb has grown, though, he said the thinking has evolved.

“I think the first reaction of the whole industry was ‘we need to shut this down because this is not good,'” Davidson said. “But you can’t shut it down, so now we need to figure out the best way to work with it.”

Community impact

In Lawrence, room rentals within an owner-occupied home account for about 55 percent of short-term rentals, according to Airbnb listings. The rest allow guests to rent the entire apartment or home.

McCullough said the city has gotten a handful of complaints about short-term rentals so far this year, all of which center on neighborhood impact. He said that included parking issues, partying and concerns about the effects an increasing number of short-term rentals and guests may have.

“There is the concern about just the proliferation of them without regulation,” McCullough said. “So that if they see a couple of houses going up in a neighborhood, that to have a whole neighborhood turn into many short-term rental uses may just exacerbate any impacts that these things cause.”

City code currently doesn’t allow for short-term rentals. As with any land use issue, McCullough said that when the city receives a complaint, it sends notice to property owners informing them they are in violation of development code and zoning laws and asks them to desist. The Airbnb notices have also let property owners know the city is in the process of developing regulations.

“We encourage owners to comply with the codes today, then participate in development of a set of regulations that address short-term rentals,” McCullough said. “If they comply, then we close the case.”

In the month of May, the average Airbnb property was occupied about 40 percent of the time, and the median revenue for a host of private room was about $475 that month, while the host of a one-, two- and three-bedroom made about $1,250, $1,800 and $2,340, according to a report shared with the City Commission.

Davidson said short-term rentals like Airbnb have grown from a niche market to encompassing every demographic. Davidson also said there could be some negative impacts, noting that while short-term rentals create economic activity and income for the hosts, they don’t provide jobs as directly as hotels do.

“We have a new hotel that’s opening up on 23rd (Street), and (it’s) going to start with probably 30 or 40 full-time employees once (it) gets up and running,” Davidson said. “From that perspective, this is a challenge to the traditional tourism industry.”

Still, Davidson said it’s an interesting time for the tourism industry and the proper tools need to be created to support visitors who choose short-term rentals. He said regulating short-term rentals to make sure they are safe “makes all the sense in the world.”

Potential regulations

According to a city staff report released earlier this year, regulations in other cities range from safety and permitting requirements to limits on the type or number of rentals allowed. Those regulations stem from concerns about neighborhood impact as well as concerns that too many short-term rentals will exacerbate affordable housing shortages.

One option is a requirement that the short-term rental be within the host’s residence, in essence ruling out rentals of secondary properties. The report notes that residency requirements inhibit landlords from converting long-term rentals into short-term rentals.

Other business-related regulations limit the number of rooms dedicated to short-term rentals, the number of occupants or the number of days a property can be rented, according to the report. Some cities have also restricted the number of permits that can be issued citywide or within each neighborhood.

In reference to the concerns about affordable housing, Herbert said he doesn’t think the cost and work associated with operating a short-term rental makes them an appealing alternative to residential landlords. He noted the additional responsibilities such as house cleaning and paying utilities.

“As somebody who is in the property management business, it’s not all that appealing to me because the constant turnover aspect of it,” Herbert said. “While there is certainly probably more money in the game, there’s also a significantly larger amount of work.”

Herbert said his primary focus for regulation is public safety, and he thinks Airbnb hosts should have the same standards, registration and inspections as landlords. When considering regulation beyond that, he said the city needs to keep in mind that people often rent rooms in their home as a way to supplement their mortgage.

“I’m of the belief that we need to be very careful when we go about doing this, because I think sometimes when we talk about affordable housing we think of it just as what can we do to help put people into affordable housing,” Herbert said. “And we forget that there exists an entire issue of how do we pass ordinances that enable people to stay in their housing.”

Davidson said he’s encouraged the city to move forward and that he expects the discussion to be multifaceted, including both people from the hotel industry and small-scale Airbnb hosts.

“I’m happy it’s going to see the light of day, so people can have an open discussion about it,” Davidson said.

Neighbors, however, will also have a say. McCullough said city staff plan to come up with a framework for the ordinance, which will be put out for public comment before city staff brings the first draft of the ordinance to the City Commission for review.

McCullough said he thinks the regulations will be about striking a balance.

“It’s really balancing the ability to do short-term rentals in different housing types with the impacts they bring to a neighborhood,” McCullough said. “Those transient habitation impacts could be traffic, noise and party houses, and those types of potentially negative impacts.”