Lawrence considers requiring licenses, inspections for Airbnb, other short-term rentals

photo by: Mike Yoder

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

The City of Lawrence could soon begin regulating the fast-growing short-term rental business in Lawrence.

Following direction from city commissioners last year, city staff has drafted regulations that would allow short-term rentals in all residential areas, but would require them to be licensed, to be inspected annually, to be insured to a certain level and to follow occupancy limits and other restrictions. Permits for short-term rentals where the property owner resides elsewhere would be an option, but not guaranteed.

Current city code doesn’t allow short-term rentals, but that hasn’t stopped the practice from occurring in Lawrence. Figures show the number of such rentals has been growing quickly in Lawrence over the past few years. Guests use online platforms such as Airbnb and HomeAway to rent rooms, apartments or entire homes for stays as short as one day. Airbnb, one of the more popular websites, has approximately 230 properties listed for Lawrence, more than half of which allow guests to rent out the entire home or apartment.

A city staff memo to the City Commission says that since 2014, the number of properties listed on Airbnb has on average doubled annually. Over the past couple of years, commissioners have heard concerns from neighbors about short-term rentals bringing traffic, trash and other issues to neighborhoods. Commissioners have also heard concerns about rentals that are not owner-occupied contributing to the city’s affordable housing shortage by taking a property off the housing or rental market. Short-term rental owners, on the other hand, have said the extra income from rentals allows them to substantially improve the properties.

In a letter to the commission, the Lawrence Association of Neighborhoods says that short-term rentals being used as “party houses” compromise the quality of life in neighborhoods. The association says it would like to see the city implement regulations for short-term rental units.

“While modest use of this kind of rental offers possible financial assistance for homeowners, there are other individuals that will take advantage of such an unregulated use and cause neighborhoods to suffer and decline,” the letter says.

Per the previous direction of the commission, the proposed regulations vary depending on whether the owner of the property lives in the home, typically renting just a room or portion of the residence, or lives elsewhere.

The owner-occupied category of short-term rental, defined as one where the owner resides in the residence at least 270 days per calendar year, would qualify as an accessory use under the proposed regulations. For nonowner-occupied short-term rentals, the property owner would have to be issued a special use permit. The permit would have to be considered by the Planning Commission and City Commission, which could vote not to approve it, according to Planning Manager Jeff Crick. Crick said that process takes 14 to 16 weeks but is dependent on the meeting schedules of the planning and city commissions.

Both categories of short-term rentals would have to adhere to the following licensing and inspection requirements, among others, according to the draft ordinance and other regulatory changes being proposed:

License: Short-term rentals must be licensed prior to being leased. Owners must pay an annual short-term rental licensing fee of $17. To renew a license, owners must submit proof that they paid all state retail sales tax, local retail sales tax and transient guest tax in full.

Inspection: Short-term rentals must be inspected, at a cost of $50 per unit, prior to being licensed. Annual inspections are required as part of the license renewal process. Any violations will require re-inspection, at a cost of $50 per unit, to verify that all violations have been remedied.

Insurance: The short-term rental must have a certificate of insurance in an amount of at least $1 million for casualty, personal injury and property damage. Crick said that $1 million is the standard certificate of insurance rate used by the city.

Occupancy: The short-term rental must comply with the occupancy limits of its zoning district, which is a maximum of either three or four unrelated people, depending on the district. Minor children are not included in the occupancy count.

Parking: For owner-occupied short-term rentals, parking must comply with existing requirements. For nonowner-occupied short-term rentals, there must be one parking space per guest room.

Requirements for out-of-town owners: If owners do not have a local address, within 40 miles of the city, then they must appoint a local person or management company to serve as their resident agent.

Appearance: The property and site shall adhere to the city’s property maintenance code and remain residential in appearance and characteristics. Internal or external changes that will make the property appear less residential in character or function are prohibited.

The City Commission will convene at 5:45 p.m. Tuesday at City Hall, 6 E. Sixth St.


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